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Supermarket definition Quality definition Customer expectations Quality incorporated in design Logistics & CSI Quality management tools
These are retail formats which are large, low cost, low margin, high volume, selfservice operations designed to meet the needs for food, groceries & other non food items. This formats controls more than 30% of the grocery market in many countries A typical supermarket has a wide array of more than 20,000 SKU’s and has the distinction of selling items below their MRP(Manufacturers Recommended Price)
“Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.”
Varkeys Nilgiris Reliance More 9/10 Big bazaar Mithra Margin free Spencers Supply co Subhiksha etc…………………..
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Reasonable prices and sales promotions and offers Availability of required goods Wide assortment/ variety Availability of latest items in the market Easy movement Proper directions & signage inside the store(Quick discovery) Cleanliness No adulteration in quantity as well as quality (food safety) Speed & ease of buying exercise (Timely Billing)
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Combination of related goods Quality of individual goods Value for money Ambience Freedom of choice No expired items Facilities like toilet, water cooler etc Service by staff- behavior, helpfulness, courteousness, etc. Safety- fire safety: sprinklers etc.
Layout Location of store Space planning Visual Merchandising Planogram Signage Ambience Pricing/promotion strategies Assortment
Why is Location so Important?
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It is of great customer interest Hard to overcome a bad location Determines who you will attract Long term commitment and not easily changed Major Financial investment
Steps in selection of location
Regional Analysis - Select a geographic market Area Analysis - Evaluate the trading area Site Evaluation - Actual physical site
Population size and characteristics Demographics and lifestyles of people in a region Economic base of region Cost and availability of labor Local gov’t support of business Warehouse accessibility Demand for goods vs. supply Competition Number and size of competitors Competitors’ strengths and weaknesses Saturation
A trading area is a geographic area containing the customers of a retailer for specific goods or services Geographical map from which the retailer draws customers GIS (Geographic Information System)
population demographics data on customer purchases listings of current, proposed, and competitor locations
Size and Shape are dependent on:
Size of Store Neighboring stores Transportation network Population density Physical, social, and political barriers Location of Competition Merchandise uniqueness, low prices, superior service (Marketing Strategies)
Trading Areas: Primary
50-80% of customers (less than 10 min.)
15-25% of customers (less than 20 min.)
Remainder of customers (15-50 mi. away)
Primary, Secondary, and Fringe Areas
Techniques for Identifying Trading Areas Customer Spotting License plates Customer records (credit cards, delivery records,service) Promotions (sweepstakes, contests, coupons) Customer surveys
It is the manner in which product are arranged inside a super market. It is tool for controlling the flow inside a supermarket. It is also known as circulation plan Eg: in a supermarket fresh vegetables and groceries are placed at the rear end of retail store.(this would encourage the people to browse through the entire store till they reach that section)
Select a layout if It allows a complete presentation of the merchandise offered by the store(Eg: Giving different exit and entry points) Address the needs of the targeted customers (Eg: Provide ramps for the wheel chairs and strollers, provide seating arrangement for people if they expect to spend hours in a store)
Grid Commonly used in supermarket. Efficient utilization of space. Preferred in stores that adopt self-service Race track (Loop Lay-out) In the form of a race track with aisle running throughout the store Free form Merchandise arranged in an asymmetrical manner allows for free movement . May not allow maximum
Storage, Receiving, Marketing
Checkout counter Tops
Feature Open Display Window
Feature Open Display Window
Skirts and Dresses
Hats and Handbags
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Prime objective is to aid the movement and flow of customers Complementary items should be placed near each other. Seasonal needs should be considered. Items needing frequent restocking should be placed near store rooms. Effective space utilization is the utmost concern
Shopping behavior and operational considerations should be recognized. Areas should be divided into
Transition zone prime selling area Impulse merchandise area Seasonal or special merchandise area
EDLP (every day low pricing) by WalMart Sales promotions of Big Bazaar “Sabse saste theen din” “junk swap offer” bundled product offers Discount coupons Exchange offers Seasonal , stock clearance sale etc….
