RETAIL MANAGEMENT

SUBMITTED BY – JAGNEET KAUR

ROLL NO. – 1020
[Link] (PROF.) 1ST YEAR

SUBMITTED TO – GEETIKA GROVER

PATEL MEMORIAL NATIONAL COLLEGE

RAJPURA
AFFILIATED TO PUNJABI UNIVERSITY, PATIALA
 INDEX

Sr. no. Topics Page no.

1. Introduction 1

2. Advantages/ Disadvantages 3

3. Retail stores 15 - 19

4. Retail location 27

5. Retailing in India 30 - 32
 ACKNOWLEDGEMENT

On every step there is need of proper guidance, support and motivation the
encouragement enables the persons to give his best performance and thus to
achieve his goal.

I express my sincere gratitude to my guide, Lect. Geetika Grover

(Lecturer of Patel memorial national college, Rajpura) for her valuable
guidance, proper advice and constant encouragement under the tutelage.

I do not find enough words with which I can express my feeling

of thanks to entire faculty and staff of management, Patel memorial national
college, for their help, inspiration and moral support, which went a long way
in successfully completion of my project.

Jagneet Kaur
 DECLARATION

I hereby declare that the project entitled (Retail management) is an authentic

record of my own work carried out as requirement for degree of
management at PMN College (Patel memorial national college) Rajpura
under the guidance of (Lect. Geetika Groover).

Jagneet Kaur
 CERTIFICATE

This is to certify that this project has been made by Jagneet Kaur of class
[Link] (Prof.) on the topic Retail management has successfully completed
this activity under my supervision. He has worked hard on this project very
sincerely and honesty this report has been examined and approved by me.

Geetika Grover

RETAIL MANAGEMENT
Introduction - Retail management is the sale by seller in small quantities to
customer not for resale. I prefer to understand "Retail Management" as:
“The process of bringing the ultimate user to the main producer,
through a series of stages, where retailing is the last one. It is not limited to
quantities, but limited to the exact requirement of the ultimate user.
Therefore, bringing about operational efficiency at this last stage, and
creating an environment so compelling that he looks nowhere else, is "Retail
Management".
RM- is an art, and necessitates employing several tools of logistics
management for a complete end user satisfaction. RM - is getting to know
the final user on behalf of the producer. RM - is a process of facilitation.”

What is Retail? – Retail involves the sale of goods from a single point
(malls, markets, department stores etc.) directly to the consumer in small
quantities for his end use.

Retail Management – It is the sale by seller in small quantities to

customer not for resale. Retailing encompasses the business activities

involved in selling goods and services to consumers for their personal,
family, or household use. It includes every sale to the final consumer.
In other words, a process of promoting greater sales and customer
satisfaction by gaining a better goods and services produced by a company.
Retailing involves a direct sale with customers.
According to Kotler - “Retailing includes all the activities involved in
selling goods or services to the final consumers for personal, non
business use”

A better known theory of retailing “wheel of retailing” proposed by Mac

comb McNair says,

1. New retailers often enter the market place with low prices, margins,
and status. The low prices are usually the result of some innovative
cost-cutting procedures and soon attract competitors.

2. With the passage of time, these businesses strive to broaden their

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 Customer base and increase sales. Their operations and facilities increase
and become more expensive.

3. They may move to better up market locations, start carrying higher

quality products or add services and ultimately emerge as a high cost
price service retailer.

4. By this time newer competitors as low price, low margin, low status
emerge and these competitors too follow the same evolutionary
process.

5. The wheel keeps on turning and department stories, supermarkets, and

mass merchandise went through this cycles.

Retailer – A retailer comes at the end of the supply chain who sells the
products in small quantities to the end users as per their requirements and
need.
The end user goes to the retailer to buy the goods in small quantities
to satisfy his needs and demands. The complete process is also called
shopping.

Features – 1. Small quantities – Retailer buy and sell goods in small

quantities.
2. Sell to ultimate consumers – Retailers sell goods to ultimate final
consumer.
3. Varieties of goods – A retailer can sell various necessary goods to
consumers.
4. Personnel contact – A retailer establishes direct and personnel contact
with customers.
5. Shop display – Retailers decorates and display goods to attract customers.
6. Lost link – Retailers work as the last link of distribution channel.

Objectives – 1. Understand your customer

2. Make connections
3. Improve direct marketing
4. Increase customer loyalty
5. Make the product known.

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Advantages – 1. To the retailer
1. Buying in bulk – Buying in bulk direct from the manufacturer would
give the large retailer better discount therefore a lower cost of goods.
2. Employment of specialist buyers and other specialist staff – It
employs specialist buyers and other specialist staff hence goods of
better quality will be purchased at reasonable price.
3. Saving on transport – Since they buy in bulk, they can also have their
own fleet of transport vehicle where its own cheaper then hiring them
from others.

2. To the customers
1. Competitive price – The customers assured to get the same quality
good at the same price at any other smaller retailers.
2. One stop shopping – Customers finds it very convenient as they can
do all their shopping under one roof due to wide range of goods offered by
the various departments.
3. Convenience – Self service in large stores makes goods easy to
collect and customers can go round on their own.

