Wings Business School, Tirupati 414- Retail Management

UNIT-1 Q.2. How to Build and Sustain Relationship in

Retailing?
Q.1. Give A Brief on Types of Retailers? Ans:
A. For relationship retailing to work, enduring
Ans: Introduction value-driven relationships are needed with other
It consists of selling merchandise from a channel members, as well as with customers.
permanent location (a retail store) in small B. As to customer relationships, there are
quantities directly to the consumers. four factors to keep in mind in applying
These consumers may be individual buyers relationship retailing:
or corporate. 1. The Customer Base
Retailer purchases goods or merchandise in bulk 2. Customer Service
from manufacturers directly and then sells in small 3. Customer Satisfaction
quantities 4. Loyalty Programs
Shops may be located in residential areas, colony C. Regarding channel relationships, members
streets, community centers or in modern shopping of a distribution channel (manufacturers,
arcades/ malls. wholesalers, and retailers) jointly represent a
Meaning of Retailing: value delivery system, which comprises all the
According to Kotler: ´Retailing includes all the parties that develop, produce, deliver, and sell
activities involved in selling goods or services to and service particular goods and services.
the final consumers for personal, non-business 1. Ramifications for retailers
uses. 2. When they forge positive relationships,
Types of Retailers: members of a value delivery system better
Store Retailing by Store based Strategy serve each other and the final consumer..
1. Departmental stores. 3. One relationship-oriented practice that some
manufacturers and retailers use is category
2. Convenience Store.
management.
3. Full Line Discount. D. TECHNOLOGY AND RELATIONSHIPS
IN RETAILING
4. Conventional Supermarket.
1. Technology is beneficial to retailing
5. Specialty Stores relationships if the result is a better
information flow between retailers and
6. Food Based Superstore
customers, as well as between retailers and
7. Off Price Retailer. suppliers; and there are faster, more
dependable transactions.
8. Combination Store.
2. These two points should be kept in mind when
9. Variety Store. studying technology and its impact on
relationships in retailing:
10. Super Centers
E.ETHICAL PERFORMANCE
11. Flea Market. AND RELATIONSHIPS IN
RETAILING
12. Hypermarket.
1. Ethical challenges fall into three
13. Factory Outlet. interconnected categories
2. Ethics 3. Social Responsibility
14. Limited Line Stores.
4. Consumerism
15. Membership Club.

Prepare By : S. Charan Prasad, MBA, Assistant Professor 1

 Wings Business School, Tirupati 414- Retail Management

Unit-2 in incomes, habits and fashions of customers must

be considered in the choice of goods.
3. Discuss the Factors Influencing Store location? 7. Source of supply:
Ans: Proper establishment of shop is very important The wholesalers and manufacturers from whom
for success in retail trade. While deciding the goods are to be purchased must be selected
location of a retail outlet the following factors should carefully. Availability of supplies, reputation of the
be taken into consideration: brand, price range, and distance from the shop,
1. Selection of the area: means of transport, etc. should be considered.
Before commencing his business, a retailer should 8. Sales policy:
decide about the area which he would like to serve. The retailer should adopt a suitable sales policy to
While deciding the area of operations, he should increase sales and profits. Sales policy and prices
examine the population of the area, its nature should be decided keeping in mind competition and
(permanent or shifting), income level of the people, customers.
nearness to big markets, transport and Unit-3
communication facilities, etc. 4. Discuss in Detail about Implementation of
2. Choice of the site: Merchandise Plans?
Once the area is decided, a specific site is selected FUNCTIONS OF A MERCHANDISE
for location of the retail shop. A retailer may open MANAGER
his shop in special markets or in residential areas. 1. Planning
The shop should be near the consumers in a 2. Organizing
congested locality or at a place frequently visited by 3. Directing
the consumers. 4. Controlling
3. Scale of operation: 5. Coordinating
A retailer should decide the size of his business. Size MERCHANDISE PLANNING
will depend upon his financial and managerial
resources, capacity to bear risks and demand Step I: Process of Planning Sales Forecast
potential of the area. 1. Identifying Past Sales.
4. Amount of capital: 2. Reviewing the Changes in the Economic
Then the retailer has to decide the amount and Conditions.
sources of capital. The amount of capital required 3. Analyzing the changes in the sales potential.
depends on the size of business, terms of trade, 4. Finding the changes in the marketing strategies
availability of credit, cost of decoration of shop and of the retail organization and the completion
display of goods. Adequate finance is necessary for 5. Creating the Sales Forecast
success in any business. Step II: Identifying the Requirements
5. Decoration of shop: 1. The creation of the Merchandise Budget
The layout and decoration of shop are decided so 2. The Assortment Plan
that customers find the place attractive and
comfortable for shopping. The retailer should Methods of Inventory Planning
arrange and display the goods in an attractive The Basic Stock Method
manner to attract more and more customers. The percentage Variation Method
6. Selection of goods: The week„s Supply Method, and
The goods to be sold are selected on the basis of the The Stock/ Sales Ratio Method
nature, status and needs of the customers. Changes
Step III: Merchandise Control
Step IV: Assortment Planning

