2. LO1 HISTORY OF RETAIL,
LO2 RETAIL OVERVIEW AND PRESENT SCENARIO
LO3 CONCEPT AND FUNCTIONS PERFORMED BY RETAILERS
LO4 EMERGING TRENDS AND CAREER OPPORTUNITIES IN
RETAILING
LO5 THE BUYING PROCESS - NEED RECOGNITION, INFORMATION
SEARCH, EVALUATION OF ALTERNATIVES.
LO6 SOCIAL FACTORS INFLUENCING THE BUYING PROCESS
FAMILY, REFERENCE GROUPS AND CULTURE.
LO7 RETAILER CHARACTERISTICS
LO8 RETAIL FORMATS - STORE BASED, NON-STORE BASED,
WEB BASED VARIOUS FORMAT WITHIN STORE BASED
RETAILING E.G. SPECIALTY STORE, HYPER MARKET, AND
SUPERMARKET.
LO9 DRAW AN INSIGHT INTO DEVELOPING A SALES STRATEGY
AND PLAN AND IMPLEMENTING THE PLAN.
2
UNIT 1: Introduction to the World of Retailing
4. Recall…. When is the last time you went to your
favorite retailer? What store was it? Is it a clothing
store, or is it a grocery store? Maybe you prefer to
shop online. Why?
Have you wondered about the journey those
products take before making it out to the shelves?
What is your definition the word “retail.”
Spend five minutes writing your responses to the following
questions
4
Before we define Retail & Retailer….let us
Reflect !!!
5. Retailing – includes all the activities involved
in selling the goods&services to the final
consumer for personal,family, householduse
or for nonbusiness purpose .
Retail – The word retail is derived from a
french word retaillier which means to cut off a
piece or to break bulk.
What is Retailing?
6. Understanding Retailing
Definition of Retail: sale of goods and services to the
public for consumption, covering a huge range of customer
needs
Design to create contact efficiency
Define target buyer segments, identify service outputs, and match
offerings to provide value to each target
Utilize structural differences among retailers that influence strategies
and results
94.5% of retail companies only have one location, and more
than one million have fewer than 100 employees
7. Examples of Retailers
Retailers:
-Reliance Retail, KFC, McDonalds,
More,Subiksha,Spencers,VishalRetail,Bigbazar etc
Firms that are retailers and wholesalers
that sell to other business as well as
consumers:
-Metro,Office Depot(Stationery products).
9. Learning Outcomes: Evolution of Retail
1.2 Analyze the evolution of the retail industry
1.2.1 Describe the overall change in the structure
of the retail industry over the past 60 years
1.2.2 Discuss the role information systems have
played in the changing retail industry
1.2.3 Explain why a willingness to adapt is
essential to a retailer's survival
10. Historical Changes in Retail
Pre-1800s: retail was made up of local merchants who
provided full service to customers (credit, repairs, etc.)
First department store was developed in 1800s, by the
1950s over 4,000 department stores operated, and by
1970s department stores closed and replaced with malls
1990s: Internet impacted retail industry, online shopping
became widely popular and still is to this day
11. Historical Changes in Retail
(Contd…)
Retail comes from the Old French word tailor, which
means "to cut a piece off, clip or to break bulk" in terms of
tailoring (1365). It was first recorded as a noun with the
meaning of a "sale in small quantities" in 1433.
The true department store in the world was founded in
Paris in 1852 by Aristide Boucicaut and was named Bon
Marche.
It was only after World war II that retailers began to
upgrade their services, facilities and merchandise
selection to offer a fascinating array of additional benefits
to consumers through organised retailing.
11
12. Information Systems in Retail
Frequently utilized information systems in retail:
Inventory management software: tracks
inventory levels, orders, sales, and deliveries
Customer Relationship Management: looks at
data about current and future customers in
hopes of retaining and building relationships
(personal profile/details, sales history,
communication, feedback)
Accounting Information Systems: system of
collecting, storing, and processing data used
by decision makers
13. Adaptation in Retail
Examples that failed to adapt and why:
Blockbuster Video: late fees led to its
demise, and they were too slow to adapt to
changes
Borders Bookstore: filed for bankruptcy in
2011 because they struggled to fill stores
with products consumers wanted
Toys R Us: had to lay off over 30,000
employees and sold 15% of toy market,
needing to make up for lost sales
14. Practice Question
As you consider those shifts also think about
how you, the consumer, has changed over time.
Do you shop differently then you used to a year
ago or even a decade ago?
What have been some of your biggest
influencing factors?
What has been a dramatic shift for you in retail?
16. The market after 2021 has been an eye-
opening time for the Indian retail sector. The
industry saw a decline of 8.5% in FY 2021, but
it recovered in 2022 to reach $836 billion with
81.5% contribution from traditional retail.
However, the COVID-19 disruptions led to a
rapid increase in e-commerce and digital
adoption. Now, brands across segments are
concentrating on increased online presence
and direct sales as customers continue to
shop online.
