Professional Documents
Culture Documents
retail
retail
retail
g) What is POS ?
i) What is GMROI ?
a) Retail Management involves the process of overseeing the operations and functions of a
retail business to maximize its efficiency and profitability.
b) Hedonic benefits refer to the emotional or psychological rewards that consumers derive
from purchasing and using a product or service, beyond its functional utility.
c) The Butt-Brush Effect is a phenomenon in retail where customers avoid narrow aisles or
crowded spaces to prevent accidental contact with others, particularly from behind.
e) Two advantages of Power Walls are increased visibility for products and the ability to
showcase featured or promotional items effectively.
f) A Speed Bump is a technique used in retail to slow down shoppers' progress through a
store, often achieved by strategically placing displays or fixtures in their path.
g) POS stands for Point of Sale, which refers to the location where a transaction is
completed, typically involving the exchange of goods or services for payment.
i) GMROI stands for Gross Margin Return on Investment, which is a metric used in retail to
evaluate the profitability of inventory investments by measuring the relationship between
gross margin and the average inventory investment.
k) Retail Pricing involves determining the selling price of products or services in a retail
environment, considering factors such as costs, competition, and consumer demand.
l) Store Layout is the arrangement of aisles, shelves, displays, and other elements within a
retail store to optimize traffic flow and enhance the shopping experience for customers.
5 marks
2. What are the different pricing strategies that retailers adopt to meet their financial objectives ?
4. What are the recentrends in life style in retailing shopping behavior of customers in India ?
Retailers employ various pricing strategies to meet their financial objectives. Some common ones
include:
- **Penetration Pricing:** This involves setting a relatively low initial price to penetrate the market
quickly and attract customers. The goal is to gain market share and then increase prices over time.
- **Skimming Pricing:** Skimming involves setting a high price initially to maximize profits from the
most eager customers and then gradually lowering the price to attract more price-sensitive
segments.
- **Competitive Pricing:** This strategy involves setting prices based on competitor prices. Retailers
monitor competitors' pricing closely and adjust their own prices to remain competitive.
- **Dynamic Pricing:** With the help of algorithms and real-time data analysis, retailers can adjust
prices based on factors such as demand, time of day, or even individual customer behavior. This
allows for maximizing profits in different situations.
- **Value-Based Pricing:** Here, prices are set based on the perceived value of the product or
service to the customer. This strategy focuses on what customers are willing to pay rather than
production costs.
Visual merchandising is crucial for creating an appealing in-store experience and driving sales. Its
components include:
- **Window Displays:** These are the first point of contact with customers and should be eye-
catching, thematic, and reflective of the store's brand and products.
- **In-Store Displays:** These include product displays, end caps, and promotional setups
strategically placed throughout the store to highlight specific products or promotions.
- **Store Layout:** The layout should be intuitive, guiding customers through the store in a logical
flow while maximizing exposure to products.
- **Signage:** Clear and visually appealing signage helps customers navigate the store and learn
about promotions or product features.
- **Lighting:** Proper lighting highlights products and sets the mood of the store, influencing
customers' perception and behavior.
- **Visual Merchandising Props:** These include mannequins, props, and decorations used to create
visual interest and showcase products in a lifestyle context.
In recent years, several trends have shaped lifestyle and shopping behavior in India:
- **E-commerce Boom:** The rise of e-commerce platforms has transformed the way Indians shop,
offering convenience, a wide product selection, and competitive pricing.
- **Omni-channel Retailing:** Retailers are integrating online and offline channels to provide a
seamless shopping experience, allowing customers to browse and purchase through multiple
channels.
- **Preference for Experiences:** Millennial and Gen Z consumers are prioritizing experiences over
material possessions, leading to increased spending on travel, dining out, and entertainment.
- **Health and Wellness:** There's a growing awareness of health and wellness, leading to increased
demand for organic, natural, and sustainable products across categories.
- **Rise of Influencer Marketing:** Influencers on social media platforms wield significant influence
over consumer purchasing decisions, leading brands to invest more in influencer marketing
campaigns.
A Stores Manager is responsible for overseeing the operations of a retail store, including:
- **Inventory Management:** Ensuring adequate stock levels, managing stock rotation, and
minimizing stock shrinkage through effective inventory control.
- **Staff Management:** Hiring, training, and managing store staff, including scheduling shifts and
conducting performance evaluations.
- **Customer Service:** Ensuring high standards of customer service, resolving customer
complaints, and fostering a positive shopping experience.
- **Sales Target Achievement:** Setting sales targets, monitoring performance, and implementing
strategies to achieve sales goals.
- **Store Maintenance:** Overseeing the cleanliness, maintenance, and security of the store
premises.
- **Budgeting and Reporting:** Managing store expenses within budget constraints and preparing
regular reports on sales, inventory, and other key performance indicators.
Department stores are large retail establishments offering a wide range of products across multiple
categories under one roof.
**Merits:**
- **Convenience:** Customers can find a diverse range of products in one location, saving time and
effort.
- **Variety:** Department stores offer a wide selection of brands and products, catering to diverse
customer preferences.
- **One-stop Shopping:** Customers can fulfill multiple shopping needs in a single visit, enhancing
convenience and efficiency.
- **Services:** Many department stores offer additional services such as personal shopping
assistance, alterations, and gift wrapping, enhancing the shopping experience.
- **Economies of Scale:** Department stores can often negotiate better prices from suppliers due to
their large purchasing volumes, allowing for competitive pricing.
**Drawbacks:**
- **Impersonal Experience:** With their large size and vast product offerings, department stores
may feel impersonal compared to smaller specialty stores.
- **Competition from E-commerce:** Department stores face stiff competition from online retailers,
who offer convenience, competitive pricing, and a wider selection of products.
- **High Overhead Costs:** Maintaining large retail spaces and managing extensive inventories can
lead to high overhead costs, impacting profitability.
- **Difficulty in Navigating:** The sheer size of department stores can be overwhelming for
customers, making navigation challenging and potentially leading to frustration.
- **Lack of Specialization:** While department stores offer a wide range of products, they may lack
the depth of selection and expertise found in specialty stores focused on specific product categories.
10 marks
7, Explain the stages in buying decision process and its implication on retailing.
8. Discuss the types of retail formats that exist in the following product categories: i) Garments ii)
Grocery iii) Durable-White Goods
The buying decision process typically consists of several stages, each of which has
implications for retailers:
4. **Purchase Decision:** This is when the consumer decides which product or service to
buy. Retailers need to ensure that their products are readily available, and the purchasing
process is convenient. Factors like ease of payment, shipping options, and return policies can
impact the purchase decision.
5. **Post-Purchase Evaluation:** After making a purchase, consumers assess whether their
expectations were met. Positive experiences can lead to repeat purchases and brand loyalty.
Retailers can encourage positive evaluations by providing excellent customer service,
addressing any issues promptly, and maintaining product quality.
