final sr rp
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Societal Retailing -The Futuristic Retailing
Author1: -Prof Ramkishen.Y Author 2: -Anand Thakkar *
Author 3: - Isha Maru *
Abstract:
Indian retail at its nascent stage is subjected to many factors like varied culture and shopping
behaviour with different styles and habits. Each customer has a different rationale for
purchasing a product and sometimes it is just impulse. The whole concept of shopping has
changed over a period of time right from barter until today when retail has gone online onlyone thing, which has remained constant, is that retailers have to be different to build their
strong customer base. As a differentiation strategy marketers came up with social marketing,
which proved to be a successful toll. However with advent of more and more competition
retailers have to be innovative and when it comes to retail every customer contributes to sale.
As a new concept societal retailing has been initiated which aims at giving back to the society
by providing value.
Societal Retailing aims at creating Sustainable competitive advantage by working in tandem
with changing norms of society and benefiting society by implementing various related
activities which makes retailer more responsible towards his duties. New entrants and that too
operating in niche segments will carry out societal retailing. Big retailers will copy the same
format and try to compete in the market.
Keywords Social Marketing, Social Retailing, Green Stores, Societal Retailing.
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Introduction: -
The term Societal Retailing is derived from 2 terminologies i.e. Social Marketing and Social
Retailing. First we will separately understand what these terminologies mean and then define
Societal Retailing.
Social marketing was "born" as a discipline in the 1970s, when Philip Kotler and Gerald
Zaltman realized that the same marketing principles that were being used to sell products to
consumers could be used to "sell" ideas, attitudes and behaviors.
Social marketing is defined as differing from other areas of marketing only with respect to the
objectives of the marketer and his or her organization
- Kotler and Andreasen.
Social marketing seeks to influence social behaviors not to benefit the marketer, but to benefit
the target audience and the general society." This technique has been used extensively in
international health programs.
Like commercial marketing, the primary focus is on the consumer on learning what people
want and need rather than trying to persuade them to buy what we happen to be producing. The
planning process takes this consumer focus into account by addressing the elements of the
"marketing mix." This refers to decisions about 1) the conception of a Product, 2) Price, 3)
distribution (Place), and 4) Promotion. These are often called the "Four Ps" of marketing.
Social marketing also ads a few more "P's viz.
Publics--Social marketers often have many different audiences that their program has to
address in order to be successful. "Publics" refers to both the external and internal groups
involved in the program. External publics include the target audience, secondary audiences,
policymakers, and gatekeepers, while the internal publics are those who are involved in some
way with either approval or implementation of the program.
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Partnership--Social and health issues are often so complex that one agency can't make a dent
by itself. You need to team up with other organizations in the community to really be effective.
You need to figure out which organizations have similar goals to yours--not necessarily the
same goals and identify ways you can work together.
Policy--Social marketing programs can do well in motivating individual behavior change, but
that is difficult to sustain unless the environment they're in supports that change for the long
run. Often, policy change is needed, and media advocacy programs can be an effective
complement to a social marketing program.
Purse Strings--Most organizations that develop social marketing programs operate through
funds provided by sources such as foundations, governmental grants or donations.
Retail today has become much more organized. It is not merely restricted to selling goods and
services. Retailing will survive only if it contributes to the society. A retailer has to prove him
to be a responsible citizen.
The concept of Social Retailing was first unveiled at National Retail Federations (NRF) BIG
show in 2007 when Icon Nicholson launched Interactive Mirror. The interactive mirror
provides on the spot feedback and ambient aura animation while beaming the customers in-
store experience across the Web via live video feed.
The main idea is to facilitate the following among their customers:
Discover new things from people with similar taste and style
Recommend and discuss customers favorite products and stores
Simplify customers life with wish lists and shopping lists
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Retailers have an indispensable role to play in terms of advancing the cause of
sustainability. They function as both the industrys interface with the community, and at
least potentially, as the consumer conscience of the community. They are positioned to
acquaint their customers with those companies doing good on behalf of people and planet,
and also to buy conscientiously on behalf of the highest values held by their customers.
