RETAIL MANAGEMENT

BY: MA. KATRINA S. MORA

BA Instructor
CHAPTER I:
THE
INTRODUCTION
TO RETAILING &
THE STRATEGIC
RETAIL
MANAGEMENT
 Reasons for Retailing- encompasses the business activities involved in
selling goods and services to consumers for their personal,
studying retail family, or household use. It includes every sale to the final. It is
the last stage in distribution process.
management: Retailer- French word means “to cut a piece off”.
It is important field to
study because of its These are the key issues that retailers must resolve:
impact on the 1. “How can we best serve our customers while earning a fair profit?”
economy, its functions 2. “How can we stand out in a highly competitive environment where
in distribution and its consumers have so many choices?”
relationship with the 3. “How can we grow our business while retaining a core of loyal
firms selling goods and customers?”
services to retailers for Our point of view: Retail decision makers can best address these questions by fully
3 their resale or use. understanding and applying the basic principles of retailing. R
Retailer- is an organization that purchases
products for the purpose of reselling them
to ultimate consumers. Although most of
retailers’ are made directly to the
consumer, non retail transactions occurs
occasionally, when retailers sell products to
other businesses.

FUNCTIONS OF RETAILER TO DISTRIBUTION:

 Retailers act as the contact between
manufacturers, wholesalers and consumers.
(typical channel of distribution)
 Collect an assortment from various sources, buy I
large quantity, sell in small amounts (sorting
process)
 Communicating customers, manufacturers and
wholesalers. (information gathering and provision)
 Provide assistance by transporting, sorting,
marking, advertising and pre-paying for products.
 Complete transactions with customers.
4
04/26/2023
Provide customers services not provided by other ADD A FOOTER
intermediaries.
 MULTI-CHANNEL RETAILING
 Many firms engage here to make
themselves even more appealing
whereby a retailer sells to consumers
through multiple retail formats.
 It is the practice of making products
available to consumers on more than
one channel.
 It uses multiple sales channels such as e-
commerce websites, retail stores, online
marketplaces, social media platforms,
etc.

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 RELATIONSHIP AMONG RETAILERS & THEIR SUPPLIERS
Exclusive Distribution
• Suppliers make agreements with one or few retailers that
designate the latter as the only ones in specified
geographic areas to carry certain products.
• Stimulates both parties to work together for the
betterment of the product and profit.
• It requires that retailers limit their brand selection in
specified product line (decline other supplier’s brand)
• Channel relations tend to be smoothest.
• Extreme form of selective distribution in which only one
wholesaler, retailer or distributor is used in a specific
geographical area.
e.g.: luxury cars, iPhone, Gucci, Rolex, Gucci & BMW.
watch: https://thebusinessprofessor.com/en_US/principles-of-marketing/exclusive-
distribution-explained
NOTE: Firms uses this to create an aura of
prestige & exclusively that sets their products
apart from customers.
Intensive Distribution
• Suppliers sell through as many retailers as possible.
• Often maximizes suppliers’ sales and retailers offer many brands &
product version.
• Competition among retailers selling the same time is high.
• Retailers may use tactics not beneficial to individual suppliers.
• Retailers are concerned on their own results.
• Retailers may assign little shelf space to specific brands & set very
high prices on them
• Channel relations tend to be most volatile
• A customer will be able to find the product everywhere he goes.
e.g.: Soft drinks, Toothpaste, Soaps, Cigarettes, some liquor & beer,
grocery items, drug store items, etc.
NOTE: Some firms uses this because LARGE-
SCALE DISTRIBUTION RESORTS TO MORE SALES
WHICH IN TURN BOOSTS REVENUE.
 Selective Distribution
• Suppliers sell moderate number of retailers.
• Combination of exclusive and intensive
distribution. (middle road of exclusive &
intensive)
• Suppliers have higher sales exclusive
distributors.
• Retailers carry some competing brands.
• Company sells its goods through a select group
of intermediaries.
• It is making a product available in more than
one outlet but not in as many as are willing to
stock it.
• Limited number of outlets in geographical area
to sell products.

e.g.: HP printers, Nikon Cameras, Levis, Hugo Boss,

Cars (Toyota, Nissan, etc.)

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Please watch:
(3639) What are the 3 Levels of Distribution Intens
ity? - YouTube
 RETAILER’S ROLE IN THE SORTING PROCESS
 Sorting- retailer balance the demand by collection an assortment of goods from different
sources. Buying in sufficiently large quantities and selling to consumers in small unit.
How does SORTING help customers?
 It generates a better match between customer requirements and the actual supply of sorted
products.

