RETAILING - AN INTRODUCTION 9 Definition- Functions- Importance- Types of retailing - Prospects of Retailing in India- Key Drivers of Retailing in India- Opportunities

in Retailing- Retail management decision process- Global Retail market- Business Models in Retail- Theories of Retail DevelopmentConcept of life cycle in Retail RETAIL MARKET SEGMENTATION & CONSUMER BUYING DECISION PROCESS 9 Criteria for Evaluating market segment- Approach for segmenting market- Selection of Promotion mix- Market Targeting- Customer Profile- Market Segmentation in India-Need for studying consumer behavior- Factors influencing retail shoppers- Customer decision making process RETAIL MARKET STRATEGY 9 Definition- Target market and retail format- Building sustainable competitive advantagesgrowth strategies- Strategic retail planning process - Purpose- Method- Structure and monitoring the plan

PRICING IN RETAILING & IMPACT OF INFORMATION TECHNOLOGY 9 Approaches- Factors influencing - Price adjustments- Strategies-Techniques- Integrated systems and Networking EDI- Bar Coding- Customer database management- Electronic retailing - Role of web- Online retailing- Retail audit RETAIL LOCATION DECISION MERCHANDISE & STORE MANAGEMENT 9 Types of location - Factors influencing location- Site evaluation - Trading area analysisEstimating potential sales-Factors affecting site selection-Assortment plan and Inventory management; Purchase negotiation- Supply channel and relationship- Store design - Layout and space management- Visual merchandising and displays

M.B.A. DEGREE EXAMINATION, NOVEMBER/DECEMBER 2010 Elective BA 9252 RETAIL MANAGEMENT (Regulation 2009) Time : Three hours Maximum : 100 Marks Answer ALL questions PART A (10 2 = 20 Marks) 1. What is retailing? 2. Mention any four challenges of retailing in India. 3. Give some examples for organized retail formats. 4. What is unorganized retail format? 5. Explain internal atmospherics in retailing. 6. What is retail service quality? 7. Mention any five retail store brands. 8. What is space management? 9. What is shopper profile? 10. Mention the steps involved in shopping decision process. PART B (5 16 = 80 Marks) 11. (a) Critically highlight the issues and challenges of retailing in India. Or

(b) Discuss the socio, economic and technological influences on retail management with specific reference to India. 12. (a) Describe the characteristics of the organized and unorganized retail formats in India. Or (b) Highlight the MNC role in organized retail formats with suitable examples. 13. (a) Describe the process involved in the retail pricing decisions. Or (b) How will you build the retail store image? Explain with current Indian examples. 14. (a) Critically evaluate some of the retail advertisements and promotions in Indian context.Or (b) Highlight the impact of online in retailing. Discuss the emerging trends in retailing. 15. (a) Discuss the process involved in understanding the retail shopper behavior. How will you develop the shopper profile? Or (b) Enumerate the factors influencing the retail shopper behavior with suitable examples.

CHALLENGES & TRENDS IN RETAIL MANAGMENT:

CHALLENGES & TRENDS IN RETAIL MANAGMENT

What is RETAIL:
The word retail is derived from French word retaillier which mean cut off a piece or to break bulk. Retailing is the final stage of any Economy. Retail may be redefined as first point of customers contact Any organization selling to final customers whether it is a manufacturer, wholesaler or retailer is doing retailing W h at is RETAIL

Retailing Worlds largest private industry US$ 6.6 trillion sales annually Indian retailing Largest employer after agriculture - 8%* of population Highest outlet density in world Around 12 mn outlets Still evolving as an industry Long way to go An overview Retailing: An overview

Wal-Mart Topmost global Fortune 500 company(3 Consecutive Years) Annual Sales of over US$ 250 bn Indias two largest retail player turnover around US$ 158 mn (Bata) and US$ 102 mn (Shoppers Stop) Fortune 100 9 Retailers Carrefour, Ahold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Albertsons An overview Retailing: An overview

Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty in enforcing tax collection mechanisms No monitoring of labor laws Formal Retailing Sector Typically large retailers Greater

enforcement of taxation mechanisms High level of labor usage monitoring Indian retail Evolution of Indian retail

Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc. Dedicated brand outlets Nike, Reebok, Zodiac etc Multi-brand outlets Vijay Sales, Viveks etc Manufacturers/ Exporters Pantaloons, Bata, Weekender Indian retail Categories of Indian retail

Hypermarket Big Bazaar Giants Shoprite Star Department store Lifestyle Pantaloons Pyramids Shoppers Stop Trent Entertainment Fame Adlabs Fun Republic Inox PVR Indian retailers Large Indian retailers

Introduction to retail industry:

Retail industry is one of the largest industries in the world by number of businesses and number of employees. Wal-Mart continues to dominate as the Worlds Biggest Retailer. Various kinds of retail formats in the organized retail sector are supermarkets, departmental stores, convenient stores, specialty stores, hypermarkets and so on. Introduction to retail industry

Recent trends in retail sector :

Evolution of stores as a major marketing medium - Millions of dollars have been spend by Procter & Gamble, Kroger and dozens of other major retailers to invest in a project called PRISM, or Pioneering Research for an In-Store Metric to study customer preferences and behavior to various brands of products by tracking down all purchases in the store using infrared sensors. Increasing importance of packaging - Its been proven that the design of the package is one of the top 3 reasons people buy something, just behind the price and the primary need the product fulfills . For instance, Wrigleys recent introduction of their new gum 5. The effort they have put into the package design and positioning of it is visual example of the importance of packaging . Recent trends in retail sector

Strategies of companies like Wal-Mart of being the low-price leader on key items and taking a higher margin on other items will force every retailer to improve the quality of their price message . For retailers that choose not to compete on price, it means they will need to emphasize service, selection, experience, or whatever their niche is . Selling off of brands - cycle of major companies selling off brands they deem no longer worthy of their focus. The end result is that it will create significant opportunities for some smaller companies to pick up some brands .

Exploiting Key New Technologies -Whether in the area of stock control, supply chain efficiency or in CRM many retailers are queuing up to utilise the latest technologies to innovate. Wal-Mart is the owner of the worlds largest data warehouse which it uses to identify customer-buying patterns at the store level, manage inventory and identify merchandising opportunities.

Retailing in India:
India has been a nation of Dukandars, having approximately 12 million retailers. Obviously retailing is in our blood either as a shopkeeper or as a shopper. The Indian Retail market is estimated to grow to U. S. $ 637 billion by 2015. Retail which contributes 10% of our GDP is the largest source of employment after agriculture . It is not just the global players like Wal-Mart are eying to capture a pie of this galloping market but also the domestic corporate behemoths like Reliance, NeelKamal, KK Modi, Aditya Birla group, and Bharti group too Retailing in India

Emerging Trends in Modern Retail Formats of India:

Most of grocery retailers are region centric to suit different segments and taste preferences. Now a number of retailers are in a mode of experimentation and trying several formats which are essentially to fit into the consumer mind space. For example Pantaloon Retail India is experimenting with several retail formats to cater to a wide segment of consumers in the market. Govt. is also promoting the development of modern retail formats by policies like tax exemptions as Punjab government did. Emerging Trends in Modern Retail Formats of India

4 . Increasing acceptance of tier II cities- Real estate developers are jumping very fast to take mall culture further from Metro cities to smaller cities. Emergence of Private-Label Brands: The private labels are offering flexibility to both the retailer and the consumer on price front. Emergence of convenient stores: In India, Convenience stores occupied 23 thousand sq. meter of retail space with sales of about Rs 1347 million in 2005 and are expected occupy 85 thousand square meter of selling space by 2010. It offers ease of shopping and customized service to the shoppers Category Killer: A New Concept imported from U.SCategory Killer is a kind of discount specialty store that offers less variety but deep assortment of merchandise. By offering a deep assortment in a category at comparative low prices, category specialist can be able to kill that specific category of merchandize for other retailers.