Every retailer has the opportunity to engage his or her customers on issues of sustainability
(as well as local environmental and social issues, if desired), in a non-invasive way. The
idea is to nurture an upward spiral of values that is good for the environment, good for your
community and good for your store!
Definition: -
Societal Retailing includes all the activities of consumer profiling, retail research,
merchandise management, category management and visual merchandising in
collaboration with store operations and supply chain management so as to serve societys
needs, aspirations so as to benefit the retailer, the consumer and the society.
-Prof Ramkishen.Y (2008)
From the above-mentioned definition we can infer that: -
Societal Retailing encompasses all the regular activities like merchandising, VM etc.
It also dwells into the role of retailer as a caretaker to the society at large, so as to
mutually benefit all the stakeholders.
Societal retailing is more about co-creation and coo petition rather than competition. In
co-creation the vendors, the customers and the retailer will participate in the design of
the store and the merchandise.
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Social
Marketing
Retailing
Societal
Retailing
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Factors influencing Societal Retailing
Changing Consumerism: -The consumers today are well educated and they have all the
sources to access the information they require. The traditional customers used to go to a
particular store inquire and purchase it directly, but today's consumer will search information
on the Internet, will find substitute of that product and when he finds value he will purchase it.
Consumers today have started giving importance to the environmental friendly products.
Competition: -Retail sector is considered as the sunrise sector; so all the major players have
to make sure that they make their presence feel in the market. So a retailer has to make sure he
is following current trends and fashion, which the competitors are carrying out. Secondly he
has to make sure he provides valuable goods t right price in order to sustain himself in the
market. Retailer will have to face fierce competition in near future and if he follows SocietalRetailing which is considered to have potential scope in future of retail, he will be able to keep
himself ahead in competition.
Corporate Social Responsibility: - The retailer uses it as a strategic tool. He earns profit
from the society, so it is his responsibility to make sure the society also benefits from the
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Retailer
Changing
Consumerism
Competition
Corporate social
Responsibility
Media
Pressure
NGOs
Pressure from
Government
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retailer. The return which retailer gets after undertaking CSR cannot be quantified, but it
definitely enhances the reputation of the retailer in the form of long lasting good will.
Media Pressure: - A retailer has to make sure that he doesnt come into much limelight of
the media for wrong reasons. If media describes the retailer as a threat to the small kirana or
unorganized sector, then it can be a threat for retailer to carry out his operations smoothly.
Retailer through his societal marketing activities can be rest assured of his positive image in
front of media.
NGOs: - NGOs today have become active partners in working for benefit of the society and
they take up different issues which posses as harm to the society. Retailers have to be very
careful about their activities, which can go against the interest of the society. As a part of
Societal marketing activity retailers can tie up with NGOs where in they indirectly support
poor people by providing them with basic necessities like food or clothing.
The example of the retailer would be Hyper city wherein at the end of the day they sell their
fruits and vegetables to the NGOs at no profit/ no loss basis and these Ngo's further
distribute it to the beggars who fight hard for their daily survival.
Pressure from Government: - Retailer has to abide by the rules and policies laid down by
the government. He cannot run the business on his own. Even though there is no government
body to govern the operations of retail in India, the govt is planning to setup a regulatory body
with the entry of foreign players in the Indian market, so as both of them carry their functions
smoothly and properly. He has to make sure that he as to pay his taxes on time and if
government introduces a new law for the retailers, he has to make sure that also follows the
law. Societal Retailing will definitely help to reduce the pressure from the government because
it is a direct give and take relationship and it will help to reduce the pressure from the
government.
PROPOSED MODEL FOR SOCIETAL RETAILING
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Need For Societal
Retailing
Government
Regulations
Design of New
Formats
DesigningMerchandise/Category
Possibility of Brand
Communication/
Distribution
Enhances Value and
Enduring Relationships
Consumer Society Retailer
Consumers Are
Getting Environment
Conscious
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Consumers are getting Environment Conscious: - The green trend no longer simply
concerns environmentally friendly packaging, it has evolved into an entirely new mindset and
approach to doing business that more and more retailers are embracing. This trend also affects
the purchasing decisions of a growing population, with consumers increasingly demanding
greener products from retailers and brands that have adopted green practices throughout the
entire supply chain. Consumers and retailers are becoming increasingly conscious of where and
how products are produced, to the amount of energy consumed during production and
distribution, to the energy efficiency of retail outlets in which the goods are sold.