16
17. Quite interestingly, shoppers from Tier II and
Tier III cities make up over 61 percent of the
total market share in FY 2022 in comparison to
53.8 percent in FY 2021. While Tier I cities
have a lesser growth rate for e-commerce at
47.2 percent, tier II and III cities showcased
growth of 92.2 percent and 85.2 percent,
respectively. In 2023, tier II and III cities
dominance is likely to continue. Looking at the
way Indian retail industry is moving, 2023 will
be the year to watch.
17
18. Let us talk about trends
Retailers are deluging the market in droves to invest in
cutting-edge technology and take advantage of the
chance to empower the gen-Z, tech-savvy, and millennial
consumer-driven market. A Forbes report says that global
AR/VR investment will most certainly reach $72.8 billion in
2024. Additionally, consumers will engage in more
conversational commerce, increasing the use of chatbots.
The chatbot industry is anticipated to reach a market
value of over $102 billion by 2026, with a CAGR of under
35%.
Today’s consumers seek out white-glove customer care
and demand experiences going beyond the typical
shopping experience. According to various market
studies, 32% of customers are more willing to interact with
18
19. moments. Through experiential retail, companies can give
their customers unique and cutting-edge experiences —
both online and in-person.
Retailers can use AR/VR technology to provide
immersive shopping experiences focusing on in-person
interactions, enhancing the relationship between the
brand and the consumer. Virtual navigation, virtual fitting
rooms, virtual shopping, and in-store displays are just a
few cutting-edge ways; businesses may make the most
of this technology that boosts contactless transactions
and encourages interaction.
19
20. The world retailing industry is becoming increasingly
competitive, forcing companies to take an innovative
approach to attract consumers and encourage long-
term loyalty to the customers. Department stores, for
example, are increasing consumer footfalls by replacing
more expensive brand-name products with less
expensive private-label products. There are many
market segments that are fueling the growth of this
industry. The convenience store industry and the global
e-commerce industry are all expected to grow
significantly in the next few years especially in emerging
markets such as Latin America, the Middle East and
Asia.
20
21. According to Yahoo Finance, the Indian online retail
market was valued at INR 4,822.80 billion in 2023. The
market is expected to grow to INR 15,159.11 billion by
2028, with a compound annual growth rate (CAGR) of
24.93% from 2024 to 2028.
Deloitte India and the Shopping Centre Association of
India (SCAI) project that India's retail industry will grow
to $4.5 trillion by the end of the decade. As of 2022, the
Indian retail market is valued at around $1.3 trillion.
According to BCG, India's retail market is expected to
reach $1.1–1.3 trillion by 2025, growing at a CAGR of 9–
11%. This growth is driven by factors such as
urbanization, income growth, and the rise of nuclear
21
22. According to LinkedIn, the Indian retail industry is
undergoing a significant transformation in 2023. Digital
retail has become the focus, with e-commerce becoming
more popular due to its convenience and improved
internet accessibility.
22
24. How Retailers Add Value
Breaking Bulk
-Buy it in quantities customers want
Holding Inventory
-Buy it at a convenient place when you want it
Providing Assortment
-Buy other products at the same time
Offering Services
-See it before you buy, get credit, discount etc.
25. Smartwatch can
be bought on
credit or cash.
Smartwatch is
featured on floor
display
Smartwatch is offered
in
convenient locations in
quantities of one
Smartwatch is
developed in
several styles
How Retailers Add Value
Smartwatch is
developed at
manufacturer
The value of the product and service increases
as the retailer performs functions.
26. Manufacturer’s Perspective
The Four P’s of Marketing
Distribution
Retailers are part of the
distribution channel
Retailers are part of the
distribution channel Product
Price
Promotion
29. Decision Variables for Retailers
Customer Service
Store Design
and Display
Merchandise
Assortment
Communication
Mix
Location
Pricing
Retail
Strategy
30. Economic Significance of
Retailing
Over 1lak cr in sales
Employs 7% of population
-about the same as manufacturing and growing.
Management training opportunities
Entrepreneurial opportunities
31. Nature of Retail Industry is
Changing
Mom and Pop Store
To Today’s Retailer
32. RETAILING IS A HIGH TECH
INDUSTRY
- Selling Merchandise over the Internet eg: ebay etc.
- Using Internet to manage supply chains
- Analyze POS data to tailor assortments to stores
- Computer systems for merchandise planning
33. Retail Environment Differs Across the
Globe
US INDIA
Concentration High Medium
Store Size Big Small
Role of Low Low
Wholesaling
Efficiency High Low
35. Types of Retail
The retail industry covers an enormous range
of consumer needs.
According to the National Retail Federation,
there are sixteen major segments in the
industry.
This diversity in size and earnings is reflected
in the range of different ownership and
management structures
36. Supply Chains
A supply chain is system of organizations, people,
activities, information, and resources that involve
transformation in an efficient, nimble, and seamless
way
Supplier: person providing service (domestic or
international)
Factory: supplier has raw materials made into products
Distribution Center: finished product goes here after
leaving factory
Regional Distribution Center: local to area with many
advantages
37. Challenges in Retailing
1.Inventory: having too much or too little can
affect reputation of retailer and perception of
consumer
2.Mobile Experience and Engagement: 90% of
customers use smartphones while shopping
3.Digital Disruption: 5 stages (need recognition,
information search, evaluating alternatives,
purchase decision, post-purchase evaluation)
39. Learning Outcomes: Careers in Retail
Recognize career opportunities available in the
retail businesses
Identify key roles within retail businesses
List some challenges of working in the retail field
Categorize the general role requirements of a
retail manager
Discuss the most valuable skills for a retail
manager to possess
40. Key Roles in a Retail Business
Industry offers diverse and unique career paths, and
main goal includes intersecting with marketing, finance,
technology, etc. fields
Entry level positions don’t require worker to supervise
other workers t same level
Intermediate management is HR, production, strategic,
marketing, and/or financial
Management comprises of planning, organizing,
staffing, etc.
