The Retail marketing Mix

The set of variables that the retailer can use to satisfy the customers needs to influence their buying behavior and compete effectively in the market Retail managers must determine the optimum mix of retailing activities and coordinate the elements of the mix. The aim of such coordination is for each store to have a distinct retail image in consumers mind. Elements of Retail Marketing Mix: Elements of Retail Marketing Mix The best combination of different elements of the mix are Merchandise Assortments, Location, Price, Visual merchandising, Store atmosphere, Customer service, Advertisement Promotions and Personal Selling 1. Product/ Merchandise Assortments: Products are also termed as merchandise. The different products that the store offers is termed as the merchandise mix. A merchandise line consists of a group of product that is closely related because they are intended for the same end use, are sold to the same customer group or fall within the same price range. The variety of the merchandise mix refers to the number of different lines that the retailer stocks in the store. Breadth or Width of merchandise - The number of merchandise categories (E.g.: food stuff, textiles, electronics, jewelry and other accessories available in a retail outlet- Department stores) Depth of merchandise -the number of items in a category - Stock Keeping Units (SKUs) (E.g.: Wide rage of mobile available in a mobile sales and service unit in a retail outlet- Specialty stores) 2. Price: Pricing is an integral part of the retail marketing mix. The price policy that the organization decides to follow depends on the customer profile that is the target audience for its range of products. It also depends on whether the product offering is unique or has other substitutes available. For example designer clothing is always expensive as compared to the prt lines offered. The ability of a product to customer satisfaction is determined by its value_ price tag A retailer needs to consider the role of a product in terms of its contribution to the overall profitability to the retail business Thus prices are visible & highly sensitive part of Retail Marketing Mix Prices are subject to individual interpretation in terms of value representation, and so deeply affected by consumer behaviour

3. Place/ location: For a very long time the location of the retail store was considered to be the most important element of the retail marketing mix. However, with the advances in technology and the advent of television shopping and the Internet many retailers are now going in for a click and mortar approach. The issues that affect Location analysis & Location decisions are: Consumer choice- customers decision of where to shop. The need for competitive advantage- best locations can give scope for further growth Consideration of trends- recent social and structural changes High investments- high investment and long lead times, involves long term financial implications Property asset- final property of company can be valued high as their annual turnover Declining number of sites- restricted number of new sites, government policy guidelines and less opportunity to obtain planning permission 4. Promotion: Retail promotion is descriptive term for the mix of communication activities which retail companies carry out in order to influence those publics on whom their sales depend on. Retailers need to develop a communication strategy in line with target market and the products that they stock in store. Retailing promotion has the main objective of influencing customer perceptions, attitudes, behaviours, in order to increase store loyalty, store visits and store purchase And there is also need to influence trade contactors such as agents and suppliers and opinion formers such as journalists and writers. Each local, national and international politicians and important professionals may also needed to be influenced 5. Visual merchandising/Presentation: Visual Merchandising In short, its the Retailers Display. The manner in which the merchandise is presented at the store level is very important. The use of Visual Merchandising includes visual materials and window displays used in retail outlets to stimulate sales. Visual Merchandising is the orderly systematic and intelligent way of putting stock on display in the retail store. This: Ensures maximum exposure Enhances product appearance and creates interest Provides sales and product information Allows storage and security of stock Generates additional sales through impulse purchase 6. Customer service: An agreement to service provision is concerned with creating levels of service to be offered Such as self- service requires no attention to customer, while personalised service means specialised services to customers 5 dimensions to measure service quality: Tangibles uniforms, toilet supplies, mirrors, fitting rooms Reliability based on the ability to

