PONDICHERRY UNIVERSITY (A Central Ủniversity) DIRECTORATE OF DISTANCE EDUCATION Retail Marketing RY U ST ‘ © = 0 fe] a a 1 < ` # äì tr sìf ng: &. aaat AT we ey `» ° VERS LÊ MBA - MARKETING Paper Code : MBMM 3005 MBA - RETAIL MANAGEMENT Paper Code : MBRM 3005 Ill Semester Authors % Prof. Mohammed Jaffer % «=Prof. Subramaniam Edited by Prof.
Bidu Bhushan Mishra, Professor, Dept. of Business Management, UtkalUniversity, Odisha. © All Rights Reserved For Private Circulation Only TABLE OF CONTENTS UNIT | LESSON TITLE PAGE NO.1 An overview of Retailing 4 1.2 Types of Stores 12 I 1.5 Trends in Indian Retail Industry 45 2.1 Retail Store Location 56 5 2.2 Store Layout & Design 86 3.1 Merchandise Management 114 IH 3.3 Retail Pricing & Merchandise Performance 144 41 Communicating with Retail Customers 164 4.3 Sales Promotion & Personal Selling 201 4.4 Retail Selling Process 224 V 5.1 Globalisation & Retailing 243 MBA (Marketing) - III Semester Paper Code: MBMM 3005 Paper-XV Retail Marketing Objectives > To understand the concept, process and management of retail business > To develop an understanding of the retail strategy and planning process, and > To have an understanding of merchandise process Unit - 1 An overview of Retailing - Types of stores - Product Retailing vs. Service Retailing - Non store Retailing - Retail strategy - Achieving competitive advantage and positioning Retailing environment - Legal, Social, Economic, Technological, issues - Trends in the Indian Retailing Industry.
Unit - Il Retail store location and layout - Country/Region analysis - Trade area analysis - Site evaluation and selection - Store design and layout - Comprehensive store planning - Exterior design and layout - Interior store design and layout - Interior design elements. Unit - II Planning merchandise needs and merchandise budgets - Methods for determining inventory evaluation - Assortment planning, buying and vendor relations - Merchandise pricing - Price strategies - Psychological pricing - Mark-up and markdown strategies. Notes Notes Unit - IV Communicating with the retail customer - Retail promotion mix- Advertising - Sales promotion - Publicity - Retail selling process - Retail database- In-store customer service. Unit - V Globalization and changing retail formats - Online retailing - International Retailing - Opportunities and Challenges - Market entry formulas - New customized formats (customized stores, portable stores, merchandise depots, retail theater, service malls, customer-made stores, interactive kiosk ‘shopping arcades’) References Chetan Bajaj, Tuli & Srivastava, RETAIL MANAGEMENT, Oxford University Press, New Delhi.2010 Fernie, PRINCIPLES OF RETAILING, Elsevier Publishing, 2010 Giridhar Joshi, INFORMATION TECHNOLOGY FOR RETAIL, Oxford University Press, New Delhi.2009 Ron Hasty and James Reardon, RETAIL MANAGEMENT.
McGraw- Hill Publication, International Edition. Swapna Pradhan, RETAIL MANAGEMENT, TEXT & CASES, Tata McGraw-Hill PublishingCo, New Delhi, 2008 Notes UNIT - I Learning Objectives After going through this unit the students will learn: > What and why of retailing in the modern business. > Different types of retail format helping the retailer to carry out its business. > Provide an understanding of the retail environment that helps in formulating appropriate retail strategy in achieving competitive advantage, and > Also will highlight the issues and trends in the Indian Retail Industry.
Unit Structure Lesson 1.1 - An Overview of Retailing Lesson 1.2 - Types of Stores Lesson 1.3 - Retail Strategies Lesson 1.4 - Retail Environments Lesson 1.5 - Trends in Indian Retail Notes Lesson 1.1 - An Overview of Retailing Introduction Retail is the sale of goods and services from individuals or businesses to the end-user called the customer. Retailers are the integral part of a system called the supply chain which carries goods from the producer to the target market. A retailer purchases goods or products in large quantities from manufacturers directly or through a wholesale, and then sells smaller quantities to the consumer for a profit. Retailing can be done in either fixed locations like stores or markets, door-to-door or by delivery.
Retailing is the process that the retailer adopts in selling the products including subordinated services, such as delivery and installation. The term “retailer” is also applied where a service provider services the needs of a large number of individuals, such as a public. Shops may be in residential streets or in a shopping mall. Sometimes a shopping street has a partial or full roof to protect customers from precipitation.
Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-shop retailing. Shopping generally refers to the act of buying products by a consumer. Sometimes this is done to obtain necessities such as food, clothing and other daily necessities; sometimes it is done as a recreational/ social activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.
Retail comes from the Old French word tailler, which means “to cut off, clip, pare, divide” in terms of tailoring (1365) and prefix with re and the verb tailor meaning “to cut again”. It was first recorded as a noun with the meaning of a “sale in small quantities” in 1433 (from the Middle French retail, “piece cut off, shred, scrap, paring”).' Like in French, the word retail in both Dutch and German also refers to the sale of small quantities of items. Evidently, retail trade is one that cuts off smaller portions from large lumps of goods. It is also a process through which goods are transported to final consumers.