Disadvantages – 1. To the retailer

1. Large capital – A large amount of capital is needed since the business
stocks a great variety of goods which it buy in bulk direct from the
manufactures.
2. Administrative difficulties – As the number and size of branches
increase control from the headquarters become quite difficult and
expensive.
3. High overheads – A large staff means high wage bills.

2. to the customers
1. Only standard goods are stocked – A large retailer will stock only
these items which are in regular demand and which can be sold quickly.
2. No credit – Since a large retailer serves many customers who
normally strangers, therefore they won’t offer any credit.

Types of retailers stores –

1. Department stores
2. Discount stores

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 3. Warehouse stores
4. Variety stores
5. Specialty stores
6. General stores
7. Convenience stores
8. Malls etc.

Choosing a retail store location –

1. Population and your customer
2. Accessibility, visibility and traffic
3. Planning
4. Competition
5. Location costs
6. Personal factors.

Eight characteristics of successful retail concepts –

The holy grail of strategy for any firm, but especially retailers, is to create a
concept that is so different and compelling that it renders competitors
irrelevant — and then to implement that concept in such a way that core
customers are bonded and the competitors find it hard to copy or react.

Innovative offerings from a variety of industries have attempted to create

niches that were protected from competition. Brands such L.L. Bean, REI,
Wal-Mart, The Body Shop, Muji, Tokyo Hands, IKEA, Zara, H&M,
Enterprise Rent-A-Car, Best Buy Geek Squad, Whole Foods Market,
Subway (its low fat menu), Apple, Zippo’s and dozens of others have been
able to maintain a distinctive offering that attracts an extremely loyal
customer base.

How? Are there any common characteristics that these brands share?
Although each is different with respect to strategy and context, it is possible
to observe some factors that are associated with successful new retail
concepts. Not all are always present but there are cases in which the absence
of even one can be fatal. The resulting eight guidelines are meant to be
provocative.

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They have a clear vision Firms with successful new retailing concepts tend
to have a strong vision that connects to a core customer group. There is
clarity around the offering, the identity of the target group, and the value
proposition. All the brands noted above certainly have this quality.
Enterprise-Rent-A-Car, for example, focused on the need to support the car
repair industry with rental cars, which implies outlets spread throughout a
city rather than having an airport focus, a system tied to insurance
companies and repair shops, and an ability to deliver cars to users. Tokyo
Hands is a one-stop store for the hands-on customer who wants the
stimulation of a puzzle, a wood working product, or a decorating challenge.

There is a theory in marketing that if you connect with a core segment, as

long as it is of reasonable size, you will tend to have not only a sales base
but a clear message and a set of nodes that can communicate and advocate
for your concept. A clear vision makes that connection.

They evolve the offering most successful new retail concepts evolve over
time, especially during the early days. They do not arrive out-of-the-box but
benefit from changes which can be refinements or major changes in the
vision. IKEA, [Link], Best Buy, L.L. Bean, Whole Foods Market all
started small in scope and ambition and expanded the vision as they got
traction and found things that worked. IKEA discovered outsourcing
assembly to customers when an employee had to remove the legs for a table
to get it in a car. Zippo’s changed from assortment to service as the key
value proposition. Best Buy’s policy of serving customer rather than selling
components was implemented over time. Pret-A-Manger, the enormously
successful U.K. sandwich chain, refined the concept over five years when it
was still a single storefront.

Retailers have a unique ability to experiment, try out many concepts with
modest investments, and wait until one hit. The Limited tried out many
concepts within an existing store and created chains such as Bath and Body
Works and Structure out of those that showed promise. With different
locations, experiments are doable not only to refine the concept but to tweak
it, keeping it fresh and ahead of competition.

They execute the main reason that new retailing concepts fail may be

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Execution. The successful ones have been able to execute. That means they
have been able to deliver the value proposition consistently and profitably.

The fast fashion pioneers, Zara and H&M, developed systems to conceive,
create, make, and deliver products on a real time basis. Whole Foods
Markets has the ability to source and handle organic foods. IKEA has
footprints, a presentation system, and a customer-assembly offering they can
deliver behind that would be almost impossible to duplicate. Excellence in
execution means that needed resources in the form of people and capital
have been accessed and that capabilities and process have been put in place.
The result is formidable barriers to competitors.

They develop a strong culture and set of values In part because retail
execution involves service and unique offerings; it is hard to maintain
excellence over time. It is too easy to see the offering decline or become
fuzzy. The successful new retail concepts are almost always accompanied by
extraordinarily strong culture and values that provide energy and direction in
the early years and support the vision and its execution as the business
matures.

[Link] has been guided by ten values which include delivering "Wow"
service, being a bit weird and acting humble. Best Buy’s Geek squad is
about fun, humor and taking the stress out of dealing with computers and
entertainment systems. A vision-driven organizational culture has enormous
power to make the strategy succeed. Because the culture involves values,
programs and leadership, it is hard to copy.