#### i) Garments:
1. **Department Stores:** These retail formats offer a wide range of clothing brands and
styles under one roof. They typically cater to various demographics and price points.
2. **Specialty Stores:** These stores focus on a specific type of clothing, such as sportswear,
formal wear, or children's clothing. They provide a more specialized shopping experience
and often have knowledgeable staff.
3. **Fast Fashion Retailers:** Fast fashion brands produce trendy clothing quickly and at
affordable prices. They frequently update their collections to stay in line with the latest
fashion trends.
4. **Online Retailers:** E-commerce platforms and online clothing stores have gained
popularity due to their convenience and vast product selection. They offer a wide range of
clothing options and cater to diverse customer preferences.
1. **Supermarkets:** These are large self-service stores that offer a wide variety of food and
household products. They focus on providing convenience and value to customers through
competitive pricing and a broad product assortment.
2. **Convenience Stores:** Convenience stores are smaller retail outlets that primarily sell
convenience items such as snacks, beverages, and ready-to-eat meals. They target
customers looking for quick and easy shopping solutions.
3. **Hypermarkets:** Hypermarkets combine the features of supermarkets and department
stores, offering a vast selection of groceries along with non-food items like clothing,
electronics, and household goods. They provide a one-stop shopping experience for
customers.
4. **Online Grocery Retailers:** With the rise of e-commerce, online grocery retailers have
become increasingly popular. They offer the convenience of shopping from home and
provide delivery services, making grocery shopping more convenient for busy consumers.
1. **Specialty Electronics Stores:** These stores specialize in selling durable white goods
such as refrigerators, washing machines, and televisions. They often have knowledgeable
staff and provide assistance with product selection and technical support.
2. **Appliance Retailers:** Appliance retailers offer a wide range of durable white goods
from various brands. They focus on providing competitive pricing and excellent customer
service to attract and retain customers.
3. **Home Improvement Stores:** Some home improvement stores also sell durable white
goods like kitchen appliances and HVAC systems. They cater to homeowners looking to
renovate or upgrade their homes and offer installation services.
4. **Online Appliance Retailers:** E-commerce platforms and online appliance stores have
gained popularity for their convenience and wide product selection. Customers can compare
prices and features easily and have appliances delivered to their doorstep.
These retail formats cater to different consumer preferences and shopping behaviors within
each product category, offering a variety of choices for consumers and opportunities for
retailers to differentiate themselves and capture market share.
9. Read the following case and answer the questions given at the end
SLR is one of the retail outlet in India. lt has an outlet of around 5000sq.feet, providing wide varieties
of products right from accessories, furniture, books, cosmetics, garments, groceries, over a period of
time it was observed that their sales started falling down into 80:20 pattern with loyalty card
customers despite being only 15% of the base contribution over70/. of the revenue of SLR. lt was
struggling to fifth competition and demographic changes. There was increased competition from
discounters supermarkets. The company had the data of loyalty card holders. lt decided that if they
could understand the individuals time of purchasing, what they purchase, why are they purchasing
them, they could figure out the needs, expectations of customers and be in a better position to
provide better quality, experiences and services to their customers, which would in turn help in
increasing their market sha re. Questions : a) What type of store layout pattern has to be adopted by
SLR and why ? b) What elements do you suggest in store designing ? c) How can you attracthe
customers to shop in retail outlets ? d) What are the competitive strategies that could be adopted by
SLR
a) SLR should adopt a grid store layout pattern. Grid layout patterns are known for their
straightforward and efficient design, with parallel aisles and perpendicular product displays. This
layout allows for easy navigation and visibility of products, which can help improve the shopping
experience for customers. Given SLR's diverse range of products, a grid layout will ensure that each
product category is easily identifiable and accessible, catering to the varied needs of their customer
base.
b) In store designing, several elements can be incorporated to enhance the shopping experience and
attract customers:
- Clear signage: Ensure that signage is prominent and easily readable, guiding customers to
different sections of the store.
- Visual merchandising: Use attractive displays and product placements to highlight featured items
and encourage impulse purchases.
- Comfortable seating areas: Provide seating areas where customers can rest and relax, especially in
sections like furniture or books, encouraging them to spend more time in the store.
- Adequate lighting: Ensure that the store is well-lit to create a welcoming atmosphere and
showcase products effectively.
- Interactive elements: Introduce interactive displays or kiosks where customers can learn more
about products or engage with promotions.
- Convenience amenities: Offer amenities such as restrooms, fitting rooms, and shopping carts to
enhance convenience for customers.
c) To attract customers to shop in retail outlets, SLR can employ various strategies:
- Promotional activities: Offer discounts, promotions, and special offers to incentivize customers to
visit the store.
- Loyalty programs: Implement a robust loyalty program to reward repeat customers and encourage
brand loyalty.
- Personalized marketing: Utilize customer data to personalize marketing efforts, such as targeted
email campaigns or personalized offers based on past purchases.
- Community engagement: Host events or workshops within the store to engage with the local
community and create a sense of belonging.
- Exceptional customer service: Train staff to provide excellent customer service, creating a positive
shopping experience that encourages repeat visits.
- Online integration: Offer online ordering with in-store pickup options or provide exclusive online
promotions to drive traffic to the physical store.
- Differentiation: Focus on offering unique products, services, or experiences that set SLR apart
from competitors, attracting customers who value these differences.
- Cost leadership: Implement cost-saving measures to offer competitive pricing, appealing to price-
sensitive customers and competing effectively with discounters and supermarkets.
- Product diversification: Expand product offerings to cater to a broader customer base and capture
market share in new product categories.
- Market segmentation: Identify and target specific customer segments with tailored marketing
messages and product assortments to meet their unique needs and preferences.
2015
a) What are the types of retailers?
a) The types of retailers include department stores, specialty stores, convenience stores,
supermarkets, discount stores, and online retailers.
d) Retail space refers to the physical area within a store where products are displayed and
sold to customers.
e) Category specialists are retailers that focus on a specific product category, offering a wide
selection and deep assortment within that category, such as electronics or sporting goods.
f) Trade area refers to the geographic region from which a retailer draws its customers and
where its marketing efforts are targeted.
10 marks
2. Which factors do retailers consider when evaluating an area of the country to locate stores?
4. Does the customer buying process entl when a customer buys some merchandise? Explain your
answer.
2. Retailers evaluate various factors when deciding where to locate stores, as the location
significantly impacts their sales and profitability. Some key factors include:
c. Accessibility: The accessibility of the location is vital for attracting customers. Factors like
proximity to highways, public transportation, parking availability, and foot traffic contribute
to a location's attractiveness.
d. Economic indicators: Economic factors such as employment rates, household income, and
economic growth projections provide insights into the area's purchasing power and
potential for retail sales.
e. Regulatory environment: Retailers need to consider zoning laws, permits, taxes, and other
regulatory factors that may affect their operations and costs in a particular area.
f. Real estate costs: The cost of leasing or purchasing retail space significantly impacts the
overall profitability of a store. Retailers evaluate rental rates, property taxes, and other real
estate-related expenses when selecting a location.
g. Market potential: Analyzing market trends, consumer behavior, and demand for specific
products or services helps retailers identify areas with high growth potential and
opportunities for expansion.
