Assignment On

Types of Retail Marketing

Subject:
Marketing

Submitted To:
Prof.Vikas Jadhav.

Submitted By:
Mr.Swapnil S. Ghag.
Roll No.10 (A)

Mms-2009-11
2nd Semister

Retail marketing
Retail marketing plans, sales promotion ideas, branding and advertising resources for retailers.
Learn how to use loss leaders, media buys and sales events to the benefit of your retail store.
Select a newspaper to advertise in, create an effective ad and understand newspaper rate cards.

Retailing consists of the sale of goods or merchandise from a very fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption
by the purchaser.[1] Retailing may include subordinated services, such as delivery. Purchasers
may be individuals or businesses. In commerce, a "retailer" buys goods or products in large
quantities from manufacturers or importers, either directly or through a wholesaler, and then sells
smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers
are at the end of the supply chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy. The term "retailer" is also applied where a
service provider services the needs of a large number of individuals, such as a public utility, like
electric power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping
mall. Shopping streets may be for pedestrians only. 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. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and browsing
and does not always result in a purchase.
Retailing includes all activities involved in selling goods or services directly to final consumers
for personal, non-business use. A retailer or retail store is any business enterprise whose sales
volume comes primarily from retailing.

Any organization selling to final consumers – whether a manufacturer, wholesaler or retailer- is

doing retailing. It does not matter how the goods or services are sold (by person, mail, telephone,
vending machine or internet) or where they are sold (in store, on the street, or in consumer's
home).

There are 3 types of retailers:

1. Store retailer
2. Non Store retailer
3. Retail Organization

From the assortment point of view, Store retailers are of 5 types:

1. Specialty Store
2. Departmental Store
3. Super market
4. Convenience Store
5. Discount Store

From customers service point of view:

1. Self-service retailing: Many customers are willing to carry out their own locate-
compare-select process to save money.

2. Self-selection retailing : Customers find their own goods, although they can ask for
assistance.
 3. Limited service retailing: These retailers carry more shopping goods, and
customers need more information and assistance. The stores also offers services such
as credit & merchandise-return privileges.

4. Full service retailing:Salespeople are ready to assist in every phase of the locate-
compare-select process.

Although majority of goods & services is sold through stores, non-store retailing has been
growing much faster than store retailing.

Major non-store retailer types:

1. Direct Selling: It deals with door-to-door or at home sale parties i.e. it involves one-to-one or
one-to-many selling.
Example > Eureka Forbes, Amway, Mary Kay Cosmetics.

2. Automatic Vending: Example > ATM

3. Buying services: Is a store less retailer serving a specific clientele-usually employees of large
organizations-who are entitled to buy from a list of retailers who have agreed to give them
discounts in return for membership.
Example > Amazon.com

4. Direct marketing: It involves direct response marketing. The different forms of direct
marketing are: Direct mail, catalog marketing, telemarketing, television direct response
marketing and electronic shopping.
Example: Dell Computers

Retail Organization mainly falls into 4 major categories:

1. Corporate chains: Example > Pantaloons, Westside

2. Retail Co-operative: Example > Amul, Samavaika, Khadi Gram Yudog
 3. Consumer Co-operative: Example > Apna Bazar
4. Franchise Organization: Example > Monginis, Café Coffee day.

Global Scenario

Retail stores constitute 20% of US GDP & is the 3 rd largest employer segment in USA. China on
the other hand has attracted several global retailers in recent times. Retail sector employs 7% of
the population in China. Major retailers like Wal-Mart & Carrefour have already entered the
Chinese market. In the year 2003, Wal-Mart & Carrefour had sales of US $ 70.4 Crore & US $
160 Crore respectively.

The global retail industry has traveled a long way from a small beginning to an industry where
the world wide retail sales is valued at $ 7 x 10 5 Crore. The top 200 retailers alone accounts for
30 % of the worldwide demand. Retail turnover in the EU is approximately Euros 2,00,000 Crore
and the sector average growth is showing an upward pattern. The Asian economies (excluding
Japan) are expected to grow at 6% consistently till 2005-06.

On the global Retail stage, little has remained same over the last decade. One of the few
similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still
holds that distinction. Other than Wal-Mart's dominance, there's a little about today's
environment that looks like the mid-1990s. The global economy has changed, consumer demand
has shifted & retailers' operating systems today are infused with far more technology than was
the case six years ago. 

