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    Retailling Retailling Presentation Transcript

    • { Derived form a French word “Retailer” Meaning : to cut a piece off or to break bulk } “Includes all the activities of selling products orservices to the end consumers with added value”.
    •  Sale of goods/Services to the ultimate consumers-Personal, Family or Household use. Thus involves more than just selling products-(Services) Final leg in the distribution channel Is labor intensive
    •  Identifying the target markets (customers) Interpreting the needs of the targeted customers Developing good assortment of merchandise Presenting them in an effective manner so thatcustomers find it easy and attractive to buy
    • Retailing has multiple functions-Creates Market & Generates Employment
    • Why are retailers needed? Understanding customers needs and wants Providing assortment of Products/Services Breaking bulk Providing services to the customers Holding inventory & Providing information to the suppliers
    • Understanding Customer’s Needs & Wants Difference between need and want Understand what products and services are required bythe customers
    • Breaking the Bulk` Manufacturers normally send in cartons/cases/bags Retailers breaks these bulk suitable to the customer’s need Breaking Bulk: Breaking large shipments into smaller
    • Providing Services Provision of credit limit & hire-purchase facilities Home delivery of goods/services Provision of warranty, after sale service, customercomplaint resolution Helping customers choose a product/service Displaying products for customers ease of selection
    • Holding Inventory Help the customers in keeping the inventory alreadybroken into user-friendly sizes/prices Help the customers in making the products available at allthe time at relatively stable prices. Helps the customers in reducing the storage costs/losses
    • Providing Information to Suppliers Retailers are in direct contact with the end consumers Feed back from the customers, comments, suggestions etc.. Market/Source of competitor information
    • TYPICAL CHANNEL OF DISTRIBUTION Manufacture Wholesaler Dealer Retailer Final Consumer
    • Types of Retailers Specialty Store: (Narrow product line ) E.g. Athlete’s Foot. Reebok, Nike, Department Store: (Several Product lines) E.g. Pantaloons, Shoppers stop Convenience Store: (Limited line of high turnover convenience products, Small store in residential area, ) E.g. Local retail shops open 24/7 Discount store: Standard or specialty merchandise low price, low margin, high volume stores (Big Bazaar, Wal-Mart)
    • CONT… Super markets: (Huge Selling space, routinely purchased food and household items. Plus services (Food World, More Retailing) Off-price retailer: Leftover goods, overruns, irregular merchandise sold at less than retail price E.g. Factory outlets Catalog Showroom: Broad selection of high markup, fast moving, brand-name good sold by catalog at discount. E.g. Oriflame, Amway
    • Based on merchandise and pricing Departmental Stores Specialty Stores Discount Stores Supermarkets & Hypermarkets
    • Department StoresA large store selling: Broad Variety & DeepAssortment Offer considerable customerservices Organized into physically separatedepartments Ex: Shoppers Stop, J C Penny, Regional Malls
    • Continued.. The Characteristics :  Located in the market area or a major shopping center  Availability of parking space  Freedom for the customers to move around  Relatively high prices with margins large enough
    • Specialty Stores Have narrow product line with deep assortment Provides higher degree of customer service Better selection with the assistance of sales people.
    • Discount Stores General merchandise retailer Offers broad variety & assortment Limited services and low prices
    • The characteristics :  Located in the lower priced areas away from the market  Dependence on the shoppers  Low cost fittings  No free services such as delivery to door etc..  Relies on heavy advertisement in the nearby areas No free services such as delivery to door etc..
    • Super Market , Superstores & HypermarketsSuper Market Self-service (Majorly) food storeoffering groceries along with otherhousehold maintenance products Size of the store- <25000 Sq Ft. Low cost, low margin, high volumestores
    • Continued.. Superstores  Larger supermarkets  Size of the store- 25000 Sq Ft +.  Also offers products and services like pharmacy, bakery, chats, salad bar etc under one roof Ex: Nilgiris
    • Continued.. Hypermarkets  Very large in size  Size of the store- 50000 Sq Ft +.  offers mainly grocery, general merchandise goods, flower shop, photo shop etc..  Selling huge volumes at less margins  Similar to that of the discount stores.
    • Based on Operational Structure Independent Traders Multiple or Retail Chain Stores Cooperative Societies Concessionaire Franchising
    • Independent Traders` Individual trader owns majority of the shop. Other than Cooperatives Have less than 10 branches or no branches
    • Continued..  Branches usually controlled by the family members  Examples: Kirana Shops, drug stores, Photo copier shops etc.. Advantages:  Management (owner) has direct contact with his customers  Can be very flexible owing to their small size  Can freely locate/ change their store, merchandise wherever required
    • Multiple Retail or Retail Chains Large multiple retail store (eitherpublic/private) belong to a common ownerwith ten or more branches Strongest in the departmentalStores, Specialty stores, Drug Stores, Foodstores etc... Size allows to buy in bulk and sell atlower prices Presence of specialists for every retailfunction
    • Continued..  Have well defined management philosophies  Strategies with reference with the store hours, product assortment, prices, sales personnel, promotion etc..  Centralized decision making system- difficulty in adopting to the local needs of the target markets  Ex: Raymonds, Titan, Tanishq, Ginger etc..
