Professional Documents
Culture Documents
A.Gupta
Manufacturer may reach customers through: Dealers Company showrooms Super / Hypermarkets Manufacturers will decide on Retail Distribution: Intensive Selective Exclusive
In India Organised Retailing is 2% Retail sector highly fragmented Retail chains like Wal Mart, Sears, McDonalds brought Rapid Growth and consolidation of Organised Retail Rapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organised Retail
In India, increase in Disposable income, Purchasing Power of growing Middle Class conducive conditions for growth of Organised Retail Indian Retail environment different from that of western countries: - Cities congested, large population in rural areas - Smaller purchases, limited household space
Strong economies have a strong Retail sector Entry in retail sector is easy, hence results in fierce competition Retail must perform its primary role of catering to customer satisfaction Retail earns modest profits of 910% Retail stores of different sizes face distinct challenges. Their sales volume influences: - Merchandise purchase - Promotion & - Expenses Control
2. 3.
4.
5.
GLOBAL RETAIL INDUSTRY Retail sales driven by Ability (disposable income) and willingness (consumer confidence) Worldwide retail sales Est.$7 Trio. Expenditure on Household Consumption increased by 68% between 1980 and 1998 Top 200 retailers account for 30% worldwide demand Over 50 of the Fotune 500 and 25 of Asian Top 200 are Retailers
2.
3.
4.
ORGANISED RETAIL FORMAT By 2006 - 200 Shopping Malls Up from 25 in 2003 Expect by 2006, to develop 40 mio.sq.ft. quality Retail Space 6 A Grade cities Delhi NCR, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata will have 34 mio. and non metros Pune, Ahemadabad Ludhiana, Chandigarh, Jaipur, Lucknow, indore, Cochin 6 mio. Delhi NCR will have 26 mio., Mumbai another 5 mio.
3. 4. 5.
6.
RETAIL CHARACTERISTICS Direct End-User Interaction Platform for Promotions & POP displays Lower unit sales Retail location critical Services as important as Core Products Large number of Retailers to meet geographical coverage and population density
DIALECTIC PROCESS
2.
3.
RETAIL BUSINESS CLASSIFICATION Ownership Business: Proprietorship, Partnership, Limited liability company Operational Structure: Independent Trader, Chain Of Stores, Franchising, Consumer Cooperative Width & Depth Of Merchandise: Specific Product Category Wide Range
5.
Type Of Pricing: Low pricing, minimum Service Premium Merchandise, High Service Premium pricing, distinctive Image Consumer Interaction: Direct interaction Mail Order Tele-Selling Vending machines Door-to-door Mobile Vending
GROCERS - Major business is grains, provisions, spices, edible oils. Grocers may be dealing in many other items. GENERAL STORES - Deal in items Daily needs and stocking number of categories, is identified as a general store. CHEMIST- Deal in Ethical Pharmaceutical Products. Require a license and a Qualified Pharmacist. Such outlets also deal in diverse FMCG products.
TOBACCO KIOSK : Deal in tobacco products like Paan, Cigarettes, etc. are called Pan Bidi shops. Many of them also deal in packaged consumer products like toilet soaps, toothpaste, washing soaps, biscuits, confectionery, batteries etc. COSMETIC STORE : Deal in Ladies Personal care products / Cosmetics, General toiletry products, Mens toiletry products, Baby Care Products.
Retail Industry employs 17-20% Workforce that drives the Economy. Retail trends often mirror trends in a nation s overall economy. Retailers add value by Providing the Right Product at The Right Place at the Right Time.
ENVIRONMENT Retailing is a Dynamic field with very Competitive Environment. Retailers act as Filters Strong lobby for success or otherwise of a Product or Services. Companies create Retailer Value and Consumer Differential Advantage to improve success rate of their Brands. Constraints Multiple Brands and SKUs for each category, Shelf Space, funds available, Turnover of Merchandise.
2.
New Concepts & Trends Vertical Retail Concept: Traditional stores and Shop-in-Shop concepts mixture of system and individuality, e.g. Sale of Non-food items like newspapers, magazines with snacks, beverages Consumption Related Trends: Increasing Consumers with Purchasing Power & More Migrant Consumers Demand for Broad selection of Products Demand for Good quality Products e.g. Honest, Original and Green Products
Indian Economy
US$ Billion
B raz il R us s ia India F ranc e UK C hina G erm a US A 0 1,068 979 916 2,232 2,374 2,630 2,897
2007
201
B ra z il R us s ia India F ra nc e UK G erm a ny C hina US A 5,000 1,789 1,688 2,119 2,761 2,953 3,513 6,341
10,000
US$ Billion
US$ Billion
B raz il R us s ia India F ranc e UK G erm any C hina US A 5,000 2,282 2,103 3,128 3,085 3,251 3,766
2022
10 % 9% 8% 6 .6 % 7% 5 .4 % 6% 5% 4% 3% 2% 1% 5 .6 % 5 .2 % 6 .0 % 6 .4 % 6 .0 % 6 .8 %
9 .0 %
9 .4 %
1997
1998
1999
2000
2001
2002
2003
2004
2005
Projections of 8% sustainable real GDP growth rate till 2020 promise high growth potential for Indian Retail
2006
0%
Indian Retail expected to grow close to 12% p.a. in the next 10 years
Private Consumption US $568 Bn (62%) Retail US $352 Bn (62%) Urban US $158 Bn (45%) Rural US $194 Bn (55%) Non-Retail US $358 Bn (38%) Public Spending +Gross Capital Formation 38%
Rural India consists of 720 Million consumers across 627,000 villages 17% of these villages account for 50% of the rural population and 60% of the rural wealth implying reaching out to almost 100,000+ villages to address even 50% of this rural opportunity
WITH HIGH PRIVATE CONSUMPTION
Retail market is growing from US$ 336 billion to US$ 590 in 2012 That means an additional market of US$ 254 billion Even if the modern retailing can go from US$ 12 billion to US$ 74 billion in 2011 Still US$ 180 billion is left to be addressed by traditional retailers The growth of modern retail will be more in urban as compared to rural
3.
