The document provides an overview of retailing and sales management. It discusses key concepts like what constitutes retailing, the functions of retailers, different retail formats organized by ownership, merchandise, and store type. It also covers topics like evolution of Indian retail, private label brands, theories of retail development, consumer behavior and decision making, merchandising, and the role of merchandisers.

1. Retail and Sales Management

2.  ‘Retailing includes activities of marketing
and selling products or services to end
consumers for their own household or
personal use’
 ‘Retailer is a Person or Agent or Company
or Organization who is instrumental in
reaching the Goods or Merchandise or
Services to the End User or Ultimate
Consumer’

3. “Retailing includes all the activities in selling goods or
services directly to final consumers for personal
,nonbusiness use”
“A Retailer or retail store is any business enterprise
whose sales volume comes primarily from retailing”
“A retailer is a business and can be an individual, chain
store, departmental store, supermarket, specialty
store, small locality shop, paan-bidi kiosk, or a service
retailer etc., who links the producers and the final
consumer.

4. Evolution of Indian Retail
Malls, Hyper
markets,
Departmental
stores etc
Cooperative
stores
Mom and Pop
‘ Kirana
Stores’
Weekly Bazaars
Rural Fairs
(Melas)

5.  Retailing is divided into two categories
 Store retailing
 Non store retailing
 Direct selling, Direct marketing, Automatic vending,
Telemarketing, TV Home Shopping, Electronic shipping
 Functions of Retailers
 Arranging assortment
 Breaking bulk
 Holding stock
 Channel of communication
 Promotional support
 Extending services

6. Retail Formats
 Ownership Based- It refers to the basic system
or basic format of doing business. Under this format,
proprietor is responsible for the success and failure
of the store. It is a format, which legally has no
separate existence from its owner
 Independent Retailer
 Chain store
 Franchising
 Leased Departments
 Vertical Marketing System
 Consumer Cooperatives

7.  Chain store- A chain retailer operates
multiple outlets under a common ownership
and name.
 Merits:
 good bargaining power with suppliers
 cost effectiveness and ease of managing store
operations
 use of technology increases work efficiency
 Demerits:
 huge establishment cost
 difficulty to monitor the day to day activities of
all the retail chains

8. Few examples of chain stores
 Mc Donald’s
 Big Bazaar
 Café Coffee Day
 Pizza Hut
 Archies
 Westside

10.  Franchising- It signifies a contractual
agreement that allows the Franchisee to
operate a retail outlet using the name and
format of the franchiser. The franchisee
pays a fee and royalty.
 Product or trademark franchising: Here the
franchiser allows the use of the identity but does
not always control the operations. The franchisee
may draw up certain operating rules in
consultation with the franchiser
 Archies and Hallmark

11.  Business Format Franchising: Here the franchiser
draws out the strategic plans and lays the procedures
for operations and assist the franchisee on the issue of
site location, building the store, quality control, training
the store employees etc
 Mc Donald’s
 Domino’s Pizza
 Few Key Franchisers
 Aptech
 Koutons
 Reliance Fresh
 NIIT
 Pizza Hut

12.  Merits of Franchising to Franchisee
 Individual franchisee can own and run a retail store
with relatively less investment
 Well established and successful brands can create
more customers
 Demerits of Franchising to Franchisee
 Due to presence of more than one outlet of the
same barnd, the problem of over saturation may
occur, resulting in low sales
 Under contractual agreement Franchisee may be
restricted to make purchases through Franchiser or
through some approved suppliers

13.  Leased Department Stores- A leased
department which is also known as shop-in
shop or store-in store is a section of a
department in a retail store given to any
outside party on monthly rental basis. The
person who provides the store space to
outside party is known as lessor and the
person who takes the store space is known as
lessee

14. Vertical Marketing Systems- It refers to an arrangement
in which the whole channel focuses on the same target market
at the end of the channel. This includes producer,
distributors, wholesalers & retailers acting in an integrated
manner
Corporate VMS- It refers to the producer’s ownership of
the entire channel right from manufacturing to wholesaling
& retailing like Sherwin-Williams not only makes paint but
also owns & operates 3000 retail outlets, Titan, Vimal
fabrics, Bata, BPCL owns many petroleum refineries as well
as petrol pumps
Administered VMS- It is achieved when some members
because of their position, size and power are in a
commanding position to secure cooperation and support
from resellers at different levels like HUL, ITC, P&G
Contractual VMS- It consists of independent businesses
at different levels in the channel. Members agree to
cooperate with each other by entering into contract like
Jaipuria group bottler for Pepsi , Body shop