41. Understanding Key Roles in a Retail
Business
Basic Functions:
Planning: what needs to happen in the future
Organizing: implementing pattern of
relationships
Staffing: job analysis, recruitment, hiring
people
Leading/directing: what needs to be done in
a situation
Controlling/monitoring: making adjustments
when needed
Motivating
42. Why Working In Retail Is Tough
Inventory levels and assortment: must have right amount
of product available at right times in right places
Mobile engagement and experience: 90% of consumers
use smartphones while shopping, mobile revenue expected
to be $520 million in 2024
Digital disruption: need recognition, information search,
evaluating alternatives, decision to purchase, post-purchase
evaluation
Socially conscious consumer: eco-friendly or “green”
products among millennials and younger
43. Retail Management
Requirements
Middle managers: excellent interpersonal skills relating to
communication, motivation, and mentoring
Front Line Management
Focus on controlling and directing specific employees
Skill Sets
Effective at communicating, observing/actively
listening, giving/receiving feedback, prioritizing
Responsibilities
Expertise required, tasked with hiring, assessing
performance, providing feedback, aligning teams, etc.
44. Retail Management
Requirements
Functional Management:
authority over organizational unit within
business, ongoing responsibilities
General Management:
focuses on entire business as a whole,
formatting policies, managing daily operations,
planning, managing cost revenue
46. Skills of a Retail Manager
Technical Skills:
Learned capacity in any given field of work, study, &
play
Management and communication skills
Programming, website maintenance, typing, writing,
giving presentations
Conceptual Skills:
Most relevant in upper-level thinking and broad
strategic situations
Ability to formulate ideas, generate values, policies,
mission statements, ethics
Abilities to communicate critical concepts
47. More Retail Management
Requirements
Defining Agendas
Business application
know what will be discussed in meetings
Keeping minutes
verbatim record of what was discussed and made
available to public
Relevance to management
distributing in timely fashion, communication,
organization skills
48. Skills of a Retail Manager
(cont.)
Interpersonal Skills:
Leadership, manager vs. leader
Communication and interpersonal skills lie at
center of considerations
Experiential Learning:
The process is cyclical with no required
starting point or end
Learning through reflection, focus on learning
process for individual
50. Microenvironment vs.
Macroenvironment
Business management: art, science, and craft of
formulating, implementing, and evaluating
decisions that will enable an organization to
achieve its long-term objectives
Strategic planning: organization’s process of
defining strategy and making decisions to pursue
this strategy
Business environment: refers to factors and
forces that affect firm’s ability to build and
maintain successful customer relationships
51. Microenvironment vs. Macroenvironment
(cont.)
Micro: small forces within company that affect
ability to serve its customers
Anything in immediate environment (suppliers,
customers, competitors, stakeholders
Macro: larger societal forces that affect the
microenvironment
Outside of retailer’s control and of an
economic and industry viewpoint
53. Strategic Planning in Retail
Four key elements of strategic planning :
strengths and weaknesses
personal values of key implementers (internal)
industry opportunities/threats &
broader societal expectations (external)
Steps in strategic retail planning process
define business mission, conduct situation audit, identify strategic
opportunities, evaluate strategic alternatives, establish specific
objectives, develop retail mix, evaluate performance
54. The Retail Mix
Price: What is strategy for marketing?
Promotion: What tools will you use to influence
consumers purchase decision
Place: What are hours of operation, how many
employees are needed?
Product: What type do you intend to carry, what
is depth that you will carry in assortment?
Presentation: Will there be a free-standing
location?
Store Image: What is layout, graphics?
55. The Retailing Concept
Idea that examines the evolution of the transformation of
retail life cycle, suggesting new retailers will begin with low-
cost and low-margin operations
Barnes & Noble example:
Stage 1: began with variety of books in one location at
low cost
Stage 2: expanded to various locations, increasing sales,
brand image, value, and profit
Stage 3: established, opened new stores, greater profits
Stage 4: Amazon entered market, allowing customers to
browse books online and have them delivered
56. Quick Review
Key challenge in retail: Inventory
Adequate inventory levels imperative to retailer
success
Too much inventory leads to unproductive sales
and lost margin due to markdowns
If it doesn’t support customer demand, lost sales
and negative image of retailer
The Retail Mix helps with strategic planning
Technology has transformed the industry in
many ways
57. CONSUMER BUYING PROCESS:
PROBLEM RECOGNITION, SEARCH
AND EVALUATION, PURCHASING
PROCESSES, POST-PURCHASE
BEHAVIOR.
