RETAIL MANAGEMENT

4TH SEMESTER/18MBA401A
3 CREDIT/35 HOURS
MODULE-I
Retail

Retail is the sale of goods to end users, not for resale, but use and consumption by the purchaser.

Retail involves the sale of merchandise from a single point of purchase directly to a customer who intends to
use that product. The single point of purchase could be a brick-and-mortar retail store, an Internet shopping
website, a catalog, or even a mobile phone.

Why is Retailing Important?

Retailers are the final link in the supply chain between manufacturers and consumers. Retailing is important
because it allows manufacturers to focus on producing goods without having to be distracted by the enormous
amount of effort that it takes to interact with the end-user customers who want to purchase those goods.

EMERGENCE OF ORGANISED RETAIL IN INDIA

Retail is India's largest industry, accounting for over 10 percent of the country's GDP and around eight percent
of employment. ... With growing market demand, the industry is expected to have grown at a pace of 25-30%
annually. The India retail industry is expected to grow from Rs 35,000 crore in 2004-05 to newer heights.

Introduction

The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry
of several new players. Total consumption expenditure is expected to reach nearly US$ 3,600 billion by 2020
from US$ 1,824 billion in 2017. It accounts for over 10 percent of the country’s Gross Domestic Product (GDP)
and around 8 percent of the employment. India is the world’s fifth-largest global destination in the retail
space.

India is the world’s fifth-largest global destination in the retail space. In FDI Confidence Index, India ranks 16th
(after the U.S., Canada, Germany, United Kingdom, China, Japan, France, Australia, Switzerland, and Italy).

Market Size
The retail industry reached US$ 950 billion in 2018 at CAGR of 13 percent and expected to reach US$ 1.1
trillion by 2020. Online retail sales are forecasted to grow at the rate of 31 percent year-on-year to reach US$
32.70 billion in 2018. Revenue generated from online retail is projected to grow to US$ 60 billion by 2020.

Revenue of India’s offline retailers, also known as brick and mortar (B&M) retailers, is expected to increase by
Rs 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.

India is expected to become the world’s fastest-growing e-commerce market, driven by robust investment in
the sector and the rapid increase in the number of internet users. Various agencies have high expectations
about the growth of Indian e-commerce markets.
The luxury market of India is expected to grow to US$ 30 billion by the end of 2018 from US$ 23.8 billion 2017
supported by growing exposure of international brands amongst Indian youth and higher purchasing power of
the upper class in tier 2 and 3 cities, according to Assocham.

Investment Scenario
The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totaling US$ 1.85 billion
during April 2000–June 2019, according to the Department for Promotion of Industry and Internal Trade
(DPIIT).

With the rising need for consumer goods in different sectors including consumer electronics and home
appliances, many companies have invested in the Indian retail space in the past few months.
India’s retail sector investments doubled to reach Rs 1,300 crore (US$ 180.18 million) in 2018.

Walmart Investments Cooperative U.A has invested Rs 2.75 billion (US$ 37.68 million) in Wal-Mart India Pvt
Ltd.

Government Initiatives
The Government of India has taken various initiatives to improve the retail industry in India. Some of them are
listed below:

The Government of India may change the Foreign Direct Investment (FDI) rules in food processing, in a bid to
permit e-commerce companies and foreign retailers to sell Made in India consumer products.

Government of India has allowed 100 percent Foreign Direct Investment (FDI) in online retail of goods and
services through the automatic route, thereby providing clarity on the existing businesses of e-commerce
companies operating in India.

Road Ahead
E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of products at the
lowest rates. E-commerce is probably creating the biggest revolution in the retail industry, and this trend
would continue in the years to come. India's e-commerce industry is forecasted to reach US$ 53 billion by
2018. Retailers should leverage the digital retail channels (e-commerce), which would enable them to spend
less money on real estate while reaching out to more customers in tier-2 and tier-3 cities. The Union Budget
2019-20 is expected to give boost to the rural consumption in India.

It is projected that by 2021 traditional retail will hold a major share of 75 percent, organized retail share will
reach 18 percent and e-commerce retail share will reach 7 percent of the total retail market.

Nevertheless, the long-term outlook for the industry is positive, supported by rising incomes, favorable
demographics, entry of foreign players, and increasing urbanization.

Trends in Retailing in India

The top seven trends in retailing in India are as follows: 1. Shift from Unorganized to Organized Retailing 2.
Store Design 3. Competition 4. New Form of Retailing 5. Technology 6. Consumer Buying Behaviour 7.
Entertainment.

1. Shift from Unorganized to Organized Retailing:

Retailing in India is thoroughly unorganized. There is no supply chain management perspective. The key factors
that drive the growth of organized retailing in India are higher disposable incomes, ris-ing urbanization,
growing consumerism, nuclear family structure, growing number of educated and employed women
population.

2. Store Design:
Irrespective of the format, the biggest challenge for organized retailing is to create an environment that pulls
in people and makes them spend more time in shopping and also increases the amount of impulse shopping.

3. Competition:
Competition is increasing between different types of retailers. Discount stores, departmental stores,
supermarkets, etc. all compete for the same customers. The small independent retailers survive by pro-viding
personal services to the customers.
4. New Form of Retailing:
Modem malls made their entry into India in the late 1990s, with the establishment of Crossroads in Mumbai
and Ansal Plaza in Delhi. India’s first true shopping mall, ‘Crossroads’—complete with food courts, recreation
facilities, and large car parking space—was inaugurated as late as 1999 in Mumbai. Malls have given a new
dimension to shopping experience.

5. Technology:
Technology today has become a competitive tool. It is the technology that helps the organized retailer to score
over the unorganized players, giving both cost and service advantages. Technology has also made possible the
growth of non-store retailing.

6. Consumer Buying Behaviour:

In India, there are no uniform trends concerning consumer buying behavior. There are visible differences in the
shopping pattern of consumers across income segments. Organized retailing has made headway in the upper
class.

However, even in this segment, items such as milk, fruits, vegetables and a significant portion of ‘through-the-
month’ purchases seem to be done at tra­ditional outlets. Organized retail outlets seem to be associated with
branded items/special purchases. Organized retailing does not seem to have made an impact on the lower
class, except for ‘curiosity’ shopping.

7. Entertainment:

Modem retail formats provide a place for people to assemble, and a means of entertainment, by provid-ing
facilities such as food courts, mini theatre, children’s play spaces, and coffee shops. These facilities help the
customers enjoy shopping.

What Are Different Types of Retail Stores OR Retail Format

What are retail formats?

Store Formats are formats based on the physical store where the vendor interacts with the customer2. It is the
mix of variables that retailers use to develop their business strategies and constitute the mix as assortment,
price, transactional convenience and experience

What is the modern retail format in India?

Modern formats such a discount stores, hypermarkets, supermarkets, department stores, specialty stores,
convenience stores, warehouse retailers have emerged. The emergence of new formats and the evolution of
modern retail in India have attracted the attention of the aspiring class.

Here are some examples of the different types of retail stores where consumers can purchase products for
immediate use or consumption.

[1] Department Stores: Sell a wide range of merchandise that is arranged by category into different
sections of the physical retail space. Some department store categories include shoes, clothing,
beauty products, jewelry, housewares, etc. Examples of department store retailers include Macy's,
Nordstrom, and JCPenney, to name just a few.

[2] Mom-and-pop Stores

These are small family-owned businesses, which sell a small collection of goods to the customers.
They are individually run and cater to small sections of the society. These stores are known for their
high standards of customer service.

[3] Warehouse Retailers: Large no-frills warehouse-type facilities stocked with a large variety of products
packaged in large quantities and sold at lower-than-retail prices.
 [4] Specialty Retailers/ Category Killers: Specialize in a specific category of products. Toys ‘R’ Us,
Victoria's Secret, and Nike are examples of specialty retailers. Specialty stores are called category
killers. Category killers are specialized in their fields and offer one category of products. Most popular
examples of category killers include electronic stores like Best Buy and sports accessories stores like
Sports Authority.

[5] Grocery Stores and Supermarkets: Sell all types of food and beverage products, and sometimes also
home products, clothing, and consumer electronics as well.

[6] Convenience Retailer: Usually part of a retail location that sells gasoline primarily, but also sells a
limited range of grocery merchandise and auto care products at a premium "convenience" price from
a brick-and-mortar store.

[7] Malls
One of the most popular and most visited retail formats in India is the mall. These are the largest
retail format in India. Malls provide everything that a person wants to buy, all under one roof. From
clothes and accessories to food or cinemas, malls provide all of this and more. Examples include
Spencers Plaza in Chennai, India, or the Forum Mall in Bangalore.

[8] Supermarkets
One of the other popular retail formats in India is the supermarkets. A supermarket is a grocery store
that sells food and household goods. They are large, most often self-service and offer a huge variety
of products. People head to supermarkets when they need to stock up on groceries and other items.
They provide products for reasonable prices, and of mid to high quality.

[9] Street vendors

Street vendors, or hawkers who sell goods on the streets, are quite popular in India. Through shouting
out their wares, they draw the attention of customers. Street vendors are found in almost every city
in India, and the business capital of Mumbai has several shopping areas comprised solely of street
vendors. These hawkers sell not just clothes and accessories, but also local food.

[10] Hypermarkets
Similar to supermarkets, hypermarkets in India are a combination of supermarket and department
store. These are large retailers that provide all kinds of groceries and general goods. Saravana Stores
in Chennai, Big Bazaar and Reliance Fresh are hypermarkets that draw enormous crowds.

[11] Kiosks
Kiosks are box-like shops, which sell small and inexpensive items like cigarettes, toffees, newspapers
and magazines, water packets and sometimes, tea and coffee. These are most commonly found on
every street in a city and cater primarily to residents.

[12] Discount Retailer: Sell a wide variety of products are often private labeled or generic brands at
below-retail prices. Discount retailers like Family Dollar, Dollar General, and Big Lots will often source
closeout and discontinued merchandise at lower-than-wholesale prices and pass the savings onto
their customers.

[13] Mobile Retailer: Uses a smartphone platform to process retail transactions and then ships the
products that were purchased directly to the customer.

[14] Internet Retailer: Sells from an Internet shopping website and ship the purchases directly to
customers at their homes or workplaces and without all the expenses of a traditional brick-and-
mortar retailer, usually sell merchandise for a lower-than-retail price.