Government Regulations: - Another important factor is the government, and companies
have lived through a generation where the market has been paramount, eclipsing the role of the
government. Whether its through global trade agreements and the WTO or whether its their
own enforcement of laws or smart regulation that looks at creating incentives to engage the
business community as a partner, the government remains an incredibly significant actor and
can be a net negative, net positive, or neutral in terms of influencing the kinds of decisions that
businesses make.Hence a retailer has to change his way of functioning with the changing
norms of government and societal reatiling is the solution to have a postive image in the eyes
of law.
Design of New Formats :- With the changing consumer preference ,threat to sustainability
and government regulation retailers have to change the format of the store by making it more
enviornrmental friendly causing least threat to the sorrounding and giving maximum returns to
the society.
Designing Merchandise Category: - Designing a merchandise mix becomes very critical
for a retailer. He has to use Raw materials and finished goods which are environment friendly
and do not have any side effects when the consumers consume it. It will definetely attract
consumers becuase they will feel that they are consuming goods which are harmless.
Merchandise should be easily degradable and easily disposable which does not pollute the
environment as well. Plastics as we know cant be recyclyed and cant be degraded, so
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materials like plastics should not be used. Usage of chemicals should be reduced and in terms
of food items.
Possibility of Brand Communication and Distribution:-Brands and branding are of
great importance in today's marketing. As a key component of branding, brand communication
determines whether a brand is successfully established and eventually turns a profit.
Conventional forms of brand communication via advertising, and public relations have
achieved great success in the past, but their effectiveness is declining dramatically in todays
more customer-dominated business climate. The traditional forms of advertising reach fewer of
the targeted customers. Yet brand placement, being a new form of brand communication, can
compensate for the setbacks experienced by advertisements due to its innate advantages.
Besides, it can also work seamlessly with other marketing communication methods such aspublic relations in order to achieve the branding success.
Enhances Value: - Societal Retailing enhances the value to the society. Whatever it takes
from the society in terms of profits it has to return to the society by contributing money for
social cause and upliftment of the society. It has to provide value by not harming or destroying
the environment, by not cutting trees and making less usage of chemicals.
Today the retailer looks for Customer Satisfaction but by using this model the retailer will be
able to provide Customers Delight, which will exceed customer expectations. It will definitely
increase its share of business and also form positive Word of mouth communication from his
delighted consumers. It will provide value in terms of long-term goodwill.
Hence this model will help the retailer in having an edge over his competitors as well as will
prove to have satisfied all the elements of society in which he practices.
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Scope for future research: -
Societal retailing is relatively a new term which has been derived by us by the combination of
retailing and social marketing. More exploratory research and empirical studies have to be
carried out both at primary and secondary research level. Societal retailing can earn goodwill,
foster relationships and enhance the brand image for a retailer there by increasing his GMROI
(Gross Margin Rate of Return) and satisfying the needs of consumers and society alike.
Conclusion:-
Retail is succumb to change and the pace of change is so fast with regards to public attitudes in
some areas such as modes of consumption that retailer must respond to and anticipate. Retailerhas to anticipate in advance and plan his strategy and only then can he cater to different and
varied markets. Thus it stands very important to understand customers and cater them.
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ANNEXURE 1
CASE STUDY
GREEN STORES BY TESCO: -
UKs retail giant Tesco is greening up its image and making progress with its emissions and
environmental impact. Sir Terry Leahy has a new mission for Tesco. He wants his supermarket
to turn the masses green.
Tescos Commitment: Recycling/packaging/plastic bags
Make all Tesco carrier bags degradable from September 2006.
Double the amount that customers bring back to stores for recycling by 2008.
Tescos Commitment: Local sourcing and more British seasonal produce
Tesco says it will:
Increase the amount of local sourcing to give its customers more local lines than they
will find in any other retailer.
Make it easier for small suppliers to gain access to Tesco.