15. Conventional vs. Vertical Marketing System

16.  Consumer Cooperatives- These retail outlets are owned and
managed by its customers. A group of customers (members)
start retail operations by investing money and then elect
members to run day to day activities and share profits on the
basis of investment made. However because of limited members
and lack of marketing skills State Consumer Cooperative
Organizations have come up like:
 Karnataka Cooperative Consumers Federation Limited
 Maharashtra State Cooperative Consumers Federation Ltd
 Gujarat State Cooperative Consumers Federation Ltd
Few examples of Consumer Cooperatives
 Kendriya Bhandar
 Apna Bazaar
 Sahakari Bhandar


19. Retail Formats
 Merchandise Based
 Food Oriented Retailers
 General Merchandise Retailers

20.  Food Oriented Retailer- They deal with food related
products and also sometimes deal with general
merchandise
 Convenience store- These are small retailers that
offer a limited variety of merchandise but at
convenient locations. These stores are modern
versions of the traditional ‘kirana’ store and are
relatively small stores 400-3000 sq ft located near
residential areas. They are usually small size easily
accessible stores offering a quick shopping and
extended hours.
 In & Out, Twenty Four Seven Retail Stores
 Conventional supermarket- It is a self service store
offering groceries, dairy products, shampoos, soaps,
clothes and household cleaning products etc. These
are located in or near residential high streets and
ranges till 50000 sq ft and carry around 10000 SKUs
 Apna bazaar, food world, super bazaar

21.  Food based superstore- Superstores are usually
large supermarkets that have space area till
50000 sq.ft. These stores sell grocery and many
other related products
 Food Mart Outlets
 More outlets
 Combination store/Super Center/Mega Store-
A super centre is a combination of supermarket
and a discount retail store. Its average size is
about 150000 sq.ft. and deal with grocery and
general merchandise
 Wal Mart

23.  Warehouse store/club- It is a retailer that
offers food and general merchandise at low
prices mainly to other retailers and also to final
consumers. Warehouse stores are membership
based retail outlets and are sometimes also known
as cash and carry wholesalers
 Big Bazaar Wholesale club
 Sam club
 Costco club
 Carrefour to operate in India through the
wholesale cash & carry route
 METRO cash & carry wholesale center

24.  General Merchandise Retailers
 Specialty store- The retail chains, which deal in specific
categories and provide deep assortment. They carry a
narrow product mix with depth of assortment within the
line.
 RPG's Music World, Mumbai's bookstore Crossword,
Music store Planet M, Park Avenue of Raymond's
 Category killer (Big Box Store): It is a large specialty
store featuring enormous selection of its product category
at relatively lower prices. Range 20000 to 100000 sq ft.
 Home Depot- Home Improvement
 Best Buy- In Electronics
 Staples- Office supplies
 Amazon.com- Books
 Hypermarket- It is a superstore which combines a
supermarket and a department store offering full lines of
grocery and general merchandise all under one roof. Ranges
from 15000 sq ft to 100000 sq ft and above.
 Reliance mart, Big bazaar, Giants

26. Future Group Big Bazaar
Reliance Retail Reliance Mart
Spencer's Spencer’s Hypes
Trent (Tata Group) Star India Bazaar

29.  Departmental stores- A store with several
departments like apparel, cosmetics, home-ware,
electronics etc under one roof with each section within
the store functioning as a strategic business unit.
Range more than 10000 sq ft. with usually more than
100000 SKU’S-(A number assigned to a product by a
retail store to identify the price, product options and
manufacturer of the merchandise)
 Shopper stop, Lifestyle, Pantaloons, Westside
 Malls- The largest form of organized retailing today.
Located mainly in metro cities. Ranges from 60,000 sq
ft to 7,00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product,
service and entertainment, all under a common roof
 Central, Huma mall, Iskon mall, Mall of India, Ansal Plaza,
Centre Plaza mall, Sahara mall

