RETAIL & SALES

MANAGEMENT

August 19, 2010

 RETAIL & SALES MANAGEMENT
CHANNELS OF SALES ORGANIZATIONS

FMCG MANUFACTURER – C&F AGENT - DISTRIBUTOR - RETAILER - CONSUMER

MANUFACTURER – DISTRIBUTOR - DEALER - COUSTOMER

WHITE
GOODS MANUFACTURER – DISTRIBUTOR - CUSTOMER

MANUFACTURER – DEALER - CUSTOMER

INDUSTRIAL
MANUFACTURER – DISTRIBUTOR - USER
PRODUCTS
 RETAIL & SALES MANAGEMENT

GOAL

PROCESS

ACTION RESULTS
 INTRODUCTION – RETAIL MANAGEMENT

MANUFACTURER WHOLESALER RETAILER CONSUMER

Point of Production Point of Sale

Backward Integration Forward Integration

 INTRODUCTION – RETAIL MANAGEMENT

4 P’s OF 4 C’s IN RETAIL

MARKETING MIX MIX

PRODUCT : Customised Solution to Customer Needs

PRICE : Cost to Customer, Customer Value

PLACE : Convenience of buying

PROMOTION : Communication Mix

 INTRODUCTION – RETAIL MANAGEMENT
MAIN FUNCTIONS OF DISTRIBUTION CHANNEL
TRANSACTIONAL: Buying, Selling & Risk taking
LOGISTICAL: Assorting, Storing and Sorting
FACILITATING: Financing, Grading & Market Information
FUNCTION OF RETAILER
BREAKING BULK
HOLDING STOCK / RISK TAKING
CREATING PLACE & TIME UTILITY
ASSORTMENT OF PRODUCT & SERVICES
EXTENDING OTHER SERVICES – info, gift wrap, after sales etc
CREATING DEMAND & SALES OF MERCHANDISE
INTRODUCTION – RETAIL MANAGEMENT

CHANGING FACE OF RETAIL

MODERN/ PROFESSIONAL OUTLOOK
GROWTH OF MULTI-STORE RETAIL CHAINS

LARGE FORMAT RETAILING

INTEGRATED & DEDICATED DISTRIBUTION SYSTEMS

GROWTH IN PRIVATE LABELS

CRM & LOYALTY PROGRAMMES

INTRODUCTION – RETAIL MANAGEMENT
MAJOR RETAILER TYPES

GENERAL STORES – GROCERY / KIRANA SHOP –

78% of Indian retail points

MOM & POP STORES – CORNER SHOP

SPECIALTY STORES: Narrow product line, deep assortment

Eg Body Shop, Gap, Nautica, Woodland

DEPARTMENT STORES: Several product lines – clothing,

furnishing Eg Sears, Macy’s, Ebony

SUPERMARKETS: Low cost, low margin, hi volume, self-service

Eg Kroger, Vons, A&P, Foodworld
INTRODUCTION – RETAIL MANAGEMENT
MAJOR RETAILER TYPES

CONVENIENCE STORES: In residential localities, 24X7

Eg 7- Eleven, Stop-N-Go,

DISCOUNT STORES: Standard merchandise at low price/ margin,

high volume Eg Wal-Mart, K-Mart, Margin Free

OFF PRICE RETAILERS: leftovers, < retail prices, irregulars

Eg. Maxx, Sam’s

SUPERSTORES: V large stores, consumer total needs,

category killers Eg Wal-Mart, Carrefour

HYPER MARKETS: Very large store – low prices + discounts

plus superstore for food Eg Big Bazaar, Star
INTRODUCTION – RETAIL MANAGEMENT

SUPPLY STORE LOCATION / SALES & MARKETING

CHAIN OPERATIONS

Purchasing Product Assortment Pricing – Promo

Outsourcing Atmospherics Advertising MARGIN

Logistics Product Presentn Cash / Credit Handling

Inventory Mgmt
Warehousing Category Mgmt CRM
INTRODUCTION – RETAIL MANAGEMENT

Customer Location
Service

Retail
Store Design Strateg Merchandise
& Display y Assortment

Communication Pricing
Mix
INTRODUCTION – RETAIL MANAGEMENT
RETAIL CHAIN - COMPETITIVE ADVANTAGES

Bargaining Power

Undertaking Wholesaling
Shared services- warehousing, uniforms

Use of technology to the best

Undertake TV & media support

Long term planning – preparedness for future

Professionally managed – organised

Shopping ambience, quality products & services
INTRODUCTION – RETAIL MANAGEMENT
RETAIL CHAIN - DISADVANTAGES
LIMITED FLEXIBILITY
HIGH INVESTMENTS
COMPLEXITY OF MANAGING
ADAPTING TO LOCAL NEEDS

LIMITED INDEPENDENCE TO TAKE DECISIONS

 INTRODUCTION – RETAIL MANAGEMENT

RETAIL ING THEORY

SITE SELECTION APPROACHES
DESTINATION APPROACH PARASITIC APPROACH
INTRODUCTION – RETAIL MANAGEMENT

RETAIL ING THEORY

WHEEL OF RETAILING
Harvard Professor Malcolm Mcnair’s Wheel of Retailing

INNOVATION
New retailer
Low Prices, Low Margins,
limited product lines

TRADING UP
VULNERABILITY
Responds to competitive
In trading up, Innovator
pressure Innovator opens
leaves gap at lower end of
fancier stores, expends
market for new plow price
product lines & raises prices &
entrants
profits
 INTRODUCTION – RETAIL MANAGEMENT
RETAIL ING THEORY
RETAIL ACCORDIAN THEORY
OR
GENERAL -SPECIFIC-GENERAL THEORY

NEW LOCALITY ESTABLISHED DEVELOPED

LOCALITY LOCALITY

GENERAL SPECIALISED GENERAL

CATEGORIES CATEGORY CATEGORIES

ADD ON CATEGORIES

Eg Crossword adding stationery, pens, music etc

A lot of designer labels diversify from garments to watches to perfumes to footwear

 INTRODUCTION – RETAIL MANAGEMENT
RETAIL ING THEORY
DIALECTIC PROCESS THEORY
Traditional ‘store based’ effort + Direct marketing (home-based)
= Electronic Direct Marketing

THESIS + ANTITHESIS SYNTHESIS

PARAMETERS Department Store Discount Store Deep Discount Store

Profit Margin High Low Average

Sales Turnover Low High Average

Price High Low Moderate

Level of Service Full Service Self Service Limited Service

INTRODUCTION – RETAIL MANAGEMENT
RETAIL ING THEORY
THEORY OF NATURAL SELECTION
DREESMAN was first applied Darwin’s Theory of Natural Selection to retail

New formats keep emerging

Old formats keep phasing out or transforming

What suits most to the customer gets patronised

Habit of eating out + Growing MNC Snack Food joints

= Bikanerwala, Haldiram
( MNC points had limited variety to suit discerning Indian palate)