Developing sales forecast
Review past sales b. Analyse changes in the economic conditions c. Analyse changes in the sales potential d. Analyse competitor’s strategy e. Create forecast
Determining the merchandise requirement
Merchandise budget Sales plan Stock support plan Gross margin of each product
Merchandise control Level of purchasing EOQ Limit over buying or under buying 5. Assortment planning Season Department Class Sub-class
Tool used by the retailers that helps to determine the location of merchandise within a dept. Allows for proper visibility and price point option Allows for consistency in presentation across location . Customer feels familiar and comfortable at each and every location
When visual cues are not sufficient Types
for location and guidance purposes to communicate corporate policy related to merchandise (brands, prices, sizes) related to promotional activity
Design of signage (size, font, colour) should be incorporated in overall retail design
Creation of an aura or atmosphere, which is interpreted favourably by the customer Atmospherics can be used to appeal to all of our senses: colours, textures, music, aromas, temperature
LIGHTING Contributes to atmosphere, and overall design Ambient lighting level Up-lighters Down-lighters Spot lights Wall lights Many fixtures now have integrated lighting Different coloured light
Orderly, systematic, logical and intelligent way of putting stock on the floor Visual merchandising is visually appealing the customer Store windows and floor displays, signs, space design, fixtures and hardware, props and mannequins. It ensures that the selling space is neat, easy to see, follow and shop.
Colour dominance Using mannequins, floor fixtures Co-ordinated presentation This can be done for garments, home fashions and kitchen appliances Presentation by price
Related articles together Display seasonal goods Tie up display with advertisement Do not crowd window Make display simple Improve lighting Change display frequently Make display of all sell merchandise
It is the basic element of merchandise/category management Product grouping allows customers to quickly find what they are looking for and to see the breadth offered in any category Merchandise similar products together which enables the customers to efficiently use their time while in the store
The CSI model is a cause-and-effect model with indices for drivers of satisfaction on the left side (customer expectations, perceived quality, and perceived value), satisfaction (CSI) in the center, and outcomes of satisfaction on the right side (customer complaints and customer loyalty, including customer retention and price tolerance).
Customer Expectations Customer expectations is a measure of the customer's anticipation of the quality of a company's products or services. Expectations represent both prior consumption experience, which includes some non experiential information like advertising and word-of-mouth, and a forecast of the company's ability to deliver quality in the future. Perceived Quality Perceived quality is a measure of the customer's evaluation via recent consumption experience of the quality of a company's products or services. Quality is measured in terms of both customization, which is the degree to which a product or service meets the customer's individual needs, and reliability, which is the frequency with which things go wrong with the product or service. Perceived Value Perceived value is a measure of quality relative to price paid. Although price (value for money) is often very important to the customer's first purchase, it usually has a somewhat smaller impact on satisfaction for repeat purchases.
Customer Complaints Customer complaints are measured as a percentage of respondents who indicate they have complained to a company directly about a product or service within a specified time frame. Satisfaction has a negative relationship with customer complaints, as the more satisfied the customers, the less likely they are to complain. Customer Loyalty Customer loyalty is a combination of the customer's professed likelihood to repurchase from the same supplier in the future, and the likelihood to purchase a company’s products or services at various price points (price tolerance). Customer loyalty is the critical component of the model as it stands as a proxy for profitability.
While food logistics is similar in many ways to logistics as a whole, there are some important differences, Safety. Freshness Temperature variations Brand image and identity Finally, while some food products have higher margins, many others have very low margins. Low margins coupled with increased competitive pressures mean that wringing every excess dollar out of the food chain becomes crucial -- so we can expect to see even more collaboration and creative use of technology in the years to come.
INBOUND LOGISTICS OPTIMISATION
Collaborative Planning, Forecasting and Replenishment (CPFR) is a concept that aims to enhance supply chain integration by supporting and assisting joint practices..
CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain. Information shared between suppliers and retailers aids in planning and satisfying customer demands through a supportive system of shared information. This allows for continuous updating of inventory and upcoming requirements, making the end-to-end supply chain process more efficient. Efficiency is created through the decrease expenditures for merchandising, inventory, logistics, and transportation across all trading partners
In the retail industry the retailer typically fills the buyer role, a manufacturer fills the seller role, and the consumer is the end customer The consumer drives demand for goods and services while the retailer is the provider of goods and services. The manufacturer supplies the retailer stores with product as demand for product is pulled through the supply chain by the end user, being the consumer.
Visual management Visual merchandising, planogram are application visual management tools Kanban Vendor managed inventory of Wal-mart is an example of kanban Poka-Yoke The fire sprinkler inside the supermarket is based on poka yoke principle
5s House keeping consists of following part Sorting Set in order Sweeping/Cleanliness Standardizing Sustaining discipline
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