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Internal Assignment No.

Master of Business Administration / DM

Paper Code: MBA/DMM– 108
Paper Title: Retail Management

Note : Question No. 1 is of short answer type and is compulsory for all the students.
It carries 5 Marks. (Word limits 50-100)

Q. 1. Answer all the questions:

(i) What are the features of retailing?
Ans: Features Of Retailing

The main characteristics or features of retailing can be highlighted as follows:

1. Small quantities - Retailers buy and sell goods in small quantity.

2. Sell to ultimate consumers - Retailers sell goods to ultimate final consumers.
3. Varieties of goods - A retailer can sell various necessary goods to consumers.
4. Personal contact - A retailer establishes direct and personal contact with customers.
5. Shop display - Retailers decorate and display goods to attract customers.
6. Last link - Retailers work as the last link of distribution channel.

(ii) What are the factors that influence retail shopper?

Ans: Factors which influence the customer’s decision making process.

1) Socio-cultural background of shopper

2) Travel time and distance
3) Location convenience
4) Range of merchandise
5) Stage of family life cycle of consumers.

(III) What do you understand by merchandising mix?

Ans. The breadth of the product mix consists of all the product lines that the company has to offer to its customers
are known as merchandising mix.The product mix of a company is generally defined as the complete set of all
products a business offers to a market. The product mix sometimescalled "product assortment" or “merchandising
mix” is made up of both product lines and individual products.The breadth of the product mix consists of all the
product lines that the company has to offer to its customers. If we take P&G, for example, the breadth of the major
product lines would consists of hair products, oral care, soaps and detergents, baby care, and personal care.

(IV) What is supply chain management?

Ans.Supply chain management is the active management of supply chain activities to maximize customer value and
achieve a sustainable competitive advantage. It represents a conscious effort by the supply chain firms to develop
and run supply chains in the most effective & efficient ways possible. Supply chain activities cover everything from
product development, sourcing, production, and logistics, as well as the information systems needed to coordinate
these activities.The organizations that make up the supply chain are “linked” together through physical flows and
information flows. Physical flows involve the transformation, movement, and storage of goods and materials. They
are the most visible piece of the supply chain. But just as important are information flows. Information flows allow
the various supply chain partners to coordinate their long-term plans, and to control the day-to-day flow of goods
and material up and down the supply chain.

(V) Define “Sales Promotion”. Give examples.

Ans: Sales Promotion is one of the elements of the promotional mix. (The primary elements in the
promotional mix are advertising, personal selling, direct marketingand publicity/public relations). Sales
promotion uses both media and non-media marketing communications for a pre-determined, limited time
to increase consumer demand, stimulate market demand or improve product availability. Examples
include contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, product
samples, and rebates.
Sales promotions can be directed at either the customer, sales staff, or distribution channel members
(such as retailers). Sales promotions targeted at the consumer are called consumer sales promotions.
Sales promotions targeted at retailers and wholesale are called trade sales promotions.

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)
Q. 2. Discuss the functions of HRM in retail organizations.
Ans: HRM in people centric industry is concerned with the ‘people’ dimensions of the organization. In
order to achieve the objectives as stated above, HRM must perform certain functions. Generally, it is said
that to achieve the organizational objectives, retailers must set up a proper correlation between the
objectives and the functions. Usually a particular set of functions helps realize specific objectives .

These human resource functions are expressed as under:

1. Job analysis and job design: Job analysis is the process of describing the operations, duties and
responsibilities of the job. In order to recruit retail employees on a scientific and rational basis, it becomes
necessary to determine in advance a standard of personnel with which interested candidate can be
compared. This standard must establish the minimum acceptable qualities necessary for the
accomplishment of tasks by retail employees.

Job Analysis Process:

The process provides information about what the job involves and what human features are essential to
carry out these activities. This information becomes vital to decide what sort of people to recruit and hire.
The data derived from job analysis process is beneficial for estimating the value and appropriate
compensation for each job.

The reason behind this is the belief and practice that compensation generally depends on the job’s
required skill and education level, safety hazards, degree of responsibility, and so on all these factors that
are assessed through job analysis. This ultimately provides the base for determining the relative worth of
each job so that each job should be properly classified.

Hence, job analysis is a data collection function performed by the HR department that
includes the following steps:

The above mentioned steps are discussed as under:

(i) Collection of factual materials:
The first step of job analysis process includes collecting factual information relating to the job.

