CHAPTER 1: INTRODUCTION TO RETAILING

MEANING
• The retailing concept is fairly easy to adopt. It means communicating with shoppers and viewing their
desires as critical to the firm's success, having a consistent strategy, offering prices perceived as "fair"
by customers, and working to achieve meaningful, specific, and reachable goals.

• Retail involves the sale of goods from a single point directly to the consumer in small quantities for his
end use. In layman's language, retailing is nothing but transaction of goods between the seller and the
end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his
direct consumption.

• Retail is derived from a French word with the prefix "re" and the verb "tailer" means "to cut again".
Evidently, retail trade is one that cuts off smaller portions for large lumps of goods.

CLASSIFICATION OF RETAILING FORMAT

OWNERSHIP BASED RETAILING

• Independent Retailers: They own and run a single shop, and determine their policies independently.
Their family members can help in business and the ownership of the unit can be passed from one
generation to next. The biggest advantage is they can build personal rapport with consumers very easily.

• Chain Stores: When multiple outlets are under common ownership it is called a chain of stores.
Chains stores offer and keep similar merchandise. They are spread over cities and regions. The
advantage is, the stores can keep selected merchandise according to the consumers' preferences in a
particular area.

• Franchises: These are stores that run business under an established brand name or a particular format
by an agreement between franchiser and a franchisee.

• Consumers Co-Operative Stores: These are businesses owned and run by consumers with the aim
of providing essentials at reasonable cost as compared to market rates. They have to be contemporary
with the current business and political policies to keep the business healthy.
MERCHANDISE BASED RETAILING

• Convenience Stores: They are small stores generally located near residential premises, and are kept
open till late night or 24/7. These stores offer basic essentials such as food, eggs, milk, toiletries, and
groceries. They target consumers who want to make quick and easy purchases.

• Supermarkets: These are large stores with high volume and low profit margin. They target mass
consumer and their selling area ranges from 800 sq.ft. to 10,000 sq.ft. They offer fresh as well as
preserved food items, toiletries, groceries, and basic household items.
 • Hypermarkets: These are one-stop shopping retail stores with at least 3000 sq.ft. selling space, out of
which 35% space is dedicated towards non-grocery products. They target consumers over large area,
and often share space with restaurants and coffee shops.

• Specialty Stores: These retail stores offer a particular kind of merchandise such as home furnishing,
domestic electronic appliances, computers and related products. They also offer high level service and
product information to consumers.

• Departmental Stores: It is a multi-level, multi-product retail store spread across average size of
20,000 sq.ft. to 50,000 sq.ft. It offers selling space in the range of 10% to 70% for food, clothing, and
household items.

• Factory Outlets: These are retail stores which sell items that are produced in excess quantity at
discounted price. These outlets are located in the close proximity of manufacturing units or in
association with other factory outlets.

• Catalogue Showrooms: These retail outlets keep catalogues of the products for the consumers to
refer. The consumer needs to select the product, write its product code and handover it to the clerk
who then manages to provide the selected product from company's warehouse.
NON – STORE BASED RETAILING

It is a form of retailing where the retailer is in direct contact with the consumer at the workplace or at home.
The consumer becomes aware of the product via email or phone call from the retailer, or through an ad on the
television, or Internet. The seller hosts a party for interacting with people. Then introduces and demonstrates
teh products, their utility, and benefits. Buying and selling happens at the same place. The consumer itself is a
distributor.

Non-store based retailing includes non-personal contact based retailing such as:

 Mail Orders/Postal Orders/E-shopping

 Telemarketing

 Automated Vending/Kiosks
SERVICE BASED RETAILING
• These retailers provide various services to the end Consumer. The services include banking, car rental,
electricity, and cooking gas container delivery.

• The success of service based retailer lies in service quality, customization, differentiation and timelines
of service, technological up gradation, and consumer oriented pricing.

IMPORTANCE OF RETAILING

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,
TYPES OF RETAILING
There are seven main types of retailers which can be defined by the size of their business and the way
they in which they sell their products:

• Department Store - This type of retailer is often the most complex offering a wide range of products
and can appear as a collection of smaller retail stores managed by one company. The department store
retailers offer products at various pricing levels.
 • Supermarkets - Generally this type of retailer concentrates in supplying a range of food and beverage
products. However many have now diversified and supply products from the home, fashion and
electrical products markets too.

• Warehouse retailers - This type of retailer is usually situated in retail or Business Park and where
premises rents are lower.