UNIT 1: Introduction to the World
of Retailing
5
67. Stimulus
Any unit of input affecting
one or more of the five senses:
sight
smell
taste
touch
hearing
Stimulus
68. Recognition of
Unfulfilled Wants
When a current product
isn’t performing properly
When the consumer is
running out of a product
When another product seems
superior to the one currently
used
69. 2. Information Search
Internal Information Search
Recall information in memory
External Information search
Seek information in outside
environment
Nonmarketing controlled
Marketing controlled
70. 2. Information Search (Contd.)
Deliberate attempt to gain knowledge
about a purchase decision; goal is to
reduce uncertainty.
Internal search
Retrieve information from long term
memory
External search
Gather information from external
sources, e.g., ads, media, friends, stores
72. External Information Searches
Need More
Information
More Risk
Less knowledge
Less product experience
High level of interest
Lack of confidence
Less Risk
More knowledge
More product experience
Low level of interest
Confidence in decision
Need Less
Information
73. 3. Evaluation of Alternatives
and Purchase
Evoked Set
Purchase!
Analyze product
attributes
Rank attributes by
importance
Use cutoff criteria
74. 3. Evaluation of Alternatives and
Purchase (Contd.)
Occurs either separately or in conjunction with
information search.
We rely on internal processes to help us
organize the evaluation process.
Consideration (evoked set)
Decision rules (heuristics)
76. Decision Rules
Strategies used by consumers to guide
decision making.
Some decision rules use product
characteristics to guide decisions.
Compensatory
Noncompensatory
Some decision rules rely on stored
information in consumers’ memories to
guide decisions.
77. Compensatory Decision Rule
Select the best overall brand
Consumer evaluates brand options in terms of
each relevant attribute and computes a weighted
or summated score for each brand. The
consumer chooses the brand with the highest
score.
A compensatory model because a positive
score on one attribute can outweigh a negative
score on another attribute.
78. Noncompensatory Decision
Rules
Conjunctive Decision Rule
Consumer sets a minimum standard for each
attribute and if a brand fails to pass any standard,
it is dropped from consideration.
Reduces a large consideration set to a
manageable size.
Often used in conjunction with another
decision rule.
79. Noncompensatory Decision Rules
Disjunctive Decision Rule
Consumer sets a minimum acceptable
standard as the cutoff point for each attribute--
any brand that exceeds the cutoff point is
accepted.
Reduces large consideration set to a more
manageable number of alternatives.
Consumer may settle for the first
satisfactory brand as final choice or may use
another decision rule.
80. Noncompensatory Decision
Rules
Lexicographic Decision Rule
The consumer ranks the attributes according to
importance and then selects the brand that is
superior on the most important attribute.
If one brand ranks sufficiently high on just one
attribute, it will be selected regardless of how it
scores on other attributes.
81. Affect-Referral Rule
Synthesized decision rule
Consumers maintain overall evaluations of
brands in their long term memories. Brands on
not evaluated on individual attributes but on the
highest perceived overall rating.
82. Frame of Reference
Another way in which consumers evaluate
information is the frame of reference from
which s/he subjectively evaluates messages
related to a decision problem.
“Percent lean” vs. “Percent fat”
“Sale” vs. “Clearance”
83. Hypothetical Use of Popular Decision Rules in
Making a Decision to Purchase an Ultralight Laptop
DECISION RULE MENTAL STATEMENT
Compensatory
rule
“I selected the computer that came out best
when I balanced the good ratings against the
bad ratings.”
Conjunctive rule “I selected the computer that had no bad
features.”
Disjunctive rule “I picked the computer that excelled in at least
one attribute.”
Lexicographic
rule
“I looked at the feature that was most important
to me and chose the computer that ranked
highest on that attribute.”
Affect referral
rule
“I bought the brand with the highest overall
rating.”
86. 5. Postpurchase Behavior
Consumers can reduce dissonance by:
Seeking information that reinforces positive
ideas about the purchase
Avoiding information that contradicts the
purchase decision
Revoking the original decision by returning
the product
Marketing can minimize through:
Effective Communication
Follow-up
Guarantees
Warranties
87. Post-Purchase Evaluation
Consumers evaluate purchases during
consumption process.
Three possible outcomes.
Postpurchase cognitive dissonance.
Complaining behavior.
89. Outcomes
Actual product performance exceeds
prepurchase expectations.
Positive disconfirmation of expectations
Satisfaction
90. Outcomes
Actual product performance is below
prepurchase expectations.
Negative disconfirmation of expectations
Dissatisfaction
91. A Continuum of Satisfaction
Dissatisfaction Delighted
Satisfaction
92. If dissatisfied….
Alternative actions
Do nothing
Avoid seller/brand in the future
Negative WOM to friends
Seek redress of problem from seller
Complain to outside agency
PORTABILITY! (If possible)
93. Decision to complain...
Is based on:
Level of dissatisfaction
Importance of decision/purchase
Costs/benefits of actions
Personal characteristics
Attribution of blame
94. Managerial Implications Related to
Consumer Decision Making
Understanding decision making process
enables marketers to assist consumers along
decision pathway.