They deliver emotional and self-expressive benefits

Most of these successful new retail concepts have gone beyond functional
benefits to deliver emotional or self-expressive benefits. Muji, one of
Japan’s top four retailing brands, is the no-brand brand and is all about
simplicity, natural, moderation, humility, calmness and self-restraint. Muji is
anti-glitz and delivers self-expressive benefit to those that are beyond buying
badge brands and have the right values about sustainability. Whole Foods
Market is a way to express a love of food using natural and organic
ingredients.

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They address a real unmet need Developing a new concept is hard enough
with wind at your back. Many of the new retain concepts benefited from a
market force often based on a visible and meaningful unmet need. There was
an opportunity. The Geek Squad and the Apple Store captured the unmet
need to avoid the frustration of installing, using and maintaining computer
and entertainment systems. Tokyo Hands addressed the need for a do-it-
yourself segment to have a one-stop store that supports that desire.

Many firms saw a trend emerge after they had gotten traction and were
poised to grow. Whole Foods Market saw a growing interest in organic and
natural foods when they were established and it was late for others to climb
on the bandwagon from a brand and capabilities view. Muji benefited from
an interest in sustainability and a withdrawal by some from the glitz of
designer brands.

They scale

A successful retail concept needs to scale. Expanding the footprint is

difficult because it is costly, because it can involve adapting to a business
with added complexity, and because a good concept is visible and others can
run with it in different geographies. Several, such as Whole Foods Market,
have scaled by buying like-minded companies with local strength. Others,
such a Subway, have used a franchising model. Most have used a
combination of cash flow streams and external financing to expand. In any
case, there has to be a proven model to scale.

They integrate social and environmental programs into the brand

It is remarkable how many of the successful new concepts incorporate social
or environmental programs into their offering. They, of course, have the
advantage of creating a brand rather than adapting an established brand and
thus can credibly build this dimension into it. Whole Foods and Muji have
broken through with visible substance and are seen as sharing the values,
interests, and even the lifestyles of an important customer segment. Muji is
all about environmental sensitivity in their offerings and, in addition, they
developed a set of three large campgrounds that allow people to enjoy nature
that is undisturbed. Best Buy’s "Greener Together" program implements
their programs around recycling and sustainability. The tagline "Whole
Foods, Whole People, Whole Planet" reflects the many programs at Whole
 7

Foods Market such as using farmed seafood standards, wind power for an
energy source, and reusable grocery bags.

Many of these factors, while not unique to retailing, have a higher incidence
in this category. Few other categories have as many opportunities to test,
learn and evolve as retail. Further, retailers have so many variables with
which to work, including location, ambiance, selection, visible policies and
customer interaction.

Retailing in India - The Indian retail industry has grown at a Compounded

Annual Growth Rate (CAGR) of 13.3%for the period FY06-10. The growth
in the Indian economy since the last decade and the change in consumption
pattern of the Indian populace in terms of higher proportion of middle class
population, greater proportion of working women etc can unarguably be
linked to the growth of the Indian retailing industry. Of all the segments in
retail, the contribution of ‘food & grocery’ remained the highest at 58% of
the total retail sales during FY10, with the ‘clothing & footwear’ segment
remaining the second largest contributor occupying 10%of the total retail pie
during the same period. However in terms of growth figures, the’
entertainment, books & sports goods equipment segment outperformed the
other retail segments registering a CAGR of 22.5% during the period FY06-
[Link] spite of the growth, the industry remains largely fragmented with the
organized retailing still at a nascent stage. In case of overall retailing
revenues, the food & grocery segment accounted for the highest share at
58% of the total retailing pie aggregating Rs.11.49 lakh crore during FY10.
In the organized retailing, the food & grocery segment stood as the second
largest contributor with revenues aggregating Rs.24273 crore during the
 8

