Transcript Retail-Management-Demo - Management Study Guide

Retail Management
Course Objectives
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Explain What is Retail Management
Describe the Benefits of Retailing
Explain the Retail Selling Process
Explain the Classification of Retailers
Explain the Components of Retailing Concept
Explain the Steps of Retail Strategy Planning
Explain What is Franchising
Explain What is Merchandising
Explain What is Visual Merchandising
Describe the Importance of Location in Retailing
Explain the Types of Retail Location
Explain What is a Private Label
Explain the Process of Creation of Private Label
List the Myths about Careers in Retailing
List the Tips for Success in Retailing
Introduction
Look at the logos of
some of the leading
organizations across
the world.
What do you think is
common among the
companies shown?
All the companies
whose logos have been
shown are ‘retailers’.
Introduction
Thus, each one of the companies shown sells directly to the
final consumers.
They also render services that are incidental to
the sale of such goods.
All these retailers are establishments that
are engaged in selling merchandise for
personal or household consumption.
Introduction
Let us look at the various aspects of retail
management in detail.
Therefore, like any business, it is very important
to manage a retail business and its various
components.
In fact, the retail industry is one of the
fastest growing and biggest sources of
employment across the globe.
Definition
Now, let us look at a few definitions that will be useful while you study retail
management.
The word ‘Retailing’ is derived from the
Retailing
Retailer
Wholesaling
Wholesaler
French verb ‘retailer’, which means, "to
cut a piece off.” Retailing is defined as all
business activities that are involved in
selling goods or services directly to the
final consumers for their personal, family
or household and non-business use.
Whereas, from a marketers point of view,
retailing is defined as a set of marketing
activities that are designed to provide
satisfaction to the end consumer and
profitably maintain the customer base by
continuous quality improvements across
all areas concerned with selling goods
and services.
What is Retail Management?
Role of Retailer in Channel of Distribution
Manufacturer
Wholesaler
Retailer
Final Consumer
Benefits of Retailing
• Benefits to Customers
Breaking Bulk :
One of the major benefits that retailers
Benefits
Retailing
to Customers:
pass
on toof
their
customers
is through their
For consumers
or customers,
retailers act as buying agents. Retailers perform
activity
of ‘breaking
bulk’. Thisthe
is because
various buy
activities
increase
retailers
goodsthat
in bulk
fromthe value of goods and services that are then
ultimately soldThey
to the
enddivide
consumer.
The various activities performed by the
manufactures.
then
the bulk
retailers
ultimately
benefit
customers
are as follows:
goods
intothat
smaller
saleable
unitsthe
as per
the
consumption
patterns
• Breaking
Bulkof the end
consumer.
• Providing Assortment
• Holding Inventory
• Providing Services
• Providing Information
Let us look at each activity in detail.
Real Life Example
Providing Assortment:
Retailers evaluate the products of
various manufacturers; they then
choose and offer the best assorted
collection of products depending
on the tastes and needs of their
target customers. Hence,
consumers get a wide range of
products and prices to choose
from as per his/her choice.
Therefore, the offered variety in
assortment makes the buying
process easier for customers.
External Environment Affecting Retailing
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Technological Environment:
One of the major factors that drive change in
the retail industry is ‘Technology’. Across the
globe, the manner in which retailing is
carried out has changed drastically due to
the computerization of various retail store
operations through the advent of
computers, MIS etc. Technology is now being
used in the retail industry as a means to
improve the shopping environment and to
provide a pleasant shopping experience to
the customer.
Retail Marketing Mix
The following are the components that make up the ‘Retail Marketing Mix’:
Customer
Service
Presentation
People
Retail
Marketing
Mix
Promotion
Product
Price
Place
Classification of Retailers
• Amount of Service
Self-service
Retailers
Limited-service
Limited-service
Retailers
Retailers
Full-service
Retailers
Retailers can be classified based on the ‘amount
of service’ they offer to their customers. Hence,
based on the amount of service offered to
customers, retailers can be such as follows:
Limited-service Retailers:
In such retail stores, the customers are
offered limited service rather than a
completely self-serving mode. Such retail
stores are such as discount stores, most
department stores etc.
Classification of Retailers
• Organizational Approach
Corporate Chain Stores
Retailers can be classified based on the
‘organizational approach’ they choose for their
business. Hence, based on the organizational
approach, retailers can be such as follows:
Voluntary Chains
RetailerCooperatives
Cooperatives
Retailer
Franchise Organizations
Merchandising
Conglomerates
Retailer Cooperatives:
These stores are operated by groups of
independent retailers who buy in bulk.
Components of Retailing Concept
One of the key components of the retailing concept is
‘customer orientation’. A retailer always determines the
attributes and needs of its customers. He then endeavors
to take action in order to satisfy these needs of his
customers.
A retailer must always make a coordinated effort
to succeed. Hence, a retailer integrates all his
plans and activities to maximize efficiency.
One of the primary things that a retailer should
aim to offer to his customers is a ‘good value
proposition. Hence, a retailer must offer good
value to the customers, through ‘appropriate
pricing’ for goods and customer service.
Customer
Orientation
Coordinated
Effort
Retailing
Concept
Value-driven
A retailer should always set goals and then use strategy
to attain them.
Goal
Oriented
Classification of Retail Institutions
The given flowchart shows the classification of retail institutions:
Ownership
Ownership:
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Independent
Chain
Franchise
Leased Department
Vertical Marketing
System
Consumer Cooperative
Store-based Retail
Strategy Mix
Store-based Retail Strategy
Mix:
• Convenience Store
• Conventional & Foodbased Supermarket
• Box (limited line) Store
• Warehouse Store
• Specialty Store
• Variety Store
• Traditional & Full-line
Department Store
• Off-price Chain
• Factory Outlet
• Flea(louse) Market
Non-store Based
Retail Strategy Mix
Non-store Based Retail
Strategy Mix & Nontraditional Retailing:
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Direct Marketing
Direct Selling
Vending Machine
World Wide Web
(WWW)
Real Life Example
Let us now understand how the concept of franchising works through
SUBWAY® Restaurants.
SUBWAY® Restaurants were started way back in 1965 by a seventeen-yearold Fred DeLuca.
Fred DeLuca had just completed his high school and he aspired to become a
medical doctor.
What is SKU?
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SKU is an acronym for
Stock Keeping Unit.
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SKU is a unique numerical
identifying number.
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This unique number
refers to a specific stock
item in a retailer's
inventory or product
catalog.
Retail Life Cycle
The given image shows the ‘Retail Life Cycle’ of any retail establishment.
Importance of Location in Retailing
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Location decides and influences the
merchandise mix and interior layout of
the store based on the locality and
neighbors surrounding the store.
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Hence, vice versa, the choice of the
location of the store also depends on
the target audience and kind of
merchandise to be sold.
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It is important to keep in mind that
once the store comes into existence, it
is very difficult to change the location
as changing the location of a store may
result in loss of customer and
employees.
Private Label
In certain
cases, a store
may belong to
a wholesale
buying group.
This wholesale
buying group
may own labels,
which are made
available to the
members of the
group.
Hence, this
whole-sale
owned labels
are referred to
as controlled
labels.
Controlled
labels can be
used by the
retailer
belonging to
that wholesale
group.
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