Retailing

Management
By
Basharatullah malik

Book and Author

Retailing Management
By Michael Levy & Barton A Weitz
Preferably buy 6th Edition
Available at Book Shop, UCP Lahore

Retailing

Set of business
activities that add value
to the products and
services sold to
consumer for their
personal or family use.

Retailer and Business

Channel

Manufactur
er

A Distribution
Channel is a set
of Firms that
facilitate
the movement of
products
from the point of
production to the
point of sale
to the ultimate
consumer

Distributor

Wholesaler

Retailer

Consume

Vertical Integration
Some times Retailer go for Vertical Integration

Firm performs more than one

function or set of activities in the
channel.
Investing in Wholesaler or
Manufacturing
An Am Store developed factory of
Garments
KFC investing in poultry Farms
Gold smith buying a Gold mine

Why depend upon Retailers?

Manufacturers can Directly sell to Consumers, Why keep
Retailers in between?
How many consumers of soap in Pakistan?
May be 20 million (2 Crores) Families

If one family of 10 buys once in a month

2 0 million contacts every month
800,000 interactions per day

One employee handles 100 customers per day

800,000/100 = 8000 employees required permanently

Salary + perks per employee = 20,000

For 8000 employees X 20,000 = Rs 160,000,000 ( 160 mn) per
month
Assuming cost of soap Rs. 20 X 800,000 x 25 = Rs 400 mn
Commission paid @ 10% to Retailer = 40 mn per month

Saving = 160 mn-40 mn= Rs 120 mn

Functions Performed by Retailers

to Increase the Value of Products and Services

1- Providing assortments
Specialize in one
Keep one or two
Keep multiple SKUs

2- Breaking Bulk
Breaking big bulk to suit individual
consumer need
Bringing in bulk but sold in small
quantities

Functions Performed by
Retailers
3- Holding Inventory
Keeping Inventory in no consumption times
Selling when demand arises
Providing funds to manufacturers by keeping Stocks

4- Providing Services
Credit to Customers
Opportunity to test the product
Displaying products
Touch and Feel before buying
Return facility
Arranging Sales people to answer the queries
Home Delivery