Promises
Despite the populist rhetoric, Tesco has chosen to start acting on climate change in large
part because of pending UK carbon regulations.
Tesco has pledged to triple its recycling, cut in-store energy use per square foot by 50%
from the 2000 level by 2008 and halve greenhouse gas emissions by 2020.
Other plans include installing on-site renewable energy systems, launching a 100 million
climate technologies fund and carbon labeling products.
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Tescos new climate friendly policies anticipate plans in the UK governments energy
white paper to include supermarkets in an emissions trading scheme and introduce a
carbon-labeling scheme, which may one day be mandatory.
Tesco promises to meet emissions reductions targets by investing an estimated 500
million in environmentally friendly refits for its stores, as well as funding research.
A separate investment of 100 million will go into developing low carbon technologies.
Tesco plans to install ten combined heat and power systems this year.
A further 5 million will fund Tescos new Institute for Sustainable Consumption, set up
with the help of Oxford University. The institute will look at how carbon labeling and
recycling information influence consumer behavior.
Tesco has suggested it will roll out a carbon-labeling scheme in a few years time. The UK
government has announced plans to develop a carbon labeling methodology within 18
months in conjunction with the major supermarkets and the Carbon Trust.
While cutting emissions, Tesco is simultaneously building an average of one new store
almost every week. The two trends cutting emissions and business expansion could be a
lucrative combination for Tesco if its emissions caps increase with its size while emissions
from stores decrease.
Tesco calculates its energy and carbon cuts per square foot of floor space. Tesco owns
about 1,500 stores worldwide, amounting to about 27 million square feet.
Tesco has started tackling its direct emissions, having commissioned Environmental
Resources Management, a consultancy, to audit the companys carbon footprint. The recent
audit revealed that Tesco has a direct annual carbon footprint of 4.13 million tones of CO2
equivalent.
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The company has no plans to address the emissions of customers driving to its stores, for
example through offsets or encouraging shoppers to take public transport. Tesco estimates
that customers in the UK make 20 million car journeys to its stores every week.
A waiting game
It appears Tesco is waiting for carbon labeling to trigger a lowering of supply chain
emissions.
But carbon labeling could also be likened to Fair-trade labeling, which remains a niche
market in the UK despite years of saturation consumer marketing. It remains to be seen
whether low-carbon products will have mass appeal.
Being the UKs largest retail chain, Tesco has an obvious chance to lead the consumer
market on tackling climate change, and reap the financial rewards for doing so. How far
and how fast the company moves on supply chain carbon may prove to be a bellwether for
the rest of UK plc.
How Tesco has cut its energy usage
Introducing more energy-efficient ovens, refrigeration and air-conditioning the big users of
energy in stores.
Introduction of More efficient lighting, and timers and motion detectors that switch off the
lights when they are not needed.
It has redesigned fridges to keep more of the cold air in cutting energy use by 10%.
It has installed Equipment that retrieves cold air from chiller cabinets to use as an energy-
efficient alternative to air-conditioning on the sales floor.
Heat recovered from machinery to use as heating when needed.
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Green fridges
More than 20% of emissions reductions could be made from reducing HFCs, highly potent
greenhouse gases used in stores fridges.
The industry is preparing for an EU-wide ban on HFCs, expected to come into force by 2011.
Big wins
Tesco believes the market for attracting customers away from rival supermarkets is worth 10
billion .
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ANNEXURE 2
CASE STUDY
FAB INDIA STORES: -
In May 2008, India-based exporter and retailer of textiles and home accessories, Fabindia
Overseas Pvt. Ltd (Fabindia), announced that by the end of the year, about 20,000 weavers
from backward communities would become shareholders in about 35 of its subsidiary
companies.
John Bissell, who had worked as a consultant for Ford Foundation, founded Fabindia. In 1958,
he traveled to several small villages across India where he interacted with weavers and
craftsmen and discovered the rich heritage of Indian fabrics and textiles.
With the aim of showcasing Indian handloom and textiles in the international market and
providing employment to traditional artisans, he founded Fabindia in 1960 as an export house.