30. Departmental stores Promoter Group
Westside Trent Ltd
Shopper stop
Globus K Raheja Group
Pantaloons Pantaloon Retail

31.  Discount stores- Wal-Mart, Big Bazaar
 Factory outlets/Off-Price Stores
 Membership club/Warehouse Club

33. Retail Formats
Group name
/ Retailer Existing Formats Brand Name
Pantaloon Department stores Pantaloons
Retail India ltd Hypermarkets Big bazaar
Supermarkets Food bazaar
Malls Central
RPG Retail Hypermarkets, Supermarkets Spencer’s
Music stores- speciality stores Music world
Shopper’s Department store Shopper’s stop
stop Ltd Books & music stores- hypermarket Crosswords
Home furnishings- speciality stores Home stop
Trent India Ltd Department stores Westside
Hypermarkets Star India bazaar
Viswapriya Discount stores Subhiksha
BPCL Convenience stores In & Out

34. FUTURE GROUP

38. Theories of Retail Development
 The Wheel of Retailing
 The Retail Accordion
 Melting Pot Theory (dialectic process)

39. The Wheel of Retailing (Malcomb McNair)
Entry phase
Vulnerability phase
Top heaviness
Conservatism Low price
Declining ROI Low margin
Low status
Becomes Limited products
Up-market location
Trading-up phase Fashion orientation
Becomes
Extended assortment
Higher prices
Elaborate facilities
Exotic services

40. CONSUMER BEHAVIOUR
“Consumer behavior refers to the mental
and emotional process and the observable
behavior of consumers during searching,
purchasing and post consumption of a
product or service”

41. Consumer decision making process
Need recognition
Information
search
Evaluation of
alternatives
Purchase
decision
Post purchase
behavior

42. Consumer Buying process
Need recognition
Searching for
Retailers
Finalizing a
Retailer
Selecting
Merchandise
Purchasing
Merchandise

43. Level of Consumer Decisions
 Extensive decision making/Complex high-
involvement- This kind of decision making
usually happens for unfamiliar, expensive and
/or infrequently bought products. Like cars,
homes, computers etc
 Limited Decision Making- Here it happens
when an individual purchases a product
occasionally and is required to look for a
different brand or retailer for a product one is
used to because of non-performance or non-
availability

44.  Routine response/Programmed behaviour-
Here low involvement, frequently purchased
products are involved
 Impulse buying- It is those purchases that
do not involve any concious planning

45. Buying Roles
 Initiator- The initiator is the person who first
suggests or thinks of the idea of buying the
particular product or service.
 Influencer- Is a person whose views and advice
carry some weight in making the final decision
 Decider- The decider is a person who ultimately
determines any part of, or the entire buying decision-
whether to buy, what to buy, how to buy or where to
buy etc
 Buyer- Is the person who makes the actual purchase
 User- Is the person or persons who consume or use
the product or service

46. Forms of Purchasing or Buying Behavior
 Complex
 This behavior occurs when customers get very
much involved in the purchase and acquaint
themselves with brands and quality differences
 Dissonance Reducing
 Sometimes in spite of high involvement, the buyer
may find it difficult to differentiate between
brands
 Habitual
 This behavior occurs on low involvement products
and on frequent purchases
 Variety Seeking

47. Private label Brands
“Private labels often referred to as in-house
brands or store brands, are those that are
owned by the retailers themselves”

49. Reasons for the development of Private
Label Brands
Identification of
need gap
Need to create
unique merchandise
Need for a Changing consumer
Private Label habits
Creating customer
Need to earn Loyalty
increased margins

50. The Process of Private Label Creation

51. Defining the Objective
Defining the Gaps in the Market
Decision on make or buy and
sourcing
Determine the marketing and sales
strategy
Determine the measures of
performance

52. Steps involved in developing a Retail strategy

53. Defining the Objective
Analyze situation
Identify options and allocate
resources
Develop the implementation plan
Monitor progress and control

54. The Retail Marketing Mix
Product
Price
Place
Retail Marketing
Mix
Promotion
Presentation
Customer
People
Service

55. Merchandising
 American Marketing Association ‘the
planning involved in marketing the right
merchandise at the right place at the right
time in the right quantities at the right
price’
 ‘planning, developing and presenting of
products for identified target markets
with regard to pricing, assorting, styling
and timing’

56. The Merchandiser: Role and Responsibilities
 Planning- Though the merchandisers may not be
directly involved in the actual purchase of
merchandise, they formulate the policies for the
areas in which they are responsible by forecasting
sales and analyzing consumer demand
 Directing- Guiding and training buyers in terms
product quantity and quality to be purchased
 Coordinating- Usually, merchandise managers
supervise the work of more than one buyer, hence
they need to coordinate the buying effort in terms of
how well it fits in with the store image and with the
other products being bought by other buyers
 Controlling