• Specialty Retailers - Specializing in specific industries or products, this type of retailer is able to offer
the customer expert knowledge and a high level of service.

• E-tailer - This type of retailer enables customers to shop on-line via the internet and buy products
which are then delivered.

• Convenience Retailer - Usually located in residential areas this type of retailer offers a limited range
of products at premium prices due to the added value of convenience.

• Discount Retailer - This type of retailer offers a variety of discounted products.

RETAIL ENVIRONMENT

• With sustainable development at its heart, retail environment is uniquely positioned for business to
business advertisers to market their products and services directly to those who influence and make
purchasing decisions within the retail sector.

• Retail environment maximizes advertising potential by co-coordinating relevant editorial features

alongside display advertisements as well as offering an array of creative advertising opportunities
including advertorials and cover wraps.
ACTORS IS THE RETAILER’S MICRO ENVIRONMENT

Every retailer's primary goal is to profitably serve and satisfy specific needs have chosen target markets. To
carry out this task, the retailer links himself with a set of suppliers and a set of intermediaries to reach its target
customers. The suppliers/intermediaries/customers chain comprises the core marketing system of the retailer.

• Suppliers: Suppliers are business firms and individuals who provide resources needed by the retailer.
Developments in the 'suppliers environment can have a substantial impact on the retailer's marketing
operations. Retail managers need to watch price trends of their key inputs. They are equally
concerned with supply availability.

• Intermediaries: Intermediaries are firms that aid the retail shop in promoting selling and
distributing its goods to final buyers. Physical distribution firms assist the retailer in stocking and
moving goods from their original locations to their destinations.

• Customers: A retailer links himself with suppliers and middlemen, so that they can efficiently supply
appropriate products and services to its target market.

• Competitors: A retailer rarely stands alone in its effort to serve a given customer market. His efforts
to build an efficient marketing system to serve the market are matched by similar efforts on the part
of others. The retailer's marketing system is surrounded and affected by a host of competitors.
FORCES IN THE RETAILERS MACRO ENVIRONMENT
All retail companies operate within a "macro environment," or the sphere of influence outside the company
that shapes how companies do business. The macro environment includes economic, technological, societal
and governmental influences. A retailer must understand the role of each to compete within the retail industry.

There are some forces in the retailer's macro environment, such as:

 Demographic Environment
  Political/Legal Environment

 Social/Cultural Environment

 Economic Environment

 Technological Environment

RETAIL LIFE CYCLE

The important distinction between the retail life cycle theory and the two preceding theories of retail change
is that the retail life cycle theory attempts to identify the speed with which change occurs. This theory suggests
that the pace of innovation in retailing accelerates over time within any particular retail form.

The given descriptions of the steps of the retail life cycle:

 Innovation Stage

 Accelerated Development

 Maturity

 Decline
PHYSICAL FACILITIES

Physical facilities, which represent the distribution element of a retailer, are marketing mix. Firms that
operate retail stores must consider four aspects of physical facilities:

 Location

 Size

 Design

 Layout
WHEEL OF RETAILING
• Wheel of retailing is a process observed in retail marketing when what is originally a discount store
improves its services and products in order to boost prices once it has become established. As it
cycles through the wheel of retailing, a discount retail business might develop into a higher end
department store, leaving its former niche to be filled by newer discount businesses.

• The wheel of retailing concept was introduced by McNair from Harvard University and it is
considered to be more an observation than a theory.

Step 1: Establishing and penetrating in the market

Step 2: Expanding in the market

Step 3: Stabilized business model attracting margins

PROCESS

A need is a consumer's desire for a product's or services specific benefit, whether that be functional or
emotional. The emotional benefit tends to be a stronger driver for consumers, as functional benefits can be
easily copied by competitors. On the other hand, a consumer want is the desire for products or services that
are not necessary, but which consumers wish for.
NEEDS & MOTIVES OF CUSTOMERS
• At the heart of marketing, lies what is referred to as a consumer need. Consumer needs are the
quintessence of the marketing theory. Psychologists and consumer researchers agree that human
beings have the same needs; however, these needs get translated differently into different wants,
resulting in varied motives

• Consumer motivation is the urge or drives to satisfy needs through product purchase and its
consumption.
MOTIVES AND MOTIVATION
• We are interested in motivation because it is the driving force of behavior and there must be a reason,
a motive for purchasing, and using products. Motivation can be described as the driving force within
individuals that impels them to action. The driving force is produced by a state of tension, which exists
as a result of an unfulfilled need. Individuals strive both consciously and unconsciously to reduce this
tension through behavior which they anticipate will fulfill their needs and thus relieve them of the stress
they feel.

