Yashwantrao MKG 403

Chavan
Maharashtra
Open University

MBA : SECOND YEAR

SEMESTER IV
MARKETING GROUP

Retail Marketing
Unit 1 Introduction to Retailing and Concept of Retail 1
Unit 2 Types of Retailer 15
Unit 3 Strategic Planning in Retailing 39
Unit 4 Decision on Retail Location 57
Unit 5 Management of Retail Business 73
Unit 6 Retail Branding and Positioning 103
Unit 7 Customer Relationship Management 117
Unit 8 Management of Services 129
Unit 9 Retail Information System - Incorporating Information Technology in 139
Retailing
Unit 10 Retailing in India- Opportunity and Challenges 159
YASHWANTRAO CHAVAN MAHARASHTRA OPEN UNIVERSITY
VICE-CHANCELLOR : Prof. E. Vayunandan
DIRECTOR, SCHOOL OF COMMERCE & MANAGEMENT : Dr. Pandit Palande
NATIONAL ADVISORY BOARD
Dr. Pandit Palande Prof. Devanath Tirupati, Dr. Surendra Patole
Former Vice Chancellor Dean Academics, Assistant Professor,
Director, School of Commerce Indian Institute of Management (IIM) School of Commerce &
& Management, Bangalore. Management,
Yashwantrao Chavan Maharashtra Yashwantrao Chavan Maharashtra
Open University, Nashik Open University, Nashik

Prof. Sudhir. K. Jain Prof. Karuna Jain, Dr. Latika Ajitkumar Ajbani
Former Vice Chancellor Director, Assistant Professor,
Professor & Former Head N I T I E, Vihar Lake, School of Commerce &
Dept. of Management Studies Mumbai Management,
Indian Institute of Technology (IIT) Yashwantrao Chavan Maharashtra
Delhi Open University, Nashik

Prof. Vinay. K. Nangia

Professor & Former Head
Department of Business Studies,
Indian Institute of Technology (IIT)
Roorkee

Authors Editor
Dr. Piyush Seth Dr. Latika Ajitkumar Ajbani Dr. Vinay Sharma
Assistant Professor Assistant Professor, YCMOU Associate Professor
Feroze Gandhi Institute of Department of Management Studies
Engineering & Technology Dr. Surendra Patole Indian Institute of Technology (IIT)
Raebareli, Uttar Pradesh, India Assistant Professor, YCMOU Roorkee, Uttarakhand, India
Visiting Professor, IIM, Lucknow

Instructional Technology Editing & Programme Co-ordinator

Dr. Latika Ajitkumar Ajbani
Assistant Professor
School of Commerce & Management
Yashwantrao Chavan Maharashtra
Open University, Nashik

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Manager, Print Production Centre, Y. C. M. Open University, Nashik- 422 222

Copyright © Yashwantrao Chavan Maharashtra Open University, Nashik.

(First edition developed under DEB development grant)
q First Publication : February 2018 q Publication No. : 2263
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ISBN : 978-81-8055-453-7
MKG 403
Introduction

Retailing is one of the largest industries in world and one of the biggest sources of
employment in the industry. The Indian retail market has around 14 million outlets, the largest
retail outlet destiny in the world. India has been identified as the third most attractive retail
destination’ globally from among thirty emerging markets. Therefore, with the increasing scope
in in the field of retail marketing this book explores the basic theoretical underpinnings for the
learners with an advancement in their understanding in retail marketing.
With the binding objectives of this course material the unit first explores the introductory
concepts for the learners with an emphasis on the basic understanding of concepts of retailing.
Unit second deals with the diverse form of retail marketing. Strategic planning is actual a top
level management activities that decides direction and future of any organization, hence the unit
three explores a detail overview of strategic planning in retailing. The further units describes
how the location for retail outlets will be selected, along with the management of retail business
with branding, positioning and the management of customer relationship management in retail
businesses. How the various retail services are managed and performed is defined in unit
eights. The unit ninth deals with the role and applications of information system in retail marketing.
Finally the unit tenth provides a complete overview of retail marketing in India.
The authors hope that all the contents on understanding of the retail marketing will definitely
enhance the learner’s capability and skills for outstanding management of the retail activities
they are expected to perform for the retail organizations.
- Dr. Vinay Sharma
- Dr. Piyush Seth
- Dr. Latika Ajitkumar Ajbani
- Dr. Surendra Patole
-
Copyright © Yashwantrao Chavan Maharashtra Open University, Nashik.
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The information contained in this book has been obtained by authors from sources believed
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Message from the Vice-Chancellor

Dear Students,
Greetings!!!

I offer cordial welcome to all of you for the Master’s degree programme of
Yashwantrao Chavan Maharashtra Open University.

As a post graduate student, you must have autonomy to learn, have information
and knowledge regarding different dimensions in the field of Commerce & Management
and at the same time intellectual development is necessary for application of knowledge
wisely. The process of learning includes appropriate thinking, understanding important
points, describing these points on the basis of experience and observation, explaining
them to others by speaking or writing about them. The science of Education today
accepts the principle that it is possible to achieve excellence and knowledge in this
regard.

The syllabus of this course has been structured in this book in such a way, to give
you autonomy to study easily without stirring from home. During the counseling sessions,
scheduled at your respective study centre, all your doubts will be clarified about the
course and you will get guidance from some experienced and expert professors. This
guidance will not only be based on lectures, but it will also include various techniques
such as question-answers, doubt clarification. We expect your active participation in
the contact sessions at the study centre. Our emphasis is on ‘self study’. If a student
learns how to study, he will become independent in learning throughout life. This course
book has been written with the objective of helping in self-study and giving you autonomy
to learn at your convenience.

During this academic year, you have to give assignments and complete the Project
work wherever required. You have to opt for specialization as per programme structure.
You will get experience and joy in personally doing above activities. This will enable
you to assess your own progress and thereby achieve a larger educational objective.

We wish that you will enjoy the courses of Yashwantrao Chavan Maharashtra
Open University, emerge successful and very soon become a knowledgeable and
honorable Master’s degree holder of this university.

Best Wishes!

- Vice-Chancellor
 Retail Marketing (MKG 403)
SYLLABUS

Unit 1 : Introduction to Retailing and Concept of Retail

Defining Retailing—Functions of Retailing/Retailer—Social and Economic
Importance of Retailing—Nature of Retailing and Distribution Supply
Chain—Wholesalers vs. Retailers—Global Retail Market

Unit 2 : Types of Retailer

Retailer Characteristics, Functions and Services —Food Retailers — Food
Retail in India —Retail Models in India: Current and Emerging —Integration
of Food Industry – The Key Driver of Food Retail in India —Evolution of
Organized Retailing —Types of Ownership —Retail Channels —Benefits
of Multi-channel Retailing

Unit 3 : Strategic Planning in Retailing

Retail Market Strategy —Levels of Strategy for Retail Organizations—
Strategic Retail Planning Process —Alternate Retail Strategies —Target
Market and Retail Formats —International Retailing

Unit 4 : Decision on Retail Location

Types of Retail Locations —Location and Retail Trends —Legal
Considerations in Retailing —Location Considerations for Retail Business
—Evaluating a site for Locating a Retail Store —Trade Area Characteristics

Unit 5 : Management of Retail Business

Retail Market Segmentation & Strategies — Market Segmentation — Types
of Retail Markets — Retail Strategy — Strategies for Effective Market
Segmentation — Strategies for Market Penetration — Growth Strategies
Retail Business Location — Importance of Location in Retail Business —
Types of Business Locations — Factors Determining Retail Locations —
Steps to Choose the Right Retail Location — Measuring the Success of
Location — Merchandise Management — Merchandising — Factors
Influencing Merchandising — Functions of a Merchandising Manager —
Merchandise Planning — Merchandise Buying — Merchandise
Performance — Retail Business Operations — Store Management —
Premises Management — Inventory Management — Receipt Management
Supply Chain Management and Logistics — Customer Service — Retail
Space Management — Space Management — Optimum Space Use —
Retail Floor Space — Store Layout and Design — Store Design
Unit 6: Retail Branding and Positioning
Retailers as Brands — Advantages of a Retail Brand — Brand Architecture
Retail Brand Positioning — Retail Brand Image — Principles of Successful
Retail Branding

Unit 7 : Customer Relationship Management

Relationship Marketing as New Paradigm — Customer Lifetime Value and
Relationship Lifecycle — Customer Loyalty and Customer Satisfaction —
Loyalty Marketing of Retailers — Analyzing Customer Data — Using
Customer Data — Loyalty Marketing on the Internet

Unit 8 : Management of Services

Strategic advantage through customer services — Customer service Strategies
Customer evaluations of service quality — Role of Expectation — Perceived
service — Knowing what customers want; The Knowledge gap

Unit 9 : Retail Information System - Incorporating Information

Technology in Retailing
Importance of IT in Retailing — Strategic Advantage through Supply Chain
and Information System — Flow of Information and Products in Supply
Chain — Integrated Systems and Networking — Marketing Information
Systems (MIS) — Retail Management Information System — Radio
Frequency Identification Device (RFID) — Networking — Electronic Data
Interchange — Bar Coding — Customer Database Management —
Electronic Retailing — Role of Web — Online Retailing - Advantages —
Factors to be Considered in Developing Website — Limitations of Web —
Future Trends in E-tailing

Unit 10 : Retailing in India- Opportunity and Challenges

The Indian Retail Sector — Key Trends in Urban India. — Key Trends in
Rural India. — The Hidden Challenges — Strategies to Overcome Challenges
Right Positioning — Effective Visual Communication — Strong Supply Chain
Changing the Perception
 Introduction to Retailing
UNIT 1 : INTRODUCTION TO and Concept of Retail

RETAILING AND
NOTES
CONCEPT OF RETAIL
1.0 Unit Objectives
1.1 Introduction
1.1.1 Defining Retailing
1.1.2 Functions of Retailing/Retailer
1.1.3 Social and Economic Importance of Retailing
1.1.4 Nature of Retailing and Distribution Supply Chain
1.2 Wholesalers Vs. Retailers
1.3 Global Retail Market
1.4 Summary
1.5 Key Terms
1.6 Questions and Exercises
1.7 Further Reading and References

1.0 Unit Objectives

After reading this unit, you should be able to understand the
meaning and concept of retailing along with its functions and an over
view of retail market.

1.1 Introduction
Retailing comes at the end of the marketing distributive channel.
The word ‘retail’ has been derived from the French word “retaillier” and
means ‘to cut a piece’ or ‘to break bulk’. It covers all the activities involved
in the sale of product and services. Retailing is a high-intensity competition Retail Marketing : 1
Introduction to Retailing industry and second largest globally. The reason for its popularity lies in its
and Concept of Retail
ability to provide easier access to a variety of products, freedom of choice,
and many services to consumers. The size of an average retail store varies

NOTES across countries depending largely on the level of a particular country’s

economic development. The largest retail store in the world is Wal-Mart
of USA. Retailing is the world’s largest private sector contributing to 8%
of the GDP and it employs one-sixth of the labor force. The estimated
retail trade is expected to be 7 trillion US $. Many countries have
developed only due to retailing and presently we see there is a vast change
in the retail industry. As far as India is concerned it contributes to 14% of
our GDP and it is the second largest sector next to agriculture which provides
employment to more number of persons.
Now according to a survey, India is classified in to the fifth most
attractive retail destination and second among the countries in Asia.
Worldwide it is ranked as fifth most attractive retail destination.

1.1.1. Definition of Retailing

Retailing is the business activity of selling goods and services to
the final consumer.
Retailing can be defined as the business products and services to
consumers for their own use. According to Kotler, “Retailing includes all
the activities involved in selling goods or services to the final consumers
for personal, non-business use”.
Retailing is the activity of selling goods and services to last level
consumers for their use. It is concerned with getting goods in their finished
state into the hands of customers who are prepared to pay for the pleasure
of eating, wearing or experiencing particular product items. Retailing is all
about the distribution of goods and services because retailers play a key
role in the route that products take after originating from a manufacturer,
grower or service-provider to reach then person who consumes. Retailing

Retail Marketing : 2 is also one of the key elements of a marketing strategy facilitating the
targeting process, making sure that a product reaches particular groups of Introduction to Retailing
and Concept of Retail
consumers. It is important in a marketing strategy to match the arena in
which a product is purchased to the benefits and characteristics of the
product itself and its price. NOTES
Retailers provide a collection of service benefits to their customers
such as being located in convenient places, editing product ranges according
to shopping tasks, and selling goods in quantities that match personal
consumption levels. Ensuring that this process runs smoothly presents a
host of managerial challenges. Retailing is therefore a deceptively simple
management process - yet fascinatingly complex in its detail.
Companies who provide meals out, haircuts and aromatherapy
sessions are all essentially retailers, as they sell to the final consumer, and
yet customers do not take goods away from these retailers in a carrier
bag. The consumption of the service product coincides with the retailing
activity itself.
From a traditional marketing viewpoint, the retailer is one of a
number possible organization through which goods produced by
manufacture flow on their way to their consumer destiny. These
organizations perform various roles by being a member of a distribution
channel. Check Your Progress

For Example: Chocolate producer like Cadbury’s will use a number of Describe the act of
retailing. Why do you think
distribution channels for its confectionery, which involve members such as retailing is important?
agents, wholesalers, supermarkets, convenience stores, petrol stations,
vending machine operators and so on.
Channel members, or marketing intermediaries as they are
sometimes referred to, take on activities that a manufacturer does not have
the resources to perform, such as displaying the product alongside related
or alternative items in a location that is convenient for consumer to access
for shopping.
Retailing consists of the sale of goods or merchandise from a fixed
location, such as a department store or kiosk, or by post, in small or
individual lots for direct consumption by the purchaser. Retail Marketing : 3
Introduction to Retailing Retailing may include subordinated services, such as delivery.
and Concept of Retail
Purchasers may be individuals or businesses. In commerce, a retailer buys
goods or products in large quantities from manufacturers or importers,
either directly or through a wholesaler, and then sells smaller quantities to
NOTES
the end-user. Retail establishments are often called shops or stores. Retailers
are at the end of the supply chain. Manufacturing marketers see the process
of retailing as a necessary part of their overall distribution strategy. The
term “retailer” is also applied where a service provider services the needs
of a large number of individuals, such as a public utility like electric power.

Caselet
Industry Status for Retail Sector?

Barely recovering from the slump in the economy, organized

retailers in the country demand that the sector should be given
industry status, besides easing foreign investment norms in the
forthcoming Budget. “Industry status has been a long standing
demand of the retail sector. Besides we also want a relaxation in
the foreign direct investment (FDI) norms,” Retailers Association
of India chief executive officer Kumar Rajagopalan said. Sharing
similar views, Koutons Retail India chairman D P S Kohli said:
“Industry status has been a recurring demand of the retail sector
for many years since only then will the retailers be able to fully
enjoy the benefits of organized financing, insurance and fiscal
incentives.”

According to industry figures, only around five per cent of the

estimated over USD 450 billion Indian retail sector is currently
organized. Calling for easing of FDI norms, Rajagopalan said,
“No industry in India has grown without FDI participation and for
retail to emerge as a big player, more FDI should be allowed.”
Besides, he said even if FDI norms are not relaxed in the Budget,
Retail Marketing : 4
the government must give a clarification on FII and foreign PE Introduction to Retailing
and Concept of Retail
funding route as there is a lot of ambiguity.

Kohli said clarity on the issue will help Indian retailers raise funds
from abroad as the global liquidity condition is showing NOTES
improvement. At present, the government allows 51 per cent
FDI in single brand retailing and prohibits any foreign
investments in the multi-brand segment.

1.1.2 Functions of Retailing/Retailer

Retailers are crucial players in the emerging market scenario. Large
brands are running first to get into the desired retail formats to cater to the
growing middle class of India. Retailers perform various functions like
providing assortments, sorting, breaking the bulk, rendering services,
bearing risk, serve as a channel of communication, transportation,
advertising and holding inventory. They significantly contribute towards
increasing the product value and satisfying the consumers. Following are
the functions of a retailer/retailing :
1. Providing assortments : Offering an assortment enables
customers to choose from a wide selection of brands, designs,
sizes, colors, and prices in one location. Manufacturers specialize
in producing specific types of products.
2. Sorting : Manufacturers make one single line or multiple product
lines and will always prefer to sell their entire output to few buyers
to reduce their costs. Final consumers will prefer to choose from a
large variety of goods and services and then usually buy in smaller
quantities. Retailers have to strike a balance between demands of
both the sides, by collecting a combination of goods from different
producers, buying them in large quantities and selling them to
individual consumers in smaller quantities. The above process is
called sorting and under this process, the retailer undertakes
activities and performs functions that add value to the products Retail Marketing: 5
Introduction to Retailing and services while selling them to consumers.
and Concept of Retail
3. Breaking Bulk : Retailers offer the products in smaller quantities
tailored to individual consumers and household consumption

NOTES patterns. This reduces transportation costs, warehouse costs and

inventory costs. This is called breaking bulk.
4. Rendering Services : Retailers render services that make it easier
for customers to buy and use products. They provide credit facilities
to the customers. They display products, which attract the
customers. Retailers keep ready information on hand to answer
queries of the customers. They provide services by which the
ownership can be transferred from manufacturer to the end
consumers with convenience. They also provide product guarantee
from owner’s side, after sales service and also deal with consumer
complaints. Retailers also offer credit to consumers and develop
hire purchase facilities to enable them to buy a product immediately
and pay the price at their ease. Retailers also fill orders, promptly
process, deliver and install the product at customer point. Retail
sales people answer the customer complaints and demonstrate the
product for the customer to evaluate before making a choice. They
also help in completing a transaction and realizing the sale.
5. Risk Bearing : Retailers bear a different kind of risk to the
manufacturers and wholesalers. Even the customers can come back
to the retail point and return the product. In that case, the risk of
product ownership many times rests with the retailers. Many
companies have buy back schemes and return schemes whereby
the retailers can always return the unsold items to the manufacturer.
6. Holding Inventory : A major function of retailers is to keep
inventory so that products will be available for consumers. Thus,
consumers can keep a much smaller inventory of products at home
because they can easily access more from the nearby retailers.
Retailer’s inventory allows customers instant availability of the
Retail Marketing : 6 products and services.
 7. Channel of Communication : Retailers are the bridge between Introduction to Retailing
and Concept of Retail
the manufacturer or his representative and the end customers.
8. Transportation : Retailers also help in transport and advertising
function. The larger assortments are transported from wholesaler’s NOTES
point to retailers point by retailer’s own arrangements and many
times, the retailer delivers the goods at final consumer’s point. So,
retailers provide assistance in storage, transportation and
prepayment merchandise.

1.1.3 Social and Economic Importance of

Retailing
The social and economic significance of retailing is explained
under the following heads.
• Social Responsibility : Retailers are socially responsible
businesses. Corporate social responsibility describes the voluntary
actions taken by a company to address the ethical, social, and
environmental impacts of its business operations and the concerns
of its stakeholders. Retailing figure 1.1 illustrates how retailers
provide value to their communities and society, as well as to their Check Your Progress
customers. Describe the dimensions of
• Retail Sales : Retailing affects every facet of life. Just think of retail equation.

how many daily contacts you have with retailers when you eat
meals, furnish your apartment, have your car fixed, and buy clothing
for a party or job interview. American retail sales are over $3.6
Trillion for 2012, but even this sales level underestimates the impact
of retailing, because it does not include the retail sales of automobiles
and repairs.
Although the majority of retail sales take place within large retail
chains, most retailers are small businesses of the 1.9 million retail
firms in the United States, 95 percent of them run only one store.
Less than 1 percent of U.S. retail firms have more than 100 stores. Retail Marketing : 7
Introduction to Retailing • Employment : Retailing also is one of the nation’s largest industries
and Concept of Retail
in terms of employment. More than 25 million people were employed
in retailing-approximately 18 percent of the non-agricultural U.S.
workforce. Between 2004 and 2014, the retail industry expects to
NOTES
add 1.6 million jobs, making it one of the largest sectors for job
growth in the United States.
• Global Retailers : Retailing is becoming a global industry, as more
and more retailers pursue growth by expanding their operations to
other countries. The large retail firms are becoming increasingly
international in the geographical scope of their operations. Amway,
Avon, Ace Hardware, and Inditex (Zara) operate in more than 20
countries. The share of the global retail market accounted for by
retailers operating in more than one country also is increasing,
because these global retailers are growing at an even faster rate
than are global retail sales. International operations account for a
larger proportion of sales by these large firms, as is particularly
apparent in European firms with their longer internationalization
experience. Wal-Mart, Carrefour, Royal Ahold, Metro, and
Schwarz each generate more than $25 billion annually in sales from
their international operations.

1.1.4 Nature of Retailing and Distribution

Supply Chain
The nature of retailing and distribution supply chains in various areas
around the world differs. Some critical differences among the retailing and
supply chain systems in the United States, European Union, China, and
India are summarized in Figure 1.1.
For example, the U.S. supply chain system has the greatest retail
density and the greatest concentration of large retail firms. Many U.S. retail
firms are large enough to operate their own warehouses, eliminating the
Retail Marketing : 8 need for wholesalers. And the fastest growing types of U.S. retailers sell
through large stores with more than 20,000 square feet. The combination Introduction to Retailing
and Concept of Retail
of large stores and large firms results in a very efficient supply chain.
The Chinese and Indian supply chain systems are characterized by
small stores operated by relatively small firms and a large independent NOTES
wholesale industry. To make the daily deliveries to these small retailers
efficient, the merchandise often passes through several levels of distributors.
In addition, the infrastructure to support retailing, especially the
transportation and communication systems, are not as well developed as
they are in Western countries. These efficiency differences then mean that
a much larger percentage of the Indian and Chinese labor force is employed
in supply chains and retailing than is the case in the United States.

Figure 1.1 : Comparison of Retailing and Supply Chain Across the

world

The European supply chain system falls between the American and
the Chinese and Indian systems on this continuum of efficiency and scale,
but the northern, southern, and central parts of Europe should be
distinguished. In northern European, retailing is similar to that in the United
States, with high concentration levels—in some national markets, 80 percent
or more of sales in a sector such as food or home improvements are
accounted for by five or fewer firms. Southern European retailing is more Retail Marketing : 9
Introduction to Retailing fragmented across all sectors. For example, traditional farmers’ market
and Concept of Retail
retailing remains important in some sectors, operating alongside large “big-
box” formats. Some factors that have created these differences in supply

NOTES chain systems in the major markets include (1) social and political objectives,
(2) geography, and (3) market size.

1.2 Wholesalers Vs. Retailers

Major difference between wholesalers and retailers are presented
in the following table: Wholesale means “selling in large quantities” while
retail means “selling in small quantities.” Therefore, wholesalers sell in bulk
and retailers sell in individual or smaller quantities. Most often, wholesalers
do not sell directly to individual customers, but rather sell goods directly to
retailers who are then able to sell to individual customers.

Wholesalers Retailers

(1) They are connecting (1) They are connecting links

links between the between the wholesalers and
manufacturers and the the customers.
retailers.

(2) They purchase goods in (2) They purchase goods in

large quantities from the small quantities from the
manufacturers. wholesalers.

(3) They deal in limited (3) They deal in variety of

number of products. products for meeting the
varied needs of consumers.

(4) They need more capital (4) They can start business
to start their business. with limited capital.

(5) The display of goods and (5) They lay more emphasis
decoration of premises is not on window display and
necessary for them. proper decoration of business
premises in order to attract
Retail Marketing : 10
the customers.
 Introduction to Retailing
(6) Their business operations (6) They usually localize at a
and Concept of Retail
extend to different cities and particular place, area or city.
places.

(7) They do not directly deal (7) They have a direct link NOTES
with the customers. with the customers.

(8) They do not extend free (8) They provide free home
home delivery and after delivery and after sales
sales services. services to the consumers.

(9) They provide more credit (9) They provide lesser credit
facilities to retailers. facilities to the consumers
and usually sell goods on
cash basis.

(10) They may not possess (10) They must possess

expert knowledge regarding expert knowledge in the art
selling techniques. of selling.

(11) They enjoy the (11) They do not avail such

economies of bulk buying, economies.
freights and price etc.

(12) They are not usually (12) They can be divided into
classified in different types. categories viz., small scale
and large scale retailers.

(13) Their services can be (13) They are integral

dispensed with or can be component of the distribution
eliminated from the chain of chain and cannot be
distribution. eliminated.

1.3 Global Retail Market

Retailing is increasingly a global business. A more structured retail
industry with more multiple retailers (those with more than one outlet) is a
sign that an economy is developing, as organizations specialize and gain
economies of scale. Additionally, when disposable incomes rise, retailers
play an active part in distributing increasingly discretionary goods to centers
of population. Emerging markets are a real (although highly complex) Retail Marketing : 11
Introduction to Retailing opportunity for experienced retailers, especially if they are faced with
and Concept of Retail
high levels of retail provision and therefore competition in their traditional
markets.
NOTES As the artificial barriers to trade, such as import duty and quota
restrictions, are removed from the global economy, many retailers will
view the world as their marketplace and make sourcing and outlet operation
decisions on a set of criteria that are relevant across the globe.

1.4 Summary
Retailing in simple term can be defined as “Retailing is the business
activity of selling goods and services to the final consumer”. Retailing can
be defined as the business products and services to consumers for their
own use. It has its origin in the French word, retailer meaning ‘to cut a
piece off’. The term retailing applies not only to the selling of tangible
products like loaves of bread or pairs of shoes, but also to the selling of
service products. Retailing, one of the largest sectors in the global
economy, has become the most active and attractive sector of the last
decade. Retailers perform various functions like providing assortments,
sorting, breaking the bulk, rendering services, bearing risk, serve as a
channel of communication, transportation, advertising and holding
inventory. They significantly contribute towards increasing the product
value and satisfying the consumers. This unit also addresses the question
of how the Marketing Mix framework can be used to analyses the
competitive standing of a retail business organization and how the outcome
of this analysis can then be translated into practical tactics which capitalize
on the organization’s strengths. To build a competitive advantage that can
be sustained, retailers need to pay special attention to aspects like price,
location, merchandise, service and communications. There are a number
of retail marketing jobs out there, wherein one is not a sales executive,
but one who creates and supervises sales strategies in the retail market.
Retail Marketing : 12
 Introduction to Retailing
1.5 Key Terms and Concept of Retail

Breaking Bulk : Offering the products in smaller quantities tailored to

individual consumers and household consumption patterns and thereby NOTES
reducing transportation and inventory costs.
Department Stores : It is a retail establishment which specializes in
satisfying a wide range of the consumer’s personal and residential durable
goods product needs.
Gatekeeper : Member of a decision-making unit or social group who
acts to prevent or discourage a purchase by controlling the flow of
information and/or access to people in the buying center.
Kiosk : A small open - fronted hut or cubicle from which newspapers,
refreshments, tickets, etc., are sold.
Marketing : The process by which individuals and groups obtain what
they want and need through creating, offering and freely exchanging products
and services of value with others.
Merchandise : Goods to be bought and sold.
Retailing : Business activity of selling goods and services to final
consumers.

1.6 Questions and Exercises

1. Describe the act of retailing. Why do you think retailing is important?
2. “Retailers provide a collection of service benefits to their customers.”
Substantiate.
3. Discuss the functions of retailing with the help of suitable examples.
4. Discuss about the Social and Economic significance of Retailing.
5. Explain about the structure of Retailing and Distribution
6. Describe about the opportunities in Retailing.
7. Explain how sorting by the retailer helps you as a customer.
8. Describe the dimensions of retail equation. Retail Marketing : 13
Introduction to Retailing 9. “Retailing is not only an integral part of our economic structure but
and Concept of Retail
also shapes and is shaped by, our way of life.” Discuss.
10. ........................ is the world’s biggest retailer.

NOTES 11. ........................ is at the top of GRDI.

