Retail Management: A Presentation by

RETAIL MANAGEMENT
A Presentation by
www.siddhimanagement.com/muthep@g
mail.com
ABOUT SIDDHI MANAGEMENT
CONSULTANTS
• Services in Research, Tie-Ups and Training since 2002
• Team of Management professionals from Top-B
schools
• Associates in USA,UK, Russia, Germany, Japan
• Well networked within industry and government
• Worked with well known Indian companies, MNCs,
government bodies
• Specialised services for the Security Industry - Business
Intelligence, Partner search, Management support,
Business Formation and Location advice
mail.com
Retail Management
• What is Retailing?
• Retailing involves selling products and services to
consumers for their personal or family use
mail.com
Retail Management
• What is Retailing?
• Retailing involves selling products and services to
consumers for their personal or family use
mail.com
Importance of retailing
 Retailers are a vital part of business as the final link

between the consumers and manufacturers
 Retailers add value to products by making it easier
for manufacturers to sell and consumers to buy
 Retailers also provide services that make it less risky
and more fun to buy products
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Retailing industry worldwide
• Retail is the largest industry in the world with sales

of $ 7.3 trillion
• 25 of the top 50 Fortune 500 companies are in retail
• Every 10th billionaire in the world is a retailer
• Retail is the second largest industry in US in terms of
establishments and employees.
• Generates $3.8 trillion in sales in US
• Generates 11.7% of US employment
• Well known retailers-Wal Mart, Harrods, Sears,
Mcdonalds
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Retailing industry in India
• Indian retail segment contributes to 20% of the GDP
• Indian market worth $ 250b a year
• “Real Retailing” yet to arrive
• Organized retailing only 2% compared to that of 85% in US
40% in Thailand,55%in Malaysia and 20% in China
• Retailing to jump from 2% to 10% by 2010
• Report by Mckinsey and CII has pegged Indian retail market at
$180 billion;market growing at 11 to 12 % annually
• Big Bazaar, Café Coffee Day, Cinemax, Fame, Loreal salon,
World of Titan, Smokin Joes, Sify, Mcdonalds etc.
• Potential in metros,urban,semi urban and rural areas also
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Type of industries in retailing
 Supermarkets, department stores, discount stores,
speciality stores
 Hotels, health clinics, hair salons, fast food joints, on-
line stores, multiplexes, entertainment zones,
cyberjoints, book stores
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Changing trends in retailing
in India
• From kirana stores to supermarkets and malls
• Exclusive stores and speciality stores
• From unorganised to organised format
• Professionally managed systems
• Impact to be seen in metros,urban,semi urban and
rural areas also
• Shopping is being transformed from a daily chore to
a pleasurable experience
• Integrated retail-cum-entertainment centres-”Shop
Entertainment” to be seen more
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Future of retailing
• In 2002,there were 1800 chain stores, sales are growing at
24%p.a
• Food retailers-Pizza Hut, Dosa Diner, Food World
• Health and beauty products-Himalaya’s, Dr.Batra
• Clothing and footwear-Benetton, Westside
• Home furniture and household goods
• Durable goods
• Leisure and personal goods-Books and music products-Planet
M, Crosswords
• Alternative selling-Direct marketing, Tele marketing
• On-line retailing-E-bay, Amazon
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Opportunities in retail industry
• From a traditional setup to a professional setup
• Fastest growing service industry in India
• Marketing oriented industry like FMCG, consumer
durables etc.
• Being customer focused and being innovative is the
key.
• Includes dynamics of supply chain management,
merchandising more than any other industry.
• Large requirements of professionally trained
manpower like MBAs to manage businesses.
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TYPES OF RETAILERS
1.FOOD RETAILERS
• Conventional supermarket-is a self service food
offering groceries and regular items with limited
sales of non-food items
• Superstores-are larger conventional supermarkets
with expanded service in regular items
• Supercenters-are 150k-170k sq ft size stores that
offer a wide variety of food and non-food
merchandise
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FOOD RETAILERS
• Hypermarkets-are also large(100k-300k sq ft)
combination food(60-70%) and general
merchandise(30-40%)retailers.h’markets stock
typically less than supercenters.
• Warehouse club-is a retailer that offers a limited
assortment of food and general merchandise with
little service at low prices.