57. Visual Merchandising
It is largely associated with creating the
look of the store. Here the Visual
merchandisers are responsible for the
placement of design elements

58. Retail Pricing

59. Factors affecting Retail Pricing
Uniqueness of the
Product
Retail Business
Model
Pricing Strategy Competitors Pricing
Strategy
Economic Conditions
Target Market and
Demand

60. Retail Pricing Policies/Strategies
 Cost Oriented Pricing- A basic markup is
added to the cost of the merchandise to
arrive at the price. Here the retail price is
considered to be a function of cost and
markup
Retail Price= cost + markup

61.  Demand Oriented Pricing- Here the price is set
focusing on the quality and quantity that the
customer would prefer while purchasing
 Competition Oriented Pricing- Here the retailer
may set the price of the product at par with
competition, above competition or below the
competition
 Price Lining- It is a term used by retailers when
they sell their merchandise only at given prices
 Price Zone or Price Range- It is a range of
prices for a particular merchandise line
 Price Point- It is a specific price in that price
range

62.  Market skimming- This pricing strategy is also known as price
creaming. Market skimming pricing involves charging a high price for
new products because the customer is new and unique so (hopefully)
the consumers will be willing to pay higher prices for them.
 Market Penetration- Penetration pricing is used by firms who are
trying to establish themselves in a new market and gain instant
market share usually use this strategy. It is based around the idea
that a company will set their prices low to encourage customers to
buy their products instead of higher priced, more established brands.
 Value Pricing- Companies have adopted value pricing in which they win
loyal customers by charging a fairly low price for a high quality
offering. It is not simply setting lower prices it is a matter of
reengineering the company’s operations to become a low cost producer
without sacrificing quality.
 Everyday low pricing (EDLP), High-low pricing
 (Wal-Mart, Big Bazaar, Peter England)
 Psychological pricing/ Odd Pricing

63.  Price Bundling- This form of pricing is a variation
of multiple pricing where various products are
bundled together and sold as one unit
e.g. Happy price Menu, computer hardware,
printer and some software's sold together
 Multiunit Pricing- The retailer offers discounts
to customers who buy in quantity or who buy a
product bundle. E.g. one t-shirt at 255.99 and two
t-shirts for 355.99

64. Promotional Pricing
 Loss-leader pricing- Supermarkets and department
stores often drop the price on well-known brands to
increase additional store traffic
 Special event pricing- Sellers will establish special
prices in certain seasons to draw in more customers
 Psychological discounting- It involves setting an
artificial high price and then offering the product at
a less price. (Big Bazaar)
 Cash Rebates
 Longer Payment terms
 Low-interest financing
 Warranties & service contracts

65. Differentiated Pricing
 Price discrimination- It occurs when a company sells a
product or service at different prices
 Customer segment pricing- Different customer
groups pay different prices for the same product or
service. (Museums, Parks)
 Product form & Image Pricing- Many retail stores
may sell men’s shirts in many styles, fabrics and
levels of quality at different prices
 Channel Pricing- Coca-Cola, Pepsi, Nescafe etc
carries a different price depending on whether the
consumer purchases in a restaurant or a vending
machine
 Location Pricing, Geographic Pricing
 Time Pricing

67. Store Site Selection
 Types of Retail Locations
 Freestanding Store/Isolated Store
 Part of a Business District
 Part of a shopping center

68. Steps involved in choosing a Retail Location
 Market Identification
 Determining the Market Potential
 Demographic features of the population
 The Characteristics of the households in the
Area
 Competition and Compatibility
 Laws and Regulations
 Trade Area Analysis
 Identify alternative sites

69. Trade Area Analysis
Tertiary Trading
Tertiary Trading
Area
Area
Secondary
Secondary
Trading Area
Trading Area
Primary
Primary
Trading Area
Trading Area
Retail Store

70.  Select the site
 Accessibility of the market
 The Total number of stores and type of stores
that exist in the area
 Amenities available
 To buy or to lease
 The product mix offered

71. The Process of Merchandise Planning
and Management
 Merchandise Planning
 Product assortment
 Price Range
 space
 Sourcing
 Make or buy
 Vendor identification
 Negotiations
 Placing the order
 Allocation of Merchandise to stores
 Performance monitoring and evaluation