Answer for question 10 and 11 : (False ; Attractiveness)

1.7 Further Reading and References

• Bajaj, Tuli and Srivastava, Retail Management, New Delhi: Oxford
University Press
• Gibson G. Vedamani, Retail Management, Mumbai: Jaico
Publishing House
• Lewison, D. M. and Delozier, W. M., Retailing, Columbus: Merrill
Publishing Co.
• http://edissertations.nottingham.ac.uk/785/2/ediissertation.pdf
• http://www.indiainbusiness.nic.in/industry-infrastructure/service-
sectors/retailing.htm
• http://books.google.co.in/books?isbn=0074637177
• http://www.skirec.com/images/download/ijmmr/5.pdf

Retail Marketing : 14
 Types of Retailer

UNIT 2 : TYPES OF RETAILER

NOTES
2.0 Unit Objectives

2.1 Introduction

2.2 Retailer Characteristics, Functions and Services

2.3 Food Retailers

2.4 Food Retail in India

2.5 Retail Models in India: Current and Emerging

2.6 Integration of Food Industry – The Key Driver of Food Retail in India

2.7 Evolution of Organized Retailing

2.8 Types of Ownership

2.9 Retail Channels

2.10 Benefits of Multi-channel Retailing

2.11 Summary

2.12 Key Terms

2.13 Questions and Exercises

2.14 Further Reading and References

2.0 Unit Objectives

After reading this unit, you should be able to describe retailer
characteristics and various types of retailing and ownership in retail.
Retail Marketing : 15
Types of Retailer
2.1 Introduction
The word retailer has been derived from the French word “Retail”
which means to sell in small quantities, rather than in gross. A retailer is a
NOTES
person who purchases a variety of goods in small quantities from different
wholesalers and sell them to the ultimate consumer. He is the last link Notes
in the chain of distribution from the producer to the consumer.

2.2 Retailer Characteristics, Functions and

Services
The followings are some of the essential characteristics of a retailer:
• He is regarded as the last link in the chain of distribution.
• He purchases goods in large quantities from the wholesaler and
sell in small quantity to the consumer.
• He deals in general products or a variety of merchandise.
• He develops personal contact with the consumer.
• He aims at providing maximum satisfaction to the consumer.
• He has a limited sphere in the market.
Functions
Retailers perform a number of functions. These are :
• The retailer buys a variety of products from the wholesaler or a
number of wholesalers. He thus performs two functions like buying
of goods and assembling of goods.
• The retailer performs storing function by stocking the goods for a
consumer.
• He develops personal contact with the consumers and gives them
goods on credit.
• He bears the risks in connection with Physical Spoilage of goods
and fall in price. Besides he bears risks on account of fire, theft,
deterioration in the quality and spoilage of goods.
• He resorts to standardization and grading of goods in such a way
Retail Marketing : 16
 that these are accepted by the customers. Types of Retailer
• He makes arrangement for delivery of goods and supply valuable
market information to both wholesaler and the consumer.

NOTES
Service of a Retailer
A retailer provides a number of services to the customer and to the
wholesaler. The services provided by a retailer to customer are as follows:
• He provides ready stock of goods and as such he sells and quantity
of goods desired by the customers.
• He keeps a large variety of goods produced by different producers
and thereby ensures a wide variety of choice to the customers.
• He relives the consumers of maintaining large quantity of goods for
future period because he himself holds large stock of goods.
• He develops personal relationship with the customers by giving them
credit.
• He provides free-home delivery service to the customers.
• He informs the new product to the customers.

The services provided by retailer to wholesaler are as

Check Your Progress
follows:
Discuss the retailer
• He gives valuable market information with regard to taste, fashion
characteristics in India?
and demand for the goods to the wholesaler.
• The retailer maintains direct contact with the customers and so he
relieves the wholesaler with regard to maintenance of direct contact.
• He helps the wholesaler in getting their goods distributed to the
consumer.
• He is regarded as an important link between the wholesaler and the
consumer.
• He creates demand for the products by displaying the goods to the
consumers.
• A retail business endeavors to create a compelling concept against
competitors. For the characteristics of the vision to be effective, the Retail Marketing : 17
Types of Retailer concept must create an emotional bond with customers. For a
customer to see the value of the characteristics of the business’
appeal, he looks at what the business gives him, not what the
business put in.
NOTES

1. Clear Vision : To connect to a core customer group, one of the

characteristics a retail company must have is a clear vision. What
the company is offering, who their target market is and the value of
the product or service to the customer must be clear. For example,
North American car rental company Enterprise Rent-A-Car focused
on customers who need a car during repairs as its target market
rather than the standard airport focused car rental. That focus helped
Enterprise dominate a market and increase market share.
2. Value : A retail business that sells products or services that appeal
to customers’ needs has the ability to stand up against competition.
Physical facilities, pricing, products and customer service differentiate
a busy retail store from an unnoticed one. If the characteristics
appeal to a consumer, in her mind, the business represents value.
When a retailer makes the value of its business obvious, it prevents
service levels from dropping.
3. Functional : Price, convenience and store experience are functional
characteristics that make up a strong retail brand. These functional
characteristics are common to almost all retail stores. A brand may
use its store experience to create an emotional bond by matching
its brand’s characteristics with consumers’ values. The emotional
connection could trigger sales. Combining functional characteristics
of store experience with price and convenience, a retailer strives to
have returning customers.
4. Concept : A retail business aims to conceive an idea and deliver
consistency, profitability and integrity from concept to execution.
Ikea, an international furniture company, for example, developed a
Retail Marketing : 18 unique presentation and customer assembly system difficult to copy.
 The unique concept created a barrier to competitors. In order to Types of Retailer
be able to execute on its ideas, a company must have adequate
resources and capital.

NOTES
2.3 Food Retailers
The latter half of the 20th Century, in both Europe and North
America, has seen the emergence of the supermarket as the dominant
grocery retail form. The reasons why supermarkets have come to dominate
food retailing are not hard to find. The search for convenience in food
shopping and consumption, coupled to car ownership, led to the birth of
the supermarket. As incomes rose and shoppers sought both convenience
and new tastes and stimulation, supermarkets were able to expand the
products offered. The invention of the bar code allowed a store to manage
thousands of items and their prices and led to ‘just-in-time’ store
replenishment and the ability to carry tens of thousands of individual items.
Computer-operated depots and logistical systems integrated store
replenishment with consumer demand in a single electronic system. The
superstore was born.
On the Global Retail Stage, little has remained the same over the
last decade. One of the few similarities with today is that Wal-Mart was
ranked the top retailer in the world then and it still holds that distinction.
Other than Wal-Mart’s dominance, there’s little about today’s environment
that looks like the mid-1990s. The global economy has changed, consumer
demand has shifted, and retailers’ operating systems today are infused with
far more technology than was the case six years ago.
Saturated home markets, fierce competition and restrictive legislation
have relentlessly pushed major food retailers into the globalization mode.
Since the mid-1990s, numerous governments have opened up their
economies as well, to the free markets and foreign investment that has
been a plus for many a retailer. However, a more near-term concern, has
been the global economic slowdown that has resulted from dramatic cutback Retail Marketing : 19
Types of Retailer in corporate IT and other types of capital spending. Consumers themselves
have become much more price sensitive and conservative in their buying,
particularly in the more advanced economies.

NOTES The global retail industry has traveled a long way from a small
beginning to an industry where the world wide retail sales alone is valued at
$ 7 trillion. The top 200 retailers alone account for 30% of worldwide
demand. Retail sales being generally driven by people’s ability (disposable
income) and willingness (consumer confidence) to buy, compliments the
fact that the money spent on household consumption worldwide increased
68% between 1980 and 2003. The leader has indisputably been the USA
where some two-thirds or $ 6.6 trillion out of the $ 10 trillion American
economy is consumer spending. About 40% of that ($ 3 trillion) is spending
on discretionary products and services. Retail turnover in the EU is
approximately Euros 2000 billion and the sector average growth looks to
be following an upward pattern. The Asian economies (excluding Japan)
are expected to grow at 6% consistently till 2005-06. Positive forces at
work in retail consumer markets today include high rates of personal
expenditures, low interest rates, low unemployment and very low inflation.
Negative factors that hold retail sales back involve weakening consumer
confidence.

2.4 Food Retail in India

Though with a population of a billion and a middle class population
of over 300 million organized retailing (in the form of food retail chains) is
still in its infancy in the Country. India has been rather slow in joining the
Organized Retail Revolution that was rapidly transforming the economies
in the other Asian Tigers. This was largely due to the excellent food retailing
system that was established by the kirana (mom-and-pop) stores that
continue meet with all the requirements of retail requirements albeit without
the convenience of the shopping as provided by the retail chains; and also

Retail Marketing : 20 due to the highly fragmented food supply chain that is cloaked with several
intermediaries (from farm-processor-distributor-retailer) resulting in huge Types of Retailer
value loss and high costs. This supplemented with lack of developed food
processing industry kept the organized chains out of the market place. The
correction process is underway and the systems are being established for NOTES
effective Business-to-Business (farmer-processor, processor-retailer)
solutions thereby leveraging the core competence of each player in the supply
chain.

Organized retailing is spreading and making its presence felt in

different parts of the country. The trend in grocery retailing, however, has
been slightly different with a growth concentration in the South. Though
there were traditional family owned retail chains in South India such as
Nilgiri’s as early as 1904, the retail revolution happened with various major
business houses foraying into the starting of chains of food retail outlets in
South India with focus on Chennai, Hyderabad and Bangalore markets,
preliminarily. In the Indian context, a countrywide chain in food retailing is
yet to be established as lots of Supply Chain issues need to be answered
Retail Marketing : 21
Types of Retailer due to the vast expanse of the country and also diverse cultures that are
present.

NOTES 2.5 Retail Models in India: Current and

Emerging
The Indian food retail market is characterized by several co-existing
types and formats. These are :
• The road side hawkers and the mobile (pushcart variety) retailers.
• The kirana stores (the Indian equivalent of the mom-and-pop stores
of the US), within which are :
ü Open format more organized outlets
ü Small to medium food retail outlets.
• Convenience Stores
• Supermarkets
Within modern trade – the organized retailers, we have :
• The discounter (Subhiksha, Apna Bazaar, Margin Free)
• The value-for-money store (Nilgiris)
• The experience shop (Foodworld, Trinethra)
• The home delivery (Fabmart)
While the focus of this note is on modern organized retail trade, we
hereunder present insights into the smaller, semi and unorganized retailers.

Hawkers – “Mobile Supermarkets”

The unorganized sector is characterized by the lari-galla vendors
(also known as “mobile supermarket”) seen in every Indian bylane and is,
therefore, difficult to track, measure and analyze. But they do know their
business – these lowest cost retailers can be found wherever more than 10
Indians collect – a rural post office, a dusty roadside bus stop or a village
square. As far as location is concerned, these retailers have succeeded
beyond all doubt. They have neither village nor city-wide ambitions nor

Retail Marketing : 22 plans – their aim is simply a long walk down the end of the next lane. This
mode of “mobile retailers” is neither scalable nor viable over the longer Types of Retailer
term, but is certainly replicable all over India. Most retailing of fresh foods
in India occurs in Mandis and roadside hawker parks, which are usually
illegal and entrenched. These are highly organized in their own way. Hawking NOTES
of food products, cooked food and FMCG products is a very interesting
model of retailing. Much has been written about these roadside “malls” –
from social security issues to their nuisance value. However, if you put these
hawkers together, they are akin to a large supermarket with little or no
overheads and high degree of flexibility in merchandise, display, prices and
turnover. While shopping ambience and the trust factor maybe missing, these
hawkers sure have a system that works.

Kirana/Grocers/ Provision Stores/Mom-and-Pop Stores :

Semi-organized retailers like kirana (mom-and-pop stores), grocers
and provision stores are characterized by the more systematic buying –
from the mandis or the farmers and selling – from fixed structures. Economies
of scale are not yet realized in this format, but the front end is already visibly
changing with the times. These stores have presented Indian companies
with the challenge of servicing them, giving rise to distribution and cash flow
cycles as never seen elsewhere in Asia. The model is very antithesis of
modern retail in terms of the buyer (retailer)-seller (FMCG) equations. It is
not unknown for MNC leaders to link the supply of one line of products to
another slower moving line of products. These retailers are not organized in
the manner that they could challenge the power of the sellers, most protests
have been in the form of boycotts, which really haven’t hit any company
permanently.
Convenience Stores :
A convenience store is a small store that stocks a range of everyday
items such as groceries, toiletries, alcoholic and soft drinks, tobacco products,
and newspapers. They have a wide category of products and have a
minimum required stock of each. They are open for long hours and are
situated at various convenient locations. They differ from general stores and Retail Marketing : 23
Types of Retailer village shops in that they are not in a rural location and are used as a
convenient supplement to larger stores.
A convenience store may be part of a gas/petrol station. It may be

NOTES located alongside a busy road, in an urban area, or near a railway or railroad
station or other transport hub. In some countries, convenience stores have
very long shopping hours, some being open 24 hours.
Convenience stores usually charge higher prices than ordinary
grocery stores or supermarkets, which they make up for with convenience
by serving more locations and having shorter cashier lines. Some of the
Major convenience Store chains with their locations in India are as follows:
• Reliance Fresh - All India
• Spencer’s - All India
• More - All India
• Easyday - Mainly in Punjab and Delhi currently.
• Big Apple - Delhi and surroundings
• Sabka Bazaar - Mainly in Delhi and surroundings.
• 6Ten - Mainly Delhi and Punjab
• Nilgiris - Mainly South India - Tamil Nadu, Karnataka
Check Your Progress
• Big Bazaar - All India (India’s Walmart)
Describe the general
merchandise retailers?
Also, a lot of Petrol pumps in big cities have IN & OUT or
CONVENIO convenience stores.
Supermarkets :
A supermarket, a large form of the traditional grocery store, is a
self-service shop offering a wide variety of food and household products,
organized into aisles. It is larger in size and has a wider selection than a
traditional grocery store, but is smaller and more limited in the range of
merchandise than a hypermarket or big-box shop.
The supermarket typically comprises meat, fresh produce, and dairy
and baked goods aisles, along with shelf space reserved for canned and
packaged goods as well as for various non-food items such as household
Retail Marketing : 24 cleaners, pharmacy products and pet supplies. Most supermarkets also sell
a variety of other household products that are consumed regularly, such as Types of Retailer
alcohol (where permitted), medicine, and clothes, and some stores sell a
much wider range of non-food products.

NOTES
2.6 Integration of Food Industry – The Key
Driver of Food Retail in India
India is world’s second largest grower of fruits and vegetables
after Brazil and China. While the agriculture sector has witnessed several
leaps of innovation and technological advancements, the processing sector
is still in its infancy. Even with less than 4% processing of fruits and
vegetables, the Food Processing Industry sector in India is one of the
largest in terms of production, consumption within India, export and growth
prospects. The government has accorded it a high priority, with a number
of fiscal reliefs and incentives, to encourage commercialization and value
addition to agricultural produce; for minimizing pre/post-harvest wastage,
generating employment and export growth. As a result of several policy
initiatives undertaken since liberalization in early 90’s, the industry has
witnessed fast growth in most of the segments. In the following few
paragraphs, it can be noted that the processed food market for India is
vast and the amount of scope that retail chains would be exposed to is
phenomenal taking into consideration the demographics and raise in
standards of living. Retailers could throng the market with all these processed
and packaged foods with their private labels.
With the emergence of the big private corporate, NGOs (Non-
Government Organizations) and Government organizations into the food
processing scene, India is making big inroads into the Food Processing
Industry. These corporate and NGOs have reached out to the farmers and
provided them with timely advice and help in the up gradation of farm
practices with valuable inputs on various areas of farming from sowing to
harvesting which includes quality seed procurement, manures, fertilizers
and pesticides etc. Some of the successful models are that of ITC’s e- Retail Marketing : 25
Types of Retailer choupal a model that helps the soyabean farmers in contract producing
for ITC for its commodity trading business. The PEPSI experimenting
with Punjab farmers in growing the right quality tomato for its tomato

NOTES purees and pastes. Some of the leading food retail chains working with
farmers for contract growing greens for supply to their retail outlets etc.
These successful models are being replicated with required changes all
over the country and the food industry is getting integrated more strongly.
India has also seen a flurry of food chain majors like McDonalds,
Pizza Hut and Kentucky Fried. Chicken finding their place among the
Indian consumers. The trend still follows for food chains in India to spread
to almost all cities and towns.

Economy : Economic growth at over 5.5% over the last eight

years, forex reserves of over $100 billion and a stable government
has helped India to look more progressively towards future. The
economic development was largely attributed to its dominance in
the Information Technology Sector in the global market place and
its large English speaking population that made it the ideal choice
for back office operations for MNC’s world over. The
manufacturing sector also provided its might to the economic
development by going global hitherto restricting to export of raw
materials or intermediaries that has not graduated to supply of
end product be it Pharmaceuticals or Consumer Vehicles. All this
has translated in higher income levels and more surpluses for the
middle class segment that is getting ploughed into the retail sector;
again fueling the economy to higher levels. The last five years have
seen the PPP of average Indian middle class (over 300 millions)
go up several times unleashing the power of purchasing. The retail
sector was the greatest beneficiary. The need for a shopping
experience combined with the convenience of shopping for the
upwardly mobile middle class has been on the major factors for

Retail Marketing : 26
retail boom in India.
 The Informed Consumer : Over the years, the increasing literacy Types of Retailer
in the Country and the exposure to developed nations via satellite
television or by way of the overseas work experiences, the
consumer awareness has increased on the quality and the price of NOTES
the products/services that is expected. Today more and more
consumers are vocal on the quality of the products/services that
they expect from the market. This awareness has made the
consumer seek more and more reliable sources for purchases and
hence the logical shift to purchases from the organized retail chains
that has a corporate background and where the accountability is
more pronounced. The consumer also seeks to purchase from a
place where his/her feedback is more valued.

2.7 Evolution of Organized Retailing

Retailing, one of the largest sectors in the global economy, is going
through a transition phase in India. For a long time, the corner grocery
store was the only choice available to the consumer, especially in the urban
areas. This is slowly giving way to international formats of retailing. The
traditional food and grocery segment has seen the emergence of
supermarkets/grocery chains, convenience stores and fast-food chains.
The traditional grocers, by introducing self-service formats as well
as value-added services such as credit and home delivery, have tried to
redefine themselves. However, the boom in retailing has been confined
primarily to the urban markets in the country. Even there, large chunks are
yet to feel the impact of organized retailing. There are two primary reasons
for this. First, the modern retailer is yet to feel the saturation effect in the
urban market and has, therefore, probably not looked at the other markets
as seriously. Second, the modern retailing trend, despite its cost-
effectiveness, has come to be identified with lifestyles.
In order to appeal to all classes of the society, retail stores would
Retail Marketing : 27
Types of Retailer have to identify with different lifestyles. In a sense, this trend is already
visible with the emergence of stores with an essentially ‘value for money’
image. The attractiveness of the other stores actually appeals to the existing

NOTES affluent class as well as those who aspire to be part of this class. Hence,
one can assume that the retailing revolution is emerging along the lines of
the economic evolution of society.
It was only in the year 2000 that the economists put a figure to it:
‘ 400,000 crore (1 crore = 10 million) which is expected to develop to
around ‘ 800,000 crore by the year 2005 – an annual increase of 20 per
cent. Retailing in India is unorganized with poor supply chain management
perspective. According to a recent survey by some of the retail consulting
bodies, an overwhelming proportion of the ‘ 400,000 crore retail market
is UNORGANISED. In fact, only a ‘ 20,000 crore segment of the market
is organized. As much as 96 per cent of the 5 million-plus outlets are
smaller than 500 square feet area. This means that India per capita retailing
space is about 2 square feet (compared to 16 square feet in the United
States). India’s per capita retailing space is thus the lowest in the world.

2.8 Types of Ownership

Entrepreneurs have many forms of retail business ownership
available to them. Each business model has its own list of pros and cons.
choosing a type of retail business to start will depend on why you want to
own a business, as well as your lifestyle, family, personality, basic skills
and much more. Here are a few of the main types of retail ownership and
the advantages, disadvantages, and support system of each. There are
five types of Retail ownership:
• Independent Retailer : In independent retailer is one who builds
his/her business from the ground up. From the business planning
stage to opening day, the independent retail owner does it all. He/
she may hire consultants, staff and others to assist in the business
endeavor. The opportunities are endless.
Retail Marketing : 28
 ü Advantages : There are no restrictions on who, how or Types of Retailer
where an entrepreneur should set up his/her business. The
freedom to do what one wants to do is the biggest
advantage in this form of business. It can be extremely NOTES
fulfilling.
ü Disadvantages : Because of the ease and flexibility of
getting started, there can be a lot of competition in a
particular area for a certain type of customer. Every
business decision rests on the owner(s). There is no
branding, no preset guidelines and a great deal of risk in
this business model.
ü Support : Other than small business resources online, in
print or sponsored by the various government and trade
organizations, there isn’t much in the way of support for
the independent retailer.

• Existing Retail Business : Someone who inherits or buys an

existing business is taking ownership and responsibility of someone
else’s hard work. The foundation has already been laid.
ü Advantages : The biggest advantage to buying an existing
business or taking ownership of an already established retail
store is time. The time to build a customer base, the time to
establish branding, and the time it takes to establish credit
are generally all past which means most of the hard part is
behind the new owner.
ü Disadvantages : The existing business may have a negative
image or reputation that will take a lot of time to undo.
Loyal customers may not like the change of ownership.
Previous owners have caused problems by opening a
competing business.
ü Support : A well-established business will usually have a
Retail Marketing : 29
Types of Retailer written set of procedures or policy manual. Staff members
already in place have the knowledge to help guide a new
owner.
NOTES • Franchise : Purchasing a franchise is buying the right to use a
name, product, concept and business plan. The franchisee will
receive a proven business model from an established business.
• Dealership : Retailers may find the business model of a licensed
dealership as a mix of franchise and independent retailer. The
licensee has the right (sometimes this is exclusive) to sell a brand of
products. Unlike a franchise, the dealer can sell a variety of brands
and there generally no fees to the licensor. Dealerships may or may
not be identified as an authorized seller or by the company’s
trademark.
ü Advantages : All of the business operation processes have
been established. The franchisee receives help from a
network and customers may already familiar with the name.
The marketing strategy has already been put in place. Most
all of the risk associated with starting a retail business has
been reduced.
ü Disadvantages : Franchisees pay a fee, or royalty, based
on sales each year. Startup costs relating to the franchise
may be high. One of the biggest disadvantages of owning
affranchise is the lack of flexibility and freedom.
ü Support : Franchisors usually provide all the marketing,
training and ongoing support needed to run a successful
business.
• Network Marketing : Multilevel marketing (MLM) or network
marketing is a business model where the selling of products depends
on the people in the network. Not only is a product being sold, but
other salespeople are being recruited to sell that same product or
product line. It’s probably not a type of business one would initially
Retail Marketing : 30 consider when discussing retail businesses, but Amway used this
 model quite successfully for many years. Types of Retailer
ü Advantages : Generally very little startup funding is
needed to operate this type of business. Network
marketing provides freedom from conventional retailing NOTES
businesses and offers a greater interaction with all types of
people. For those willing to invest the time, huge profits
can be made.
ü Disadvantages : Too many unscrupulous multilevel
marketing schemes exist. Some systems require their
dealers to be more interested in recruiting new members
than in selling the products to consumers. It may be difficult
to operate without a storefront.
ü Support : Most network marketing systems offer
motivational materials, training and support.

2.9 Retail Channels

A channel of distribution or trade channel is defined as the path or
route along which goods move from producers or manufacturers to ultimate
consumers or industrial users. In other words, it is a distribution network
through which producer puts his products in the market and passes it to
the actual users. This channel consists of: - producers, consumers or users
and the various middlemen like wholesalers, selling agents and retailers
(dealers) who intervene between the producers and consumers. Therefore,
the channel serves to bridge the gap between the point of production and
the point of consumption thereby creating time, place and possession utilities.
A channel of distribution consists of three types of flows:
• Downward flow of goods from producers to consumers
• Upward flow of cash payments for goods from consumers to
producers
• Flow of marketing information in both downward and upward
direction i.e. Flow of information on new products, new uses of Retail Marketing : 31
Types of Retailer existing products, etc. from producers to consumers. And flow of
information in the form of feedback on the wants, suggestions,
complaints, etc. from consumers/users to producers.
NOTES
These channels of distribution are broadly divided into four types :
1. Producer-Customer : This is the simplest and shortest channel in
which no middlemen is involved and producers directly sell their
products to the consumers. It is fast and economical channel of
distribution. Under it, the producer or entrepreneur performs all
the marketing activities himself and has full control over distribution.
A producer may sell directly to consumers through door-to-door
salesmen, direct mail or through his own retail stores. Big firms
adopt this channel to cut distribution costs and to sell industrial
products of high value. Small producers and producers of perishable
commodities also sell directly to local consumers.
2. Producer-Retailer-Customer : This channel of distribution
involves only one middlemen called ‘retailer’. Under it, the producer
sells his product to big retailers (or retailers who buy goods in
large quantities) who in turn sell to the ultimate consumers. This
channel relieves the manufacturer from burden of selling the goods
himself and at the same time gives him control over the process of
distribution. This is often suited for distribution of consumer durables
and products of high value.
3. Producer-Wholesaler-Retailer-Customer : This is the most
common and traditional channel of distribution. Under it, two
middlemen i.e. wholesalers and retailers are involved. Here, the
producer sells his product to wholesalers, who in turn sell it to
retailers. And retailers finally sell the product to the ultimate
consumers. This channel is suitable for the producers having limited
finance, narrow product line and who needed expert services and
promotional support of wholesalers. This is mostly used for the

Retail Marketing : 32 products with widely scattered market.

 4. Producer-Agent-Wholesaler-Retailer-Customer : This is the Types of Retailer
longest channel of distribution in which three middlemen are
involved. This is used when the producer wants to be fully relieved
of the problem of distribution and thus hands over his entire output NOTES
to the selling agents. The agents distribute the product among a
few wholesalers. Each wholesaler distribute the product among a
number of retailers who finally sell it to the ultimate consumers.
This channel is suitable for wider distribution of various industrial
products.

An entrepreneur has to choose a suitable channel of distribution

for his product such that the channel chosen is flexible, effective and
consistent with the declared marketing policies and programs of the firm.
While selecting a distribution channel, the entrepreneur should compare
the costs, sales volume and profits expected from alternative channels of
distribution and take into account the following factors:
• Product Consideration
• Market Consideration
• Other Considerations that may have an impact on business and
business activities.

2.10 Benefits of Multi-channel Retailing

Creating a successful multi-channel experience can seem intimidating
to many retailers, who may wonder if the effort is worth it. They may not
have a choice, however. “Consumers are expecting this kind of integration
already,” said Ron Bowers, senior vice president of Frank Mayer and
Associates, a Grafton, Wis.-based merchandising company. “They expect
that if they order an item online, they can return it in the store, that kind of
thing. It’s up to retailers to make sure that expectation is met.” But multi-
channel retailing offers plenty of benefits to retailers, benefits that make
investing in the strategy worthwhile. Retail Marketing : 33
Types of Retailer • Improved Customer Perception : “Channels are disintegrating
for customers,” said Jeremy Gustafson, vice president at KSC
Kreate, a digital commerce agency based in Hollywood, Fla.

