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Transcript of "321 23 hints-concept-review-questions_chapter-1-retailing-role-relevance-trends"
1. Retail Management, 2/E Bajaj, Tuli & Srivastava CHAPTER 1 RETAILING: ROLE, RELEVANCE AND TRENDSHints to Concept Review Question:1. What is retailing? Enlist the retail activities carried by retailers.Retailing is defined as the conclusive set of activities or steps used to sell a product or aservice to consumers for their personal or family use. It is responsible for matchingindividual demands of the consumer with supplies of all the manufacturers. The word“retail” is derived from the French word retailer, meaning to cut a piece off or to break.The retail activities carried by retailer are: 1. Arrange for assortment of offerings 2. Breaking Quantity 3. Holding Stock 4. Extending Services2. Discuss briefly various types of retail formats.The various forms of retail formats are: i. Mom and Pop Stores and Traditional Kirana Stores:Mom and pop stores and traditional Kirana stores are very small stores in the city wherethey buy in few numbers from whole sellers and sell it to the consumers. These storesoffer few products that are necessarily required for daily life. These are so small stores,where you cannot go inside and select what ever you want. There will be an owner anda few workers appointed to help owner, owner will be sitting on the cash counter totake money and order.Customer orders by standing out side the counter. Owner takes the order and tells theworkers to give the required products to the consumers and he checks the workers forthe correct delivery of the products. Consumers give cash to the owner who is sitting onthe counter. This is how the activity is being done in mom-pop or Kirana stores. Thesestores will not give discounts and offers until and unless the company or wholesalersprovide it.ii. E-retailing:E-retailing or e-commerce means retail business being conducted on the Internet. E-commerce is growing every year. Indeed, Forrester Research projects e-commercerevenue to rise to $123 billion in 2004, an increase of some 28 percent over the previousyear—and for e-tailing to comprise a bigger slice of the overall retail pie (5.6 percent, upfrom 4.5 percent in 2003). Many major retail organizations and manufacturers haveonline retail stores.Example: Amazon.com, First and second.comiii. Department stores:Over the last decade or so, however, department stores have suffered. In part this is aresult of changing shopping patterns and increased competition from discount stores. Ithas also come from financial burdens incurred by companies that acquired competitors Copyright © Oxford University Press, 2010
Retail Management, 2/E Bajaj, Tuli & Srivastavaand grew too fast. Its unlikely that these players will disappear from the market.However, expect more bumps as the strong get stronger and the weak get absorbiv. Discount Stores:Discount stores along with category Killers have changed the landscape of retailindustry. Where once mom-and-pop and department stores dominated retail, now thediscount retailers and category killers are at the top of the heap. And where onceshopping malls, anchored by at least one major department store, used to be thedominant retail presence lining the nation’s roads.Example: Wal-Mart (the largest retailer in the world, with more than a millionemployees), Target, and Kmart, as well as membership warehouses such as Costco.v. Category Killers:These are the giant retailers that dominate one area of merchandise (e.g., Office Depot,Tower Records, and The Sports Authority). They are able to buy bathroom tiles, filecabinets, electronic goods, or pet food in such huge volumes that they can then sellthem at prices even fairly large competitors cant match.vi. Specialty Stores:These stores concentrate on one type of merchandise and offer it in some manner thatmakes it special. Some are very high-end (Louis Vuitton); others cater to the price-conscious masses (Old Navy).Example: Crate & Barrel, the Body Shop, and Victorias Secretvii. E-tailers:While most retailers have online storefronts, strictly online purveyors with no bricks-and-mortar counterparts are hoping to snare a percentage of the retail profit. Andmajor players, such as Amazon.com, have generated enough business to cause topbrick-and-mortar competitors to follow up with their own Internet sites. Traditionalretailers like Wal-Mart and Starbucks, hugely successful in their own right, have also setup online stores so as not to miss out on the revenue opportunities that the Internetoffers.3. What are the drivers of changing face of retail structures in the developing world particularly in context of India?The drivers of changing face of retail structures in the developing world particularly inIndia are:Customers are the driving force in Change:Customers are king in the market. The day of Caveat emptor is gone now manufacturershas to identify the needs and wants of consumers and has to manufacture according toit. Anything offered to consumers is not acceptable. But consumers needs and wantswill not always be same. It goes on changing based on the income level and based onneeds of hierarchy. Therefore consumers are driving force in change of products arefacilities offered by the retailers.Example:The family in which both mother and father is earning, they are in short of time.Therefore they want prepared products and examples for prepared products are tomato Copyright © Oxford University Press, 2010
Retail Management, 2/E Bajaj, Tuli & SrivastavaPuree, prepared flour, instant dishes etc. Like this consumers are the driving forces inchange.Re-evaluating the Marketing Plan:Every year marketing plan will be done; the planes are often evaluated for thedeviations. The evaluation focus can be done on the advertising prices because throughadvertising products are placed in the minds of the customers, which requires attractiveplace and much space is consumed to advertise in retail outlet. As mass advertising isbecoming generic and less effective, building a strong public relation campaign hasbecome a more effective way to get attention for many retailers.Strong Visual Recognition:Retailing is the end process for selling; retailing is the process where goods are sold tothe consumers. But during the process of buying product from retail shop a consumershould visualize the products to buy. Which products should be bought is recognizedand the image of the product is drawn in the mind. Therefore strong visual recognitionmeans recognizing the need and recalling the product to buy from the pool of productsadvertised.The Workplace Challenge:The work place challenge means over coming the difficulty in running a retail outlet. Thedifficulty lies in understanding or identifying the needs of consumers and placing suchproducts on the shelf attractively. For this employees are educated through training.Planning for success It means that understanding how best a retail out let traffic is increased or how toattract the customers or how to create loyalty by consumers for the particular outlet.After understanding, a strategy should be drawn to execute. Planning for the success isnothing but drawing blue print for achieving the goals and objectives set during thestrategy. Through this focus on marketing approach can be increased and a strong teamof supporting employees can be built.4. What is the role of Internet technology in redefining the retail industry in entire value chain?The role of Internet technology is to support existing marketing activity. The Internethas opened a new world of opportunities for retailers. It offers a way to grow an existingretail business and increase exposure to that marketplace. Retailers of any size canappear even more successful on the Internet with an effective service and sell site.The Internet has been used in three main ways to facilitate retail marketing. In the mostbasic respect it is a means of merely communicating information about the retailorganization, its products and services. At the next level, it is used as a more proactivemarketing tool, inviting consumers interactively to access the Web site to gain moreproduct information to facilitate their buying decision-making process. At the same timeit provides valuable consumer data for retailers to enable greater targeting Copyright © Oxford University Press, 2010
Retail Management, 2/E Bajaj, Tuli & SrivastavaInternet retailing offers a retail experience that is totally different from fixed locationretailing Comparison and price shopping across a greater number of sites will be easierand could be achieved within minutes. More and more consumers are beginning to usethe Internet for research in the early part of the buying decision-making process. Copyright © Oxford University Press, 2010