Assignment-1 Of Retail Management

Submitted by: Nishant Sood MBA 4th Sem Roll no

Submitted to: Mr. Samarth Singh

!ate Of Submission:

"4 A#ril $"14

Q1) Write short notes on:

A% &thi'al issues in Retailing Ethical issues in retailing Ethics relates to retailers moral principles and values. 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. Retailers are trying to 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 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. Ethical hallenges Ethical hallenges fall into three interconnected categories! " " " Ethics #ocial Responsibility onsumerism

#ocial Responsibility$ % retailer e&hibiting social responsibility acts in the best interests of society ' as well as itself. The challenge is to balance corporate citizenship with a fair level of profits for stock holders, management, and employees. onsumerism$ onsumerism relates to the activities of government, business and other organizations that are designed to protect individuals from practices infringing upon their rights as consumers

B% Methods of (RM #ra'ti'ed in Retailing (rofile the )arket! This refers to the grouping of customers based on their different characteristics. #egmentation of customers can be done on the interaction that they have at the time of sales or the way they wish to be informed of upcoming products or events. The creation of a profile for each customer allows for a systematic flow to be embedded in the R) process design. *esign ommunication #trategy! ommunication with clients can take several formats. +ith multiple modes at the disposal of the business, it is important that the right one be selected in order to have a stronger and positive response from the consumer. The choice depends on the

nature of the business and the message being imparted, but the mode could be print, mail or electronic. ,mplement #trategies! %ny strategies designed by the organization should fit within the culture and the operational processes. -nce this fit is determined, the strategy should be implemented. %s an e&ample, the strategy could be linked to the sending out of direct mails that have been prepared for introduction of a new product. %s a R) strategy, it is essential that staff who deal with customer are well$informed of the segments and the strategy, so they can be ready to pass the information to customers, or direct customers in the right direction. +here customers have been classified for a particular level of service, this would re.uire more organizational entities to remain in the loop, in order for the strategy to be effective. Evaluate Results! %t the end of the implementation, it is important for the company to assess the effectiveness of the strategy. ,n terms of any campaigns, this could be in the form of numbering the performance of various aspects of the process, by both the customer as well as an internal individual of the organization. This data helps in analysing the changes that should be adopted for future strategies.

(% Retail )ife (y'le

!% *ri+a'y strategies in retail Trial: This techni.ue involves identifying products believed to have strong potential, sourcing a small .uantity of the product, determining a trial market and testing product sales. This simple techni.ue hinges on the selection of an accurate trial market/s0 that enables the retailer to properly e&trapolate sales and conduct a proper analysis. 1ecause small .uantities of product are being purchased, the retailer places less emphasis on cost negotiations during the trial. Results are analyzed, and only then does the retailer make product commitments, adjusting product design, specifications, order .uantities, distribution, etc., as appropriate. The primary advantages of this techni.ue are the limited capital needed to implement the pilot and the ability to change any aspect of the product based on the results of the trial. The biggest disadvantage of the trial techni.ue is the time delay between the trial test and ultimate roll'out, due to the fact that no commitments to materials or factory time have been made in advance. Pilot: ,n this techni.ue, retailers ship in early a small .uantity of a product to which they have already committed mass .uantities to gain intelligence for use during the primary selling season. The pilot enables retailers to optimize gross margins and flow'through by pinpointing those markets and customers that will support the most sales and, importantly, to validate pricing decisions. The primary advantage of the pilot is the immediacy with which its results can be applied in' market to the greater distribution. The disadvantage of this techni.ue is that there are limited changes that can be made to the product'pricing and distribution. Domestic/Import Variable Sourcing: ,n recent years, retailers have applied 2smart sourcing3 parameters, where a product can be sourced in more than one import country to handle localized issues, such as increases in the cost of raw materials and labor wages, political instabilities and weather or other 2acts of 4od.3 The problem is, this smart sourcing was generally not dynamic enough to handle changes or improved knowledge within the season. % uni.ue fi&ture in the 5.#. manufacturing landscape is emerging! the import manufacturer. +ith its shorter lead times, domestic sourcing has a place in today6s retail environment, particularly when it comes to mid'season replenishment. The scenarios typically work as follows! pre'season or early'season shipments are sourced from offshore to ma&imize profit, and mid' and late'season shipments are sourced domestically to shorten lead times to stores. *omestic7import variable sourcing re.uires a more sophisticated ,T approach than traditional sourcing.