• Motives can be rational as well as emotional.

GOALS

• Goals are sought-after results of motivated behavior. All behavior is goal-oriented. Marketers are even
more concerned with consumer's product-specific goals that is, the specifically branded or labeled
products they select to fulfill their needs.
Selection of Goals
• The goals selected by individuals depend on their personal experiences, physical capacity, prevailing
norms and values, and the goals and accessibility in the physical and social environment.
Interdependence of Needs and Goals

• Needs and Goals are interdependent; neither exists without the other. However, people are often not
as aware of their needs as they are of their goals.

THE DYNAMIC

NATURE OF MOTIVATION
 • Motivation is a highly dynamic construct that is constantly changing in reaction to life experience.
Needs and Goals are Constantly Changing.

• Our needs and goals are always growing and changing in response to the physical condition,
environment, interactions with others, and experiences. As anyone attains his goals, they develop new
ones. If they do not attain his goals, he continues to strive for old ones, or develop substitute goals.
AROUSAL OF MOTIVES

Most of the specific needs are dormant much of the time. The arousal of any specific set of needs at a specific
point in time may be caused by internal stimuli found in the physiological conditions, or in the emotional or
cognitive processes, or by external stimuli in the outside environment.

 Physiological Arousal

 Emotional Arousal

 Cognitive Arousal

 Environmental Arousal
HANDLING CUSTOMER COMPLAINTS
No matter how impeccably the business is run, anyone is going to get complaints. Customers will call anybody,
angered by a mistake one or a member of team made. And employees will air grievances, feeling management
has been unfair to them. How one handle these situations can make or break the company.

These are steps uncomplicated, yet effective in nearly every situation will help one defuse complaints and turn
an unhappy person into a loyal fan.

 Listen with an open mind

 Repeat the problem back

 Follow up promptly

RETAIL MANAGEMENT

Retail Management is the process which helps the customers to procure their desired merchandise form the
retail stores for their personal use. It includes all the steps required to bring the customers into the store and
fulfill their buying needs. Retail management saves time and ensures the customers easily locate their desired
merchandise and return home satisfied.

An effective management avoids unnecessary chaos at the store. Effective Management controls shopliftings
to a large extent.

• The retailer must keep a record of all the products coming into the store.

• The products must be well arranged on the assigned shelves according to size, color, gender, patterns
etc.

• Plan the store layout well.

• The range of products available at the store must be divided into small groups comprising of similar
products.

• Necessary labels must be put on the shelves for the customers to locate the merchandise on their own.

• Do not keep the customers waiting.

• Make sure the sales representatives attend the customers well.

• The retailer must ensure enough stock is available at the store.

 • Make sure the store is kept clean.

• The store manager must make daily sales reports to keep a track of the cash flow. Use soft wares or
maintain registers for the same.

• Remove the unsold merchandise from the shelves.

• Create an attractive display.

• Plan things well in advance to avoid confusions later on.

• Ask the customers to produce bills in case of exchange.

RETAIL MANAGEMENT DECISION

The success of a small entrepreneurial retailer or a major retail corporation, in making these decisions, depends
largely on how much it embraces the retailing term. The retailing term is a managerial orientation that focuses
a retailer on determining its target markets needs and satisfying those needs more effectively and efficiently
than its competitors.

STRATEGIC DECISION AREAS

The key strategic decision areas involve determining a market strategy, financial Strategy, location strategy,
organizational structure and human resource strategy and information systems strategy. When major
environmental changes occur the current strategy and the reasoning behind it are reexamined.

IMPLEMENTING

THE RETAIL STRATEGY

To implement a retail strategy, management develops a retail mix that satisfies the needs of its target market
better than its competitors. The retail mix is the combination of factors retailers use to satisfy customer needs
and influence their purchase decisions.

Elements in the retail mix include:

• The types of merchandise and services offered.

• Merchandise pricing.

• Advertising and promotional programs.

• Store design.

• Merchandise display.

• Assistance to customers provided by salespeople.

• Convenience of the store's location.

RECENT TRENDS IN RETAILING

• The retail industry over the past decade has been seen as the harbinger and an indicator of economic
growth and spending power globally. It has transformed itself into global phenomena and has been a
scene of constant change and innovation.