3. **Example: Walmart**
a. Economies of scale: Walmart leverages its vast size and scale to negotiate lower prices
from suppliers, allowing it to offer competitive pricing to customers. This cost leadership
strategy enables Walmart to attract price-conscious consumers and maintain its position as a
low-cost retailer.
b. Supply chain efficiency: Walmart has invested heavily in building a highly efficient supply
chain network. Through advanced logistics and inventory management systems, Walmart
minimizes stockouts, reduces transportation costs, and optimizes inventory turnover,
ensuring that products are readily available to customers while keeping costs low.
e. Strong brand and customer loyalty: Walmart has built a strong brand reputation over the
years, known for its wide selection, everyday low prices, and convenient shopping
experience. By consistently delivering value to customers, Walmart has fostered customer
loyalty and maintained a significant market share in the retail industry.
4. The customer buying process doesn't necessarily end when a customer buys merchandise.
While the transactional aspect of the purchase is complete, the customer journey often
extends beyond the point of sale. Several reasons contribute to this:
a. Post-purchase evaluation: After making a purchase, customers may assess their buying
decision based on factors like product performance, quality, and overall satisfaction. Positive
experiences may reinforce brand loyalty, while negative experiences could lead to
dissatisfaction or even returns.
b. Word-of-mouth and referrals: Satisfied customers may share their experiences with
friends, family, or online communities, influencing others' purchase decisions. Conversely,
dissatisfied customers may voice their grievances, potentially damaging the retailer's
reputation and future sales.
d. Cross-selling and upselling: Retailers may continue to engage customers after a purchase
by recommending complementary products or upgrades. By understanding customers'
preferences and purchase history, retailers can personalize recommendations and increase
the lifetime value of each customer.
e. Returns and exchanges: In cases where customers are dissatisfied with their purchase or
encounter issues with the product, they may seek returns, exchanges, or refunds. Handling
these post-purchase transactions efficiently and courteously is crucial for maintaining
customer satisfaction and loyalty.
In summary, the customer buying process extends beyond the point of purchase,
encompassing post-purchase evaluation, word-of-mouth influence, follow-up
communication, cross-selling opportunities, and handling returns and exchanges. Effective
management of these post-purchase interactions is essential for fostering customer
satisfaction, loyalty, and repeat business.
2016
a) How is Assortrnent different frorn Variety?
c) As per 20LG global retail development index, what is the position of India?
d) What is RFID?
e) What is a planogram?
a) Assortment refers to the range of products within a category, while variety refers to the
different categories of products available.
b) A speciality store is a retail store that focuses on a specific product category or niche
market.
c) According to the 20LG global retail development index, the position of India varies
depending on the year and the specific factors considered in the index.
d) RFID stands for Radio Frequency Identification, a technology that uses electromagnetic
fields to automatically identify and track tags attached to objects.
e) A planogram is a visual representation or diagram that illustrates how and where specific
retail products should be placed on shelves or displays to maximize sales and visual appeal.
f) Mystery shoppers are individuals hired by companies to anonymously evaluate the quality
of service, products, or the overall customer experience in a retail store.
5 marks
2. What are the major classifications of retail ownership? Give suitable examples.
3. What do you mean by building brands through retailers? Justifu your answer with relevant
examples.
Retail ownership can be classified into various categories based on ownership structure.
Here are the major classifications:
Building brands through retailers involves leveraging retail channels to enhance brand
visibility, equity, and customer loyalty. This strategy allows brands to reach a wider audience
and capitalize on the existing customer base of retailers. Here's how it works:
a. **Brand Presence:** By partnering with retailers, brands can ensure their products are
available where consumers shop, increasing brand exposure and accessibility. For example,
Apple strategically places its products in authorized retailers such as Best Buy and the Apple
Store, expanding its reach beyond its own retail outlets.
b. **Brand Experience:** Retailers provide opportunities for brands to create immersive
brand experiences through store displays, promotions, and customer interactions. For
instance, cosmetic brands like Sephora offer in-store makeup tutorials and product
demonstrations, enhancing the brand experience and building customer loyalty.
c. **Brand Recognition:** Collaborating with retailers can reinforce brand recognition and
credibility. When reputable retailers carry a brand's products, it signals quality and
trustworthiness to consumers. For example, luxury fashion brands like Gucci and Louis
Vuitton are sold in upscale department stores like Harrods and Saks Fifth Avenue, enhancing
their prestige and desirability.
Retailers employ various pricing strategies to maximize sales, profitability, and competitive
advantage. Here are some common pricing strategies:
a. **Everyday Low Pricing (EDLP):** Retailers offer consistently low prices on products
without the need for frequent promotions or discounts. Walmart is a prominent example of
a retailer that adopts EDLP to attract price-conscious shoppers.
b. **High-Low Pricing:** Retailers alternate between offering high prices and deep
discounts or promotions to create a perception of value and urgency. This strategy
encourages impulse purchases and drives traffic during sales events. Examples include
department stores like Macy's and electronics retailers like Best Buy.
c. **Premium Pricing:** Retailers set higher prices to position products as luxury or high-
end offerings, appealing to affluent consumers who are willing to pay for quality, exclusivity,
or prestige. Luxury brands like Rolex and Chanel employ premium pricing to maintain brand
cachet and aspirational appeal.
d. **Price Skimming:** Retailers initially set high prices for new or innovative products and
gradually lower them over time as market demand stabilizes. This strategy maximizes early
adopter sales and captures surplus consumer surplus. Tech companies like Apple often use
price skimming for new iPhone releases.
e. **Penetration Pricing:** Retailers set low initial prices to penetrate or gain market share
quickly. This strategy is commonly used in competitive markets to attract price-sensitive
consumers and discourage rivals from entering the market. Examples include budget airlines
like Ryanair and discount retailers like Aldi.
These strategies illustrate the diverse approaches retailers employ to price their products
effectively and achieve their business objectives.
2017
(a) Assortment merchandise
(b) A convenience store is a small retail outlet typically open for extended hours, offering a
limited selection of everyday items for immediate consumption or use.
(c) Loss leader strategy involves selling a product at a loss to attract customers with the aim
of generating profit through additional sales of complementary products.
(d) Multi-channel retailing refers to the practice of selling products through multiple
distribution channels, such as physical stores, online platforms, and mobile applications, to
reach a wider audience.
(e) Private retail brands are products developed and sold exclusively by a specific retailer
under its own brand name, providing unique offerings compared to national brands.
(f) Visual merchandising involves the use of creative displays, signage, and layout techniques
in retail environments to enhance the aesthetic appeal and effectively showcase products to
customers.
