321 33 powerpoint slides chapter 1 retailing role relevance trends

7/15/2019 321 33 Powerpoint Slides Chapter 1 Retailing Role Relevance Trends

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© Oxford University Press 2010

RETAIL MANAGEMENT,RETAIL MANAGEMENT,

2/E2/E

Chetan BajajChetan Bajaj, Director,

Sona School of Management, Salem, Tamil Nadu

Rajnish TuliRajnish Tuli, Director,Millward Brown, South East Asia, Singapore

Nidhi Varma SrivastavaNidhi Varma Srivastava, Director,

Millward Brown, India




Chapter - 1Chapter - 1RETAILING: ROLE, RELEVANCERETAILING: ROLE, RELEVANCE

AND TRENDSAND TRENDS




What is

retailing?Retailing: a conclusive set of activities orsteps used to sell a product or a service toconsumers for their personal or family useRetailer: a person, agent, agency,

company or organization instrumental inreaching the goods, merchandise, orservices to the ultimate consumerCountries that have enjoyed the greatest

economic and social progress have beenthose with a strong retail sectorOver the last decade there have been

sweeping changes in the general retailing

business




Retail industry andeconomyRetail business is the largest privateindustry

Retail is ahead of finance and engineering

and contributes over 8 per cent of GDP inthe western countries

Over 50 of the Fortune 500 and about 25of the Asian Top 200 companies areretailers

Today, in some developed countries, retailbusinesses have shares as large as 40 percent of the market

The significance of the retail business has

increased with the fast growth in the




Retail industry in IndiaRetail forecasts in India:- the business in India is crossed Rs. 25,000

billion in 2008- growth of organized retailing in both food andnon-food

segments

- proportion of sales through organizedretailing increased by 8% in 2010

Emergence of organized retailing:

-India to have over 700 shopping malls by2015(400 operational malls in 2010)- land developers rushing to cash in on the

booming retail




Contd…

40 per cent of the total mall space to beconcentrated in the National Capital Region


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Characteristics of retailingDirect end-user interaction

Sole point in the value chain to provideplatform for promotions

Sales at the retail level is generally in smallerunit sizes

Location is a critical factor for retail businessRetail services are as important as core

products

A larger number of retail units as compared to

other members present in the value chain



Functions of retailing

Sorting

Breaking bulkHolding stock

Additional services

Channel of communication Transport and advertising functions



Activities performed byretailers

Arrange for assortment of offerings

Breaking quantity

Holding stock

Extending services



Categorizing retailers

Number of outletsMargin vs Turnover

Location

Size



Trends in retail formats

Mom and Pop Stores and traditional kirana

storesE-commerce

Department Stores

Discount StoresCategory Killers

Specialty Stores

E-tailers



Relationships betweenretailers and suppliers

The retail sector is critically dependent on itssuppliers for effective operation and theprofitability of its businessSeveral socio-economic and demographic

factors are considered by manufacturers foridentifying the ideal retail format mix for itsproducts

This is illustrated by the washing soap categoryin India and the resultant retail formatpreferences



Retail format mix adopted

by manufacturers forsoaps

Soap is targeted towards women as they

are the chief decision-makers in soappurchase. Medicated positioning like germkilling and anti-bacterial are marketed tofamilies.

About 75% of the soaps are bought throughthese following types of outlets.

Kirana stores

Pan-beedi shops

Department stores



Retail strategyDefine the business of the firm in terms of

orientation towards a particular sectorSet short-term and long-term objectives with

regard to image and profitabilityIdentify the target market and direct efforts on

the basis of the customers characteristics andneedsDecide the broad direction the company must

take in futureImplement an integrated plan that

encompasses all aspects of retailing likepricing, location, and channel decisions

Evaluate and revise the plan depending on thenature of the internal and external environment



Retail concepts

An essential part of the retailing strategy,the retailing concept is essentially acustomer-centred, company-wide approachto developing and implementing amarketing strategy. The retailing conceptcovers four broad areas:

Customer orientation

Goal orientation

Value driven approach

Coordinated effort



The changing face of retailingRole of the Internet- Does the size of the retail organization play a big

part in adapting easily to the Internet?- Is the product/service offering also a prime

determinant of cyber retailing?Branding through retailers- How do retailers choose which brands to

display?

- Why do many new products fail in themarketplace- How can manufacturers maximize the brand

opportunity in a given retail outlet?- What is future of Lifestyle Clustering?

- Vertical retail concepts are increasing inpopularity



Drivers of success in theretail sector Customers are the driving force in change

Re-evaluating the marketing planAdvanced education for retailers is critical for

growth

Strong visual recognition

The workplace challenge

Planning for success

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