Retail management

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Retail management

  1. 1. SALES AND RETAIL MANAGEMENT 10MBAMM312 PART B Retail Management
  2. 2. Module - 8VTU SyllabusRelationship Marketing in Retailing Management of Relationship Evaluation of Relationship Marketing Relationship Marketing Strategies Retail Research Retail Audits
  3. 3. Building and Sustaining Relationships in RetailingIn recent years Relationship Marketing (RM) has been widely promoted asa means of retaining customers.
  4. 4. Relationship Marketing refers to a long-term arrangement whereboth the buyer and seller have an interest in providing a moresatisfying exchange!Relationship marketing is not about having a "buddy-buddy"relationship with your customers! & the customer don’t wantthat. Relationship Marketing uses the event-driven tactics ofcustomer retention marketing, but treats marketing as a processover time rather than single unconnected events.Relationship Marketing approach achieves very high customersatisfaction and is highly profitable
  5. 5. What is Value?The bottom line: Consumers will demand more for less from the shopping experience They will spend less time shopping They will split the commodity- shopping trip from the value-added shopping trip
  6. 6. What is Value?Channel Perspective: Customer Perspective: Value is a series of  Value is the perception activities and processes - that the shopper has of the the value chain - that value chain provides a certain value  It is the view of all the benefits from a purchase for the consumer versus the price paid.
  7. 7. Providing Extra Value for Customers
  8. 8. Retail Value ChainRepresents the total bundle of benefits offered to consumers through a channel of distribution ▫ Store location & parking ▫ Retailer ambience ▫ Customer service ▫ Branded Products ▫ Product quality, ▫ Pricing
  9. 9. Potential Pitfalls to Avoid in Planning aValue-Oriented Retail StrategyPlanning value with just a price perspectiveProviding value-enhanced services that customers do not want or will not pay extra forCompeting in the wrong value/price segmentBelieving augmented elements alone create valuePaying lip service to customer service
  10. 10. A Value-Oriented Retailing Checklist  Is value defined from a  Is the retailer’s value- consumer perspective? oriented approach  Does the retailer have a clear effectively communicated to value/ price point? the target market?  Is the retailer’s value position competitively defensible?  Can the target market clearly  Are channel partners capable identify the retailer’s of delivering value-enhancing positioning strategy? services?  Does the retailer set  Does the retailer distinguish customer satisfaction between expected and goals? augmented value chain elements?  Does the retailer periodically  Has the retailer identified measure customer meaningful potential value satisfaction levels? chain elements?  Is the retailer careful to  Is the retailer’s value-oriented avoid the pitfalls in value- approach aimed at a distinct oriented retailing? market segment?  Is the retailer’s value-oriented  Is the retailer always looking approach consistent? out for new opportunities that will create customer value?
  11. 11. Bring the Care Back to HealthCare
  12. 12. 3 Aspects of Value-OrientedRetail Strategy Expected Augmented Potential
  13. 13. Customer Service Expected customer  Augmented customer service is the service service includes the level that customers activities that enhance want to receive from the shopping any retailer such as experience and give basic employee retailers a competitive courtesy advantage
  14. 14. Classifying Customer Services
  15. 15. Fundamental DecisionsWhat customer services are expected and what customer services are augmented for a particular retailer?What level of customer service is proper to complement a firm’s image?Should there be a choice of customer services?Should customer services be free?How can a retailer measure the benefits of providing customer services against their costs?How can customer services be terminated?
  16. 16. Typical Customer Services  Credit  Gift certificates  Delivery  Trade-ins  Alterations/  Trial purchases Installations  Special sales  Packaging/ gift  Extended store hours wrapping  Mail and phone orders  Complaints/ Return handling
  17. 17. Miscellaneous CustomerServices Interior designers  Restrooms Personal shoppers  Restaurants Ticket outlets  Baby-sitting Parking  Fitting rooms Water fountains  Beauty salons Pay phones  Fur/Coat storage Baby strollers  Shopping bags  Information
  18. 18. Turning Around WeakCustomer Service Focus on Empower Front-Line Customer Concerns Employees Show That You Are Express Sincere Listening Understanding Apologize and Rectify the Situation
  19. 19. Principles of CategoryManagementRetailers listen more to customersProfitability is improved because inventory matches demand more closelyBy being better focused, each department is more desirable for shoppersRetail buyers are given more responsibilities and accountability for category resultsRetailers and suppliers must share data and be more computerizedRetailers and suppliers must plan together
  20. 20. Elements Contributing to EffectiveChannel Relationships
  21. 21. 3 Kinds of Service RetailingRented goods servicesOwned goods servicesNon-goods services
  22. 22. Four Characteristics ofServices RetailingIntangibilityInseparabilityPerishabilityVariability
  23. 23. Characteristics ofService Retailing Intangibility •No patent protection possible •Difficult to display/communicate service benefits •Service prices difficult to set •Quality judgment is subjective•Some services involve performances/experiences
  24. 24. Characteristics ofService Retailing Inseparability•Consumer may be involved in service production •Centralized mass production difficult •Consumer loyalty may rest with employees
  25. 25. Characteristics ofService Retailing Perishability •Services cannot be inventoried •Effects of seasonality can be severe •Planning employee schedules can be complex
