Dr.S.

Yogananthan
To learn
What is retailing?
Types & Functions
Retail mix
Retail consumer behaviour
Design & location
Merchandising
Pricing
Interface between producer & end
consumer.
Firsthand information towards producer
& end consumer.
High sensitivity towards profit (win win).
Order lead time.
Identify Retail Brand Identity .
Shift trend in Merchandise mix.
Facilitator / Coordinator for VAS.

Manufacturer
Retailer
Consumer
Manufacturer
Consumer
Manufacturer
Wholesaler
Retailer
Consumer
F
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d
b
a
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+ The word retail has its origin in French word retaillier and
means to cut a piece or to break bulk.

+ Retailing is the sale of goods and services to the
ultimate consumer for personal, family or household
use.

+ According to Kotler: Retailing includes all the
activities involved in selling goods or services to
the final consumers for personal, non business
use
+ Retailers must be customer-focused, not product-
focused, Carl Steidtmann, director & chief
economist of Pricewaterhousecoopers.
+Retailing may be understood as the final step in the
distribution of merchandise for consumption by the end
consumers.

+Retailing is responsible for matching final consumer
demand with supplies of different marketers.

+Retailing is high intensity competition industry, The reasons
for its popularity lie in its ability to provide easier access to
variety of products, freedom of choice and many services
to consumers.

+The Indian retail is dotted by traditionally market place
called bazaars or haats comprises of numerous small and
large shops, selling different or similar merchandise
Types and Classification of
Retailing.
Superstores
Department Stores
Supermarkets
Hyper Markets
Specialty Stores
Category killers







Amount of service
Product lines
Relative prices
Organizational
approach


Retailers Are
Classified By:
Functions of a Retailer.
+From the customer point of view, the retailer serves
him by providing the goods that he needs in the
required assortment, at the required place and time.

+From an economic standpoint, the role of a retailer
is to provide real added value or utility to the
customer. This comes four different perspectives

1. Form: First is utility regarding the form of a product
that is acceptable to the customer.
The retailer does not supply raw material, but rather
offers finished goods and services in a form that the
customers want.
The retailer performs the function of sorting the goods
and providing us with an assortment of product in
various categories.

2. Time: He cerates Time utility by keeping the store
open when the consumers prefer to shop.
preferable shopping hours.

5. Place: By being available at a convenient location, he
creates place utility.

6. Ownership: Finally, when the product is sold,
ownership utility is created.
Apart from these functions retailer also performs like:
5. Arranging Assortment: manufacturers usually make
one or a variety of products and would like to sell their
entire inventory to few buyers to reduce costs. Final
consumers, in contrast prefer a large variety of goods
and services to choose from and usually buy them in
small units.
Retailers are able to balance the demands of both sides,
by collecting an assortment of goods from different
sources, buying them in sufficiently large quantities and
selling them to consumers in small units

5. Breaking Bulk: to reduce transportation costs,
manufacturer and wholesalers typically ship large cartons
of the products, which are then tailored by the retailers
into smaller quantities to meet individual consumption
needs

6. Holding stock: Retailers maintain an inventory that
allows for instant availability of the product to the
consumers. It helps to keep prices stable and enables the
manufacture to regulate production.

7. Promotional support: small manufacturers can use
retailers to provide assistance with transport, storage,
advertising, and pre- payment of merchandise.
Retailers on creating value
for Consumers.