Importance of Retailing in an Economy

Retailing plays a significant role in the economic system of any country. It involves selling goods and services to
the ultimate consumers. “Retailing is a part of the continuous process going in between the farm and the
factory and household in which goods are changed in form, packed, transported and subdivided”.

Retailing is one of the oldest of all business institutions. It has developed along with various stages of
civilization, altering its form or varying its offerings to meet the changing demands of the people it has served.
The roots of retailing are embedded deeply in antiquity. In the earliest cultures, trading and bartering took
place. These activities were conducted to satisfy basic needs and accumulate luxuries.

The importance of retail trade runs through the entire story of the human race. From the very beginning of
human history, it is found that people traded with one another for the necessities of their lives. And
throughout, the objective has the same – the struggle of mankind to satisfy his wants.

Retail Formats

Store Formats are formats based on the physical store where the vendor interacts with the customer2. It is the
mix of variables that retailers use to develop their business strategies and constitute the mix as assortment,
price, transactional convenience, and experience.
Retail Marketing Mix and the 7 P’s of the Retail Mix

Retail marketing mix refers to the variables that a retailer can use in variable methods to arrive at an effective
marketing strategy to attract his prospects.

The variables are the varieties of merchandise and assortment along with the services that are offered,
including advertising pricing layout and promotion and also store location design and visual merchandising.

Retailers of an employ a variety of combinations to promote their business and to ensure proper reach to their
prospective customers. The use of multiple methods depending on their objectives to promote themselves
and create a market profile.

The choice of methods of promotion varies and is dependent on the nature of the business, the goods that are
kept in the retail store, and other such multiple factors.

The credibility, control, and flexibility along with the cost that is associated with the retail promotion methods
determine the choice of method of promotion.

There are 7 Ps of the retail mix, which is as follows:

Retail marketing mix refers to the variables that a retailer can use in variable methods to arrive at an effective
marketing strategy to attract his prospects.
[1]Product

Product is the basic element of any and every organization. Some people go to the extent to comment that an
organization is nothing but a collection of products. The product line is defined as the varieties of the products
that are produced by a company, or that is stocked by a retailer.

The retail product mix is also called as a product assortment. Making sure that the availability of the product
and inventory levels are according to the demands of the customer is very crucial for a retail store manager.
Maintaining adequate inventory levels of products to meet the demands of the customer is very important.

Multiple strategies can be used in case of retail product mix such as

 New product launches

 Modification of existing product lines
 Trading town or trading up
 Assortment reduction or line elimination
 Management of PLC

[2]Price

One of the most important elements or variables and the retailing buying decision is price. The entire retail
organization is dependent on the single factor; it was either make it or break it. It is also known as the biggest
and easiest measurement, which is subject to change.

Rising helps the retail organization to complete its objective. This is also significant for new market entrant
whose primary function is to establish their brand and then enjoy the increasing profits as and when the brand
gets acceptance from the customers. From the customer’s point of your price is considered as one of the main
reasons to visit a particular retail store.

The pricing strategy in the case of the retail marketing mix should be consistent and consider the overall
positioning of retailers' sales, profits, and rate of return on investment.

The lowest price may not necessarily mean the best price. Profit is the difference between cost and price. This
can be very high when an urgent situation is exploited by the salesman.

Cash flow, overall growth, and profitability are sort out by the retailers to survive the retail business. But in this
case, pricing cannot be determined in isolation, and operating expenses and costs are equally important while
establishing the retail price. Pricing the products is either based on the market at the cost of the product.

The profits that are generated are within this and is controlled by the government and oriented by consumer
or competition. Before one can determine the price, it needs a certain consideration such as the position of
the market the position of the product in the market the perception of the customer various stages of a
product life cycle through which the product is passing along with the competitive strategy and the overall
retail marketing mix.

The calculation of retail price should always be based on the markup and not the cost that is involved.

Following are the components of price mix

Competition, organizational objectives, credit terms, discount, cost and profit, variable and fixed cost, pricing
options, positioning strategies, pricing policies, etc.

[3]Place
The availability of the product should be close to the place of consumption so that the prospects and the
customers can buy it easily. Ab preferred brand by the customer who is not easily available at a location that is
convenient to the customer that person made by some other brand in the same category thereby increasing
the market share of the competition.

This is my the retailer has to and sure the availability of the product so that the customers can buy it whenever
they require — the major components of place, in the retail marketing mix: physical distribution and marketing
channels.
[4] Promotion

Once the budget of the retail store has been decided, the retailer should select an appropriate combination of
public relations advertising, sales promotion, and personal selling. While this may be true in case of retailers, in
case of small traders there are points which are limited because of limited availability of the funds, and they
have to use advertising methods of promotional methods like direct mail holdings store displays fliers and
other related publicity methods to attract the customers.

Retailers who have no problems with financing may opt for Print or television media to promote their Store.
The promotional mix is the one which varies from retailer to retailer and country to country and also depends
on technological advancement. It also depends on the nature of competition and the finances available with
the retailer.

The promotional mix is designed by the retailer, which complies with the objectives of the store, such as
attracting the customers' positioning of the organization and increasing the turnover.

[5] Process

The process is perhaps one of the most crucial P in the retail marketing mix. The retail industry is based
entirely on processes such as order processing and management of the database.

Right from the moment a customer enters the retail store, he is dependent on the process which will help him
to find the appropriate section which has the appropriate goods.

[6] People

People is perhaps another most important aspect and the element of retail marketing. People in the retail
store are the ones that help the customers to find their product to help them with a particular product. Is also
includes the capacity of the staff and the efficiency and availability.

The staff should be capable and efficient to carry out the functions of the store smoothly. The interaction of
the staff with customers should be a profession as well behaved and helpful.

If if a particular product needs internal marketing it is the people who make sure that the internal marketing is
done in accordance to the marketing rules and also ensures that the message reaches the right people or right
customers.

[7] Physical Evidence

The layout of the shop and the reception and check out are part of physical evidence. Answering questions
such as what will be the location of the store, or the location of the store in the mall, etc. cockroaches in case
of physical evidence.

Interaction of customers and the staff is also included in physical evidence along with people. The testimonials
of the customer the cash receipts and after-sale service are also part of physical evidence of retail Marketing
Mix.

What is retail consumer Behaviour?

Consumer Behaviour & Retail Operations. ... The term consumer behavior is defined as the behavior that
consumers display in searching of, purchasing, using, evaluating and disposing of products and services that
they expect will satisfy their needs
The five stages of the the consumer buying process are:

 Problem or Need Recognition: Consumer buying process's first step is a problem or need recognition.
 Information Search:
 Evaluation of Alternatives:
 Purchase Decisions:
 Post Purchase Behavior:

According to Kotler & Lee (2005), consumer buying process is a psychological process that plays an important
role in understanding how consumers actually make their buying decisions. Consumer buying process helps
individual decide what the specifications is that is wanted in the product.

The five stages of the consumer buying process are:

[1] Problem or Need Recognition:

Consumer buying process's first step is a problem or need recognition. For consumer to buy goods or service
they should have a clear idea as to what is needed from the product. This step helps to identify the specific
need that consumer wants in the product which they want to buy.

[2] Information Search:

After recognizing the need, information about the need is searched about the product. Informations like
features added benefits, and advantages of the product are searched. Through various sources like internal
search and external search required information is gathered.

[3] Evaluation of Alternatives:

After searching information various alternatives are revealed. Form the revealed alternatives consumers
evaluates, calculates and logically identifies the strength and weakness of the alternatives. On conscious and
rational basis evaluation is conducted so that the result is good. Evaluation the best alternative which gives
better satisfaction is chosen. Evaluation is based on product attributes, brand belief and utility function
attributes.

[4] Purchase Decisions:

After carefully evaluating the alternatives, the purchase decision is taken by the consumers. Purchase decision
is influenced by the methods of payment, purchase intention, etc. At this stage, the purchase is made.

[5] Post Purchase Behavior:

After the product is consumed, the consumer generates the level of satisfaction or dissatisfaction that is
developed by consuming the product. If consumers are satisfied with the product or service, they develop
brand loyalty and if not they discontinue buying that product or service. At this stage, consumers are full of
anxiety which relates to whether the purchase decision was good or not.

The four-set consumers advance concerning brands before a decision is reached are:

i. Total set: Total set is the summation of all the available brands set of the product in the market. For
example, if you want to consume noodles, then all the noodle manufacturing companies are total sets.

ii. Awareness set: Those sets which the consumer knows of existence in the market among the total set is
awareness set. For example, if there are plenty of existing as well as new producer of the same product in the
market and you know only a few producers' product, the few products known is awareness set.

iii. Consideration Set: Based on price and quality consumers evaluate and choose from various alternatives is
the consideration set. Those brands that are considered for purchase out of awareness set in consideration
set.

iv. Choice Set: The alternative that is chosen to provide the consumer high return and satisfaction is choice
set. At this point purchase decision is taken.
Definition of Retail Market Strategy

First of all, you should understand the concept of strategy

In today’s term, the word strategy has become common in corporate colloquial. A product strategy, a
marketing strategy, a branding strategy – the list is endless.
Retail Strategy is a complete marketing plan for a service or a product to reach and influence consumers.

What is the role of Retails Strategy?

Retail strategy is part of a strategic marketing plan that attracts or reaches consumers directly. It includes
product pricing/discounts, commission structure, promotional schemes, product performance demonstration,
and commission structure for retailers. This retail tactic will also help retailers to maximize the productivity of
manufacturers.

Importance of strategy from the retail perspective

A strategy in commercial domination will mean planning or methods by which an organization wants to
achieve its objectives. Thus, the strategy of retail can be defined as a clear and definite plan, so that retailers
have drawn up the framework to tap the market and build long-term relationships with consumers.

Why retail strategy is important?

Retail strategy is part of a strategic marketing plan that attracts or reaches consumers directly. ... Retail
strategies can develop the needs of consumers. It's important to have the right product at the right time.
Retailers' strategy also helps retailers maximize sales in less time

The following are common retail strategies:

 Business Models. The basic strategy behind your business that describes how you capture value. ...
 Branding. Building a valuable identity for your business. ...
 Customer Experience. Building relationships with customers. ...
 Promotion & Advertising. ...
 Distribution. ...
 Pricing.