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 Importance of Retailing
 It is important for the creators, customers as well as the economy. Retail stores are the places
where most of the actual sales to customers take place. In general, it is a great asset to economy.

Special Characteristics Characteristics of Retailing: Retailing Types:

Affecting Retailers:
 Small Average Sale
 Impulse Purchases
 Popularity of Stores
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 Direct Contact with Customers  Store Retailing
 Relationship with the Customers
 Non-store Retailing
 Stock small quantities of goods
 Stock goods of different brands
 Corporate Retailing
 Customers’ contact with the  Internet Retailing
company
 Have limited shelf space
 Service Retailing
 Sells the goods at maximum prices
 Retailing Types
1. Store Retailing
 includes different types
of retail stores like
department stores,
specialty stores,
supermarkets,
convenience stores,
drugstores, etc.
4. Internet Retailing
 It works on similar concept of
selling small quantities of
goods to the final consumer
but they serve to a larger
market and doesn’t have a
physical retail outlet where
the customers can go and
10 touch the product.
2. Non-store Retailing
 The transaction happens
outside conventional shops
or stores.
a.) Direct selling- door-to-door
selling
b.) Automated vending-
vending machine
5. Service Retailing
 Retailer deals with
services, the process is
called service retailing.
Restaurants, hotels, bars,
etc. are examples of
service retailing.
3. Corporate Retailing
 Retailing through
corporate channels like
chain stores, franchises
and merchandising. It
focuses on retailing
goods of only the parent
or partner brand.
NOTE: Retailers NOT
ALWAYS sell tangible
goods. Retail offerings
also CONSISTS OF
SERVICES.
 Importance of Developing and Applying a Retail Strategy
A retail strategy is the overall plan guiding a retail firm. It influences the firm’s business
activities and its response to market forces, such as competition and the economy. Any
retailer, regardless of size or type, should utilize these six steps in strategic planning:

1. Define the type of business in terms of the goods or
services category and the company’s specific
orientation (such as full service or “no frills”).
2. Set long-run and short-run objectives for sales and
profit, market share, image and so on.
3. Determine the customer market to target on the basis
of its characteristics (such as gender and income level)
and needs (such as product and brand preferences )
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4. Devise an overall, long run plan that gives general
direction to the firm and its employees.
5. Implement an integrated strategy that combines such
factors as store location, product assortment, pricing,
and advertising and displays to achieve objectives.
6. Regularly evaluate performance and correct
weaknesses or problems when observed.
 RETAILING CONCEPT
 It is straightforward.
  It means communicating with shoppers and view­ing their desires as critical to the firm’s success;
having a consistent strategy (such as offering designer brands, plentiful sales personnel, attractive
displays, and above-average prices in an upscale store); offering prices perceived as “fair” (a good
value for the money) by customers; and working to achieve meaningful, specific, and reachable
goals. However, the retailing concept is only a strategic guide. It does not deal with a firm’s
internal capabilities or competitive advantages but offers a broad planning framework.
These four principles form the retailing concept:

Coordinated Effort
Good Orientation
The retailer Value Driven
Customer Orientation
integrates all plans The retailer offers good value
The retailer sets
The retailer determines to customers whether it be
the attributes and needs
and activities to upscale or discount. This goals and then
of its customers and maximize efficiency. means having appropriate uses its strategy to
prices for the level of products attain it.
endeavors to satisfy and customer service.
these needs to the
12 fullest
 Three issues that relate to a retailer’s performance in terms of the retailing concept

THE TOTAL RETAIL EXPERIENCE RELATIONSHIP RETAILING

 It is a concept that
addresses the fact that
 refers to the identifiable, but
consumers encounter a
retailer as more than just a
store with stuff to buy. They
interact with the retailer in a
variety
13 of channels and ways.
CUSTOMER SERVICE
sometimes intangible, activities
undertaken by a retailer in
conjunction with the basic
goods and services it sells.
 Retailers seek to establish and maintain
long-term bonds with customers, rather
than act as if each sales transaction is a
completely new encounter. This means
concentrating on the total retail
experience, monitoring satisfaction with
customer service, and staying in touch
with customers.
WHY IS RETAILING IMPORTANT
FOR BUSINESS STUDENTS?
 Retailing is important for
business students to understand
for two main reasons. First,
almost all product channel
structures conclude with a
retailer. This means that no
matter where a product starts its
journey, it almost always ends up
at a retailer. Second, retail offers
an immense number of job
14 opportunities.
 FABRIKAM

Thank you!

makatrinamora@gmail.com www.fabrikam.com