same period. However, the organized retail penetration of other segments

Such as clothing &footwear, entertainment & books and furniture &
furnishing surpassed that of the food &grocery segment. The Indian retail
industry has witnessed rampant growth over the last decade. However,
during the economic recession since the latter half of FY09, the retailers
especially in the organized segment suffered a set-back in the form of
declining revenues and halt in their apex plans. The unemployment situation,
further aggravating the fear of job losses during the recession, resulted in
muted consumer spending with the consumers choosing to spend on
necessities rather than discretionary items; the industry thus witnessed
decline in footfalls, conversion rate, which was especially apparent in the
decline of same store sales. The slowdown in consumer spending led to the
inventory being stacked up resulting in a low inventory turnaround ratio,
registering a decline to 4.3 times during FY09 from 4.8 times during FY08.
Before the onset of recession, the large scale expansion plans of the Indian
retailers warranted an increase in inventory and greater store operating
expenses in the form of rentals and staff expenses thus increasing the
working capital requirement. However with the economic recession in
effect, the retailers faced a liquidity crunch owing to difficulties in raising
funds both from the equity as well as debt markets. Additionally, the funds
raised during the economic boom attracted higher interest rates thereby
affecting the retailer’s ability to service the interest as well as principal
repayments during the downturn. The total interest outgo of the retailers as
tracked by CARE Research registered a y-o-growth of 78.6% during
[Link] though, post recession, the industry is witnessing a gradual
turnaround, it is met by a few stumbling blocks that constitute the challenges
ahead for the Indian retail industry [Link] store rentals as compared to
retailers globally, taxation & other policy regulations, inefficiencies in
supply chain management and higher rate of shrinkage. In spite of the said
challenges, CARE Research expects the Indian retail industry to grow on the
backdrop of expectant rise in the country’s Gross Domestic Product (GDP)
during the period FY11-FY13. The rise in income level of the Indian
populace, in turn, is expected to fuel the domestic consumption ultimately
resulting in higher revenues for the Indian retailers. Importantly, CARE
Research expects the penetration of organized retail in the total retail pie to
increase by FY13 owing to the expanding reach of the retailers to tier-II &
III cities accompanied by higher consumer spend on discretionary items.
 9

Also, in an attempt to increase margins, CARE Research expects the

retailers would restore to adapting measures such as increasing the share of
private labels in the total store sales, reducing store level operating expenses
etc. Key Players in Indian Retail Sector Pantaloon Retail (India) – The first
Pantaloon store was opened at Gariahat in Kolkata in the year 1997 covering
8,000-square-feet area. Over the years, the store has undergone several
transitions. When it was launched, the store mostly sold external brands.
Gradually, it started retailing an eclectic mix of external brands as well as
private labels. Initially, it positioned itself as a family store targeted across
age and gender groups but later it shifted its focus towards being a fashion
store and gave more emphasis on the youth. As on Dec 2010, Pantaloons
had around 44 stores spread across major cities in India.

Shopper’s Stop- A menswear store owned by K Raheja in the Mumbai

suburb of Andheri in 1991 has now transformed into Shopper’s Stop, with
27 departmental stores. The company entered airport retailing in a joint
venture with the Nuance Group. It also launched India’s largest
hypermarket, hyper city. In 2005, it bought the Crossword bookstore chain.

Lifestyle-Growing from one store in Bahrain in 1973, the NRI-led Landmark

Group today operates over 5 million sq ft in the Middle East and India. The
group’s first Lifestyle store in India opened in Chennai in 1999. Now it has
325,000 sq ft in Chennai, Hyderabad, Bangalore, Gudgeon and Mumbai. Its
first hypermarket, branded as ‘Max’, is expected to open soon. Reliance
Retail- Reliance Retail Ltd, a subsidiary of Reliance Industries Ltd, has an
aggressive plan to expand its retail network across India. It entered the food
and grocery segment in November 2006 through its convenience store
format Reliance Fresh. The store offers a range of fruits, vegetables,
personal care, and home care and kitchen utensils. It focuses on building a
strong relationship with the agri-business value chain and sources directly
from wholesalers. Reliance Retail also plans to invest Rs. 25,000 crore on
hypermarkets, supermarkets and specialty stores in the next four years.

Aditya Birla Retail-The Company, which will operate under the brand
‘More’, has selected two formats – hypermarkets and supermarkets – for its
initial foray. The first store has opened in Pune. Last January, the company
acquired Trinethra Super Retail, which has given it more than 5, 00,000 sq ft
and a strong presence in the South. The Birla’s’ outlay for the business over
 10
The next three years is Rs 9,000 crore.

Bharti Retail- The world’s largest retailer Wal-Mart, which is entering India,
chose Sunil Mittal’s Bharti Enterprises as its partner in India. The venture
has already started with the cash & carry (wholesale) format, which could be
extended to retail operations once foreign direct investment is allowed in
multi-brand retail, as is expected. The Indian retail sector can be broadly
classified into:

a) FOOD RETAILERS There is large number and variety of retailers in the

food-retailing sector. Traditional types of retailers, who operate small single-
outlet businesses mainly using family labour, dominate this sector .In
comparison, super markets account for a small proportion of food sales in
India. However the growth rate of super market sales has been significant in
recent years because greater numbers of higher income Indians prefer to
shop at super markets due to higher standards of hygiene and attractive
ambience.

b) HEALTH & BEAUTY PRODUCTS With growth in income levels,

Indians have started spending more on health and beauty products. Here also
small, single-outlet retailers dominate the market. However in recent years, a
few retail chains specializing in these products have come into the market.
Although these retail chains account for only a small share of the total
market , their business is expected to grow significantly in the future due to
the growing consciousness of the buyers towards health and appearance.

c) CLOTHING & FOOTWEAR Numerous clothing and footwear shops in

shopping centers and markets operate all Over India. Traditional outlets
stock a limited range of cheap and popular items; in contrast, modern
clothing and footwear stores have modern products and attractive Displays
to lure customers. However, with rapid urbanization, and changing patterns
of consumer tastes and preferences, it is unlikely that the traditional outlets
will survive the test of time.