Retail Management By Chetan Bajaj Retail Management By Berman & Evans Retail Management By Levy & Weitz
Facts Of the Case No assumptions Key Issues List alternatives Evaluate alternatives Recommend Course Of Action
Management Raise capital Purchase Use MIS to Control Operations Employ for Sales Counters, Stores and Cash Counters Undertake Marketing Activities Entrepreneurial Opportunities
Forward Retail Planning FOCUS Analysis Of Requirements Of Business Set realistic Goals Differentiate Itself for Target Customers - Benchmarking Knowledge Of Business Environment Legal, Economic, Competitive Synergize efforts Reduce Business Risk Feedback and Control
Commitment to A Business Business Decision Around Goods and Services sold or around Consumer needs. Specific or Generic approach
Distinctive Role In Market A Leader or a Follower Leader Unique strategy Follower Emulate standard Practices with better execution than competitor. Market Scope Customer Base Dynamic Decision In Sync. With Retail Environment
Corporation Incorporated under law. Funds through Sale of Stocks. Ownership Transfer is easy. Private Limited Company Limited number of Individuals with Limited Liability. Public Limited Company Open to Public to Invest In Stocks. Profits and Dividends attract Taxes. Managed by professional managers.
Personal Aptitude Knowledge, Experience, Qualifications, Inborn Skills and Acquired Skills Financial Resources Land and Building, Fixtures, Equipment Time Demands Owner s Availability Personnel Sales People, Inventory, Cashiers
Near Small Medium Pop. Deep Assortment, High/ Low Qual. Direct mail
Near Large Population Distinct Goods for Target Market Different Media for Target Groups High, Medium and Low Strategies directed at Heterogeneous Groups
RETAILMIX
PROMOTION
PRICING
STRATEGY
Consumers Competition Technology RETAIL STRATEGY Economic Conditions Seasonality Legal Restrictions
Mission Ownership Goods/Services category Sales Profit Customer satisfaction Image Mass Concentrated Differentiated Controllable Uncontrollable Short Term Competition Evaluation Adjustment
RETAILERS MARKETING DECISIONS: -Target Market: Focus resources & Retail Mix -Product Differentiation Strategy: Product Assortment Breadth & Depth -Services: Pre-purchase, Post-purchase, Ancillary -Price: Target market, Product Mix, Competition -Promotion: Promote & Reinforce Image -Location: Vicinity of Target market
MARKET SEGMENTATION- TARGET MARKET Sex, Age, Family Size -Type, Marital, Status, Socio-economic Class, Occupation, Geographic: Metros, large Towns Psychographic: lifestyles, Personality, Values Services: Advertising, Displays, Special Offers; Delivery, Gift Wrapping, Returns, Tailoring, Installation; Cheque Cashing, Parking, Restaurants, Rest rooms
Merchandise Plan - Forecasting : Staple Merchandise Regular Daily Need Products, Stable Sales List Of products, Inventory Level, Colours, Brands, Style Size Assortment Merchandise Apparel, Furniture, Autos. Variety Of products to enable Customers a Selection. Demand Varies, Forecast difficult. Decision On Product Lines, Styles Designs & Colours. Model Stock Plan - Colour, Size, Qty.
Strategic Plans
(a) DATA COLLECTION INFORMATION (b) DATA STORAGE+ ANALYSIS CONTROL RETREIVAL INTERPRETATION CENTRE UPDATING DATA FILES
FEEDBACK IMPLEMENTATION
Retail Operation
PROPER PLACEMENT OF SIGNAGES INDICATING PRODUCTS OFFERED INCREASE EFFECTIVENESS. CUSTOMERS NECESSITY TO ASK QUESTIONS INCREASE STRESS LEVELS. UNIFORMS WORN BY STORE EMOLOYEES ALSO REDUCE CUSTOMER STRESS AND ANXIETY TO ASK QUESTIONS.
QUALITY OF STORE FIXTURES SIGNIFY A RETAILER CUTTING CORNERS OR MAKING LARGE PROFITS.
CUSTOMER S SENSES