perform the service dependably and accurately Responsiveness by reaching in a timely manner with the right knowledge & courtesy Empathy demonstrated by providing caring , individualised services Assurance to provide credibility that the service standard will be upheld. 7. People: Retailers operate in a unique environment. The retail industry is characterized by a large number of inexperienced workers, who need to put in ling hours of work. Most of the time, these employees are in direct contact with the customer and may face irate or unreasonable customers. The people who work at the front end of a retail organization are very important, as they are the face the organization for the customers. Their attitude behavior manners and product knowledge play a very important role in building long term relations with the customers. 8. Store atmosphere: The environment and physical aspects of the place _ includes atmospherics of the store and the stores location The social surroundings_ possibility of interaction among customers for judgment, avoiding crowding behaviour The temporal aspects of the occasion in terms of the time of the day, week or even, may be based on seasonal aspects(eg: Onam, Christmas, etc) The objective of the shopping trip may be either small or significant and this decides the mood of the shoppers. (customers coming to purchase home appliances will have a serious aspect) The predisposition of the individual (specific mooSds will lead to distinct purchasing behaviour). 9. Advertisement : Any paid form of non- personal communication through the media about a product that has an identified sponsor Advertising is normally associated with mass communication, where abroad target market is to be contacted Models of Advertising_ DAGMAR (Defining advertising Goals for Measured advertising results) The sequence of stages in DAGMAR: Unawareness Awareness Comprehension to offer Conviction Action or inaction. 10.Personal Selling: Personal selling is an attempt to gain benefit through face-to-face or telephonic contact between the seller and the prospective buyer. Whatever situations occur in the buyer- seller relationship, trust is the important aspect of any interaction Trust is the perceived credibility of the company and its staff This is because trust affects the credibility in the communication

between seller and customer, all of which leads to commitment and greater loyalty intention and loyalty behavior. SOCIAL FORCES In recent years, the concept of social responsibility has entered into the marketing literature as an alternative to the marketing concept. The implication of socially responsible marketing is that retail firms should take the lead in eliminating socially harmful products such as cigarettes and other harmful drugs etc. There are innumerable pressure groups such as consumer activists, social workers, mass media, professional groups and others who impose restrictions on marketing process and its impact may be felt by retailers in doing their business. RELIEGION , BELIEFS, CUSTOMS AND VALUES OF CONSUMERS: People live in different parts of the country may have different cultural values which has to be analysed by retail business people/firm.This will help them to reorient their strategy to fulfill the demands of their consumers. EDUCATION LEVEL: People with different education level have different type of needs and demands.

ECONOMIC FORCES Factors such as level of employment, rate of inflation, rate of interest, demographic changes, and fiscal and monetary policies, which determine the state of competitive environment in which a firm operates. INCOME LEVEL:Different income level group has different type of product need. So the retailer should adopt the retail mix according to the income level of consumers, existing in that area. PURCHASING POWER: Consumer purchasing power measures the value in money for which consumers may purchase goods or services.If the purchasing power of consumer is strong they will go for more and more purchasing of costly goods. MARKET CONDITIONS:Market condition means whether it is boom or recession, inflation or deflation.

FISCAL AND MONETARY POLICY: Factors such as interest rate, taxation policy e.t.c.

TECHNOLOGICAL FORCES Technological factors such as packaging, billing system, storing system, e.t.c affect the retail mix very much. 1. Innovative packing of the products 3. Modern stores where merchandise can be stored for a long time. 4. Billing. Transportation. Internal facilities. e.t.c.

Private label
Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands. Types of Private Label Store brands - The retailer's name is very evident on the packaging. Store sub-brands - Products where the retailer's name is low-key on the packaging. Umbrella branding - A generic brand, independent from the name of the retailer.

COMPETITIVE FORCES Forces in the marketing environment that are based on competition among customers and competition with other firms Who is buying goods and services and who is providing them to those customers? Are there many competitors or are there just a few? Maybe none. Knowing what competitive forces exist helps an organization develop strategic planning to attract customers Disadvantages of Private Label Conflict with other brands in the category. Higher R&D expense Higher marketing expense If product fails, will create negative image Inventory risk

Advantages of Private Label Lower Prices Better Margins Offer consumer greater value Bargaining power to the retailer

10 ps of private labels 1. Product: quality is equal to national brand. 2. Partnership: work in extra mile in terms of support, marketing, mechandising e.t.c. 3. Planogram: ensuring every product leads to sales and profit, delist the slow movers. 4. Packaging: reflect quality and performance of overall brand & from inside as first impression.,as 70% of purchase decision only at pop. 5. Pricing: provides the high perceived value to customer Without leaving profit. 6. Position: position mark the one that you want to compete directly against . 7. push: let the branded player spend money to develop category awareness, once customer in store, retailer have major impact 8. personnel: 9. promotion: by display and through features to gain customer attention. 10. pride: take pride in your brand, treat it and market it with the respect it deserves.