    • Cooperative Societies Are the cooperative retail organizations trading on cooperativeprinciples and registered under the Cooperative Societies Act Mother D’airy in Delhi, Sahkari Bhandar, Apana Bazaar inMumbai are the examples Some times independent retailers set up central buying systemcalled retailer cooperative
    • Franchising Granting of sole selling rights within a given geographical area bythe Franchiser Provide all the equipments, furnitures and fixtures to carry ou thebusiness
    •  The Franchisee provided with the license against the royaltypayments Franchisee pays for part of the system. Initial deposit and theservice charges as per the agreement with the Franchiser Beneficial to bothBenefits to the Franchiser: Covering new territory Hard working entrepreneurs’ (not employees) Franchisee’s familiarity with the locality
    •  Mail Order Direct Selling Automatic Vending Machines Electronic Retailing
    • Catalog & Direct –Mail RetailingCatalog Retailing Retail offerings communicated through a catalogDirect-Mail Retailing Retail offerings communicated through letters and brochuresConvenient and time savingalternativeInternet acting as a naturalextension to catalogers sellingstrategy.
    • Direct SellingIs the retail format in which the salespersons contacts thecustomer directly in a convenient location.Demonstrate the merchandise and explain the benefits andthe services, take an order, deliver the merchandise.Is highly interactive, considerable information conveyed.Is very costly.It can be Door-to-Door, Mobile Shops
    • Party Plan System Customer is asked to act as a host and invite friends and coworkers to a party. Host receives a gift Sales made here are influence by the social relationshipsMultilevel Network  People serve as master distributors, recruiting other people to distribute & sell (either to the members of the network/ end users)  Every member of the network either buy the merchandise from the firm and resell it/they receive commission on every product
    • Automatic VendingVending of Products or Servicesthrough machines.Usually placed in closed relativelyvandal-proof areasCan be in operation 24 x7Ex: ATMs, Coin Boxes etc…
    • Electronic RetailingRetailing through Internet: The customer and the retailer can communicatethrough an interactive electronic system- Internet. Customer places an order after browsing through andsatisfying himself www.jaldi.com www.indiainfo.com www.rediff.comwww.amazon.com
    • Retailing through Television: A retailer demonstrates product/service on the television Customer places an order over telephone. Ex: Asian Sky Shop, TSN, TVC, Telebrands etc..
    •  Very important part of retailing Employs more employees than in product retailing Ex: Banks, Doctors, Legal Advisors, Consultants, EducationalInstitutions, Hotels, Beauty Parlors, Garages, Transporters etc.. Specialty Service Retailers also present-APTECH, VLCC, NIIT etc..
    •  Retail Competition form those who use/do not COMPETITO use the same retail format RS AND THEIR STRATEGIE S  Competition can be Intra-type Ex: Between two departmental stores Retail Competition can be Inter-typeEx: Between a departmental store & a discount store. Competition form the Scrambled Merchandise Retailers Competition is greater where customer views two retailers havingsimilar Retail Mix. Competition from similar kind of retailer/ retailer with similarmerchandise
    •  Environmental factors surrounding theENVIRONMENT retailer and its customers AL TRENDS  Includes the following: -Economic Factors - Demographic Factors - Social Factors - Psychological Factors - Brand Profusion - Psychographic Change - Demographic Change - Political Change - Technological Change
    • Economic Factors:  The growth of economy  Increased Buying Power and Disposable Incomes  India’s Large Middle-Class sector – Led to introduction of Organized Retailing.  Indian Economy getting integrated in the world- Globalization Global trends started effecting the Indian economy  Results in change in consumer buying patterns
    • Demographic Factors:  Significant increase in the population in urban due to migration  Created interest in large retailers  Changing demand and consumption- Numerous clusters with distinct needs  Types of families living, Families living in big apartments  India- Highest youth population.  USA- Majority of population turning old
    • Social Factors:  Joint Family- Nuclear family  Increasing number of women working  Lack of time, more income
    • Social Factors:  Joint Family- Nuclear family  Increasing number of women working  Lack of time, more income
    • Psychological Factors:  Consumer Psychology changed- fuelled by Increased exposure to media, TV  Consumer’s increased emphasis on Health & Fitness, Skin Care, Personal & Family hygiene & care.  Has led to the change in concept of marketing.
    • Brand Profusion:  Brand Explosion in almost all goods/services  Consumers surrounded with huge number of brands.  Consumers have become brand conscious at the same time.  Has altered the consumer buying behavior
    • Political Factors:  Severe Political Instability since few years  Causing frequent and major changes in the policies effecting retail industry.Technological Factors:  Advancement in IT  Provided with new ways to expand, network and increase market share.