  26. 26. Characteristics ofService Retailing Variability•Standardization and quality control hard to achieve •Services may be delivered in locations •beyond control of management •Customers may perceive variability •even when it does not actually occur
  27. 27. Selected Factors Affecting ConsumerPerceptions of Service Retailing
  28. 28. A Self-Checkout Station
  29. 29. Consumer Advantages toSelf-CheckoutShorter linesIncreased speedPrivacy
  30. 30. Lessons in Service Retailing
  31. 31. RETAIL RESEARCHInformation Gathering andProcessing in Retailing
  32. 32. Suppliers Need To Know From the Retailer From the Customer  Estimates of category  Attitudes toward styles sales and models  Inventory turnover rates  Extent of brand loyalty  Feedback on competitors  Willingness to pay a premium for superior  Level of customer returns quality
  33. 33. Retailers Need To Know From the Supplier  Advance notice of new From the Customer models and model  Why people shop there changes  What they like and dislike  Training materials  Where else people shop  Sales forecasts  Justifications for price changes
  34. 34. Consumers Need To Know From the Supplier From the Retailer  Assembly and operating  Where specific instructions merchandise is stocked in  Extent of warranty the store coverage  Methods of payment  Where to send a acceptable complaint  Rain check and other policies
  35. 35. How do we gatherinformation?• Qualitative Methods ▫ Nonsystematic Information Gathering ▫ Focus Groups, Depth Interviews• Quantitative Methods ▫ Secondary ▫ Primary
  36. 36. Nonsystematic Info’Gathering• Intuition (either self or based on few individuals)• Status Quo• Copying a Competitor• Assume Past will Continue into the Future• What are the problems with these?
  37. 37. Retail Information System(RIS) Anticipates the information needs of the organization Collects, organizes, and stores relevant data on a continuous basis Directs the flow of information to the proper decision makers
  38. 38. Database ManagementA major element in an RISSystem gathers, integrates, applies, and stores information in related subject areasInformation can be from external or internal sources (by customer, vendor or product category)Data warehousing –all databases are in one location & accessible by employees anywhere.Components - physical storage location, software to copy original databases, interactive software to process inquiries & a directory
  39. 39. Data Mining andMicromarketingData mining is the in-depth analysis of information to gain specific insights about customers, product categories, vendors, and so forthMicromarketing is an application of data mining, whereby retailers use differentiated marketing and develop focused retail strategy mixes for specific customer segments
  40. 40. Marketing Research in Retailing• The collection and analysis of information relating to specific issues or problems facing a retailer• Examples: How can we improve sales in this store? How effective was our last promotion campaign?• Secondary data –existing data: internal/external• Primary data – collected specifically for issue under consideration – usually collected when secondary data is inadequate
  41. 41. Marketing Research Process Define Issue or Problem to be Researched Methodology Examine Issues Secondary Data Generate Primary Data Analyze Data Make Decision Implement Findings
  42. 42. Secondary Data Advantages Disadvantages Inexpensive May not suit current Fast study Several sources and May be incomplete perspectives May be dated Generally credible May not be accurate Provides or credible background May suffer from poor information data collection techniques
  43. 43. Secondary Data SourcesInternal External Sales reports  Databases Billing reports ▫ Research Agencies, Business Periodicals Index, Inventory records etc. Performance reports  Government ▫ Census of Retail Trade ▫ Statistical Abstract of the Country ▫ Public records
  44. 44. Primary Data Advantages Disadvantages  Collected for specific  May be more expensive purpose  Tends to be more time  Current consuming  Information may not be  Relevant acquirable  Known and controlled  Limited perspectives source
  45. 45. Primary Decisions • In-house or outsource? • Sampling method? ▫ Probability ▫ Non-probability • Data collection method? ▫ Survey ▫ Observation ▫ Experiment ▫ Simulation
  46. 46. Survey Methods  In-person  Disguised  Over the telephone  Non-disguised  By mail  Online
  47. 47. Mystery ShoppersRetailers hire people to pose as customers and observe operations from sales presentations to how well displays are maintained to service calls
  48. 48. UPC & EDIUniversal Product Code read by scanners contains model number, size, color, etcUPC-A labeling format – numbers & linesAdvantages: speed transaction, reduce errors, rich data, inventory managementElectronic data interchange – data transfer using networks (computer systems linked together)
  49. 49. RetailAudit
  50. 50. RETAIL AUDITRetail-audit service providers gatherinformation on a brand’s sales volume,sales trends, stock levels, effectivenessof in-store display and promotion efforts,and other associated aspects.
  51. 51. Performance Measures Total sales  Operating income Average sales per store  Inventory turnover Sales by goods/ service category  Markdown percentages Sales per square foot  Employee turnover Gross margins  Financial ratios Gross margin return on  Profitability investment
  52. 52. Utilizing Gap Analysis
  53. 53. Minimizing GapsCustomer insightCustomer profilingCustomer life-cycleExtended business modelRelationship program planning and designImplementation
  54. 54. The Retail Audit Process
  55. 55. Obstacles for Doing a Retail AuditAn audit may be costlyIt may be quite time consumingPerformance measures may be inaccurateEmployees may feel threatened and not cooperate as much as desiredIncorrect data may be collectedManagement may not be responsive to the findings
  56. 56. Thank You

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