3. Major retailers and wholesalers that own their own manufacturing facilities and provide store brand products for themselves. 4. Regional brand manufacturers that produce private label products for specific markets.

Private Label as a Marketing and Business Tool

Retailers have extended the concept of private label to identify a brand with a store, a concept known as the store brand. This can be a far more profitable business than selling nationally advertised brands. Private Label may be behind the decision of some companies to enter the market with products that are quite different, but somehow associable, to those that have made them famous (apparel companies launching perfumes; car companies launching watches and so on). Private Label may be an extremely profitable business for companies or corporations commanding an important share of the market with certain products that enjoy a high customer recognition. As sophisticated technologies become widespread, and even subsidized, in emerging countries (generally with export-driven economies), sourcing of a wide range of products can be made at very low cost. These same products may have prices that allow for net margins to account up to several times the cost of the goods sold. Customers may be unaware of this business practice and be paying higher prices for products that differ little from others with less famous brands. On the other hand, some companies do provide additional guarantees to these products offering better quality, customer support, additional services.

Private Label Manufacturers Association

The Private Label Manufacturer's Association (PLMA) categorizes PL manufacturers into 4 main categories: 1. Large national brand manufacturers that utilize their expertise and excess plant capacity to supply store brands. 2. Small, quality manufacturers who specialize in particular product lines and concentrate on producing store brands almost exclusively. Often these companies are owned by corporations that also produce national brands.

Private Label use by small companies

Another use of private labeled products that has seen good growth is by small companies. Small companies usually do not have any input in the recipes or packaging of the products they buy. These small companies buy from a specialty food company that uses their recipes and simply label for the individual retail store. The reasons small companies look at branding products with their name is for the advertising benefits they receive.

Factors Affecting Buying Decision of the Customers at the Store There are several factors which affect the buying decision of the customers. 1.Store Display and Presentation of Products The store display plays an important role in influencing the buying decision of the customers. It is the display of the store which attracts passing individuals into the store. The store must have an attractive display to entice the customers. Shopping may be the last priority for an individual but a creative display encourages him to spend on shopping.
A retailer must intelligently display the latest trends on mannequins to prompt the customers to buy the

same. Make sure the products are kept on their respective racks. The merchandise should not fall off the shelves. Since most of us are right handed; we tend to go towards the right side of the store, the moment we step inside. The retailer must thus display expensive and unique merchandise on the right side of the store. Remove old stock from the shelves. 2. Ambience of the Store The store ambience plays an important role in attracting new customers and retaining existing ones.
A customer would never purchase anything from a store which is not clean. Foul smell irritates individuals

and thus they leave in no time. Play soulful music for a positive effect on the customers. The store should be well lit and ventilated for the customers to enjoy their shopping. 3. Customer Treatment Warm customer treatment is an effective way to pull the customers into the store. It is essential for the retailers to treat the customers like kings to expect loyalty from them.
Understand your customers well. Try to find out what they expect from the store. The sales representative must greet the customers with a warm smile. It makes a difference. Assist them in their shopping. Never oversell. The retailer must never lie to the customers. If something is not looking good on them, be honest and give

them a correct feedback. If a customer comes for an exchange, dont be rude; instead help him with an alternative. 4.Store Design and Layout A customer would never prefer shopping from a store which gives a cluttered look.
There should be ample space in the store for the customers to move and shop freely. Put stickers and labels (size, colour, FS (Full sleeves), HS (Half Sleeves) and so on) on the shelves and racks. Dont stock unnecessary furniture and fixtures in the store. Classify the complete range of merchandise into small groups (categories) comprising of similar and related

products. Categories help the customers to locate the products easily. A store must have a trial (change) room. Individuals avoid places where there is a parking hassle. The store should have an adequate parking space.