Offer products that meet needs/wants
Advertising
Making information available
Making product available
Follow-up sales calls, good service
95. Consumer Buying Decisions
and Consumer Involvement
Identify the types of consumer buying
decisions and discuss the significance a of
consumer involvement?
96. Consumer Buying Decisions
and Consumer Involvement
More
Involvement
Less
Involvement
Routine
Response
Behavior
Limited
Decision
Making
Extensive
Decision
Making
97. Five Factors Influencing Decisions
1. Level of consumer involvement
2. Length of time to make decision
3. Cost of good or service
4. Degree of information search
5. Number of alternatives considered
99. Routine Response Behavior
Little involvement in selection process
Frequently purchased low cost goods
May stick with one brand
Buy first/evaluate later
Quick decision
100. Limited Decision Making
Low levels of involvement
Low to moderate cost
goods
Evaluation of a few
alternative brands
Short to moderate time to
decide
101. Extensive Decision Making
High levels of involvement
High cost goods
Evaluation of many brands
Long time to decide
May experience cognitive
dissonance
102. Factors Determining the Level of Consumer
Involvement
Situation
Social Visibility
Interest
Perceived Risk of
Negative Consequences
Previous Experience
103. Marketing Implications of Involvement
High-involvement
purchases require:
Extensive and informative
promotion to target market
Low-involvement
purchases require:
In-store promotion,
eye-catching package
design, and good displays.
Coupons, cents-off,
2-for-1 offers
106. Class Discussion
Based on those characteristics that contribute
to postpurchase dissonance, discuss
several product purchases that are most
likely to results in dissonance and several
that will not create this effect.
107. Postpurchase Dissonance
Postpurchase Dissonance: a consumer
reaction after making a difficult decision that
involves doubt and anxiety
Probability of experiencing dissonance
increases based on:
Degree of commitment or irrevocability
Importance of the decision
Difficulty in choosing
Individual’s tendency to experience anxiety
108. Postpurchase Dissonance
Approaches to reduce dissonance:
Increase the desirability of the brand purchased
Decrease the desirability of rejected brand
Decrease the importance of the purchase
Reverse the purchase decision (return before use)
109. Consumer Insight
What ethical issues, if any, are there with state
lotteries encouraging counterfactual and
prefactual thinking about winning the lottery?
Why is counterfactual thinking so common
among consumers (it is common)?
112. SOCIAL FACTORS INFLUENCING THE
BUYING PROCESS FAMILY,
REFERENCE GROUPS AND CULTURE
UNIT 1: Introduction to the World
of Retailing
6
113. Culture
The sum total of learned beliefs, values, and
customs that serve to regulate the consumer
behavior of members of a particular society.
113
114. Culture
Culture offers order, direction, and guidance in
all phases of human problem solving: When to
eat, Where to eat, What to eat for each meal,
What to serve guests at a dinner party, picnic, or
wedding.
Culture is a learned behavior.
114
115. Culture…
. . is adaptive, i.e. it changes as a society faces
new problems and opportunities...
. . . satisfies needs by providing norms (rules of
behavior)...
. . . provides values which delineate what is
right, good, and important to a society.
115
116. Characteristics of culture
Culture is a learned response.
Culture includes inculcated values.
Culture is a social phenomenon.
Culture is gratifying and continues for a long
time.
Cultures are similar and yet different.
Culture prescribes the ideal standards of
behavior.
116
118. Culture Includes:
The Material Objects of a Society
Ideas and Values
Institutions
Symbols
The Ways We Dress, Think, Eat, and Spend Our
Leisure Tim
118
119. :::Beliefs:::
Consist of the very large number of mental or
verbal statements that reflect a persons
particular knowledge and assessment of
something
“I believe this is a good restaurant to eat”
“I believe she is a nasty person”
119
120. :::Values:::
1) Values are also beliefs in a way but they differ
due to
2) They are relatively few in number
3) Serve as a guide for behavior
4) Difficult to change
5) Not tied to specific objects or situations
6) Widely accepted by society
120
121. The beliefs, values, customs…
Influence of culture
1. ON cultural values systems.
- Ethics-good, moral, immoral.
- Aesthetics-beautiful, ugly, pleasant, unpleasant.
- Doctrine- political, social, ideological
121
122. 2-Culture exist & reveals at different levels.
Supranational level- Reflects different
dimensions of multiple cultures/ different
society of nations
National level- dimensions of culture of country
and national characters.
Group level- Held with in a country with
various sub-divisions of the society like family,
reference group, & other closely held group.
122
123. Levels of Culture
Level 1: Cultural
differences that cross
national boundaries or can
be seen to be present in
more than one country
Level 2 : Unique to a
particular country
Level 3 : Basically
subcultures can also be
Families, shopping
groups, friendship groups
123
Group
National
Supranational
124. Forms of Cultural Learning
Formal Learning: what the elder family
member teach the younger one how to
behave.
Informal Learning: what the child learns
primarily by imitating the behavior of selected
others such as family, friend, or TV heroes.
Technical Learning: In which teacher instruct
the child in an educational environment about
what should be done, how it should be done,
and why it should be done.
124
126. Issues in Culture
Enculturation: the learning of one’s own culture.
Acculturation: The learning of a new or foreign
culture.