5 marks
2. Explain the factors that contribntc to the success of a retail outlet location.
4. Describe ancl e-r'aluate the mercheu-rdising management philosophy of your favorite restaurant.
- Visibility and Accessibility: A prime location with high foot traffic and easy accessibility by
car or public transportation is crucial for a retail outlet's success.
- Demographics: Understanding the demographics of the area, such as income levels, age
groups, and lifestyle preferences, helps in tailoring products and services to meet the needs
of the target market.
- Parking Facilities: Sufficient parking space, preferably free or affordable, can significantly
enhance the convenience of shopping at a retail outlet.
- Economic Factors: Economic stability, growth prospects, and consumer spending patterns
in the area influence the potential profitability of a retail outlet.
- Regulatory Considerations: Compliance with zoning laws, building codes, and other
regulations is essential to avoid legal issues that could disrupt business operations.
- Advertising: Utilizing various media channels, such as television, radio, print, online
platforms, and outdoor signage, to promote products, services, and special offers.
- Public Relations: Managing the public image and reputation of the retail brand through
activities like press releases, events, sponsorships, and community involvement.
- **Seasonal and Local Emphasis**: Embracing seasonal ingredients and supporting local
producers aligns with the restaurant's commitment to freshness, sustainability, and
community engagement.
- **Marketing and Promotion**: The restaurant utilizes a mix of traditional and digital
marketing channels to reach and engage with its target audience, promoting its unique
offerings and special events.
These elements work together to shape the overall merchandising management philosophy
of the restaurant, ensuring its success in attracting and retaining customers.
2018
a) What is meant by Retail mix?
b) What is franchising?
F) What is Planograms?
a) Retail mix refers to the combination of elements such as product assortment, pricing,
promotion, place (location), presentation, and personnel within a retail environment to
meet the needs and preferences of customers.
b) Franchising is a business strategy where a franchisor grants a franchisee the right to use
its brand name, business model, and processes in exchange for ongoing fees and royalties.
c) Category specialists are retailers that focus on a specific product category, offering a wide
assortment and deep expertise within that category.
d) Power centers are large shopping centers or retail complexes that are anchored by several
big-box retailers and attract high levels of customer traffic.
e) Leader pricing is a pricing strategy where a retailer sets prices for certain products at a
level lower than competitors to attract customers and encourage purchases.
f) Planograms are visual merchandising tools used by retailers to plan and optimize the
placement of products on shelves or displays to maximize sales and enhance the shopping
experience.
5 marks
2.how do retailers create value for consumers?
3.What are the different types of non store retail channels a retailer can use? Give suitable examples.
4. Giving suitable examples, explain why does a retailer like Raymond want to run relationship
marketing programme
- **Customer Service:** Providing excellent customer service enhances the overall shopping
experience, fostering loyalty and satisfaction among consumers.
- **Quality:** Retailers ensure the quality of products they sell, reassuring consumers about
the reliability and performance of their purchases.
- **Price:** Through competitive pricing strategies, retailers aim to offer value for money,
attracting price-conscious consumers.
- **Brand Image:** Retailers build strong brand images through marketing efforts,
endorsements, and consistent delivery of quality products and services, which can influence
consumers' perceptions and preferences.
Overall, retailers create value for consumers by meeting their needs, providing convenience,
offering quality products and services, and enhancing the overall shopping experience.
### 3. What are the different types of non-store retail channels a retailer can use? Give
suitable examples.
Non-store retail channels refer to methods of selling products and services that do not
require a physical storefront. Some common types include:
These non-store retail channels offer convenience, accessibility, and flexibility to consumers,
allowing them to shop anytime, anywhere, using their preferred devices or methods.
### 4. Giving suitable examples, explain why does a retailer like Raymond want to run a
relationship marketing programme?
Raymond, a renowned clothing retailer, would benefit from running a relationship marketing
program for several reasons:
2019
a) Brand factory retail chain belongs to which organisation?
e) List down five retail stores i:r India, which can be called as speciality stores.
c) Key strategic decision areas for a firm include marketing, finance, operations, human
resources, and technology.
d) Category killers are large retail stores or chains that specialize in a specific product
category and dominate that category in terms of assortment, price, and service.
e) Specialty stores in India include Fabindia, Croma, Nature's Basket, Kalyan Jewellers, and
Decathlon.
f) Examples of corporate retail chains are Walmart, Target, Tesco, and Carrefour.
i) A merchandise kiosk is a small retail unit or stand located within a larger retail space or in
public areas like malls, airports, or train stations, used for selling merchandise.
j) Visual merchandising refers to the practice of designing and arranging the presentation of
products in a retail environment to attract customers and maximize sales.
5 marks
2. What is retailing? What are the activities they take up to create value for consumers?
4. Giving suitable examples, explain the classification of retail stores on the basis of ownership.
6. What are the different pricing strategies that retailers adopt to meet their financial objectives?
### 2. What is retailing? What are the activities they take up to create value for consumers?
Retailing refers to the process of selling goods or services directly to consumers for their
personal use. It's the final step in the distribution of products, where businesses interact
directly with the end-users.
**b. Assortment Planning:** Offering a diverse assortment of products within a store allows
consumers to choose from different options and find what best suits their preferences and
needs. Retailers often conduct market research to understand consumer preferences and
adjust their product assortment accordingly.
**c. Pricing Strategies:** Retailers employ pricing strategies such as discounts, promotions,
and pricing tiers to attract customers and drive sales. Effective pricing strategies can enhance
value perception among consumers.
**d. Customer Service:** Providing excellent customer service is crucial for retailers to build
and maintain relationships with consumers. This includes knowledgeable staff, efficient
checkout processes, hassle-free returns, and personalized assistance.
**e. Convenience:** Retailers strive to make the shopping experience convenient for
consumers by offering various services such as online shopping, home delivery, click-and-
collect options, and extended operating hours.
**f. Marketing and Promotion:** Retailers utilize marketing and promotional activities to
communicate with consumers and persuade them to make purchases. This includes
advertising, in-store promotions, social media engagement, and loyalty programs.
**g. Store Atmosphere:** Creating an inviting and engaging store environment through
factors like layout, decor, lighting, and music can enhance the overall shopping experience
and influence consumer behavior.
**a. Product:** This refers to the merchandise or services offered by the retailer. For a
clothing retailer, the product component includes various types of apparel such as shirts,
pants, dresses, and accessories like shoes and handbags.
**b. Price:** Pricing strategies play a crucial role in attracting customers and driving sales.
The clothing retailer may offer a range of price points to cater to different segments of the
market, including budget-friendly options and premium designer labels.
**c. Place:** Place refers to the location where the retailer sells its products or services. In
the case of our clothing retailer, this could include physical brick-and-mortar stores located
in shopping malls or high-traffic areas, as well as an online store accessible through the
retailer's website or mobile app.
