Retail Marketing

Module I Introduction/Overview of Retailing, Key terms and concepts, Benefits and nature of the retailing industry Sales Organization Module II Strategies and Operational framework, Strategic positioning tactics, Developing retail plan to achieve competitive advantage, Analysis of ethical, social, legal, economic and competitive environment, and their implications on retail management Module III Customer identification and understanding consumer behavior, Purchase decision process and categorizing customers, Applying research and customer information to retail management Module IV All about retail stores (Location and site evaluation, Design and Layout, Human Resource Management and Operations Management, Financial Analysis and Mgmt., Merchandise Management and Pricing) Module V Merchandising and pricing in retail management, Retailer/Vendor relations, Integrated marketing communications in retail management, Challenges and recent developments in retail management, Integrating and controlling the retail strategy Module VI Retail Measures ( Retail Sales Rupee ( Revenue) and Unit Sales, Square feet returns, Gross Margin, Gross Profit,Store Unit Capacity, Average Transaction Value, Return On Investment )Inventory Measures ( BOM/ EOM, Average Stock, Sales Turnover, Sell Through, Stock to Sales Ratio, Weeks Of Supply )

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 Over 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 The 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

50 million square feet of total mall space in India, expected to sprout in six metros (Delhi and Mumbai) and seven non-metros in 2008

 40 per cent of the total mall space to be concentrated in the National Capital Region Characteristics of retailing Direct end-user interaction Sole point in the value chain to provide platform for promotions Sales at the retail level is generally in smaller unit sizes Location 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 Sorting Breaking bulk Holding stock Additional services Channel of communication Transport and advertising functions Activities performed by retailers Arrange for assortment of offerings Breaking quantity Holding stock Extending services Categorizing retailers Number of outlets Margin vs Turnover Location Size

Trends in retail formats Mom and Pop Stores and traditional kirana stores E-commerce Department Stores Discount Stores Category Killers Specialty Stores E-tailers 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 This 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 Define the business of the firm in terms of orientation towards a particular sector Set short-term and long-term objectives with regard to image and profitability

 Identify the target market and direct efforts on the basis of the customers characteristics and needs Decide the broad direction the company must take in future Implement an integrated plan that encompasses all 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 customercentred, company-wide approach to developing and implementing a marketing strategy. The retailing concept covers four broad areas: Customer orientation Goal orientation Value driven approach Coordinated effort 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 Consumption 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 RETAIL ORGANIZATION The changing structure of retailing All dynamic developments in retailing (department stores, warehouse clubs, and hypermarkets) are responses to a changing environment Changing customer demand, new technologies, intense competition, and social change create new opportunities even as they shake up existing business The Internet and web technologies have itself created a myriad of opportunities for web based business model of retailing This has created competition for the retailer in order to maintain and grow its share of market and compete within its band of retailers For e.g.: Bharat Petroleum - Making A Difference through Innovative Retailing

Theories of structural change in retailing Retailing has always been a dynamic industry. There are certain theories of how firms evolve and change the industry in the process. They are: The wheel of retailing The dialectic process Natural selection The wheel of retailing It was proposed by Malcomb McNair at Harvard University. It is basically a theory of cyclical or circular development. The wheel of retailing concept describes how retail institutions transform during their evolutionary life cycles.

The dialectic process This second theory holds that retailing evolves through a dialectic process- the blending of two opposite store types into a superior form. For example- Fabindia and Nalli offer both a wide array of customer services and a broad assortment of specialized merchandise. Natural selection According to this theory, retail stores evolve to meet changes in the micro-environment. The retailers that successfully adapt to technological, social, demographic, economic, and political changes are most likely to grow and prosper. Classification of retail units Bases for classification of retail units Nature of ownership Operational structure Length and depth of merchandise Nature of service Types of pricing policy Types of retail location Method of customer interaction Retailers classified on the basis of ownership Sole proprietorship Partnership Joint venture Limited liability company (public and private) Retailers classification on the basis of operational structure Independent retail unit Retail Chain Franchise

 Size and structural arrangements in franchising: 1. Manufacturer-retailer 2. Wholesaler-retailer franchise 3. Service sponsor-retailer Leased departments

Co-operatives New areas Leased department or Shop-in-shop Co-operative outlets Largest consumer cooperative society Major initiatives Benefits To Consumers Target market Revised positioning Types of retail location Retailers at freestanding locations Retailers in business-associated locations Retailers in specialized markets Retailers at airports Variety of merchandise mix Departmental stores For e.g: Ebony, Globus, Lifestyle, Pantaloon, Shoppers Stop, and Westside Discount Stores For e.g.: S Kumars S-MART Discount Chain, Margin Free Market, and Subhiksha Specialty Stores For e.g.: Footware - Speciality Store Khadder- Khadi Specialty , Gautier , Vivek , and Titan

 Hypermarkets For e.g. : Pantaloons Big Bazaar ,Giant, and FoodWorld Methods of customer interaction Retail transactions are carried out through face-to-face interaction between retailers and customers in the case of retail stores. There are certain methods: Store retailers like candles for sale during a Diwali mela at Dilli Haat. Non-store retailers Electronic retailing like Internet and Mobile Association of India (IAMAI) Catalogue and direct mail retailing Factors for the success of catalogue retailing: - Convenience: customers can shop when it is convenient for them in accordance to their schedule - Time saving: one save resources on account of time and travelling cost and parking problems - Information: relevant product information is available in detail - No time limits: no undue pressure to buy unlike as in retail store shopping For example FABMALL --- E-RETAILER Direct selling Person-to-person selling: - Party-plan or group presentations - Multilevel network Television shopping Television shopping is retail format where existing and prospective customers watch a TV programme demonstrating a product and then place an order for the same by telephone, e-mail or Internet Three types of television shopping: cable channels meant for shopping, infomercials, and direct-response advertising shown on TV

(For example: Asian Sky Shop, TSN, TVC, TSNM) Vending machine retailing A form of non-store retailing where products or services are placed in a machine and are dispensed to customers when they deposit cash or use plastic money (credit or debit card) Vending machines vending machines offer consumers greater convenience 24 hours a day, and have replaced many services formally requiring a human interface