A retail strategy needs to be focused on:

[1] Store location

[2] Merchandising
[3] Pricing
[4] Marketing

[1] Store Location

First of all, the Store location is very important; the frequency of your sale depends on the store
location, especially when your business focuses on offline sales. Your store location also increases the
connectivity and network if your store is in the primary place, you can convert sales through reference
and other sources as well.

[2] Merchandising
If you are selling a product then you have to have all the options for your customer. A customer can
come for anything you can help them for their needs of the products. These ways you can easily
manipulate the market. Merchandising strategy should match the sales strategy. Many times, the
business strategy is more based on long-term salesperson relationships or competitive delivery issues
than thinking about an organization’s good strategy, which is written and communicated throughout
the organization.

[3] Pricing
Pricing is one of the important factors in retail. It depends more on your advertising, promotion,
communication, sales and anything else. The retailer has to provide the right price to the customers
 [4] Marketing
There is also a big factor in the marketing retail strategy. The market in which the retail organization
chooses to compete is determined. In the end, the result should be evaluated to measure and
evaluate that the strategy is working and any necessary changes should be effective.

TECHNOLOGY IN RETAILING

Introduction

It performs or perish scenario for most retail companies nowadays, with their managers struggling to maintain
low costs and high revenues - a complex combination to accomplish, considering the cut-throat competition in
this sector. Every retailer is always on the lookout for ways to attract more customers into their nets while
keeping their costs in check. Technology has always been a means for them to achieve both these goals.

Retailers are adopting advanced technologies such as artificial intelligence and social media analytics to
understand consumers' shopping behavior and preferences with a view to target niche segments, according to
a Deloitte India report.

Speed, agility, and efficiency are expected of today’s retail businesses. To attain this, retailers should invest in
an electronic inventory control system, a point of sales system, a central database and an automated statistical
forecasting system. This equipment doesn’t simply reduce your overhead and aid your planning. They have
become an integral part that can provide you with a competitive edge to survive and grow in the market.

WAYS TECHNOLOGY CAN IMPROVE RETAIL BUSINESS

[1] Reduce inventory costs

An inventory control system is a basic tool for retail management. It allows you to know what merchandise you
have on hand and order, and how many of each item you have received and sold. Once set up, these systems
automatically update your database when products sell or move from one location to another like, from a
warehouse to a store. They also provide a variety of
instantaneous data analysis tools to keep track of your business.

[2] Improve customer satisfaction

Customers expect you to be able to tell them if you have a product in stock or on order almost immediately.
Having an electronic inventory system allows you to answer customer questions The Increasing Importance of
Technology in the Retail Sector http://www.iaeme.com/IJCIET/index.asp 1108 editor@iaeme.com with just a
few keystrokes, after checking the inventory held by different stores in case of multiple locations.

[3] Automate your inventory control

Electronic inventory control can eliminate over-ordering and under-buying by referring to each store's sales
history to calculate the optimum stock levels for each item. The retailer can tell the system how many days of
supply is preferred and the system will look at past sales patterns to determine when you need to re-order.

[4] Facilitate inventory control

Internal theft and pricing errors can eat up about 4% of retail inventory. A portable terminal offers much
greater speed and accuracy than manual counts. The system immediately flags discrepancies with recorded
inventory levels and verifies pricing, making it easier to detect pricing errors and missing merchandise on the
spot.

[5] Keep track of your margins

Inventory control system can suggest pricing and markdowns within pre-set parameters, and/or track margins
based on the prices. It will also ensure you are always aware of gross margins. Even with special pricing offers,
you never lose track of your margins. You can establish different pricing for different stores across geographic
regions, for instance, and preferred customers such as employees or major buyers. You can also pre-set
markdowns for end-of-season or other sales. The system continues to track gross margin, including the effects
of markdowns and preferred pricing.
Improve your forecasting

 Automated statistical forecasting systems create far more calculated and accurate demand
forecasting.

 Past sales data, forecasts, and future orders are all on one system. As a result, more accurate
forecasts can be made based on the totality of this information.

 Forecasting systems can reach the desktop of every line manager, bringing chain-wide input
(if appropriate) into the process through interactive Web-based applications. Forecasts can
then be further adjusted, taking every aspect into account.

 Automation facilitates fast projections and scenario planning. Adopt a just-in-time approach with
suppliers

Forecasting tools work with a central database, inventory control, and sales systems to tie purchasing more
closely to actual customer demand. The result is an opportunity to reduce inventory and adopt a just-in-time
relationship with suppliers.

Following are some of the application areas of technology in the retail business:

[1] Point of sale (POS) Payments:

With the aid of handheld computers, scanners and printers with integrated credit card readers, the point of
sale can be made fully mobile and hence a lot quicker. During times of high sales, these mobile POS terminals
can be used throughout the store at several places so that customers can get their stuff billed at any of those
counters quickly. Moreover, the sales personnel with these handheld POS terminals can also process
transactions while moving through checkout lines to accelerate the checkout process. Products can be scanned
with a barcode scanner while in the line and tickets can be printed with prices along with a master barcode for
the entire merchandise. On reaching the counter, only the master bar code needs to be scanned for the total
price.

[2] Contactless Payments: Contact payment systems are credit cards, debit cards, smart cards or even devices
like smart-phones and tablets that make use of Radio Frequency Identification (RFID) technologies to make
secure payments. They have an embedded chip and an antenna that allows users to simply wave their card
over a reader at the POS terminal, and make their payment. They don’t even have to sign a receipt or enter
passwords or PINs (Personal Identification Numbers) - eliminates the need for customers to deal with the
problems of handling cash or remembering their PINs. This speeds up transactions, which makes it one of the
most preferred means of making payments for customers.

[3] Customer service: Self-help placed in stores help customers to access product information, store
information, inventory information, and store directory. Such kiosks allow customers to find answers to their
questions on their own, thereby improving customer service.

[4] E-commerce sites: Many improvements such as rotating and interactive product displays and other kinds
of personalization are already helping retailers deliver a more delightful shopping experience online. Such
personalized online experiences along with in-store personalization provide customers with the most satisfying
experience.

5. Augmented reality: Some companies are providing added services through their catalog, using augmented
reality to give customers a virtual view of products such as furniture in a living room, etc., to make better
decisions when choosing a product. Augmented reality is one of the best ways to improve customer
experience and increase sales.

[6] Customer Feedback: In-store feedback – to measure customer satisfaction can be made more effective
with the use of technology. Retailers can have wireless tablets and notes placed in their stores that offer easy-
to-fill feedback forms for customers.
[7] Inventory management: Real-time inventory information needs to be available in stores to plan the
purchase of products, as and when they go out of stock. A total inventory management system that is
integrated with the POS can put things to a large extent.

As the products are sold through the POS, they also get removed from the inventory and are updated across all
systems that use such inventory information.

[8] Price Auditing: With wireless devices like a tablet or a notebook, the store associate can check the price
labels of all the products by scanning the shelf labels using a barcode scanner. These devices can be linked to
the store’s central database of products which are also linked to the POS terminals to track the prices of
products being sold. If there are any differences between the POS prices and the database prices or the shelf
prices, corrective action can be taken immediately. Hence, accurate pricing can be achieved and a lot of time
can be saved, plus it adds to the trust factor for customers as well.

-End-
 RETAIL MANAGEMENT
4TH SEMESTER/18MBA401A
3 CREDIT/35 HOURS

MODULE-2

RETAIL LOCATION DECISION

What is the retail store location?

Retail Location. Definition: A space you lease for the selling of goods to consumers. When it comes to business,
retailers have one overall goal: to sell merchandise. That's why they focus on sales floor space, adequate
parking for customers, and an overall image that draws in customers.

Why is store location an important decision for retailers?

Store location is an important decision for a retailer due to the following reasons: First, location is typically the
prime consideration in customer's store choice decision. ... Second, location decisions have strategic
importance because they can be used to develop a sustainable competitive advantage.

What are the factors affecting retail location?

 While deciding the location of a retail outlet the following factors should be taken into consideration:
 Selection of the area:
 Choice of the site:
 Scale of operation:
 Amount of capital:
 Decoration of shop:
 Selection of goods:
 Source of supply:
 Sales policy:

What are the types of retail locations?

Types of Retail Locations

 Frequented Spots. A mall space can potentially provide you with quite a bit of foot traffic as people
come to malls specifically to walk around and shop.
 Commercial Building.
 Office Space.
 Home Office.

How do I choose a good retail location?

When choosing a city or state to locate your retail store, research the area thoroughly before making a final
decision. Read local papers and speak to other small businesses in the area. Obtain location demographics
from the local library, chamber of commerce or the Census Bureau.

What are some examples of retail stores?

Examples of Retailers

The most common examples of retailing are the traditional brick-and-mortar stores. These include giants such
as Best Buy, Wal-Mart, and Target. But retailing includes even the smallest kiosks at your local mall. Examples
of online retailers are Amazon, eBay, and Netflix.
INTRODUCTION

 Of the retail. Having a good location is one of the primary element in attracting prospects and
customers.

 At times a good location can also lead to an excellent competitive advantage because in retail
marketing mix location is one of the crucial parameters and unique which cannot be copied by
competitors in any way.

 Having a good location for retail is one of the crucial impacts in the case of the marketing strategy of
retail because many of the associated long-term decisions and commitments depend on the location
of the retail. Having a good location is one of c primary element in attracting prospects and
customers.

 At times a good location can also lead to an excellent competitive advantage because in retail
marketing mix location is one of the crucial parameters and unique which cannot be copied by
competitors in any way.

Importance of a good retail store location

 A good retail location as a competitive advantage that cannot be copied by the competition. One
location can occupy one retail store, and time also plays a crucial role along with the location.

 For example, the retail store of Gucci opens up in a particular neighborhood then, and for a couple of
months, that is the store that is going to be the only purchase point of all the Gucci products for a
neighborhood.

 If Nike shows up in the same neighborhood after a couple of months, it won’t be possible for Nike to
occupy the same location as of Gucci. Nike store has to be located either very close, which entirely
depends on the availability of the location, or it has to be placed very far from the Gucci store thereby
targeting a different neighborhood and different customers.