Language and symbols: Marketers must choose
appropriate symbols in advertising.
Ritual: A ritual is a type of symbolic activity
consisting of a series of steps (multiple behavior)
occurring in a fixed sequence and repeated over
time.
Rituals extend over the human life cycle
Marketers realize that rituals often involve products.
126
128. Culture and Advertising
Is it the role of advertising to socialize readers
on how to dress, decorate their homes,
celebrate festivals and food for parties, etc.?
128
129. American Core
Values
Achievement and
success
Activity
Efficiency and practicality
Progress
Material comfort
Individualism
Freedom
External conformity
Humanitarianism
Youthfulness
Fitness and health
129
Indian Core
Values
Family orientation
Saving orientation
Festivities
Shopping as a ritual
Mythology
Food Habits
130. Criteria for Value Selection
The value must be pervasive.
The value must be enduring.
The value must be consumer-related.
130
131. Changing cultural trends in
Indian urban markets
Achievement orientation
Work Ethic
Material Success
Middle of the road approach to tradition
Impulse Gratification
Use of hi-tech products
131
134. Culture
The sum total of learned beliefs, values, and
customs that serve to regulate the consumer
behavior of members of a particular society.
134
135. Culture
Culture offers order, direction, and guidance in
all phases of human problem solving: When to
eat, Where to eat, What to eat for each meal,
What to serve guests at a dinner party, picnic, or
wedding.
Culture is a learned behavior.
135
136. Culture…
. . is adaptive, i.e. it changes as a society faces
new problems and opportunities...
. . . satisfies needs by providing norms (rules of
behavior)...
. . . provides values which delineate what is
right, good, and important to a society.
136
137. Characteristics of culture
Culture is a learned response.
Culture includes inculcated values.
Culture is a social phenomenon.
Culture is gratifying and continues for a long
time.
Cultures are similar and yet different.
Culture prescribes the ideal standards of
behavior.
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139. Culture Includes:
The Material Objects of a Society
Ideas and Values
Institutions
Symbols
The Ways We Dress, Think, Eat, and Spend Our
Leisure Tim
139
140. :::Beliefs:::
Consist of the very large number of mental or
verbal statements that reflect a persons
particular knowledge and assessment of
something
“I believe this is a good restaurant to eat”
“I believe she is a nasty person”
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141. :::Values:::
1) Values are also beliefs in a way but they differ
due to
2) They are relatively few in number
3) Serve as a guide for behavior
4) Difficult to change
5) Not tied to specific objects or situations
6) Widely accepted by society
141
142. The beliefs, values, customs…
Influence of culture
1. ON cultural values systems.
- Ethics-good, moral, immoral.
- Aesthetics-beautiful, ugly, pleasant, unpleasant.
- Doctrine- political, social, ideological
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143. 2-Culture exist & reveals at different levels.
Supranational level- Reflects different
dimensions of multiple cultures/ different
society of nations
National level- dimensions of culture of country
and national characters.
Group level- Held with in a country with
various sub-divisions of the society like family,
reference group, & other closely held group.
143
144. Levels of Culture
Level 1: Cultural
differences that cross
national boundaries or can
be seen to be present in
more than one country
Level 2 : Unique to a
particular country
Level 3 : Basically
subcultures can also be
Families, shopping
groups, friendship groups
144
Group
National
Supranational
145. Forms of Cultural Learning
Formal Learning: what the elder family
member teach the younger one how to
behave.
Informal Learning: what the child learns
primarily by imitating the behavior of selected
others such as family, friend, or TV heroes.
Technical Learning: In which teacher instruct
the child in an educational environment about
what should be done, how it should be done,
and why it should be done.
145
147. Issues in Culture
Enculturation: the learning of one’s own culture.
Acculturation: The learning of a new or foreign
culture.
Language and symbols: Marketers must choose
appropriate symbols in advertising.
Ritual: A ritual is a type of symbolic activity
consisting of a series of steps (multiple behavior)
occurring in a fixed sequence and repeated over
time.
Rituals extend over the human life cycle
Marketers realize that rituals often involve products.
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149. Culture and Advertising
Is it the role of advertising to socialize readers
on how to dress, decorate their homes,
celebrate festivals and food for parties, etc.?
149
150. American Core
Values
Achievement and
success
Activity
Efficiency and practicality
Progress
Material comfort
Individualism
Freedom
External conformity
Humanitarianism
Youthfulness
Fitness and health
150
Indian Core
Values
Family orientation
Saving orientation
Festivities
Shopping as a ritual
Mythology
Food Habits
151. Criteria for Value Selection
The value must be pervasive.
The value must be enduring.
The value must be consumer-related.
151
152. Changing cultural trends in
Indian urban markets
Achievement orientation
Work Ethic
Material Success
Middle of the road approach to tradition
Impulse Gratification
Use of hi-tech products
152
161. Types of Store Retail
Department Stores
Specialist Stores
Categories Killers
Convenience Stores
Supermarkets, Superstores and
Hypermarkets
Catalogue Shops
Discount Stores
Factory Outlets
161
162. Department Stores
A department store is a multi-level store (at one time six or
seven stories were common, but today there tend to be from
two to three stories).
