Yash PatelIIT Madras

They must define and profile TargetMarket to make consistent decisionsabout product assortment, storedécor, advertising messages &media, price and service levels

Mistake in Choosing or Switching Target markets can be Costly

Jeweler ZALES: Decided to chase upscale customers

Lost many traditional customers without winning the new customers they expected

They must the channels to be usedto reach the customers

It should be done via multiplechannels working together effectively

JC Penny has ensured that itsinternet, store and catalogbusiness are fully intertwined

FabIndia hassuccessfully used anintegratedmultichannelapproach to retailstores, the internetand institutional salesto establish the brand

The product assortment must matchthe target market’s shoppingexpectation in breadth and depth

Feature Exclusive NationalBrands that are not available atcompeting retailers- Wills Lifestylehas added wills luxuria, anexpensive men’s wear

Feature most private labelmerchandise- Beneton designsmost of the clothes in theirstores

Feature Blockbuster distinctivemerchandise events-Bloomingdale’s ran a month longcelebration for Barbie Doll’s 50th

anniversary

Feature Surprise or Everchanging merchandise –Wearhouse offers a surpriseassortment of export surplus atheavy discounts

Feature latest or newestmerchandise first - Zara first tomarket with appealing new looksand designs

Offer merchandise customizingservice - Harrods makes customtailored suits, shirts and ties

Procurement is the acquisition ofgoods, services or works from anoutside source

Computers are used to track inventory, compute economic order quantities, order goods and analyze money spent on vendors and products

Direct Product Profitability (DPP): Used to measure product’s handling cost from the time it reaches the warehouse until a customer buys it in the retail store

Prices must be set in relationship tothe target market, product andservice assortment mix andcompetition

All retailers want High turns x earns

But usually both don’t go together

Westside has combined a hip image with affordable prices

Unerringly reliableservice should beprovided, whetherface-to-face,across phonelines, or via onlinechat

Every store has a look, feel, and aphysical layout that makes it hard oreasy to move around

Different essence in every department of store makes your store stand

OUT

Stores provide a shoppingexperience as a differentiator fromOnline Shopping

Store atmosphere should matchshoppers’ basic motivation

Panasonic and Sony creates a home likeenvironment at their stores to let their customersexperience their home theatre

Wide range of communication toolsare used to generate traffic andpurchases

- Ads

- Money saving Coupons- Membership cards- Special Sales on holidays

Most advantageous locations for theoutlets must be decided based on:- Survey of consumer shopping habits

- Traffic Counts

- Analysis of Competitive Locations

Most companies try to shorten the order-to-payment cycle- that is the elapsed timebetween an order’s receipt, delivery, and

payment

Lower the cycle takes, higher thecustomer satisfaction, higher thecompany’s profit

Every company must store the finished goods until they are sold, because production and consumption cycles rarely match

To reduce the inventory costs:- Centralize the inventory in one place- Use fast transport to fill orders- Assembly, packaging and construction promotional displays in plants itself

Inventory refers to the goods and materials that a business holds for the purpose of resale

Inventory Management involves:- Deciding at what stock level to place a new order- Deciding how much to order

Inventory costs: Cost related to storing and maintaining its inventory over a period of time

Order Processing Costs: Setup and running costs for the manufacturer

Larger the quantity ordered, less frequently an order needs to be placed

Transportation choices affect product pricing, on-time delivery performance, and the condition of the goods when they arrive, all of which affect the customer satisfaction

Criteria to keep in mind while shipping:Speed FrequencyDependability CostAvailability TraceabilityCapability

Containerization :Consists of puttinggoods in boxes ortrailers that arebest to carrybetween twotransport modes

PiggybackAir Truck

FishybackTrain ship