• Convenience stores-provides a limited variety and
assortment merchandise at a convenient location
with a speedy checkout.
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2.GENERAL MERCHANDISE RETAILERS
1.Discount store-is a retailer that offers a broad variety
of merchandise, limited service and low prices.
2.Speciality store- concentrates on a limited number of
complementary merchandise categories and
provides a high level of service in a relatively smaller
area.
3. Category specialist- is a discount store that offers a
narrow variety but deep assortment of
merchandise.
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GENERAL MERCHANDISE RETAILERS
4.Department stores are retailers that carry a broad
variety and deep assortment, offer some customer
services and are organised into separate
departments for displaying merchandise
5.Drugstores are speciality stores that concentrate on
health and personal grooming merchandise.
6.Off-price retailers offer an inconsistent assortment of
brand-name, fashion oriented soft goods at low
prices.
mail.com
GENERAL MERCHANDISE RETAILERS
7.Value retailers- are general merchandise
discount stores that are found in either lower
income urban or rural areas and are smaller
than traditional discount stores.
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3.NON STORE RETAIL FORMATS
• 1.Electronic retailing- also called e-tailing and
internet retailing is a retail format in which the
retailers communicate with customers and offer
products and services for sale on the internet.
• 2.Catalog retailing-is a non-store retail format in
which the retail offering is communicated to a
customer through a catalog
• 3. Direct-mail retailing- is a non store retail in which
the offering is communicated through letters and
brochures.
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NON-STORE RETAIL FORMATS
• 4. Direct selling is a retail format in which a
salesperson, frequently an independent
businessperson, contacts a customer directly in a
convenient location either at the customers house or
at work and demonstrates merchandise benefits,
takes an order and delivers the merchandise to the
customer.
• 5. TV home shopping- is a retail format in which
customers watch a TV program demonstrating
merchandise and then place orders for the
merchandise by telephone
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NON-STORE RETAIL FORMATS
• 6.Vending machine retailing- is a non-store
format in which merchandise or services are
stored in a machine and dispensed to
customers when they deposit cash or use a
credit card.
mail.com
SERVICES RETAILING
• Services retailers primarily sell services rather
than merchandise compared to earlier
formats.
For eg.-airlines, banks, education, financial
services, entertainment parks, health care,
hotels, insurance etc.
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TYPES OF OWNERSHIP
• 1. Independent, single store establishments
• 2. Corporate chains- A retail chain is a company
operating multiple retail units under common
ownership and usually has centralized decision
making for defining and implementing its strategy.
Eg- Café coffee day,Big bazaar
• 3.Franchising- is a contractual agreement between a
franchisor and a franchisee that allows the
franchisee to operate a retail outlet using a name
and format developed and supported by the
franchisor. Eg-NIIT,Raymond’s
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CUSTOMER BUYING BEHAVIOUR
• THE BUYING PROCESS-
• 1.Need recognition
• 2.Search for information about retailers
• 3.Evaluate retailers
• 4.Select a retailer
• 5.Visit store/net/catalog
• 6.Repeat store patronage
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BUYING PROCESS
• 1. NEED RECOGNITION
• process triggered when there is an unsatisfied need
• Difference between desired level of satisfaction and present
level of satisfaction
• For eg- Im feeling hungry and I want to eat a burger
• Types of needs-a. Functional b. Psychological
• Functional needs are related directly to the performance of
the product
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BUYING PROCESS
• Psychological needs are associated with the
personal gratification customers get from
shopping or from purchasing and owning a
product
• Psychological needs can be satisfied through
shopping and purchasing merchandise include
stimulation, social experience, learning new
trends, status and power and self reward
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BUYING PROCESS
• 2.INFORMATION SEARCH
• Amount of information search will depend on the
nature and use of the product, characteristics of the
individual customer, aspects of the market and
buying situation in which the purchase is made
• Sources of information-internal and external
• Reducing the information search-
• a. Retailers must provide a good selection of