Given below a list of World's top 15 retailers:

DT RankCountry ofCompany name Formats 2003 retail

04 Origin sales            (US $
Crore)
1 US Wal-Mart Discount, Hypermarket,25,632.9
Supermarket, Superstore,
Warehouse
2 France Carrefour Discount, Hypermarket,7,979.6
 Supermarket, Specialty,
Convenience, Cash & Carry
3 US Home Depot DIY 6,481.6
4 Germany Metro Hypermarket, Superstore,6,050.3
Specialty, Convenience,
Cash & Carry, Departmental,
DIY, Food Service
5 US Kroger Discount, Convenience,5,379.1
Supermarket, Super center,
Warehouse, Specialty
6 UK Tesco Department, Hypermarket,5,153.5
Supermarket, Superstore,
Convenience
7 US Target Department, Discount, Super4,678.1
center
8 Netherlands Ahold Discount, Hypermarket,4,458.4
Supermarket, Specialty,
Convenience, Cash & Carry,
Drug
9 US Costco Warehouse 4,169.3
10 Germany Aldi Einkauf Discount, Supermarket 4,006.0 e
11 Germany Rewe Hypermarket, Superstore,3,893.1e
Super market, Specialty,
Convenience, Cash & Carry,
Departmental, DIY, Food
Service, Discount, Drug
12 France Intermarche Superstore, Super market,3,747.2e
Specialty, Convenience,
Cash & Carry, DIY, Food
Service, Discount
13 US Sears Department, mail order,3,637.2
Specialty
14 US Safeway, Inc. Supermarket 3,555.3
15 US Albertsons Convenience, Drug,3,543.6
Supermarket

        

                                                                                              
Indian Scenario
Retailing in India is the largest employer after agriculture. It employs almost 7% of the total
work force in India and has a contribution of 14% to the national GDP. In the year 2004 , the size
of Indian organized retail industry was Rs 28000 Crore, which was only 3% of the total retailing
market. Organized retailing is projected to grow at the rate of 25%-30% p.a. and is estimated to
reach an astounding Rs 1,00,000 Crore by 2010. The contribution of organized retail is expected
to rise from 3% to 9% by the end of the decade. The projection for the year 2005 is Rs 35000
Crore.

Though with a population of a billion and a middle class of 300 million (upper middle class= 40,
Middle class =150 & lower middle class = 110), organized retailing is still at its infancy in India.
The great Indian middle class is estimated to grow to over 60 Crore by 2010 making India one of
the largest consumer markets of the world. It is projected that by the year 2010, 65% of the
Indian population will be in the age group of 10-49 years, which makes the scenario even more
attractive. India has the largest retail network with 1.2 Crore outlets but only 4% of them are
larger than 500 sq. feet in size. USA on the other hand has 9 Lakh outlets catering to more than
13 times the total retail market size of India. Thus India has the highest number of outlets per
capita in the world with a widely spread retail network but with the lowest per capita retail space
(@ 2 sq.ft. per person). AT Kearney has ranked India as the 2nd most attractive retail market after
Russia, in its Global Retail Development Index 2004 report.

Retailing, one of the largest sectors in the global economy, is going through a transition phase in
India. For a long time, the corner grocery store was the only choice available to the consumer,
especially in the urban areas. This is slowly giving way to international formats of retailing.

Let us look at the evolution process:

Detailing reasons why Indian organized retail is at the brink of revolution, the IMAGES-KSA
report says that the last few years have seen rapid transformation in many areas and the setting of
scalable and profitable retail models across categories. Indian consumers are rapidly evolving
and accepting modern formats overwhelmingly. Retail Space is no more a constraint for growth.
India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner
with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC,
Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and private equity
players are firming up plans to identify investment opportunities in the Indian retail sector. The
quantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures
more and more investors to earn large profits. Investments into the sector are estimated at    INR
2000 - 2500 Crore in the next 2-3 years, and over INR 20,000 Crore by end of 2010.

Few of India's top retailers are:

1. Big Bazaar-Pantaloons: Big Bazaar, a division of Pantaloon Retail (India) Ltd is already
India's biggest retailer. In the year 2003-04, it had revenue of Rs 658.31 crores & by 2010; it is
targeting revenue of Rs 8,800 Crore.

2. Food World : Food World in India is an alliance between the RPG group in India with Dairy
Farm International of the Jardine Matheson Group.
3. Trinethra : It is a supermarket chain that has predominant presence in the southern state of
Andhra Pradesh. Their turnover was Rs 78.8 Crore for the year 2002-03.

4. Apna Bazaar : It is a Rs 140-crore consumer co-operative society with a customer base of

over 12 lakh, plans to cater to an upwardly mobile urban population.

5. Margin Free : It is a Kerala based discount store, which is uniformly spread across 240
Margin Free franchisees in Kerala, Tamil Nadu and Karnataka.

Wholesale trading is another area, which has potential for rapid growth. German giant Metro AG
and South African Shoprite Holdings have already made headway in this segment by setting up
stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These
new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who
do not have to maintain relationships with multiple suppliers for all their needs.