Most of the customers still rely on traditional supermarkets which sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small utensils, stationery and Gift items. e-Retailing or internet retailing is also emerging as a new trend all over the world. Eg . e Bay and rediff are providing a platform to vendors to sell their products online and they do not take the responsibility of delivering the product to buyer.

Challenges & Opportunities in Indian Retail Industry:

Challenges & Opportunities in Indian Retail Industry

Low domestic competition Because of fragmented nature of industry Lack of exposure to global best practices Low entry barriers for unorganized retailing Moderate entry barriers for organized retailing Wholesale system under-invested leading to 20-40% wastage Non level playing field issues Wide differences in treatment of small and large retailers Industry Challenges Challenges in the Industry

Real Estate Costs Supply Chain Inconsistency Poor Infrastructure Lack of Skilled Manpower issues Challenges

INDIAS RETAILINGSTRATEGIC ISSUES AND CHALLENGESBY :SARABJEET SINGH DUAMBA (Marketing)Sarabjeetsinghdua10@gmail.com 2. RETAIL INDUSTRY IN INDIA 3. India is the third-most attractive retail market forglobal retailers among the 20 largest emergingmarkets, according to US consulting group ATKearneys report published in June 2012. 4. Weekly MarketsVillage FairsMelasConvenience StoresMom and Pop/KiranasPDS OutletsKhadi StoresCooperativesExclusive Brand OutletsHyper/Super MarketsDepartment StoresShopping MallsTraditional/PervasiveReachGovernmentSupportedHistoric/RuralReachModern Formats/InternationalSource ofEntertainmentNeighborhoodStores/ConvenienceAvailability/ LowCosts /DistributionShoppingExperience/Efficiency 5. CHALLENGES IN INDIAN RETAILING 6. MODERN MARKETING MIXExperienceEveryplaceExchangeEvangelismPRODUCT PLACE PRICE PROMOTION 7. MAIN CHALANGES IN RETAILINGSTORE TYPESTORE LOCATIONSTORE DESIGNSTORE PROMOTIONSTORE PRICING POLICYSTORE COMPETITION 8. WHEEL OF RETAILING 9. WHEEL OF RETAILINGA hypothesis holding that newretailers usually enter the market aslowstatus, low-margin, low-priceoperators but eventually evolve intohigh-cost, high price merchants. 10. RETAIL FOCUS ISSUES 11. CHALLENGES TO RETAILINGRETAIL POSITIONINGRETAIL PRICINGRETAIL COMPETITIONRETAIL PROMOTIONCUSTOMER ORIENTATIONMARKET ORIENTATIONFACTORS TO FOCUS ON 12. FACTORS AFFECTING RETAIL LOCATION Intended target market trading area Types of products being sold Suitability of site for customer access Customer characteristics Location of competitive retail operationsTypes of LocationsFree-standing structuresTraditional business districts 13. FC ROAD - SHOP 14. VIMAN NAGAR - PHOENIX MALL 15. RETAIL PRICING Cost Plus Pricing Mechanism Every organization runs to earn profits and so is the retail industry. Cost plus pricing works on the following principle: Cost Price of the product + Profit (Decided by the retailer) = Finalprice of the merchandise. According to cost plus pricing strategy the retailer adds some extraamount to the actual cost price of the product to earn his share ofprofits. The final price of the merchandise includes the profit asdecided by the retailer. 16. RETAIL PRICING Competitive Pricing (Below --> Same --> Above) The cut throat competition in the current retail scenario hasprompted the retailers to guarantee excellent customer service tothe buyers for them to prefer them over their competitors. The price of the merchandise is more or less similar to thecompetitors but the retailers add on certain attractive benefits forthe customers. (Longer payment term, gifts etc.) 17. RETAIL PRICINGMANUFACTURER SUGGESTED RETAIL PRICE The retailer sells his merchandise at a price suggested by themanufacturer.Condition 1 The retailer sells the product at the same price as suggested by themanufacturer. FIXEDCondition 2 The retailer sells the merchandise at a price less than what wassuggested by the manufacturer. SALECondition 3 Retailers initially quote an unreasonably high price and then reducethe price on the customers request. BARGAIN 18. Psychological Pricing Certain price of a product at which the consumerwillingly purchases it is called psychological price. The consumer perceives such prices to be correct. A retailer sets a