d) HOME FURNITURE & HOUSEHOLD GOODS Small retailers again

dominate this sector. Despite the large size of this market, very few large
and modern retailers have established specialized stores for these Products.
 11
However there is considerable potential for the entry or expansion of
specialized retail chains in the country.

e) DURABLE GOODS The Indian durable goods sector has seen the entry
of a large number of foreign Companies during the post liberalization
period. A greater variety of consumer Electronic items and household
appliances became available to the Indian customer. Intense competition
among companies to sell their brands provided a strong impetus to the
growth for retailers doing business in this sector.

f) LEISURE & PERSONAL GOODS Increasing household incomes due to

better economic opportunities have encouraged consumer expenditure on
leisure and personal goods in the country. There are specialized retailers for
each category of products (books, music products, etc.) in this sector.
Another prominent feature of this sector is popularity of franchising
agreements between established manufacturers and retailers.

RETAIL PRICING - Retail Management consists of Managing the sale

of goods or merchandise from a fixed location, such as a department store or
kiosk, or by post, in small or individual lots for direct consumption by the
purchaser. Retailing may include subordinated services, such as delivery.
Purchasers may be individuals or businesses. In commerce, a retailer buys
goods or products in large quantities from manufacturers or importers, either
directly or through a wholesaler, and then sells smaller quantities to the end-
user. Retail establishments are often called shops or stores. Retailers are at
the end of the supply chain. Manufacturing marketers see the process of
retailing as a necessary part of their overall distribution strategy.
Shops may be on residential streets, shopping streets with few or no houses,
or in a shopping center or mall. Shopping streets may be for pedestrians
only. Sometimes a shopping street has a partial or full roof to protect
customers from precipitation. Online retailing also referred to as B2C type
of e-commerce, and mail-order are forms of non-shop retailing.
Shopping generally refers to the act of buying products. Sometimes this is
done to obtain necessities such as food and clothing; sometimes it is done as
a recreational activity. Recreational shopping often involves window
shopping (just looking, not buying) and browsing and does not always result
in a purchase.

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The pricing technique used by most retailers is cost-plus pricing. This
involves adding a markup amount (or percentage) to the retailers cost.
Another common technique is suggested retail pricing. This simply involves
charging the amount suggested by the manufacturer and usually printed on
the product by the manufacturer.
In Western countries, retail prices are often called psychological
prices or odd prices.

Often prices are fixed and displayed on signs or labels. Alternatively, there
can be price discrimination for a variety of reasons, where the retailer
charges higher prices to some customers and lower prices to others. For
example, a customer may have to pay more if the seller determines that he or
she is willing to. The retailer may conclude this due to the customer's
wealth, carelessness, lack of knowledge, or eagerness to buy. Another
example is the practice of discounting for youths or students.

Retail management improves productivity and business

performance –
i. Increase knowledge of operations.
ii. Make fast, informed decisions.
iii. Offer superior customer service.
iv. Improve inventory and supplier management.
v. Maximize cash-in per customer.
vi. Minimize labor costs.
vii. Reduce inventory costs and out-of-stocks.
viii. Integrate credit card processing.

INTERNATIONAL RETAILING
International Expansion of Retailers
In order to gain competitive advantage and to increase sales and
13
Profits, retailers are rapidly expanding internationally. Among leading
retailers conquering international markets are Wal-Mart (U.S.), Metro AG
(Germany), Sears Roebuck (U.S.), followed by a number of German groups
—Rowe, Edeka, and Aldi.

International Retailing Defined

All activities involved in selling products and services to final
international consumers for their personal consumption. It involves
operations of international retailers beyond home-country borders, along
with operations of local retailers in different countries worldwide.

Retail Formats
Variations in Different Markets: There are three main retail formats:
general merchandise retailing, food retailing, and non-store retailing.
General Merchandise Retailing
1. Specialty Stores, stores that offer a narrow product line and
wide assortment, category include clothing stores, bookstores,
toy stores, etc. Represent the main retail format in developing
countries, but are popular in developed countries as well as.

2. Specialized Markets, large markets that contain specialty

stores specializing in a particular product category; exist in both

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Developed and developing countries.

3. Department Stores, large stores that offer a broad variety of

Products, as well as a wide assortment. Although department
stores have suffered losses lately in North America and many
appear to be retrenching, they abound both in Western and
Eastern Europe, and are very popular in Asia.

4. General Merchandise Discount Stores, stores that sell high

volumes of merchandise, offer limited service, and charge
lower prices. All-purpose discount stores like Wal-Mart offer a
wide variety of merchandise and limited depth. Category
specialists (category killers) like Staples' and Toys ‘R Us
carries a narrow variety of merchandise and offer a wide
assortment.

15
 5. Off-Price Retailers, retailers that sell brand name and designer
merchandise below regular retail price; they usually sell
overruns, irregular products and products from earlier seasons.
Off-price retailers are very popular in the United States and
Canada and are rapidly catching on in the rest of the world.