Prepare By : S. Charan Prasad, MBA, Assistant Professor 2

 Wings Business School, Tirupati 414- Retail Management

5. Give an Overview on Pricing in Retail APPROACHES TO A PRICING

management? STRATEGY Price lining do retailers use a
term when they sell their merchandise only at
Factors Affecting Retail Pricing the given prices. The pricing strategies that
can be followed include:
Market skimming
Market Penetration
Leader pricing
Price Bundling
Multi-unit Pricing
Discount pricing
Every Day Low Pricing
Odd Pricing
A Comparison of Mark ups and Markdowns A
mark up is where profit is expressed as a
percentage of the costs, as shown below: (price-
DEVELOPING A PRICING STRATEGY Cost)/CostX100
The pricing strategy adopted by a retailer can be Thus, a selling price of Rs 30, with a cost of
cost-oriented, demand-oriented or competition- Rs 20, gives a markup of 50 percent.
oriented. A markdown is where profit is expressed as a
In Cost-oriented pricing, a basic markup is added to percentage of the sale price and is shown
the cost of the merchandise, to arrive at the price. below: (price-Cost)/PriceX100
Here, retail price is considered to be function of the thus, a selling price of Rs 60, with a cost of
cost and the mark up. Rs 24, gives a markdown of 60 percent.
Thus, Retail Price = Cost + mark up If this formula
is rearranged, % Markdown on selling price = %Mark Up on
We get Cost = Retail Price – Mark up cost X
and, Mark up = Retail Price– Cost. 100
Mark up % (at retail) = (Retail Selling Price – = 100% = Mark Up on cost
Merchandise Cost) / Retail Selling Price % Mark Up on cost = % Markdown on selling
price X
Mark up % (at cost) = (Retail Selling Price – 100
Merchandise Cost) / merchandise Cost = 100 % - % Markdown on selling price.
When the buyer is aware of the mark up Unit-4
percentages required and of the selling price, he 6. Describe about Concept and Importance of
can also work out the price at which he actually Supply chain Management?
needs to procure the product. Ans: All the processes that you utilize to ensure
Demand-oriented pricing focuses on the your products reach the customers, starting from
quantities that the customers would buy at obtaining the raw materials, managing inbound
various prices. It largely depends on the materials & production processes to last-mile
perceived value attached to the product by the delivery of those products at your customer‟s
customer. Sometimes, a high priced product is doorstep, are together known as retail supply
perceived to be of a high quality and a low chain.
priced product is perceived to be of a low Importance of Retail Supply Chain
quality. An understanding of the target market Management:
and the value proposition that they would look The differentiating factor of retail supply chain
for is the key to demand-oriented pricing. management from other supply chain
Prepare By : S. Charan Prasad, MBA, Assistant Professor 3
Wings Business School, Tirupati 414- Retail Management