NOTES “People are watching television and using their tablet at the same
time. They expect the same kind of integration with their shopping
experience.”Brands who don’t provide that kind of experience, he
said, are likely to lose customers, especially as the digital generation
gains even more buying power.
Stores who do create a seamless experience that integrates
all different forms of technology, however, can gain significant
customer loyalty. Those brands are perceived as forward-thinking
and responsive to customer’s needs - qualities that will keep
customers coming back.
That improved perception offers another advantage, as well.
In a world of big-box stores and online shopping, finding the best
price is easier than ever for customers. A store that is perceived as
responsive to customer needs and gives customers easy access to
a variety of channels can differentiate itself in a crowded field. That
allows the brand to compete on the experience offered, rather than
just price. Customers might be willing to pay a little more for the
convenience, and will come back repeatedly, and brands don’t
have to slice their profits just to keep up.
• Increased Sales : The primary driver for a retailer adopting any
strategy is, of course, increasing profit, most frequently by increasing
sales. Multi-channel retailing, by offering a variety of engagement
points for the customer to make a purchase, increases the
convenience and ease of sales, thus boosting profit.
A customer who thinks about buying a pair of pants, for
example, may not want to drive to the mall, park, walk to the
store, find the pants and try them on. For that customer, she can go
online at home and order the pants from the store’s website. Another
Retail Marketing : 34 customer, however, might be in the store trying on the pants and
 decide she’d like them in a different color. In that case, she can Types of Retailer
use an in-store kiosk to find the pants in the preferred color, order
them and have them delivered to her home. Still another customer
can use her Smartphone to take a picture of the pants, send it to a NOTES
friend and discuss whether to purchase them or not. Having a
variety of engagement points gives retailers more tools to make a
sale.
• Better Data Collection : Knowing the customer is a key tenant
for successful retailing, and multi-channel engagement points provide
more opportunities to gather information about customers. There
are two benefits to the data collection offered by multi-channel
retail: First, the possibility for gathering more information exists,
and the information can be used more effectively.
• Enhanced Productivity : Multi-channel retailing offers benefits
for more than shoppers. Workers, too, can benefit from the use of
new technology, by arming them with more information and
increasing their efficiency. A tablet, for example, frees employees
from the point-of-sale system, instead allowing them to carry the
register with them. Employees can go directly to the aid of
customers, helping them to find out what is in stock, what is available
at other stores and when new products might be launching. The
tablet also can contain information about the loyalty program, so a
frequent customer can be given VIP status. Then, when a purchase
is ready to be made, the customer does not have to stand in line,
but rather can simply continue talking to the salesperson and make
her purchase via tablet.
• Best Practices : While every type of channel has its own unique
set of challenges, there are some strategies that are true across all
engagement points.
• Be consistent : Messaging across all channels should have the
same look and feel; the customer should always know exactly
what brand she is interacting with. Retail Marketing : 35
Types of Retailer “Traditionally, retailers have approached each channel
individually,” said Gustafson. “What is needed, though, is to create
a single marketing message, and then figure out how to deploy it
NOTES across all channels. The messaging doesn’t have to be identical,
but it all needs to be clearly related.”
• Provide a value-add : Make sure each engagement point offers
something to the customer. An in-store kiosk that simply accesses
the company’s website, for example, is not bringing anything unique
to the customer; instead, she can check the website at home, on
her own. The same is true of a tablet. If the salesperson with the
tablet does not have access to more or better information than the
customer can access via her own tablet or Smartphone, the
application will not bring much value to the transaction.
• Security : There is a fine line between being helpful and being
intrusive, and it’s a line that is easily crossed. Customers are aware
of security issues, and are wary of providing too much personal
information.

2.11 Summary
A retail business that sells products or services that appeal to
customers’ needs has the ability to stand up against competition. Price,
convenience and store experience are functional characteristics that make
up a strong retail brand. The latter half of the 20th Century, in both Europe
and North America, has seen the emergence of the supermarket as the
dominant grocery retail form. Saturated home markets, fierce competition
and restrictive legislation have relentlessly pushed major food retailers into
the globalization mode. The global retail industry has travelled a long way
from a small beginning to an industry where the world wide retail sales
alone is valued at $ 7 trillion. Organized retailing is spreading and making
its presence felt in different parts of the country. India is world’s second

Retail Marketing : 36 largest grower of fruits and vegetables after Brazil and China. Economic
growth at over 5.5% over the last eight years, forex reserves of over Types of Retailer

$100 billion and a stable government has helped India to look more

progressively towards future. Retailing, one of the largest sectors in the

NOTES
global economy, is going through a transition phase in India.

2.12 Key Terms

Independent Retailer : In independent retailer is one who builds his/

her business from the ground up

Multi-Level Marketing : Multilevel marketing (MLM) or network

marketing is a business model where the selling of products depends on

the people in the network.

Producer-Customer : This is the simplest and shortest channel in

which no middlemen is involved and producers directly sell their products

to the consumers.

Convenience Stores : A convenience store is a small store that

stocks a range of everyday items

2.13 Questions and Exercises

1. Discuss the retailer characteristics in India.

2. Explain food retailers.

3. Discuss the food retail in India.

4. Describe the key driver of food retail in India.

5. Explain the evolution of organized retailing.

6. What is the impact of organized retail in India?

7. Describe the general merchandise retailers.

8. Explain the different types of ownership.

Retail Marketing : 37
Types of Retailer
2.14 Further Reading and References

• Bajaj, Tuli and Srivastava, Retail Management, New Delhi: Oxford

NOTES University Press Gibson G. Vedamani, Retail Management, Mumbai:

Jaico Publishing House Lewison, D. M. and Delozier, W. M., Retailing,
Columbus: Merrill Publishing Co.

• http://www.publishyourarticles.net/knowledge-hub/business-studies/
who-is-a-retailer-what-are-the-characteristics-functions-and-
services-of-a-retailer.html

• http://www.eolss.net/Sample-Chapters/C10/E5-15-01-06.pdf

• www.iasms.in/pdf/nationalseminar.pdf

• http://www.econjournals.com/index.php/irmm/article/download/18/
14.

Retail Marketing : 38
 Strategic Planning
UNIT 3: STRATEGIC PLANNING IN in Retailing

RETAILING NOTES
3.0 Unit Objectives
3.1 Introduction
3.2 Retail Market Strategy
3.3 Levels of Strategy for Retail Organizations
3.4 Strategic Retail Planning Process
3.5 Alternate Retail Strategies
3.6 Target Market and Retail Formats
3.7 International Retailing
3.8 Summary
3.9 Key Terms
3.10 Questions and Exercises
3.11 Further Reading and References

3.0 Unit Objectives

After reading this unit, you should be able to discuss the retailing
strategies, assess the international expansion efforts of the retailers and e
explain the concept of retail value chain.

3.1 Introduction
“Strategy” means several things to several people at different points
of time. It is fashionable nowadays to use the word ‘strategy’. Hence,
people talk about defense strategies, business strategies, strategies for
games (be it cricket or chess), National Strategies, Global Strategies and
many more strategies. Retail Marketing : 39
Strategic Planning The retailing strategy outlines the mission and vision of a retail
in Retailing
organization. It is a systematic plan that provides the retailers the overall
framework for dealing with competitors as well as technological and global

NOTES movements. In the past traditional retailers mainly reacted to changes in the
business environment, but with increasing business complexities, this is no
longer valid. The reason of this, competition in all the disciplines of retailing
is increasing and changes in the consumer’s tastes, need, wants, technological
environment and other external environmental variables are taking place
very fast. Long term strategies and continuous examination of strengths,
weaknesses, opportunities and threats (SWOT analysis) is required to ensure
that the growth, opportunities are not missed and action is taken at the right
time to combat potential threats in the prevailing business environment.

3.2 Retail Market Strategy

A company’s strategy provides a central purpose and direction to
the activities of the organization to the people who work in it, and often to
the world outside. Using suitable strategies and communicating them to all
important groups inside and outside the corporate firm would gain
cooperation from all corners.
Strategy if defined clearly by the top management and accomplished
well, provides the purpose and focus for all other activities and starts the
organization on the road to successful operation. ‘Every long journey starts
with taking the first step’, says a proverb. Obviously, the formulation of a
strategy is only the beginning but the beginning is the most significant point
in any enterprise.

3.3 Levels of Strategy for Retail Organizations

An organization’s strategy includes where it wants to go and how it
intends to get there. This definition applies both to the overall strategy of an
organization and to the strategies of its major sub-units. The implications of
Retail Marketing : 40
strategy at different levels can be distinguished. Analytically, there are three Strategic Planning
in Retailing
levels of strategy:
• Corporate level strategy
• Business unit strategy or Retail Format level NOTES
• Functional level strategy
At the corporate level, strategic decisions relate to organization’s
wide policies and are most useful in the case of multidivisional companies
or firms having wide ranging business interests. The nature of strategic
decisions at the corporate level tend to be value oriented, conceptual and
less concrete than decision at the business or functional level. There is also
greater risk, cost and profit potential as well as greater need for flexibility
associated with corporate level strategic activities. These are natural
outcomes of the futuristic, innovative and pervasive character of corporate
level strategy. Major financial policy decision involving acquisition,
diversification and structural redesigning belong to the category of corporate
strategy.
At business unit level (retail format level) decision-makers are
primarily concerned with the immediate industry or product—market issue,
and with policies bearing on the integration of the functional units. Retail
business level strategic decisions translate the general statements of direction Check Your Progress

and intent generated at the corporate level into concrete functional objectives Explain the levels at which
a retail organization’s
and strategies for divisions or strategic business units (operating division of
strategy is developed?
a firm which serves a distinct product/market segment or a well-defined set
of customers or a geographical area). Strategic decisions at the business
level should include policies involving new product development, marketing
mix, research and development, personnel etc.
Functional strategic level strategy involves decision making at the
operational level with respect to specific functional areas-production,
marketing, personnel, finance etc. Decisions at the functional level are often
described as ‘tactical’ decisions. These decisions are necessarily guided
by overall strategic considerations and must be consistent with the
framework of business strategy. Retail Marketing : 41
Strategic Planning
in Retailing 3.4 Strategic Retail Planning Process
This text developing and applying retail strategy, retailers are
required to follow a step-by-step procedure or planning process. The
NOTES
planning process involves the present stage of business, the formulation,
lists of available strategic options, and the implementation of the selected
strategies. Considering the importance of strategic decisions for the future
success of the business, a systematic approach is essential. The strategic
planning process, after considering the HR potential and the unique selling
proposition (USP) of a particular store takes proper shape. Strategic retail
planning process divided into the following four steps:
1. Deciding the Store’s Mission and Objectives : The retail
strategic planning process starts with the identification of a store’s
mission for its existence, and hence the scope of the retail store.
The mission of a store is identifying the goods and services that will
be offered to customers. It also deals with the issue of how the
resources and capabilities of a store will be used to provide
satisfaction to customers and how the store can compete in the
target market vis-à-vis its competitors.
The mission also involves the way of the store’s functioning.
How a store will work and accomplish its day-to-day operations.
What is the emergency planning? All these questions are answered
in the store’s mission statement.
For Example: Big Bazaar, they have philosophy of customer
satisfaction through ‘manufacturing retailing’. This reflect not only
the way it tends to treat its customers but discuss secret of its
competitive advantage, i.e. the profit saved from absence of
intermediaries like agents and brokers, the profit saved is thus,
distributed to the customers by way of low price items.
Once the organization mission has been determined, its
objectives the desired future positions that it wishes to reach, should

Retail Marketing : 42 be identified. A store’s objectives are defined as ends that the store
 seeks to achieve by its USP and operations. The store’s objectives Strategic Planning
may be classified into two parts: in Retailing

• External store objectives: are those objectives that define

the impact of store on its environment. Example: To
NOTES
develop high degree of customer confidence by providing
quality goods at affordable price.
• Internal store objectives: Are those objectives that define
how much is expected to be achieved with the available
resources. Example: To raise the store turnover by 20%
in the coming year.
2. Situational Analysis : The objective of doing store’s situation
analysis is to determine where the store is at present and to forecast
where it will be if the formulated strategies are implemented. The
difference between current and future position is known as planning.
And the objective of conducting store’s situation analysis, normally
study in the context of external environment and internal
environment.
3. External Analysis : The purpose of examining the store’s external
environment is to study the opportunities and threats in the retailing
environment. The external analysis studies factors that affect the
macro-environment of the retailing industry and the task
environment. Under external analysis retailer studies these
parameters:
• Economic environment of retailing
• Political/Legal environment of retailing
• Socio-cultural environment of retailing
• Technological environment of retailing
• International environment of retailing
Economic Environment of Retailing
• Inflation
• Employment
• Disposal income Retail Marketing : 43
Strategic Planning • Business cycle
in Retailing
• Energy availability and cost
• Others
Political/Legal Environment of Retailing
NOTES
• Monopolies legislation
• Environmental protection laws
• Taxation policy
• Employment laws
• Government policy
• Legislation
• Others
Socio-Cultural Environment of Retailing
• Demographics
• Distribution of income
• Social mobility
• Lifestyle changes
• Consumerism
• Levels of education
• Others
Technological Environment of Retailing
• New discoveries and innovations
• Speed of technology transfer
• Rates of obsolescence
• Internet
• Information technology
• Others
International Environment of Retailing
• Growth
• Opportunities
• Others
4. Internal Analysis : The objective of studying the internal
Retail Marketing : 44 environment of its own store is to identify the store’s capabilities
and weakness. The store will try to increase its capabilities, and Strategic Planning
in Retailing
overcome the weaknesses that deter the business profit. While doing
the internal analysis, the store examines the quality and quantity of
its available resources and critically analysis how effectively these NOTES
resources are used. These resources for the purpose of examining
are normally grouped into human resource, financial resources,
physical resources and intangible resources.

The questions may arise under these resources:

Human Resource
• Is the present strength of employees at various levels
sufficient for future action?
• Are the employees trained and capable to perform the tasks
assigned to them?
• Are the employees loyal to the store?
• Are the employees punctual and regular?
• Are the employees skilled matched to their assigned tasks?
Financial Resource
• What is the total cash flow from the store’s present
activities?
• What is the ability of the retail store to collect money at the
time of requirement/ emergency?
• How effective and stable are the financial policies?
• What is the ratio between fixed and current assets?
• What are the contingency plans in case of negative cash
flow?
Physical Resources
• What is the contribution of fixed assets?
• What is the position of abandoned/unused assets?
• How effective and updated are the store’s information
systems?
Retail Marketing : 45
Strategic Planning Intangible Resources
in Retailing
• What are the present capabilities of the company’s
management?
• How effective is the R&D cell?
NOTES
• How good is the competitor’s intelligence system?
• How effective are the store’s loyalty programs?
• What is the capability of a retail store manager?
• Are customers loyal towards the company’s products?
5. Retail Strategy : It is a clear and definite plan outlined by the
retailer to tap the market. A plan to build a long-term relationship
with the consumers. Process of strategy formulation in retail is the
same as that for any other industry. It starts with the retailer defining
or stating the mission for the organization.
6. Mission : The mission is at the core of the existence of the retailer.
Other aspects of the strategy may change over a period of time or
vary for different markets.
Functions of Retail Strategy
a. Retail strategy define mission or purpose: A Mission
statement is a long term purpose of the organization. It
describes what the retailer wishes to accomplish in the
markets in which he chooses to operate. Retailers mission
statement would normally highlight the following:
• The products and services that will be offered.
• The customers who will be served.
• The geographic areas that the organization chooses
to operate in the manner in which the firm intends
to compete.
b. Retail strategy conduct a situation analysis : Once
the retail mission is defined, the retail organization needs to
look inwards; Understand what its strengths and weaknesses
are; Look outwards to analyze its opportunities and threats;
Retail Marketing : 46 Situation analysis helps the retailer determine his position
 and his strengths and weaknesses; Helps formulate a clear Strategic Planning
in Retailing
picture of the advantages and opportunities which can be
exploited; The weaknesses need to be worked upon. This
forms the basis or the core element of any strategy. NOTES
c. Retail strategy identify options/strategic alternatives
: After determining the strengths and weaknesses vis-à-vis
one environment retailer needs to consider various
alternatives available to tap a particular market. Igor Ansoff
presented a matrix which looked at growth opportunities.
He focused on firm’s present and potential products in the
existing and new markets. Ansoff’s matrix also helps to
understand the options available to a retailer.
The alternatives available to a retailer are: Market
Penetration, Market Development, Retail Format
Development and Diversification.
d. Retail strategy set objectives : Translation of mission
statement into operational terms Indicate Results to be
achieved. Give direction to and set standards for the
measurement of performance. Management sets both long
term and short-term objectives. One or two year time
frames for achieving specific targets are short-term
objectives. Long term objectives are less specific and reflect
the strategic dimension of the firm. Two important focus
areas of retailers are Market Performance and Financial
Performance. Objectives are set keeping these focus areas
in mind Sales volume targets. Market hare targets
Profitability targets Liquidity targets Returns on investment
targets.
e. Retail strategy obtain and allocate resources needed
to compete Resources needed by a retailer: First,
Human Resource (HR) plan must be consistent with overall
strategy of the organization. HR management focuses on Retail Marketing : 47
Strategic Planning issues such as recruiting, selecting, training, compensating,
in Retailing
and motivating personnel. These activities must be managed
effectively and efficiently. Second, Financial Resources takes

NOTES care of the monetary aspects of business shop rent, salaries

and payments for merchandise.
f. Retail strategy develop the strategic plan : At this stage,
strategy is determined through which retailer will achieve
objectives. The retailer determines and defines his target
market. The retailer finalizes the retail mix that will serve the
audience. Target Market – that segment of consumer market
that the retail organization decides to serve. No definite
process of deciding and selecting the target market. Most
retailers look at the entire market in terms of both size and
consumer segments to which it might appeal. From these
segments, he identifies smaller number of segments that
appear promising. These become possible targets. Variables
like growth potential, investment needed to compete, the
strength of competition, etc. are evaluated. This enables the
Check Your Progress retailer to arrive at the best alternative that is most compatible
Discuss about the target with the organizations resources and skills.
market and retail formats
in retailing? g. Retail strategy implement the strategy : Implementation
is the key to success of any strategy. Effective implementation
of the retailers desired positioning requires. Every aspect of
stores to be focused on the target market. Merchandising
must be single-minded. Displays must appeal to target
market. Advertising must talk to the target market. Personnel
must have empathy for the target market. Customer service
must be designed with the target customer in mind.
h. Evaluate and Control : After implementation, the
management needs feedback and should focus on
Performance Effectiveness of long term strategy by periodic
Retail Marketing : 48 evaluation. Ensuring that the plans do not degenerate into
 fragmented adhoc efforts. Ensuring that all efforts are in Strategic Planning
in Retailing
harmony with the overall competitive strategy of business.
Management can also use the process to decide on. Any
future policy change. Modifications if any, in the plan, to NOTES
ensure that the combination of the retailing mix variables
support the firms strategy.
7. Strategy Implementation and Control: It is concerned with the
designing and management of retail system to achieve the best
possible combination of human, financial, physical and service
resources of a retail store; to achieve the formulated objectives,
without timely and effective implementation also requires scheduling
and coordination of various retail activities.

Further, the spirit of teamwork is an essential part for the success

of strategy implementation. If the retail store’s strategies are competitive,
marketing efforts are as per demand, but the sales promotion employees
are not taking it seriously or are ineffective, the result will not be up to the
mark. The implementation of new retailing strategies sometimes require
changes in the way of functioning and duties that can lead to resistance
from employees. Therefore, stores should take positive steps to reduce
this resistance to change and to convince the employees that it in the long
term will be beneficial for both the store and the employees. Strategy
control deals in three basic concepts :
a. Inspection
b. Detection
c. Correction
It means after implementing the retail strategies, a retailer should
assess how effectively the strategies are being implemented, how far the
strategic objectives are being achieved and what has been left to be
achieved in the store’s objectives list. Therefore, retailers inspect the
implemented strategies from time to time and detect any fault in the
implementation of various retail elements. If any deficiency is found during Retail Marketing : 49
Strategic Planning the inspection process that has to be corrected with immediate effect
in Retailing
without any further loss to the store.

NOTES 3.5 Alternate Retail Strategies

Given that the objectives are well articulated, resources are well
managed but when it comes to implementation due to sudden change in
internal or external environment, the old concepts or formulated policies
become invalid. Now what should a retail manager do, this is not an
uncommon phenomenon but can happen to any retailer. It has rightly been
said that ‘think positive but the prepared for the worst’. Considering
retailers, who are sensitive to environmental changes, they always prepare
a set of alternative strategies, in case change in technology or change in
customer’s preferences make the present schemes ineffective.

3.6 Target Market and Retail Formats

The retailing concept emphasizes that retailers must consider both
their customers and their competitors when developing a retail strategy.
Successful retailers satisfy the needs of customers in their target market
segment better than the competition does. The selection of a target market
focuses the retailer on a group of consumers whose needs it will attempt
to satisfy. The selection of a retail format outlines the retail mix to be used
to satisfy needs of customers in the target market.
The retail strategy determines the markets in which a retailer will
compete. Traditional markets, like a farmers’ market, are places where
buyers and sellers meet and make transactions – say, a consumer buys six
ears of corn from a farmer. But in modern markets, potential buyers and
sellers aren’t located in one place. Transactions can occur without face-
to-face interactions. For example, many customers contact retailers and
place orders over the Internet using a computer.
Vie define a retail market, not as a specific place where buyers
Retail Marketing : 50
and sellers meet, but as a group of consumers with similar needs (a market Strategic Planning
in Retailing
segment) and a group of retailers using a similar retail format to satisfy
those consumer needs. A number of retail formats offers a different retail
mix to its customers. Customer segments are listed in the exhibit’s top NOTES
row. As these segments can be defined in terms of the customer’s
demographics, lifestyle, buying situation, or benefits sought. In this
illustration, we divide the market into three fashion-related segments:
conservatives who place little importance on fashion, traditional who ‘want
classic styles, and fashion-forwards who want the most fashionable
merchandise. For example, Wal-Mart and Kmart stores in the same
geographic area compete with each other using a discount store format
targeting conservative customers, while Saks and Neiman Narcus compete
against each other with a department store format targeting the fashion-
forward segment. Retail formats could be expanded to include outlet stores
and electronic retailing. Rather than being segmented by fashion orientation.
One of the key determinants of a retailer’s success is the format
that they use to present to their target customers. A retailer can chose a
format based on the kind of store design they want to render, the locality
they would like to establish, the various products and services they wish to
provide and the approach taken to pricing. The most important aspect is
the format should be ideal to their target demographics.

3.7 International Retailing

International retailing is an essential ingredient for the global
economy. International retailing satisfies the increasingly complex and
demanding needs of global consumers.
Global retailers are at the forefront of technology change to manage
their operations and consumer interface. Consumers are international in
their outlook through traveling for business through accessing the Internet,
music, television and magazines, and so are looking for new experiences
and a global appeal when shopping. Progressive retailers have to meet this Retail Marketing : 51
Strategic Planning demand through keeping abreast of global trends and working with suppliers
in Retailing
to optimize the appropriate product mix in store. Sustainability and ethical
aspects of retailing are particularly apt when working globally. This is a

NOTES challenging area for retailers and is an aspect of their quality management.
Addressing the dynamics of the market for teenagers and youth
market is another demanding area. Young consumers have their own finance
and make their own decisions about what products they chose to buy and
where from. They tend to be strongly influenced by celebrities, brands and
peer-group pressure. Retailers need to understand their shopping habits
and cater for the needs of this cohort. In general, consumers are increasingly
brand aware and want to have access to luxury products. Own brands, or
private labels, have to offer premium quality and a sense of uniqueness to
attract and retain consumers’ loyalty.
Retailers have long operated on global basis, yet it is only since the
last decade or so of the twentieth century that they have done so on any
significant scale. In the past, companies trading outside their home market
were rare by comparison with number of retailers operating solely within
the domestic market. Also global operation usually accounted for a much
smaller part of the business than domestic trade. However, the larger retail
companies that have successfully developed their marketing strategy and
human resource base in the domestic market are well suited to extend
development into global markets.
Other smaller players that have powerful brand and a strong retail
concept also have the ability to globalize successfully through using a lower
cost and risk strategy such as that of franchise.

Caselet :
Starbucks’ Expansion into the Indian Territory

Starbucks aims to open 50 outlets in India by 2012’s end, through

a 50-50 joint venture with Tata Global Beverages, the companies
Retail Marketing : 52 said Monday.
Tata Starbucks Ltd., as their venture is known, hopes to capitalize Strategic Planning
in Retailing
on the rising aspirations and fattening wallets – of many Indians,
who are eager to partake of the global latter life.
“What we are seeing is an evolution in lifestyles,” said R. K. NOTES
Krishna Kumar, vice chairman of Tata Global Beverages. “In some
ways the distinctions between the developed world and the
developing world are blurring.”
He said the partners would initially invest 4 billion rupees ($80
million), with the first outlet to open in Mumbai or New Delhi by
September.
Long known as a nation of tea drinkers – despite a rich tradition
of coffee in the south India has embraced coffee house culture
with a vengeance.
Last year, India had 1,600 cafes, up from just 700 in 2007,
according to Techno Pak Advisors, which expects India’s $170
million cafe market to grow 30 percent a year, adding up to 2,700
more outlets over the next five years.
“We’re going to move as fast as possible in opening as many
stores as we can so long as we are successful and so long as we
are embraced by the Indian consumers,” said John Culver,
president of Starbucks China and Asia Pacific.
Unusually, the stores will be cobranded “Starbucks Coffee: A Tata
Alliance.”
The companies will also develop a tea for the Indian market under
the Tata Tazo brand.
Top of Form
Bottom of Form
Last January, Starbucks signed an agreement with Tata Coffee,
a unit of Tata Global
Beverages, to source and roast coffee beans in India.
The alliance with Tata could help ease one of the main burdens
for retailers in India: the high cost of real estate. Retail Marketing : 53
Strategic Planning
in Retailing 3.8 Summary
Retailing is the latest buzzword among the business. It is evolving

NOTES into a global, high-tech business and occupies a pre-eminent position in

the economics of all modern societies. The Indian retailing Industry is
becoming intensely competitive, as more and more players are vying for
the same set of customers. Strategy planning or formulation of strategy
consists of a set of decisions that leads to the development of an effective
strategy. We check all the activities related to the internal and external
factor those affect directly or indirectly to the organization. Companies
need to categories segments according to their present and future
attractiveness and their company’s strengths and capabilities relative to
different segments’ needs and competitive situation. Strategic retail planning
process divided into the following steps: Deciding the store’s mission and
objectives, Situation analysis, Formulation of retail strategy, and
Implementation and control of strategy. International retailing is an essential
ingredient for the global economy. International retailing satisfies the
increasingly complex and demanding needs of global consumers. Retailing
is predominantly a domestic market activity. The total business of the vast
majority of retailers is done within one particular country and in many
cases, within one specific region or district.

3.9 Key Terms

Retail Strategy : It is a clear and definite plan outlined by the retailer to

tap the market.

Corporate Level Strategy : At the corporate level, strategic decisions

relate to organization’s wide policies and are most useful in the case of

multidivisional companies or firms having wide ranging business interests.

Target Market : A defined market.

Retail Marketing : 54
 Strategic Planning
3.10 Questions and Exercises in Retailing

1. “Retailing today is at an interesting cross road.” Elaborate.

2. “The Indian retail market is quite large but highly fragmented.” Do NOTES
you agree? Justify your answer.
3. Explain the levels at which a retail organization’s strategy is
developed.
4. Discuss the retail strategy planning process in detail.
5. “International retailing is an essential ingredient for the global
economy.” Substantiate.
6. Retailing is predominantly a domestic market activity. Do you
agree with the statement? Why or why not?
7. Discuss about the target market and retail formats in retailing.

3.11 Further Reading and References

• Bajaj, Tuli and Srivastava, Retail Management, New Delhi: Oxford
University Press
• Gibson G. Vedamani, Retail Management, Mumbai: Jaico Publishing
House
• Lewison, D. M. and Delozier, W. M., Retailing, Columbus: Merrill
Publishing Co.
• Online links http://www.blurtit.com/q1788130.html
• http://www.exforsys.com/career-center/career-tracks/duties-and-
responsibilities-related-to-being-a-retail-store-manager.html
• http://www.oup.com/uk/orc/bin/9780199216468/

Retail Marketing : 55
Strategic Planning
in Retailing

NOTES

Retail Marketing : 56
 Decision on
UNIT 4: DECISION ON RETAIL Retail Location

LOCATION
NOTES
4.0 Unit Objectives
4.1 Introduction
4.2 Types of Retail Locations
4.3 Location and Retail Trends
4.4 Legal Considerations in Retailing
4.5 Location Considerations for Retail Business
4.6 Evaluating a site for Locating a Retail Store
4.7 Trade Area Characteristics
4.8 Summary
4.9 Key Terms
4.10 Questions and Exercises
4.11 Further Reading and References

4.0 Unit Objectives

After reading this unit, you should be able to describe the location
and retail strategy, explain the trade area characteristics and estimate
potential sales for a store site.