This task is usually accomplished in four ways:

(a) With the help of structured questionnaire

(b) Using narrative descriptions

(c) Observations, and

(d) By interviews

Two types of information are collected through above mentioned four techniques:
(a) Belonging to the job environment, i.e. its physical environment such as use of computers, sitting
arrangements, comforts, lighting, restrictions etc; its financial obligations (salary, bonus, commission,
DA, TA, fringe benefits, incentive schemes etc); its social environment (whether job is individual or in
groups, shifts, working hours, team work).

(b) Belonging to employees’ qualities:

It includes following qualities of employees performing retail tasks:

i. Physical demands: number of working hours, store job/field job, physical (muscular energy).

ii. Intellectual demands: degree, diploma, working experience, fresher, problem solving ability.

iii. Personality demands: look, height, spoken language, humbleness, ability to listen, working under
stress, employees’ complaint handling.
(ii) Completing job description blank:
After collecting the information, job analysis puts such information in a standard job description form as
a comprehensive draft which shows full details of the activities of the retailing job. As per the nature and
format of the retail organization, separate forms may be used for various activities in the job and may be
compiled later on. In actual, the whole task of job analysis depends upon these forms, which are regularly
consulted as reference guide for the future planning tasks.

(iii) Preparation of the job specifications:

Job specifications are also prepared on the basis of information collected through data collecting
techniques. Job description basically refers to a statement of minimum acceptable qualities of a candidate
whose selection should be made.

(iv) Preparation of Report:

This report indicates various activities to be performed by the retail staff and expectations from them. It is
prepared by the job analyst on the basis of information collected. The report is then submitted to the HR
department for its suggestions and amendments.

(v) Approval:
The report submitted by the analyst and reviewed by the HR department may now be revised by the top
executives for:

(i) Competitive policies

(ii) Comments of HR department (if any)

(iii) Views of Trade Unions (if applicable)

(iv) Mission and vision of the organization

In some organizations, such drafts are usually approved by the HR manager while in some organizations
by the top executive, who has the ultimate responsibility to finalize it.

2. Recruitment and selection of retail employees:

The success of a retail organization largely depends upon the team of efficient store employees who are
chosen out of a number of applicants for the job. Recruitment is a very first step in the employment
process, which aim at obtaining and maintaining an efficient store staff (floor employees) as a means of
achieving sales targets.

Recruiting employees basically involves three major sub-functions:

(i) Recruitment,

(ii) Selection, and

(iii) Placement on the job.

Recruitment defined:
According to Edwin Flippo, “Recruitment is the process of searching for prospective employees and
stimulating them to apply for the jobs in the organization”.

Theoretically, recruitment is the positive process of employment aiming at searching for the prospective
employee and inspiring them to apply for jobs in the organization. In short, it increases the number of
applicants and number of posts vacant and thus provides an opportunity to the management to select the
suitable person.

Selection defined:
Selection is the process by which qualified and suitable store employees are selected and placed on the
jobs according to their capabilities and organization’s requirements. Thus, it is a tool in the hands of the
management to differentiate the suitable and unsuitable applicants by applying various techniques such
as group discussions, personal interviews, game tests etc.

Selection procedure employed in large retailing concerns:

Selection is a long process beginning with receipt of applicants and ending with the final placement. The
selection process varies from organization to organization and also between two different positions.

For example, in a retail company, when they are looking for entry level sales personnel, they tend to reply
on educational institutions, advertisements and employee recommendations. Moreover, when a retail
company is looking for middle-management positions, they are likely to use employment agencies,
competitors, advertisements and current employees. The recruitment process can be very costly. It takes a
great deal of time to set up an effective recruitment process.
Therefore, the company has to carry this job out in a systematic way. For instance, selection procedure for
store accountants, store supervisors, store managers will be long drawn and rigorous as compared to
those applicants who apply for floor staff position. The various steps in the selection of desirable employee
in the organization should be decided by the top management.

Following are the commonly used steps involved in the selection of retail employees:

3. Training and development:

After selecting the most suitable and eligible candidates in the organization, the next step of HR
department are to arrange for their training. All types of jobs require some type of training for their
efficient performance and therefore, all employees, new or old should be trained or re-trained from time
to time.

Further, the way new and new retail formats are emerging, new developments are taking place throughout
the globe, it becomes imperative for any retail organization to systematically plan for the training program
aiming at increasing the knowledge, skills, abilities and aptitude of employees to perform the new
competitive tasks.