5. Other Factors 1. Discounts and rebates influence the customers to shop more. A customer might not need a product, but a discount will encourage him to purchase the same as he would now get it at a lower price. 2. Promotional schemes like free gifts also affect the buying decision of the customers. A Free T Shirt with a pair of jeans would definitely prompt the customers to shop more. 3. Customers also indulge in shopping to redeem their coupons and avail discounts. Retail Pricing - Different Types of Pricing Models

The sale of goods from fixed points (malls, department stores, supermarkets and so on) to the consumer in small quantities for his own consumption is called as retail. According to the concept of retailing, a retailer doesnt sell products in bulk; instead sells the merchandise in small units to the end-users. 1.Cost Plus Pricing Mechanism: Cost plus pricing works on the following principle:
Cost Price of the product + Profit (Decided by the retailer) = Final price of the merchandise.

According to cost plus pricing strategy the retailer adds some extra amount to the actual cost price of the product to earn his share of profits. The final price of the merchandise includes the profit as decided by the retailer.
Cost plus pricing strategy takes into account the profit of the retailer. Cost plus pricing is an easy way to calculate the price of the merchandise. The increase in the retailer price of the merchandise is directly proportional to the increase in the cost price. The customers however do not have a say in cost plus pricing.

2.Manufacturer Suggested Retail Price (Also called List Price or Recommended retail price) According to manufacturer suggested retail pricing strategy the retailer sets the final price of the merchandise as suggested by the manufacturer.
The retailer sells the product at the same price as suggested by the manufacturer. The retailer sells the merchandise at a price less than what was suggested by the manufacturer - Such a condition

arises when the retailer offers Sale on his merchandise. Retailers initially quote an unreasonably high price and then reduce the price on the customers request to make him realize that a favour has been done to him. A condition of Bargain - where the customer negotiates with the retailer to reduce the price of the merchandise. 3.Competitive Pricing The cut throat competition in the current retail scenario has prompted the retailers to guarantee excellent customer service to the buyers for them to prefer them over their competitors.
The price of the merchandise is more or less similar to the competitors but the retailers add on certain attractive

benefits for the customers. (Longer payment term, gifts etc.) The retailers ensure that the customers leave their store with a smile to have an edge over the competitors. He tries his level best to offer better services to the customers for a better business in future. 4.Pricing Below Competition According to pricing below competition policy
The price of the merchandise is kept lesser than what is being offered by the competitors.

5.Prestige Pricing (Pricing above competition) According to prestige pricing mechanism, the price of the merchandise is set slightly above the competitors. The retailer can charge higher price than the competitors only under the following circumstances: Exclusive Brands at the store. Brand image of the store Prime location of the retail store Excellent customer service Merchandise not available at any other store Latest Trends 6.Psychological Pricing
Certain price of a product at which the consumer willingly purchases it is called psychological price. The consumer perceives such prices to be correct. A retailer sets a psychological price which he feels would meet the expectations of the buyers and they would easily

buy the merchandise. 7.Multiple Pricing

According to multiple pricing, the retailer sells multiple products (more than one) for a single price. The retailers combine few products to be sold for a single fixed price. 3 Shirts for $100/- or 3 Perfumes for $20/- and so on.