• The latest trends reflect the spending power, lifestyles, tastes, time available, geographies; loyalties etc.
Apart from these, there have been a lot of initiatives to improve the productivity and efficiency of the
supply chain, better vendor management and efficient global operations.

OTHER RETAIL

AREAS TO WATCH
 • Cross-Channel One-to-One Shopper Engagement: Retailers looking to differentiate themselves
with shoppers will invest in "recognizing" or knowing shoppers across platforms and routes to market
and providing individualized, customized messaging and content through each.

• Content-Rich Experiences: Savvy retailers are using multimedia content to make the shopping
experience more engaging.

• Social Curation Buzz: Social curation will become a small-scale buzzword for retail, as retailers
leverage shopper social data and insights to curate product assortments online and in-store.

• Smaller Format Store Growth: The smaller format stores such as dollar stores and specialty
discounters will have a formidable impact on super centers, malls, and mass merchandisers.

• Big Data 'Buzz" Subsides Analytics Investments Increase: Retail, like many other industries is
looking to leverage Big Data in new and different ways to maximize profits.

• Mobility is no Longer the Exception: E-commerce has been growing for years (Cyber Monday), but
now consumers are shifting away from purchasing items on their laptop or desktop and are, buying via
phone or tablet. Consumers are increasingly using mobile pho and tablets for product research and
online purchase.
RETAIL DYNAMICS AND CUSTOMER BUYING DECISIONS

Retail dynamics provides merchandising services and solutions for major real outlets. An expanding company
with a team of dedicated merchandisers servicing both metropolitan and regional areas offering an unsurpassed
level of excellence in the retail merchandising. Retail dynamics offers an effective solution to implementing,
measuring and reporting the field marketing strategies of our suppliers/principals. The consumer buying
decision process is a systematic way of looking at how a consumer makes the decision to purchase a product
(any product) in a product category. A buying decision process is the process a customer goes through when
buying a product.

The five step processes are:

• Need recognition/Problem Recognition: The need recognition is the first and most important step
in the buying process. If there is no need, there is no purchase. This recognition happens when there is
a lag between the consumer's actual situation and the ideal and desired one.

Classification by type of Needs:

• Functional Need

• Social Need

• Need for Change

MASLOWS HIERARCHY OF NEEDS

Developed by the eponymous psychologist, this is one the best known and widely used classifications and
representations for hierarchy of needs. It specifies that an individual is "guided" by certain needs that he wants
to achieve before seeking to focus on these ones:

• Physiological needs

• Safety needs

• Need of love and belonging

• Need of esteem (for oneself and from the others)

• Need of self-actualization
RETAIL DYNAMICS AND CUSTOMER BUYING DECISIONS

2. Information Search: Once the need is identified, it is time for the consumer to seek information about
possible solutions to the problem. He will search more or less information depending on the complexity of the
choices to be made but also his level of involvement.

3. Evaluation of Alternatives

4. Purchase Decision: In this stage the consumer chooses the product or brand to be bought.

5. Post purchase Evaluation: Post purchase behavior refers to all behavior, positive and negative, that is
generated from the purchase

RETAIL

CONSUMER BEHAVIOR

Consumer behavior is defined as "The dynamic interaction of affect and cognition, behavior and the
environment into which human beings conduct the exchange aspects of lives". It means that the buying
habits of the consumer are greatly affected by their thought process and their feelings experienced.

A general consumer behavior model that is appropriate for retailing. Retail consumer behavior is
functionally related to seven components:

 Cultural background

 Individual personality

 Need realization and shopping motivation

 Shopper characteristics

 Purchase behavior

 Store choice, brand choice, and product choice behaviors

 Buyer remorse or cognitive dissonance

CHAPTER 2: RETAIL STRATEGIC PLANNING

Learning Objectives:

• Explain the advantages and disadvantages of strategic planning

• Describe the specific activities and control
• Discuss the stimulus
• Explain the purchase decisions
• Define the category management
• Understand the vendor collaboration

STRATEGIC PLANNING: OVERVIEW

Strategic planning is an organizational management activity that is used so set priorities, focus energy and
resources, strengthen operations, ensure that employees and other stakeholders are working toward common
goals, establish agreement around intended outcomes/results, and assess and adjust the organization's
direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions
and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with
a focus on the future.