4. Performance Management:
After selected, training and motivation, the next task, a HR manager has to perform is to evaluate the
personality and performance of each employee by quantitative factors (such as targets achieved). In
actual, with the help of performance management, the management through HR department would like to
find out how effective it has been hiring and placing employees. Performance management allows
retailers gain access to the reliable, timely information that drives better decisions.

A typical performance management system involves following actions:

(i) To develop job descriptions clearly.

(ii) Selecting right employees at right jobs with right selection process.

(iii) To negotiate requirements and accomplishment based performance standards, outcomes and
measures as and when required.

(iv) To provide appropriate training, education and induction.

(v) To facilitate ongoing coaching and feedback.

(vi) To conduct quarterly/half yearly performance development discussions.

(vii) To design appropriate compensation and appraisal system that rewards employees for their
outstanding contributions.

(viii) To provide career development opportunities for employees.

(ix) To assist with exit interviews to understand why loyal employees leave the organization.

5. Compensation and Benefits:

Compensation and benefits represent a substantial part of total cost in most of the organizations.
Compensation is not only the concern of the organization but is equally important for the workers and
employees to maintain their social image.

The attitude of the employees towards his employer will usually be determined by the extent to which
he/she is satisfied with the wages he/she is getting, though it is not the only reason for employee
satisfaction. Even motivation comes after an employee is satisfied with his/her basic compensation. It is
also the best way to satisfy the employee at the lower and middle level of management.

6. Labor Relations:
In modern days, retailing is carried on a large scale where hundreds of employees work together. The HR
manager is basically responsible for the control of labor (workers and employees) through human relation
approaches. Employees differ in nature and therefore, it is but natural that due to any communication
gap, labor relations may spoil within the organization. Therefore, the HR department should know the
proper policies, rules and regulations with regard to labor relations.

7. Managerial Relations:
The employment relationship, irrespective of nature of organization, usually has two parts: labour
relations and managerial relations. The former which covers the price of labour is more obvious. The
labour relation is also known as ‘market relations’. The managerial relations on the other side are the
relationships that define how the process takes place.
Q. 3. Define store environment. Explain in detail various components of interior and exterior
store design
Ans: "Store image is the image or impression of a store in the minds of
customers. Good overall impression of this nature in terms of products available in the store, the store
itself and the experience they expect when shopping at the store "(Dunne and Lunsch, 2005: 449). So it
can be said that the store image is actually areflection of the overall customer to store environment.

When thinking about interior design, words like creativity and flair immediately spring to mind – but
many would be surprised to find there is a degree of science involved. Professional interior designers will
usually follow a set of informal “rules”, based on specific interior design principles and elements. These
interior design elements include space, line, forms, light, colour, texture and pattern; and keeping them
balanced is the key to creating an aesthetically pleasing interior.

The foundation of an interior, space is a fundamental concept to understand, ensuring you’re best equipped to take
advantage of what is available to you. The available ‘space’ usually can’t be easily changed (though sometimes a designer
may have the luxury of doing so), so you need to work with what you have within the physical boundaries of the room.
In interior design we have the luxury of working within three dimensional space (length, width and height). This three
dimensional space can be filled or left empty, depending upon what you need to achieve from a functionality and design

Horizontal, vertical and dynamic lines help to shape a room and guide the eye. Creating lines using the room’s furnishings
and structural design can form harmony, unity and contrast.Horizontal lines, created by tables and other surfaces, give a
sense of stability, formality and efficiency. Interior designers highlight horizontal lines to make a room appear wider and
longer, and to draw the eye to a focal point. But be careful, overemphasis of horizontal lines has the ability to make the
space seem boring and uninspired.

Natural or man-made light is a critical aspect of any space. Without it, all of the other elements would not be able to shine to
their full potential. Light can be broken into the categories of task lighting (defined purpose), accent lighting (emphasising
objects) and mood lighting (adding ambience). When considering lighting, it is important to address the activities that will be
undertaken in the space. Both the quality and quantity should be assessed here. For example, an office will require bright
lighting so that the workers can see clearly and act alert. On the other hand, living room lighting can be applied with a softer
touch. Applying a dimmer has the ability to make a space much more versatile. Natural lighting should always be taken into
consideration, and can be manipulated through clever placement of doors, windows and even mirrors.

Colour is a science all on its own, and is another extremely important element that interior designers master. It has the ability
to create mood, define unity and alter the perception of how large or small a space is.The psychology of colour shouldn’t be
underestimated, and will be used to full advantage by any skilled interior designer. Colour can evoke memories and stir
emotions, stimulating a physical and psychological response in our bodies. For example, greens and blues entice calmness
and are suited to bedrooms, whereas red entices appetite and therefore often features in kitchens.

