Retail Marketing

289 Pages·2013·1.87 MB·English

PONDICHERRY UNIVERSITY
(A Central University)
DIRECTORATE OF DISTANCE EDUCATION
Retail Marketing

MBA - MARKETING
Paper Code : MBMM 3005
MBA - RETAIL MANAGEMENT
Paper Code : MBRM 3005
III Semester
Authors
ӵ Prof. Kalyanaraman
ӵ Prof. S. C. Sivasundaram
ӵ Prof. A. Mohammed Jaffer
ӵ Prof. K. 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.
1.1 An overview of Retailing 4
1.2 Types of Stores 12
I 1.3 Retail Strategy 29
1.4 Retail Environment 38
1.5 Trends in Indian Retail Industry 45
2.1 Retail Store Location 56
II
2.2 Store Layout & Design 86
3.1 Merchandise Management 114
III 3.2 Category Management 139
3.3 Retail Pricing & Merchandise Performance 144
4.1 Communicating with Retail Customers 164
4.2 Retail Advertisement 174
IV
4.3 Sales Promotion & Personal Selling 201
4.4 Retail Selling Process 224
V 5.1 Globalisation & Retailing 243

Notes
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 – I
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 - II
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 - III
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.
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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
2
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
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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
4
Notes
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.C.M. 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.e.
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,
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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
i.e. he acts as a consumers’ agent.
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