8.Discount Pricing According to discount pricing, the retailer sells his merchandise at a discounted price during off seasons or to clear out his stock. Traffic flow Traffic flow is the movement of customers through the store. It is a critical aspect of store layout due to the impact that it can have on the customer both practically and psychologically. Types of traffic flow There are two basic traffic-flow alternatives available to the retailer:the grid pattern which is characterised by its structured layout design; and the free flow pattern which is less formal in its appearance. GRID PATTERN A highly structured format that maximises the available display space. The grid pattern uses the length and width of the traffic area to create clear aisles and facilitate self-serve shopping. FREE FLOW PATTERN An informal format that uses a variety of fixtures to create a relaxed, unbalanced floor layout. While the free flow layout often sacrifices selling space to create atmosphere, it does encourage browsing and unplanned purchases. COMBINATION PATTERN The combination pattern incorporates both grid and free flow formats to create atmosphere suited to the style of products and shopping behaviour involved. Improving customer traffic flow Study customer traffic flow Studying your customers' traffic flow will help you know where to place certain items to ensure your customers move through your whole store. Draw a map of your store and mark the way customers walk around it:

Is there a common pattern to the way they walk through your shop? Are there any areas that customers rarely go to? Are there spaces that customers leave quickly?

Which areas do most customers go to? Where are customers gazing and how much are they looking around? Direct traffic to your products Your customers will pay more attention to your products if you place them in a way that helps browsers discover what they want. Here are the best ways to showcase your products:

Place high-profit items in high traffic areas and demand items in low-traffic areas. Don't place feature products or important promotional material right inside the entrance to your store. Customers need a 'decompression zone' to adjust to the environment of your store and are less likely to notice detailed information in this area. Know your 'strike zone'. It's the space you use to make first product impressions on your customers. Place widely appealing, affordable products here so customers don't get turned off by high prices. Place impulse items - that is, the low-cost, repeat-purchase items - around the counter and in high-traffic areas. Place your high-demand products at the back to draw customers through the store. Direct traffic throughout your store Retail designers use clever store design principles to help draw customers and increase traffic through the store. Here are some of the main store design principles:

Place your sales counter so it is not the first thing customers see. The cash register reminds them they're spending money, and forces your customers to engage with your sales staff before they've decided they're comfortable in your store. Use lighting and layouts that ensure your customers can always easily see the way through and way out of your store. Customers who feel trapped or lost in your store will leave quickly. Create aisle space that is narrow enough to slow customers down to look, but wide enough to be comfortable, clear and safe. Excessively wide aisles encourage customers to rush without browsing. Consider access for customers with disabilities and special needs. For example, aisles should be uncluttered and wide enough to allow wheelchairs and prams.

Multi level marketing

Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation. Other terms for MLM include pyramid selling, network marketing, and referral marketing. Pros Start-up outlay is lowthis is indeed one of the best things about MLM business. You dont have to have huge amount of money to be able to get the initial package with products and the training to start MLM. All you have to do is sign-up, give the registration fee and pay the products inclusive of your initial product supply. You are now ready to start selling! High Quality Productsresearch on a number of MLM manufacturers show that products that they actually manufacture are of high quality and standards. That is why many individuals actually would want to buy the products. But we all know that MLM is not just retailing the products but convincing other people to invest in the business as well. You are your own managercertainly one of the best aspects of this business is that you dont have to answer to anybody but yourself. Just like running your own conventional type of business MLM lets you set your own phasing. It is up to you whether you want to take your time or go on a faster mode. Work From Homeyou dont have to go or go back and forth to work each day. You can do cold calls and lead generation at home. You can invite people including your friends and links to listen to your business opportunity meeting at home. You can

already take care of your business while taking care of your family. You can even do other businesses if you manage your time well. Cons: Frustrationthis can eat you up because of so many things about MLM. You might begin very fast, very productive but will get plenty of rejections. You could also read and hear many negative opinion about MLM causing you to think twice or doubt as to why you entered this business in the first place. Wrong Reasonsbecause business opportunity meetings and seminars are designed to get people who are listening into an excited mood or get them hyped and ready to sign-up anytime; they tend to think that this is a business of easy money. It is not. The truth is MLM requires a lot of work, a lot of influential power and determination. You will invite people to listen. Sometimes you might get 20-30 audience but zero converts. Rejectionsthis is the hardest thing to handle with. After the first, second and third rejection you will probably say to yourself that you dont want to continue anymore. And when that happens that will be the end of your MLM career. Doubtsyou might come across many people with different doubts about MLM and some of it might rub onto you. You might also start doubting if you can actually make it in this business or not. You might even doubt your business if they are actually going to deliver their end of the bargain. FRANCHISE Definition A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a continuing contractual relationship with other businesses (franchisees) operating under the franchisor's trade name and usually with the franchisor'sguidance, in exchange for a fee. Some of the most popular franchises in the United States include Subway, McDonalds, and 7-Eleven. There are advantages and disadvantages in buying a franchise rather than buying or starting an independent business, including: Advantages:

