RETAIL MANAGEMENT(Orig.)

8/7/2019 RETAIL MANAGEMENT(Orig.)

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RETAIL

MANAGEMENT


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2/12/2011 By Akhil Agnihotri (Asst.Prof.)BBS IMS, Gr. Noida

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The sale of goods or

commodities in small

quantities directly to

consumers.

Commercial

transaction in which

consumer intends to

consume the goods orservices through

personal, family or

household use.

What is Retailing?


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Retailing a set of business activitiesthat adds value to the products and

services sold to consumers for their

personal or family use.

A retaileris a business that sells

products and/or services to consumers

for personal or family use.


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Conti..

Retailing includes all the activities involved in

selling goods or services to the final

consumers for personal, non-business use. Aretailer or retail store is any business

enterprise whose sale volume comes primarily

from retailing. Philip Kotler


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Functions of a Retailer: Breaking Bulk

-Buy it in quantitiescustomers want

Holding Inventory

-Buy it at a convenientplace when you wantit

Providing Assortment

-Buy other products atthe same time

Offering Services

-See it before you buy,get credit, layaway


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How Retailers Add Value

Breaking Bulk

-Buy it in quantitiescustomers want

Holding Inventory

-Buy it at a convenientplace when you want it

Providing Assortment

-Buy other products at thesame time

Offering Services-See it before you buy,get credit, layaway


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2/12/2011 By Akhil Agnihotri (Asst.Prof.)BBS IMS, Gr. Noida 7

Doll can be bought

on credit or oncash

Doll is featured on

floor display

Doll is offered in

convenient

locations in

quantities of oneDoll is developed in

several styles

How Retailers Add Value

Doll is developed at

manufacturer

The value of the product and service increasesas the retailer performs functions.


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Manufacturers Perspective

The Four Ps of Marketing

Distribution

Retailers are part of the

distribution channel

Retailers are part of the

distribution channel

Product

Price

Promotion


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Distribution ChannelD istribu tion C hanne l

PPT 1-4


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Accounting Finance

MISOperations

Marketing

Human Resources

Retailers are a Business Like Manufacturers


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Hot Topics Retail Mix

Retail Strategy

Customer Service Location

Merchandise

Assortment

PricingCommunication

Mix

Store Design

And Display


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Enclosed malls

Customer

Service

Merchandise

Assortment


Mix

Store Display

And Design

Location Strategy


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Location

PricingCommunicationMix

Store Design

and Display

Customer

Service

Many Different

Hot Band

T-shirts and

Accessories

Assortment Strategy


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Location

Communication

Mix

Store Design

and Display

Customer

ServiceMerchandise

Assortment

Modest with Sales

Pricing Strategy


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Communication Mix

TV andMagazine Ads

Store Design

And Display

Customer

Service Location

Merchandise

Assortment

Pricing


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Store Design and Display

Heavy Metal,

Gothic Look

Customer

Service Location

Merchandise

Assortments


Mix


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Customer Service

Modest

Location

Merchandise

Assortment

Pricing

Communication

Mix

Store Design

and Display


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Wal-Marts Retail Mix

Retail Strategy

Customer

ServiceLocation

Merchandise

Assortment


Mix

Store Design

And Display


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Free-standing Stores

Customer

Service

Merchandise

Assortment


Mix

Store Display

And Design

Location Strategy


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Location


Mix

Store Design

and Display

Customer

Service

Large Number

ofCategories

Few Items

in Each Category

Assortment Strategy


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Location

Communication

Mix

Store Design

and Display

Customer

ServiceMerchandise

Assortment

Low, EDLP

Pricing Strategy


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Communication Mix

TV and NewspaperInsert Ads

Location

Pricing

Store Design

and Display

Customer

Service

Merchandise

Assortment


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Store Design and Display

Basic, Special

Displays

for Products

Customer

Service Location

Merchandise

Assortments


Mix


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2/12/2011 By Akhil Agnihotri (Asst.Prof.)

BBS IMS, Gr. Noida

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CustomerService

Limited

Location

Merchandise

Assortment

Pricing

Communication

Mix

Store Design

and Display


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BBS IMS, Gr. Noida

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Wal-Mart


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BBS IMS, Gr. Noida

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Major type of retail stores

There is no universally accepted method of classifyingretailer. Various schemes have been proposed tocategories retailers based on

Number of outlets Margin vs. turnover

Location

Size.

Because of overlap of classification criteria, some stores mayqualify as under two different categories.


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BBS IMS, Gr. Noida

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1. General merchandise retailer: general merchandise

retailer carry a variety of product lines, with considerabledepth. Some major types of these stores include

supermarkets and hypermarkets , discount stores and

department stores.

o Super market: A supermarket is a large self service retailstore that carries a wide variety of consumer products

under one roof , such as complete line of food products ,

laundry requirement, household maintenance items. InIndia cooperative have managed some supermarkets for

quite sometime like super bazaar in Delhi, apna bazaar

shakari bhandar etc.


