Professional Documents
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Retail Management
Retail Management
Chapter - 1
RETAILING: ROLE, RELEVANCE AND TRENDS
What is retailing?
Retailing: a conclusive set of activities or steps
used to sell a product or a service to consumers for
their personal or family use
Retailer: a person, agent, agency, company or
organization instrumental in reaching the goods,
merchandise, or services to the ultimate consumer
Countries that have enjoyed the greatest economic
and social progress have been those with a strong
retail sector
O v e r the last decade there have been sweeping
changes in the general retailing business
Retail industry and economy
Retail business is the largest private industry
Retail is ahead of finance and engineering and
contributes over 8 per cent of GDP in the western
countries
Over 50 of the Fortune 500 and about 25 of the Asian
Top 200 companies are retailers
Today, in some developed countries, retail businesses
have shares as large as 40 per cent of the market
T h e significance of the retail business has increased
with the fast growth in the service sector
Retail industry in India
Retail forecasts in India:
- the business in India is expected to reach Rs. 25,000
billion in 2008
- growth of organized retailing in both food and non-food
segments
-proportion of sales through organized retailing
estimated,
increase by 8% in 2010
Emergence of organized retailing:
-India to have over 700 shopping
malls by 2015
(400 operational malls in 2010)
- land developers rushing to cash in on the booming retail
business
Characteristics of retailing
Direct end-user interaction
Sole point in thevalue chain to provide platform
for promotions
Sales at the retail level is generally in smaller unit sizes
Locati on is a critical factor for retail business
Retail services are as important as core products
A larger number of retail units as compared to other
members present in the value chain
Functions of retailing
Sorti ng
Breaking bulk
Holding stock
Additi onal services
Channel of communication
Transport and advertising functions
Activities performed by retailers
Number of outlets
Margin vs Turnover
Locati on
Size
Trends in retail formats
Department Stores
Discount Stores
Category Killers
Specialty Stores
Relationships between retailers and
suppliers
The retail sector is critically dependent on its suppliers for
effective operation and the profitability of its business
Several socio-economic and demographic factors are
considered by manufacturers for identifying the ideal retail
format mix for its products
T h i s is illustrated by the washing soap category in India and
the resultant retail format preferences
Retail format mix adopted by
manufacturers for soaps
Soap is targeted towards women as they are the chief
decision-makers in soap purchase. Medicated
positioning like germ killing and anti-bacterial are
marketed to families.
About 75% of the soaps are bought through these
following types of outlets.
Kirana stores
Pan-beedi shops
Department stores
Retail strategy
Defi ne thebusiness of thefirm in terms of
orientation towards a particular sector
Set short-term and long-term obejcvtieswith regard
to image and profitability
Identi fy the target market and direct efforts on the basis of
the customers characteristics and needs
Decide thebroad direction thecompany must take
in future
Implement an integrated plan that encompasses al aspects
of retailing like pricing, location, and channel decisions
Evaluate and revise the plan depending on the nature of
the internal and external environment
Retail concepts
An essential part of the retailing strategy, the retailing
concept is essentially a customer-centred, company-
wide approach to developing and implementing a
marketing strategy. The retailing concept covers four
broad areas:
Customer orientation
Goal orientation
Va l u e driven approach
The changing face of retailing
Role of the Internet
- Does the size of the retail organization play a big part in
adapting easily to the Internet?
- Is the product/service offering also a prime determinant of
cyber retailing?
Branding through retailers
- How do retailers choose which brands to display?
- Why do many new products fail in the marketplace
- How can manufacturers maximize the brand opportunity in
a given retail outlet?
- What is future of Lifestyle Clustering?
- Vertical retail concepts are increasing in popularity
Consumpti on related mega trends
Drivers of success in the retail sector
Customers are the driving force in change
Re-evaluating the marketing plan
Advanced education for retailers is critical for growth
Strong visual recognition
The workplace challenge
Planning for success