ROLE OF STRATEGIC PLANNING IN RETAILING

Retail strategic planning is a detailed process organizations go through in order to have the most successful
operations possible. Steps in this strategic planning process include situational analysis, set objectives, and the
identification of target markets. Once the initial set is complete, a second group of steps includes the use of
specific tactics to meet objectives, controlled processes, and feedback.

A retail strategy is a statement identifying:

• The retailer's target market

• The format the retailer plans to use to satisfy the target market's needs

• The bases upon which the retailer plans to build a sustainable competitive advantage.

• Situational analysis involves a review of the company's mission, opportunities, and threats. These
overarching goals ensure the retail strategic planning process has solid footing for the remaining steps.

• Objectives are the various goals a retail business has set for itself. Monetary goals include sale and profit
levels owners wish to achieve during each year. Retail strategic planning may also include goals on
presenting an image for the store to consumers.

• Target markets represent the demographic groups a company believes will be most apt to purchase its
products. Retail strategic planning may also include information on how to best reach these target
markets, often through the use of marketing and advertising campaigns.

ADVANTAGES OF STRATEGIC PLANNING

• It ensures the company's ability to prevent problems.

• Ensures consistency of strategic decisions with the current and tactical ones and better coordination of
all operational and functional units within the company;

• Contributes to the clarification and understanding of the mission and the purpose of the organization
and, therefore, increases employment of all staff for their achievement and for the company strategy.

• Firms can obtain a competitive advantage by implementing value-creating strategies, not

simultaneously being implemented by any current competitor.

• Sustainable, competitive advantages are advantages that are not easily copied and, thus, can be
maintained over a long period of time.

• Developing a sustainable, advantage requires customer competitive loyalty, a great location, unique
merchandise, proper distribution channels, good vendor relations, a reputation for customer service,
and multiple sources of advantage.

DISADVANTAGES OF STRATEGIC PLANNING

• Venturing into the retail market can involve a wide range of additional expenditures, as well as an
increase in existing expenses.
• When any company changes its business model, a loss of focus within the company can occur. This can
happen with both management and employees, as well as with existing customers.
• In order to compete in the retail marketplace, businesses must expand to reach the widest audience
possible.
• The strategic planning structure of a business may not be practical or functional for a combined retail
model. While the top levels of executive management may apply to both sides, positions involving
operations and administration may require duplication.

SITUATION ANALYSIS
 • Situation analysis is the process of identifying and evaluating all relevant factors connected with a
particular situation. This type of approach may take place as a means of uncovering something that is
not working right within a project or production process, or as a way of projecting the potential
outcome of an action, given the circumstances that prevail at the present time.

• One common application of situation analysis has to do with the marketing process. Here, the emphasis
of the process has to do with looking at core factors that determine the success or failure of a given
marketing campaign.

• One form of situation analysis that is commonly used in many different situations is known as SWOT
analysis. With this model, the goal is to identify and evaluate all strengths, areas of weakness, potential
opportunities, and possible threats associated with a given project or process.
OBJECTIVES OF A SITUATION ANALYSIS
The objectives are described as:

• Define the nature and extent of the problem in the local context;

• Map the perceptions and experiences of key stakeholders in relation to the problem.

• Identify existing strategies and activities which address the problem;

• Identify the actors and organizations that are already active in the area;

• Identify the actors and organizations that could be important partners; and

• Identify gaps in existing strategies and activities.

IDENTIFICATION OF CONSUMERS AND POSITIONING

The objective of positioning is to create in consumers mind’s clear position of a brand, which differentiates it
from its competitors and represents a clear benefit or value to the consumer.

In the first step, the question arises are:

• Who are the consumers of my product?

• What is their problem that my product satisfies?

• Who are the competitors; how to offer the customers a similar product?

• How can my product/brand satisfy the need of the targeted consumers?

A key positioning objective is to develop such a brand perception that will resonate with consumers' expectations
because of compelling value proposition or because of another benefit that differentiates the brand in the
consumers mind compared to the competitors. The core of this objective is the consumer and his or her perception
of a brand.

