Retail marketing

5/3/2014 copyright@CSE_SMVDU 1

What it is:
-Sale of goods to end user not for resale but for use
& consumption
Importance:
-Economic Growth
-Emploment Opportnities
-Move the Economy into Motion
Statistics of Indian Retail Market:
-Fastest Growing Sector in India
-Contribute 8% of the total Economy
-It will grow from US$400 in 2011 to US$785
billion in 2k14

Retail Sector
Organised
WholeSale Specialist
Unorganised
Traditional
Stores
Handcart
Vendors

 The key aspects of retail marketing is an attitude
of mind.
 In making retail marketing decisions, retailers
must consider the needs of the customers.
 Retail marketing decisions are driven by what
the shoppers need and want.
 Retail marketing is therefore a philosophy and is
all about satisfying the customers

 What the customers regard as value and what
they buy is decisive.
 What the customers buy determines the
nature of the retailer’s business.
 The essence of retail marketing is developing
merchandise and services that satisfy specific
needs of customers, and supplying them at
prices that will yield profits.
 Retailers must take the customers’ needs into
consideration in retail operation

 Retail marketing is stimulating, quick-
paced, and influential.
 It encompasses a wide range of
activities including:
 Environmental analysis
 Market research
 Consumer analysis
 Product planning etc.

 The retail marketing concept is the acceptance by the
retailer that it is the “customer” and not “demand”
that lie at the core of the retail organisation.
 The retail marketing concept is a philosophy, not a
system of retailing or retail structure.
 It is founded on the belief that profitable retailing
and satisfactory returns on investment can only be
achieved by identifying, anticipating and satisfying
customer needs and desires.
 It is an attitude of mind that places the customer at
the very centre of retailing activities

 The retail marketing objective is a performance
parameter which has been explicitly stated.
 It can be stated in quantifiable terms and time
terms so that results can be measured against
it.
 Three types of retail objectives include:
1. Basic objective – those which defines retailer’s
long-term purposes.
2. Goals – those which the retailer must achieve
to be successful
3. Targets – short-term goals that require
immediate achievement.

 Retail marketing mix is the term used to describe
the various elements and methods required to
formulate and execute retail marketing strategy.
 Retail managers must determine the optimum
mix of retailing activities and co-ordinate the
elements of the mix.
 The aim of such coordination is for each store to
have a distinct retail image in consumers’ mind.
 The mix may vary greatly according to the type
of market the retailer is in, and the type of
product/services.

 The retail marketing mix is the vehicle through
which a retailer’s marketing strategy is
implemented and, in planning the mix,
retailers should be guided by three basic
principles:
1. The mix must be consistent with the
expectation of target customers;
2. Elements must be consistent with each other to
create synergy; and
3. The mix must be responsive to competitive
strategy.

 Retail marketing plan consists of:
 Setting objectives
 Systematic way of identifying a range of
options.
 Formulation of plans for achieving goals
 Logical sequence of retailing activities.

 Hostile and complex retail marketing environment
 External and internal retail organisation factors interact
 Maximising revenue
 Maximising profit
 Maximising return on investment
 Minimising costs
 Each element has conflicting needs
 All these variables interact
 All these variables result in optimum compromise

 Top down approach
 Retail management sets goals and plans for all
levels of management.
 Bottom up approach
 Various units prepare own goals and plans sent
up for approval.

 Annual plan – short term and tactical.
 Long range – three to five years relating to
strategic retail management.
 Strategic plans – five to ten years long term
plans relating to the adaptation of the retailing
approach.

 Tactical planning relating to:
 Current retail marketing position
 Strategy for the year
 Objectives for the year
 Action , budgets and controls.
 Coordinating retail activities within departments.

 Medium range planning relating to:
 Major factors and forces affecting the retailer.
 Long-term objectives.
 Resources required.
 Reviewed and updated regularly.
 Deals with current business

 When retailers understand customer needs, they
can create niche in marketplace by building a
retail strategy
 Effective strategies consider the target market,
set formats to reach target market, and plan
growth of competitive advantage over time
 Retailers with a strong, proven strategy and
stick to it do better than those who don’t

 The strategic retail planning process
gives steps retailers follow to meet
strategic goals:
1. Define Mission: describe stores
objectives
 and activities
1. Situational Audit: also called a SWOT
 assessment, it looks at Strengths,
 Weaknesses, Opportunities, and
 Threats in the retail environment

3. Identify Opportunities: based on SWOT
assessment, identify opportunities to
increase sales
4. Evaluate Alternatives: now that
opportunities are identified, decide which
best establish a sustainable competitive
advantage
5. Establish Specific Objectives and Allocate
Resources: set specific goals, define the
timeframe to meet these goals, and
decide the level of investment dedicated
to the goals