**d. Promotion:** Promotional activities are used to communicate with customers and
stimulate demand for products or services. The clothing retailer may utilize various
promotional tactics such as advertising in fashion magazines, running social media
campaigns, offering discounts and sales events, and partnering with fashion influencers or
celebrities.
**e. Presentation:** The presentation of products and the overall store environment can
significantly impact the shopping experience. The clothing retailer may focus on creating
visually appealing displays, organizing merchandise by category or style, providing ample
fitting rooms for customers to try on clothes, and ensuring a clean and well-maintained store
environment.
### 4. Giving suitable examples, explain the classification of retail stores on the basis of
ownership.
**b. Chain Retailers:** Chain retailers operate multiple stores under the same brand name
and management structure. They often have standardized store formats, product
assortments, and marketing strategies across all locations. Examples include Walmart,
Target, Starbucks, and McDonald's.
**c. Franchise Retailers:** Franchise retailers operate under a licensing agreement with a
larger parent company, known as the franchisor. The franchisor provides the franchisee with
the rights to use its brand name, business model, and support services in exchange for a fee
or royalty. Examples include Subway, Dunkin', and UPS Store.
**d. Cooperative Retailers:** Cooperative retailers are owned and operated by a group of
independent retailers who come together to form a cooperative organization. They pool
their resources to achieve economies of scale in purchasing, marketing, and other business
operations. Examples include ACE Hardware and Associated Food Stores.
**a. Accessibility:** A well-chosen location ensures that the store is easily accessible to the
target market, increasing the likelihood of attracting customers. Accessibility includes factors
such as proximity to transportation hubs, parking availability, and ease of navigation.
**b. Visibility:** A prime location with high visibility increases the store's exposure to
passing traffic and potential customers. Being located in a busy shopping district or near
other complementary businesses can attract foot traffic and enhance brand awareness.
**c. Target Market Reach:** The location should be strategically chosen to reach the
retailer's target market. For example, a high-end boutique may thrive in an affluent
neighborhood, while a discount retailer may perform better in a more economically diverse
area.
**d. Competition:** Analyzing the location relative to competitors is crucial for retail
success. Being located too close to direct competitors can lead to cannibalization of sales,
while being too far away may result in missed opportunities.
**e. Costs:** The cost of real estate varies depending on location, with prime locations
typically commanding higher rents or property prices. Balancing the benefits of a prime
location with the associated costs is essential for retailers to maintain profitability.
### 6. What are the different pricing strategies that retailers adopt to meet their financial
objectives?
**a. Everyday Low Pricing (EDLP):** This strategy involves offering consistently low prices on
products without the need for frequent sales or discounts. Retailers like Walmart and Aldi
are known for their EDLP approach, which attracts price-conscious customers and promotes
loyalty.
**b. High-Low Pricing:** With this strategy, retailers alternate between high prices and
promotional discounts or sales events. Customers are enticed by the perceived value of
discounts during sale periods, while regular prices generate higher margins for the retailer.
Department stores and fashion retailers often use this approach.
**c. Price Skimming:** This strategy involves initially setting high prices for new or
innovative products and gradually lowering them as competition increases or demand
stabilizes. Technology companies often use price skimming to capitalize on early adopters'
willingness to pay premium prices for the latest gadgets.
**d. Penetration Pricing:** Penetration pricing involves setting low initial prices to penetrate
the market quickly and gain market share. This strategy is commonly used when entering
new markets or launching new products to attract price-sensitive customers and build brand
recognition.
**f. Value-Based Pricing:** This strategy involves pricing products based on the perceived
value to the customer rather than solely on production
10 marks
- **Product Selection and Procurement:** I am responsible for selecting the right mix of
products to offer in our store, considering factors such as customer preferences, trends, and
seasonality. This involves analyzing sales data, monitoring market trends, and working
closely with suppliers to ensure we have the best products available for our customers.
- **Pricing and Promotions:** Setting prices and running promotions are key strategies to
drive sales and maximize profitability. I analyze pricing trends, competitive pricing strategies,
and customer behavior to determine the most effective pricing and promotional strategies
for our products.
- **Visual Merchandising:** How products are presented in the store can significantly
impact sales. I work closely with the visual merchandising team to create visually appealing
displays that highlight products, promote sales, and enhance the overall shopping
experience for customers.
- **Sales Analysis and Reporting:** I regularly analyze sales data to identify trends,
understand customer preferences, and evaluate the performance of different product
categories. This information helps inform future merchandising decisions and strategies to
improve sales and profitability.
- **Customer Feedback and Satisfaction:** I pay close attention to customer feedback and
satisfaction to understand their needs and preferences better. This information helps guide
product selection, pricing decisions, and overall merchandising strategies to better serve our
customers and enhance their shopping experience.
8. The impact of online stores like Amazon and Flipkart on brick and mortar stores,
particularly during events like the Great Indian Festival and Big Billion Day, is significant and
multifaceted.
- **Increased Competition:** These online events create intense competition for brick and
mortar stores by offering attractive deals, discounts, and promotions that may lure
customers away from physical stores.
- **Shift in Consumer Behavior:** Consumers increasingly turn to online platforms during
these events to take advantage of the convenience of shopping from home and the
perceived better deals offered by online retailers.
- **Pressure on Brick and Mortar Stores:** Brick and mortar stores face pressure to match
the discounts and promotions offered by online retailers during these events, impacting
their profitability and margins.
- **Impact on Foot Traffic:** During online sales events, brick and mortar stores may
experience a decrease in foot traffic as customers opt to shop online instead of visiting
physical stores.
- **Adaptation and Innovation:** To compete effectively, brick and mortar stores must
innovate and adapt their strategies, such as offering exclusive in-store promotions,
enhancing the shopping experience, and investing in omnichannel capabilities to bridge the
gap between online and offline shopping.
- **Opportunities for Collaboration:** Some brick and mortar stores may also capitalize on
these events by partnering with online platforms or leveraging their own online presence to
reach customers who prefer to shop online during these events while still maintaining a
physical presence for those who prefer in-store shopping.
Overall, the impact of online events like the Great Indian Festival and Big Billion Day on brick
and mortar stores underscores the need for retailers to be agile, customer-focused, and
innovative in their approach to remain competitive in today's rapidly evolving retail
landscape.
2021
a) What is Retail Management ?
i) Expand CBD
a) Retail management involves overseeing the functions and operations of retail businesses
to ensure they efficiently meet customer demands and maximize profits.
b) Retail pricing refers to the process of determining the appropriate prices for products or
services sold in retail stores, considering factors like costs, competition, and consumer
demand.
d) The customer service gap refers to the disparity between customer expectations of
service and the actual service provided by a business.
e) Store layout refers to the arrangement of fixtures, merchandise, and aisles within a retail
store to optimize customer flow, promote sales, and enhance the shopping experience.
g) Retail strategy is a comprehensive plan outlining how a retailer aims to achieve its
objectives and gain a competitive advantage in the marketplace through activities such as
pricing, merchandise selection, and customer service.
h) SKU stands for Stock Keeping Unit, which is a unique code assigned to each distinct item
in a retailer's inventory for tracking purposes.
i) CBD can stand for Central Business District, referring to the commercial and business
center of a city or urban area.
j) Key strategic decision areas for a firm include product development, market positioning,
pricing strategy, distribution channels, marketing communication, and resource allocation.
k) Pull supply chain is a strategy where production and distribution are based on actual
customer demand rather than forecasts or predictions.
l) Supply chain management involves the coordination and integration of various processes,
including procurement, production, inventory management, and distribution, to efficiently
deliver products or services to customers.