OVERALL STRATEGY

A strategy must be devised with both variables in mind. The ability of retailers to grasp and predict the effects
of controllable and uncontrollable variables is greatly aided by the use of suitable data. A situational analysis
often is called the foundation of a marketing plan. A situational analysis includes a thorough examination of
internal and external factors affecting a business.
Internal Analysis

The internal analysis is a thorough knowledge and understanding of the strengths and weaknesses within an
organization. These factors are seen in company culture and image, organizational structure, staff, operational
efficiency and capacity, brand awareness, financial resources, etc.
External Analysis
Opportunities and threats are measured as part of an external analysis. Both can occur when things happen in
the external environment that may require a change within the business. These external changes can be
attributed but not limited to market trends, suppliers, partners, customers, competitors, new technology and
economic environment.
SPECIFIC ACTIVITIES AND CONTROL
Specific tactics and controlled processes define how a retail company governs itself. These two steps in the tail
strategic planning process ensure the company is both efficient and effective in what it does.

Here are some tactical moves a retailer may make:

• Store Location: Trading-area analysis gauges the area from which a firm draws its customers. The
level of saturation in a trading area is studied regularly.

• Managing the Business: There is a clear chain of command from managers to workers. An
organization structure is set into place. Personnel are hired, trained, and supervised.

• Merchandise Management and Pricing: The assortments within departments and the space
allotted to each department require constant decision making.

• Communicating with the Customer: The storefront and display windows, store layout, and
merchandise displays need regular attention
NEED FOR STUDYING CONSUMER BEHAVIOR

A key faced by the retailer is creating products and services which would be successful in the market. An
accurate understanding of consumer need helps the retailer create product that is likely to be successful in the
market. Consumer understanding or an understanding of the consumer buying behavior is the starting point
of strategy creation. It is not only important to understand what Consumers know about a product, but also
what they do not know.

The process starts with:

• Understanding how the need for a product / service was determined

• Understanding how information was sought by the customer

• The process of evaluation of various products and stores

• The payment process

• The post purchase behavior

CONSUMER DECISION PROCESS
Consumer decision process is the process in which consumers make decisions before or during the purchasing
process. This does not simply include which products they choose to buy, but also which ones they do not
choose, as well as the different factors that play a role in the purchase. Consumer behavior is complex, and the
purchasing process includes functions before, during, and after a purchase.

The six stages of the consumer decision making process are:

• Stimulus

• Problem Recognition

• Information Search

• Alternative Evaluation

• Purchase Decision
 • Post Purchase Evaluation
STIMULUS

A stimulus is a cue (social, commercial, or noncommercial) or a drive (physical meant to motivate or arouse a
person to act). When one talks with friends, fellow employees, family members, and others, social cues are
received.

• To begin the decision making process, a stimulus must be present. This could be through a marketing
device which alerts the consumer to the possibilities, through specific circumstances which prompt the
buyer, or through any other stimulus which plants a seed of an idea into the consumer.

• A second type of stimulus is a commercial cue, which is a message sponsored by a manufacturer,

wholesaler, retailer, or other seller. The objective is to interest consumer in a particular product or store.

• A third type of stimulus is a noncommercial cue, which is a message received from an impartial source
such as Consumer Reports or the government. This cue has higher credibility because it is not affiliated
with the seller.

• A fourth type of stimulus is a physical drive. This occurs when a person's physical senses are affected.
Thirst, cold heat, pain, hunger, and fear cause physical drives.
PROBLEM RECOGNITION
The need recognition is the first and most important step in the buying process. If there is no need, there is no
purchase. This recognition happens when there is a lag between the consumer's actual situation and the ideal
and desired one. However, not all the needs end up as a buying behavior. It requires that the lag between the
two situations is quite important. But the "way" to obtain this ideal situation has to be perceived as “acceptable"
by the consumer based on the level of importance he attributes to the need. The consumers recognize a
problem as a need or want. The recognition of a need by a consumer can be caused in different ways.

Different classifications are used:

• Internal stimuli (physiological need felt by the individual as hunger or thirst) which opposes the external
stimuli such as exposure to an advertisement.

• Classification by type of needs

• The Maslow's hierarchy of needs

INFORMATION RESEARCH

It is time for the consumer to seek information about possible solutions to the problem. He/she will search
more or less information depending on the complexity of the choices to be made but also his level of
involvement.