6. Catalog Showrooms, retailers that offer high-turnover, brand

name products at discount prices. Customers usually order from
a catalog in the showroom where the product is only displayed,
then pick up the goods at a designated location. Ikea has
pioneered the catalog showroom concept around the world.

Food Retailers
i. Conventional Supermarkets, self-service retailers with
Annual sales; abound worldwide.

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ii. Superstores, large food retailers that sell food, drugs,
and other products. In this category are: combination
stores that sell foods and drugs, which are popular in the
U.S., and hypermarkets, which combine supermarket,
discount, and warehouse retailing principles, which are
popular in the rest of the world, especially in Europe and
Latin America.

iii. Warehouse Clubs or Wholesale Clubs, stores that

require members to pay an annual fee and operate in low-
overhead, warehouse-type facilities, offering limited lines
of brand name and dealer-brand groceries, apparel and
other goods at a discount.

17
 iv. Convenience Stores, small retailers located in residential
areas; carry limited lines of higher-turnover necessities.
While the formats differ, convenience stores abound in
both developing and developed countries.

Non-Store Retailing
i. Internet Retailing, (also known as interactive home shopping
or electronic retailing): a venue for selling merchandise
through the Internet; includes both the new dot-com companies
along with traditional retailers attempting additional market
penetration using the Internet.

ii. Vending Machines, retailing format that has become very

popular, with extent of use varying from country to country—
they are particularly popular and omnipresent in Japan.

iii. Television Home Shopping, a venue for selling merchandise to

consumers in their homes using cable channels. Examples of
television home shopping are infomercials and direct response

18
 advertising, popular in North America and Europe, and becoming
increasingly popular in Asian markets.

iv. Catalog Retailing and Direct Mail Retailing, a venue for

selling merchandise to consumers using catalogs and other
types of direct mail. It allows for the international expansion of
retailers, but must be adapted to local market needs and
practices. There are many obstacles to catalog retailing in
developing countries: deficient telephone service, unreliable
mail service, and low income, among others.

v. Direct Selling, a retailing venue whereby a salesperson,

typically an independent distributor, contacts a consumer,
demonstrates product use and benefits, takes orders and delivers
the merchandise. Direct selling firms are most active in the
growth markets of Southeast Asia, Central and Eastern Europe,
and Latin America. Recently, due to the negative publicity
surrounding direct selling practices, China has banned all direct
selling operations.

vi. Network Marketing, variation on direct selling, involves

signing up sales representatives to go into business for them
with minimal start-up capital. Their primary task is to sell more
"distributorships" and merchandise. Network marketing is
growing rapidly, especially in emerging markets.

Issues in International Retailing

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 i. Legislation and Regulation local governmental regulations
differ from one market to another. Legislation has a profound
impact on a firm's operations through regulations that restrict
the firms' marketing strategies in the target market.

ii. Taxation and Cross-Border Shopping in countries where

consumers are not charged duties for products they purchase
from a neighboring country, consumers' purchase decisions
become driven by tax differences, rather than by differences in
producer prices. This may cause reduced profits for domestic
retailers.

iii. Variation in Retail Practices Consumer Perspective, retail

practices vary from one market to another depending on
consumer practices and preferences in the market. In the
United States, for example, consumers purchase products in
bulk and less frequently. In Japan and in most European
countries, consumers purchase products in smaller quantities
And on a daily basis.

iv. Variation in Retail Practices Sales people and Management

sales service differs from market to market, ranging from
extremely friendly to curt and even rude salespeople. Some
stores can charge an entrance fee for people shopping there,
while other stores require a particular dress code of their
customers.

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Global Economic Impact of Retailing

• Four of the 30 largest businesses in the U.S. are retailers.

• In 1997, Wal-Mart’s $119 billion in sales surpassed the gross

domestic product of Finland for the same year.

• Sears, Wal-Mart, Kmart, and JC Penny together employ more than 1.6
million people.

• Wal-Mart has 603 stores outside the U.S., including joint ventures in
China and Korea.

Classifying retail outlets

Method of classification Description of retail outlet

Form of ownership Independent retailer

Corporate chain

Contractual system

• Retailer-sponsored cooperative

• Wholesaler-sponsored voluntary chain

Franchise

Level of service Self-service

Limited service

Full-service

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Merchandise line Depth

• Single line

• Limited line

Breadth

• General merchandise

• Scrambled merchandise

Depth and Breadth of Product Line

• Depth of product line means that the store carries a large assortment
of each item, such as shoe stores that offer running shoes, dress shoes,
and children’s shoes.

• Breadth of product line refers to the variety of different items a store

carries.

- Scrambled merchandising refers to retailers that offer

- Several unrelated product lines in a single store.

- Hypermarkets are very large retail outlets that have the Goal of
offering customers everything at one outlet.

- Super centers are retailers that combine a typical merchandise store

with a grocery store.