Texture refers to the tactile surface of an object or finish. It’s an element that is often overlooked, but really does have the
ability to bring a unique dimension to the room. Just like mixing colour and pattern, an interior designer mixes the textures
within a space to give a subtle sense of depth. Think glossy, coarse, smooth… From furniture to accessories to fabric,
texture has the ability to add interest and detail, making it visually pleasing to the eye. In essence, it gives a room feeling.

Paired with colour, pattern offers a similar use to texture in that it can add appeal to a room. A pattern is created by the use
a repetitive design and can be found in wallpaper, soft furnishings, rugs and fabrics. Patterns come in various types, such as
stripes, geometric, pictorial, organic, motif and animal prints.When implementing pattern, it’s best to firstly consider the size
and style of a room. Introducing pattern in a small room should be done sparingly, to avoid overwhelming the space.
However, as discussed in the element of line, patterns that create vertical or horizontal lines can be used to give a
heightened sense of space
exterior store design :
1. Grab their attention
It takes eight seconds to walk by a typical storefront.Once someone is two seconds past the door, they won’t
turn round. That means retailers must capture passing footfall in the first four seconds of their approach. Even
for big box retailers and global names, that is an incredibly short amount of time to convince someone to enter
your store.Through striking window displays, e.g these Halloween themed ones – and eye-catching external
technology– like our ASICS MetaRun campaign activation window below – retailers can attempt to capture the
attention of passing shoppers.

2. The Decompression Zone

Savvy retailers need to be aware of what is often called the “decompression zone”.According to research
by Paco Underhill, the first few feet within a store are where customers adjust to the new space. This means
that, more often than not, the majority of products placed right by the store entrance are largely ignored and
often forgotten about.

3. Wayfinding and customer journey

Despite being one of the most important elements in any retail design, wayfinding and customer journey are
often an afterthought by many retailers. This can result in messy floor plans and complicated store layouts that
are simply not designed with the shopper in mind.Brands and retailers should consider the path they want their
customers to take around the store, and assess how merchandising, point of sale, and wayfinding techniques
can be employed to aid this journey..

4. Learn from the customer

At Green Room, we use our four-stage IDEA process to inform every aspect of every design brief we
undertake. This starts with analysing the brand, customer, and marketplace insights to outline what it is that
motivates people to shop.In-depth insight enables brands to not only meet the needs of their customers but to
exceed them. Brands may not be able to capture the depth of insight and information our team can, but they
should take inspiration. For example, we used the real-time data visualisation that we captured at our Retail
Design Expo stand to improve it’s performance if we saw a drop in engagement. This real-time data provided
us with quick insight and thus allowed us to create an immediate increase in interaction.

5. Interactive, Immersive, Experiential

As we move to an increasingly multichannel way of shopping, bricks-and-mortar retailers need to do all they
can to capture the attention of increasingly fickle shoppers. Interactive and experiential design elements are a
great way to do just this. Take a look at our report Compelling Experience at Retail, to find out more.Through
seamless digital integration, interactivity and a digitally focused design, brands can not only encourage
shoppers to dwell within a space; but forge relationships and ultimately part with their money.

6. Lighting
Lighting is another often overlooked element of great retail design but is extremely important. Lighting creates
ambience, builds atmosphere, and helps to showcase products in the best possible way. Brands should
consider how to implement the best lighting – in key locations and innovative ways – to add to their retail
7. Hero product presentation
Eye-catching merchandising is always an important factor in the design of a store, but a great retail design
includes unique and memorable product presentation.Retailers that have taken the time to learn exactly what
their customer want to buy, how to appeal to them, and where in a store they would look for it can really make
the most of every product display in-store.Think about the different ways mannequins can be used, unique and
interesting ways point of sale displays can be introduced, and how signage can be used to grab customer

8. Flexibility and seasonality

One of the biggest challenges for retailers is flexibility within a store.As the seasons change, product lines
come and go, and different promotions are run; the retail design of a store needs to allow for maximum
flexibility and seasonality. This means product displays that can easily be added to or reduced down to cater to
changing products, window displays that can easily be switched in and out, and signage and displays that can
be regularly updated.

Q. 4. What is retail chain? Explain the advantages of operating a chain of retail outlets.
Ans: A retail chain is a retail outlet in which several locations share a brand, central management,
and standardized business practices. They have come to dominate the retail and dining markets, and
many service categories, in many parts of the world. A franchise retail establishment is one form of chain
store. In 2004, the world's largest retail chain, Walmart, became the world's largest corporation based on
gross sales.