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BBS IMS, Gr. Noida

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o Discount store: these stores are self service, standard

general merchandise retailers regularly offering brandname and private brand items at low price, earn lower

margins and push for high sales turnover. The

characteristics of true discount stores include

Selling products at discounted price Carry standard international , national, or store brand toi

build image

Self service stores to minimize operational costs

Preferred store location are low rent areas.Like best known discount store is Wal-Mart. In India almost

all retail stores offer discounts, subhiksha


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BBS IMS, Gr. Noida

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o Department store: a department store is larger retail

store organized into several departments, offering a broadverity and depth of product lines. The product mix may

include food products, appliances, clothing, furnishing

and other household goods.

Like Pantaloons, shoppers stop,

department store only for kids is Kids Kemp.

Fashion related department stores in India are Ebony,

Globus, pantaloons, lifestyles.


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BBS IMS, Gr. Noida

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2. Specialty Stores: specialty stores carry a narrow productmix with depth of assortment within the line.

The emphasis is on a limited number of complimentary productsand high level of customer service

Specialty store often sell shopping goods such as Jewelry, apparel,

computers, music systems, sporting goods.

Like; Tanishq, Titan watches, Van Heusen, Raymond's.

3. Shopping Malls: shopping malls typically deal with severalbases and product categories and provide a large variety of

merchandise abs service. There are 96 operational malls in India

and expected to grow 158 by this current year.

Ansal plaza (Delhi), Garuda mall (Bangalore) Sahara plaza

Gurgaon, Spenser Plaza Chennai


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BBS IMS, Gr. Noida

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4. Retail chains: a retail chain operates multiple retail

outlets under common ownership in different cities andtowns.

To some extent the purchasing function and decision

making are coordinated or centralized. Like Westside, Globus, Food world, McDonald's retail

petrol outlets. Etc.


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BBS IMS, Gr. Noida

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Drivers of Retail change in India

major drivers :

1. Changing Income Profiles: Steady economic growth

fuelled the increase in disposable income in India. The

average middle class family's disposable income rose by

more than 20% between 1999-2003.

2. Diminishing difference between Rural and urban India:

Rural India accounts for over 75% of India population

and this in itself offers a tremendous opportunity for

generating volume driven growth. Tax benefit. In year2002-03 LIC sold 50% of its policies in rural India.

Same BSNL also sold its 50% connection in small

towns .


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BBS IMS, Gr. Noida

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3. Changes in Consumption patterns: Occupational changes

and expansion of media have caused a significant changein the way the consumer lives and spends his money.

o The changes in income brought about changes in theaspirations and the spending patterns of the consumers.

the buying basket of the consumer changed4. The emergence of a young Earning India : Nearly 70% of

the Indian population is below the age of 34. takingadvantages of employment opportunity in the boomingservice sector these young Indians are redefining service

and consumption patterns


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35352/12/20112/12/2011

By Akhil Agnihotri (Asst.Prof.) BBS IMS,By Akhil Agnihotri (Asst.Prof.) BBS IMS,

Gr. NoidaGr. Noida

BUILDING AND SUSTAININGBUILDING AND SUSTAINING

RELATIONSHIPRELATIONSHIP

A Retailer must properly apply the conceptA Retailer must properly apply the concept

of Value and Relationship soof Value and Relationship so

Customers strongly believe the firm offers a good valueCustomers strongly believe the firm offers a good value

for the money andfor the money and

Both customers and channel members want to doBoth customers and channel members want to do

business with that retailer.business with that retailer.


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Gr. NoidaGr. Noida

Value means:Value means:

From the perspective ofFrom the perspective ofmanufacturer, wholesalermanufacturer, wholesalerand retailer:and retailer:

Value is embodied by a seriesValue is embodied by a seriesof activities and processesof activities and processes aavalue chainvalue chain-- that provides athat provides acertain value for the consumer.certain value for the consumer.It is the totality of the tangibleIt is the totality of the tangible

and intangible product andand intangible product andcustomer service attributescustomer service attributesoffered to shoppers.offered to shoppers.


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ContiConti

From the customersFrom the customersperspective:perspective: Value is the perceptionValue is the perception

the shopper has of athe shopper has of avalue chain. It is thevalue chain. It is thecustomers view of allcustomers view of allthe benefits from athe benefits from apurchase (formed bypurchase (formed bythe total retailthe total retailexperience). Value isexperience). Value isbased on thebased on theperceived benefitsperceived benefitsreceived vs. the pricereceived vs. the pricepaid.paid.