 Customer proximity is another concern for most of the retail businesses. Several stores can be opened
away from the city with a cheaper budget, but it won’t be possible for the retailers to bring customers
to that particular neighborhood.

 Hence the retailers have to think the way customer would think and open a store which would be
convenient for the customers. Since geographically, peoples are spread out at every possible location,
retailers cannot open a store in every neighborhood and instead they have to think of a Central
location which would be accessible by most of the neighborhood within a particular diameter of the
circle.

Types of Retail Store location

[1] Solitary sites

These are single small outlets of shops which are separated from different writers, and they are positioned
near other retailers on the roads on the way to shopping centers. Many of the food and non-food retailers use
this type of solitary site.

[2] Unplanned shopping areas

These are the locations of retail stores which have evolved over a long period and have multiple outlets in
nearby proximities. These are further divided into:

 Central business district such as the downtown areas in major cities

 Secondary business districts on main or high Street

 District neighbourhood
  Location switch on the street or on the motorway which is also known as strip locations.

The advantages of having unplanned shopping areas are that there is very high pedestrian traffic during
working hours and also because of my residential areas. This ensures a constant pull of customers.

The disadvantage of having an an unplanned shopping area is that there is a threat of shoplifting because of
which high security is required. Also, it may cause inconvenience to other customers, and there are high
chances of traffic blocking because of the unavailability of parking facilities.

3) Planned shopping areas

 The retail locations which are well planned according to the architecture and provide multiple out
that are under the same roof are called as planned shopping areas. They have huge land spaces and
the collection of major retail brands. Malls, Speciality, and Lifestyle centers are classified under
planned shopping areas.

 High visibility to customers and harmful of customers is a major advantage of planned shopping areas.
But the disadvantages are that why security is required, and the cost of occupancy is also high.

Tips to have a good retail location:

Choosing the right education is crucial in terms of business, as stated above. As such, there are different rules
which govern choosing of location for retail store depending on the nature of the business and the target
audience.

[1] Market analysis:

The company has to analyze the market in terms of their product and industry along with the nature of
competition and the presence of competition. The company also has to consider how old they are there in the
market and how many other businesses are there in the current location.

[2] Demographics of the market:

The demographics of locality is essential to be considered to choose the retail location. The age group of the
customer, profession, Lifestyle, profession, religion income groups, etc.

[3] Market potential evaluation:

The paying capacity of the population plays an important role in the evaluation of the potential of the market,
along with the impact of the competition and the product estimation and demand. The retailer should also
know the regulations and laws of the country in which the store is being operated.

Other things such as communal festivals which have an impact on the demand should also be considered by
the business such as Christmas.

[4] Identification of alternatives:

Most of the time it so happens that the retailers in the hurry of starting the business finalize a location that
costs them a fortune within fact a similar location with similar business potential would’ve been available
somewhere very close which was neglected or overlooked.

In such cases, the retailer should not carry on finalizing the retail location and should also go out for
alternatives and evaluate that location with similar parameters as stated above.

[5] Allocation of marketing budget:

A retail store should have a marketing budget depending on the cost of the location, which is in the third to
build the brick and mortar place. The store which is occupying a prime location and has a good inflow of
customers has indeed cost a fortune for the retailer.
How to measure the success of Retail Location

[1] Macro location evaluation

As the name suggests, this is the type of evaluation that is carried out to measure the success of retail location
at the National level and is conducted by the company when it wants to start the spelling of its product and
open a retail business internationally.

Following are the few steps which are carried out to conduct the retail location assessment:

Detailed auditing of the market is carried out by analyzing the locations and the macro environment, which is
abbreviated as PEST, which is Political, Economic, Social, and Technical and is also known as PEST analysis.

[2] Micro-location Evaluation

Many of the factors are analyzed and assessed at this level, such as:

 Population – The approximate number of people from the locality is taken into consideration. This
number represents the people who shop at that particular retail store.

 Store outlet – competing stores in the nearby vicinity are identified and the stores which reduce the
attractiveness of the location and the stores which increase the attractiveness of the location.

 Infrastructure – the accessibility of the story is energized concerning potential customers.

 Cost – the most important factor in the case of a retail store is the cost of development and
operation. The performance of the retail business depends on the cost required to set up the retail
store.

MERCHANDISE PLANNING

What is merchandise planning?

Merchandise planning is a data-driven approach to selecting, buying, presenting and selling merchandise to
maximize your return on investment and satisfy consumer demand. Merchandise planning seeks to satisfy
consumer demand by making the right merchandise available at the right places, times, prices and quantities.

What is the merchandise planning process?

Merchandise planning is a data-driven approach to selecting, buying, presenting and selling merchandise to
maximize your return on investment and satisfy consumer demand. Merchandise planning seeks to satisfy
consumer demand by making the right merchandise available at the right places, times, prices and quantities.

How do you create a merchandise plan?

 The Five Crucial Steps of Merchandise Planning

 Establish a Cross-Channel Merchandise Planning Process.
 Establish a Cross-Channel Merchandise Planning Organization.
 Define Exit Strategies for All Merchandise.
 Assign Logical Store Clusters.
 Acquire the Proper Tools.
 The point: work toward one common set of reports and create one version of the truth.

What are the 5 R's of merchandising?

The five rights include providing the

[1] Right merchandise,

[2] At the right place
[3] At the right time,
[4] In the right quantities,
[5] At the right
What are the six rights of merchandising?

The six rights of merchandising are

 The Right Product. The product range must be merchandise that the customer wants – following
current trends or relevant brands.
 The Right Place.
 The Right Time.
 The Right quantities.
 The Right Price.
 The Right manner.
 About ARA Retail Institute.

Why is merchandise planning so important?

If anyone ever asks you why a merchandise plan is important for a retailer, you should answer them by asking
this simple question: what are the biggest expenses that any retailer faces?

The answer they provide should be proof enough. That’s because among the top few expenses they list - and
Alongside the more obvious ones like rent and payroll - you’ll find merchandise. That makes sense, though, if
you consider all the additional expenses that come with buying and selling merchandise. Think shipping costs,
delivery costs and storing costs to name just a few.

Order the wrong merchandise and you could easily double your costs and spend money that you don’t have.
That said, having a merchandise plan is about more than just avoiding the problem of wasting money.

By not having a thorough and well-developed merchandise plan, you’re left scrambling to meet the needs of
your customers. And isn’t that partly the reason why retailers exist - to meet consumer demand? As already
mentioned, this is about offering the right product at the right time, right place and right price. The only likely
way that that can ever happen is if you plan.

And what if you don’t? Imagine the consequences then if you will. While your shelves might be packed with
merchandise, it’ll be the wrong merchandise. That means you stand a good chance at having to offer discounts
and markdowns just to get rid of unwanted stock. More than that, you’ll find your customers moving to buy
from your competition.

The challenges of planning your merchandise

As much as you might want to believe it, having a plan doesn’t guarantee success. That means that when it
comes to planning what merchandise to stock, you’re bound to face a few challenges. How you front up to
these challenges will ultimately decide whether you’re successful or not.

[1] Finding the balance between the right product and right quantity

The first challenge is finding the balance between the right product and the right quantity. Keep in mind the
adage of too much of a good thing (the right product in this case) can be harmful. And don’t forget this
becomes that much more complicated when you consider that you need to decide today what merchandise
you’re going to stock in a year, let alone next month.

[2] A lack of clearly defined goals

Gmerick also says that a lot of merchandise planning challenges can be attributed to a “lack of clearly defined
goals”. That’s because retail planning can vary, depending on both your size and the type of retailer that you
are.

For example, the larger the retailer, the easier it is to diversify and focus on different goals. But, while large
corporations have the advantage of an abundance of data, this plethora of information can sometimes hinder
rather than help.
FEW QUESTIONS AND ANSWER :

What is assortment management?

Assortment planning is the process of selecting the collection of products that will be on offer in particular
areas (localization) and during specified periods (seasonality). The assortment plan defines the products that
make up your categories, sub-categories, segments, and sub-segments.

What is assortment in retailing?

An assortment strategy in retailing involves the number and type of products that stores display for purchase
by consumers. ... The depth of products offered, or how many variations of a particular product a store carries.
The width of the product variety, or how many different types of products a store carries.

What is the meaning of SKU?

Short for stock keeping unit, SKU is a unique numerical identifying number that refers to a specific stock item
in a retailer's inventory or product catalog. The SKU is often used to identify the product, product size or type,
and the manufacturer.

What is SKU example?

Businesses create different SKUs for their goods and services. For example, a store that sells shoes creates
internal SKUs that show a product's details, such as color, size, style, price, manufacturer, and brand

What is the use of SKU?

By definition, a stock keeping unit (or SKU) is a number assigned to a product by a retail store to identify the
price, product options and manufacturer of the merchandise. An SKU is used to track inventory in your retail
store.

Is SKU a serial number?

SKU number is a store stocking unit number each store gives for the item model/color/size, etc. All same items
have the same store SKU number. The serial number is unique to the individual item. ... The SKU(stock keeping
unit) number and the serial number should not be the same.

What is an SKU vs UPC?

Another difference between SKU numbers and UPC barcodes is that SKU codes are alphanumeric, while UPC
barcodes are numeric. UPC barcodes must be 12 digits, while SKU numbers are whatever length the company
assigning them decides.

How do I find the SKU code?

Finding the SKU Number on Products, A barcode is a series of black vertical lines equal in length. Below this
code is a number for manual entry. If you don't see the barcode right away, continue to search; sometimes it's
placed in an obscure location, such as the underside of a box or on the inside flap.

What does UPC stand for in retail?

Universal Product Code 'UPC' stands for Universal Product Code, a unique 12-digit number assigned to retail
merchandise that identifies both the product and the vendor that sells the product.

Can Excel generate barcodes?

It is extremely easy to create and print barcodes in Excel. Please make sure that ConnectCode has been
installed on your computer. Key in the data "12345678" in the cell A1 as shown below. ... You can enter more
data in the first column.

What is the purpose of an SKU?

SKU (pronounced “skew”), short for stock keeping unit, is used by retailers to identify and track its inventory,
or stock. An SKU is a unique code consisting of letters and numbers that identify characteristics about each
product, such as manufacturer, brand, style, color, and size
INTRODUCTION TO MANAGING ASSORTMENT

Assortment planning is the process of selecting the collection of products that will be on offer in particular
areas (localization) and during specified periods (seasonality). It considers the financial objectives and
seasonality of the product selection in a way so that both you and your customers gain from the outcome.