4.1 Introduction
The overall objective of retail marketing is creating and developing
services and products that meet the specific needs of customers and offering
these products at competitive, reasonable prices that will still yield profits.
Businesses must realize that, in retail, the customer lies at the center of any
organization’s marketing efforts, determining the overall success of the
product or service. Retail Marketing : 57
Decision on
Retail Location 4.2 Types of Retail Locations
Commercial retail locations are available in many different forms.
Stop and think about the businesses in your town. Like most communities,
NOTES
there are probably older shopping areas, new bustling retail locations and
some tucked away shops. Retailers have many store location factors to
consider when choosing a place for their business. Here are a few of the
more common types of retail locations.
• Mall Space : From kiosks to large anchor stores, a mall has many
retailers competing with each other under one roof. There are
generally 3 to 5 anchor stores, or large chain stores, and then dozens
of smaller retail shops. Typically the rent in a mall location is much
higher than other retail locations. This is due to the high amount of
customer traffic a mall generates. Before selecting this type of store
location, be sure the shopper demographic matches the description
of your customers. Mall retailers will have to make some sacrifices
in independence and adhere to a set of rules supplied by mall
management.
• Shopping Center : Strip malls and other attached, adjoining retail
locations will also have guidelines or rules for how they prefer their
tenants to do business. These rules are probably more lenient than
a mall, but make sure you can live with them before signing a lease.
Your community probably has many shopping centers in various
sizes. Some shopping centers may have as few as 3 units or as
many as 20 stores. The types of retailers, and the goods or services
they offer, in the strip mall will also vary. One area to investigate
before choosing this type of store location is parking. Smaller
shopping centers and strip malls may have a limited parking area
for your customers.
• Downtown Area : Like the mall, this type of store location may be
another premium choice. However, there may be more freedom

Retail Marketing : 58 and fewer rules for the business owner. Many communities are hard
 at work to revitalize their downtown areas and retailers can greatly Decision on
Retail Location
benefit from this effort. However, the lack of parking is generally a
big issue for downtown retailers. You’ll find many older, well-
established specialty stores in a downtown area. This type of store NOTES
seems to thrive in the downtown setting.
• Free Standing Locations : This type of retail location is basically
any stand-alone building. It can be tucked away in a neighborhood
location or right off a busy highway. Depending on the landlord,
there are generally no restrictions on how a retailer should operate
his business. It will probably have ample parking and the cost per
square foot will be reasonable. The price for all that freedom may
be traffic. Unlike the attached retail locations where customers may
wander in because they were shopping nearby, the retailer of a
free standing location has to work at marketing to get the customer
inside.
• Office Building : The business park or office building may be
another option for a retailer, especially when they cater to other
businesses. Tenants share maintenance costs and the image of the
building is usually upscale and professional. Check Your Progress
• Home-based : More and more retail businesses are getting a start Explain about types of
at home. Some may eventually move to a commercial store location, locations?
while many remain in the business owner’s spare room. This type
of location is an inexpensive option, but growth may be limited. It
is harder to separate business and personal life in this setup and the
retailer may run into problems if there isn’t a different address and/
or phone number for the business.

4.3 Location and Retail Trends

Nationwide, the retail sector enjoyed robust growth during the first
half of the decade, due in great part to the continued expansion of big
boxes. The excitement, however, is dying down, as several category-killer Retail Marketing : 59
Decision on retailers experience slowing sales. The once-zealous players are becoming
Retail Location
more cautious, and once again the rules of the game are changing for
developers and commercial brokers.
• New Development Drivers : Traditionally, retail centers have
NOTES
been defined as either regional, community, or neighborhood, with
standard tenants for each of these categories. Recently, though,
the lines have blurred, as discount department stores anchor regional
malls and traditional mall tenants move in-line at strip centers or
into freestanding locations.
The three familiar categories have now polarized into either
regional or neighborhood locations. Lackluster performance has
caused the retreat or merger of a number of retail chains, both
large and small. The theatre and entertainment group, once shunned
by many developers and anchor retailers, is fast becoming the
darling of the industry. And in the wake of continuing retail
bankruptcies and mergers, capital markets are taking a closer look
at new development. In fact, many financial institutions have
reallocated funds for property types, dropping retail from the most-
favored status.
With fewer dollars focused on this overbuilt market-and
cautious tenants becoming more selective in choosing new
locations-developers and retailers must be more creative. As a
result, new deals will rely less on the credit of the tenant and more
on the developer’s use and positioning of a site as it relates to the
market.
• Location, Location, Location? : What does all of this mean if
you have a site looking for a use or a use looking for a site? Throw
out those preconceived ideas about location, as the old adage is in
a state of evolution. Market, market, market is a more-appropriate
concept for the future as retailers and developers alike ask not “Is
this a good location,” but rather “Is this the best location in the

Retail Marketing : 60 market, given the competition?”

 Historically, the criteria for many retailers has included a Decision on
Retail Location
location on Main and Main, with a minimum population within a
specific radius, generally concentric rings of 1, 3, 5, or 10 miles.
But providing demographics based on concentric rings and NOTES
identifying the competition are no longer enough to sell a buyer on
a location. Road systems, buyer preferences, and new venues of
competition must now be considered, making use of the new
technologically advanced systems that overlay mapping,
demographics, and other data.
Consistency in consumer behavior also plays a part in the
decision-making process, as cluster analysis, which identifies
similar behavior patterns within similar demographic tracts,
becomes prevalent. Psychographics-adding psychology, behavior,
and lifestyles to demographic data-is also being utilized. For
example, the shopping patterns in the Midwest are not the same
as those in the New York City metropolitan area when parking,
road access, and visibility are considered.
Providing information on the existing, proposed, and
potential competition surrounding each site is critical when reviewing
any location. Geodemographic systems have quickly become the
choice among savvy market researchers, as the use of one or
more of these systems has proved successful in selecting new store
locations. Doing research and providing this information are now
key to satisfying retailers and capital markets.
Retailers, developers, and brokers must push the envelope
and look beyond the obvious to find creative options. For example,
Tandy’s Incredible Universe, the cutting edge of electronic retailing,
includes in-store McDonald’s in its 185,000 square foot stores.
Brand recognition has made Starbucks a household word, with
locations in malls, airports, stadiums, and most recently, flying the
friendly skies with United Airlines. Retail Marketing : 61
Decision on • Current Trends : With many retailers opting for locations in more
Retail Location
densely populated areas, sites currently occupied for other uses
are finding new life as adaptive reuse becomes the standard in

NOTES urban economic development. Many of the nation’s retailers are

discovering the substantial dollar volumes that are largely untapped
in the major urban markets. Obsolescent industrial buildings in A
locations are making way for new supermarkets, Wal-Marts, and
Home Depots across the country. In fact, Wal-Mart is considering
obsolescence in its new prototype by designing stores that can be
converted into multifamily housing in the future. Communities with
enterprise zones and other economic incentives are getting a second
chance as retailers rediscover downtown in more-affluent markets.
A) shining example is the Circle Centre redevelopment in Indiana
polis. B) locations, or those neighborhood centers once anchored
by supermarkets, are getting a breath of new life from Rite Aid,
Walgreens, and CVS as consumers yearn for service and
convenience.
In addition, the surviving supermarkets and large discount
department stores are anchoring regional malls. K mart now
focuses on its superstore concept in metropolitan locations, with
Wal-Mart continuing to identify gaps in suburban markets. There
are fewer active big-box players; therefore, opportunities for
regional mall locations, as they become repositioned, will become
more prevalent.
• The Challenge of Cyber Retailing : Technology is making a
dramatic impact on the retail industry as a whole. A recent Gallup
Poll study concluded that 40 percent of all shoppers are now using
non-store venues to make some of their purchases. Another recent
study concluded that electronic shopping could shift 10 percent to
20 percent of sales away from retail stores.
In addition to catalog and TV shopping, cyber retailing
Retail Marketing : 62 has entered the scene, and continuing advances in info technology
will make home shopping more desirable. Many retailers now have Decision on
Retail Location
World Wide Web pages on the Internet to market their goods,
making cyberspace the great equalizer as retailers of all sizes
compete on an even electronic playing field. NOTES
At a recent panel discussion regarding retail strategies, a
panelist and counsel for a major supermarket company in the
Northeast stated that his company is “rethinking” the concept of
the 25-year lease, as the speed of technology is changing the way
retailing will be done in the future. The Catalina Marketing
Corporation is currently beta testing a new Web site that will allow
consumers to comparison shop at local supermarkets. The site
also provides online advertising from manufacturers and coupons
that consumers can print from their home computers.
Ultimately these technological changes will result in a
reduced need for physical space as retailers expand electronically.
Tenants that may disappear from shopping centers include camera
and photo-processing stores (as digital cameras, without film,
become more popular), travel offices, music stores, and bank
branches (that are meeting and serving customers online, greatly
reducing costs).
All of these factors will diminish the value of location.
Eventually consumers will come to value the convenience of
shopping online over the need to personally pick out products,
just as they have with catalog shopping. For example, if a retailer
were to offer its products online, the customer who wants to touch
and try on the products at a regional location could do so; others
could stay at home, make a selection, place an order, and await
delivery. The retailer would eliminate the need for a location in
every market.
As an example, consider L.L. Bean, the leader in catalog
retailing; most consumers know where they can visit its stores.
Becoming a destination retailer, less emphasis is placed on location. Retail Marketing : 63
Decision on With fewer retailers needing fewer locations, there will be an
Retail Location
abundance of good locations. We see this trend already as the
vacancies for traditional strip centers increase and their lease rates
decrease.
NOTES
• The Next Trend : Will all of this technology eliminate the need for
us to leave our homes? Human beings are by nature social creatures.
Therefore, shopping will evolve into places for entertainment and
socialization. In many areas of the country, particularly the
waterfronts, we have already seen this new breed of retailers
clustering around entertainment venues and tourist destinations.
Now that value pricing has left its mark, customer service and
entertainment will again become the hallmarks of retailing.
For example, theater chains and other entertainment venues
are taking center stage as the anchors of new retail centers. The
newest entertainment concept is Sega Game Works, a 5,000-to-
30,000-square-foot venture between Steven Spielberg’s
DreamWorks, MCA/Universal, and Sega. Approximately 20
freestanding and/or mall locations across the country are planned,
with the first to open in late 1996 in downtown Seattle. National
and regional restaurant groups are complementing the mix of this
new environment.
• Under All Is the Land : In many areas, few choice undeveloped
sites-level and visible from the highway or easily accessible-are
still available. Those remaining may have any number of challenges
associated with them. Determining and providing the following
information to the developer or user will undoubtedly expedite the
process, and surprisingly, is often overlooked.
a. Physical constraints: Does the site have difficult topography?
Are the soil conditions such Notes that blasting will be
required? A review by a geologist will quickly assist in
determining whether the soil conditions will result in any
Retail Marketing : 64 unusual site costs. Are there any easements or rights of
 way that will affect access or use of the site? Do a title Decision on
Retail Location
search earlier rather than later to identify any potential
negotiations with additional third parties.
b. Conservation issues: Are wetlands on the site? Are they NOTES
regulated by the state or federal government? Is the site in
an established flood plain area? Reviewing local or county
soils and flood plain maps will reveal these facts. Additionally,
if you suspect that the site may be home to some rare species
of plant or animal life, consult with a qualified botanist or
biologist to avoid any surprises.
c. Environmental dilemmas: Phases I and II audits may be
warranted on the site-certainly any financial institution will
require a preliminary study. Understanding state and federal
environmental protection laws is important; however, be sure
to include the reporting criteria from your lender in any
requests for proposals to environmental review companies,
because many of their guidelines now go beyond state or
federal regulations.
Assembling a qualified and experienced team of professional
consultants is critical to the success of any project. Site selection
and development focus on managing the process versus monitoring
the transaction.
• The Players : In addition to the developers, professional consultants,
brokers, and tenants, today communities themselves are very much
a part of the success or failure of proposed retail projects. Citizens
are more educated, sophisticated, and involved in the development
of their communities. Organized grass-roots efforts opposing retail
projects are no longer the exception but the norm. Community public
relations is an important early step to identify opposition groups and
potential objections so that issues can be negotiated and projects
are presented in a manner that will win all necessary approvals.
Satisfying the concerns of the municipal planning and zoning boards Retail Marketing : 65
Decision on is critical; however, the potential always exists for a “change of
Retail Location
heart” by one board member as a result of pressures from organized,
vocal opposition-which could prove fatal to a project. In a few

NOTES areas, the competition among tenants has created direct or indirect
opposition for projects-an expensive lesson to learn and too often
overlooked by developers.
Increased site costs, costs to development of community
opposition, high land prices, and changing tax laws, including the
new impairment standard (FASB Statement number 121) and IRS
Section 263A (capitalizing unimproved land development costs)
have contributed to rising project costs. As a result, many retailers
have found themselves in the development business to maintain
already thin profit margins and meet their objectives for new
locations. Other new players in the site development arena include
real estate investment trusts, which will continue to see mergers as
shareholders demand favorable returns.
The changing rules of retail raise as many questions about site
selection as they answer. For instance, what will happen when category-
Check Your Progress
killer retailers finally “kill” off each other? Will we see a vast landscape of
Discuss about common big boxes waiting for redevelopment? Will cyber retailing live up to its hype
area maintenance?
and actually decrease the need for retail space? Consider the coming
decrease in disposable income-expected to drop off after 1996-as well as
the compression of the retail cycle (concepts that once took 10 years to
mature now fade after five or six years). These are the factors that will
continue to influence retailers in their search for perfect locations. Flexibility
and preparedness will aid savvy developers and brokers in staying one
step ahead of the game.

4.4 Legal Considerations in Retailing

Retailers have realized the advantages of reflecting an ethical sense

Retail Marketing : 66 in business operations. The organizational environment plays a major role
in the kind of ethical sense the employees possess. Retailers are trying to Decision on
Retail Location
ensure that their employees behave ethically. Though there are many laws
influencing the business environment of the retailer, there are many more
aspects that come under the purview of ethics. These aspects concern NOTES
the merchandise buying and selling practices in the firm. Retailers also
need to be socially responsible and environmentally concerned. They often
undertake activities that are beneficial to the society. Retailers are also
taking measures for waste reduction, trying to recycle the materials used
and are switching over to environment friendly packaging materials.
Legislation governs the retail firm’s operations and relations with
its channel partners. Its relations with suppliers, competitors, consumers
and employees are governed by appropriate laws. Legal restrictions are
imposed on practices concerning pricing, product, promotion, distribution,
trademarks and HR policies.

4.5 Location Considerations for Retail

Business
One of the most dangerous times in the life of a small retail business
is when the owner must relocate because the business is growing and the
existing facility is no longer adequate. This is a nice problem to have, but
choosing the wrong new location can kill the growing business. Retail
locations must have high visibility and easy accessibility to succeed. There
are many criteria to consider when choosing a new location. Too often,
business owners make assumptions about the new location without taking
time to do the necessary research to evaluate the decision. The following
discussion includes some of the most important location considerations
for a retail business.
Choose a High Density Area: This seems obvious, but many times
business owners assume a location is right and that there are plenty of
potential customers without actually looking at the numbers. Take time to
research the area and find out the actual population of the area and the Retail Marketing : 67
Decision on make-up of the population.
Retail Location
Choose a Growing Area: In addition to knowing the population
of an area, be sure to research the growth that is taking place, in terms of

NOTES both residential population and number of business establishments. Look

for new construction of subdivisions, office buildings, shopping centers,
etc.
Consider Customer Convenience: The flow of customers into,
throughout, and out of your store should be easy and convenient for the
customers. Without proper planning, it is easy to design your location for
the convenience of owners, store operations, and employees without taking
customer satisfaction into consideration.
Consider the Parking Situation: Not only should there be plenty
of parking for your customers, it should be convenient and safe. Customers
tend to want to park very close by your entrance and are concerned
about remote and poorly lit parking areas. Also, be sure the parking lot is
level, smooth, with well-marked spaces and arrows indicating flow of
vehicles. Make sure customers have plenty of room to park and to
maneuver.
Beware of Curves: Locating on a curve can make it difficult for
approaching vehicles to see your business from very far off. By the time
they see your business, it may be difficult and even dangerous for them to
stop and turn into your location. This is particularly true of locations on the
inside of curves. And once they have passed you, they are unlikely to turn
around and come back due to the inconvenience.
Beware of Dead Ends: Dead end roads mean there will be less
traffic moving back and forth in front of your location. And a no-outlet
dead end road reduces traffic even more and is an inconvenience for
potential customers.
Beware of One-Way Streets: Locating on a one-way street
exposes your business to the traffic traveling in only one direction. In
addition, it will be more difficult for your potential customers to access
Retail Marketing : 68 your location.
 Choose the Correct Side of the Street: Consider which side of Decision on
Retail Location
the street may be more beneficial to your particular type of business. Learn
about the traffic patterns in the area. Evaluate your customers’ habits and
determine whether your location should be more convenient for persons NOTES
traveling to work, from work, or to run errands and accomplish shopping
goals.

4.6 Evaluating a site for Locating a Retail

Store
In making this decision, retailers consider the following three
factors:
a. The characteristics of the site.
b. Trading area characteristics.
c. The estimated potential that can be generated by a store at the
site.
Where you choose to locate your retail business will have a major
impact on everything your shop does. The difference between selecting
the wrong location and the right site could be the difference between
business failure and success.
Before choosing a retail store location, define how you see your
business, both now and in the future.

• What do your customers look like?

• Can you visualize your building?
• Do you know what you want to sell and what you want your
business to be known for?
• Have you determined how much retail space, storage area, or
the size of the office you need?
Without the answers to these basic questions, it will be hard to
find the perfect location for generating the maximum amount of profit for
your retail store. Retail Marketing : 69
Decision on • Type of Goods : Examine what kind of products you sell, as
Retail Location
some goods will require certain types of locations. Would your
store be considered a convenience store, a specialty shop or a

NOTES shopping store?

Convenience goods require easy access, allowing the
customer to quickly make a purchase. A mall would not be a good
location for convenience goods. This product type is lower priced
and purchased by a wide range of customers.
Specialty goods are more unique than most products and
customers generally won’t mind travelling out of the way to
purchase this type of product. This type of store may also do well
near other shopping stores.

A shopping store usually sells items at a higher price which are

bought infrequently by the customer. Furniture, cars and upscale clothing
are examples of goods found at a shopping store. Because the prices of
these items are higher, this type of customer will want to compare prices
before making a purchase. Therefore, retailers will do well to locate their
store near like stores.

4.7 Trade Area Characteristics

Trade area analysis and mapping describe the characteristics of
the area around a store or network of stores. Without accurate trade area
definitions, you cannot measure the key statistics that impact a store’s
performance.
Use trade area analysis to aid site selection and target
marketing.
Trade area analysis and mapping tell you:
• Where a store’s customers are coming from
• How many customers you have in a trade area

Retail Marketing : 70 • Where to look for more customers

Benefits of Trade Area Analysis Decision on
Retail Location
• Identify gaps or overlaps in the market coverage of your existing
store network, and make corrections by opening, closing or moving
stores. NOTES
• Make better site selection decisions by using characteristics of
existing trade areas to predict trade areas around potential locations.
• Define a geographic area to analyze for market potential, market
penetration, and competitive threats.
• Become more efficient and effective at target marketing by reaching
out only to those customers and prospects in a store’s trade area.
• Use as a key input into customer profiling

4.8 Summary
A primary goal of retail marketing is understanding the connections
between the customer’s lifestyle and spending characteristics and why they
choose one product over another. Businesses must test to ensure that they
are sending the appropriate message to the appropriate households. To
increase customer loyalty, businesses must develop relationships with
customers, continually selling the value of the product in their situation.
Strip malls and other attached, adjoining retail locations will also
have guidelines or rules for how they prefer their tenants to do business.
Retailers have realized the advantages of reflecting an ethical sense in
business operations. The organizational environment plays a major role in
the kind of ethical sense the employees possess.

4.9 Key Terms

Convenience Goods : A convenience good is a consumer item that is
widely available and purchased frequently with minimal effort.
Retail Outlets : A store that sells smaller quantities of products or services
to the general public.
Retail Marketing : 71
Decision on Retail Location : A space used for the selling of goods to consumers.
Retail Location

4.10 Questions and Exercises

NOTES
1. Explain about types of locations.
2. Discuss about location and retail strategy.
3. Explain the legal considerations.
4. What do you know about trade area characteristics?
5. Analyze the potential sales of a store site.
6. Discuss about negotiating lease.
7. Discuss about common area maintenance.

4.11 Further Reading and References

• Bajaj, Tuli and Srivastava, Retail Management, New Delhi: Oxford
University Press
• Gibson G. Vedamani, Retail Management, Mumbai: Jaico
Publishing House
• Lewison, D. M. and Delozier, W. M., Retailing, Columbus: Merrill
Publishing Co.
• http://infolab.cs.unipi.gr/pubs/confs/NTmarketing07.pdf
• http://retail.about.com/od/location/a/retail_location.htm
• http://www.ccim.com/cire-magazine/articles/retail-location-
strategies
• http://www.icmrindia.org/courseware/Retail%20Management/
Ethical-Legal%20Issues-Retailing.htm

Retail Marketing : 72
 Management of Retail
UNIT 5 : MANAGEMENT OF Business

RETAIL BUSINESS NOTES

5.0 Unit Objectives
5.1 Introduction
5.2 Retail Market Segmentation & Strategies
5.2.1 Market Segmentation
5.2.2 Types of Retail Markets
5.2.3 Retail Strategy
5.2.4 Strategies for Effective Market Segmentation
5.2.5 Strategies for Market Penetration
5.2.6 Growth Strategies
5.3 Retail Business Location
5.3.1 Importance of Location in Retail Business
5.3.2 Types of Business Locations
5.3.3 Factors Determining Retail Locations
5.3.4 Steps to Choose the Right Retail Location
5.3.5 Measuring the Success of Location
5.4 Merchandise Management
5.4.1 Merchandising
5.4.2 Factors Influencing Merchandising
5.4.3 Functions of a Merchandising Manager
5.4.4 Merchandise Planning
5.4.5 Merchandise Buying
5.4.6 Merchandise Performance
5.5 Retail Business Operations
5.5.1 Store Management
5.5.2 Premises Management
5.5.3 Inventory Management
5.5.4 Receipt Management
5.5.5 Supply Chain Management and Logistics Retail Marketing : 73
Management of Retail 5.5.6 Customer Service
Business
5.6 Retail Space Management
5.6.1 Space Management

NOTES 5.6.2 Optimum Space Use

5.6.3 Retail Floor Space
5.6.4 Store Layout and Design
5.6.5 Store Design
5.7 Summary
5.8 Key Terms
5.9 Questions and Exercises
5.10 Further Readings and References

5.0 Unit Objectives

After reading this unit you should be able to:
• Describe and discuss retail marketing strategies.
• Identify appropriate retail business location.
• Explain merchandise management.
• Differentiate between organized and unorganized retail.
• Discuss retail business operations.

5.1 Introduction
The distribution of goods and services starts with the manufacturer
and finishes at the purchaser. Between the maker and shopper there is a
middle man – who is retailer and bridges the gap between the producer
and the consumer. The word “Retail” is derived from the French word
retailer which implies “ to cut a piece off’ or to break mass. India has
frequently been known as a country of retailers. Probably the purpose

Retail Marketing : 74
behind this is; that, an extensive number of retail endeavors exist in India.
In India there are over 15 million mom-and-pop stores98% are little Management of Retail
Business
privately-owned companies, using just family work.

5.2 Retail Market Segmentation & NOTES

Strategies
Market segmentation gives a practical understanding of the retail
clients’ necessities. With the unique comprehension of business sector
division, retail managers and marketing personnel can formulate strategy to
contact the clients with particular needs and preferences.
“Market segmentation is the natural result of vast differences among
people.”
Donald Norman (Director, the Design Lab)

5.2.1 Market Segmentation

It is a procedure by which the clients are partitioned into identifiable
gatherings in view of their item or administration prerequisites. Market
division is exceptionally valuable for the advertising power of the retail
association to make a custom promoting blend for particular gatherings.
Check Your Progress
For example, retailers or manufacturers of the most extreme high fashion
apparel may only sell their clothing in exclusive markets like New York How many types of
retail markets are there?
City and Los Angeles. Market division can likewise be directed in light of
client’s sex, age, religion, nationality, society, calling, and inclinations.

5.2.2 Types of Retail Markets

There are two types of retails “Organized Retail and Unorganized
Retail”.
A. Organized Retail : ‘Organized Retail refers to the set-up of
any retail chain supported by a well defined Supply Chain
which usually has a small number of middlemen when
compared to the unorganized sector. Retail Marketing : 75
Management of Retail B. Unorganized Retail : “Unorganized retailing” is defined as an
Business
outlet which is run locally by the owner or the caretaker of a
shop who lacks the technical and the accounting standardization.
The supply chain and the sourcing are also usually done locally
NOTES
to meet the local needs.

The following are differences between organized retail and

unorganized retail :
1. Scale of Operations: The scale of operations in organized
retail market is large i.e. expanded worldwide where as in
unorganized retail market it is small and limited locally.
2. Employees: The employees are professional, skilled and
trained in organized retail market where as in unorganized
retail market employees are not professionally trained.
3. Number of Stores : There is chain of multiple stores in
organized retail market whereas in unorganized retail market
the store number is limited to 2-3 stores within the city or
nearby places.
4. Ambience of Store : The ambience of store in organized
retail market is very pleasant and attractive vice versa in
unorganized retail market i.e. there is lack of good
ambience.
5. Bargaining : Pricing policy does not depend on customer
relationship so here bargaining has no scope in organized
retail market while in unorganized retail market Pricing
policy depends on customer relationship so bargaining is
possible in unorganized retail market.
6. Shopping experience : Shopping experience is excellent,
memorable, engaging in organized retail market while in
unorganized retail market it is average.
7. Range of products : In organized retail market there is
Retail Marketing : 76 availability of wide range of products across the nations
 while in unorganized retail market only a range of Management of Retail
Business
local products is available.
8. Source of merchandise : It is marketed or sold directly
through manufacturer or producer in organized retail
NOTES
market where as in unorganized retail market it is traded
mostly through wholesalers.
9. Convenience of choosing products : Convenience of
choosing products is very high, so that customer can freely
walk around and choose the product while in unorganized
retail market it is very less.
10. Examples : Reliance, D-mart, Star Bazaar, Central Mall
are examples of organized retail market and standalone
shops in any cities are examples of unorganized retail
market.

5.2.3 Retail Strategy

It is an arrangement planned by a retail association on how the
business means to offer its items and services to the clients. There can be
different systems, for example, stock methodology, own-image technique,
advancement procedure, to give some examples. The retailer’s objective
business sector, Retail design the retailer works out to fulfill the objective
business sector’s needs and Sustainable upper hand are components of
retail methodology.

5.2.4 Strategies for Effective Market

Segmentation
For viable business sector division, the accompanying two
methodologies are utilized by the showcasing power of the association:
1. Concentration (Niche) Strategy : Under this
methodology, an association centers following expansive
offer of one and only or not many segment(s). This Retail Marketing : 77
Management of Retail procedure gives a differential preferred standpoint over
Business
contending associations which are not exclusively focusing
on one section. For instance, Toyota utilizes this technique

NOTES by offering different models under half breed vehicles

market.

2. Multi-segment Strategy : Under this procedure, an

association centers its advertising endeavors on two or more
unique business sector fragments. For instance, Johnson
and Johnson offer human services items in the scope of
child consideration, healthy skin, nutritionals, and vision
watch over the clients of any age.