Retail Positioning Matrix - The retail positioning matrix positions

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 retail outlets on two dimensions: breadth of product line and value added.
Breadth of product line is the range of products sold through each outlet.
Value added includes such elements as location, product reliability,

and/or prestige. For a store to be successfully positioned, it must have

an identity which has some advantages over competitors, and at the same
time are recognized and valued by consumers.

The Retailing Mix - The retailing mix includes:

1. Goods and services

2. Physical distribution

3. Communications tactics chosen by a store.

Retail Pricing Terminology - Markup refers to how much should be

added to the cost the retailer paid for the product to reach a final selling
price. Original markup is the difference between the retailer’s original cost
and initial selling price. The maintained markup is the difference between
the final selling price and retailer cost and is also the gross margin.
Markdown occurs when the product does not sell at the original price and an
adjustment is necessary. Shrinkage is theft of merchandise by customers and
employees. Off-price retailing involves selling brand name merchandise at
lower than regular prices. The difference between the off-price retailer and a
discount store is that off-price merchandise is bought by the retailer from
manufacturer’s excess inventory at prices below wholesale prices.

Store Location - Types of Store Locations:

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• Central business district

• regional shopping centers

• community shopping centers

• strip location

• power center

Retail management solution - Retail Management Solution supports bar

code readers for faster checkout and inventory control, printing of barcode
labels and designing your own barcode numbers if your inventory items are
not already bar-coded, count your inventory using our wireless barcode
scanner software, either in real time or batched using a barcode inventory
data collector.

Features of Retail management solution –

1. Efficient: With the aid of common barcode scanners and touch screen
interfaces, you can process your sales quickly and efficiently.

2. Easy to learn: No expensive training for staff as easy to learn.

3. Easy to use: Requires minimum keystrokes and the mouse are never
required (but you can use it if you want).

4. Flexible: Handles any combination of discounts, taxes, returns, credits

and sales specials in one easy transaction.

5. Automatic: Applies automatic discounts or preferred price levels to

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special customers.

6. Accommodating: If something is not in stock can send a customer

order to the purchase order system

Scrambled Merchandising - Scrambled merchandising involves offering

several unrelated product lines in a single store.

Shrinkage - Shrinkage is the breakage and theft of merchandise by

customers and employees.

Multichannel Retailers - Multichannel retailers utilize and integrate a

combination of traditional store formats and non store formats such as
catalogs, television, and online retailing.

Retail Life Cycle - The retail life cycle is the process of growth and
decline that retail outlets, like products, experience, which consists of the
early growth, accelerated development, maturity, and decline stages.

Parasites - Parasite stores do not create their own traffic. They make
money based on their proximity to things that will draw foot traffic. (Bigger
Stores, train stations, airports, office buildings, etc.)

Destination Stores - Stores that generate customers from larger trading

areas than their neighbors or competitors. I.e.-Dunkin’ Donuts: “It’s worth
the trip!”

Power Centers - Huge shopping strips with multiple anchors and often a

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Supermarket.

Anchor Stores - A large store, such as a department store or supermarket,

that is prominently located in a shopping mall to attract customers who are
then expected to patronize the other shops in the mall.

 Strategic implications: Retail marketing strategy - A retailer

develops a marketing strategy based on the firm’s goals and strategic
plans. Two fundamental steps:

1. Picking a target market: size and profit potential position.

2. Developing a retailing mix to satisfy the chosen target market:

4Ps + Personnel and Presentation used to create a retail image.

Store - “A store is place, real or virtual, where the shoppers come to buy
goods & services. The sales transaction occurs at this junction.” The
location of retail store has for along time been considered the most
important ‘P’ in retailing. Locating the retail store in the right place was

considered to be adequate for success. Location becomes a critical

decision for a retailer for several reasons. As like; Location is generally
one of the most important factors customers consider while choosing a
store. A bad location may cause a retailer to fail even if its strategic mix
is excellent... On the other hand, a good location may help a retailer
succeed even if its strategic mix is mediocre. Store location is least
flexible element of retailer’s strategic mix due to its fixed nature, the
amount of investment, and the length of lease agreements.
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Types of Retail Location - Various options are available to the retailer

for choosing the location of store. The choice of the location of the store
depends on the target audience and the kind of merchandise to be sold. A
retailer has to choosing among alternate types of retail locations available. It
may locate in an isolated place and pull the customer to the store on its own
strength, such as a small grocery store or pan shop in a colony which attracts
the customers staying close by. Typically a store location may be:

1. Freestanding /Isolated store.

2. Part of Business District/Centers (unplanned Business Districts).

3. Part of a Shopping Center (Planned Shopping Centers)

Freestanding /Isolated store - Where there are no other outlets in the

vicinity of the store and therefore store depends on its own pulling power
and promotion to attracts customers. A biggest advantage for freestanding
stores is that there is no competition around. This type of location has
several advantages including no competition, low rent, and often better
visibility from the road, easy parking and lower property. Neighborhood
Stores; colony shops serves small locality. Highway Stores: Ebony store in
Ludhiana.