&% Online retailing shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the ,nternet using a web browser. %lternative names are! e$web$store, e$shop, e$store, ,nternet shop, web$shop, web$store, online store, online storefront

and virtual store. )obile commerce /or m$commerce0 describes purchasing from an online retailer6s mobile optimized online site or app. %n online shop evokes the physical analogy of buying products or services at a bricks$and$mortar retailer or shopping center8 the process is called business$to$consumer /19 0 online shopping. ,n the case where a business buys from another business, the process is called business$to$business /1910 online shopping. The largest of these online retailing corporations are %libaba, %mazon.com,and e1ay.

Q2) Discuss !Ps "o#el o$ customer Ser%ice I& 'etailing (What Strategies are use# to bri#ge these gaps( )ost retailers have a 64ap6 $ the difference between the promise and the actual delivered performance, most organisations involved in customer service have ' and performance. to rely on people to deliver that service people being only human do not always perform to specification. ,t is often impracticable or uneconomic to eliminate the 64ap6 entirely, so it needs to be identified and measured so that it can be managed. )anaging the 64ap6 may include: :. (roactive customer relations, 9. Empowerment of local staff to take e&traordinary action ;. <allback operational arrangements such as Relief buses or standby trains. 1ut if the 64ap6 isn6t monitored or measured it can6t be managed = )no*le#ge ap! knowing what the customer wants = Stan#ar#s ap: setting service goals = Deli%er+ ap: meeting and e&ceeding service goals = ,ommunications ap: communicating the service promise.

,losing the )no*le#ge !P :. ustomer research 9. )ore interactions between managers and customers ;. 1etter communications between managers and service providers.

,losing the Stan#ar#s !P :. >igh .uality service commitment 9. *efine the role of service providers ;. ,nnovative solutions ?. #et service goals

@. )easure service performance.

,losing the Deli%er+ !P :. ,nformation and training 9. ,nstrument and emotional support ;. ,nternal communications ?. Reduce conflicts @. Empower employees A. (roviding incentives.

,losing the ,ommunications !P :. Realistic commitments 9. )anaging customer e&pectations.

Q-) *hat are the emerging tren#s in 'etailing in In#ia. ,ndia is one of the biggest markets of for retail players in the world. Bots of supermarkets, hypermarkets, departmental stores have been inaugurated in last few years in different parts of ,ndia. The shopping culture is changed from traditional marketing culture to mall culture.

&merging ,rends in -ndian Organi.ed Retail Se'tor

The emerging tren#s in the ,ndian organized retail sector would help the economic growth in ,ndia. There is a fantastic rise in the ,ndian organized retail sector in a very short period of time between 9CC: and 9CCA. Eventually, out of the shadows of the unorganized retail sector, ,ndia has a chance of tremendous economic growth, both in ,ndia and abroad. The emerging tren#s in the In#ian organi/e# retail sector are also adding up to the development of the ,ndian organized retail sector. The rela&ation by the government on regulatory controls on foreign direct investments has added to the process of the growth of the ,ndian organized retail sector. The in$rastructure of the retail sector will evolve radically in the recent future. The emergence of shopping malls is increasing at a steady pace in the metros and there are further plans of e&pansion which would lead to :@C new ones coming up in ,ndia by 9CCD. %s the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in food trade. The growth of the In#ian organi/e# retail sector is anticipated to be heavier than the growth of the gross domestic product. %lterations in people6s lifestyle, growth in income levels, and encouraging conventions of demography are proving favorable for the new emerging trends in the ,ndian organized retail sector. The success of this retail sector would also lie in the degree of penetration into the lower income strata to tap the possible customers in the lowest levels of society. The #eman#s of the buyers would also be enhanced by more access to credit facilities. +ith the arrival of the Transnational ompanies /TE 0, the In#ian retail sector will undergo a transformation. %t present the <oreign *irect ,nvestments /<*,0 is not encouraged in the In#ian organi/e# retail sector but once the TE 6# get in they inevitably try to oust their ,ndian counterparts. This would be challenging to the retail sector in ,ndia.

