By

Rekha R Kini
Sandeep S
Santhosh Krishnan
SMS Cusat
Supermarket definition
Quality definition
Customer expectations
Quality incorporated in design
Logistics & CSI
Quality management tools
These are retail formats which are large,
low cost, low margin, high volume, self-
service operations designed to meet the
needs for food, groceries & other non food
items.
This formats controls more than 30% of
the grocery market in many countries
A typical supermarket has a wide array of
more than 20,000 SKU’s and has the
distinction of selling items below their
MRP(Manufacturers Recommended Price)
“Quality is the totality of features and
characteristics of a product or service
that bear on its ability to satisfy stated
or implied needs.”
Varkeys
Nilgiris
Reliance
More
9/10
Big bazaar
Mithra
Margin free
Spencers
Supply co
Subhiksha etc…………………..
1. Reasonable prices and sales promotions
and offers
2. Availability of required goods
3. Wide assortment/ variety
4. Availability of latest items in the market
5. Easy movement
6. Proper directions & signage inside the
store(Quick discovery)
7. Cleanliness
8. No adulteration in quantity as well as
quality (food safety)
9. Speed & ease of buying exercise (Timely
Billing)
1. Combination of related goods
2. Quality of individual goods
3. Value for money
4. Ambience
5. Freedom of choice
6. No expired items
7. Facilities like toilet, water cooler etc
8. Service by staff- behavior, helpfulness,
courteousness, etc.
9. Safety- fire safety: sprinklers etc.
Layout
Location of store
Space planning
Visual Merchandising
Planogram
Signage
Ambience
Pricing/promotion strategies
Assortment
Why is Location so Important?
• It is of great customer interest
• Hard to overcome a bad location
• Determines who you will attract
• Long term commitment and not easily
changed
• Major Financial investment
Steps in selection of location
• Regional Analysis
- Select a geographic market
• Area Analysis
- Evaluate the trading area
• Site Evaluation
- Actual physical site
Population size and characteristics
Demographics and lifestyles of
people in a region
Economic base of region
Cost and availability of labor
Local gov’t support of business
Warehouse accessibility
Demand for goods vs. supply
Competition
Number and size of competitors
Competitors’ strengths and weaknesses
Saturation
Trading Area
A trading area is a geographic area
containing the
customers of a retailer for specific
goods or services
Geographical map from which the retailer
draws
customers GIS (Geographic Information
System)
 population demographics
 data on customer purchases
 listings of current, proposed, and
competitor locations
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Trading Area
Size and Shape are dependent on:
 Size of Store
 Neighboring stores
 Transportation network
 Population density
 Physical, social, and political barriers
 Location of Competition
 Merchandise uniqueness, low prices,
superior service (Marketing Strategies)

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Trading Areas:
Primary
50-80% of customers (less than 10 min.)
Secondary
15-25% of customers (less than 20 min.)
Fringe/Tertiary
Remainder of customers (15-50 mi. away)

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Trading Areas
Primary, Secondary, and Fringe Areas

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Techniques for Identifying Trading Areas
 Customer Spotting
 License plates
 Customer records (credit cards, delivery
records,service)
 Promotions (sweepstakes, contests,
coupons)
 Customer surveys

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It is the manner in which product are
arranged inside a super market.
It is tool for controlling the flow inside a
supermarket. It is also known as
circulation plan
Eg: in a supermarket fresh vegetables and
groceries are placed at the rear end of
retail store.(this would encourage the
people to browse through the entire store
till they reach that section)
 Select a layout if
It allows a complete presentation of the
merchandise offered by the store(Eg:
Giving different exit and entry points)
Address the needs of the targeted
customers
(Eg: Provide ramps for the wheel chairs
and strollers, provide seating
arrangement for people if they expect
to spend hours in a store)
Grid
Commonly used in supermarket.
Efficient utilization of space. Preferred
in stores that adopt self-service
Race track (Loop Lay-out)
In the form of a race track with aisle
running throughout the store
Free form
Merchandise arranged in an
asymmetrical manner allows for free
movement . May not allow maximum
 Storage, Receiving, Marketing

Hats and Handbags

Underwear Dressing Rooms
Stockings

Accessories

Tops
Checkout counter
Casual Wear

Tops
Pants

Clearance

Skirts and Dresses

Items
Jeans

Feature Feature

Open Display Window Open Display Window

2. Prime objective is to aid the movement and flow
of customers
3. Complementary items should be placed near
each other.
4. Seasonal needs should be considered.
5. Items needing frequent restocking should be
placed near store rooms.
6. Effective space utilization is the
utmost concern

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1. Shopping behavior and operational considerations
should be recognized.
2. Areas should be divided into
 Transition zone
 prime selling area
 Impulse merchandise area
 Seasonal or special merchandise area
EDLP (every day low pricing) by Wal-
Mart
Sales promotions of Big Bazaar
“Sabse saste theen din”
“junk swap offer”
bundled product offers
Discount coupons
Exchange offers
Seasonal , stock clearance sale etc….
Merchandise planning
1. Developing sales forecast
a. Review past sales
b. Analyse changes in the economic conditions
c. Analyse changes in the sales potential
d. Analyse competitor’s strategy
e. Create forecast