The Advantages of Retail Outlets

The commercial marketplace has evolved to the point where retail sales no longer have a monopoly on the consumer
world. To elaborate, consumers once relied almost exclusively on retail outlets for their needed goods, but today you
can purchase from online stores, auction sites, wholesale outlets, liquidation centers, and in some cases, you can
even go straight to the manufacturer. If you sell any kind of merchandise, there are still advantages to using
traditional retail outlets.

Customer Rapport - In a retail setting, customer rapport benefits both you as a buyer and as a seller. Retail
outlets allow customers to see what they are buying up close and, as opposed to online stores, they provide instant
gratification, because the customer walks away with their purchases immediately. A friendly and helpful staff also
helps to build customer loyalty, ensuring that customers return again and again. From a business standpoint, retail
outlets allow you to reach a customer base that might be put off by the online marketplace.

Greater Inventory Options - When considering wholesale vs. retail, retail sales provides you with greater
inventory options, because not all merchandise is available on the wholesale market. To provide a bit of perspective,
wholesale goods come straight to the manufacturer to a wholesaler, usually mass produced at a low cost. The
wholesaler may sell to a retailer or sell to the public directly. But because not all goods can be mass produced at a
low cost, the wholesaler is limited in terms of inventory. By contrast, a retail business can produce goods for itself,
purchase from wholesalers, or directly from manufacturers.
Greater Sales Potential - With a retail outlet, you can sell a variety of products and expose customers to
items that they didn't even know they needed. For instance, a customer might enter the outlet looking for
a pair of jeans, but then wind up purchasing jeans, three shirts, a belt and a tie. By consolidating a variety
of merchandise in one central location, you dramatically increase your sales potential.
Less Drama - If deciding whether to sell in a retail outlet vs. online, consider that a retail outlet spares you
from having to charge shipping costs and from having to deal with lost packages, tracking codes, customer
addresses and complicated online sales databases. With a retail outlet, you can make each sale with greater
confidence and fewer conflicts.
Benefits from Consumers - If you are consumer and are considering reasons to shop at traditional
retail outlets, as opposed to online, consider some of the same benefits. You can save on shipping costs, receive
instant gratification, inspect your items carefully before making your purchase and not have to worry about
packages getting lost in the mail. You also can have all of your questions answered immediately by helpful
staff, rather than having to rely on email messages and phone calls.
Internal Assignment No. 2

Master of Business Administration / DM

Paper Code: MBA/DMM– 108
Paper Title: Retail Management

Note : Question No. 1 is of short answer type and is compulsory for all the students.
It carries 5 Marks. (Word limits 50-100)

Q. 1. Answer all the questions:

(i) What are the functions performed by a retailer?

Ans: Functions performed by retailers:

(1) Buying and Assembling: A retailer deals in different variety of goods which he
purchases from different wholesalers for selling to the consumers.He tries to locate best
and economical source of the supply of goods.
(2) Warehousing or Storing: After assembly of goods from different suppliers, the retailers
preserve them in stores and supply these goods to the consumers as and when required by
them. The goods are kept as reserve stocks in order to ensure uninterrupted supply to the
(3) Selling: The end objective of the retailer is to sell the goods to consumers. He
undertakes various methods to sell goods to the ultimate consumers.
(4) Credit Facilities: He caters to the needs of the customers even by supplying them goods
on credit. He bears the risk of bad debts on account of non-payment of amount by the

(ii) Differentiate between hyper market and super market.

Ans: Difference between Hypermarkets and Supermarkets

1. Size of Hypermarkets and Supermar kets

Supermarkets are considered to be larger shopping outlets that sell a variety of goods to their customers

under one roof. Their size is influenced by the fact that they offer many types of a specific product which

ends up increasing the number of shelves.

However, hypermarkets are larger than a typical supermarket. Despite having shelves that contain

different varieties of a specific product, hypermarkets have departmental stores that store various


2. Prices at Hyp ermarkets vers es Supermarke ts

Products retail at moderately lower prices in a hypermarket which encourages many people to purchase

goods in this stores. These stores offer products at discounted prices than other stores in the same


Supermarkets offer their products at significantly higher prices as compared to the shops and other retail

outlets in the surrounding. They tend to charge the executive shopping experience their offer to their


3. Interior Décor for Hypermarkets and Supermarkets

Interior decors in a supermarket are very attractive with distinctive colours and graphics. Some of the

graphics and colours that are used in a supermarket represent a similar product or company which is a

method marketing.