Assortment planning entails the evaluation of individual product attributes including Brand, Size, Style, Colour,
Function, Price and Stock Keeping Unit (SKU) performance during selection to address the preferences and
needs of your customers. The assortment plan defines the products that make up your categories, sub-
categories, segments, and sub-segments.

Why Is Assortment Planning So Important?

 Optimizing shelf space and the product selection within that space has always been a primary concern
for retailers. The reasons for that are because the assortment of products is critical to demand
generation and shopper satisfaction.

 One of the main ways a retailer can increase the financial performance is by increasing the level of
customer satisfaction through the variety of products on offer.

 An important factor to consider during the assortment planning process is that assortment variety
increases inventory costs. Therefore assortments need to be optimized.

 From the supplier’s viewpoint, assortment selection and category space allocation are equally critical.
Suppliers can’t generate any sales if their products aren’t represented on store shelves.

Stores Management

A professionally managed Stores has a process and a space within, to receive the incoming materials
(Receiving Bay), keep them for as long as they are not required for use (Custody) and then to move them out
of stores for use (Issue).

 Typically and at times essentially, a Stores has to follow certain activities that are managed through
the use of various resources and are thus called Stores Management.

 The task of storekeeping relates to safe custody and preservation of the materials stocked, to their
receipts, issue, and accounting.

 The objective is to efficiently and economically provide the right materials at the time when it is
required and in the condition in which it is required.

The basic job of the Stores Manager hence is to receive the goods and act as a caretaker of the materials and
issue them as and when Production demands it. Needless to say, storekeeping activity does not add any value
to the product. It only adds to the cost. The organization has to spend money on space ie. expenditure on land,
building and roads, equipment, machinery, and other facilities provided such as electricity, people i.e. salaries
and wages, insurance, maintenance costs, stationery, communication expenses and the cost to maintain the
inventory, etc. This basic reason has propelled the evolution of philosophies such as JIT, JIT II, etc.

Thus, the basic functions, to manage stores, carried out are:

 Receiving of incoming consignments (goods)

 Safekeeping of goods (Custody)

 Disposal of undesirable goods

 Inventory Management

 Housekeeping and record maintenance

  It all starts with a suitable Layout design of stores. Depending upon the nature of items used for
processing by the organization the layout and type of stores are selected. For example, a process that
requires the use of raw materials, not costly enough, an open and nearby stores with truck/rail inside
movement possibility can be adequate. Similarly, for storing costly material, a closed and restricted
type of stores shall be needed.

 However, irrespective of the type and layout, any Stores would have, as its starting activity, receiving
and accounting of the incoming goods. This part of Stores is known as Receiving Bay.

 Once the material has been received and cleared through inspection and accepted for use, it needs
safe custody till it's used.

 It calls for a separate physical storage space, open or closed, as per need. It maintains all documents
that can trace an item, show all its details and preserve it up to its shelf life in the manner prescribed
or till it is issued for use.

 This part of Stores is called Custody. Thus the role of Custody is to receive and preserve the material
and then to issue it to the user, as and when needed. A stage comes when the material is needed for
use. Stores thus release the material from its custody to the user department and the process is called
'issue of goods. It might also happen that after partial use, some materials having useable value in
future are returned to the stores and thus they also become part of the custody again.

 In the long-drawn process of preserving the materials till its use, some materials might get obsolete
and unserviceable and may require removal from stores, to clear space for other incoming goods. This
activity is known as Disposal of goods for which auction etc is done.

 Hence, record keeping is a vital function of stores. Of course, it also goes along the various activities
and with development in the information technology domain, the record-keeping in stores too is
through electronic medium making the whole process smooth and efficient.

 Any Stores as such is a physical entity which deals with material receipt, preservation and issue.
Material handling, therefore, is another vital function.

 Just as Layout of a Stores is designed considering the nature of material Stores has to handle, material
movement equipment and implements also are important.

 Within a typical retail organization, its Stores is seen having Forklifts, Overhead Cranes, Trolleys, etc
inside the store to handle materials.

What Is a Retail Store Layout?

A retail store layout (whether physical or digital) is the strategic use of space to influence the customer
experience. How customers interact with your merchandise affects their purchase behavior. This retail
principle is one of the many from Paco Underhill, author of Why We Buy: The Science of Shopping, keynote
speaker, and founder of Envirosell.

The interior retail store layout has two important components:

[1] Store Design: The use of strategic floor plans and space management, including furniture, displays,
fixtures, lighting, and signage. Website designers and user experience (UX) researchers use space
management techniques and web design principles to optimize e-commerce websites. We’ll further
discuss a variety of popular retail floor plans later in this article.

[2] Customer Flow: This is the pattern of behavior and way that a customer navigates through a store.
Understanding customer flow and the common patterns that emerge when customers interact with
merchandise based on the store layout is critical to retail management strategy. Physical retailers can
track this using analytics software and data from in-store video and the wifi signal from smartphones.
For example, solution providers like RetailNext provide shopper analytics software for retailers to
understand flow and optimize the customer experience based on in-store video recordings. The
technology also exists to track the digital customer flow and online shopping behavior. Using
“cookies” and other software, online retailers can track customer behavior, including how customers
interact with their website.
 While the exterior retail store layout includes exterior store design and customer flow, it also includes
the following factors:

 Geographic location of the retail store (real estate)

 Size of the building and length of the walkways accessible from the entrance and exit

 Use of furniture and exterior space for people to gather and interact

 Style of architecture of the retail building

 Color of paint and choice of exterior building materials

 Design of the physical entrance and exterior window displays

 A well-planned retail store layout allows a retailer to maximize the sales for each square foot of their
allocated selling space. This is done by featuring merchandise in an efficient way that encourages
customers to consider making additional purchases while they browse.

 The draft of a store layout generally shows the size and location of each department, any permanent
structures, fixture locations, and customer traffic patterns.

 Each floor plan and store layout will depend on the type of products sold, the building location, and
how much the business can afford to put into the overall store design.

A solid floor plan is the perfect balance of ultimate customer experience and maximized revenue per square
foot. Many retailers miss this point. They simply focus on revenue and forget customer experience. Retailers
who deliver on experience have higher revenues than those that don't—even if the square footage is
comparatively smaller.

For example, some retailers "crowd" the sales floor with lots of merchandise. While this increases selection,
it also decreases customer traffic flow space. Many customers are turned off by crowded stores. They prefer
cleaner, wider aisles that reduce the stress of shopping. Department stores that adopt the approach of using
wider aisles include Macy's and Belk.

Adopting and adapting are a few basic store layouts can unlock unrealized sales potential.

[1] Straight Floor Plan

The straight floor plan is an excellent store layout for almost any type of retail store. It makes use of the walls
and fixtures to create small spaces within the retail store. The straight floor plan is one of the most economical
store designs.
 [2] Diagonal Floor Plan

The diagonal floor plan is a good store layout for self-service types of retail locations. It offers excellent
visibility for cashiers and customers. The diagonal floor plan invites movement and traffic flow to the retail
store.

This plan is more "customer friendly." Unlike a straight plan, which can feel like a maze, this floor plan offers
the customer a more open traffic pattern.

[3] Angular Floor Plan

The angular floor plan is ideal for high-end specialty stores. The curves and angles of fixtures and walls make
for a more expensive store design. However, the soft angles create better traffic flow throughout the retail
store. This design has the lowest amount of available display space, so it is best for specialty stores that display
edited inventories versus large selections.

[4] Geometric Floor Plan

The geometric floor plan is a suitable store design for clothing and apparel shops. It uses racks and fixtures to
create an interesting and out-of-the-ordinary type of store design without a high cost.

This plan makes a statement about the products the store sells and the customers it wants to attract. So make
that statement speaks to the message you want to associate with your brand.
 [5] Mixed Floor Plan

As you might have guessed, the mixed floor plan incorporates the straight, diagonal and angular floor plans to
create the most functional store design. The layout moves traffic towards the walls and back of the store.
.
Retail store design

It is a branch of marketing and considered part of the overall brand of the store. Retail store design factors into
window displays, furnishings, lighting, flooring, music, and store layout to create a brand or specific appeal

Beyond just creating a good-looking store with aesthetically pleasing displays, retail store design is a well-
thought-out strategy to set up a store in a certain way to optimize space and sales. The way a store is set up
can help establish brand identity as well as serve a practical purpose, such as protecting against shoplifting.

Aspects of Retail Store Design

Retail store design is a branch of marketing and considered part of the overall brand of the store. Retail store
design factors into window displays, furnishings, lighting, flooring, music, and store layout to create a brand or
specific appeal.

[1] Store Layouts

Stores are usually laid out with new merchandise upfront to entice shoppers into the store. According to a
piece in the magazine "Inside Retailing," the front of the store also creates a sense of the store's identity with
displays of trademark products. The article also suggests other tips for store designers -- for example, having a
centrally located checkout counter stocked with accessories to encourage impulse purchases.

[2] Aesthetic Branding

Many stores take great pains to create a specific aesthetic with their catalogs, graphic design and their store
mood. A strong example of this kind of aesthetic branding is the clothing retailer Anthropologie.
Anthropologie's stores generally echo the style of its products. Just as its products feature quirky, rustic and
artsy features, the Anthropologie stores use installations of old "found" pieces and rustic hardwood flooring to
create a French flea-market kind of feel. Meanwhile, other retailers, such as the Apple store, use clean lines
and simple gray and white furniture to emulate the look of its clean laptops. In this way, these stores connect
the look of their products with their stores.

[3] Retail Design Work

Store designers are either hired by a company or consultant for several different boutiques. Some stores or
retail chains also hire store design interns to create the displays from season to season. For many stores, these
interns help layout and build the designs implemented by the corporation. They may be given a look book
from season to season and build similar-looking displays in their store.

[4] Other Purposes

Beyond helping to establish a brand identity or help sales, store design can help curb shoplifting. The setup of
specific stores can make sight lines more clear for store employees. If shoplifting is a concern, setting up a
store with few blocked-off corners and easy-to-view spaces is one step toward reducing the incidence of
shoplifting.
Retail Space Management
Retail space management is a process of using the space available in the store effectively. The management of
space is important as a retailer is required to display a large number of products in limited space available in
store. Space management is not a difficult process to understand.