2. Determining the merchandise

requirement
Merchandise budget
Sales plan
Stock support plan
Gross margin of each product
1. Merchandise control
Level of purchasing
EOQ
Limit over buying or under buying
5. Assortment planning
Season
Department
Class
Sub-class
Tool used by the retailers that helps to
determine the location of merchandise
within a dept.
Allows for proper visibility and price
point option
Allows for consistency in presentation
across location .
Customer feels familiar and
comfortable at each and every location
When visual cues are not sufficient
Types
for location and guidance purposes
to communicate corporate policy
related to merchandise (brands, prices, sizes)
related to promotional activity
Design of signage (size, font, colour)
should be incorporated in overall retail
design

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Creation of an aura or atmosphere, which is interpreted
favourably by the customer
Atmospherics can be used to appeal to all of our senses:
colours, textures, music, aromas, temperature
LIGHTING
Contributes to atmosphere, and overall design
Ambient lighting level
Up-lighters
Down-lighters
Spot lights
Wall lights
Many fixtures now have integrated lighting
Different coloured light

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Orderly, systematic, logical and
intelligent way of putting stock on the
floor
Visual merchandising is visually
appealing the customer
Store windows and floor displays, signs,
space design, fixtures and hardware,
props and mannequins.
It ensures that the selling space is neat,
easy to see, follow and shop.
 Colour dominance
Using mannequins, floor fixtures
Co-ordinated presentation
This can be done for garments, home
fashions and kitchen appliances
Presentation by price
Related articles together
Display seasonal goods
Tie up display with advertisement
Do not crowd window
Make display simple
Improve lighting
Change display frequently
Make display of all sell merchandise
 It is the basic element of
merchandise/category management
Product grouping allows customers to
quickly find what they are looking for
and to see the breadth offered in any
category
Merchandise similar products together
which enables the customers to
efficiently use their time while in the
store
The CSI model is a cause-and-effect model with indices for drivers of
satisfaction on the left side (customer expectations, perceived quality, and
perceived value), satisfaction (CSI) in the center, and outcomes of
satisfaction on the right side (customer complaints and customer loyalty,
including customer retention and price tolerance).
Customer Expectations
Customer expectations is a measure of the customer's anticipation of
the quality of a company's products or services.  Expectations
represent both prior consumption experience, which includes some
non experiential information like advertising and word-of-mouth, and a
forecast of the company's ability to deliver quality in the future.
Perceived Quality
Perceived quality is a measure of the customer's evaluation via recent
consumption experience of the quality of a company's products or
services. Quality is measured in terms of both customization, which is
the degree to which a product or service meets the customer's
individual needs, and reliability, which is the frequency with which
things go wrong with the product or service.
Perceived Value
Perceived value is a measure of quality relative to price paid. Although
price (value for money) is often very important to the customer's first
purchase, it usually has a somewhat smaller impact on satisfaction for
repeat purchases.
Customer Complaints
Customer complaints are measured as a percentage of
respondents who indicate they have complained to a company
directly about a product or service within a specified time
frame. Satisfaction has a negative relationship with customer
complaints, as the more satisfied the customers, the less likely
they are to complain.
Customer Loyalty
Customer loyalty is a combination of the customer's professed
likelihood to repurchase from the same supplier in the future,
and the likelihood to purchase a company’s products or
services at various price points (price tolerance).  Customer
loyalty is the critical component of the model as it stands as a
proxy for profitability.
While food logistics is similar in many ways to
logistics as a whole, there are some important
differences,
Safety.
Freshness
Temperature variations
Brand image and identity
 Finally, while some food products have higher
margins, many others have very low margins. Low
margins coupled with  increased competitive
pressures mean that wringing every excess dollar
out of the food chain becomes crucial  --  so we can
expect to see even more collaboration and creative
use of technology in the years to come.
INBOUND LOGISTICS OPTIMISATION
Collaborative Planning,
Forecasting and Replenishment
(CPFR) is a concept that aims to
enhance supply chain integration by
supporting and assisting joint
practices..
CPFR seeks cooperative management of inventory
through joint visibility and replenishment of products
throughout the supply chain.
Information shared between suppliers and retailers
aids in planning and satisfying customer demands
through a supportive system of shared information.
This allows for continuous updating of inventory and
upcoming requirements, making the end-to-end
supply chain process more efficient.
Efficiency is created through the decrease
expenditures for merchandising, inventory, logistics,
and transportation across all trading partners
In the retail industry the retailer typically fills
the buyer role, a manufacturer fills the seller
role, and the consumer is the end customer
The consumer drives demand for goods and
services while the retailer is the provider of
goods and services. The manufacturer
supplies the retailer stores with product as
demand for product is pulled through the
supply chain by the end user, being the
consumer.
 Visual management
Visual merchandising, planogram are
application visual management tools
Kanban
Vendor managed inventory of Wal-mart is
an example of kanban
Poka-Yoke
The fire sprinkler inside the supermarket is
based on poka yoke principle
 5s
House keeping consists of following part
Sorting
Set in order
Sweeping/Cleanliness
Standardizing
Sustaining discipline