Interior décor in a hypermarket is moderately attractive. They do not have an attractive appearance, and

they resemble more of a warehouse rather than a shopping facility.

4. Services and Customer Exp erience

Another distinguishing factor between a supermarket and a hypermarket is that a supermarket provides

warm services and has a personal touch. Moreover, supermarkets facilitate a warm and a pleasant outlook

that attracts a large number of customers.

On the other hand, hypermarkets do not offer a personal touch and the warm services of a supermarket

which makes them not to attract a large number of customers. The look of a warehouse does not offer

executive customer experience to the buyers.

(iii) What are ‘Stock Keeping Units? Give example.

Ans: A stock keeping unit (SKU) is a machine-readable bar code, most often seen printed on product
labels, that lets vendors expeditiously scan and track the movement of inventory. Typically an
alphanumeric combination of eight-or-so characters, SKUs may also be applied to intangible but billable

products, such as units of repair time or warranties.

Example of SKUs in the Modern World

SKUs are making the shopping experience more efficient than ever before. For example, If you've been
shoe shopping in the past, you'll recall that clerks would have had to visually scour the back stockroom, to
hunt for a specific model of shoes in your correct size.

(iv) What do you understand by store ambience?

Ans: Simply put, store atmosphere includes the physical characteristics of a retail store used to create
an image to attract customers. It's also known as atmospherics for short. It is a direct contributor
to the customer experience, which is the most important element of retail today.

If you're thinking about opening up a business of any kind, it's imperative that you remember the role your
store's atmosphere can play in its success. Customers not only care about how a store looks and feels,
but they're also likely to make purchasing decisions based on the ambiance of the establishments they
patronize. So, if you want to make more sales, attract new customers and retain existing ones, take pride
in how your business looks.

(v) What is the importance of Customer Relationship Management?

Ans: Looking at some broader perspectives given as below we can easily determine why a CRM
System is always important for an organization.

1. A CRM system consists of a historical view and analysis of all the acquired or to be acquired
customers. This helps in reduced searching and correlating customers and to foresee customer
needs effectively and increase business.
2. CRM contains each and every bit of details of a customer, hence it is very easy for track a
customer accordingly and can be used to determine which customer can be profitable and which
3. In CRM system, customers are grouped according to different aspects according to the type of
business they do or according to physical location and are allocated to different customer
managers often called as account managers. This helps in focusing and concentrating on each
and every customer separately.
4. A CRM system is not only used to deal with the existing customers but is also useful in acquiring
new customers. The process first starts with identifying a customer and maintaining all the
corresponding details into the CRM system which is also called an ‘Opportunity of Business’. The
Sales and Field representatives then try getting business out of these customers by sophistically
following up with them and converting them into a winning deal. All this is very easily and
efficiently done by an integrated CRM system.

Note: Answer any two questions. Each question carries 5 marks (Word limits 500)
Q. 2. Define store layout. Discuss in detail various types of layouts with suitable diagrams.

Ans: Store layout is the design of a store’s floor space and the placement of items within that
store. Store layout helps influence a customer’s behavior, which means when done right, it’s a key
strategy to a store’s prosperity. Store owners choose where the best spots are to place their
merchandise, and this helps them design their customer flow, as well as the ambiance (ambiance also
plays a huge role in restaurants as well!) within their store.
Keeping in view the type of industry and volume of production, the type of
layout to be selected is to be decided from the following:
1. Product or Line Layout

2. Process or Functional Layout.

3. Fixed Position Layout.

4. Combination type of Layout.

1. Product or Line Layout:

If all the processing equipment and machines are arranged according to the sequence of
operations of the product, the layout is called product type of layout. In this type of
layout, only one product of one type of products is produced in an operating area. This
product must be standardized and produced in large quantities in order to justify the
product layout.

The raw material is supplied at one end of the line and goes from one operation to the
next quite rapidly with a minimum work in process, storage and material handling. Fig.
8.3 shows product layout for two types of products A and B.

Advantages offered by Product Layout:

(i) Lowers total material handling cost.

(ii) There is less work in processes.

Limitations of Product Layout:

(i) No flexibility which is generally required is obtained in this layout.

(ii) The manufacturing cost increases with a fall in volume of production.