Department stores offers width and depth in the product
range so that almost every shopping need can be met.
Department stores in principal cities around the world are
not only retailers; they also act as tourist attractions and
sources of entertainment.
162
163. Specialist Stores
Specialist stores are smaller, in line with the size of
the product range offered.
The majority of stores found in shopping centres or
central retail areas are specialist stores.
Specialist store targets a narrowly defined customer
market segment.
163
164. Category Killers
The term category killer, which originated in the
USA
Category Killers is described as a large specialist
retailer that is typically found in an out-of town or
edge-of-town retail park or site.
164
165. Convenience Stores
Convenience Stores generally apply this criteria to this
format:
self service.
1,000-3,000 sq ft selling area.
Parking facilities.
Open 7 days a week.
A wide range of goods.
165
166. Supermarkets, Superstores and
Hypermarkets
Supermarkets, Superstores & Hypermarkets a store
concept imported from the USA in the twentieth century.
It is based on principal method ‘every day goods'.
Instead of requesting products over a counter, It allowed
the customer to get involved with the product prior to
purchase.
The space and labour-saving factors allowed retailers to
offer a wider choice of product at lower prices.
166
167. Supermarkets, superstores and hypermarkets can
be considered in the same 'family' of retail format, in
that the stores are self-service
167
168. Catalogue Stores
In Catalogue Stores very little product
is displayed in the outlet in
comparison to the range as a whole.
The catalogues are available for
customers to browse through.
In today's era of flexible shopping
methods, the catalogue shop is a
cost-effective way.
The format, however, introduces some
problems in terms of product
interaction and display, because of the
reliance on the catalogue for
representation rather than 'real'
168
169. Discount Stores
A discount store is a retailer that sells merchandise
at a price level that is lower than 'typical high-street
stores'.
Discount Stores uses an everyday low pricing
policy, where prices remain constantly low, rather
than a high-low pricing policy where prices only
drop at promotion times.
169
170. Factory Outlets
Factory outlet retailers offer customers a range of seconds
quality and/or previous season's goods.
Factory outlets gives manufacturers and retailers an
opportunity to sell off unwanted merchandise without
damaging the image of the main product or retail brand,
It allows accessibility to customers who might not normally
be able to afford the brands.
170
171. Types of Non-Store Retail
Mail Order
Direct Selling
Personal Retailing
Telesales
Internet Retailing
171
172. Mail Order
Mail order retailers rely on
printed media as the basis for
their format.
Catalogues are sent to
consumers who order from the
catalogue either by telephone,
by post or online.
172
173. Direct Selling
Direct selling is the term used to describe one-
to-one proactive offers from producers to
consumers.
173
174. Personal Retailing
Under Personal Retailing sellers not only earn
commission on sales, but also on the people they
persuade to join the organization.
174
176. Telesales & Telemarketing (or
Teleshopping)
TeleSales
Product offerings are made by a personal telephone call from
a seller to a consumer.
The telephone is a common method of consume response to
non-store retail offerings and so with call centers playing an
increasingly major part in many retail transactions.
Telemarketing
The products are advertised on the television. The price,
warranty, return policies, buying schemes, contact number etc.
are described at the end of the Ad. The consumers can place
order by calling the retailer’s number. The retailer then delivers
the product at the consumer’s doorstep.
For example, Asian Skyshop.
176
177. Internet Retailing
The internet provides a channel of discovery for the
consumer, and a way of providing home shopping
services for a wider target market for the retailer.
The internet is also an efficient homeshopping device,
enabling time-poor or less mobile consumers to order and
take delivery of routinely purchased items such as basic
groceries and household items.
177
178. Automated Vending/Kiosks
Automated Vending/Kiosks: It is most
convenient to the consumers and offers
frequently purchased items round the clock,
such as drinks, candies, chips, newspapers, etc.
The success of non-store based retailing hugely
lies in timely delivery of appropriate product.
178
179. Service Based Retailing
These retailers provide various services to the
end consumer. The services include banking,
car rentals, electricity, and cooking gas
container delivery.
The success of service based retailer lies in
service quality, customization, differentiation
and timeliness of service, technological
upgradation, and consumer-oriented pricing.
179
180. FRANCHISING
Franchising is seen as both an expansion strategy as well as a
distribution strategy. Numerous companies that have successfully
exploited franchising as a distribution strategy in their home
market are adopting the same strategy to exploit opportunities
abroad also. Burger King, McDonalds and other US fast food
chains with operations in Latin America, India and European
countries are good examples of such firms. Another common form
of franchising is where the franchisor supplies an important
ingredient (part, material, etc.) for the finished product.
Example: Coca Cola and Pepsi foods have franchise
arrangement with their bottling units all over the world. They
supply the concentrated syrup to the bottlers. Similarly, in India
you can notice NIIT training centres all over India, which look
similar and provide the same training programmes with same fee
structure. All these training centres are the franchisees of NIIT.
180
181. FRANCHISING (Contd…)
Some of the major forms of franchising are: manufacturer-retailer
systems (such as automobile dealership), manufacturer-
wholesaler systems (such as soft drink company with its bottlers),
and service-retailer systems (such as fast food outlets).
