Professional Documents
Culture Documents
TO The World OF Retailing By-Sachin Verma Mba (FC)
TO The World OF Retailing By-Sachin Verma Mba (FC)
TO
THE WORLD
OF
RETAILING
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RETAILERS
.9
3.8
9.6
4.9 24.5
5.7
5.9
6.2 16.7
9.2 12.9
0 325 650
Sales ($billions)
Retailers are a Business Like Manufacturers
Classifying Retail
Outlets
Retail outlets can be classified in several
ways:
-- Form of ownership. Who owns the
outlet.
-- Level of service. The degree of service
provided to the customer.
-- Merchandise line. How many different
types of products a store carries and in
what assortment.
Classifying retail outlets
METHOD OF CLASSIFICATION DESCRIPTION OF RETAIL OUTLET
Form of ownership Independent retailer
Corporate chain
Contractual system
• Retailer-sponsored cooperative
• Wholesaler-sponsored voluntary chain
Franchise
Level of service Self-service
Limited service
Full-service
Merchandise line Depth
• Single line
• Limited line
Breadth
• General merchandise
• Scrambled merchandise
The possibilities and costs of franchising
TOTAL
TYPE OF NUMBER OF
FRANCHISE START-UP
BUSINESS FRANCHISES
COSTS
Depth:
Number of
items within
each product
line
Differences in Store
Concepts
DISCOUNT STORE SUPERCENTER HYPERMARKET
Direct
selling
Tele-
marketing
On-line
retailing
Television
home
shopping
Direct mail
and
catalogs
Automatic
t s uc e vi t c A
vending
Low
Low Active retailer involvement High
Automatic Vending
Non-store retailing that makes it
possible to serve customers where
stores cannot.
Maintenance and operating costs
are high.
Small convenience products are
available in vending machines.
Of the 3 million vending machines
now in use, 1.8 million are soft
drink machines.
Direct Mail & Catalogs
Marketing efficiency is improved
through segmentation and
targeting.
Customer value is enhance by
providing a fast and convenient
means of making a purchase.
In 1998 Americans increased their
catalog spending to $87 billion.
A typical household receives 50
catalogs each year.
Television Home Shopping
TV home shopping is possible when consumers watch
a shopping channel on which products are displayed;
orders are placed over the telephone.
Two popular home shopping programs reach 60
million homes and have combined sales of $2 billion.
TV home shopping programs traditionally attract 40-
50 year old females.
Limitations of TV shopping have been the lack of
buyer-seller interaction and the inability of
consumers to control the items they see.
Online Retailing
Online retailing allows consumers to
search for, evaluate, and order
products through the Internet.
The advantages of online retailing
are:
ability to comparison shop
privacy
• Forecasts suggest that current annual sales of $10
variety
billion could reach $100 billion in just a few years.
Telemarketing
Telemarketing involves using the telephone
to interact with and sell directly to
consumers.
Product
Prices
Promotio
n
Place
THE ADDITIONAL P’s
Physical Evidence
Process
People
IMPORTANCE
WAL MART
AND
BIG BAZAAR
CULTURE,VALUES as key forces in shaping STRATEGY and
developing
COMPETENCIES …
Paras Deshpande
WALMART
Sam Walton started as a
specialty store owner of
Ben Franklin franchise
stores.
He was forty‐four when
we opened first Wal‐
Mart in 1962.
EarlyTimes
In the early days of Wal‐Mart the emphasis
on item promotion helped us to make up
for a lot of shortcomings we had—an
unsophisticated buying program, a less
than ideal merchandise assortment, and
practically no back‐office support.
Early periods were marked by extensive
benchmarking to such a level that
managers lived half of the time in
competitors stores.
CreatingCulture
4.4.New
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formofofoutlet
outlet
enters retailing
enters retailing
1.1.Outlet
Outletstarts
startswith: environment
Low prices
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characteristicsofof
Low
Lowmargins outlet
Low
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Low status
Market share or profit
Value-retail stores
Early
growth
On-line retailers
Single-brand stores
Single-price stores
Accelerated
development
Warehouse clubs
Convenience stores
Profit
Supermarkets
Maturity
Department stores
Market share
Malls (?)
Catalog Retailers
Decline
General store
Future Changes in Retailing
Impact of Technology
Importance of Brands
egift Advertisement
Courtesy ebay.com
Recent Trends in
witnessing a huge Retailing
Retailing in India is
revamping exercise as can
be seen in the graph Retail Sales in India
India is rated the fifth
most attractive emerging
retail market: a potential
goldmine.
Estimated to be US$ 200
billion, of which organized
retailing (i.e. modern
trade) makes up 3 percent
or US$ 6.4 billion
As per a report by KPMG
the annual growth of
department stores is
estimated at 24%
Ranked second in a Global
Retail Development Index
of 30 developing countries
drawn up by AT Kearney.
Recent Trends contd.
Multiple drivers leading to a consumption boom:
Favorable demographics
Growth in income
Increasing population of women
Raising aspirations : Value added goods sales
Food and apparel retailing key drivers of growth
Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number
of double-income households.
More successful in cities in the south and west of India. Reasons range from differences in consumer buying
behavior to cost of real estate and taxation laws.
Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across
most categories of consumption
ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets.
HLL is using its Project Shakti initiative – leveraging women self-help groups – to explore the rural market.
Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve
the rural markets.
IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying
behavior across the globe.
‘e-tailing’ slowly making its presence felt.
Companies using their own web portal or tie-sups with horizontal players like Rediff.com and Indiatimes.com
to offer products on the web.
Conclusion
The India Retail Report 2009 compiled by research
group Images Research is again optimistic about
Indian Retail Industry. As per the report, spiralling
income and rising economic growth will fuel the
growth of industry and it will touch Rs. 18,10,000
crore by 2010. Organized Retail is expected to
constitute 13% of it i.e. Rs. 2,30,000 crore. The
report says that though people are perceiving that
organized retail will hit mom & pop format hard,
but modernizing retail will generate employment
for 15 million people in different activities.
.
Conclusion
The report is based on rising economic
growth rate of 8-9 per cent and a hike in
average salaries by about 15 per cent which
may trigger the rate of consumption. But
with subprime crisis in US, Indian
companies are also affected in big way, and
even stock market is suffering. We hear
news of cost cutting and layoffs daily. So, I
don’t know how far it is right to believe
growth rate of 8-9% and hike of 15%.
Conclusion