6. Develop Retail Mix to Implement
Strategy: decide specifically how each
objective will be merchandised,
advertised, marketed, etc.
7. Evaluate Performance and Make
Adjustments: review each objective,
decide if performance met
expectations, and course-correct as
needed

 India ranked fifth in the Global Retail
Development Index 2012 (AT Kearney, leading
global management consulting firm).
 An estimated 35 million people are employed in
the Indian retail industry, which makes it the
second largest employer in the country (Bisaria,
2012

 India’s retail industry, which currently
accounts for around 15% of the nation’s
GDP, is expected to grow almost three
times to $660 billion by 2015
 India, with its exploding population has
always been an exciting market for
multinational companies, which have been
eyeing to invest in the Indian retail sector
for years

 The Government of India denied foreign direct
investment both in single-brand and multi-brand
retailing
 The Indian government announced the opening of
FDIs both to single and multi brand retail sectors
 The Ministry of Commerce and Industry was
seeking cabinet approval for allowing 51% FDI in
multi-brand retail trading and for increasing the
FDI limit in single-brand retail trading from 51% to
100%
 The cap on FDI in single-brand retail was finally
lifted to 100%
 This allowed foreign single brands, like Louis
Vuitton, Gucci and Adidas, to get full control on
their retail operations in India, subject to the
condition that they should source 30% of their
goods from India
Until 2006
Nov 2011
Jan 10, 2012

0
5
10
15
20
25

 Minimum limit for FDI in the country’s multi-brand retail
sector
 Minimum population of the city in which investment in multi-
brand retail is allowed

 Minimum sales to be made to small retailers

 Minimum value of manufactured items procured that should
be sourced from small and medium enterprises in India
 FDI in retail is subject to the state government’s permission.
$100 million
1 million
30 percent
30 percent

 Indian farmers get only around 30-35% of the ultimate retail price. The
rest is consumed by middlemen, wholesalers & retailers. After the
opening of FDIs, retail giants will purchase goods directly from the
farmers, who will receive a much better price for their products.
 A huge amount food grains and vegetables go waste due to
the lack of infrastructure and proper storage systems.
Foreign direct investment in multi-retail is expected to
significant reduce this wastage.
 FDI in retail is likely to create about 10 million jobs in the
span of a decade (Indian Staffing Federation report, Sept
2012). Over these years, there would be 4 million direct jobs
& about 5 million indirect jobs created in the Indian
economy.
 FDI in retail will benefit Indian consumers with a wide choice
of brands and products.
Benefit to Farmers
New Employment
Benefit to Consumers
Reduced Food Wastage

 Meaning :Single brand retail is one in which a single item is
sold across all outlets. Such as Reebok, Titan, Puma etc.
 Policy before 2011:
 FDI up to 51 %, with prior Government approval, is allowed
in retail trade of single brand products, subject to the
following conditions:
 FDI up to 51 % would be allowed, with prior Government
approval, for retail trade of Single Brand Products;
 Products to be sold should be of a ‘Single Brand’ only.
 Products should be sold under the same brand internationally.
 ‘Single Brand’ product-retailing would cover only products
which are branded during manufacturing

 Meaning :Marketing of similar and competing
products by the same firm under different and
unrelated brands. For example: walmart, big
bazar, tesco
 FDI in multi brand retail was not permitted in India.however,
the Government of India proposed some policy changes
inlate 2011.
 they are as follows:

 A decision has been taken by the Government to permit FDI in all products, in
a
 calibrated manner, subject to the following conditions:
• FDI in Multi Brand Retail Trade (MBRT) may be permitted up to 51%, with
 Government approval;
• Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses,
fresh
 poultry, fishery and meat products, may be unbranded.

• Minimum amount to be brought in, as FDI, by the foreign investor, would be
 US $ 100 million.
• At least 50% of total FDI brought in shall be invested in 'back-end
infrastructure’.
 Back-end infrastructure will include investment made towards processing,
 manufacturing, distribution, design improvement, quality control, packaging,
logistics,
 storage, ware-house, agriculture market produce infrastructure etc.
Expenditure on land
 cost and rentals, if any, will not be counted for purposes of backend
infrastructure

 The retail marketing mix is the vehicle through
which a retailer’s marketing strategy is
implemented and, in planning the mix,
retailers should be guided by three basic
principles:
1. The mix must be consistent with the
expectation of target customers;
2. Elements must be consistent with each other to
create synergy; and
3. The mix must be responsive to competitive
strategy.

Retail marketing

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