retail workshop kjc
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Dr.S.Yogananthan
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To learn
What is retailing?
Types & Functions
Retail mix Retail consumer behaviour
Design & location
Merchandising
Pricing
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Interface between producer & end
consumer.
Firsthand information towards producer
& end consumer.High sensitivity towards profit (win win).
Order lead time.
Identify Retail Brand Identity .Shift trend in Merchandise mix.
Facilitator / Coordinator for VAS.
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Manufacturer
Retailer
Consumer
Manufacturer
Consumer
Manufacturer
Wholesaler
Retailer
Consumer
Feedba
ck
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The word retail has its origin in French word retaillier and
means to cut a piece or to break bulk.
Retailing is the sale of goods and services to theultimate consumer for personal, family or household
use.
According to Kotler:Retailing includes all theactivities involved in selling goods or services to
the final consumers for personal, non businessuse
Retailers must be customer-focused, not product-focused, Carl Steidtmann, director & chiefeconomist of Pricewaterhousecoopers.
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Retailing may be understood as the final step in thedistribution of merchandise for consumption by the endconsumers.
Retailing is responsible for matching final consumerdemand with supplies of different marketers.
Retailing is high intensity competition industry, The reasonsfor its popularity lie in its ability to provide easier access to
variety of products, freedom of choice and many servicesto consumers.
The Indian retail is dotted by traditionally market placecalled bazaars or haatscomprises of numerous small andlarge shops, selling different or similar merchandise
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Types and Classification of
Retailing.
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Superstores
Department Stores
SupermarketsHyper Markets
Specialty Stores
Category killers
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Amount of service
Product lines
Relative prices
Organizational
approach
Retailers Are
Classified By:
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Functions of a Retailer.
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From the customer point of view, the retailer serves
him by providing the goods that he needs in the
required assortment, at the required place and time.
From an economic standpoint, the role of a retailer
is to provide real added value or utility to the
customer. This comes four different perspectives
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1. Form: First is utility regarding the formof a productthat is acceptable to the customer.
The retailer does not supply raw material, but rather
offers finished goods and services in a form that the
customers want.
The retailer performs the function of sorting the goodsand providing us with an assortment of product in
various categories.
2. Time: He cerates Timeutility by keeping the storeopen when the consumers prefer to shop.
preferable shopping hours.
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5. Place: By being available at a convenient location, hecreatesplaceutility.
6. Ownership: Finally, when the product is sold,ownershiputility is created.
Apart from these functions retailer also performs like:
5. Arranging Assortment:manufacturers usually make
one or a variety of products and would like to sell theirentire inventory to few buyers to reduce costs. Finalconsumers, in contrast prefer a large variety of goodsand services to choose from and usually buy them insmall units.
Retailers are able to balance the demands of both sides,by collecting an assortment of goods from differentsources, buying them in sufficiently large quantities andselling them to consumers in small units
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5. Breaking Bulk: to reducetransportation costs,manufacturer and wholesalers typically ship large cartonsof the products, which are then tailored by the retailers
into smaller quantities to meet individual consumptionneeds
6. Holding stock: Retailers maintain an inventory thatallows for instant availability of the product to theconsumers. It helps to keep prices stable and enables themanufacture to regulate production.
7. Promotional support: small manufacturers can useretailers to provide assistance with transport, storage,advertising, and pre- payment of merchandise.
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Retailers on creating value
for Consumers.