In other words, retailing consists of the activities involved in selling directly to the ultimate consumer for personal, non-business use. It embraces the direct-to-customer sales activities of the producer, whether through his own stores by house-to- house canvassing or by mail-order business. Manufacturers engage in retailing when they make direct-to- consumer sales of their products through their own stores (as Bata and Carona shoe company, D. Stores, Mafatlals and Bombay Dyeing) by door-to-door canvass, or mail order or even on telephone.
Even a wholesaler engages in retailing when sells directly to an ultimate consumer, although his main business may still be wholesaling. A retailer is a merchant or occasionally an agent or a business enterprise, whose main business is selling directly to ultimate consumers for non-business use. He performs many marketing activities such as buying, selling, grading, risk-trading, and developing information about customer’s wants. A retailer may sell infrequently to industrial users, but these are wholesale transactions, not retail sales.
If over one half of the amount of volume of business comes from sales to ultimate consumers, i. sales at retail, he is classified as a retailer. Retailing occurs in all marketing channels for consumer products. Importance of Retailing International trade and commerce has existed for centuries and played a very important part in the World History.
However International Retailing has been in existence and has gained ground in the past two to three decades. The economic boom in several countries, coupled with globalization has given way to Organisations looking at setting up retailing across borders. The advent of internet and multimedia has further changed the dimensions as far as Retailing is concerned. The retailer is an intermediary in the marketing channel because he is both marketer and customer, who sells to the last man to consume.
He is a specialist who maintains contact with the consumer and the producer; and is an important connecting link in a complex mechanism of marketing. Though producers may sell directly to consumers, such method of distributing goods to ultimate users is inconvenient, expensive and time consuming as compared to the job performed by a specialist in the line. Therefore, Notes Notes frequently the manufacturers depend on the retailers to sell their products to the ultimate consumers. The retailer, who is able to provide appropriate amenities without an excessive advance in prices of goods, is rewarded by larger or more loyal patronage.
Economic Justification for Retailing All middlemen basically serve as purchasing agents for their customers and as sales specialists for their suppliers. To carry out those roles, retailers perform many activities, including anticipating customer’s wants, developing assortments of products, acquiring market information and financing. It is relatively easy to become a retailer. No large investment in production equipment is required, merchandise can often be purchased on credit and store space can be leased with no ‘down payment’ or a simple website can be set up at relatively little cost.
Considering these factors, perhaps it’s not surprising that there are just over a 6 million retail outlets operating across the Indian cities from north to south and from east to west. This large number of outlets, many of which are trying to serve and satisfy the same market segments, results in fierce competition and better values for shoppers. To enter retailing is easy; to fail is even easier! To survive in retailing, a firm must do a satisfactory job in its primary role - catering to consumers. Rama Subramaniam the former head - retail segment Spensors described a successful retailer as a “merchant who sells goods that won’t come back to customers, who will”.
Of course, a retail firm also must fulfill its other role - serving producers and wholesalers. This dual role is both the justification for retailing and the key to success in retailing. General Services The general services which a retailer provides are: 1. The retailer anticipates the wants of the consumers and then supplies them the right kind of goods at reasonable price.
His job is to make the consumers buying as easy and convenient as possible ie. he acts as a consumers’ agent. He performs the service of bulk-breaking ie. dividing large quantities into small units, such as individual cans, bottles, boxes, wrappers, packages, appropriate for consumer use.
He offers a large assortment of merchandise, of suitable size, colour, design, style and seasonal items-ranging from domestic utensils, household requisites to specialty goods. He creates time and place utility by storing the products in off season and by transporting these goods to the places where they can be readily available as and when needed by the consumer. He also assumes risks by guaranteeing the goods he sells to the consumer. He also offers free delivery of goods, credit on open accounts, free alteration, liberal exchange facilities, instructions in the use of goods, revolving credit plans, and long term installment programmes.
He adds to the convenience and ease of consumer purchasing by offering convenient shopping locations, market information and other services such as free parking privileges, lessons on product use and a multitude of other facilities may be offered and found sufficiently desired to result in increased patronage. He helps the producers in distributing their products by using advertisement display and personal selling. The level of retail sales is one of the most useful barometers of the nation’s economic health. For example when sales of cycles pick- up, sales of steel and components also increase, as does employment and thus increasing purchasing power.
But when sales go down, manufacturers cut back production, unemployment increases and retail sales also goes down. Facilitating Services In order to carry out functions involving transfer of ownership and physical supply effectively retailers perform a number of facilitating functions i. functions relating to standardisation and grading, financing, risk-taking and market information. Notes A retailer offresh fruits and vegetables has to standardise and grade these to make these acceptable to customers.
They establish standards, inspect goods they receive, and sort them in various classifications. Quite often they purchase in large quantities and then divide them and repack them before selling. When the retailer sells goods on credit he performs finance function. From the moment he sells and collects the last rupee from the customer, when goods are sold on credit, he is said to be performing a financing function.
Another function performed by retailers is that of risk-taking. During the entire time a retailer holds title to particular goods, he must inevitably bear a wide variety of risks.