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Retail management
- 1. SALES AND RETAILMANAGEMENT 10MBAMM312 PART B Retail Management
- 2. Module - 8 VTUSyllabus Relationship Marketing in Retailing Management of Relationship Evaluation of Relationship Marketing Relationship Marketing Strategies Retail Research Retail Audits
- 3. Building and SustainingRelationships in Retailing In recent years Relationship Marketing (RM) has been widely promoted as a means of retaining customers.
- 4. Relationship Marketing refersto a long-term arrangement where both the buyer and seller have an interest in providing a more satisfying exchange! Relationship marketing is not about having a "buddy-buddy" relationship with your customers! & the customer don’t want that. Relationship Marketing uses the event-driven tactics of customer retention marketing, but treats marketing as a process over time rather than single unconnected events. Relationship Marketing approach achieves very high customer satisfaction and is highly profitable
- 5. What is Value? Thebottom 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. What is Value? ChannelPerspective: 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. Providing Extra Valuefor Customers
- 8. Retail Value Chain Representsthe 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. Potential Pitfalls toAvoid in Planning a Value-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. A Value-Oriented RetailingChecklist 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. Bring the CareBack to Health Care
- 12. 3 Aspects ofValue-Oriented Retail Strategy Expected Augmented Potential
- 13. Customer Service Expectedcustomer 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
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- 15. Fundamental Decisions What customerservices 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. 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. Miscellaneous Customer Services Interiordesigners 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. Turning Around Weak CustomerService Focus on Empower Front-Line Customer Concerns Employees Show That You Are Express Sincere Listening Understanding Apologize and Rectify the Situation
- 19. Principles of Category Management Retailerslisten 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. Elements Contributing toEffective Channel Relationships
- 21. 3 Kinds ofService Retailing Rented goods services Owned goods services Non-goods services
- 22. Four Characteristics of ServicesRetailing Intangibility Inseparability Perishability Variability
- 23. Characteristics of Service 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. Characteristics of Service Retailing Inseparability •Consumer may be involved in service production •Centralized mass production difficult •Consumer loyalty may rest with employees
- 25. Characteristics of Service Retailing Perishability •Services cannot be inventoried •Effects of seasonality can be severe •Planning employee schedules can be complex
- 26. Characteristics of Service 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. Selected Factors AffectingConsumer Perceptions of Service Retailing
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- 29. Consumer Advantages to Self-Checkout Shorterlines Increased speed Privacy
- 30. Lessons in ServiceRetailing
- 31. RETAIL RESEARCH Information Gathering and Processing in Retailing
- 32. Suppliers Need ToKnow 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. Retailers Need ToKnow 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. Consumers Need ToKnow 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. How do wegather information? • Qualitative Methods ▫ Nonsystematic Information Gathering ▫ Focus Groups, Depth Interviews • Quantitative Methods ▫ Secondary ▫ Primary
- 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. 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. Database Management A majorelement 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. Data Mining and Micromarketing Datamining 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. Marketing Research inRetailing • 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. 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. 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. Secondary Data Sources Internal 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. 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. Primary Decisions • In-house or outsource? • Sampling method? ▫ Probability ▫ Non-probability • Data collection method? ▫ Survey ▫ Observation ▫ Experiment ▫ Simulation
- 46. Survey Methods In-person Disguised Over the telephone Non-disguised By mail Online
- 47. Mystery Shoppers Retailers hirepeople to pose as customers and observe operations from sales presentations to how well displays are maintained to service calls
- 48. UPC & EDI UniversalProduct 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)
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- 50. RETAIL AUDIT Retail-audit serviceproviders gather information on a brand’s sales volume, sales trends, stock levels, effectiveness of in-store display and promotion efforts, and other associated aspects.
- 51. Performance Measures Totalsales 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
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- 53. Minimizing Gaps Customer insight Customerprofiling Customer life-cycle Extended business model Relationship program planning and design Implementation
- 54. The Retail AuditProcess
- 55. Obstacles for Doinga 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
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