 A store which is well-organized and spacious provides better sales because people like to shop in
places where they don’t have to struggle much to find what they need.

 A well-organized store also helps you to cut costs as you don’t have to keep the main salespersons to
assist your customers in looking for products they want.

In simple words, you can say that space management is a process of utilizing store space to attract more and
more customers and providing them a pleasing shopping experience because you cannot deny that only a
happy customer can bring more sales.

Importance of Retail space management

[1] Retail space management is important to increase sales

Planning available space in the store helps you to increase sales. Having an understanding of the
space available in the store helps you to decide the layout of your store and location of different
categories of products.

[2] Customers can easily find the products they need

Nowadays, customers don’t only come to your store to buy things they need, but they also come to
distress themselves. Just think how they will feel if they can’t find things they want to buy easily.

[3] It helps control the rush in the peak hours

Choosing an effective layout for your store is important as it will not only help you keep your store
well organized but will also keep the rush moving during peak hours of a day.

Types of Merchandise Which Occupies Retail Space

[1] Demand Products

Demand products are those products which are regularly bought by your customers or the products
which are consumed regularly. For example, bread, eggs, milk, etc. are the kind of products that are
bought and consumed regularly by customers and they can’t live without them.

[2] Impulse Products

 he products of this category are not bought with planning. People buy these products just because
they look good or have tempting price tags or attractive offers on them. You must have seen fragrant
candles near the cash counter.

[3] Category Products

People make a lot of brand comparison for the products under the category products. For example,
when people buy a laptop or mobile phone, they usually do a lot of research before making a
purchase decision. People make a buying decision based on how that brand makes them feel.

Take the example of Apple company. When people buy “iPhone,” it makes them feel that they are
richer and have status in society. To make the maximum sales of this category of products stores
should place a few brands that your customers would want to buy.

[4] Specialty Products

Now, this category of products in your store’s specialty. People come to your store to buy these
products, especially. The good thing about these products is that there are no brand comparison
alternatives for customers to choose from. People will find you out on their own if your product is a
specialty product.

Effective management of retail space requires you to consider the following points

[1] life of products on the shelf

The space on shelves should be allocated to products based on their shelf lives. For example, a
product with a short product life should not be placed on the top of a shelf.

[2] Categories of products:

This is the most important factor for deciding the space allocation. Products can be of different
categories such as profit builders, traffic builders, star performers, and space wasters.

[3] Adjacent Products:

The next important decision a retail manager is required to take “which products should be placed
adjacent to one another so that sales can be increased.

[4] size, shape, and weight of products:

These are important factors that a manager needs to consider while placing products on the shelf. For
example, it would be poor space management if you place heavy products such as a bottle of cooking
oil on the topmost shelf. However, products such as kids’ diapers, soft toys can be placed on the top
shelf because of their heavy size.

[5] Frequency of purchase:

There is a certain category of products which are frequently bought by customers, and customers
usually come in a hurry to buy such products. The example of such products will be toilet paper. Toilet
papers should be placed at the bottom of the entry shelf. So that people can easily find them without
making many efforts.

Visual merchandising

It is the practice in the retail industry of developing floor plans and three-dimensional displays to maximize
sales. Both goods and services can be displayed to highlight their features and benefits.

FEW QUESTIONS AND ANSWER

What does a visual merchandiser do?

Visual merchandisers use their design skills to help promote the image, products, and services of retail
businesses and other organizations. They create eye-catching product displays and store layouts and design to
attract customers and encourage them to buy.
What are the four elements of visual merchandising?

 Store exterior.
 Store layout.
 Store interior.
 Interior display.

What is an example of visual merchandising?

Visual merchandising is presenting or displaying products in a way that makes them visually appealing and
desirable. Things like themed window displays, dressed mannequins, the arrangement of running shoes on a
wall, and fresh fruits organized by color are all examples of visual merchandising.

What are the 5 Key Elements of Visual Merchandising

[1] Color: The Soul. The color palette is the essence of the display. ...
[2] Landscaping: The Ups and Downs. The elevation of products is referred to as landscaping. ...
[3] Texture: The Touch and Feel. Contrast in texture can enhance a display. ...
[4] Communication: The Storyteller. ...
[5] Decor: The Finishing Touches.

Why Visual merchandising is so important?

Visual merchandising is the act of making retail spaces more attractive and pleasing for customers, entice foot
traffic, and encourage impulse buying. ... Visual merchandising is all about the look, feel, and culture of your
store and brand. If it's done perfectly, it will help increase your customer brand loyalty.

How does visual merchandising impact a store?

Visual merchandising coordinates displays and décor within a retail store that work together to promote
products while supporting the overall ambiance of the store. ... The key is to arrange products so that they are
eye-catching, but also finding the positions that will best display those products.

What is Visual Merchandising? - Definition, Objectives & Types

The Defination

Visual merchandising is presenting or displaying products in a way that makes them visually appealing and
desirable. Things like themed window displays, dressed mannequins, the arrangement of running shoes on a
wall, and fresh fruits organized by color are all examples of visual merchandising. It can also be as simple as
stacking toilet paper into a pyramid or as elaborate as recreating a scene from a fairytale. The point here is,
visual merchandising is all about using artistic product displays to capture the attention and interest of
shoppers.

The Objectives of Visual Merchandising

When it comes to visual merchandising, there's more than meets the eye. Product displays don't just look
pretty for the sake of looking pretty. There is a specific purpose for why they look the way they do.

The primary goal of visual merchandising is to attract shoppers and increase sales. Yes, it's that simple, yet
incredibly important. Thus, an effective visual merchandising strategy should draw shoppers into the store and
keep them in there long enough to buy something.

The following are common examples of visual merchandising.

 Display Windows. Display windows are glass enclosures on the exterior walls of a shop.
 Store Layout. The floor plan of a retail location or showroom.
 Interior Displays.
 Mannequins.
 Point of Purchase Display.
 Lighting Design.
 Music.
 Scent.
Types and Roles of Visual Merchandiser in the Fashion Industry

Visual merchandiser:
Visual merchandiser is a person who applies his or her design skills that helps to promote the image, create
eye-catching product displays and store layouts, and design to attract customers and encourage them to
buy.

Visual merchandiser assemble marketing principles, get combine the knowledge about retail merchandising,
and creativity to use the space and layout of the store to represent the store’s catalog in the right way. They
need professional training to do the following task successfully.

 In-store displays
 Interactive displays
 Mannequin styling
 Point-of-sale displays
 Posters
 Price tickets
 Promotional/seasonal displays
 Shelving
 Window installations

Types of visual merchandiser and their roles:

A visual merchandiser is a key person in the fashion industry who determines how a product is displayed to the
public. Today in the fashion industry, there are three main types of visual merchandising roles are included.
Every role is slightly different from others. Here the types are:

[1] In-store visual merchandiser

[2] Field visual merchandiser and
[3] Head office display team.

[1] In-store visual merchandiser:

In-store visual merchandisers are needed to have a real fair for layout and composition, consciousness about
the retailer's brand image, products, and display techniques are combined with knowledge.

In-store visual merchandiser play some essential roles, these are below:
They maintain all the in-store visual displays

By analyzing the reports they maximizing commerciality

 They will always do change monthly floor makeovers
 Always maintaining product standards
 Using space planning information

[2] Field visual merchandiser:

Field visual merchandisers are to help and give guidance to the retail stores of the fashion brands on all
perspectives of visual merchandising like set guidelines, ensuring consistency and visual excellence across the
brand. To move forward the fashion brand, the field visual merchandiser always informs the district visual
merchandising manager and area manager to discuss any identified chance, issues/ needs, put forward advice
and agree actions.
Some roles of a field visual merchandiser are:
 In the retail store design area, they will drive and develop visual merchandising standards.
 For the retail store, they highlight commercial visual merchandising opportunities.
 Always maintain the fashion retailer’s brand strategy.
 Some visual merchandising experience must be needed.

[3] Head office display team:

Head office Creative/visual merchandiser starts their career as a creative assistant, moving to creative
manager, and then moving to head of creative or visual merchandiser. Some store retailers do not have a head
office display team, that’s why the marketing team maintain this responsibilities. But they are not enough
creative as a display team. So, brand marketing manager try to recruit more creative candidate for this post.

Some roles of head office display team are:

 They are support and communication between the buying and merchandising teams
 Update knowledge about fashion trends, latest key trends, styles.
 They should be able to put visual display packs together.
 They will reserve the latest visual display packs and old packs are leave from the store.
 Get more knowledge about creativity.

Store Aesthetics - Best Practices

In a typical purchase decision process, customers evaluate desired parameters and place certain brands in
their consideration set. Once that’s done, a lot of customers visit retail stores to come down to a final choice.
Hence, the retail store is a very important interface of the customer with the brand. Apart from the right stock
& visual merchandising, it is equally important to invest time and attention on the aesthetics of the store. This
is where the two parameters Layout Planning & Hygiene Maintenance comes into play.

Retail store requires comprehensive interior & layout planning. Part of that planning is developing effective
retail layout strategies. Each retail store needs to address basic strategy concepts, monitor customer response
to any strategy, and make changes accordingly to improve sales.

 Walking Space - The aisles must be wide enough to accommodate traffic flowing in both directions
and allow for sufficient navigation space for customers.
 Flow - The layout of your retail store should allow customers to enter from the front and be
encouraged to walk to the back of the store. This increases the amount of time that the customers
spend in the store and boosts the chances of buying more products.
 Eye-Level - Putting products at the proper eye level will help to improve the visibility of products and
which will ultimately result in better sales.
 Display Cases - Display cases serve several important functions in the layout of a retail store.
Expensive product can be put in a lighted display case to draw attention to it. The display case also
acts as a countertop customer interaction area for convenience.

From store hygiene point of view, the following points must be focused upon:

Cleanliness is a very basic feature which customer expects in any retail space. Its maintenance might not
increase sales but the absence typically results in a sour experience for the customers, inducing them to not
visit the retail store again. To take care of cleanliness, a cleaning routine should be designed that not only
addresses all the areas but gives extra attention to high traffic areas as well.