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It varies by type of shopper:-

Price oriented shopper - Low price


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Service oriented shopper superior customerservices

Status oriented shopper Prestigious stores


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Gr. NoidaGr. Noida

A retail value chain represents the total bundle of benefits offered toA retail value chain represents the total bundle of benefits offered to

consumes through a channel of distribution. It comprises:consumes through a channel of distribution. It comprises:

Store locationStore location

ParkingParking

The level of customer serviceThe level of customer serviceProduct brand carried, product qualityProduct brand carried, product quality

PricesPrices

The retailers image etc.The retailers image etc.


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Some elements of retail value areSome elements of retail value are

visible to shoppersvisible to shoppers

DisplayDisplay

Store hoursStore hours

Sales personnelSales personnelSale equipmentSale equipment

Etc.Etc.


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Some are not visible:Some are not visible:

Store location planningStore location planning

Credit processingCredit processing

Company warehousesCompany warehousesAnd many merchandising decisions.And many merchandising decisions.

Etc.Etc.


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There are three aspects ofaThere are three aspects ofa

value oriented retail strategy:value oriented retail strategy:

Expected.Expected.An expected retail strategyAn expected retail strategyrepresents the minimum value chainrepresents the minimum value chainelements a given customer segmentelements a given customer segment

expects from a given retail type. In mostexpects from a given retail type. In mostcases these are expected value chaincases these are expected value chainelements:elements: store cleanliness,store cleanliness,convenient hours, well informedconvenient hours, well informed

employees, timely service, popularemployees, timely service, popularproducts in stock, parking and returnproducts in stock, parking and returnprivileges.privileges.


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Augmented retail strategyAugmented retail strategy-- includes the extraincludes the extra

elements in a value chain that differentiate oneelements in a value chain that differentiate oneretail from another. These are oftenretail from another. These are often

augmented elements:augmented elements: exclusive brands,exclusive brands,

superior salespeople, loyalty programmes,superior salespeople, loyalty programmes,

perso

nnel, ando

ther special servicesperso

nnel, ando

ther special services..Augmented features complement expectsAugmented features complement expects

value chain elements and they are the key tovalue chain elements and they are the key to

continued customer patronage.continued customer patronage.


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Potential retail strategyPotential retail strategy comprisescomprises

value chain elements not yet perfectedvalue chain elements not yet perfectedby a competing firm in the retailersby a competing firm in the retailers

category. For examples what customercategory. For examples what customer

services could a new upscale apparelservices could a new upscale apparel

chain offer that no other chain offers?chain offer that no other chain offers?

24x7 store hours24x7 store hours..


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In applying relationship retailing withIn applying relationship retailing with

consumers, these factors should beconsumers, these factors should be

consideredconsideredCustomer baseCustomer base--retailers must regularlyretailers must regularlyanalyze their customer base in terms ofanalyze their customer base in terms ofpopulation and lifepopulation and life--style trends. Attitudestyle trends. Attitude

toward and reasons for shopping, the leveltoward and reasons for shopping, the levelof loyalty, and the mix of new versus loyalof loyalty, and the mix of new versus loyalcustomerscustomers

Customer serviceCustomer service-- customer service hascustomer service hastwo components:two components: first expected servicesfirst expected servicesand augmented services.and augmented services.


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Conti.Conti.

Planning individual custom

erPlanning individual custom

erservicesservicesonce a broad customer serviceonce a broad customer service

plan is outlined, individual customerplan is outlined, individual customer

services are planned. Department storeservices are planned. Department store

may offer credit, lawaway, gift wrapping,may offer credit, lawaway, gift wrapping,free parking, dressing rooms, clothingfree parking, dressing rooms, clothing

alterations, and sitting areas, the use ofalterations, and sitting areas, the use of

baby strollers.baby strollers.


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Conti.Conti.

Customer satisfactionCustomer satisfactionoccurs when the valueoccurs when the valueand customer service provided through aand customer service provided through aretailing experience meet or exceed consumerretailing experience meet or exceed consumerexpectations.expectations.

Loyalty programmeLoyalty programmeloyalty programs rewardloyalty programs reward

the best customers, those with whom a retailerthe best customers, those with whom a retailerwants to develop longwants to develop long--lasting relationships. Tolasting relationships. Tosucceed, they must complement a sound valuesucceed, they must complement a sound value--driven retail strategy. By studying defections, adriven retail strategy. By studying defections, afirm can learn how many customers it is losingfirm can learn how many customers it is losing

and why they no longer patronize it.and why they no longer patronize it.Turning around weak customer serviceTurning around weak customer service


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There are four unique aspects ofservice retailing thatThere are four unique aspects ofservice retailing that

influence relationship building and customer retention:influence relationship building and customer retention:

IntangibilityIntangibility-- It is difficult to display and communicate services andIt is difficult to display and communicate services and

service benefits.service benefits.

Service prices are difficult to setService prices are difficult to set

InseparabilityInseparability The consumer may be involved in the production ofThe consumer may be involved in the production of

servicesservices

Centralized mass production of services is difficult.Centralized mass production of services is difficult.