psychological price which he feelswould meet the expectations of the buyers and theywould easily buy the merchandise.RETAIL PRICING 19. RETAIL PROMOTIONSPRODUCT LAUNCHSDealer MeetsGuerilla MarketingPress LaunchOut-of-home (OOH)DESIGN / CREATIVESMall MarketingCanters/BusDisplayExhibitionBRAND ACTIVATIONConsumer PromosMall ActivitySchool & College PromosRoad ShowsRWA (Residents Welfare Association) ActivityFlash Mobs 20. MALL ACTIVITY 21. Mall Marketing 22. MALL EXIBITIONS 23. Van Activity 24. OUT OF BOX PROMOTIONS 25. I Walker The Walking Billboard 26. How does Magic mirror works? Usually magic mirror works as a Advertisingboard in which you may display any creative, and that glows all the times. Butas soon as someone stands in front of this Display..it turns into a mirror.. andthats MAGIC.. This has a excellent use in malls, showrooms and airports.MAGIC MIRRORS 27. What is a Video Jacket (VJ) ? VJ is a unique Blend of Video + Audio Advertising.VJ is the first and only product that combines ATL & BTL together. Televisioncommercial is considered to be the most effective form of advertisementcarrying human emotions and adequate message. With VJ, TVCs can be used inmalls, markets & Airports, Brands can reach their customers outside their homeand offices. It gives a combined effect of Audio + Video Advertising on themove.Video Jacket.. Walk with TVC : 28. Product Inflatables 29. Automatic Vending Machines 30. e- RetailingThe role of e-distribution is tomake theproductsavailable at theright time, atthe right place,in the rightquantities 31. VIRTUAL CHANGING ROOM 32. STRATEGY MAKES YOU DIFFERENT FROM OTHERSREST OF THE GAME IS THE SAME.

Prospects and challenges of retail sector in india copy Presentation Transcript

1. PROSPECTS AND CHALLENGES OFRETAIL SECTOR IN INDIASubmitted by : Submitted to : Mr Gaurav AroraPreeti GulatiMalvika didwalVenkatesh 2. INTERESTING FACTS ON Every 10th billionaire is a retailer.RETAIL 25 of the top 50 Fortune 500 companies are in Retail. In India the Retailing Industry provides employment to over 18 million people. 1 out of every 25 families in India are engaged in the business of retailing 3. Indian Retail Scenario Today Retail amongst the largest industries in India, With over 12% of countrys GDP & about 8% of employment 12th largest economy in the world 4th largest in purchasingpower parity terms Over 65% of Indian population below 24yrs. That is over 564 million people, nearly twice the total population of the United States 4. Changing Scenario BEFORE AFTER Shift from Unorganized to Organized self service outlets 5. Brands in India Today 6. PROSPECTS Ample Scope for the New Players to Enter the Indian Retail Market Sea Changes in the Preferences of the Indian Consumers Scope in Retail Education FDI in Multi brand Retailing taking India to a new level

