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Chapter 1


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Chapter 1

  3. 3. 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
  4. 4. 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
  5. 5. Retail industry in IndiaRetail 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 retailingestimated, 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
  6. 6. 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
  7. 7. Functions of retailingSortingBreaking bulkHolding stockAdditional servicesChannel of communicationTransport and advertising functions
  8. 8. Activities performed by retailers Arrange for assortment of offerings Breaking quantity Holding stock Extending services
  9. 9. Categorizing retailersNumber of outletsMargin vs TurnoverLocationSize
  10. 10. Trends in retail formats Mom and Pop Stores and traditional kirana stores E-commerce Department Stores Discount Stores Category Killers Specialty Stores E-tailers
  11. 11. Relationships between retailers andsuppliers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
  12. 12. Retail format mix adopted bymanufacturers 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
  13. 13. 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
  14. 14. 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Value driven approachCoordinated effort
  15. 15. 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
  16. 16. 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