5 marks
5.What are the procedure for selecting vendors and building Partnership
in Merchandise Management ?
- **Cost Reduction**: SCM helps in minimizing costs across the entire supply chain by
optimizing processes, reducing inventory levels, and improving efficiency.
- **Enhanced Visibility and Tracking**: SCM provides real-time visibility into inventory
levels, shipments, and production processes, allowing companies to track and manage their
resources effectively.
Several factors influence the demand for regional trade areas in retail:
- **Demographics**: Population size, density, age distribution, income levels, and cultural
preferences impact consumer demand and purchasing power.
The retail mix consists of several elements that retailers can manipulate to influence
consumer behavior and achieve their business objectives. These components include:
- **Product**: This refers to the assortment of goods and services offered by the retailer.
For example, a clothing retailer might offer a range of products such as shirts, pants, dresses,
and accessories.
- **Price**: Pricing strategy involves setting the right price for products to attract customers
while ensuring profitability. For instance, a discount retailer might adopt a low-price strategy
to compete with rivals.
- **Place**: Place refers to the location and distribution channels through which products
are made available to customers. An example would be a convenience store strategically
located in a high-traffic area to capture impulse purchases.
- **Promotion**: Promotion encompasses all activities aimed at communicating with
customers and persuading them to buy. This includes advertising, sales promotions, public
relations, and personal selling. For example, a supermarket might advertise a special
promotion on a particular brand of cereal to drive sales.
- **People**: People represent the employees who interact with customers. Friendly and
knowledgeable staff can enhance the shopping experience and build customer loyalty. For
instance, a luxury boutique may invest in well-trained sales associates to provide
personalized service to customers.
- **Physical Evidence**: Physical evidence refers to the tangible aspects of the retail
environment that influence the customer experience, such as store layout, ambiance, and
signage. An example would be a high-end furniture store with elegant interior decor and
spacious displays that convey a sense of luxury and sophistication.
- **Process**: Process refers to the procedures and systems used to deliver products and
services to customers. This includes aspects such as checkout procedures, return policies,
and online ordering processes. For example, a fast-food chain may streamline its ordering
process through self-service kiosks to reduce wait times and improve efficiency.
The procedure for selecting vendors and building partnerships in merchandise management
involves several steps:
- **Vendor Evaluation**: Evaluate vendors based on factors like their reputation, financial
stability, production capacity, and ability to meet your requirements.
- **Negotiation**: Negotiate terms and conditions with selected vendors, including pricing,
payment terms, delivery schedules, and quality standards.
- **Contracting**: Draft and finalize contracts with chosen vendors, outlining the rights,
responsibilities, and expectations of both parties.
**Retail Location** refers to the geographical area where a retail business chooses to
establish its physical presence. It is a critical factor that can significantly impact the success
or failure of a retail operation.
- **Central Business District (CBD)**: CBD locations are typically found in the downtown
areas of major cities. These locations offer high foot traffic, accessibility via public
transportation, and a concentration of office buildings, shopping centers, and entertainment
venues. Retailers in CBDs often cater to urban professionals and tourists.
- **Regional Shopping Centers**: Regional shopping centers are large retail complexes that
serve as destinations for shopping, dining, and entertainment. These centers typically
feature anchor stores, specialty retailers, restaurants, and entertainment facilities. They
draw customers from a wide geographic area and often offer amenities such as ample
parking, indoor climate control, and security.
- **Strip Malls/Plazas**: Strip malls or plazas are clusters of retail stores and restaurants
located along major roadways or in suburban areas. They offer convenience and easy access
for customers, with storefront parking and a mix of tenants catering to various needs and
preferences.
- **Outlet Centers**: Outlet centers are dedicated retail destinations that offer discounted
prices on brand-name merchandise. These centers are typically located in suburban or rural
areas near major highways, attracting value-conscious shoppers seeking bargains on
clothing, accessories, and household goods.
- **Online Retail Locations**: With the rise of e-commerce, online retail locations have
become increasingly important. These locations encompass websites, mobile apps, and
digital platforms where customers can browse, purchase, and receive products without
visiting a physical store. Online retail locations offer convenience, 24/7 availability, and
personalized shopping experiences tailored to individual preferences.
Each type of retail location has its unique advantages and challenges, and the choice of
location depends on factors such as target market demographics, competition, accessibility,
and business objectives. Retailers must carefully
10 marks
- Closing this gap involves understanding customer needs and expectations through market
research, customer feedback, and effective communication channels.
- This gap exists between management perceptions and service quality specifications.
- It involves ensuring that service quality standards and policies are aligned with customer
expectations and that employees have the necessary resources and training to meet these
standards.
- This is the difference between service quality specifications and the actual service
delivered.
- Closing this gap requires effective training, motivation, and empowerment of employees,
as well as continuous monitoring and improvement of service processes.
4. **Gap 4: Communication Gap**:
- This gap refers to the difference between service delivery and external communication to
customers.
To improve retail customer service quality using the GAPS model, businesses need to
systematically identify and address these gaps. This might involve conducting regular
customer surveys, implementing training programs for employees, refining service
processes, and enhancing communication strategies to bridge the divide between customer
expectations and actual service delivery.
The consumer buying process, also known as the buyer's journey, typically consists of
several stages:
1. **Awareness**:
- At this stage, the consumer becomes aware of a need or desire for a product or service.
This awareness can be triggered by various factors such as advertisements, word-of-mouth,
or personal experiences.
2. **Research**:
- Once aware of the need, the consumer starts researching available options. This may
involve gathering information from different sources like online reviews, product
comparisons, or visiting physical stores.
3. **Consideration**:
- During this stage, the consumer evaluates the different options based on factors such as
price, quality, features, and brand reputation. They may narrow down their choices to a few
alternatives.
4. **Decision**:
- In this stage, the consumer makes the final decision and selects a specific product or
service to purchase. This decision can be influenced by various factors including personal
preferences, recommendations, and promotional offers.
5. **Purchase**:
- The consumer completes the transaction and buys the chosen product or service. This
may involve visiting a store, ordering online, or engaging in other purchasing channels.
6. **Post-purchase Evaluation**:
- After the purchase, the consumer evaluates their decision and experiences with the
product or service. They assess whether it met their expectations and if they are satisfied or
dissatisfied. This evaluation can influence future buying behavior and brand loyalty.
