Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

What is Retailing

 Retailing is defined as a conclusive set of activities

or steps used to sell a product or a service to
consumers for their personal or family use.

 Retailer> a person, agent agency, company, or

organization who links the producers and the
ultimate consumers.

 (Reaching of goods, merchandise, or services to the

ultimate consumer. (Product in stores, services in
restaurants, parlor, or car rental agencies.
Selling via mail, internet, door to door visits.

 Nations with greatest economics and social

progress. (Because of retailing).
1. Easier access to a variety of products.
2. Freedom of choice.
3. Higher levels of customer service.

 Product categories
1. large department stores:-
These stores offer a huge assortment of
goods and services.
2. discounters:-
These stores offer a wide array of products
and compete on price.
3. high end retailers:-
These businesses target extremely niche
segments.

 Retailers make optimum selection of goods to sell

(Major concerns).
1. Unsold inventory sold at reduced price
resulting in lower profit.
2. Damage to image due to poor quality and
supplies.

 Challenges of retail managers. (Changes due to

technology and consumer needs. )
1. Setting appropriate price.
2. Setting multimillion dollar stores in malls.
3. Selecting target markets.

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Chetan Bajaj, Nidhv Srivastava,
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 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

4. Making a decision which merchandise and

services to offer.
5. Negotiating with suppliers.
6. Training sales people.

 Global retail industry-related facts.

1. Increase in retail sales on global bases.
2. Retail sales are generally driven by people’s
ability (disposable income) and willingness
(consumer confidence) to buy.

 Regional facts.
1. Analysis in sales of product and services
through retailing.
2. Factors affecting growth of retail business.

 Consumer expectations.
1. Time and quality of life are becoming relatively
important than money.
2. Product performance top purchasing criterion.
3. Environmental features.

 Retail industry and economy.

1. Largest private industry ahead of finance and
engineering.
2. Over 8% contributions in west and growing in
east (GDP).
3. Laws made easy to attract FDI.
4. Developing countries affected due to entrance
of global retailers.

 Retail industry in India. (Similar in Pakistan).

1. Second largest employer after agriculture.
2. Highly fragmented and small, independent,
owner managed shops.
3. Changed image and looks of stores, attractive
retail formats like malls, supermarkets,

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Rajnish Tuli
 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

discount stores, department stores, book stores

chemist shops. Etc.

 Retail forecast in India.

1. Trend in favor of retail business.
2. Customers prefer one stop shop.
3. Dual income families or couples prefer
faster services.

 Characteristics of Retailing.
Difference of retailing from manufacturing.
1. Direct end user interaction in retailing.
2. Providing promotions.
3. Purchase of small unit sizes. Compare to bulk.
4. location a major and critical decision making
factor
5. Service part of core products, same importance.
6. Handles the needs of consumers and clients more
than any business.

 Direct interaction with customers.

 Lower average amount of sales transaction

 Point of purchase display and promotions.

1. Unplanned or Impulse buying.
2. display , store layout and catalogues
3. Point of purchase merchandise.
4. High visibility high traffic location in a
store.

 Large number of retail business units

1. Location:- important in retail
business, factors in deciding
1. Potential demand.
2. supply of merchandise
3. Store image.

 Roles of services in retailing

 Functions of retailing
1. Sorting.
2. Breaking bulk.
3. holding stock
4. Additional services.

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 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

5. Channel of communication.
6. transport and advertising
functions

 Activities performed by retailers.

1. Arrange for
assortment of
offerings.
2. Breaking
quantity.
3. Holding stock.
4. Extending
services.

 Categorizing retailers. (Classifying on the basis

of).
1. Number of outlets.
2. Margin vs. turnover.
3. Location.
4. Size.

Small chains: - use economies of scale while tailoring

merchandise to local needs.
Big chains: - operating on a national scale save costs by
a centralized system of buying and
accounting.
1. Standard stock list. Same merchandise is stocked
in every retail outlet.
2. Optional stock list. Outlets given advantage of
changing the merchandise
according to customer needs
in the area.

Factors considered in inventory selection.

1. Branding.
2. Pricing.
3. regional or national reputation
4. Huge buying power.
5. Vast inventory.
6. hassle free return and exchange policies
7. Convenience (open 24 hours, close to customers).
Successful independent retailers embrace the following
principles:
1. Be prepared for change.
2. Move to a narrower niche market and stop
competing directly with the big retailers.

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Chetan Bajaj, Nidhv Srivastava,
Rajnish Tuli
 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

3. Up to date customer data base.

4. Invest appropriately in advertising and promotion.
5. Charge regular prices and avoid discounting.
6. Purchases for business with care full selection.
7. focus on profit instead of volume
8. Provide the best service.
9. Employ the best staff (personal).
10. Extensive use of internet (importance).

Gross margin retailer:

Net sales minus the cost of goods sold and gross margin
percentage is the return on sales. 30% margin implies that
a retailer generates Rs 30 for every Rs 100 sale that can be
used to pay operating expenses.
Inventory turnover Retailer:-
Number of times per year, on average, a retailer sells his
inventory.

Structure and nature of retailing channels.

Trends in retail format.
 Mom and pop stores.
 Mass merchandisers.
 Discount clubs.
 Category killers.
 Specialty retailers.
 E commerce. (e-tailers example Amazon .com)
 Department stores.
 Discount stores.

Relation ship between the retailers and their suppliers.

 Intensive distribution.
 Selective distribution.
 Exclusive distribution.

Selection of retail format mix by manufacturers in the

soap category
Females are the target due to hygiene factors.

Retail strategy. (Six steps involved)

1. Choosing a segment.
2. Setting short term and long term objectives with
regard to image and profitability.
3. What kind of merchandise or customer needs
should it cater to?

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 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

4. Integrating and implementing a plan with all the

aspects of retailing like pricing, location, and
channel decisions.
5. Future business plans and actions.
6. Evaluating and revising the plan based on the
nature or the internal and external environment.

Retail concept. (Four broad areas)

1. customer orientation
2. goal orientation
3. value driven approach
4. coordinated effort

Major criteria for the right customer approach

 Creating the right environment.
 Listening to customers
 Providing rewards to the best customers
 Realizing the lifetime value of consumers.

The changing face of retailing

It consists of two parts 1. Role of internet in retailing.
2. Branding through
retailers.

Drivers of success in the retail sector.

To be a successful retailer they must possess revolutionary
thinking.
This type of thinking involves a desire to change within
their organization.
i. Focused approach to strategic planning.
ii. Advanced marketing skills.
iii. Strong customer focus.
iv. Enhanced exposure on the World Wide Web .
(WWW)

 Customers are the driving force in change.

 Reevaluating the marketing plan.
 Advanced education for retailers is critical
for growth.
 Strong visual recognition
 The workplace challenge
 Planning for success

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 Dr Zain Yusufzai Retailing, Role Relevance, and Trends Chapter #1 (page 1-52)

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