 Store should be adequately lit highlighting the product categories and its display.
 Store temperature should be maintained at a comfortable level for the customers.
 The navigation space should be free of any clutters to provide an obstacle-free path for the
customers.
 The product categories should be segregated and the categories should be properly called out.

Keeping a clean and hygienic store is about more than just appearance. It raises the trust & confidence of the
staff in the brand’s values and makes the customer feel that the brand cares.
What is Retail atmospherics?
Atmospherics are the controllable characteristics of retail space which entice customers to enter the store,
shop, and point of purchase. Many retail giants will use elements of atmospherics to help identify their retail
brand and set it apart from competitors.

What is store atmospherics?

Atmospherics are the controllable characteristics of retail space which entice customers to enter the store,
shop, and point of purchase. Many retail giants will use elements of atmospherics to help identify their retail
brand and set it apart from competitors.

Why is ambiance important?

Ambiance is key to getting the customers to keep coming back as the customers dine out for the experience as
well as for the quality of the food that is being served there. Make sure that the ambiance stays true to what
the restaurant wants its customers to experience.

INTRODUCTION

Retail atmospherics refers to anything inside of a retail environment that is intended to influence buyer
behavior. This often includes the use of certain colors, designs, smells, lighting, or even music. For example, a
coffee shop may play slower-paced music to draw in their target crowd and entice people to stay and drink
coffee. A grocery store might use the colors red and yellow to trigger the appetite and make people more
likely to stop in and make a purchase. Most customers do not consciously notice these subtleties, but they are
very effective.

The Benefits of Retail Atmospherics

[1] Retail atmospherics helps retail stores have more influence over their customers to not only
encourage spending but to have them think of their brand in a certain way. Most retail stores that use
atmospherics often work with marketing and even psychological experts to create a cohesive brand
experience and to ensure that they are using the best approach to target their ideal customers.

[2] Although it sounds intuitive, it does require an expert’s assistance to create the right effect. Some of
the benefits from retail atmospherics are that more people may decide to make purchases, stay
longer, and establish a personal connection to the brand or store overall.

Mobile Technology and Atmospherics:

[1] Mobile technology and retail atmospherics go hand in hand because businesses want to target
consumers who are starting to use mobile more frequently to enhance their shopping experience.
Mobile technology includes smartphones and tablets. Customers can use their mobile devices in the
store to access special coupons, offers, discounts and loyalty programs. Many major retailers have
mobile apps that allow customers to search for items within the store and receive discounts and
coupons.

[2] There is no one approach to retail atmospherics that works in all retail environments because these
details are very specific to the brand and their customer demographics. To have an effective retail
atmospherics program, it is recommended that retail stores work with an expert with a background in
marketing and consumer behavior to create the right experience.

Retail Equity
In other words, retail equity is defined as values associated with consumers when they encounter the name of
a particular retailer.
 Retail Equity

Retailer Perceived Retailer

Retailer Retailer Loyalty Retailer
Awareness Associations Reputation
Quality Equity

[1] Introduction

Increasing market globalization has created an economy in which companies face a wide range of intense
competition. As market boundaries have widened and the types of customers have increased, the needs of
customers have become more complex. Companies have found it difficult in this environment to dominate
competition using traditional marketing strategies. Brand equity has become an increasingly important factor
in creating differential advantage.

The rise of retailer as a brand is one of the most important trends in the market. Many of the world’s most
valuable brands listed on the 2016 Interbrand Global Brand TOP 30 list are retailers such as Amazon, H&M,
IKEA, Zara and flagship stores such as Apple, Nike, Samsung, and Toyota.

The concept of retailer equity refers to assets and values owned by retailers, similar to customer-based brand
equity, which is an asset of the retail store associated with the consumer with the receiver’s name and symbol.
Retailer equity studies view a retail store as a brand. For example, a Wal-Mart store can be considered a brand
of the retailer and the value-added to that store by the brand of Wal-Mart becomes retailer equity

[1] Retailer Awareness

Retailer awareness is defined as a consumer’s ability to identify and recall a retailer when exposed to the
relevant retail category. Retailer awareness is being studied as one of the major dimensions in measuring retail
equity.

[2]Retailer Associations
Retailer association is a concept that is similar to that considered in the study of brand equity, and refers to
anything that comes to a consumer’s mind about the retailer. A brand has a number of associations that
differentiate it and create reasons for consumers to purchase, which results in positive feelings for the brand.

[3] Perceived Retailer Quality

Perceived quality is based on Perceived Retailer Quality on consumer perception of the quality of products and
services, not the objective quality associated with the actual quality of them. Thus, perceived quality refers to
consumer judgment on the overall excellence and superiority of the brand.

[4] Retailer Loyalty

One of the main goals of shopping mall managers is retaining customers. Therefore, customer loyalty in an
increasingly competitive market is an important factor in market share and sustainable competitive advantage.
Loyal customers are willing to repurchase products and services, spread positive word of mouth, and pay
higher prices.

[5] Retailer Reputation

Various studies recognize the importance of corporate reputation to company financial
performance and profitability [37–39]. Corporate reputation is a complex and dynamic concept
defined as the overall valuation of a company based on the experiences of its stakeholders over a long
period.

-End-
 RETAIL MANAGEMENT
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MODULE-III

The Retail communication mix

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.

It is believed that every brand contact delivers an impression that can strengthen or weaken the customer
view of the company. The retailer can use various platforms/channels for communication. The most common
tools are:

[1] Advertising
[2] Sales Promotion
[3] Public Relations
[4] Personal Selling
[5] Direct Marketing

Advertising can be defined as any paid form of non-personal presentation and communication through mass
media. It is popularly believed that one of the main aims of advertising is to sell to a wide mix of consumers
and also to induce repeat purchases. However, a retailer may use advertising to achieve any of the following
objectives:

[1] Creating awareness about a product or store

[2] Communicate information to create a specific image in the customer’s mind in terms of the store
merchandise price-quality benefits etc.
[3] Create a desire to want a product.
[4] To communicate the store’s policy on various issues.
[5] Help to identify the store with nationally advertised brands.
[6] Help in repositioning the store in the mind of the consumer.
[7] To increase sales of specific categories or to generate short term cash flow – by way of a sale, bargain
days, midnight madness, etc.
[8] Help reinforce the retailer’s corporate identity.

The retailers for advertising may use any one or a combination of the following mediums:

1) Press advertisements
2) Posters and leaflets, brochures booklets
3) Point of purchase displays
4) Advertising can also be done through mediums like radio, television, outdoor hoardings and the internet.

Determining the Advertising / Promotional budget

While there is no definite formula for determining the advertising or the overall promotion budget the
following are the main methods that may be employed to determine the advertising budget. ‘

[1] The percentage of Sales method:

This is perhaps the most commonly used method for determining the budget. Here, the budget is a
fixed percentage of sales. The biggest advantage of this method is that it is simple to apply and it
allows the retailer to set an affordable limit on promotional activity. This method, however, takes
little consideration of the market conditions of any special advertising needs.
 [2] The Competitive Parity Method

Here the budget is based on the estimated amount spent by the competition. There is risk that it
could be based on wrong information and again there is little consideration for market conditions or
growth opportunities.

[3] Task and objective Method

The budget is determined based on a study of the best forms of advertising media and the costs of each. The
retailer formulates advertising goals and then defines the tasks necessary to accomplish these goals. Next, the
management determines the cost for each task and adds up the total to arrive at the required budget. Here,
the advertising expenses are linked to the retailer’s objectives and the effectiveness of some forms of
advertising can be measured and compared to costs.

[4] The incremental Method

The budget is simply based on the previous expenditure.

Selection of Promotion Mix

The promotion mix is an element of the marketing mix. It includes advertising, public relations, personal sales,
and sales promotion. Mediums used for promotion include the Internet, television, advertisements, special
events, endorsements, newspapers, and magazines. Different approaches are needed for each medium to be
successful.

Marketing Mix: The marketing mix includes product, promotion, price, and place.

Promotional Mix Objectives:

There are three main objectives of a promotional mix:

[1] Increase demand: These strategies are used during the product life cycle to increase sales. Eventually,
a product will reach its saturation point, at which time investing in sales will decrease as the company
focuses its attention on a new product.

[2] Present information about the product: For customers and consumers to want the product they
need to understand what the product is and how it benefits them. Information about the product will
differ depending on the specific target market.

[3] Differentiate a product: This is especially important if there are multiple competitors in the same
market. For example, Apple was able to differentiate itself in the computer industry. For many years it
was the preferred computer for those who had advanced computing skills. Then Apple did an
advertising campaign to show general users how easy it is to use. This took advantage of the
complaints the market had over Windows operating software, which came standard with most PCs.

For a market to accept a new product, they need to know how it address their pain point. Information about
the product should address the “what’s in it for me” aspect that is inherent in human nature.

FEW QUESTIONS AND ANSWER

What are the 5 elements of the promotional mix?

A promotional mix is an allocation of resources among five primary elements:

[1] Advertising.
[2] Public relations or publicity.
[3] Sales promotion.
[4] Direct marketing.
[5] Personal selling.
What are the factors to be considered in choosing a promotion method?

Top 8 Factors Influencing Promotion Mix

[1] Type of Product:

[2] Use of Product:
[3] Complexity of Product:
[4] Purchase Quantity and Frequency:
[5] Fund Available for Market Promotion:
[6] Type of Market:
[7] Size of Market:
[8] Stage of Product Life Cycle:

Promotion Mix: It includes advertising, public relations, personal sales, and sales promotion.
Mediums used for promotion include the Internet, television, advertisements, special events, endorsements,
newspapers, and magazines. Different approaches are needed for each medium to be successful.

Retail Sales Promotion

What are sales promotions?

A sales promotion is a marketing tactic used by retailers to drive sales. It involves offering shoppers a deal that
would enable them to either purchase a product for a lower price (e.g., Rs.100 off) OR get more value of the
sale (e.g., Buy One Get One Free).

What are some examples of sales promotion?

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).

What are the two main categories of sales promotion?

There are two types of sales promotions: consumer and trade. A consumer sales promotion targets the
consumer or end-user buying the product, while a trade promotion focuses on organizational customers that
can stimulate immediate sales.

What are sales promotion techniques?

The techniques of promotion used are-free samples, contests, coupons, demonstrations, price reductions,
counter- display cards, etc. Free samples are distributed among the prospects to arouse interest. Sales
contests are conducted to attract new customers or to introduce new products.