merchandise
• b. Better services c. Everyday low pricing
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BUYING PROCESS
3.EVALUATION OF ALTERNATIVES
Multi attribute model suggests that customers
see a retailer or a product as a collection of
attributes or characteristics which may include
prices, delivery cost, travel time, checkout
time, number of products, brands, sizes, fresh
produce, ease of finding products, ease of
collecting information
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BUYING PROCESS
• 4.PURCHASING THE MERCHANDISE
• Following steps are taken to convert prospects into
customers-
• A. Stock popular merchandise
• B. Have complete assortment of sizes and colors
• C. Offer credit
• D. Have convenient checkout terminals
• E. Reduce actual and perceived waiting time in
checkout terminals
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BUYING PROCESS
• 5. POSTPURCHASE EVALUATION
• Customer uses the product and evaluates whether it
was satisfactory or unsatisfactory.
• Satisfaction would occur when a store meets or
exceeds a customers expectations
• Satisfaction can increase by offering quality
merchandise, providing accurate information about
the merchandise and contacting customers after a
sale.
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FACTORS INFLUENCING BUYING
DECISIONS
• 1. PERSONAL
• A. Beliefs- about performance of retailers and
products
• B. Values
• C. Attitudes-evaluations of retailers and products
• 2.SOCIAL
• A. Family
• B. Reference group
• C. Culture
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RETAIL MARKET STRATEGY
• A retail strategy is a statement identifying-a. the
retailers target market, b. the format the retailer
plans to use to satisfy the target market needs and c.
the bases upon which the retailer plans to build a
sustainable competitive advantage
• Target market-is the market segment (s) toward
which the retailer plans to focus its resources and
retail mix.
• A retail format is the retailers mix (nature of
merchandise and services offered, pricing policy,
advtg and sales promos, store design, merchandising
and location)
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• A sustainable competitive advantage is an advantage
over competition that can be maintained over a long
time.
• A retail market is not a specific place where buyers
and sellers meet but as a group of consumers with
similar needs and a group of retailers using a similar
retail format to satisfy those consumer needs. Eg-
Men’s formal wear- Raymonds, Digjam, Vimal, Mayur
suitings,Reid and Taylor
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• BUILDING A SUSTAINABLE COMPETITIVE
ADVANTAGE
• Following opportunities are available for retailers to
build a sustainable competitive advantage-
• 1.Customer loyalty-Building a brand image with an
emotional connection with customers ;using
databases to develop and utilize a deeper
understanding of customers; loyalty programs
• 2.Location- is a critical factor in the consumer
selection of a store and cant be duplicated.
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• 3.Human Resource Management-Important since
retailing is a labor intensive business and employees
play an important role in providing services to
customers and building customer loyalty.
• 4.Distribution and information systems-Important
tool to reduce the demand supply gap as much as
possible.
• 5.Unique merchandise-Develop private label brands
(store brands)
• 6. Vendor relations-Important in the long term
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• 7.Customer service-Important to provide good
service consistently
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• GROWTH STRATEGIES
• 1. Market penetration- Involves directing efforts
toward existing customers by using the present retail
format. Eg-Cross selling
• 2. Market expansion-Employs the existing retail
format in new market segments Eg- Men’s wear
store now in women’s wear segment
• 3. Retail format development-involves offering a new
retail format with a different retail mix to the same
target market. Eg- Using the internet to sell existing
products
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• 4. Diversification- Happens when a retailer
introduces a new retail format directed
toward a market segment that’s not currently
served.
• Could be related or unrelated
• Vertical integration
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FOR MORE DETAILS
• Contact: Pankaj Muthe
• Visit us on : www.siddhimanagement.com
http://pankajmuthe.blogspot.com
• Mail :pankajmuthe@gmail.com
mail.com

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RETAIL MANAGEMENT

 Retailers are a vital part of business as the final link

• Retail is the largest industry in the world with sales

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