For example, let's consider the consumer buying process for purchasing a smartphone:
- **Awareness**: The consumer realizes they need a new smartphone after noticing that
their current device is outdated.
- **Research**: They start researching different smartphone brands, features, and prices
online, reading reviews and comparing specifications.
- **Consideration**: After narrowing down their options, they consider factors like camera
quality, battery life, and price to choose between a few models.
- **Purchase**: They buy the chosen smartphone either online or from a physical store.
- **Post-purchase Evaluation**: After using the smartphone for some time, they evaluate its
performance, features, and overall satisfaction, which may influence their future buying
decisions and brand loyalty.
2023
1. a) What are the types of retailers ?
f) What is a planogram ?
b) Category specialists are large retailers that offer a narrow but deep assortment of
merchandise in a specific category, often dominating their category and often referred to as
"category killers."
c) Mystery shoppers are individuals hired by companies to visit stores and act as regular
customers to evaluate the quality of service, compliance with regulations, and overall
shopping experience.
d) Store layout refers to the arrangement of merchandise, fixtures, and aisles within a retail
store to optimize space, enhance the shopping experience, and maximize sales.
e) Franchising in retail is a business model where a franchisor grants the franchisee the right
to operate a store or business using the franchisor's brand, products, and business system in
exchange for a fee.
h) A merchandise kiosk is a small, standalone booth or cart located in high-traffic areas, such
as shopping malls, used to sell specialty items or services.
i) Private retail brands, also known as private labels, are products that are manufactured or
provided by one company for sale under another company's brand, typically the retailer's
own brand.
j) The retail communication mix refers to the combination of promotional tools and
strategies used by retailers to communicate with customers, including advertising, sales
promotions, public relations, personal selling, and direct marketing.
k) Impulse purchasing buying behavior refers to the spontaneous and immediate purchase
of products without prior planning or consideration, often triggered by emotions or
immediate desire.
l) Assortment merchandise refers to the variety of different products that a retailer offers for
sale, encompassing various categories, styles, sizes, and brands to meet diverse customer
needs.
5 marks
2. Explain the classification of retail stores on the basis of ownership. Give suitable examples
wherever necessary.
3. Explain various pricing strategies that retailers do adopt to meet their financial objectives.
Give examples wherever necessary.
4. Describe the use of market research as a tool for understanding markets and consumers.
5. Explain the components of exterior and interior consideration for selecting layout.
Retail stores can be classified into several types based on ownership. Each type has unique
characteristics and operational structures. The main classifications are:
These are single-store businesses owned by an individual or a small group. They operate
autonomously and have full control over business decisions. Independent retailers are
common in local communities, offering personalized services and niche products.
Chain stores are multiple retail outlets owned and operated by a single corporate entity.
They maintain standardized operations, marketing, and merchandising strategies across all
locations, providing consistency and economies of scale.
#### Franchises
In this model, a franchisee buys the rights to operate a store using the brand, products, and
operational guidelines of an established franchisor. Franchisees benefit from brand
recognition and support while maintaining ownership of their individual stores.
#### Cooperatives
Retail cooperatives are owned and operated by a group of individuals who share decision-
making responsibilities and profits. Members of the cooperative pool resources to achieve
mutual benefits like better purchasing power and shared marketing costs.
Department stores are large retail establishments that offer a wide variety of products
organized into distinct departments such as clothing, electronics, home goods, and
cosmetics. They are usually part of a chain and can be independently or corporately owned.
Supermarkets are large, self-service stores offering a wide range of food and household
products. Hypermarkets are even larger, combining the features of supermarkets and
department stores to offer an extensive range of goods.
Retailers adopt different pricing strategies to achieve their financial objectives, attract
customers, and compete in the market. Key pricing strategies include:
- **Example:** A retailer buys a product for $50 and applies a 20% markup, selling it for
$60.
Prices are set based on competitors' pricing strategies. Retailers may choose to price their
products slightly lower, higher, or match the competition to gain market share or convey a
premium image.
- **Example:** Gas stations often use competitive pricing to attract customers by offering
slightly lower prices than nearby stations.
This strategy involves setting prices that have a psychological impact, such as pricing a
product at $9.99 instead of $10.00 to make it seem less expensive.
- **Example:** Most retail stores use prices ending in .99 or .95 to create a perception of
value.
Retailers set low prices initially to attract customers and gain market share quickly. Once a
customer base is established, prices may gradually increase.
- **Example:** A new grocery store offering significant discounts during its opening month.
High initial prices are set for new or innovative products to maximize profits from early
adopters willing to pay more. Prices are reduced later to attract a broader customer base.
- **Example:** Tech companies often use skimming pricing for new gadgets and
smartphones.
#### Discount Pricing
Products are offered at reduced prices through sales, promotions, or clearance events to
increase customer traffic and clear out inventory.
- **Example:** Seasonal sales like Black Friday and Cyber Monday discounts.
### 4. Use of Market Research as a Tool for Understanding Markets and Consumers
Market research is essential for retailers to understand their target markets, consumer
behavior, and preferences. It involves collecting and analyzing data to make informed
business decisions. The key components include:
Retailers use surveys, focus groups, and interviews to gather information about what
consumers want and need. This helps in tailoring products and services to meet market
demands.
- **Example:** A clothing retailer conducts surveys to understand the latest fashion trends
and customer preferences.
Retailers monitor market trends and economic indicators to stay ahead of changes that
could impact their business. This includes tracking industry reports, competitor activities,
and technological advancements.
- **Example:** Grocery stores analyzing the trend towards organic and health-conscious
products to adjust their inventory accordingly.
Market research helps in dividing the market into distinct segments based on demographics,
psychographics, geographic, and behavioral factors. This allows for targeted marketing
strategies.
- **Example:** A retailer segments its market by age and income to tailor marketing
campaigns for luxury products versus budget-friendly options.
Retailers conduct post-purchase surveys and feedback forms to gauge customer satisfaction.
This helps in identifying areas for improvement and enhancing customer experience.
- **Example:** Online retailers like Amazon use customer reviews and ratings to understand
product performance and service quality.
The layout of a retail store significantly impacts customer experience and sales. Key
components of exterior and interior considerations include:
- **Storefront Design:** The exterior should be visually appealing to attract customers. This
includes signage, window displays, and overall aesthetics.
- *Example:* A fashion boutique using elegant window displays to showcase its latest
collection.
- **Accessibility:** The store should be easily accessible with ample parking space, clear
signage, and proximity to public transport.
- **Store Layout:** The arrangement of aisles, shelves, and product displays should facilitate
smooth traffic flow and easy navigation. Common layouts include grid, free-flow, and
racetrack designs.
- *Example:* A grid layout in a supermarket with clearly marked aisles for different product
categories.
- *Example:* A jewelry store using focused lighting to enhance the sparkle of displayed
items.
- **Ambiance:** The overall ambiance, including colors, music, and scent, should align with
the store’s brand and target audience.