7. International Retailers in India International Players Eyeing India Shoprite South Africa (Hypermarkets) Landmark, Dubai (Lifestyle stores) Marks & Spencers (Lifestyle stores) Metro Cash & Carry (Wholesale Hypermarket) Tesco Wal Mart (Hypermarkets) 8. The challenges of Indian retail The Positioning Challenge The Location Challenge The Format Challenge The Manpower Challenge 9. The Positioning Challenge Positioning Position on price on range Position Position on on convenience store experience 10. The Location Challenge Lack of availability of stores locations convenient to shopper The infrastructural problems to get to a store The rising cost of leasing Mad rush to open stores contributing to increased cost 11. The Format Challenge Multiple formats being experimented Convenience versus supermarkets versus hypermarkets 12. The Manpower Challenge Big disconnect between quality of personnel and customer experience desired Lack of skilled Manpower High cost of retaining Manpower 13. What does it mean? It means that global retailers such as Wal-Mart, Carrefour, Tesco and others can set up mega deep-discount stores in the country through joint ventures with Indian firms, where the foreign partner can hold up 51% equity. The issue arises that Wal-Mart, Carrefour and Metro already have stores in India but these are wholesale cash-and-carry stores where only institutions or kirana shops can buy not consumers.Conditions set by government for allowing FDI in India: Minimum investment of $100 million. 50% of the investment is to be in backend infrastructure development. 30% of all raw material has be procured from Indias small and medium industries. contd 14. contd Permission to set up malls only in cities with a minimum population of 10 lakh. Government has the first right to procure material from the farmers.Why do we need it: We are the second highest producer of fruits and vegetables in the world but still we are not able to utilize is properly because of inadequate infrastructure facilities. It will create 1.5 million more jobs in 5 years. Apart from the huge number of indirect employment. It will increase competition which is always beneficial for the customer. It will remove the middleman from the equation. It will reduce costs which in turn will reduce prices.

Characteristics of Retailing It offers direct interaction Sale volume is comparatively large in quantities Customer service Sales promotions are offered at this point only Different forms Location and layout are critical factors More employment opportunitiesBy:- Ramendra Mani Tripathi MBA 7 8. Functions of Retailing Sorting Breaking Bulk Holding stock Communications Assist small suppliers Customer serviceBy:- Ramendra Mani Tripathi MBA 8 9. INDIAN RETAIL-BRIEFOVERVIEW The Indian retail sector is highly fragmented with morethan 90 per cent of its business being carried out bytraditional family run small stores. In Indian context total 7% of population engaged in theretailing trade and in those 7% only 10% population areengaged in organized retailing and rest other 90%population are engaged into the Unorganized Retailing.By:Ramendra Mani Tripathi MBA 9

10. Organized Retailing Organized retailingcomprises mainly ofmodern retailing with busyshopping malls, multistoried malls and hugecomplexes that offer alarge variety of products interms of quality, value formoney and makesshopping a memorableexperience.By:- Ramendra Mani Tripathi MBA 10 11. Unorganized Retailing Traditional orUnorganized retail outletsare normally streetmarkets, counter stores,kiosks and vendors, wherethe ownership andmanagement rest with oneperson only.By:Ramendra Mani Tripathi MBA 11 12. INDIAN RETAIL-BRIEFOVERVIEW This provides immense opportunity for large scaleretailers to set-up their operations a slew of organizedretail formats like departmentalstores, hypermarkets, supermarkets and specialty storesare swiftly replacing the traditional formats dramaticallyaltering the retailing landscape in India.By:- Ramendra Mani Tripathi MBA 12 13. INDIAN RETAIL-BRIEFOVERVIEW India is the third-most attractive retail market for globalretailers among the 30 largest emergingmarkets, according to US consulting group AT Kearneysreport published in June 2010By:- Ramendra Mani Tripathi MBA 13 14. RETAIL-MARKET SIZE The total retail sales in India will grow from US$ 395.96billion in 2011 to US$ 785.12 billion by 2015 Indian retail sector accounts for 22 per cent of thecountrys gross domestic product (GDP) and contributes to8 per cent of the total employment.By:- Ramendra Mani Tripathi MBA 14 15. Driving forces of Retailing Ecommerce The Store Marketing Information technology Mobile & Social Generation of shoppers The economy CouponsBy:- Ramendra Mani Tripathi MBA 15 16. Concept of Retailing It uses a customer-centered, chain wide approach tostrategy development and implementation, it is valuedriven, and it has clear goals. Together these fourprinciples form the retailing ConceptBy:- Ramendra Mani Tripathi MBA 16 17. Concept of Retailing Customer Orientation-The retailer determines theattributes and needs of its customers and endeavors tosatisfy these needs to fullest Coordinated Effort-The retailer integrates all plansand activities to maximize efficiencyBy:- Ramendra Mani Tripathi MBA 17 18. Concept of Retailing Value-driven-The retailer offers good value tocustomers, whether it be upscale or discount. Thismeans having prices appropriate for the level ofproducts and customer service Goal orientation-The retailer sets goals and then usesits strategy to attain themBy:- Ramendra Mani Tripathi MBA 18 19. By:- Ramendra Mani Tripathi MBA 19