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MoneyShopping time
Travel timePhysical effort
Stress
Risk to personal safetyRisk of wrong purchase
BENEFITS COSTS
High quality productsFavourite brands
Wide range of productsGood shopping
environment
Ease of usePleasant service
BALANCING BENEFITS AND COSTS TO CREATE
VALUE
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Retail Strategy
Customer Service Location
Merchandise
Assortment
PricingCommunication
Mix
Store Design
And Display
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Extended Problem Solving
High financial or Social Risk
Limited Problem Solving
Some Prior Buying ExperienceHabitual Decision Making (Routine /Impulse)
Store Brand, Loyalty
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Hard Coreloyalists
Soft Core loyalists
Shifting loyalistsSwitchers
Platinum (Angels)
Gold
Iron
Aluminium(Demons)
Word of Mouth (Viral Marketing)Customer Partnering
Benchmarking
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Are based on the distances customersare from a store and the willingness to
overcome these distances Divided into:
a) Primary Trading Zone 50-70% ofbusiness
b) Secondary Trading Zone 20-30% ofbusiness
c) Fringe Trading Zone 5-10% ofbusiness
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a) Convenience Goods Zone
b) Shopping Goods Zone
c) Specialty Goods Zone
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Central Business Districtversus
Secondary Business DistrictversusNeighborhood Business District
versusPlanned Shopping Center
VersusSolo Location
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Free Flow Layout - Fixtures andMerchandise are grouped in Free-flowing
patterns on the sales floor
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Grid Layout - Counters and Fixtures areplaced in long rows or runs usually at
right angles, throughout the store
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Loop Layout - The major customer aislebegins at the entrance, loops through the
store and returns customer to the front ofthe store
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Spine Layout - Themajor customer aisle
runs from the front to
the back of the store,
with merchandise
departments branching
off to the the back sidewalls
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Process by which a retailer offers theright quantity of the rightmerchandise in the right place at theright time and meets the companys
financial goals.
Merchandise management:
The analysis, planning, acquisition,handling, and control of the
merchandise investments of retailoperation.
Merchandise Management
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Six Basic methods
Shelving
Hanging
Pegging
Folding
Stacking
Dumping
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Visual Merchandising
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Examples of Visual MerchandisingHeres sampling of the techniques stores use to generate those
sales:
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Getm coming and going.
Escalators are a focal point of
many stores. That makes
them ideal locations for
promotional signs and for
impulse items like perfume.
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Examples of Visual Merchandising
Lead them to temptation.
Department-store design
incorporates a gauntlet of
goodies to stimulate impulsebuys. Cosmetics, a stores
most profitable department,
should always be at the main
entrance to the store.
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
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Examples of Visual Merchandising
Color is king. Retailers
believe consumers are more
apt to buy clothes that appear
in full size and colorassortments.
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
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Examples of Visual Merchandising
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Suggestion positioning. Once the customer
has already purchased one item, its easier to
sell an additional item. Thus apparel retailers
strategically place impulse buys like hair
bows and costume jewelry by the cashier the
same way supermarket checkouts display
candy and magazines.
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Traditional Purchase Order System(often adversarial relationship)
Quick Response System - usescomputer technology (partnership ofvendor and retailer)
Electronic Data Interchange -technology connecting retailer andvendor in a quick response system
Just-in-Time Delivery Systems -Reduces inventory requirements
Direct Store Delivery (DSD) - nowarehouse; vendor delivers directlyto store
AR &RS
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EDLP
High / low pricing Pricing & Internet
Coupons
Leader pricing
Price bundling
Multiple unit pricing
Price lining
Odd pricing
Cost orientedmethod
Competitionoriented method
Demand orientedmethod
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Future of Retailing.
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The Future of Retailing
Rise of mega retailers
Growing importance of retail technology
Global expansion of major retailers
Retail stores as Communities or Hangouts
Goal 2: Know the major types of retailers
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Retailing management, Levy & Weitz, Tata McGraw Hill company,
Page 5-24.
Retailing management, David Moore, Prentice hall company, 5th
edition.
Retailing and wholesaling, Philip Kotler, web based article.
Introduction to retail product management-
www.routledge.com/textbooks/0415327156/ppt/slides1.ppt
Retail management by Dr. Pooja Sharma,
www.infofanz.com/Download/MBA_MPA.../Retail-Management-
1.ppt
RETAILING MANAGEMENT I, Dr . Padmaja Rachapudi, web basedarticle.