- *Example:* A spa using soft lighting, calming music, and pleasant scents to create a
relaxing environment.
- **Signage and Navigation:** Clear signage helps customers find what they are looking for
quickly, enhancing their shopping experience.
- *Example:* Supermarkets using hanging signs to indicate product sections like dairy,
bakery, and produce.
Efficient SCM helps in reducing costs associated with procurement, transportation, and
storage. Bulk purchasing and optimized logistics minimize expenses.
- **Example:** A retail chain negotiating lower prices with suppliers due to large order
volumes.
SCM enables accurate demand forecasting and inventory management, reducing the risk of
overstocking or stockouts. This ensures that products are available when customers need
them.
- **Example:** E-commerce retailers offering fast and reliable delivery options like same-
day or next-day shipping.
Strong SCM practices foster better relationships with suppliers, leading to more reliable
partnerships and better negotiation terms. This can result in priority service and better
pricing.
- **Example:** A retailer working closely with a supplier to develop exclusive product lines.
SCM provides valuable data and insights into sales patterns, inventory levels, and supplier
performance. This information aids in strategic decision-making and continuous
improvement.
- **Example:** Using sales data to identify trends and plan future inventory purchases.
Effective SCM can be a significant competitive advantage, allowing retailers to offer better
prices, faster delivery, and superior service compared to competitors.
- **Example:** A retailer using advanced SCM systems to offer more competitive pricing and
faster delivery than rivals.
By integrating these strategies, retailers can optimize their operations, enhance customer
experiences, and achieve long-term success in a competitive market.
10 marks
7 . Consider yourself as a merchandising manager, what is your significant role in the retail
store ? Give examples to justify your answer.
- **Example:** If managing a fashion retail store, I would analyze market trends, customer
preferences, and sales data to select a mix of trendy and classic clothing lines. This involves
attending trade shows, negotiating with suppliers, and placing orders for the upcoming
season.
- **Example:** Designing eye-catching window displays and in-store layouts that highlight
new arrivals and seasonal promotions. For instance, creating a themed display for a summer
sale that attracts customers into the store and guides them through various product
sections.
- **Example:** Coordinating with the marketing team to plan and execute promotional
campaigns. For instance, organizing a “Buy One, Get One Free” event on certain product
categories to increase foot traffic and drive sales.
By effectively managing these aspects, a merchandising manager ensures that the retail
store remains competitive, meets customer expectations, and achieves financial targets.
Starting a franchise business involves several steps, each requiring careful consideration and
planning. Here is a detailed guide:
- **Example:** For a Subway franchise, the initial investment can range from $116,000 to
$263,000. This includes the franchise fee, equipment, inventory, and working capital. Explore
financing options like bank loans, SBA loans, or franchisor financing programs.
- **Example:** Review the Franchise Disclosure Document (FDD) carefully. This document
outlines the franchise's history, financial performance, fees, and obligations. Consulting with
a franchise attorney can help understand the terms and protect your interests.
- **Example:** The success of a franchise like Dunkin' heavily depends on its location.
Conduct a market analysis to identify high-traffic areas with your target demographic.
Factors to consider include competition, accessibility, and local regulations.
- **Example:** Hire employees who align with the brand’s values and provide them with
comprehensive training. For a McDonald's franchise, this would include training on food
safety, customer service, and operational procedures.
- **Example:** Regularly engage with the franchisor for updates, support, and training.
Participate in franchisee meetings and comply with all brand standards and operational
guidelines to maintain the franchise’s reputation and success.
By following these steps and leveraging the franchisor’s resources, starting a franchise
business can be a viable and profitable venture. It combines the benefits of
entrepreneurship with the support and brand recognition of an established business.
9. Read the case and answer the questions given at the end. An established and a leading multi
brand footwearetailer with a strong presence in all the major cities in North India, is now certainly
geared up to expand and also penetrate his operations by replicating with similar retail formats in
semi urban and urban markets in a phased manner. The sole objective of the retailer rs to cater to
these untapped potential markets with high disposable income among people who buy and large
and also travel all the way to cities and also metros for all their buying needs and requirements. The
offerings includes a wide range of footwear of international national and regional brands for men,
women and also children for all occasions. a) Propose a retail mix (4P's) for this particular retailer.
What criteria should the retailer consider in assessing and evaluating appropriate locations for the
proposed outlets ? Discuss. b) Do you foresee any scope for offering loyalty programmes by the
retailer ? Justify your answer related to the case.
1. Product:
- The retailer should offer a wide range of footwear, including international, national, and
regional brands for men, women, and children.
- Products should cater to various occasions and preferences, ensuring there's something
for everyone.
- Regular updates to the product mix based on trends, customer feedback, and seasonal
demands should be incorporated.
2. Price:
- Pricing should be competitive yet reflective of the quality and brand value.
- Different pricing tiers could be established to cater to varying income levels in semi-urban
and urban markets.
3. Place:
- The retailer should strategically select locations in semi-urban and urban markets with
high foot traffic and proximity to residential areas.
- Setting up outlets in shopping malls, high streets, or busy marketplaces could enhance
visibility and accessibility.
4. Promotion:
- Promotional strategies should focus on reaching out to the target audience in semi-urban
and urban markets.
- Utilize a mix of traditional advertising channels such as newspapers, billboards, and radio
along with digital marketing strategies like social media, email campaigns, and influencer
partnerships.
- Population density and demographic profile: Target areas with a sizable population and
high disposable income.
- Competition analysis: Assess the presence of competitors and evaluate the gap in the
market that the retailer can fill.
- Infrastructure and accessibility: Choose locations with good transportation links and
sufficient parking facilities.
- Economic indicators: Consider factors like GDP growth, employment rates, and consumer
spending patterns in the selected areas.
- Potential for growth: Identify areas with untapped market potential and scope for
expansion in the future.
- Regulatory environment: Ensure compliance with local regulations and zoning laws while
selecting the location.
Yes, there is a significant scope for offering loyalty programs by the retailer. Loyalty programs
can be an effective tool for retaining existing customers and attracting new ones, especially
in competitive markets. In the case described, the retailer aims to cater to semi-urban and
urban markets with customers who have high disposable income and travel to cities for their
shopping needs. A well-designed loyalty program can incentivize these customers to choose
the retailer over competitors by offering rewards, discounts, exclusive offers, and
personalized shopping experiences.
Key Justifications:
- Customer Retention: Loyalty programs encourage repeat purchases and foster long-term
relationships with customers, thereby enhancing retention rates.
- Data Collection and Personalization: Loyalty programs provide valuable insights into
customer preferences and behavior, enabling the retailer to tailor offerings and marketing
efforts accordingly.
- Increased Spending: By rewarding customers for their purchases, loyalty programs can
stimulate higher spending and increase customer lifetime value.
- Word-of-Mouth Marketing: Satisfied loyal customers are likely to recommend the retailer
to others, contributing to positive word-of-mouth marketing and brand advocacy.