Part of Business District/Centers (unplanned Business Districts) -

A retail store can also be located as a part of a business district. Or we can
refer this as unplanned business centers. A business district is place of
commerce in a city which developed historically as the center of trade and
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commerce in the city or town. A business districts can be a central,

secondary or a Neighborhood business district. A Central business
District CBD is the main center of commerce and trade in the city. (High

land rates, intense development). A CBD is the hub of retailing activity

in a city. CBD served different sections of population for Examples of
Can naught place in Delhi, Colaba in Mumbai, Commercial Street and in
Bangalore are up market CBD’s. CBD’s serving the upper and upper
middle class customers across these cities like, chandani chowk in Delhi,
Kalbadevi-Bhuleswar in Mumbai, and Chick pet in Bangalore. Secondary
Business District are composed of unplanned cluster of store often
located on a major intersection of city they a customers from a large part
of the city.

• Part of a Shopping Center (Planned Shopping Centers) - A

shopping center has been defined as “ a group of retail and other
commercial establishments that is planned , developed, owned and
managed as a single property”. The basic configuration of a shopping
centre is a “Mall” or Strip centre. A mall is typically enclosed and
climate controlled. A walkway is provided in front of the stores. A
strip centre is a row of stores with parking provided in the front of the

stores. In India we can planned shopping centre can categorize in two

category:
1. Regional shopping centers or Mall: Regional shopping centers or mall are
the largest planned shopping centers Often they are anchored by two or more
major department stores have enclosed mall serve a large trading area and

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Have high rents. (Ansal plaza, spencers plaza crossroads, DLF city in
Gudgeon)

2. Neighborhood/community/shopping centers: Neighborhood

/community centers usually have a balanced mix of stores
including a few grocery stores, a chemist, a verity store and a
few other stores selling convenience goods to the residents of
the neighborhood.

Retail Store Design & Visual Merchandising - Store design and

layout tells a customer what the store is all about and it is very strong tool in
the hands of the retailer for communicating and creating the image of the
store in the mind of the customers. The design and layout of the store are a
means of communicating the image of the retail store. The environment
which is creates in the retail store, is a combination of the exterior look of
the store, the store interiors, the atmosphere in the store and the events,
promotions and the themes. The overall look of a store and the series of
mental pictures and feelings it evokes within the beholder. For the retailer,
developing a powerful image provides the opportunity to embody a single
message, stand out from the competition and be remembered.

Exterior Store Design & Interior Design – 1) Exterior:

1. Location
 2. Parking

3. Ease of access

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4. The building architecture

5. Health and safety standards

6. Store windows, lighting

2) Interior:

1. Fixtures

2. Flooring & Ceilings

3. Lighting

4. Graphics & Signage’s

5. Atmospherics

Retailing in India - Retail is the new buzzword in India. The global Retail
development Index has ranked India first, among the top 30 emerging
markets in the world. It is believed that India has the potential to deliver the
fastest growth over the next 50 years. While barter would be considered to
be oldest form of retail trade, since independence, retail in India has evolved
to support the unique needs of country, given its size and complexity.
Second largest sector after Agriculture. Contributes about 10 – 11 % of the
GDP. The estimated size of the organized retail industry in India is Rs.
16,000 cores. This is 2 % of the total estimated retail trade. Indian Retail
trade increased from Rs. 2200 billion in 2000 to Rs 3300 billion by the year
2005. India's first true shopping mall – complete with food courts, recreation
facilities and large car parking space – was inaugurated as lately as in 1999

30

In Mumbai. (This mall is called "Crossroads").

The Evolution of Retail in India - Retail in India has evolved to support

the unique needs of our country, given its size and complexity Hats, Mandis
and Meals have always been a part of the Indian landscape. They still
continue to be present in most parts of the country and form an essential part
of life and trade in various areas. The PDS (Public Distribution System)
would easily as the single largest retail chain existing in the country. The
evolution of the PDS of Grains in India has its origin in the “rationing
system” introduced by the British during World War II. The system was
started in 1939 in Bombay and subsequently extended to other cities and
towns. The system was abolished post war but however attaining
independence India was forced to reintroduce it in 1950. There was rapid
increase in the ration shops (being increasingly called the Fair Price Shop or
FPSs). The Canteen Stores Department and the Post Offices in India are also
among the largest network of outlets in the country reaching population

across the country. The Khadi & Village industries (KVIC) were also set up
post independence. The cooperative movement was again championed by
the government.

India's largest retail Chains: 1) PDS: 463,000

2) Post offices: 160,000

 3) KVIC: 7,000

4) CSD Stores: 3,400

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Prominent sector in Indian retail –

1. Clothing, textiles and fashion Accessories:

2. Food & food Services:

3. Consumer Durables:

4. Books & Music:

Other emerging sectors

5. Jewellery retail

6. Footwear retail

7. Time Wear Retail

8. Fuel Retail/ petrol retail.

Challenges to retail Development in India –

1) Retail not being recognized as an industry in India.

2) The high costs of real estate.

3) Lack of Adequate infrastructure.

4) Multiple and complex taxation system.

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