72. Store Design and Visual Merchandising

73. Elements of Store Design
 Exterior Store Design
 The Store Marquee- The store marquee is the
first ‘mark’ of identification of the retailer or the
retail store. It helps the retailer in identifying and
attracting customers
 The Storefront
 Interior Store Design
 Space Planning- It helps a retailer determine the
amount of space available for selling and for
storage. Space planning also includes
 The location of various departments
 The location of various products within the
department (the creation of planograms) etc

74.  Atmospherics and Aesthetics
 Fixtures are used for storing and displaying
products. They may be floor fixtures or wall
fixtures and are manufactured in various
materials like wood, glass,steel etc
 Flooring and ceilings
 Lighting
 Graphics and Signages
 The Layout- The layout of the store is the manner
in which merchandise or products have been arranged
in a retail store. It helps the movement of the
customer within the store
 Grid Layout
 Race Track/Loop Layout
 Freeform Layout

75. Grid Layout
The Grid Layout is the one most commonly
used in supermarkets and discount stores.
While one area of display is along the walls
of the store, the other merchandise is
displayed in a parallel manner. It allows for
movement within the area and uses space
effectively. It is therefore a preferred
layout in many retail stores that adopt
self-service

76. The Grid Layout

77. The Race Track/Loop Layout
As the name suggests, the display is in the
form of a racetrack or a loop. It provides
access to various shop-in-shops or
departments within the store

78. The Race Track/Loop Layout

79. The Freeform Layout
This type of layout allows free movement
and is often used in retail stores to
encourage people to browse and shop

80. The Freeform Layout

81. Types of Technologies used in Retailing
 In-store Technologies
 Interactive Kiosks- These are computers with
touch screen displays that provide shoppers with
information about products in the store. With the
help of these kiosks, customers can identify and
select products without moving around the store
 Virtual Display Case- A ‘virtual display case’ is a
large screen projection video display and computer
graphics system which shows images of shelves and
the merchandise on them. It allows customers to
scan and purchase items without going around the
store. Here it is done with the help of 3D glasses
and joystick

82. Interactive Kiosk

83.  Electronic Point-of-Sale Signage- Electronic
POS signs are LCDs that show the names and
prices of merchandise
 Hand-held Shopping Assistant- It consists of
a touch screen and barcode reader. As soon as
the customer scan the barcode of the chosen
product , the device provides them product
information, usage suggestions and warranty
information
 Body Scanning
 Electronic Retailing

84.  Self-scanning and Self-checkout system- It is
a hand-held bar code reader used by shoppers to
scan and tally their purchases while shopping. The
scanner displays the price of the chosen item.
After shopping, the scanner prints out a ticket
that the shopper can take to an express checkout
counter.

85. Self-scanning and Self-checkout system

87. Virtual grocery store

93. HRM in Retail
 The Human Resource Function in retail
involves
 Identifying various roles in the organization
 Recruiting and selecting the persons with the
right attitude to fit the jobs
 Training
 Motivation of employees
 Evaluation of employee performance

94. Tasks to be performed in a Retail Organization
Buying and
Merchandising
Store Operations
Management Administration and
Legal
Finance and
Marketing and Accounts
Promotion mix

95. Category Management
 Category- ‘A category is a distinct,
manageable group of products or services
that consumers perceive to be inter-
related and /or substitutable’

96. The Reasons for the emergence of Category
Management
Consumer
Changes
Information Technology
Economic and
Competitive
Efficiency
Pressures
considerations

97. The Components of Category
Management
 Core Components
 Strategy
 Business Processes
 Enabling Components
 Organizational capabilities
 Information Technology
 Performance measurement
 Trading partner relationships

98. The Category Management Business Process

99. Category Definition
Category Role
Category Assessment
Category strategy and Tactics
Category Plan Implementation
Category Review

100.  Category Role- It determines the priority
and the importance of various categories in
the overall business
 Four Consumer Based Category Roles
 Destination Categories- Here the retailer is
the customer’s first choice for specific
products. Destination categories are those
that the retailer uses to help itself as the
store of choice to the consumers by simply
offering better value to the customer
 Preferred/Routine Category- Here the
retailer deals with products that consumers
purchase as a matter of routine

101.  Occasional / Seasonal Category
 Convenience Category- These categories are
those that the consumer finds convenient to
pick up at a neighbourhood retailer, rather
than visiting another retailer who may offer a
wider selection