5.2.5 Strategies for Market Penetration

Market penetration strategies include the following:

1. Price Penetration : It is setting the cost of the item or

administration lesser than that of the contender’s item or
administration. Because of diminished cost, volume may
build which can keep up a respectable level of benefit.
2. Aggressive Promotion : Expanding item or
administration advancement on television, print media,
radio stations, messages, pulls the clients and drives them
to view and profit the item or administration. By offering
rebates, different purchasing plans alongside the additional
advantages can be helpful in high market entrance.
3. High Product Distribution : By appropriating the item
or administration up to the level of immersion helps
entrance of business sector in a better way. For instance,
Coca Cola has a high dissemination and is accessible
wherever from little shops to hypermarkets.
Retail Marketing : 78
 Management of Retail
5.2.6 Growth Strategies Business
On the off chance that a retail association conducts SWOT
Investigation (Quality, Shortcoming, Opportunity, Danger) before
NOTES
considering development techniques, it is useful for breaking down the
association’s present procedure and arranging the development system.

1. Ansoff’s Matrix : An American arranging master named

Igor Ansoff built up a key arranging instrument that
presents four option development procedures. On one
measurement there are items and on the other are markets.

(Source : New Corporate Strategy, 1988, New York Wiley)

This matrix provides strategies for market growth. Here is the

sequence of these strategies:
• Market Penetration: Company concentrates on offering the
current items or administrations in the current business sector for
higher piece of the overall industry.
• Market Development: Company concentrates on offering
existing items or administrations to new markets or market portions. Retail Marketing : 79
Management of Retail • Product Development: Company takes a shot at advancements
Business
in existing items or growing new items for the current business sector.
• Diversification: Company deals with growing new items or
administrations for new markets. RETAIL
NOTES

5.3 Retail Business Location

Before visiting a mall or a shop, the first question that arises in

consumers’ mind is, “How far do I have to walk or drive?”In populous
cities such as Mumbai, Delhi, Banglore, and Chennai to name a few,
consumers face rush-hour traffic jams because of road structure. In such
cases, to access a retail outlet to procure day-to-day needs becomes very
difficult. It is very important for the consumers to have retail stores near to
their residence.

5.3.1 Importance of Location in Retail

Business
Retail location area is additionally a critical component for the
promoting group to consider while setting retail advertising technique. Here
are a few reasons:
• Business area is an odd variable which the contenders can’t mirror.
So, it can give a solid upper hand.
• Selection of retail store is a long term choice.
• It requires long term capital investment.
• Good location is the major component for drawing in clients to the
outlet.
• Locations can change customers purchasing behavior.

5.3.2 Types of Business Locations

A trade zone is a territory where the retailer draws in clients. It is
Retail Marketing : 80 likewise called catchment region. There are three essential sorts of trade
zones: Management of Retail
Business
1. Solitary Sites : These are without single standing shops/outlets,
which are segregated from different retailers. They are situated
on streets or close different retailers or strip malls. They are NOTES
predominantly utilized for nourishment and non-sustenance
retailing, or as comfort shops. For instance, stands, kirana stores
in India.
Advantages:
• It requires very less possession cost.
• It is far from competition.
• It also incurs very less operation limitations.
Disadvantages :
• No pedestrians: As it is located solitary pedestrians
cannot be attracted towards shop.
• Low visibility: It is far from cities so low visibility.

2. Unplanned Shopping Areas : These are retail stores that have

advanced after some time and have numerous outlets in nearness.
They are further separated as:
• Central business locale, for example, conventional
“downtown” territories in urban communities/towns.
• Secondary business locale in bigger urban communities and
primary road or high road areas.
• Neighborhood locale.
• Locations along a road or motorway (Strip areas).
Advantages:
• High passerby activity at business hours.
• High occupant movement.
• Convenient transport center.
Disadvantages:
• High security required.
• Risk of shoplifting. Retail Marketing : 81
Management of Retail • Poor parking facilities.
Business

3. Planned Shopping Areas : These are retail stores that are

NOTES structurally adequate to suit a measure of outlets. These sites

acknowledge expansive, key retail brand stores (also called
“anchored stores”) and a few small stores to include
combination and drag clients’ interest. There are different sorts
of planned shopping centre’s, for example, nearness or strip/
malls, shopping centers, lifestyle centers’, specialty centers,
outlet centers.
Advantages:
• High visibility.
• High customer traffic.
• Excellent parking facilities.
Disadvantages:
• High security required
• High cost of possession.

Check Your Progress

5.3.3 Factors Determining Retail Locations
What is retail business
operation? The retail company needs take into consideration the following
issues while selecting a right location:
1. Size of Catchment Area: Primary (with 60 to 80% clients),
Secondary (15 to 25% clients), and Tertiary (with residual clients
who shop once in a while).
2. Occupancy Costs: Costs of lease/owning are distinctive in various
territories, property charges, area support costs.
3. Customer Traffic: Number of clients going to the area, number of
private vehicles going through the area, number of people on foot
going by the area.
4. Restrictions Placed on Store Operations: Restrictions on working

Retail Marketing : 82
hours, commotion force amid media advancement occasions.
 5. Location Convenience: Proximity to local locations, closeness to Management of Retail
Business
open transport office.

5.3.4 Steps to Choose the Right Retail NOTES

Location
A retail company needs to follow the given steps for choosing
the right location:
Step 1 - Look For : Assess the market area in terms of industry,
product, and competitors. How old is the organization in the
following business? What numbers of practically identical
businesses are there around there? What the new location is
supposed to offer: new products or new market? How far is the
competitor’s retail unit from the organization’s proposed area?

Step 2 - Classification : This step involves classification of

information obtained .Comprehend the Demographics – Literacy
of customers in the fast approaching zone, age groups, profession,
wage groups, lifestyles, and religion indifferent classes.

Step 3 - Selection : Assess the Market Potential along with

Density of masses in the arranged range, desire of contention
impact, estimation of thing solicitation, Knowledge of laws and
regulations in operations.

Step 4 - Find Alternative options : Find Alternative options if

there some other potential location? What is its cost of occupancy?
Which components can be compromised if there is a better location
around?

Step 5 – Settlement : Settle the best and most sensible Location

for the retail outlet. Retail Marketing : 83
Management of Retail
Business
5.3.5 Measuring the Success of Location
Once the retail outlet is opened at the chosen area, it is vital to
monitor how sensible was the decision of the area. To understand this, the
NOTES retail organization does two types of area evaluations:

1. Macro Location Evaluation : It is directed at a national level

when the organization needs to begin a retail business universally.
Under this evaluation, the accompanying strides are done :
• Review : Detailed outside review of the business sector
by dissecting areas as large scale environment, for
example, political, social, monetary, and specialized.
• Record : Most essential components are recorded, for
example, client’s level of spending, level of rivalry, Personal
Disposable Income (PDI), accessibility of areas, and so
on.
• Select : The same variables recorded above are
considered for neighborhood locales inside the selected
nations to locate a solid area.

2. Micro Location Evaluation : At this level of assessment, the

area is evaluated against four elements to be specific :
• Population: Desirable number of reasonable clients who
will shop.
• Infrastructure: The extent to which the store is available
to the potential clients.
• Store Outlet: Identifying the level of contending stores
(those which the diminishing engaging quality of an area)
and also correlative stores (which increment allure of an
area).
• Cost: Costs of improvement and operation. High startup
and progressing costs influence the execution of retail
Retail Marketing : 84 business.
 Management of Retail
5.4 Merchandise Management Business

In the wild rivalry of retail, it is exceptionally critical to pull in new

clients and to keep the current clients cheerful by offering them brilliant NOTES
administration. Promoting helps in accomplishing much more than just deals
can accomplish.
Promoting is basic for a retail business. The retail supervisors must
utilize their aptitudes and instruments to streamline the marketing procedure
as smooth as could be expected under the circumstances.

5.4.1 Merchandising
Merchandising is the succession of different exercises performed
by the retailer, for example, arranging, purchasing, and offering of items
to the clients for their utilization. It is a vital piece of taking care of store
operations and e-business of retailing.

Merchandising presents the items in retail environment to impact

the customer’s purchasing choice.

Types of Merchandise
There are two basic types of merchandise :

Staple Merchandise Fashion Merchandise

It has predictable demand It has unpredictable demand

History of past sales is available Limited past sales history is

available

It provides relatively accurate It is difficult to forecast sales

forecasts

Retail Marketing : 85
Management of Retail
Business
5.4.2 Factors Influencing Merchandising
The following factors influence retail merchandising:

NOTES 1. Size of the Retail Operations : This incorporates issues, for

example, how expansive is the retail business? What is the
demographic extent of business: neighborhood, national, or global?
What is the extent of operations: immediate, online with multilingual
choice, TV, telephonic? How expansive is the storage room? What
is the day by day number of clients the business is required to
serve?

2. Shopping Options : Today’s clients have different shopping

stations, for example, in-store, by means of electronic media, for
example, Internet, TV, or phone, index reference, to give some
examples. Each choice requests distinctive arrangements of
marketing assignments and specialists.

3. Separation of Portfolios : Depending upon the span of retail

business, there are workforces for taking care of every phase of
promoting from arranging, purchasing, and offering the item or
administration. The little retailers may utilize several people to
execute all obligations of promoting.

5.4.3 Functions of a Merchandising

Manager
A Merchandising manager is generally responsible to following:
• Lead the promoting group.
• Ensure the promoting procedure is smooth and auspicious.
• Coordinate and speak with suppliers.
• Participate in planning, setting and meeting deals objectives.
• Train the representatives in the group.
Retail Marketing : 86
 Management of Retail
5.4.4 Merchandise Planning Business
Merchandising is a vital procedure so as to build benefits. This
incorporates long term arranging of setting deals objectives, edge
NOTES
objectives, and stocks.

Step 1 : Define stock strategy. Get a 10,000 foot perspective of existing

and potential clients, retail location picture, stock quality and client
administration levels, showcasing approach, lastly sought deals
and benefits.
Step 2 : Collect verifiable data. Assemble information about any convey
forward stock, all out stock buys and deals figures.
Step 3 : Identify Components of Planning.
Clients : Loyal clients, their purchasing conduct and spending
power.
Departments : What offices are there in the retail business, their
sub-classes?
Vendors : Who conveyed the right item on time? Who gave
rebates?
Merchant’s general execution with the business.
Current Trends : Finding pattern data from sources including
exchange productions, stock suppliers, rivalry, different stores
situated in remote grounds, and from own experience.
Advertising : Pairing purchasing and publicizing exercises
together, thought regarding last effective advancements, spending
distribution for Ads.
Step 4 : Create a long haul arrangement. Investigate chronicled data,
anticipate gauge of offers, and make a long haul arrangement, say
for six months.

5.4.5 Merchandise Buying

This activity includes the following: Retail Marketing : 87
Management of Retail Step 1 Collect Information: Gather data on customer request, current
Business
patterns, and market prerequisites. It can be gotten inside from
workers, criticism/protest boxes, request slips, or remotely by
NOTES sellers, suppliers, contenders, or by means of the Internet.
Step 2 Determine Merchandise Sources: Know who all can fulfill the
interest: merchants, suppliers, and makers. Look at them on the
premise of costs, convenience, ensure/guarantee offerings,
installment terms, and execution and selecting the best doable
resource(s).
Step 3 Evaluate the Merchandise Items: By experiencing test items,
or the complete parcel of items, survey the items for quality.
Step 4 Negotiate the Prices : Realize a decent arrangement of
procurement by arranging costs for mass buy.
Step 5 Finalize the Purchase: Finalizing the item costs and purchasing
the stock by executing purchasing exchange.
Step 6 Handle and Store the Merchandise : Deciding on how the
seller will convey the items, looking at item pressing, securing the
item, and stocking a piece of items in the storage facility.
Step 7 Record the Buying Figures: Recording subtle elements of
exchanges, number of unit bits of items as indicated by item
classifications and sub-classes, and individual unit costs in the stock
administration arrangement of the retail business.

Vendor Relations
Welcoming association with the merchant can be an awesome
resource for the business. A solid compatibility with merchants can prompt:
• Purchasing items when required and paying the seller for it later as
indicated by credit terms.
• Getting the most recent new items in the business sector at
markdown costs or before different retailers can offer them.
• Having an incredible administration of conveyance, convenience
Retail Marketing : 88 of conveyance, returning broken items with trade, and so forth.
 Management of Retail
5.4.6 Merchandise Performance Business
The following methods are commonly practiced to analyze
merchandise performance:
NOTES
ABC Analysis : It is a procedure of stock arrangement in which
the aggregate stock is ordered into three classifications:
A - Extremely Important Items: Very significant stock control on
request planning, security, brief investigation, utilization design,
stock equalization, refill requests.
B - Moderately Important Items: Average consideration is paid
to them.
C - Less vital Items: Inventory control is totally stretch free.

This methodology of isolation offers significance to everything in

the stock. For instance, the telescope retailing organization may have little
piece of the overall industry yet every telescope is a costly thing in its
stock. Along these lines, an organization can choose its venture approach
specifically things.
1. Sell-Through Analysis : In this technique, the real deals and
gauge deals are contrasted and the distinction is examined with
figure out if to apply markdown or to put a crisp solicitation for
extra stock to fulfill current interest.
This technique is exceptionally useful in assessing design stock
execution.
2. Multi-Attribute Method : This technique depends on the idea
that the clients consider a retailer or an item as an arrangement of
components and characteristics. It is utilized to dissect different
options accessible as to merchants and select the best one, which
fulfills the store prerequisites.

5.5 Retail Business Operations

The retail business operations incorporate every one of the Retail Marketing : 89
Management of Retail exercises that the businesses perform to keep the store working easily.
Business
The shopping background of a client is arranged before the client enters,
shops, and leaves the store with a grin or with distress via conveying an
NOTES observation about the store. This experience drives the client’s choice of
going to the store in future.
Let us see, what endeavors retail business operations officials
put into make the shopping background critical for the client.

5.5.1 Store Management

The retail location being the basic wellspring of income and the
spot of client association is fundamental to the retailer.
The store supervisor may not himself perform, but rather is in
charge of the accompanying obligations:
• Maintaining cleanliness in the store.
• Ensuring sufficient supply of stock in the store.
• Appropriate arranging, planning, and association of staff, stock
and costs, for short and long term achievement.
• Monitoring the calamity and taking preventive measures to secure
the organization’s advantages and items in the store.
• Upgrading store to reflect high beneficial picture.
• Communicating with head office/local office when required.
• Conducting productive gatherings with staff to help their confidence
and spur the staff to accomplish deals objectives.
• Communicating with clients to recognize their necessities,
grievances, and grumblings.
• Ensuring that the store is in consistence with occupation laws in
regards to pay, work hours, and equivalent business open doors.
• Writing execution evaluations for helping staff.
The store director guarantees that these obligations are performed
by rules set by the organization.
Retail Marketing : 90
 Management of Retail
5.5.2 Premises Management Business
The store premises are as very important as the retail location
itself. Managing premises include the additional tasks:
NOTES
Deciding working hours of store: It significantly relies on the
intended interest group, retailed items, and store area. For instance, a
supermarket close local location ought to open sooner than a design store.
Additionally, a single store can be open the length of the proprietor needs
to yet a store in a shopping center needs to hold fast to working hours set
by the shopping center administration.
Overseeing Store Security: It helps keeping away from stock
shrinkage. It relies on the measure of store, the item, and the area of store.
A few retailers append electronic labels on items, which are detected at
store passage and ways out by sensors for robbery location. A few stores
introduce camcorders to screen development and some give separate
passage and way out to work force with the goal that they can be checked.
For instance, a substantial departmental store needs high security
than the market situated close neighborhood.
Here are some basic formulae used while managing premises:

Transaction per Hour = No. of Transactions/Number of Hours

The retailer keeps track of the number of transactions per
hour, which helps in determining store hours and staff scheduling.

Sales per Transaction = Net Sales/Number of Transactions

The result gives the value of the average sales and net return,
which is used to study sales trends over time.

Hourly Customer Traffic = Customer Traffic In/Number of Hours

This measure is utilized to track absolute number of client
movement per unit time. It is then connected to calendar hours and
decides staff quality.
Retail Marketing : 91
Management of Retail
Business
5.5.3 Inventory Management
Stock director, classification supervisor, and other staff handle the
stock. It incorporates the following assignments:
NOTES • Receiving items from the merchant.
• Recording internal passage of the items.
• Checking the items against quality standards laid by the retail
organization and for subtle elements, for example, hues, sizes, and
styles. In the event of substantial stores, this errand is mechanized
to an expansive degree.
• Separating and reporting the broken or harmed items for returning.
• Displaying the items properly to pick up clients’ consideration.
Overwhelming items are kept at the lower level. Most got to items
are kept at the eye-level and the less got to items are kept at
abnormal state of racks. On-the-fly-acquired items, for example,
chocolates, confections, and so on are put close installment
counters.

Here are a few formulae utilized for stock control:

Inventory Turnover Rate = Net Sales/Average Retail Value
of Inventory
It is expressed in number of times and indicates how often the
inventory is sold and replaced during a given period of time.

Cost of Goods Sold/Average Value of Inventory at Cost

When either of these ratio declines, there is a possibility that
inventory is excessive.

% Inventory Carrying Cost = (Inventory Carrying Cost/Net

Sales) * 100
This measure has gained importance due to rise in inventory
carrying cost because of high interest rates. This prevents blockage
Retail Marketing : 92 of working capital.
 Gross Margin Return on Inventory (GMROI) = Gross Management of Retail
Business
Margin/Average Value of Inventory
The GMROI compares the margin on sales on the original
cost value of merchandise to yield a return on merchandise investment. NOTES

5.5.4 Receipt Management

Overseeing receipt is only deciding the way in which the retailer is
going to get the installment for the sold items. The essential methods of
receipt are:
• Cash
• Credit card
• Debit card
• Gift card
Extensive stores have the office of paying by the modes recorded
above however little retailers by and large favor tolerating money. The
retailer pays card charges relying on the volume of exchanges with the
suppliers, makers, or makers.
The staff in charge of tolerating installment needs to unmistakably
comprehend the methodology for tolerating installment via cards and
gathering the sum from the bank.

5.5.5 Supply Chain Management and

Logistics
Supply Chain Management (SCM) is the administration of
materials, data, and accounts while they move from producer to wholesaler
to retailer to purchaser. It includes the exercises of planning and coordinating
these streams inside and out of a retail business.
Most supply chains work in joint effort if the suppliers and retail
organizations are managing each other for quite a while. Retailers rely on
inventory network individuals as it were. In the event that the retailers
build up a solid organization with inventory network individuals, it can be Retail Marketing : 93
Management of Retail valuable for suppliers to make consistent systems, which are hard to
Business
represent.

NOTES 5.5.6 Customer Service

The top administration of a retail business chooses the client
administration strategy. The whole retail location staff is prepared for client
administration. Every business in the retail location guarantees that the
administration begins with smile and the interfacing client is agreeable and
has a wonderful shopping background. The quickness and amenability of
the retail location staff, their insight about the item and dialect, capacity to
beat difficulties, and speed at the charging counter; everything is noted by
the client. These angles make a lot of client’s recognition about the store.
Numerous retail locations train staff individuals to handle the money counter.
They have likewise presented an idea of express charging where clients
purchasing less than 10 items can charge quicker without standing in the
normal installment line.
During festivals and markdown periods, the trend of shopping
increases.
Customer Conversion Ratio = (Number of Transactions/
Customer Traffic) * 100
The outcome is the retailer’s capacity to transform a potential
client into a purchaser. It is additionally called “stroll to purchase proportion”.
Low results imply that limited time exercises are not being changed over
into deals and the general deals endeavors should be surveyed once more.

5.6 Retail Space Management

Space administration is one of the urgent difficulties confronted
by today’s retail chiefs. An all around sorted out shopping place builds
efficiency of stock, improves clients’ shopping background, diminishes
working expenses, and increments monetary execution of the retail location.
Retail Marketing : 94 It additionally lifts the odds of client devotion. Give us a chance to see,
how space administration is essential and how retailers oversee it. Management of Retail
Business

5.6.1 Space Management

It is the way toward dealing with the floor space sufficiently to NOTES

encourage the clients and to expand the deal.

Since store space is a constrained asset, it should be utilized
shrewdly.
Space administration is exceptionally critical in retail as the business
volume and gross productivity relies on upon the measure of space used
to create those deals.

5.6.2 Optimum Space Use

While assigning the space to different items, the supervisors need
to consider the accompanying focuses:
• Product Category:
ü Profit manufacturers: High overall revenues low deals
items. Designate quality space instead of amount.
ü Star entertainers: Products surpassing deals and net
revenues. Assign extensive measure of value space.
ü Space wasters: Low deals low net revenues items. Put
them at the top or base of racks.
ü Traffic manufacturers: High deals low overall revenues
items. These items should be shown near drive items.
• Size, shape, and weight of the item.
• Product adjacencies – It implies which items can exist together
in plain view?
• Product life on the rack.

5.6.3 Retail Floor Space

Here are the steps to take into consideration for using floor space
effectively: Retail Marketing : 95
Management of Retail • Measure the aggregate territory of space accessible.
Business
• Divide this territory into offering and non-offering ranges, for
example, walkway, stockpiling, special presentations, client bolster

NOTES cell, (trial rooms if there should be an occurrence of attire retail)

and charging counters.
• Create a Planogram; a pictorial outline that portrays how and where
to place particular retail items on racks or shows keeping in mind
the end goal to build client buys.
• Allocate the offering space to every item classification. Decide the
measure of space for a specific class by considering recorded and
anticipated deals information. Decide the space for charging
counter by alluding recorded client volume information. If there
should be an occurrence of apparel retail, dispense a different
space for trial rooms that is close to the item show however far
from the charging region.
• Determine the area of the item classes inside the space. This helps
the clients to find the required item effectively.
• Decide item adjacencies coherently. This encourages different item
buy. For instance, pasta sauces and flavors are kept close crude
pasta parcels.
• Make utilization of unpredictable formed corner space carefully.
A few items, for example, residential cleaning gadgets or
greenhouse furniture can remain in a corner.
• Allocate space for limited time shows and plans confronting
towards street to inform and draw in the clients. Use glass dividers
or entryways shrewdly for advancement.

5.6.4 Store Layout and Design

Client purchasing conduct is an essential purpose of thought while
planning store format. The destinations of store format and plan are:
• It ought to draw in clients.
Retail Marketing : 96
 • It ought to help the clients to find the items easily. Management of Retail
Business
• It ought to help the clients invest longer energy in the store.
• It ought to inspire clients to make spontaneous, hasty buys.
• It ought to impact the clients’ purchasing conduct. NOTES
Store Layout Formats
The retail location formats are outlined in approach to utilize the
space effectively. There are extensively three mainstream formats for
retail locations:

1. Grid Layout : Mainly used in grocery stores.

2. Loop Layout: Used in shopping centers and departmental stores.

Retail Marketing : 97
Management of Retail 3. Free Layout: Followed mainly in luxury retail or fashion stores.
Business

NOTES

5.6.5 Store Design

Both inner and outside variables matter with regards to store outline.
1. Interior Design : The store inside is the territory where clients
really search for items and make buys. It specifically adds to
impact client basic leadership. In incorporates the accompanying:
• Clear and satisfactory strolling space, separate from
item show range.
• Free standing showcases: Fixtures, rotational
presentations, or mannequins introduced to draw in
clients’ consideration and convey them to the store.
• End tops: These showcases toward the end of the
passageways can be utilized to show limited time
offers.
• Windows and entryways can give visual messages
about stock on special.

2. Exterior Design : This territory outside the store is as speaks

with the client on incorporates: much imperative as the inside of
Retail Marketing : 98
 the store. It who the retailer is and what it remains for. The exterior Management of Retail
Business
includes:
• Name of the store, which tells the world that it exists. It can
be a plain painted board or as extravagant as a stylishly
NOTES
outlined computerized leading body of the outlet.
• The store passageway: Standard or programmed, glass,
wood, or metal, width of the passage.
• The cleanliness of the range around the store.
• The feel used to draw the clients inside the store.

5.7 Summary
Retailing is sale of product and services to the end consumer for
private and domestic use. The pivotal element in this unit is evolving retail
strategy and how it should be used to achieve competitive advantage over
its competitor retail shops. Retailers may be classified by form of ownership
and key marketing strategies. Also, types of retailers distinguished according
to product variety, price and customer service levels. Franchising in particular
is growing considerably. Each type has advantages as well as drawbacks.
The Indian retail sector is mostly long-established but stores in modern
layout are rising. Though the part of organized retailing in the retail sales in
India has been little in the last decade, but currently it is speeding up very
fast and expanding their operations not only in metros but in other cities.
Recent management techniques are used in managing the associations of
retail sector. Firms will need to actively assess their sales structures, brand
activates, logistics policy and price structure to cope with pressures from
powerful retailers. Information communication technology now helps retailers
and suppliers to share information and change shared business practices in
ways that would have been idealistic in the recent past. The success of any
retail operation is basically depending on the retailer’s ability to supply the
right commodities to the consumer, at the right place and at the right time. It
is for this reason that the role of merchandising plays a key function in retail. Retail Marketing : 99
Management of Retail
Business 5.8 Key Terms
Space Management : It is the way toward dealing with the floor space
sufficiently to encourage the clients and to expand the deal.
NOTES
Store Design : Both inner and outside variables matter with regards to
store outline.
Retail floor space : Division of space into offering and non-offering
ranges, for example, walkway, stockpiling, special presentations, client
bolster cell, (trial rooms if there should be an occurrence of attire retail)
and charging counters
Supply chain management (SCM) : It covers the whole gamut of
activities from a vendor’s vendor to the manufacturer till the end customer.
Organized retail : Refers to the organizations indulging in retailing as
their business

5.9 Questions and Exercises

1. What is retail market segmentation, Explain in your words?
2. How many types of retail markets are there?
3. Enlist various growth strategies and explain in short?
4. Describe about retail business location and its importance?
5. What are the steps involved in selection of optimum retail location?
7. Explain various types of business locations and factors determining
retail location?
8. What is merchandising management and explain functions of
merchandising manager?
9. Explain the concepts
a) Merchandise planning
b) Merchandise Buying
c) Merchandise Performance
10. What is retail business operation? Elaborate?
Retail Marketing : 100
11. Differentiate between store management and premises management? Management of Retail
Business
12. What is retail space management?

5.10 Further Reading and References NOTES

• Chetan Bajaj, Tuli & Srivastava, RETAIL MANAGEMENT,

Oxford University Press, New Delhi.2010

• Ron Hasty and James Reardon, RETAIL MANAGEMENT.

McGrawHill Publication, International Edition.

• Fernie, PRINCIPLES OF RETAILING, Elsevier Publishing, 2010

• James Reandom, RETAIL MANAGEMENT

• Giridhar Joshi, INFORMATION TECHNOLOGY FOR RETAIL,

Oxford University Press, New Delhi.2009

• Swapna Pradhan, RETAIL MANAGEMENT, TEXT & CASES,

Tata McGraw-Hill Publishing Co, New Delhi, 2008

•7. Michael Levey, Barton A.Weitz and Ajay Pandit (2008), Retailing

Management, Tata McGraw Hill, New Delhi.

• Mark Wrice (2004), First Steps in Retail Management, Macmillan

Publishers Australia Pvt.Ltd. Australia.

• Kapil Sharma (2009), Marketing Management, Global India

Publication Pvt.Ltd. New Delhi.

• Gibson G.Vedamani (2003), Retail Management, Jaico Publishing

House, New Delhi

Retail Marketing : 101

 NOTES

Retail Marketing : 102

 Retail Branding
UNIT6: RETAIL BRANDING AND and Positioning

POSITIONING NOTES
6.0 Unit Objectives
6.1 Introduction
6.2 Retailers as Brands
6.3 Advantages of a Retail Brand
6.4 Brand Architecture
6.5 Retail Brand Positioning
6.6 Retail Brand Image
6.7 Principles of Successful Retail Branding
6.8 Summary
6.9 Key Terms
6.10 Question and Exercises
6.11 Further Reading and References

6.0 Unit Objectives

Afetr reading this unit, you should be able to explain the concept
of retail branding and the advantages of establishing and strengthening
the retail brand. The brand architecture of retailers, approaches to
measuring brand equity, the concept of brand positioning and principles
of successful retail brand management are discussed.