With the growing acceptance of handlooms and handicrafts by urban Indian consumers in the
1970s, Fabindia turned the focus from exports to the domestic market. Its retail operations
began in 1976, when it opened its first retail outlet in New Delhi.
By 2008, Fabindia had emerged as a retailer selling a wide range of products from Indian
handicrafts to organic foods, with 84 stores in India and one store each in Rome, Dubai, and
Guangzhou. Fabindia had a turnover of Rs.4.5 billion in 2007
Analysts attributed its success to its unique marketing practices. Fabindia procured products
from different corners of India and sold them across the world. The products were priced
reasonably and were sold through its exclusive stores. It did not advertise much. Fabindia
operated in a niche market and did not try to compete with mainstream manufacturers or
retailers.
Fabindia worked closely with artisans and villagers located across India, and provided inputs
related to design, color, production techniques, and raw materials, in order to obtain high
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quality products. Fabindia's product range comprised textiles and non-textile items.
The textile range, which accounted for a major portion of Fabindia's products, included ready-
to-wear garments and accessories, upholstery fabric, and furnishings.
The garments included Indian and western wear for men, women, and children, which were
made of natural fabric and vegetable dyes and showcased designs that were international in
style and cut.
Education is beyond the reach of most girls in the central regions of Rajasthan, with only five
per cent of them being able to complete secondary school. Fulfilling what would otherwise be a
wild dream is a possibility thanks to the Fabindia School.Started 10 years ago in the town ofBali, in Pali district, the school is a non-profit private school established by William Bissell,
the half-Indian, half-American, Delhi-based entrepreneur who heads the Fabindia Group, a
leader in marketing handloom home furnishings and clothing. His idea was to create a
prototype school, empowering rural youth of diverse backgrounds from the poor districts to
`shape their own lives and transform the state of Rajasthan'.
From its inception, the Fabindia School has been committed to educational opportunities for
girls, even subsidizing their tuition. Girls are given positions of leadership and are encouraged
to hold their own among their male schoolmates. A picture of dignity and self-confidence, girls
top in the class, excel in science and mathematics and have a lead role in the winter's school
play. In addition to becoming fluent in English, they also get a strong grounding in other
subjects.
The Fabindia School stresses environmental education, exposing students to issues of the larger
world through workshops conducted by expert visitors. It also teaches its students to take pride
in their local heritage, instilling a sense of responsibility in them for the future of rural
Rajasthan. Students are encouraged to consider working nearer home, and staying connected to
their birthplace.
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With the 250-student `core school' in Bali now well established, the plan is to open more
Fabindia schools elsewhere in Rajasthan. In June, the first satellite school opened in nearby
Ghanerao. Hopefully, some day, hundreds of students will play a part in the transformation of
rural Rajasthan.
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References: -
Research Papers
1.) Charles B. Weinbergand and Robin J.B. Ritchie, Cooperation, Competition and Social
marketing.
2.) Deborah Alden. Environmentally conscious consumers driving Earth-friendly retail
trends
3.) Lekha Klouda, Charity Retailing: The future of sustainable shopping
4.) Lynn Mac Fadyen, (1999), A Synopsis of Social Marketing.
5.) Social Marketing: A resource guide.
6.) Social Marketing and Consumer Policy (2004)
7.) Sudeep Chatterjee, Do successful companies value Social Responsibility and Ethics in
Marketing in India?
Websites
www.tesco.com
www.fabindia.com
www.walmart.com
www.retaildude.com
About Authors:-
1. Prof Ramkishen.Y:- is Faculty of Marketing at K J SomaiyaInstitute of Management Studies and Research, Mumbai. He has close to 6 years of teaching
experience and 4 years of corporate experience. His consulting areas are Rural Marketing,
Retail management, Sales and Distribution and Management of Co-operatives. He has written
two books: Rural and Agricultural Management and Management of Co-operatives both
published by Jaico Books and has submitted his PhD Thesis on Rural Advertising E-mail:
2. Anand Thakkar: -Student of Somaiya Institute of Management
Studies and Research is pursuing Post Graduate Management in Retail.
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3. Isha Maru: - Student of Somaiya Institute of Management
Studies and Research is pursuing Post Graduate Management inRetail.