,he trends to follo/ in the future: The In#ian 0rgani/e# retail sector will grow up to :CF of total retailing by 9C:?. Eo one single format can be assumed as there is a huge difference in cultures regionally.

 The most encouraging format now would be the hyper marts. The hyper mart format would be further encouraged with the entry of the TE s.

Q1) *hat are the #i$$erent approaches use# b+ retailers to i#enti$+ their customers an# categori/e in #i$$erent categories. %nalyze the customer database and convert the data into information that will help retailers develop programs for building customer loyalty

Data "ining 2 techni3ue use# to i#enti$+ patterns in #ata Mar0et Bas0et Analysis:-*ata analysis focusing upon the composition of the customers market basket ' what items are bought during a single shopping occasion 5ses! %djacencies for displaying merchandise Goint promotions 4eer *ith bab+ #ippers Tissues *ith col# me#icine

-dentifying Mar0et Segments:-The first step in targeting markets is to separate customers who make up large, general markets into smaller groupings based on selected characteristics or variables /also referred to as bases of segmentation0 shared by those in the group. 4eneral markets are most often associated with basic product groups, such as automobile, beverage, footwear, home entertainment, etc. The purpose of segmentation is to look deeper within the general market in order to locate customers with more specific needs within the product group /e.g., seek hybrid automobiles0 %E* who also share similar characteristics /e.g., college educated, support environmental issues, etc.0. +hen grouped together these customers may form a smaller segment of the general market. 1y focusing market research on these smaller segments the marketer can learn a great deal about these customers and with this information can begin to craft highly targeted marketing campaigns. -dentifying Best (ustomers: Estimating Bifetime Halue /BTH0

 The e&pected contribution from the customer to the retailers profits over his or her entire relationship with the retailer 5se past behaviors to forecast future purchases, the gross margin from these purchases, and the costs associated with serving the customers lassifying %nalysis0 ustomers by recency, fre.uency, and monetary value of purchases /R<)

R&,A-)&RS (A,&1OR-2& !-55&R&N, (A,&1OR-&S

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5o+al ,ustomers: They represent no more than 9C percent of our customer base, but make up more than @C percent of our sales. Discount ,ustomers: They shop our stores fre.uently, but make their decisions based on the size of our markdowns. Impulse ,ustomers: They do not have buying a particular item at the top of their 2To *o3 list, but come into the store on a whim. They will purchase what seems good at the time. &ee#-4ase# ,ustomers: They have a specific intention to buy a particular type of item. Wan#ering ,ustomers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of e&perience and7or community.

Q6) Wh+ is 7uman resource more important in retailing than in manu$acturing. >uman Resource )anagement is especially important in retailing due to the simple fact that it involves such a vital aspect of any and every retailing organization$the employeesI +hat is a retailing business without people working for it, with it, and toward the productivity goals and company objectivesJ Employees play a huge role in performing the critical functions of any business, which is why >R management is more important in retailing than in manufacturing firms, where capital e.uipment such as machinery, computer systems, and robotics are often utilized to perform the jobs employees once did. Retailing, along with service businesses stay the same in their tendency to be labor focused and intensive. Retailers depend on people to perform the basic retailing activities, such as buying, merchandise displaying, and providing service'to$ customers. *esigning the organization structure for a retail firm identifies the activities to be performed by specific employees as well as decides the lines of authority and responsibility in the firm. The four main categories include strategic, merchandise, store, and administrative management. ,n retail firms, the main operating managers are involved in merchandise management, and store management. The design of the organizational structure must coordinate with the firm6s retail

strategy, for e&ample, a single$store retailer has little specialization, because the number of employees is limited and they have to perform a wide range of activities.