6.1 Introduction
Even though retailing has long had the opportunity to be marketing
oriented because retailers are in closer contact with customers than
manufacturers, mass retailing has been slow to take advantage of this
aspect. Higher priority has been placed on buying decisions, operational
concerns and short-term objectives than on strategic marketing concepts Retail Marketing : 103
Retail Branding (Mulhern 1997). A lack of a well-defined differentiation from competitors
and Positioning
has been a frequently criticized consequence in many retail sectors.
However, this has changed. Mainly as a result of changing industry

NOTES conditions and increasing management capability in retail companies, a

change of attitude towards strategic marketing can be observed. Within the
context of strategic marketing, the relevance of establishing a clear-cut and
differentiated profile is clearly recognized by retailers, and retail brands are
systematically being established and managed (Morschett 2006).

6.2 Retailers as Brands

While in the past, the term brand has been applied mainly to
manufacturer brands (such as Coca-Cola, Nokia or Gillette), the brand
concept can be applied to all kind of products and services, including
retailers (Keller 2003).
Some authors define a brand as a name or formal sign. According
to the American Marketing Association, a brand is a “name, term, design,
symbol, or any other feature that identifies one seller’s good or service as
distinct from those of other sellers” (www.ama.org). However, separating
the brand name from the product or service alters the nature of the brand.
If one were to take the IKEA logo and link it to a grocery supermarket, it
may keep part of its brand strength, but the character of the brand would
change with the under lying product. Other definitions therefore encompass
the brand name (or brand logo, brand sign) and the branded product to
define a brand: “A brand is therefore a product, but one that adds other
dimensions that differentiate it in some way from other products designed
to satisfy the same need” (Keller 2003).
Retail branding is a strategy based on the brand concept and which
transfers it to a retail company. A retailer’s “products” are his stores that
can be marketed in a similar way to a branded good. A retail brand is then
a group of the retailer’s outlets which carry a unique name, symbol, logo or

Retail Marketing : 104 combination thereof. While all retailers constitute brands to some extent,
some retail brands are strong, while many are not. Recognition and Retail Branding
and Positioning
appreciation by consumers are the essential elements of a strong retail
brand (Morschett 2002). Retail branding can be understood as a
comprehensive and integrated marketing management concept, focusing NOTES
on building long-term customer loyalty and customer preference.
The term retail brand has to be distinguished from the term store
brand (see Chapter 8). While retail brand refers to stores (e.g. B&Q, Lidl,
FNAC), the term store brand refers to the product level and is used
synonymously with private label. Often, the retail brand is also used to
label the store brands, though this is not a universal characteristic (Wileman/
Jary 1997).
Retail brands are characterized by enormous complexity, which
results from the service attributes of retailers as well as from the multiplicity
of brand attributes and consumer retailer interactions. While manufacturers
frequently offer only a few products under one brand and the industrial
production process is completed through quality control, customer
experience with the retail brand is often shaped by several hundred outlets,
with different locations and store designs, thousands of products, and dozens
of employees in each store, who are also influenced by their moods and
emotions. A uniform, consistent, and standardized performance and brand Check Your Progress
Define the concept of
message is therefore difficult to convey (Wileman/Jary 1997, pp. 40,42).
branding in retail?

6.3 Advantages of a Retail Brand

Establishing a strong brand can be the key to long-term
performance (Aaker 1996, p. vii) by providing the retailer with considerable
advantages (Keller 2003, Morschett 2002,Bruhn 2005).
An existing retail brand strengthens brand awareness and
differentiation from the competition, because it can serve as an anchor for
associations with the brand. An established brand enhances the effect of
marketing measures. In an age of increasing consumer information overload,
established and well-known brands receive more attention than unknown Retail Marketing : 105
Retail Branding brands. For example, advertising for strong retail brands is more likely to
and Positioning
be perceived and recognized by the consumer, resulting in a higher efficiency
of marketing budgets.
From the consumer perspective, strong retail brands simplify the
NOTES
purchasing process because there is already some knowledge about the
retailer and buyers do not have to search for additional information about
assortments, prices, service, etc. Strong retail brands also reduce perceived
purchasing risk. Buying well-known product brands as well as from well-
known and trusted retail brands are purchasing strategies which aim at risk
reduction. Consequently, strong retail brands may lower the price sensitivity
of consumers. A well-defined brand profile can establish a preference
position that allows a retailer to minimize price competition.
Strong brands exert halo-effects. A positive general attitude towards
the brand in total positively influences the perception of all specific brand
attributes. Considering the impact of these evaluations on the general attitude,
a virtuous cycle can develop.
Strong brands not only represent functional benefits, they can also
serve as symbolic devices. They represent different values, traits, and
characteristics. Shopping at a certain retailer might, therefore, allow
consumers to project a certain self-image to themselves and others.
If a retail company operates in different market segments, differentiated
marketing with different retail brands facilitates approaching each market
segment with a targeted approach. Cannibalization is easier to avoid and
each retail brand can develop its own image – without contradictory image
transfers. Conversely, a strong brand can be used as a platform for
expansion. This already occurs when retailers open new outlets, which,
from the very start, are loaded with a certain image. Franchising concepts,
in which the retail brand is transferred to independent shop owners, clearly
illustrate this advantage. A strong retail brand can also facilitate diversification
into new product ranges. This type of brand extension occurs when retailers
use their image in one merchandise category to expand into additional
Retail Marketing : 106 categories.
 These advantages are enjoyed especially by strong retail brands. Retail Branding
and Positioning
However, the measurement of brand equity is not easy and there is no
generally agreed upon concept. Nonetheless, measurement approaches
can generally be classified into two streams, which also differ in their
NOTES
definition of brand equity (Lassar/Mittal/Sharma 1995)

• Financially oriented, monetary approaches

• Consumer oriented approaches.

The following definition is typical of the monetary approach: “Brand

equity can be thought of as the additional cash flow achieved by associating
a brand with the underlying product or service” (Biel 1992). For example,
using a complex formula to forecast future revenues for the brand and
capitalizing them into a present value, the consulting company Inter brand
estimates that the world’s most valuable brand is Coca Cola with a brand
equity of about 67 billion USD. The most valuable global retail brands in
the Interbred ranking are Dell (13.2 billion USD), The Gap (8.2 billion
USD), IKEA (7.8 billion USD) and Zara (3.7 billion USD) (Business
Week, 1.8.2005, www.interbrand.com).
While in some situations, deriving a monetary brand value is
important (e.g. for the purpose of selling or licensing the brand), the equity
is the result of a long-term investment in the brand. For brand management,
consumer oriented brand equity concepts might be more appropriate and
sensitive to changes. Here, Keller (1993) provides a typical definition: A
brand is said to have positive customer based brand equity when consumers
react more favorably to an element of the marketing mix for the brand
than they do to the same marketing mix element when it is attributed to a
fictitiously named or unnamed version of the product or service. This type
of brand equity or brand strength is developed in the mind of the consumer
and the consumer’s attitude towards the brand, his associations and
experiences with the brand, his evaluation of the brand quality are the
most important aspects of measuring brand equity. Retail Marketing : 107
Retail Branding Different researchers propose different indicators for measuring
and Positioning
consumer oriented brand strength, which can, aggregated or individually,
be considered when managing the brand and when evaluating the success

NOTES of certain marketing measures (e.g. Aaker 1996, Lassar/Mittal/Sharma

1995; Zentes/Morschett 2002). Indicators of consumer oriented retail
brand equity are, for instance:
• Brand awareness
• Trustworthiness of the brand
• Customer satisfaction with the brand/customer loyalty to the brand
• Brand liking
• Brand differentiation.
Some other indicators suggested in literature for brand equity are
not generally appropriate for retail brands. Price premiums, for instance,
are sometimes used for evaluating brand value. Many successful retailers,
however, emphasize their low prices, and trade off potential price premiums
for higher sales volumes or higher sales productivity.

6.4 Brand Architecture

As defined above, a retail brand refers to the level of the store.
However, the brand system of a retailer is more complex. Brand
architecture refers to the internal structuring of the retailer’s brands and
revolves around how many and what kinds of offers are provided under a
certain brand (Aila,wadi/Keller 2004). Within the brand hierarchy, a
retailer’s brands can be divided into different levels (Keller 2003). Retailers
have brand names at the level of the retail company as a whole (“corporate
brand”), the retail stores, the merchandise (e.g. the store brands), and
specific retail services (i.e. banking services or loyalty programmes). Besides
the individual branding decision at each level, the interconnection between
the levels has to be considered.
As in industrial multiproduct companies, retailers with more than
one store have to decide whether the stores should carry the same or
Retail Marketing : 108
different brands. Retail Branding
and Positioning
Three general branding strategies can be distinguished at the level
of the retail brand (see Table below for examples):
• An umbrella brand strategy, where all the stores of the company NOTES
carry the same brand, in most cases differentiated by a sub-brand
• A family brand strategy, in which groups of stores of the retail
company (usually different retail formats) carry different brands,
i.e. the brands are strictly separated
• A mixed strategy, which applies an umbrella brand for some store
formats and separates others by using different brand names.

Table : Branding Strategies at Different Retail Companies

Brand Retail Selected Retail Brands of Retail

Strategy Company Company

Umbrella Tesco Tesco Extra, Tesco (Superstores),

Brand Tesco Express, Tesco Extra

Edeka Edekaaktivmarkt, Edekaneukauf,

Edeka center

Mixed System U Marché U, Super U, Hyper U

Strategy
Coop (CH) Coop, Coop Pronto, Coop bau +
hobby, Coop City, Coop@home,
Interdiscount, TopTip, Impo,
Christ

Family Migros Metro Cash&Carry, Real, Media-

Brand (CH) Markt, Saturn, Kaufhof

Metro Metro Cash&Carry, Real, Media-

Markt, Saturn, Kaufhof

DSG Currys, Dixon, Dixon.co.uk, PC

international City, Electro World, Elkjøp
Retail Marketing : 109
Retail Branding The main decision in this context is brand image transfer vs. brand
and Positioning
image separation. Using an umbrella brand strategy, the common brand
name leads to a substantial image transfer. Consumers transfer the
associations they carry for Tesco Superstores at least partly to Tesco Express
NOTES
stores. All stores are part of one large brand and have to convey the same
message to the consumer, if the brand image is to remain strong. A family
brand strategy, on the other hand, is usually the result of market segmentation
and an unambiguous brand focus with different brand attributes for each
store format. Carrefour hypermarkets, for example, target a different market
segment than Carrefour’s discount chain Dia. An image transfer would,
therefore, probably not benefit either of the stores.

6.5 Retail Brand Positioning

Strategic brand management starts with a clear understanding of
what the brand is to represent and how it should be positioned relative to
competitors (Keller 2003,Wortzel 1987). Positioning is the deliberate and
proactive process of defining and influencing consumer perceptions of a
marketable object, with a strong focus on the competitive position. A product
is thus positioned in the minds of the consumers (Arnott 1993).Positioning
usually applies certain fixed dimensions along which the retail brand defines
its position relative to its competitors.
Market segmentation is often considered necessary for successful
brand positioning. Market segmentation refers to the process of dividing a
(heterogeneous) total market by certain attributes into (more homogeneous)
partial markets. Segmentation criteria can be demographic, socioeconomic,
lifestyle, geographic location and many others. Segmentation therefore
includes the selection of one or several market segments and targeting the
marketing towards the purchasing behavior, motives, or expectations of
these groups. However, segmentation is often considered difficult for retailers

Retail Marketing : 110 with given catchment areas and the need for high customer traffic in their
stores which require appealing to broad customer groups (Wileman/Jary Retail Branding
and Positioning
1997).
Positioning is often based on the two generic competitive strategies
of Porter (1980): cost/price leadership vs. differentiation. While this broad NOTES
classification can also be applied to retailing, researchers propose other
frameworks, because retailing reality shows that there are many options for
differentiation. The following are among the positioning dimensions most
frequently proposed.
• Quality Of Merchandise
• Variety Of Merchandise
• Convenience
• Price
• Customer Service
• Location
• Store Atmosphere.
Successful positioning can be based on any retail activities and a
unique profile along the various dimensions yields a clear position that is the
prerequisite of a strong brand. At the same time, the advertising spending of
retailers has increased strongly over the last few decades and – as an indicator
of the increasing relevance of retail branding – in many countries, retail
stores are among the most heavily advertised “products” in terms of media
spending.

6.6 Retail Brand Image

Retail brand positioning is based on a set of fixed dimensions along
which a retailer is perceived to be located. However, the retail brand is
broader than the actual positioning. The total brand knowledge which a
consumer associates with a brand is relevant to the brand strength. The
associative network model views memory as consisting of a network of
nodes, representing stored information, and connecting links. Any type of
information connected to the brand is stored in the memory network, Retail Marketing : 111
Retail Branding including verbal, visual, abstract, and acoustic information. Retail brand
and Positioning
image can be defined as perceptions about a retailer as reflected by the
brand associations stored in consumer memory. The strength of the brand

NOTES can be evaluated by analyzing the various relevant associations. Their

uniqueness, favorability, strength, and the certainty with which consumers
link the information with the brand, are the dimensions to consider (Krishnan
1996; Keller 1993). The retail brand image is complex and it is connected
to an array of other images, both at a higher level as well as in the form of
sub images. The retail store format image (i.e. category killer image),
shopping centre image, location image, price image, merchandise image
and other components of the store or its context are all connected to the
retail brand image and are part of the memory network of the consumer.

6.7 Principles of Successful Retail Branding

All retail marketing instruments affect the retail brand, as illustrated
by the notion of the comprehensive retail brand image, which is made up of
a universe of interconnected associations. To develop a strong and successful
Check Your Progress
brand, three basic principles are mentioned in literature.
What is positioning in retail • Differentiation from competitors
sector?
• Long term marketing continuity
• Coherence of different marketing components.
Achieving differentiation (in consumers’ minds) is a central
characteristic of a brand (Aaker 1996), as has already been pointed out in
the discussion on positioning. Higher levels of differentiation from the
competitor are expected to lead to higher profitability. Only brands that are
well distinguished from their competitors can build up long-term customer
loyalty and avoid store switching by the consumers.
Establishing a clear brand image is a long-term process. Brands
are established through consumer learning processes. Consumers store
associations in their memory. Brand associations become stronger over

Retail Marketing : 112 time and must be reinforced by repeated exposure to the same brand
messages, because they might otherwise fade away. The past investment Retail Branding
and Positioning
in the brand building is at least partly lost if the brand marketing is changed.
Thus, continuity is important. Also, risk reduction is one of a brand’s main
functions. Consumers trusta brand, because it entails a standardized and NOTES
uniform offer under a certain brand name. Some of the world’s most
successful brands demonstrate that retaining the same brand message and
communication (with slight variations) for years and even decades is one
of the key prerequisites of successful branding.
The retail marketing mix includes all marketing instruments that a
retailer can deploy. The term mix indicates that the instruments are not
used in isolation, but that they jointly influence the consumer. In order to
be successful, all marketing measures must be coordinated to ensure a
close fit with one and other and that all measures convey the same brand
message. Because inconsistency makes a brand image fragile and
consumers strive for internal harmony or congruity in their knowledge and
information (“theory of cognitive dissonance”), creating coherence between
all the different facets of the retail brand is crucial for success. Considering
the complexity of the retail environment, ensuring a fit among the marketing
instruments and all brand contact points is challenging.
Sephora, The Body Shop, Boots, Zara and others are examples
of successful brands that succeed in projecting a uniform image with their
store atmosphere, merchandise, pricing, communication, and service.

6.8 Summary
Some of the most successful retailers in the world have developed
into strong brands without having consciously managed their brands. While
this is true, it is important to note that many successful retailers have
developed strong brands by – even if unconsciously, adopting the above
mentioned principles of branding. From the very beginning, Aldi, IKEA,
Tesco, Walmart, Lidl, and others have had a clear and distinct profile.
They pursued their own marketing approach over several decades and, Retail Marketing : 113
Retail Branding supported by a strong corporate culture, have been very coherent in all
and Positioning
their activities. Differentiation, continuity and coherence in these cases were
often ensured by the founder(s), who, over the years, developed a clear

NOTES understanding of what their company should stand for – and followed that
through rigorously.
Brand management gains additional relevance through the
internationalization of retailers (e.g., should retailers use the same name in
all countries?), with the ongoing wave of mergers & acquisitions in retailing
(e.g., should an acquired retailer keep his retail brand or be adapted to
the acquirer’s brand?) and with multichannel retailing. Especially in the
case of store retailers expanding their business to the Internet, the strategic
decision on using the same retail brand across channels or separating the
Internet shop from the store outlets, is crucial and far reaching.
In recent years, competition and changing consumer behavior have
increased the relevance of retail branding tremendously. Such branding
aims at enhancing differentiation and customer loyalty. Retail brand
management includes all components of the retail marketing mix and
develops a strategic understanding of the intended positioning of the retail
company. Developing a retail branding strategy helps to ensure the
coherence of all marketing messages and market appearances of the
company. Successful companies change over time, but considering the
prerequisites of successful branding, the brand core should remain stable.

6.9 Key Terms

Positioning : Positioning refers to the place that a brand occupies in the
mind of the customer and how it is distinguished from products from
competitors.
Brand Image : The general impression of a product held by real or
potential consumers.
Branding : The marketing practice of creating a name, symbol or design

Retail Marketing : 114 that identifies and differentiates a product from other products.
 Retail Branding
6.10 Questions and Exercises and Positioning

1. Define the concept of branding in retail?

2. What do you mean by brand architecture? NOTES
3. What is positioning in retail sector?
4. Discuss the branding strategies with example.

6.11 Further Reading and References

• AAKER, D. (1996): Building Strong Brands, New York et al.
• MORSCHETT, D.; SWOBODA, B.; SCHRAMM,KLEIN, H.
(2006): Competitive Strategies in Retailing: An Investigation of the
Applicability of Porter’s Framework for Food Retailers, in: Journal of
Retailing and Consumer Services.
• WILEMAN, A.; JARY, M. (1997): Retail Power Plays: From Trading
to Brand Leadership, New York.

Retail Marketing : 115

 NOTES

Retail Marketing : 116

 Customer Relationship
UNIT 7 : CUSTOMER RELATION- Management

SHIP MANAGEMENT
NOTES
7.0 Unit Objectives
7.1 Introduction
7.2 Relationship Marketing as New Paradigm
7.3 Customer Lifetime Value and Relationship Lifecycle
7.4 Customer Loyalty and Customer Satisfaction
7.5 Loyalty Marketing of Retailers
7.5.1 Analyzing Customer Data
7.5.2 Using Customer Data
7.5.3 Loyalty Marketing on the Internet
7.6 Summary
7.7 Key Terms
7.8 Questions and Exercises
7.9 Further Reading and References

7.0 Unit Objectives

Building enduring relationships with customers has become a prime
strategic objective of retail marketing. The purpose of this unit is to explain
the new paradigm of relationship marketing and to introduce the underlying
principles of customer value, the relationship lifecycle and the constructs
of customer loyalty and customer satisfaction. In retailing, loyalty
programmes are manifestations of customer relationship management.

7.1 Introduction
Traditionally marketing has focused on attracting new customers
for a company. Today, however, companies recognize the importance of Retail Marketing : 117
Customer Relationship retaining current customers by forming relationships with theme This focus
Management
on relationships builds on the premise that it is less expensive to market to
existing customers than to acquire new ones.

NOTES
7.2 Relationship Marketing as New Paradigm
Relationship marketing, a term usually used synonymously with
customer relationship management (CRM), involves establishing main
training and enhancing long-term relationships with customers.
With this perspective the manager’s primary task is to identify
profitable and non-profitable customers focus efforts on the former and
balance the cost of acquiring and retaining customers with current and
potential revenue from those customers. In retailing advances in IT and the
spread of loyalty cards have provided a means for retailers to identify a
particular customer and to collect customer specific data, thus enabling
individualized marketing. Compared to other industries, retailing has
tremendous advantages in CRM, and since it is indirect contact with the
consumer. Even though the methods proposed for CRM are very
heterogeneous some common and underlying principles have emerged.

• Customer Information: Companies must gather reliable and

detailed information on their existing and potential customers
usually stored in an IT based customer database.
• Individualization / segmentation: a strong customer orientation
leads to a targeted approach to individual customers or
customer segments instead of a standardized mass market
approach to retail marketing.
• Profit orientation: not all customers are treated equally. Rather
they are classified and prioritized in terms of their profit potential
for the company. Investment in customers is undertaken on

Retail Marketing : 118

the basis of their profitability.
 • Customer interaction and integration: instead of one directional Customer Relationship
Management
communication (such as traditional advertising), the aim is to
achieve a two directional interaction with the customer
including a stronger integration in the value added process. NOTES

7.3 Customer Lifetime Value and

Relationship Lifecycle
In the context of long-term customer relationships loyal customers
can be seen as an enduring asset for the retailer Customers spend money
on certain product categories not just once, but generally regularly (weekly,
monthly, yearly) for the rest of their lives. Since the purchasing relationship
might extend over many years the future revenue stream should be
discounted to arrive at the net present value of future cash flow. If a single
customer spends 400 rupees on clothing each 6 months the net present
value accrues to about 15,000 Rupees between the ages of 15 and 75 (at
a discount rate of 5%).
Customer lifetime value (CLV), the quantified value of a customer,
has become a prominent concept with the rise of CRM.CLV is the
Check Your Progress
difference between what it costs to acquire service and retain a customer
Discuss the significance
and the revenue generated by that customer over the total duration of the of customer relationship
relationship with him. management in retail
business?
CLV can be used to develop a profile of high value customers,
which can then be applied to focus customer acquisition efforts on similar
consumers’ CLV can also be employed to categories the existing customer
base into high medium and low value customers which allows a
differentiation of product offers and services according to expected
customer value and also provides an objective basis for directing retention
efforts toward higher value customers’ If for example handling a customer
complaint costs 500 Rupees and the lifetime revenue value of this customer
is 5,000 Rupees it may be worth investing the money while for a customer
with a value of 300 Rupees, to might notable. Retail Marketing : 119
Customer Relationship The monetary value of customer loyalty originates from different
Management
components’ Higher commitment to a company often leads to enhanced
purchasing frequency, larger shopping baskets lower customer price

NOTES sensitivity and a stronger resistance to counter offers from competitors.

Loyal customers search less for competing product and service offers’.
Lower marketing costs are also assumed since targeted marketing is possible
and the company acquires substantial knowledge about the consumer
making marketing more efficient Cross-selling where the customer buys
additional products from the company and up-selling where the company
manages to sell higher value products to the customer are usually also
achieved. Accordingly the marketing focus is shifted from market share in
specific product categories to increased share of wallet for a particular
customer.
In addition non monetary benefits also accrue more loyal customers
are expected to recommend the retailer to friends and relatives and this
word of mouth constitutes effective and efficient marketing communications.
Loyal customers also have an information value for the company, since
they more often complain when the performance of a company deteriorates.
They communicate with the retailer thereby contributing to maintaining and
enhancing the overall quality of the company.
Pursuing the notion that customers are potential sources of profit
over their entire life time the relationship between customer and retailer
can also be regarded as a lifecycle’s. The relationship therefore has a clear
beginning a growth stage and a maturity stage after which a decline and a
potential termination could occur. The customer relationship lifecycle
describes regularly observed patterns in the longitudinal development of
customer relationships with companies. However the model is not
deterministic, i.e. not all stages have to occur in the duration of stages
differ and a retailer can influence the shape of the curve by for example
effective counter measures in the endangerment stage.
Retail Marketing : 120
7.4 Customer Loyalty and Customer Customer Relationship
Management
Satisfaction
While loyalty has become more important as a marketing objective
NOTES
with CRM, there is no universally agreed definition of loyalty. Two basic
approaches to conventionalize loyalty can be identified.

• Often loyalty is defined with reference to a pattern of

purchases’ Behavioral loyalty is measured in terms of repeat
patronage percentage of budget allocation in a category to a
store amount of switching or purchase likelihood.
• Many researchers argue that there must be strong commitment
to a company for true loyalty to exist. Commitment refers to
an emotional or psychological attachment to a
company’s. Thruster which entails the confidence in the
retailer’s reliability and integrity is often seen as closely
connected to it. This attitudinal loyalty can be measured by
asking consumers if they like and trust the store whether they
feel committed to it, and whether they would recommend
it to others.
Both dimensions are important for true loyalty. Spurious loyalty
refers to a situation where repeat patronage is observed but is not based
on a strong positive attitude towards the retailer’s. For example a lack of
alternatives in the area can result in store patronage without having anything
to do with positive attitudes’. Habitual purchasing behavior might have
the same effect.
Therefore behavioral loyalty merely reflects situational influences
but it is permanently at risk if situational conditions change such as rivals
entering the market.

7.5 Loyalty Marketing of Retailers

In retailing CRM is closely connected to the loyalty schemes that Retail Marketing : 121
Customer Relationship are usually based on loyalty cards. Many retailers now employ some form
Management
of loyalty scheme. Typically, loyalty programmes offer delayed, accumulated
economic benefits to consumers on the basis of repeat purchases. Usually

NOTES this takes the form of points that can be exchanged for gifts, or vouchers.
The discount value of points generally ranges between 1 and 4 % of sales’.
The option of giving discounts indifferent ‘currencies’ can also offer
perceptual advantages e.g. for the retailer’s price images. In so-called
affinity programmes the focus is more on the emotional bond between
customer and retailer’s. With club memberships preferred service
newsletters, Internet chat groups, telephone help lines and other measures,
two way communication is established so that customers can interact with
the company and get to know it better.
Most frequently the ability to accrue benefits in the form of
discounts on purchases as well as the promotional offers connected to the
loyalty programme, are the principal motivation for consumers for joining
a loyalty scheme’s. However emotional bonding and psychological
relationship awards might also be important. Self-actualization is considered
a basic human need and loyalty programmes can provide recognition to
selected customers by giving the man evaluated status and the feeling of
being special. In some loyalty programmes, the sense of being a member
of a community is considered more important than financial rewards.

7.5.1 Analyzing Customer Data

In CRM, data mining techniques are used to analyses customer
information. Since the results of the analysis and the forecasting of customer
response can be used to develop marketing measures and the subsequent
behavior of specific customer can be tracked and evaluated a learning
system can be created that studies the specific behavior of each customer
and can also detect changes in behavior over time. An important potential
advantage of CRM is that the success and the profitability of marketing
measures can be evaluated in an experimental approach by comparing the
Retail Marketing : 122
purchasing behavior of the targeted customer group with a control group Customer Relationship
Management
based on incremental sales or contribution margin. However up to the
present the huge amount of data collected through loyalty results in an
inadequate usage of the data because IT capacity and methods of data NOTES
analysis develop at a slower pace than data availability.
Customer segmentation is a core task of data analysis in theory
retailers employing loyalty programmes could segment their customer base
down to individual customers, but in practice, the number of segments
used is generally limited to between 10 and30. Segmentation criteria include
purchasing volumes demographic characteristics geographical aspects
shopping motives, attitudes and lifestyles. The options start with very simple
segmentation criteria’s ABC analysis is used to categorized customers by
their annual purchases.’ Very often a 20-80 rule is used that 20% of the
customers (“A” customers) account for about 80% of retail sales volume.
Even if the ratio is often not that extreme it has frequently been shown that
the relevance of different customers for a retailer varies considerably. While
customer purchase behavior is a backwards oriented criterion total customer
lifetime value can serve as a very sophisticated basis for segmentation.
Such customer value oriented segmentation shows what customer groups
a retailer should focuson, but it doesnot show how to approach the
customers. Segmentations based on such consumer behavior as shopping
motives or attitudes are better suited to develop tailored marketing.