1. (a) What is Retailing? Throw light on retail industry of India. (10) (b) Discuss the importance of Location Decision. Explain the levels of location decisions. (10) 2. (a) Discuss the criteria for effective market segmentation. (10) (b) What information should the customer profile contain? Explain how customer profile helps in framing effective marketing strategy. (10) 3. (a) Define merchandise management. Explain the components of merchandise management. (10) (b) Discuss the retail pricing & promotion strategy. (10) 4. (a) Discuss the composition size and key players in food, jewellary retail. (10) (b) Discuss the different types of ownership in retail industry. (10) 5. (a) Discuss the importance of sales forecasting in retailing. (10) (b) Explain the factors that affect the demand for the region on trade area. (10) 6. (a) Discuss the importance of assortment plan & estimation of demand. (10) (b) What is relationship marketing? Describe the evaluation of relationship marketing. (10) 7. (a) Explain the reasons for the emergence of category management. (10) (b) Discuss the promotional strategy of any two organized retail units. (10) 8. Answer any four of the following (4 X 5 = 20) (a) Careers in Retailing (b) Contribution of retailing to economy (c) Types of Ownership (d) The attractiveness of a site (e) Retail Audits

Measuring Retail Performance and Productivity

Tracking Retail Sales
your shop has customers steadily coming through the doors, employees are busy and there is the frequent 'cha-ching' of the cash register, but how well is your business really doing? It is critical for the success of your business to constantly work towards improving not only the efficiency of employees, but the productivity of the store's selling space and inventory as well. This can be achieved by using various retail math formulas and calculations based on sales.

Performance of Selling Space

Sales per Square Foot The sales per square foot data is most commonly used for planning inventory purchases. It can also roughly calculate return on investment and it is used to determine rent on a retail location. When measuring sales per square foot, keep in mind that selling space does not include the stock room or any area where products are not displayed. Total Net Sales Square Feet of Selling Space = Sales per Square Foot of Selling Space Sales per Linear Foot of Shelf Space A retail store with wall units and other shelf space may want to use sales per linear foot of shelf space to determine a product or product category's allotment of space. Total Net Sales Linear Feet of Shelving = Sales per Linear Foot Sales by Department or Product Category Retailers selling various categories of products will find the sales by department tool useful in comparing product categories within a store. For example, a woman's clothing store can see how the sales of the lingerie department compared with the rest of the store's sales. Category's Total Net Sales Store's Total Net Sales = Category's % of Total Store Sales

Measuring Productivity of Staff

Sales per Transaction Also known as sales per customer, the sales per transaction number tells a retailer what is the average transaction in dollars. A store dependant on its sales clerks to make a sale will use this formula in measuring the productivity of staff. Gross Sales Number of Transactions = Sales per Transaction Sales per Employee

When factoring sales per employee, retailers need to take into consideration whether the store has full time or part time workers. Convert the hours worked by part-time employees during the period to an equivalent number of full-time workers. This form of measuring productivity is an excellent tool in determining the amount of sales a business needs to bring in when increasing staffing levels. Net Sales Number of Employees = Sales per Employee These are just a few of the ways to measure a retail store's performance. As retailers track these numbers month after month and year after year, it becomes easier to understand where the sales are generated, by which employees and how the store's merchandising can maximize sales growth.

Measurement Tool for Service Retailing Reliability Responsiveness Assurance Empathy Tangibles Performance Measures Total sales Average sales per store Sales by goods/ service category Sales per square foot Gross margins Gross margin return on investment Operating income Inventory turnover Markdown percentages Employee turnover Financial ratios Profitability