Money
Shopping time
Travel time
Physical effort
Stress
Risk to personal safety
Risk of wrong purchase
BENEFITS COSTS
High quality products
Favourite brands
Wide range of products
Good shopping
environment
Ease of use
Pleasant service
BALANCING BENEFITS AND COSTS TO CREATE
VALUE
Retail Strategy
Customer Service Location
Merchandise
Assortment
Pricing
Communication
Mix
Store Design
And Display
Extended Problem Solving
High financial or Social Risk
Limited Problem Solving
Some Prior Buying Experience
Habitual Decision Making (Routine /Impulse)
Store Brand, Loyalty
Hard Core
loyalists
Soft Core loyalists
Shifting loyalists
Switchers
Platinum (Angels)
Gold
Iron
Aluminium
(Demons)
Word of Mouth (Viral Marketing)
Customer Partnering
Benchmarking
Are based on the distances customers
are from a store and the willingness to
overcome these distances
Divided into:
a) Primary Trading Zone 50-70% of
business
b) Secondary Trading Zone 20-30% of
business
c) Fringe Trading Zone 5-10% of
business
a) Convenience Goods Zone
b) Shopping Goods Zone
c) Specialty Goods Zone
Central Business District
versus
Secondary Business District
versus
Neighborhood Business District
versus
Planned Shopping Center
Versus
Solo Location

- Free Flow Layout - Fixtures and
Merchandise are grouped in Free-flowing
patterns on the sales floor
- Grid Layout - Counters and Fixtures are
placed in long rows or runs usually at
right angles, throughout the store
- Loop Layout - The major customer aisle
begins at the entrance, loops through the
store and returns customer to the front of
the store
- Spine Layout - The
major customer aisle
runs from the front to
the back of the store,
with merchandise
departments branching
off to the the back side
walls
Process by which a retailer offers the
right quantity of the right
merchandise in the right place at the
right time and meets the companys
financial goals.

Merchandise management:
The analysis, planning, acquisition,
handling, and control of the
merchandise investments of retail
operation.
Merchandise Management
Six Basic methods
Shelving
Hanging
Pegging
Folding
Stacking
Dumping
Visual Merchandising
Examples of Visual Merchandising
Heres sampling of the techniques stores use to generate those
sales:
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Getm coming and going.
Escalators are a focal point of
many stores. That makes
them ideal locations for
promotional signs and for
impulse items like perfume.
Examples of Visual Merchandising
Lead them to temptation.
Department-store design
incorporates a gauntlet of
goodies to stimulate impulse
buys. Cosmetics, a stores
most profitable department,
should always be at the main
entrance to the store.
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Examples of Visual Merchandising
Color is king. Retailers
believe consumers are more
apt to buy clothes that appear
in full size and color
assortments.
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Examples of Visual Merchandising
Retailing, 3rd Edition, Dunne and Lusch Copyright 1999 by Harcourt Brace & Company
All rights reserved.
Suggestion positioning. Once the customer
has already purchased one item, its easier to
sell an additional item. Thus apparel retailers
strategically place impulse buys like hair
bows and costume jewelry by the cashier the
same way supermarket checkouts display
candy and magazines.
Traditional Purchase Order System
(often adversarial relationship)
Quick Response System - uses
computer technology (partnership of
vendor and retailer)
Electronic Data Interchange -
technology connecting retailer and
vendor in a quick response system
Just-in-Time Delivery Systems -
Reduces inventory requirements
Direct Store Delivery (DSD) - no
warehouse; vendor delivers directly
to store
AR &RS
EDLP
High / low pricing
Pricing & Internet
Coupons
Leader pricing
Price bundling
Multiple unit pricing
Price lining
Odd pricing
Cost oriented
method
Competition
oriented method
Demand oriented
method
Future of Retailing.
The Future of Retailing
Rise of mega retailers
Growing importance of retail technology
Global expansion of major retailers
Retail stores as Communities or Hangouts
Goal 2: Know the major types of retailers
Retailing management, Levy & Weitz, Tata McGraw Hill company,
Page 5-24.
Retailing management, David Moore, Prentice hall company, 5
th

edition.
Retailing and wholesaling, Philip Kotler, web based article.
Introduction to retail product management-
www.routledge.com/textbooks/0415327156/ppt/slides1.ppt
Retail management by Dr. Pooja Sharma,
www.infofanz.com/Download/MBA_MPA.../Retail-Management-
1.ppt
RETAILING MANAGEMENT I, Dr . Padmaja Rachapudi, web based
article.