Association with a well established brand, reputation and product or service; Assistance with site selection, lease negotiation, site development, builders and shop fitters; Assistance with outlet design and equipment purchasing; Initial management training and continuing management assistance; Access to group/national market research, along with advertising and merchandising assistance; Access to established standard procedures, operating manuals and stock control systems; Assistance in securing finance and sometimes financial assistance in establishing the business; Access to financing packages which may be more attractive and easier to access than for non franchised businesses; and Access to established financial systems and checks which can provide early warning signals to highlight trouble spots. Disadvantages:

Less autonomy in some business decisions. Franchisees generally have to operate the business according to the franchisor's operations manual; Restricted territory in which you may operate and/or promote your business; Ongoing payment of fees to the franchisor; Less control if you decide to sell your franchise business as there will be a set of procedures for you to follow, including getting the franchisor's approval of the buyer;

If you sell the business you will usually have to pay a fee to the franchisor as outlined in the franchise agreement; Restraint of trade provisions on the sale or termination of the franchise that may be more onerous than required if a non franchised business is sold; At the end of the franchise term, the franchisor is not obliged to renew the franchise, in which case the business and its goodwill revert to the franchisor. 6 Factors to Consider Before Buying a Franchise The franchising model works like this you (the franchisee) buys the rights to market and distribute the goods and services of another company (the franchisor) and to use its business name for a fixed period of time.So before you decide if its right for you, here are 6 factors you should consider before buying a franchise. 1. Demand As is the case before starting any new business, find out if there is a demand for the product or service you intend to offer. If you are buying an overseas franchising licence, be wary that what sells well in other countries may not be equally well-received here. So dont jump on the opportunity without doing your research. The potential for expansion should also be considered if you intend to branch out to multiple outlets in the future. 2. Track Record Just because a company offers franchising opportunities doesnt mean its worth taking up. You should only look at companies that have proven themselves successful at franchising their business. If possible, speak to current franchisees about their experience so you get a clear idea of whether the franchise is worth investing in. 3. Investment One of the biggest barriers to buying a franchise is that unlike starting your own business, where all the capital is invested in your operations, a sizeable portion of your initial capital goes to the franchisor as fees for training, equipment and licensing rights. This figure can range from a few thousand dollars to a few million. Look at what the franchise company will be providing in exchange for the franchise fees, and evaluate the time it will take to earn your upfront costs back to determine if a franchise is a sound investment. 4. Competition If the franchise is a well-known brand, there may already be lots of franchisees operating in the vicinity, and not to mention other rival companies. Consider first if the franchise and industry youre choosing is a strategic business to enter as itll be hard to establish yourself if there are many competitors in that market. If the product being sold is unique then competition will not be an issue. But for most businesses, this will not be the case. 5. Training A major advantage of franchising is the training and support offered to franchisees. If you dont have any entrepreneurial experience, then it is advisable to choose a franchise that offers substantial training. Some even provide on-going support even after your franchise is up and running. With proper guidance and training, the chances of your franchise being successful right from the start will increase greatly. 6. Restrictions It is very common for franchisors to impose certain restrictions on how their franchises are to be run. They usually require franchisees to follow guidelines and standards which may encompass things such as product offerings, prices, operational hours, and store design among others. So you may be the boss, but the franchisor generally has the control. If youre not comfortable with this kind of arrangement, then running a franchise may not be what youre looking for.