2. Process or Functional Layout:

The process layout is particularly useful where low volume of production is needed. If
the products are not standardized, the process layout is more low desirable, because it
has creator process flexibility than other. In this type of layout, the machines and not
arranged according to the sequence of operations but are arranged according to the
nature or type of the operations. This layout is commonly suitable for non repetitive

Advantages of Process Layout:

(i) There will be less duplication of machines. Thus, total investment in equipment
purchase will be reduced.

(ii) It offers better and more efficient supervision through specialization at various

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive handling is required.

(ii) Total production cycle time is more owing to long distances and waiting at various

3. Fixed Position Layout: This type of layout is the least important for today’s manufacturing
industries. In this type of layout the major component remain in a fixed location, other materials, parts,
tools, machinery, man power and other supporting equipment’s are brought to this location.

The major component or body of the product remain in a fixed position because it is too heavy or too big
and as such it is economical and convenient to bring the necessary tools and equipment’s to work place
along with the man power. This type of layout is used in the manufacture of boilers, hydraulic and steam
turbines and ships etc.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced

(ii) The task is usually done by gang of operators, hence continuity of operations is ensured

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may be time consuming.

4. Combination Type of Layout: Now a days in pure state any one form of layouts discussed above is rarely
found. Therefore, generally the layouts used in industries are the compromise of the above mentioned
layouts. Every layout has got certain advantages and limitations. Therefore, industries would to like use
any type of layout as such.

Flexibility is a very important factory, so layout should be such which can be molded according to the
requirements of industry, without much investment. If the good features of all types of layouts are
connected, a compromise solution can be obtained which will be more economical and flexible.

Q. 3. ‘Location of a store plays a vital role in its success’. Justify the statement and discuss
various types of locations that are available to a retailer.
Ans: Retail is all about relevance: right product, right place, right time, and right price. Of all these
factors, it is location which is most fundamental to the success of a bricks and mortar retail business and
the use of location intelligence to drive decision making can be the difference between retail success and
Product mixes can be adjusted and evolved, price-value equations can be revised through promotional
strategies and inventory can be optimised to reduce out-of-stocks, wastage and markdowns. However, if
you locate your business in the wrong place, relocate for the wrong reasons, or miss an opportunity to
capitalise on a trending concentration of your target demographic as a result of housing development and
infrastructure changes, then you are running a real risk of compromising your retail business future.

Types of locations that are available to a retailer:

Mall Space - From kiosks to large anchor stores, a mall has many retailers competing with each other
under one roof. In a mall, there are generally 3 to 5 anchor stores or large chain stores and dozens of
smaller retail shops. Because of the high amount of customer traffic malls generate, the rent is much
higher than other retail locations.Before selecting this type of store location, be sure the mall shopper
demographic matches that of your customers. Mall retailers will have to make some sacrifices in
independence and adhere to a set of rules stipulated by mall management.

Shopping Center - Strip malls and other attached, adjoining retail locations will also have guidelines or
rules for how they prefer their tenants to do business. These rules are probably more lenient than a mall,
but make sure you can live with them before signing a lease. Your community probably has many
shopping centers of various sizes.Some shopping centers may have as few as 3 units or as many as 20.
The types of retailers and the goods or services they offer will also vary. One area to investigate before
choosing this type of store location is parking. Smaller shopping centers and strip malls may have a
limited parking area for your customers.

Downtown Area - Like the mall, this type of store location may be another premium choice. However,
there may be more freedom and fewer rules for the business owner. Many communities are hard at work
to revitalize their downtown areas, and retailers can greatly benefit from this effort. However, the lack of
parking is generally a big issue for downtown retailers. You'll find many older, well-established specialty
stores in a downtown area.

Free Standing Locations - This type of retail location is basically any stand-alone building. It can be
tucked away in a neighborhood location or right off a busy highway. Depending on the landlord, there are
generally no restrictions on how a retailer should operate his business.It will probably have ample parking
and the cost per square foot will be reasonable. The price for all that freedom may be traffic. Unlike the
attached retail locations, where customers may wander in because they were shopping nearby, the
retailer of a free-standing location has to work at marketing to get the customer inside.

Office Building - The business park or office building may be another option for a retailer, especially
when they cater to other businesses. Tenants share maintenance costs and the image of the building is
usually upscale and professional.

Home-based - More and more retail businesses are getting a start at home. Some may eventually
move to a commercial store location, while many remain in the business owner's spare room. This type of
location is an inexpensive option, but growth may be limited. It is harder to separate business and
personal life in this setup, and the retailer may run into problems if there isn't a different address and/or
phone number for the business.