Franchising is basically a specialized form of licensing in which
the franchiser not only sells intangible property (normally a
trademark) to the franchisee, but also insists that the franchisee
agree to abide by strict rules as how it does business. The
franchiser will also often assist the franchisee to run the business
on an ongoing basis.
While licensing works well for manufacturers, franchising is often
suited to the global expansion efforts of service and retailing.
Example: McDonald’s, Tricon Global Restaurants (the parent of
Pizza Hut, Kentucky Fried Chicken, and Taco Bell), and Hilton
Hotels have all used franchising to build a presence in foreign
181
182. FRANCHISING (Contd…)
There are different types of franchise systems:
_ Territorial franchise: This kind of franchise is for a very
specific geographical area with territorial override for the
franchisee.
_ Mobile franchise: The privilege to sell store merchandise
extends to many other areas.
_ Co-management: The franchiser and franchisee jointly
manage the franchise business, with more involvement in the
day-to-day affairs by the former.
_ Co-owned: Going against the tenet of the franchise system,
the franchiser has a greater stake in the business by jointly
owning it with the franchisee.
_ Lease: The involvement of the franchisee is limited only to the
extent of renting out the premises to the franchiser.
182
183. FRANCHISING (Contd…)
Advantages of Franchising
The advantages of retail franchising are as follows:
Your business is based on a proven idea. You can check how
successful other franchises are before committing yourself.
You can use a recognised brand name and trademarks. You benefit
from any advertising or promotion by the owner of the franchise - the
“franchisor”.
The franchisor gives you support - usually including training, help
setting up the business, a manual telling you how to run the business
and ongoing advice.
You usually have exclusive rights in your territory. The franchisor won’t
sell any other franchises in the same region.
Financing the business may be easier. Banks are sometimes more
likely to lend money to buy a franchise with a good reputation.
Risk is reduced and is shared by the franchisor.
If you have an existing customer base you will not have to invest time
183
184. Franchising Trends in India
Following are the franchising trends in India:
The Education sector dominates the Indian franchising
scenario, although Retail is fast catching up.
Most of the franchisors are relatively new and small.
Several large Indian corporate houses are also going
the franchising way.
Newer and innovative concepts being introduced.
Substantial interest from international franchisors as well
as Indian business houses for master franchises.
Franchising is now spread across the country, thereby
providing opportunities to entrepreneurs everywhere.
184
185. Retail Franchising within
India
Grew initially in the apparel and footwear sectors has gradually
grown to cover a wide variety of sectors including food,
consumer durables, jewellery, books, home decor etc.
Two varieties of Retailers:
The manufacturer-retailers-typically Product Distribution Franchises-
have been around for a while.
The aggregators-typically Business Format Franchises-only now
beginning to show up
Existent and likely to be successful only in smaller formats
Substantial action also happening in non-metro locations.
Thereby spreading organized retailing over a larger footprint
Has had to contend with the peculiarities of the India real estate
markets
Result-MG (Minimum Guarantee) has become the key driver
185
190. EMERGING TRENDS IN RETAIL
FORMATS (UNCONVENTIONAL
CHANNELS)
1. Van/Mobile Van Retailing
Static retailing
Raving retailing
2. Conference/Party/Event/Festive Retailing
3. Distant Retailing a customer place the order from a remote location by
telephone, SMS, internet, pager etc, instead of visiting a store.
4. Forecourt Retailing
Example: Vishal Mega Mart has tied up with Hindustan Petroleum
Corporation Ltd (HPCL) for opening forecourt retail stores chain, which has
been branded as “Vishal Corner Mart”. Apollo Pharmacy had tied up and set
up ‘convenio’ stores at Indian Oil Corporation (IOC) petrol pump outlets for
supplying groceries and medicines.
5. Trade Parks
Example: India Exposition Mart set up by Handicraft Export Promotion
Council in Greater Noida, International Home Deco Park (IHDP) set up by a
group of private investors in Noida and World Trade Park coming up in
190
191. ELECTRONIC-RETAILING / (E-
RETAILING) / (E-TAILING) / ONLINE –
RETAILING
E-tailing is the selling of retail goods on the
Internet.
E-tailing is synonymous with business-to-
consumer (B2C) transaction.
E-tailing has resulted in the development of e-
tail ware - software tools for creating online
Catalogs and managing the business connected
with doing e-tailing.
In the year 2003, clothing and apparel segment
clocked online revenues to the tune of $ 3.6
billion.
191
192. Three types of online Retailing
Online retailing is classified into three main categories:
❖ Click: The businesses that operate only through the
online channel fall into this category. Prominent examples in
this category include: Dell, Amazon.com and e-Bay.
❖ Click and Brick: The businesses that use both the
online as well as the offline channel fall into this category.
Common example includes: Barnes and Noble’s.
❖ Brick and Mortar: This is the conventional mode of
retailing. The businesses that do not use the latest retailing
channels and still rely upon the conventional mode belong
to this category.
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193. Online Retailing – Advantages
No Real Estate Costs
Easy and Comfortably
Customer Interaction
Mass Media
Search Option
User Friendly
Effective Price Discrimination
Customized Product Placement
Global Reach
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