7.5.2 Using Customer Data

Individual customer information provides insights into consumer
behavior that can be used to bring about a general change in a retailer’s
marketing. In such a case the customer data is used to change macro
variables of retail marketing such as the merchandise mix pricing promotion
or location decisions. For example, before a product is delisted due to low
sales an analysis can be conducted to determine who still buys it’s. If for
example only 20%of customers purchase the production but those are Retail Marketing : 123
Customer Relationship most valuable customers in the store keeping this product in stock is
Management
important for retaining these profitable customers.
CRM, on the other hand focuses on micromarketing (or one to

NOTES one marketing) which targets specific consumers or consumer segments

based on knowledge of their behavior. The retail service (such as the
merchandise offered in advertising promotions services offered) is tailored
to certain segments or (seldom) individual customers. Since the store itself
is still standardized for all visitors, CRM often does not take place in the
store offer, but through marketing communication with specific customers’
measures include the following :

• Addressed direct mailings: Customized direct

mailings to customers ‘homes are used in almost all retailer
loyalty programmes. The prime communication channel in
loyalty programmes is some kind of (tailored or segmented)
product catalogue, often with targeted promotions.
• E-mail marketing : Direct customer mailings have increased
tremendously with the advent of email which is used to distribute
customized advertising and newsletters to customers’ .
Distribution costs are much lower and customizing more
flexible and cheaper.
• In-store multimedia kiosks : Similar to the Internet multimedia
kiosks in retail stores can e used to communicate with
each customer individually. At electronic point of sale
terminals loyalty cardholders can (among other functions)
check their point account order rewards or print out value
checks with which they can pay their next purchase.
• Mobile marketing : Some retailers already use the
customers’ mobile phones as communication devices for
example for providing coupons by SMS or MMS.
• Personal shopping assistants : Digital shopping assistants
Retail Marketing : 124 that a customer can carry or attach to the shopping cart are
 still in the testing stage. Based on his loyalty card, such Customer Relationship
Management
a device can guide the customer interactively through the
shopping process in real time. Shopping lists can be displayed,
the customer led to certain products, or recipes recommended NOTES
including the necessary ingredients and their location in the store.

7.5.3 Loyalty Marketing on the Internet

A higher level of CRM and one to one marketing can be employed
in Internet shopping in addition to the purchases total purchasing behavior
can be observed with web usage mining’s. Over and above the data that
can be collected with loyalty cards in store retailing an electronic retailer
can track the date and duration of each visit to his web site the time a
customer spends looking at a specific production products viewed but not
purchased the sequence in which products were viewed or web sites. In
contrast to stores the individual data can be employed to tailor the entire
retail marketing process to a specific customer from the basic merchandise
offer, prices and promotions, to the store design.
The most successful example Amazon shows how individualized
product recommendations are derived from connecting the profile of an
individual customer (established from his purchase history) to the profiles
of other customers. Demand interrelationships are detected systematically.
Even the regency of purchases is considered because purchasing behavior
can change overtime. Cookies are placed or the customer’s login with a
pass word and the customer is addressed with a personal store.

7.6 Summary
Over the last decade many retailers have shifted their focus to CRM
and introduced loyalty card programmes as a tool. The costs of such a
programme are often substantial including those of incentives. IT systems
and administration of the programme. Some researchers are critical of the
success of such programmes claiming that “loyalty programs do not create Retail Marketing : 125
Customer Relationship loyalty. This points to the fact that loyalty programmes have to be monitored
Management
closely and that loyalty cards alone are not enough to establish loyalty but
have to be employed as part of the overall retail marketing approach.

NOTES While some researchers also state that it is difficult to judge the ultimate
profitability of a loyalty programme this is true for marketing in generals.
Furthermore the success of loyalty marketing campaigns can usually be
measured more accurately than that of traditional marketing campaigns.
CRM must be compatible with the company’s broader strategy. If
a primary goal is to achieve market leadership by gaining customers from
its main competitors and grow rapidly the maximum number of customers
should be attracted. A focus on only the most profitable customers will not
be appropriate for the company’s strategic objectives. This example
illustrates that customer relationship marketing is an increasingly relevant
marketing approach in retailing.
However as with all functional strategies, alignment with the overall
company strategy is crucial. Some retailers believe that adhering to their
core strategy is more important to establish and build loyal customers,
than creating a loyalty programme. While this is certainly true for many
Check Your Progress other retailers CRM offers a universe of options for interacting with their
Discuss the different types customers’.
of loyalty in retail
business? All in all, the potential gains of analyzing detailed customer data
and targeting consumers especially with new media which lower the
communication costs of tailored marketing communication still seem
enormous.

7.7 Key Terms

Relationship Marketing : is a facet of customer relationship management

(CRM) that focuses on customer loyalty and long-term customer

engagement rather than shorter-term goals like customer acquisition and

individual sales.
Retail Marketing : 126
 Customer Relationship
Customer Lifetime Value (CLV) : CLV is a prediction of the net
Management
profit attributed to the entire future relationship with a customer.

Customer Loyalty : Customer loyalty is both an attitudinal and

NOTES
behavioral tendency to favor one brand over all others.

7.8 Questions and Exercises

1. What do you understand by customer relationship management?
2. Discussion the significance of customer relationship management in
retail business?
3. How the concept of customer relationship management is vital in
retail sector?
4. What is customer life time value and how it is useful in understanding
the value of customers for a particular product and business?
5. Discuss the different types of loyalty in retail business?
6. How the increasing role of information technology is facilitating the
retail business particular in maintaining a long term relationship with
prospective group of customers?

7.9 Further Reading and References

• REICHHELD, F.; SASSER, W. (1990): Zero Defections’
Quality Comes to Services, in: Harvard Business Review, Vol. 68,
No. 5.
• GROROOS, C. (1994): From Marketing Mix to Relationship
Marketing’s Towards a Paradigm Shift in Marketing:
Management Decision Vol.32, No. 2.
• Zentes, J., Morschett, D., & Schramm-Klein, H. (2007). Strategic
retail management. Betriebs wirtscha ftlicher Verlag Dr. Th. Gabler
GWV Fachverlage GmbH, Wiesbaden (GWV).

Retail Marketing : 127

 NOTES

Retail Marketing : 128

 Management of
UNIT 8 : MANAGEMENT OF Services

SERVICES NOTES
8.0 Unit Objectives
8.1 Introduction
8.2 Strategic advantage through customer services
8.3 Customer service Strategies
8.4 Customer evaluations of service quality
8.5 Role of Expectation
8.6 Perceived service
8.7 Knowing what customers want; The Knowledge gap
8.8 Summary
8.9 Key Terms
8.10 Questions and Exercises
8.11 Further Reading and References

8.0 Unit Objectives

After reading this unit, you should be able to understand how the
variety of retail services function within a specified area. You will look at
the different retail services and examine many operations and organizations,
including how retailers work to accommodate their different consumers.

8.1 Introduction
Consumers don’t like to wait, nor do they have to today, it’s all
one click away. This new reality makes it essential for retailers to think
faster and respond faster to changes in consumer demand and
behavior. Retail Marketing : 129
Management of Acosta provides flexible in-store solutions for its clients. A majority
Services
of the Company’s clients use its syndicated retail model which leverages
one sales force across multiple brands at a given retailer. Acosta’s syndicated

NOTES team is dedicated by retailer (not company), and utilizes resources in any
given retail location across all brands the Company represents. Syndicated
coverage allows Acosta to maximize the efficiency of in-store hours by
servicing multiple CPG brands and decreases drive time between retail
locations. Hence, management of retail services has become necessity for
all the retail operators to satisfy and retain their prospective consumers.

8.2 Strategic advantage through Customer

Services
Customer service is not always crucial to the success of an
organization. Its importance is determined primarily by supply & demand.
If there are few suppliers and many consumers, suppliers can dictate the
terms of the relationship and customers may have no choice but to accept
them. Most organizations, however, are not so lucky. Competition has
exploded the cozy castles of all but a few protected markets, and will
continue to undermine those as well. Where competition flourishes, customer
service is essential to an organization’s long-term viability. It must be central
to its strategy. A company can outperform rivals only if it can establish a
difference that it can preserve. Customer service is such a difference.
Few companies are able to excel at customer service, because it is
very difficult to control.Left to itself, the level of service may vary greatly
between two servers in the same restaurant. One salesperson may offer
great service to one customer, and then aggravate the very next person in
line. The difficulty is compounded when you have a multi-unit operation.In
addition to variability within units, you also have variability among units.
That is both the challenge and the opportunity. The consistent
delivery of superior service requires the careful design and execution of a

Retail Marketing : 130 whole system of activities that includes people,capital, technology, and
processes. The few companies that can manage this system do stand out, Management of
Services
and are sought out. This is the foundation of what Michael Porter calls their
sustainable competitive advantage.
But although it does require an almost heroic effort to build and NOTES
maintain such a system, it’s not so hard to get it started. Service today is in
such a sorry state that it doesn’t take much to surprise most customers,
and to make them want to come back for more. The trick is to get started
before your competitors do, then to stay a few steps ahead. By doing so,
you’ll be doing your whole industry (or community, or strip mall) a favor.
Unlike price competition, which tends to sink all players, competition on
the basis of service is one of those tides that lift all boats.

8.3 Customer service Strategies

Strategy 1 : Stay in Touch - Let your customers know you
value their business by reaching out to them. Use newsletters,
postcards, individual letters, or e-mails to deliver news about
products, special promotions,and store events. (Allow customers
to sign up for these missives in the store, and never send an e-mail
Check Your Progress
without their express permission.) Send a thank-you note after a
What do you mean by
major purchase, inviting the customer to contact you with questions,
retail services?
feedback, or to discuss additional requests. Focus all these
communications on letting customers know that you can solve their
problems and meet their needs.
Strategy 2 : Make Great Service a Priority - Excellent customer
service requires training your staff and constantly reinforcing the
message that customers come first. Start with the little things, such
as a standard way of politely greeting people on the phone or asking
that sales staff courteously greet anyone who enters the store.
Strategy 3 : Store Collective Wisdom - One of the most important
customer strategies is to set up a system for responding tocustomer
inquiries or complaints. The last thing you want is for your employees Retail Marketing : 131
Management of to provideinaccurate information to your customers. Neither should
Services
they fail to provide a solution to a problem or quote policies that
may not accurately address the situation. Your goal should be to
resolve issues during the initial customer contact, or, when that’s
NOTES
not possible, within one business day. Whenever necessary, make
sure employees let customers know that they may need some time
to locate the information. Do not leave customers hanging.
With that in mind, staffers need to know exactly where to
look for answers. While it’s natural for new employees to rely on
the wisdom of more experienced ones, you don’t want all that
wisdom to walk out the door when someone quits. Develop a
“knowledge base”; that is, a store of information with answers to
common questions, methods for solving problems, and standards
for resolving disputes. Your knowledge base can be as simple as a
notebook where staffers or the store manager jots notes; a
searchable text file on a computer; or a database.
Strategy 4 : Empower Your Staff - In some cases, where there is
no policy and occasionally in cases where the policy needs to be
flexed — you need to empower certain people to make decisions,
use good judgment, and bend the rules. Ask them to document
these special cases; you can provide a pad of paper forms, let
them enter information into the computer, or simply leave you a
voice mail. Depending on the size.
Strategy 5 : Know Your Customers - Instituting a formal way of
tracking your customer interactions will help you identify your best
customers, as well as those who may not have frequented your
business in a while. You can also see if someone has needed repairs
or is due for servicing on a product.
There are many software applications designed to do this,
ranging from powerful and expensive “enterprise software”
products to simple Web-based applications that cost less than $20
Retail Marketing : 132 a month. As you gain new customers, you enter their contact
 information and notes about the transaction into the software. Later, Management of
Services
you can sort this data or analyze it to uncover useful information.
But you don’t have to use a computer to track customers.
A small shop could simply prepare an index card for each customer NOTES
and file them alphabetically. If the customer returns, sales staff
can pull the card from the file, review the history, and note the
latest interaction.
Strategy 6 : Manage Customer Relationships - Once you
have some history on your customers, whether from written notes
or via a database, you can identify your best customers and reward
them. Perhaps you’ll offer a special discount to frequent customers
or make a follow-up call to those who have needed recent repair
work.
Use the information you’ve gathered about your
customers to make customer service a science. Give them a quality
experience and complete satisfaction, and they’ll keep coming
back for more.Our operation, you may want to designate one
person per shift as chief problem-solver.

8.4 Customer evaluations of service quality

Excellent service quality and high customer satisfaction is the key
issue and challenge for today’s service industry. Customer perception
(satisfaction) and customer expectation (importance) determines the service
quality performance. Questionnaires help service providers to realize their
service quality performance, and the weighted average of customer
satisfaction and the associated variance are commonly used indices
reflecting customer expectation and customer perception. To evaluate,
effectively and efficiently, service quality performance, this paper aims to
portray customer expectation and customer satisfaction by assuming that
the evaluation scales for expectation and satisfaction are between 0 and
Retail Marketing : 133
Management of 1. This paper defines a customer satisfaction index and a customer
Services
expectation index based on the two parameters of a beta distribution, and
the unbiased estimators for these two indices are provided. A standardized

NOTES Service Quality Performance Matrix helps managers realize the service
quality performance for important service elements with respect to the
locations of the satisfaction index and the expectation index on the Service
Quality Performance Matrix to propose adequate service quality
improvement plans and strategies.

8.5 Role of Expectation

Factors that Influence Customer Expectations of Service
• Factors that Influence Customer Expectations of Desired
Service
• Factors that Influence Customer Expectations of Adequate
Service
• Factors that Influence both Desired and Predicted Service
Expectations.

Criteria to Evaluate a Service based on Customers’ Service

Expectations.

Retail Marketing : 134

 Management of
• Managing Customer Service Expectations
Services
• Managing Promises
• Reliability
• Getting it Right the First Time NOTES
• Effective Communication

8.6 Perceived service

Key Factors Leading to the Customer Gap

8.7 Knowing what customers want The

Knowledge gap
The Customer Gap
1. The Provider Gaps:
• Gap 1 – not knowing what customers expect
• Gap 2 – not having the right service designs and
standards
• Gap 3 – not delivering to service standards
• Gap 4 – not matching performance to promises Retail Marketing : 135
Management of Putting It All Together : Closing the Gaps
Services
The GAP Model, was developed in 1985. It highlights the main
requirements for delivering a high level of service quality by identifying five
NOTES ‘gaps’ that can lead to unsuccessful delivery of service.

8.8 Summary
Check Your Progress Management of retail services is an important part in the retail
Discuss the GAP model business. The sound understanding of the consumer requirements and
of services?
behaviour does play a lot in the management of the retail services. For
proper understanding and delivery of retail services the gap model is vital.
With the help of GAP model the retail business can specifically recognized
the area which are creating dissatisfaction among the retail consumers and
can frame strategies to overcome the barriers that are creating dissatisfaction
among the consumers.

8.9 Key Terms

Services : Services, as a term, is also used to describe activities performed

Retail Marketing : 136

by sellers and others that accompany the sale of a product and aid in its
exchange or its utilizations. Management of
Services
Service quality(SQ) : in its contemporary conceptualization, is a
comparison of perceived expectations (E) of a service with perceived
performance (P), giving rise to the equation SQ=P-E. NOTES
Customer Satisfaction : Customer satisfaction is a marketing term that
measures how products or services supplied by a company meet or surpass
a customer’s expectation.

8.10 Questions and Exercises

1. What do you mean by retail services?
2. Define the various strategies which are useful in understanding the
retail customer behaviour?
3. What do you mean by GAP in services?
4. Discuss the GAP model of services?

8.11 Further Reading and References

• Retail Services: Lee Perlitz, ýDan Hill, ýMatthew Coxhill – 2012
• Retail Management: S.C. Bhatia – 2008.
• Delivering Quality Service: Valarie A. Zeithaml - 2010

Retail Marketing : 137

 NOTES

Retail Marketing : 138

 Retail Information System
UNIT 9: RETAIL INFORMATION SYSTEM (Incorporating Information
Technology in Retailing)
(Incorporating Information Techno-
NOTES
logy in Retailing)
9.0 Unit Objectives

9.1 Introduction

9.2 Importance of IT in Retailing

9.3 Strategic Advantage through Supply Chain and Information System

9.4 Flow of Information and Products in Supply Chain

9.5 Integrated Systems and Networking

9.5.1 Marketing Information Systems (MIS)

9.5.2 Retail Management Information System

9.5.3 Radio Frequency Identification Device (RFID)

9.5.4 Networking

9.6 Electronic Data Interchange

9.7 Bar Coding

9.8 Customer Database Management

9.9 Electronic Retailing

9.10 Role of Web

9.10.1 Online Retailing - Advantages

9.10.2 Factors to be Considered in Developing Website

9.10.3 Limitations of Web

9.10.4 Future Trends in E-tailing

9.11 Summary

9.12 Key Terms

9.13 Questions and Exercises

9.14 Further Reading and References

Retail Marketing : 139
Retail Information System
(Incorporating Information 9.0 Unit Objectives
Technology in Retailing)
After reading this unit, you should be able to:
• Explain the importance of IT in retailing
NOTES • Trace the integrated systems and networking
• Discuss the Marketing Information System
• Create strategic advantage through supply chain and information system

9.1 Introduction
Retail management involves running a store where merchandise is
sold. Retail management information systems include the use of hardware,
software and procedures to manage activities such as planning, inventory
control, financial management, logistics and point of sale transactions. Use
a retail management information system in your business when you need to
manage your store, finances and inventory from one office.
Information Technology (IT) refers to the management and use of
information using computer-based tools. It includes acquiring, processing,
storing, and distributing information. Most commonly it is a term used to
refer to business applications of computer technology, rather than scientific
applications. The term is used broadly in business to refer to anything that
ties into the use of computers.Mostly businesses today create data that
can be stored and processed on computers. In some cases the data must
be input to computers using devices such as keyboards and scanners. In
other cases the data might be created electronically and automatically stored
in computers.In this unit, you will learn about the role of information
technology in retailing.

9.2 Importance of IT in Retailing

Information technology is one of the greatest enablers of the
Collaboration between the vendor and Retailer. Wal-Mart, the largest
company in the world with more than 2,700 stores and $ 217 billion in
Retail Marketing : 140
revenue last year, gets a major competitive advantage from the efficiency Retail Information System
(Incorporating Information
of its electronic product information, ordering, supply-chain management Technology in Retailing)
and delivery systems. It possess the influence to get manufacturers into
collaborative E- business, because it can represent 5% to 30% of a NOTES
manufacturer’s total business. Wal-Mart requires every manufacturer to
manage its own in-store inventory and uses EDI networks and its private
collaborative trading hub, Supplier Link, to consolidate global purchasing.
It brings 10,000 suppliers online to bid on contracts and communicate
sales and inventory data. Wal-Mart also uses its networks to manage its
Supply Chain and Logistics. In this kind of an environment, greater data
transparency and information sharing as well the speed of response cement
the supplier-retailer relationship. The same is the case with 7-Eleven Inc.,
with over 30,000 suppliers in all-different sizes. Even in the fashion conscious
sectors of Retailing, the use of IT helps. Payless’ sources nearly 80% of
the 250 million pairs of shoes sold through its 5,000 stores from Asia. This
represents challenges in a style-oriented business. The shoe business is
very fashion driven. Many products have short lifecycles like 13 weeks.
Payless is concentrating on a core vendor/core factory programme to
achieve production efficiencies and stay ahead of fashion trends. The speed
of interacting, enabled by it helps in competing with similar stores in the Check Your Progress

shoe business. Discuss about the

importance of IT in
retailing?
Computers have replaced cash registers for billing. The bar coded
products using UPC and EDI are scanned for billing. The importance of
information technology in retail sector stems from the importance of data.
Data is nothing but information which aids decision-making. The use of
technology aids data collection. Data can be collected about consumers,
frequency of their buying. This can help a retailer in distinguishing customers.
The use of information technology serves as a basis for integrating the
functioning of various departments. With an increase in the number of outlets,
collecting and analyzing information becomes indispensable. Technology
plays crucial role in this regard. Technology has been applied to some of Retail Marketing : 141
Retail Information System the unique requirements of the retail business like the need for product
(Incorporating Information
Technology in Retailing) identification, the need for quick billing and settlement of bills electronically
and specialized logistics applications.
Modern technology is making information required for retailing
NOTES
decisions ever more accessible. It is possible to track customer buying
behaviour and better analyses and understand whatcustomers want. The
integration of various modern technologies is allowing companies to access
valuable information.

9.3 Strategic Advantage through Supply

Chain and Information System
E-SCM covers all aspects of a business, from the stage of raw
materials right on to the end user. Each and every aspect of the cycle is
covered by the E-SCM be it sourcing, product design, production planning,
order processing, inventory management, transportation, ware housing
and customer service. The E-SCM manages the flow between the different
cycles and spans across the different departments and companies involved
and the applications used by these departments and companies should be
able to talk to each other and understand each other for the E-SCM to
work properly.
In a traditional company which does not employ E-Commerce
17%-50% of the price of its products is got from the cost of just moving
the products from their manufacturing plant to shop shelves. This includes
the margin of the retailer and of the distributors. Most of the cost is attributed
to logistics and holding inventory. An efficient E-SCM can bring down the
prices of products by as high as 40% and it does so by eliminating
overstocking by reducing the average inventory levels to what is needed
and by so doing lowering warehousing costs and transport costs since
there won’t be any unnecessary trips when every stage of the supply chain
is in synch with each other. This will not only give the company a cost

Retail Marketing : 142 benefit but will also result in improved customer service levels, improved
competitiveness and an overall gain in profitability for the organization. Retail Information System
(Incorporating Information
In an E-SCM application system communication between the Technology in Retailing)
different departments or different companies is in real time and data can
be integrated with back office systems thus reducing paperwork. Using
NOTES
the Web to eliminate paper transactions can generate substantial savings
of cost and time. It facilitates the removal of purchase orders, delivery
confirmations, bills of material and invoices. The switch away from paper
can also speed up response and improve communications with those in
different time zones or who work outside normal office hours. Another
significant potential benefit is a reduction in the errors associated with
activities such as re-keying data and receiving orders by telephone calls
and handwritten faxes.
To leverage the full benefits of e-logistics in an E-SCM and achieve
full customer satisfaction visibility throughout the entire supply chain must
be completely transparent. This is achieved through the movement of
information in tandem with goods and services. Customers thus have
complete real time consignment status information over the Web, while at
the same time suppliers and delivery companies can save on the salary
previously devoted to employees answering queries on order status.
E-SCM’s main strategic advantage lies in its ability to allow real
time exchange of information to take place between the company’s
employees and their trading partners, namely customers, distributors and
manufacturers, regarding product configuration, order status, pricing and
inventory availability. Such functions improve order accuracy and provide
100% order fulfilment through accurate inventory information. This real-
time data enables users to make informed ordering, purchasing and
inventory decisions and thereby enhances the quality and scope of
customer service.
In addition to increasing productivity and reducing overall
operating expenses, E-SCM maximizes selling opportunities by capturing
valuable customer information-buying patterns, frequencyof visits,
preferences, order history and then uses this information for up-selling, Retail Marketing : 143
Retail Information System cross-sellingand promotional opportunities. E-SCM provides the tool sets
(Incorporating Information
Technology in Retailing) to get new business by reaching out to customers that you never could
before.

NOTES A strategic IS has been defined as “the information system to

support or change enterprise’s strategy”. Strategic management is the
technique that an organization can plans the strategy of its future operations;
in the other word a SIS is a system to manage information and assist in
strategic decision making. The term strategic points to the long-term nature
of this mapping exercise and to the large magnitude of advantage the
exercise is expected to give an organization (Turban 2006). Four critical
factors in developing and strategic IS are Initiation, data collection, strategy
formulation and short-term development. These factors are used to
prioritize proposed ISs, so that those giving competitive advantage to the
organization can be highlighted for immediate development (Karababas
et al, 1994). IT contributes to strategic management in many ways (for
addition information see Kemerer, 1997, and Callon, 1996). Turban et al
(2006) introduce these eight factors:
1. Innovative applications : IT creates innovative applications
that provide direct strategicadvantage to organizations. For
example, Federal Express was the first company in itsindustry
to use IT for tracking the location of every package in its
system. Next, FedEx wasthe first company to make this
database accessible to its customers over the Internet.FedEx
has gone on to provide e-fulfilment solutions based on IT and
is even writingsoftware for this purpose (Bhise et al., 2000).
2. Competitive weapons : ISs themselves have long been
recognized as a competitive weapon(Ives and Learmouth,
1984, and Callon, 1996). Michael Dell, founder of Dell
Computer,puts it bluntly: “The Internet is like a weapon sitting
on the table, ready to be picked up byeither you or your

Retail Marketing : 144

competitors”.
3. Changes in processes : IT supports changes in business Retail Information System
(Incorporating Information
processes that translate to strategicadvantage (Davenport, Technology in Retailing)
1993). For example, Berri is Australia’s largest manufacturer
anddistributor of fruit juice products. The principal goal of its NOTES
enterprise resource planningsystem implementation was “to
turn its branch-based business into a national organizationwith
a single set of unified business processes” in order to achieve
millions of dollars incost-savings (J.D. Edwards, 2002a). Other
ways in which IT can change business processesinclude better
control over remote stores or offices by providing speedy
communicationtools, streamlined product design time with
computer-aided engineering tools, and betterdecision-making
processes by providing managers with timely information
reports.
4. Links with business partners : IT links a company with its
business partners effectively andefficiently. For example,
Rosenbluth’s Global Distribution Network allows it to
connectagents, customers, and travel service providers around
the globe, an innovation thatallowed it to broaden its marketing
range (Clemons and Hann, 1999).
5. Cost reductions : IT enables companies to reduce costs.
For example, a Booz-Allen &Hamilton study found that: a
traditional bank transaction costs $1.07, whereas the
sametransaction over the Web costs about 1 cent; a traditional
airline ticket costs $8 to process, an e-ticket costs $1 (ibm.com/
partner world/pw home. nsf/v Assets Lookup /ad2.pdf/$file/
ad2.pdf). In the customer service area, a customer call handled
by a live agent costs $33, butan intelligent agent can handle
the same request for less than $2 (Schwartz, 2000).
6. Relationships with suppliers and customers : IT can be
used to lock in suppliers andcustomers, or to build in switching
costs (making it more difficult for suppliers or customersto Retail Marketing : 145
Retail Information System switch to competitors).
(Incorporating Information
Technology in Retailing) 7. New products : A firm can leverage its investment in IT to
create new products that are indemand in the marketplace.
According to Vandenbosch and Dawar (2002, p. 38),
NOTES
“Theredefinition of ICI’s role not only generated much higher
margins for the business, it also gave ICI a much more defensible
competitive position”.
8. Competitive intelligence : IT provides competitive (business)
intelligence by collecting and analyzing information about
products, markets, competitors, and environmental changes
(Guimaraes and Armstrong, 1997).

9.4 Flow of Information and Products in

Supply Chain
The design of information flow in supply chains has traditionally
followed the physical flow along the chain (Lewis and Talalayevski, 2004).
Sub-optimal supply chain performance, in many cases, has been the result
of poor information sharing.Adopting advanced information systems, which
enable efficient information sharing between the members of supply chains
and over supply chain phases, may however change the situation. Instead
of suffering from scarcity of data, the challenge for companies is to achieve
good quality information (Wagner, 2002) and to decide which data can be
utilized in decision making to improve supply chain performance and which
data can be ignored.
Information flows in the supply chain are bidirectional. From an
SCM perspective, it can be argued that managing the information flows is
the most critical of the activities described in this article. This is because the
flow or movement of materials or money is usually triggered by an associated
information movement. Effective management of material and money flows
is, therefore, predicated upon the effective management of the related

Retail Marketing : 146 information flows. It is not surprising, therefore, that recent years have
seen a huge interest in this area in the literature (see, for example: Evans et. Retail Information System
(Incorporating Information
al., 1993; Mason-Jones and Towill, 1998). The bullwhip effect to which Technology in Retailing)
Forrester (1958) referred is essentially the product of poor information
management in the supply chain and leads to a requirement to hold excessive NOTES
inventory levels. The corollary of this is that if levels of demand visibility are
high throughout the supply chain then inventory levels can be reduced. As
Christopher (2005) notes, good information effectively becomes a substitute
for high levels of inventory.
Recent years have also seen rapid developments in ICT used to
facilitate SCM. McDonnell et al. (2004) proposed a taxonomy of supply
chain ICT solutions which identifies four primary categories as follows:
• Point solutions: used to support the execution of one link
(or point) in the chain (e.g. warehouse management systems
or WMS);
• ‘Best of breed’ solutions: where two or more existing stand-
alone solutions are integrated, usually using middleware
technology;
• Enterprise solutions: based on the logic of enterprise
resource planning (ERP), these solutions attempt to integrate
all departments and functions across a company into a single
computer system that can serve all those different
departments’ particular needs; and
• Extended enterprise solutions (XES): refers to the
collaborative sharing of information and processes between
the partners along the supply chain using the technological
underpinnings of ERP.