Consumer information sources typically fall into four groups:

• Personal sources

• Commercial sources

• Public sources

• Experience sources.
INFORMATION EVALUATION

The consumer will be able to evaluate the different alternatives that offer to him, evaluate the most suitable to
his needs and choose the one he think it is best for them. It follows the information search. During this stage
consumers usually compare products with respect to their various features and benefits. They may compare
product brands, styles, sizes, colors, prices, and related services. They may also compare products at various
stores.
PURCHASE DECISIONS

At this stage in the decision making process, consumers have recognized a need, done some research on the
product and evaluated available alternatives. They are now ready to make a purchase decision, the actual
buying of a specified product. Many factors influence the purchase decision. These include the cost of the
product compared to how much money the consumer can afford to spend, the opinions of family or friends,
and the sales and services policies of the marketer. Some customers may wish to try a product before making
major purchase.
POST – PURCHASE EVALUATION

• The final step in the decision making model includes a post purchase evaluation. This stage is
important, as it effects the customer's future purchase behavior as well as word-of-mouth. An important
consideration is post-purchase dissonance, or more commonly known as buyer's remorse. The
alternative would be customer satisfaction and post-purchase rationalization.

• After customers make buying decisions, they often continue to evaluate them. Post-purchase evaluation
occurs when a customer seeks reasons to support a purchase decision. Retailers use the term buyer's
remorse to describe a customer's second thoughts after a purchase. Marketers use the term cognitive
dissonance to refer to post-decision doubt that a customer has about an original purchase.
RETAILERS ACTION

• Retailers are part of an integrated system called the supply chain. 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. In the majority of retail situations, the organization from which &
consumer makes purchases is a reseller of products obtained from others and not the product
manufacturer.

• People like to go to places that are interesting, lively, clean, safe and attractive, while every shop may
not provide customers with a lasting emotions experience, the overall area should have a defined
character that is physical! Appealing and encourages visitation through its mix of uses.

To improve their image towards the customers, retailers should take some actions such as:

• Focus on consumer concerns

• Empower frontline employees

• Show that one are listening

• Express sincere action

• Apologize and rectify the situation

PROCESS OF WRITE A RETAIL ACTION PLAN

MARKET RESEARCH
Start by identifying the core focus of the business and the products the retailer sell. Discuss the potential
market, company's current market share and how one expects to improve it in the future. Analyze the
competitors and identify potential threats to their market share.
LOCATION
List the possible locations for the retail store if it has not already been determined. Compare demographics,
rent and neighboring tenants when deciding when location will be best for the company. Include costs for
building permits, engineers, architects and construction.
HIRING
Analyze the pool of available workers in the area where the retailer plan to operate retail stores. Make sure the
population can support the staffing needs, Estimate the labor costs, including payroll taxes, insurance and other
employee benefits.
FUNDING

Spend part of the action plan discussing the planned method of funding the business, such as selling stock to
investors, applying for small-business loans or using their own personal credit line.
SOURCING AND DISTRIBUTION
Inventory and shipping costs can make or break a retail business. List everything that will need to purchase,
including store equipment, fixtures, and supplies. Estimate the expected production and the amount of raw
materials that will be required.
MERCHANDISING IN RETAILING
• Merchandising is an activity of promoting the sale of goods at retail. Merchandising activities may
include display techniques, free samples, on-the-spot demonstration, pricing, shelf talkers, special
offers, and other point of Sale methods.
• Merchandising in retailing is the process used in order to conduct retail sales. As part of the process,
the merchandiser pays close attention to the types of products offered for sale, how to best present
those products to consumers, and determining what a reasonable retail price is for each unit sold.
• Marketing is an important aspect of any merchandising in retailing strategy. Engaging in a publicity
campaign to reach prospective customers may involve something as simple as advertising in local
publications as well as electronic advertising on local radio and television stations.

CATEGORY MANAGEMENT
• Category management is a collaborative continuous process between manufacturers and retailers to
manage a shopper need state which refer to as a 'category’. The purpose of this process is to optimize
shopper satisfaction, and fulfill the role chosen by the retailer for that category within the overall
portfolio of categories in the retail format.
• Category management is data intensive and analytical in character. Category management is about
understanding data. By contrast, shopper marketing is more about understanding emotions or
motivations.
ASSORTMENT PLANNING
Assortment planning breaks the merchandise plan down into the components that enable the planner to
address customer preference and need. These components are product attributes, styles, colors, and SKUs. By
addressing these components, the assortment plan becomes the transition to the customer by way of the store.
In developing a good assortment plan, the retailer hopes to:
• Manage inventory while addressing customer need and demand
• Develop a complete range of merchandise for presentation
• Enhance and maintain the company philosophy and image
• Support and execute the overall merchandising strategy
• Integrate with other planning processes, such as merchandise allocation.
The assortment plan, then, provides the most effective way to balance the presentation of merchandise to the
customer. The properly assorted presentation en