Q. 4. What do you understand by retail communication mix? Discuss various methods of it

along with suitable examples.
Ans: Communication is an integral part of the retailer’s marketing strategy. Primarily, communication
is used to inform the customers about the retailer, the merchandise and the services. It also serves as a
tool for building the store image. Retail communication has moved on from the time when the retailer
alone communicated with the consumers. Today, consumers can communicate or reach the
organizations. Examples of this include toll free numbers, which retailers provide for customer complaints
and queries. Another example is the section called Contact Us on the websites of many companies.

Methods of Communication
The standard methods of communication are speaking or writing by a sender and listening or reading the receiver.
Most communication is oral, with one party speaking and others listening.

However, some forms of communication do not directly involve spoken or written language.

Nonverbal communication (body language) consists of actions, gestures, and other aspects of physical
appearance that, combined with facial expressions (such as smiling or frowning), can be powerful means
of transmitting messages. At times, a person's body may be “talking” even as he or she maintains silence.
And when people do speak, their bodies may sometimes say different things than their words convey.
A mixed message occurs when a person's words communicate one message, while nonverbally, he or
she is communicating something else.

Although technology such as e‐mail has lessened the importance of nonverbal communication, the
majority of organizational communication still takes place through face‐to‐face interaction. Every verbal
message comes with a nonverbal component. Receivers interpret messages by taking in meaning from
everything available. When nonverbal cues are consistent with verbal messages, they act to reinforce the
messages. But when these verbal and nonverbal messages are inconsistent, they create confusion for
the receiver.

Oral communication skills - Because a large part of a manager's day is spent conversing with
other managers and employees, the abilities to speak and listen are critical to success. For example, oral
communication skills are used when a manager must make sales presentations, conduct interviews,
perform employee evaluations, and hold press conferences.

In general, managers prefer to rely on oral communication because communication tends to be more
complete and thorough when talking in person. In face‐to‐face interactions, a person can judge how the
other party is reacting, get immediate feedback, and answer questions. In general, people tend to assume
that talking to someone directly is more credible than receiving a written message. Face‐to‐face
communication permits not only the exchange of words, but also the opportunity to see the nonverbal

However, verbal communicating has its drawbacks. It can be inconsistent, unless all parties hear the
same message. And although oral communication is useful for conveying the viewpoints of others and
fostering an openness that encourages people to communicate, it is a weak tool for implementing a policy
or issuing directives where many specifics are involved.

Here are two of the most important abilities for effective oral communication:

 Active listening. Listening is making sense of what is heard and requires paying attention,
interpreting, and remembering sound stimuli. Effective listening is active, requiring the hearer to
“get inside the head” of the speaker so that he or she can understand the communication from
the speaker's point of view. Effective listeners do the following:

o Make eye contact.

o Schedule sufficient, uninterrupted time for meetings.
o Genuinely seek information.
o Avoid being emotional or attacking others.
o Paraphrase the message you heard, especially to clarify the speaker's intentions.
o Keep silent. Don't talk to fill pauses, or respond to statements in a point‐counterpoint
o Ask clarifying questions.
o Avoid making distracting gestures.

 Constructive feedback. Managers often do poor jobs of providing employees with performance
feedback. When providing feedback, managers should do the following:

o Focus on specific behaviors rather than making general statements

o Keep feedback impersonal and goal‐oriented
o Offer feedback as soon after the action as possible
o Ask questions to ensure understanding of the feedback
o Direct negative feedback toward behavior that the recipient can control

Written communication skills - Written communication has several advantages. First, it provides
a record for referral and follow‐up. Second, written communication is an inexpensive means of providing
identical messages to a large number of people.The major limitation of written communication is that the
sender does not know how or if the communication is received unless a reply is required.Unfortunately,
writing skills are often difficult to develop, and many individuals have problems writing simple, clear, and
direct documents. And believe it or not, poorly written documents cost money.How much does bad writing
cost a company annually? According to a Canadian consulting and training firm, one employee who
writes just one poorly worded memo per week over the course of a year can cost a company $4,258.60.

Managers must be able to write clearly. The ability to prepare letters, memos, sales reports, and other
written documents may spell the difference between success and failure. The following are some
guidelines for effective written communication:

 Use the P.O.W.E.R. Plan for preparing each message: plan, organize, write, edit, and revise
 Draft the message with the readers in mind
 Give the message a concise title and use subheadings where appropriate
 Use simple words and short, clear, sentences and paragraphs
 Back up opinions with facts