The move away from point towards enterprise solutions in many

ways reflects the shift from internal and functional, to external and process,
management orientations in recent years (ashighlighted earlier). Other
technologies, in particular electronic data interchange (EDI) and the Internet,
have enabled supply chain partners to use common data. As noted by Retail Marketing : 147
Retail Information System Christopher (2000), this facilitates supply chain agility as companies can
(Incorporating Information
Technology in Retailing) act based on ‘real demand, rather than be dependent upon the distorted
and noisy picture that emerges when orders are transmitted from one step

NOTES to another in an extended chain’.

9.5 Integrated Systems and Networking

The technology has now become an essential tool for retailing.
Some of the important applications of technology in retail sector are as
follows:

9.5.1 Marketing Information Systems (MIS)

The term ‘Marketing Information Systems’ refers to a programme
for managing and organizing information gathered by an organization from
various internal and external sources. MIS assesses the information needs
of different managers and develops the required information from supplied
data in time regarding competition, prices, advertising expenditures, sales,
distribution and market intelligence, etc. Information sources for MIS include
a company’s internal records regarding marketing performance in terms of
sales, and effectiveness and efficiency of marketing actions, marketing
databases, marketing intelligence systems, marketing research, and
information supplied by independent information suppliers.
Elements of MIS

Retail Marketing : 148

 Retail Information System
9.5.2 Retail Management Information System (Incorporating Information
Technology in Retailing)
This includes the use of hardware, software and procedures to
manage activities such as planning, inventory control, financial management,
NOTES
logistics and point of scale transactions.

9.5.3 Radio Frequency Identification

Device (RFID)
In a retail store, RFID assists in inventory management. All items
in a retail outlet sport read-only tags that contain the product code and its
description, including the batch number, expiry date and price. The shelves,
exit gates, and warehouses are fitted with sensors that read the information
from the RFID tag and help in updating the inventory system in real-time.
This way it helps in total asset visibility and tracks the inventory stocking.
It also ensures better process control for products in the store. In
warehouses and container depots, containers are marked with RFID chips
that contain details of origin, destination, and other details. Entry and exit
gates, vehicles, and cranes are fitted with an antenna that senses the RFID
tags, and records and updates the system to check for any deviation in the
schedule. With precise tracking of the location of pallets and containers
within the warehouse, it is easy to pinpoint unscheduled movements. The
system also considerably helps reduce costs and time for check-in and
check-out. Figure Component of ERP.

Retail Marketing : 149

Retail Information System
(Incorporating Information 9.5.4 Networking
Technology in Retailing)
In the world of computers, networking is the practice of linking
two or more computing devices together for the purpose of sharing data.
NOTES
Networks are built with a mix of computer hardware and computer
software.
Networks can be categorized in several different ways. One
approach defines the type of network according to the geographic area it
spans. Local area networks (LANs), for example, typicallyreach across a
single home, whereas wide area networks (WANs), reach across cities,
states, or even across the world. The Internet is the world’s largest public
WAN.

9.6 Electronic Data Interchange

Electronic Data Interchange (EDI) is the inter-organizational
exchange of business documents in structured, machine process able form.
Electronic data Interchange can be used to electronically transmit
documents such as purchase orders, invoices, shipping bills, receiving
advices and other standard business correspondence between trading
Check Your Progress
partners. EDI can also be used to transmit financial information and
What are the components
payments in electronic form. Payments carried out over EDI are usually
of ERP?
referred to as Electronic Funds Transfer (EFT). EDI should not be viewed
as simply a way of replacing paper documents and traditional methods of
transmission such as mail, phone or in-person delivery with electronic
transmission. But it should be seen not as an “end” but as a means to
streamline procedures and improving efficiency and productivity.

Use of EDI in retail business reduces costs. It also strengthen the

relationship between the retailer and the supplier. A supplier can spot trends
in purchase and accordingly realign its production if there is an EDI
exchange between a retailer and the supplier.
Retail Marketing : 150
 Retail Information System
9.7 Bar Coding (Incorporating Information
Technology in Retailing)
Bar coding is a proven technology for automated data collection
needs of the business. In general terms, “a barcode actually contains any NOTES
given alpha numeric information encoded in the form of bars and spaces
using international symbolizes which are like language of the barcode.”
On retail products, the barcode normally contains the product ID (e.g.
item code, product code etc.) which is required to be entered into the
computer system to update the data at the time of billing, receiving or
dispatch. With the barcode in place, the data is fed into the system
automatically by scanning the barcode using a bar code scanner instead
of punching the same through a keyboard.
The fast checkout and reduced queues attracts more customers
and ensures that customer visit the store again and again. The Bar Code
scanners at point of sales help in the elimination of queues with fast checkout
by automating the data entry into system. The barcode scanner is basically
a device which plugs into a computer system just like another keyboard
and feed the barcode data into a computer.

9.8 Customer Database Management

A database refers to the collection of comprehensive information
about customers and prospects such as demographic and psychographic
profiles, products and services they buy, and purchase volumes, etc.,
arranged in a manner that is available for easy access and retrieval.
Databases allow marketers access to an abundance of information, often
through a computer system such as sales reports, news articles, company
news releases, and economic reports from government and private
agencies, etc., that can be useful in making various marketing decisions.
A simple purchase at any retail store can enable the store to gather
a vast amount of information about its customers and products. The use
of systems to organize, retrieve, search and manage that data is termed as Retail Marketing : 151
Retail Information System database management. Data can be with respect to products, customers,
(Incorporating Information
Technology in Retailing) vendors and suppliers or a combination of them put together.
The elements of database management are data warehousing and

NOTES data mining. Let us take the example of a customer who buys a pair of
cotton chino trousers from a large department store chain in Mumbai. The
customer is also a member of the loyalty programme run by this chain and
visits the store frequently.

9.9 Electronic Retailing

E-tailing is the selling of retail goods on the Internet. Short for
“electronic retailing,” and used in Internet discussions as early as 1995,
the term seems an almost inevitable addition to e-mail, e-business, and e-
commerce. E-tailing is synonymous with business-to-consumer (B2C)
transaction.
E-tailing began to work for some major corporations and smaller
entrepreneurs as early as 1997 when Dell Computer reported multimillion
dollar orders taken at its Web site. The success of Amazon.com hastened
the arrival of Barnes and Noble’s e-tail site. Concerns about secure order-
taking receded. 1997 was also the year in which Auto-by-Tel reported
that they had sold their millionth car over the Web, and Commerce Net/
Nielsen Media reported that 10 million people had made purchases on
the Web. Jupiter research predicted that e-tailing would grow to $37
billion by 2002.
E-tailing offers the consumers huge amounts of information in the
form of web sites with useful links to similar sites that allows consumers to
compare products by looking at individual items. The convenience of online
shopping is unmatched indeed. Shopping out of your home or office reduces
the stresses of waiting in lines and dealing with irritating sales people.
However, E-tailing causes problems with fit, since the consumer cannot
try the items on. Return policies may also act as turn offs and items can be
Retail Marketing : 152 difficult to return. The shipping and handling costs may turn the customers
away. e-tailing requires technology savvy customers and this puts a limit Retail Information System
(Incorporating Information
on its potential reach. We can see that E-tailing is emerging as an interesting Technology in Retailing)
phenomenon in the retail industry that is on a rise despite the disadvantages
associated with it. NOTES

9.10 Role of Web

It is a well-known fact that the retail industry always works on
very narrow margins and the key to survival lies in optimization of resources
both in space and time dimensions as well as maximization of customer
satisfaction. Access to timely and even real-time information to a wide
variety of channel and trading partners, sales personnel, line managers,
store managers etc. is the key to achieving this. Web services technology
holds out a lot of promise for the retail industry in this respect. It is a
platform-neutral, easy to deploy set of standards for achieving business
data and process integration, without going for proprietary point to point
connections. It promises to connect the information providers and
information consumers across a wide variety of platforms, devices and on
an on-demand basis. Being based on service-oriented architecture (SOA)
principles it can also form the enabling service interface layer for other
emerging technologies like BAM, BPM, mobile and RFID.

9.10.1 Online Retailing – Advantages

E-tailing offers unique advantages to the consumer that no other
form of retailing can match. The hypertext nature of the medium allows for
more flexible forms of transactions (growth of C2B and C2C) to flourish.
It allows for easier comparisons across broad product categories with the
evolution of shopping bots and similar mechanisms. The medium also offers
flexible/ dynamic pricing mechanisms to the consumer. These evolutions
reduce any friction in the online market place and stimulate the use of the
web as a retail environment. In the long-run, this will benefit the marketers Retail Marketing : 153
Retail Information System as well as the consumers. Further, this will penalize the marketers who
(Incorporating Information
Technology in Retailing) thrived in market places that had entry barriers in the form of a lack of
freely available information. Earlier, such a situation restricted the customers
NOTES in making informed choices and led to inefficient pricing and localized
monopolies.
Reasons for e-tailing coming up as a hot avenue in the retail sector
can be attributed to multiple factors such as:
• No Real Estate Costs
• No Real Estate Costs
• Customer Interaction
• Mass Media
• Search Option
• User Friendly
• Effective Price Discrimination
• Customized Product Placement
• Global Reach

9.10.2 Factors to be Considered in

Developing Website
An evaluation of the following is important while considering
developing a website.
• Goals and objectives
• Target Audiences
• The Content
• Browser platform

9.10.3 Limitations of Web

Most of the retailing ventures on web have not been as profitable
as they were expected to be, the primary reasons were:
1. Security issues : Security issues hold the center stage
Retail Marketing : 154 when it comes to consumer concerns while shopping
 through the online media. A lack of trust and privacy Retail Information System
(Incorporating Information
concerns prevents a lot of consumers from making online Technology in Retailing)
purchases. Consumers are also concerned with the use of
their personal data provided during the online transactions. NOTES
2. Customer retention : In e-tailing, an increase in the
customer retention by 5% leads to a corresponding increase
in profits by 25%. Most of the people buying on the Internet
do so out of curiosity and this makes a repeat purchase
highly unlikely.
3. Unsuitable for certain product categories : In case of
product categories that require relatively higher customer
involvement, the e-tailing route is found to be grossly
inadequate in providing sufficient information to the
customers. Examples include retailing of products like
clothes, cosmetics etc. Most customers are comfortable
buying books and music on the Internet because the
information required for making a purchase and the
customer involvement is low. However, in case of a blue
Trouser, the customer may want to know things such as:
Which shade of blue is it? How does it feel on the skin?
How easily does it crease? The traditional retailing does
not suffer from such a problem. In the non-standard
product categories, the Internet offers limited amounts of
crucial information to the customer. In such cases, only
the seller knows about the true quality of the trouser and
this leads to an ‘information asymmetry’.
4. Shopping is still a touch-feel-hear experience : Some
do not suffer from ‘time-poverty’ and shopping is still
considered to be a family outing. Hence this type of an
environment creates a problem of customer retention.
5. Complicated medium : Ease of use is a problem, as the
web design may suffer from high complexity bordering on Retail Marketing : 155
Retail Information System total chaos in some cases.
(Incorporating Information
Technology in Retailing) 6. Navigation hiccups : E-tail stores do not have
standardized designs in comparison to the physical retail
NOTES stores and product catalogs. Therefore different user
behaviors (navigation schemes) need to be learned for
each e-tail store. This is a temporary issue as the evolution
of the web continues.
7. Website design flaws : Graphic presentation and
aesthetics may not be as compelling for a web site as in
case of a physical retail store or a product catalog. This
is a temporary issue that may resolve with the evolution
of the web design.
8. Limited access to the Internet : Not all customers
have access to the web, as they do to the postal system.
This is a temporary issue as the evolution of the web
continues.

9.10.4 Future Trends in E-tailing

The investment and improvements in the communication
infrastructure will lead to the mass offering of electronic services in the
home from several appliances. Established appliances, including the
television and telephone will be equipped to provide simple access to
electronic products and services. Furthermore, the increased power and
portability of computers will facilitate easy, carefree, and daily use of
electronic shopping options.

9.11 Summary
The importance of formulating a retail market strategy is
understood by all small and big retailers. To build a competitive advantage
that can be sustained, retailers need to pay special attention to aspects
Retail Marketing : 156
like price, location, merchandise, service and communications. Operations, Retail Information System
(Incorporating Information
purchasing/logistics, market research, financing and technology, which Technology in Retailing)
determine the strategic positioning of the firm are also equally important.
Retailers are facing an increasingly competitive environment due to the NOTES
relatively slow growth of the retailing sector, increasing maturity and
concentration of many retailing sectors, the emergence of new retailing
formats such as the internet, changes in consumer expectations and
expenditure, and competition from international retailers. The major drivers
of competition within the industry are the threat of new entrants, the treat
from substitute forms of retailing (that is, intertype competition), the
bargaining power of producers, the bargaining power of shoppers, and
the intensity of rivalry between firms. The relative balance between
competing retailers and their competitive retail marketing strategies also
influences the intensity of competition. E-tailing has resulted in the
development of e-tail software tools for creating online catalogs and
managing the business connected with doing e-tailing. A new trend is the
price comparison site that can quickly compare prices from a number of
different e-tailers and link you to them.

9.12 Key Terms

Electronic Data Interchange : It is the structured transmission of
data between organizations by electronic means.
Enterprise Resource Planning : A business management system that
integrates all facets of the business, including planning, manufacturing, sales,
and marketing.
E-tailing : Selling on retail goods on internet.
Marketing Information Systems : It refers to a programme for managing
and organizing information gathered by an organization from various internal
and external sources.
Radio Frequency Identification : It is the use of an object applied to
or incorporated into a product, animal, or person for the purpose of Retail Marketing : 157
Retail Information System identification and tracking using radio waves.
(Incorporating Information
Technology in Retailing)

9.13 Questions and Exercises

NOTES
1. Discuss about the importance of IT in retailing.
2. What do you know about integrated systems and networking?
3. Explain the marketing information system.
4. Describe the retail management information system.
5. Discuss about the importance of IT in retailing.
6. What do you know about integrated systems and networking?
7. Explain the marketing information system.
8. Describe the retail management information system.
9. What are the components of ERP?
10. What are the components of ERP?

9.14 Further Reading and References

• Dunne Patrick M., Lusch Robert F, Griffith David A, (2002) Retailing,
4th Ed, Thomson South Western
• Levy Michael, Weitz Barton A. (2001) Retailing Management, 5th
Ed, McGraw-Hill Irwin
• Sinha Piyush Kumar and UniyalDwarika, (2005) Retail Management
- An Asian Perspective, Thomson Learning, Singapore.
• http://ezinearticles.com/?Role-of-Information-Technology-in-Growth-
of-Business&id=344198
• http://sclgme.org/shopcart/Documents/Retail%20Logistics%20-
%20Change %20and%20Challenges.pdf
• http://ccsenet.org/journal/index.php/ijbm/article/download/6631/5247
• http://www.emeraldinsight.com/ journals.htm /journals.htm ? articleid
= 1789994 & show =html&WT.mc_id=alsoread

Retail Marketing : 158

 Retailing in India
UNIT 10: RETAILING IN INDIA- Opportunity and Challenges

OPPORTUNITY AND
NOTES
CHALLENGES
10.0 Unit Objectives
10.1 Introduction
10.2 The Indian Retail Sector
10.3 Key Trends in Urban India.
10.4 Key Trends in Rural India.
10.5 The Hidden Challenges
10.6 Strategies to Overcome Challenges
10.6.1 Right Positioning
10.6.2 Effective Visual Communication
10.6.3 Strong Supply Chain
10.6.4 Changing the Perception
10.7 Summary
10.8 Key Terms
10.9 Questions and Exercises
10.10 Further Reading and References

10.0 Unit Objectives

This unit discusses the challenges like merchandising mix, retail
differentiation, supply chain management and also competition from
supplier’s brand in the Indian perspective.

10.1 Introduction
Retailing is still in its infancy in India. In the name of retailing, the
unorganized retailing has dominated the Indian landscape so far. According
to an estimate the unorganized retail sector has 97% presence whereas Retail Marketing : 159
Retailing in India the organized accounts for merely 3%. Industry has already predicted a
Opportunity and Challenges
trillion dollar market in retail sector in India by 2010. However, the retail
industry in India is undergoing a major shake-up as the country is witnessing

NOTES a retail revolution. The old traditional formats are slowly changing into more
complex and bigger formats. Malls and mega malls are coming up in almost
all the places be it – metros or the smaller cities, across the length and
breadth of the country.
A McKinsey report on India (2004) says organized retailing would
increase the efficiency and productivity of entire gamut of economic activities,
and would help in achieving higher GDP growth. At 6%, the share of
employment of retail in India is low, even when compared to Brazil (14%),
and Poland (12%).Govt of India’s plan of changing the FDI guidelines in
this sector speaks of the importance attached to retailing. Recently moves
by big corporate houses like Reliance Industries has further fueled the major
investments in retail sector. A strategic alliance, land acquisitions in prime
areas give the essence of the mood in this sector.
Both MNCs and Indian firms want to get their share of this
burgeoning pie. Notable in Indian firms are Pantaloons Retail & Big Bazaar,
Trent’s Westside, Shopper’s stop, Reliance and Subhiskha, Wills Lifestyle
stores, Café Coffee Day, which are present in India in different retail formats.
Wal-Mart stores have just started operations in India. Some leading retail
coffee chains of the world like Starbucks, Barnies are planning to expand
in a major way in India.

10.2 The Indian Retail Sector

India is the country having the most unorganized retail market.
Traditionally it was a family’s livelihood, with their shop in the front and
house at the back, while they run the retail business. More than 99% retailer’s
function in less than 500 square feet of shopping space. Global retail
consultants KSA Techno Pak have estimated that organized retailing in

Retail Marketing : 160 India is expected to touch Rs 35,000 crore in the year 2005-06. The
Indian retail sector is estimated at around Rs 900,000 crore, of which the Retailing in India
Opportunity and Challenges
organized sector accounts for a mere 2 per cent indicating a huge potential
market opportunity that is lying in the waiting for the consumer-savvy
organized retailer. Purchasing power of Indian urban consumer is growing NOTES
and branded merchandise in categories like Apparels, Cosmetics, Shoes,
Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle
products that are widely accepted by the urban Indian consumer. Indian
retailers need to advantage of this growth and aiming to grow, diversify
and introduce new formats have to pay more attention to the brand building
process. The emphasis here is on retail as a brand rather than retailers
selling brands. The focus should be on branding the retail business itself.
There is no doubt that the Indian retail scene is booming. A number of
large corporate houses —Tata’s, Raheja’s, Piramals’s, Goenka’s - have
already made their foray into this arena, with beauty and health stores,
supermarkets, self-service music stores, new age book stores, every-
day-low-price stores, computers and peripherals stores, office equipment
stores and home/building construction stores. Today the organized players
have attacked every retail category.
The Indian retail scene has witnessed too many players in too
short a time, crowding several categories without looking at their core
Check Your Progress
competencies or having a well thought out branding strategy. The growth
rate of super market sales has been significant in recent years because Define the retail sector in
India?
greater numbers of higher income Indians prefer to shop at super markets
due to higher standards of hygiene and attractive ambience. With growth
in income levels, Indians have started spending more on health and beauty
products. Here also small, single-outlet retailers dominate the market. In
recent years, a few retail chains specialized products have come into the
market. Although these retail chains account for only a small share of the
total market, their business is expected to grow significantly in the future
due to the growing quality consciousness of buyers for these products
.Numerous clothing and footwear shops in shopping centers and markets
operate all over India. Traditional outlets stock a limited range of cheap Retail Marketing : 161

and popular items; in contrast, modern clothing and footwear stores have
Retailing in India modern products and attractive displays to lure customers. With rapid
Opportunity and Challenges
urbanization, and changing patterns of consumer tastes and preferences, it
is unlikely that the traditional outlets will survive the test of time. Despite

NOTES the large size of this market, very few large and modern retailers have
established specialized stores for products.

There seems to be a considerable potential for the entry or

expansion of specialized retail chains in the country. The Indian durable
goods sector has seen the entry of a large number of foreign companies
during the post liberalization period. A greater variety of consumer electronic
items and household appliances became available to the Indian customer.
Intense competition among companies to sell their brands provided a strong
impetus to the growth for retailers doing business in this sector. Increasing
household incomes due to better economic opportunities have encouraged
consumer expenditure on leisure and personal goods in the country. There
are specialized retailers for each category of products (books, music
products, etc.) in this sector. Another prominent feature of this sector is
popularity of franchising agreements between established manufacturers
and retailers. A strong impetus to the growth of retail industry is witnessed
by economic boom and driver of key trends in urban as well as rural India.

10.3 Key Trends in Urban India

Retailing in India is witnessing a huge revamping exercise.
a. Estimated to be US$ 200 billion, of which organized
retailing (i.e. modern trade) makes up 3 percent or US$
6.4 billion.
b. India is rated the fifth most attractive emerging retail market:
a potential goldmine.
c. Ranked second in a Global Retail Development Index of

Retail Marketing : 162 30 developing countries drawn up by AT Kearney.

 d. India is rated the fifth most attractive emerging retail Retailing in India
Opportunity and Challenges
market: a potential goldmine
e. Food and apparel retailing key drivers of growth.
f. Organized retailing in India has been largely an urban
NOTES
phenomenon with affluent classes and growing number
of double-income households.

10.4 Key Trends in Rural India

a. Rural markets emerging as a huge opportunity for retailers
reflected in the share of the rural market across most
categories of consumption
b. ITC is experimenting with retailing through its e-Choupal
and Choupal Sagar – rural hypermarkets.

10.5 The Hidden Challenges

Modern retailing is all about directly having “firsthand experience”
with customers, giving them such a satiable experience that they would
like to enjoy again and again. Providing great experience to customers
can easily be said than done. Thus challenges like retail differentiation,
merchandising mix, supply chain management and competition from
supplier’s brands are the talk of the day. In India, as we are moving to the
next phase of retail development, each endeavor to offer experiential
shopping. One of the key observations by customers is that it is very
difficult to find the uniqueness of retail stores. The problem: retail
differentiation.
The next problem in setting up organized retail operations is that
of supply chain logistics. India lacks a strong supply chain when compared
to Europe or the USA. The existing supply chain has too many
intermediaries: Typical supply chain looks like:- Manufacturer - National
distributor - Regional distributor - Local wholesaler - Retailer - Consumer. Retail Marketing : 163
Retailing in India This implies that global retail chains will have to build a supply chain network
Opportunity and Challenges
from scratch. This might run foul with the existing supply chain operators.
In addition to fragmented supply chain, the trucking and transportation

NOTES system is antiquated. The concept of container trucks, automated

warehousing is yet to take root in India. The result: significant losses/
damages during shipping.
Merchandising planning is one of the biggest challenges that any
multi store retailer faces. Getting the right mix of product, which is store
specific across organization, is a combination of customer insight, allocation
and assortment techniques.The private label will continue to compete with
brand leaders. So supplier’s brand will take their own way because they
have a established brand image from last decades and the reasons can be
attributed to better customer experience, value vs. price, aspiration,
innovation, accessibility of supplier’s brand.

10.6 Strategies to Overcome Challenges

10.6.1 Right Positioning

The effectiveness of the mall developer’s communication of the
Check Your Progress
What are the challenges offering to the target customers determines how well the mall gets
the retail sector of India positioned in their minds. At this stage, the communication has to be more
is facing?
of relative nature. This implies that the message conveyed to the target
customers must be effective enough in differentiating the mall’s offering
from that of its competitors without even naming them. The message should
also clearly convey to the target audience that the mall offers them exactly
what they call the complete shopping-cum-entertainment point that meets
all their expectations. The core purpose is to inform the target customers
about the offering of the mall, persuade them to visit the mall and remind
them about the mall. The mall developer can create awareness about the
offering among the target customers in a number of ways. Various

Retail Marketing : 164 communication tools available to the mall developer for this purpose may
include advertising, buzz marketing (WoM), celebrity endorsement, use of Retailing in India
Opportunity and Challenges
print media, press releases and viral marketing .Once the message is being
conveyed through these channels, the mall developer must add a personal
touch to his message by carrying out a door-to-door campaign in order to NOTES
reinforce the message.

10.6.2 Effective Visual Communication

Retailer has to give more emphasis on display visual merchandising,
lighting, signage and specialized props. The visual communication strategy
might be planned and also be brand positioned. Theme or lifestyle displays
using stylized mannequins and props, which are based on a season or an
event, are used to promote collections and have to change to keep touch
with the trend. The merchandise presentation ought to be very creative
and displays are often on non-standard fixtures and forms to generate
interest and add on attitude to the merchandise.

10.6.3 Strong Supply Chain

Critical components of supply chain planning applications can help
manufacturers meet retailers’ service levels and maintain profit margins.
Retailer has to develop innovative solution for managing the supply chain
problems. Innovative solutions like performance management, frequent
sales operation management, demand planning, inventory planning,
production planning, lean systems and staff should help retailers to get
advantage over competitors.

10.6.4 Changing the Perception

Retailers benefit only if consumers perceive their store brands to
have consistent and comparable quality and availability in relation to branded
products. Retailer has to provide more assortments for private level brands
to compete with supplier’s brand. New product development, aggressive Retail Marketing : 165
Retailing in India retail mix as well as everyday low pricing strategy can be the strategy to get
Opportunity and Challenges
edge over supplier’s brand.

NOTES 10.7 Summary

In their preparation to face fierce competitive pressure, Indian
retailers must come to recognize the value of building their own stores as
brands to reinforce their marketing Positioning, to communicate quality as
well as value for money. Sustainable competitive advantage will be dependent
on translating core values combining products, image and reputation into a
coherent retail brand strategy.

10.8 Key Terms

Supply Chain : A supply chain is a system of organizations, people,
activities, information, and resources involved in moving a product or service
from supplier to customer.
Visual Communication : Visual communication is communication through
a visual aid and is described as the conveyance of ideas and information in
forms that can be read or looked upon.
Positioning : An effort to influence consumer perception of a brand or
product relative to the perception of competing brands or products. Its
objective is to occupy a clear, unique, and advantageous position in the
consumer’s mind.
Retail Sector : The part of a country’s economy that is made up of
businesses that sell goods through stores, on the internet, etc. to the public.

10.9 Questions and Exercises

1. Define the retail sector in India?
2. What are the challenges the retail sector of India is facing?
3. Examine some strategies that you see in your locality and demonstrate
Retail Marketing : 166
 them for overcoming the challenges of retail sector in India. Retailing in India
Opportunity and Challenges

10.10 Further Readings

NOTES
• Levy, Michel; and Weitz, Barton A. Retailing Management. New
Delhi, Tata McGraw-Hill Publishing Company Limited, 2002.
• Mariton, John. Smart Things to Know about Brands and Branding
Mumbai, Indian Books Distributors Limited, 2000.
• “Changing Gears Retailing in India”, New Delhi: Times Multimedia,
2003 (CD-ROM)
• “ET in The Classroom”, Times Multimedia ,2003(CD-ROM)
• www.indiatimes .com Sept21, 2003.
• “Mall Management strategies” www.pearlacademy.com
• http://www.indianmba.com/Faculty_Column/FC689/fc689.html
• www.blonnet.com
• www.iimcal.ac.in/intaglio/downloads/Retails.doc.
• www.imagesfasionsforum.com/fashion_vision4.htm

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