If a popular employee leaves a firm, customers mayIf a popular employee leaves a firm, customers may

switch to the new company where that person nowswitch to the new company where that person now

worksworks..


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ContiConti

Perishability:Perishability: Services cannot be inventoriedServices cannot be inventoried

VariabilityVariability standardization and quality control are hard tostandardization and quality control are hard to

achieve.achieve.

Customer may perceive variability in the serviceCustomer may perceive variability in the service

quality from one occasion to the next occasion, even ifquality from one occasion to the next occasion, even ifsuch variability does not actually occursuch variability does not actually occur


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Retail StrategyRetail Strategy

A retail strategy is the overall plan guidingA retail strategy is the overall plan guiding

a retail firm? It influences the firmsa retail firm? It influences the firms

business activities and its response tobusiness activities and its response to

market forces, such as competition andmarket forces, such as competition and

the economy.the economy.

A t il dl f i tA t il dl f i t


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Any retailer regardless ofsize or type,Any retailer regardless ofsize or type,should utilize these six steps inshould utilize these six steps instrategic planning:strategic planning:

Define the type ofbusinessDefine the type ofbusiness in terms of the goodsin terms of the goodsor service category and the company specificor service category and the company specificorientation (such as full service or no frills).orientation (such as full service or no frills).

Set longSet long run and shortrun and short--run objectivesrun objectives forforsales and profit market share, image and sosales and profit market share, image and soon.on.

Determine the customermarket to targetDetermine the customermarket to target

on the basis of it characteristicson the basis of it characteristics (such(suchas gender and income level) and need (suchas gender and income level) and need (suchas product and brand preferences).as product and brand preferences).


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Devise an overall, long run planDevise an overall, long run plan thatthat

gives general direction to the firm and itsgives general direction to the firm and its

employees.employees.

Implement an integrated strategyImplement an integrated strategy thatthat

combines such factors as store location,combines such factors as store location,

product assortment, pricing and advertisingproduct assortment, pricing and advertising

and display to achieve objectives.and display to achieve objectives.

Regularly evaluate perfo

rm

anceRegularly evaluate perfo

rm

ance andandcorrect weaknesses or problems whencorrect weaknesses or problems when

observed.observed.


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The four principles from retailingThe four principles from retailing

concept for developing strategyconcept for developing strategy

Customer orientation

Coordinated effort

Value driven

Goal orientation

Retailing concept Retail Strategy


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ContiConti

CustomerorientationCustomerorientation------the retailers determines thethe retailers determines the

attributes and needs of its customers and endeavorsattributes and needs of its customers and endeavors

To satisfyTo satisfy-- these needs to the fullest.these needs to the fullest.

CoCo--ordinated effortsordinated effortsthe retailer integrates allthe retailer integrates all

plans and activities to maximize efficiency.plans and activities to maximize efficiency. Value drivenValue driventhe retailer offers good value tothe retailer offers good value to

customers, whether it is upscale or discount. Thiscustomers, whether it is upscale or discount. This

means having prices appropriate for the level ofmeans having prices appropriate for the level of

product and customer service.product and customer service. Goal orientationGoal orientationthe retailer sets goals and thenthe retailer sets goals and then

uses its strategy to attain them.uses its strategy to attain them.


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Elements ofa retail strategyElements ofa retail strategy

Situation analysis:Situation analysis:

Current Organizational missionCurrent Organizational mission

Current ownership and managementCurrent ownership and management

AlternativesAlternatives

Current goods /service categoryCurrent goods /service category


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SWOT Analysis:SWOT Analysis:

SS-- Current and long termCurrent and long term WW-- Current and long termCurrent and long term

OO-- current and long termcurrent and long term

TT-- current and long termcurrent and long term


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Objectives:Objectives:

SalesSales

ProfitsProfits

PositioningPositioning

Satisfaction of publicsSatisfaction of publics


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Identification of customers: (Choice ofIdentification of customers: (Choice of

target market)target market) Mass marketingMass marketing

Concentrated marketingConcentrated marketing

Differentiated marketingDifferentiated marketing


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Overall strategy :Overall strategy : Controllable variablesControllable variables

Goods service strategyGoods service strategy

Location strategyLocation strategy

Pricing strategyPricing strategy

Promotion strategyPromotion strategy

Uncontrollable variablesUncontrollable variablesConsumer environmentConsumer environment

Competitive environmentCompetitive environment

Legal environmentLegal environment

Economic environmentEconomic environment

Technological environmentTechnological environment


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Specific activities:Specific activities:

Daily and short term operationDaily and short term operation

Responses to environmentResponses to environment

ControlControl

EvaluationEvaluation

AdjustmentAdjustment

Documents

RETAIL MANAGEMENT(Orig.)