7. Enumerate the Importance of Quality

management is in the volume of product Management in Retailing?
movement and the fast- moving nature of the Ans: The Indian retail industry accounts for over
products of the retail industry. 10 per cent of the country's Gross Domestic
Product (GDP) and around 8 per cent of the
The retail supply chain has to be monitored very employment.
closely and has to be free of glitches as the products The Indian retail industry accounts for over 10
are always on the move and the cycle time is very per cent of the country‟s Gross Domestic
low. Product (GDP) and around 8 per cent of the
employment. India is the world‟s fifth -largest
Importance of Retail Supply Chain global destination in the retail space.
Management: India‟s retail market is expected to nearly
The differentiating factor of retail supply chain double to US$ 1 trillion by 2020 from US$ 600
management from other supply chain management is billion in 2015, driven by income growth,
in the volume of product movement and the fast- urbanization and attitudinal shifts. While the
moving nature of the products of the retail industry. overall retail market is expected to grow at 12
The retail supply chain has to be monitored very per cent per annum, modern trade would
closely and has to be free of glitches as the products expand twice as fast at 20 per cent per annum
are always on the move and the cycle time is very and traditional trade at 10 per cent.
low. India‟s Business to Business (B2B) e -
According to Zebra‟s 2018 Shopper Vision Study, commerce market is expected to reach US$ 700
“53% of in-store and 51% of online shoppers are billion by
not satisfied with the returns/exchange process.” 2020. Online retail is expected to be at par with
Follow these five steps: the physical stores in the next five years.
Importance of Quality control in RM:
Building Reputation:
It takes ages to build reputation but it takes only
seconds to destroy the years‟ long hard work to
shatter in front of your eyes.
Customer Satisfaction:
Customer is your ultimate receiver of the
product or service, you offer. And keeping the
customer happy will ensure growth and success
of the retail brand.
Growth is Constant:
For any business the growth is the factor which
should always be upward in the graph and to
keep the movement of growth graph linear, one
has to ensure the quality of the product and
services.
Saves Unnecessary Waste of Time:
People are likely to do mistakes when they are
often made to face the panic and anxiety
moments. To avoid unnecessary and unwanted
attention or problems maintaining quality is way
easier method.

Prepare By : S. Charan Prasad, MBA, Assistant Professor 4

 Wings Business School, Tirupati 414- Retail Management

Unit-5 keeping, customer relationship, objections handling,

8. Elucidate the Recent Changes in Retailing in
visual merchandising.
India?
Retailing in India (Recent Trends) (c) Strategic management:
Ans:Retailing today is the fastest growing sectors in Strategic planning, targeting, positioning marketing,
the global economy and is under transition phase;
site location, building and creating sustainable
not only in South Asian countries like India and
China but throughout the world. The increased advantage.
popularity of organized retailing is mainly because
(d) Administration:
of the consumers‟ changing behavior. This change
has become possible due to double income families, Marketing, finance, human resource and so on.
breakup of joint family concept, changing lifestyles
and favorable demographic patterns.
9. Describe the Impact of Global Brands on
Following are the recent trends that have stood
Retailing in India?
out in recent years and continue to grow further:
 New retail formats and combinations are Ans: India is seeing an explosive growth in retail and
emerging the engine for this growth is the mall. But there are
 Internet age, increased computer awareness huge challenges in terms of rents, availability of
front-end staffing, increasing competitiveness
 Specialty stores
because of more brands coming into the market and
 Sales promotion channels
reducing maneuverability, shortening of the fashion
 Today retail organizations
cycle – in short, sustainability.
 Use of Plastic Money:
 Distance – No bar:
Director and CEO, Torero
Corporation, Yashovardhan Gupta says, “India is a
 Partnerships and tie-ups
fantastic market. Everyone is just focusing on other
 The government infrastructure support,
markets, not realising the massive opportunity that
Sophisticated customers:
exists here. India is a nascent and virgin market.
 The gap between organized and unorganized Iconic brands like Starbucks and Suzuki always
 Need for retailing skills: attempt to create cultural change. Whereas, in other
Following are the areas where specialized markets it is very hard to create cultural change.
skills are increasingly felt: India as a market has not had the opportunity to
(a) Managing Merchandise: experience many brands and for the first time
international brands actually have the opportunity to
Inventory management, vendor selection, presenting
punch above their weight.”
merchandise, pricing the merchandise,
planning and implementing merchandise
assortments.
(b) Store operations and management:
Layout, inventory management, buying, store
Prepare By : S. Charan Prasad, MBA, Assistant Professor 5