What are the advantages of sales promotion?

Advantages of Sales Promotion
Strengthens Customer Involvement and Loyalty – Sales promotion can be the primary mechanism
organizations use to interact with their customers and ultimately build a stronger connection (e.g., offer
customer rewards).

What are the sales promotion techniques used to reach consumers?

Several promotional techniques are commonly used by product manufacturers and sellers.

[1] Providing Free Samples. ...

[2] Offering a Free Trial. ...
[3] Giving Free Gifts. ...
[4] Offering Customer Contests. ...
[5] Using Special Pricing. ...
[6] Social Media and Influencer Marketing. ...
[7] Using Digital Marketing.
What is the best promotion strategy?

Social Media Promotion

Social media websites such as Facebook and Google+ offer companies a way to promote products and services
in a more relaxed environment. This is direct marketing at its best. Social networks connect with a world of
potential customers that can view your company from a different perspective

What are the 6 pricing strategies?

6 Pricing Strategies for Your B2B Business

[1] Price Skimming

Price skimming is when you have a very high price that makes your product only accessible upmarket.
Price skimming is typically associated with luxury items and only works if you have a product or
service that is highly valuable or perceived as highly valuable. Brands like Rolex, Mercedes-Benz and
Louboutin use a price skimming model, and the high price reinforces their luxury perception.

[2] Penetration Pricing

Penetration pricing is the opposite of price skimming. Instead of going to market with a high price,
companies using a penetration pricing strategy have a low-priced solution in order to capture as much
market share as possible.

For example, expense management software Expensify uses a penetration pricing model in
combination with product-led growth. Their low price draws initial users, and then more users within
a company will adopt the tool due to its functionality.

[3] Freemium

Freemium is a portmanteau of “free” and “premium,” and a freemium business model involves
offering a free version of your product or service and then upselling users into a paid version. The
music streaming platform Spotify uses this model, offering a free version that allows users to listen to
music, but if they want to download files to listen to offline, skip songs unlimitedly or adjust their
audio quality, they have to upgrade to a paid account. Freemium can be a part of your go-to-market,
or it can be used to break into new markets or introduce new products.

[4] Price Discrimination

A price discrimination strategy is when you set a different price for the same product based on the
market status of the buyer.
For example, movie theaters sell discounted tickets for children and seniors. Even though their tickets
cost less, people in those demographics can see the same movies and sit in the same seats as
customers paying full-price for their tickets. The purchased experience is the same, but the price is
different based on their demographics.

[5] Value-Based Pricing

Value-based pricing is a strategy that uses the value customer’s gain from the product or service as the basis
for the cost, ignoring the cost of production.
This strategy works well when your product or service is innovative and can’t be easily swapped with an
alternative.
The early year’s of iPhones are a great example of this: the cost to manufacture the phones are significantly
less than the market price, but because none of the existing smartphones at the time had a similar
functionality, Apple was able to set a high price and establish what the “value” of touch screen smartphones
was.

[6] Time-based pricing

A time-based pricing strategy is typically used by companies whose product or service has high-seasonality or
last-minute purchases.
Airlines exemplify this: it’s more expensive to book flights during peak seasons and cheaper if you’re traveling
during off-seasons. Additionally, the closer you book to the travel date, the more expensive the ticket will be.
For time-based pricing to work, you need to have a system in place tracking the factors at play and adjusting
prices accordingly, especially if buyers can make a purchase without talking to sales.

What are the 5 marketing strategies?

From branding to print materials and electronic marketing solutions like innovative tag barcodes, choices
abound.
[1] Branding. Branding is one of the most important marketing strategies a small business can
implement. ...
[2] Print Advertising and Marketing Materials. ...
[3] Direct Mail. ...
[4] Social Networking. ...
[5] Electronic Barcode Technology

What is the retail pricing strategy?

Vendor Pricing: Manufacturer suggested retail price (MSRP) is a common strategy used by smaller retail
shops to avoid price wars and still maintain a decent profit. Pricing below competition simply means pricing
products lower than the competitor's price.

7 Types of Sales Promotions in Retail (and How to Implement Them)

INTRODUCTION:
Promotions are almost always part of a retailer’s sales and marketing mix, and for good reason — they can
drive sales and help you move inventory.

But running promos isn’t as simple as slashing prices or putting up a “SALE” sign on your window. To get the
most out of them, you need to consider the type of promotions to offer as well as how to execute them.

And that’s precisely what we’ll talk about in this post. We’re shedding light on the ins and outs of promos and
listing the most common types of sales promotions in retail along with some handy tips to help you implement
them correctly.

Types of retail sales promotions

What kind of promotion would work best for your store? To help you answer that, here’s a rundown of the
different types of promos in retail, and how they typically perform.

[1] Percentage discounts

The percentage off deal (e.g. “20% off” or “50% off”) is one of the most popular — and effective — types of
promotions.

[2] “xx Rupees off”

An alternative to “percent-off” deals, this promotion involves discounting items by a flat dollar amount (e.g.,
Rs.5 off or Rs.20 off).

[3]BOGO
Buy One Get One (BOGO) is another common one. This promotion can be applied in two ways: There’s buy
one get one free or buy one get the 2nd item % off. BOGO is typically used to move inventory, so if you’re
sitting on a lot of stock that you want to clear out, this promotion could be a good option.

[4] Multi-buys
Multi-buy promotions (i.e., “2 for the price of 1”) is another good option if you want to clear your inventory.
But the success of multi-buys largely depends on the types of products you sell.

For example, “Buy 2 Get 1 Free Bottle of Wine” is a winner. “Buy 2 Get One Free Ottoman?” Not going to move
much.”
A great example of multi-buys in action comes from Beloved Shirts. In the email below, you’ll see that they’re
running two types of offers: “Buy 2 and get 1 50% off” and “Buy 3 to get the 1 item free.”
[5] Multi-save and conditional promotions

Multi-save promotions include offerings like:

 Buy and save off the entire sale.

 Spend and save off the entire sale.
 Buy and save off specific items.
 Spend and save off specific items.
 Buy and pay a fixed price.
Conditional promotions, on the other hand, include:

 Buy and get one or more items for free or on discount.

 Spend and get one or more items for free or on discount.
 Buy and earn loyalty.
 Spend and earn loyalty.

These types of promotions encourage sales without necessarily killing your revenues or basket values. They
also encourage shoppers to check out more products, versus just looking at what’s on clearance.

[6] Free shipping

If you’re running an eCommerce site (and you totally should), free shipping might be a good promo for you.
Just remember that like most promotions, the effectiveness of free shipping isn’t set in stone. Some businesses
find it effective. “Free shipping always drives the most conversions.

Example: By Amazon for their prime members, By Club Factory for all customers.
By Flipkart for valued customer

[7] Try before you buy

This promotion is becoming increasingly popular among eCommerce merchants. Online sellers know that the
#1 barrier to conversions is the fact that people can’t touch and feel the products before purchasing. To
address this, more and more eCommerce retailers are implementing “try before you buy” initiatives.

Try before you buy is exactly what it sounds like. It lets customers ship a product to their home (typically they
only pay for shipping costs) so they try on or see the product in action. Shoppers are given a specific trial
period (ranging from a couple of weeks to a month) and if they don’t return the item to the seller, they will be
charged for the full amount.

How to decide on the right promotion

We talked about the different kinds of sales promotions you could offer. Now let’s discuss the steps you can
take to select the right one for your business.

Be crystal clear with your objectives

The first question you should ask when considering promotions isn’t “What type of promo should I offer?”
Rather, it should be, “What do I want to achieve?”

Start by identifying your objectives. Do you want to increase foot traffic? Boost your bottom line? Are you
trying to make room for new inventory? The answer will help you decide on the right promotion.

If you want to draw people into your store, for example, then an attractive discount might be the way to go.
On the other hand, if your goal is to move inventory, then you should look into BOGO or multi-buy
promotions.

Test, test, test

Another way to figure out which promo is the best? Test different types to see what works best for your store.
That’s what Gary Nealon, President of RTA Cabinet Store, did when trying to decide on what promotion to
offer.
“We surveyed our audience when we were thinking about shifting to a free shipping model, and we found that
a “lowest price guarantee” was more important than the free shipping for our niche because people expected
there to be a cost associated with shipping big products.”

Should restrictions apply?

Generally, blanket promotions that are easy to understand (e.g., “50% entire store) are a lot more enticing.
However, if you’re trying to protect your profits or want to avoid people taking advantage of your offers, it
may behoove you to set restrictions such as:

 Product-specific promotions – The promo only applies to certain products or categories (e.g. “Half-off
all dresses”)
 Spending thresholds – The promotion will only apply if the customer spends above a set dollar
amount (e.g., “Free shipping if you spend $100 or more”)
 Customer-specific promotions – The offer is only extended to a certain shopper segment (e.g., “10%
off coupon for all NEW customers”)

If it makes sense for your promotion, see if you can apply any of these restrictions. Just note that the more
hoops people have to jump through, the less likely that they will make a purchase.\

RETAIL PRICING: Price setting and Price strategies

Definition: A retail price is the cost paid for a good at retail stores. It is a term applied to the price that final
consumers pay at retail outlets to differentiate from intermediate prices paid upward in the supply chain.

What Does Retail Price Mean?

 The retail price is the final price that a good is sold to customers for, those being the end-users or
consumers. That means that those customers do not buy the product to re-sell it but to consume it.
Retail price is differentiated from manufacturer price and distributor price, which are prices set from
one seller to another through the supply chain. In competitive, free markets, the final seller or retailer
sets the retail price considering costs as well as supply and demand conditions.

 When setting the price, the retailer will try to obtain an appropriate profit margin but at the same
time to show an attractive price in comparison to competitors. Anyway, the manufacturer can
recommend a retail price to have some influence in the decision and thus to guarantee a price aligned
to the marketing strategy.

What is the retail pricing strategy?

Vendor Pricing: Manufacturer suggested retail price (MSRP) is a common strategy used by smaller retail shops
to avoid price wars and still maintain a decent profit. ... Pricing below competition simply means pricing
products lower than the competitor's price.

What is the retail price and wholesale price?

Wholesale refers to the sale of products in large amounts, at a cheap price. The method of selling to end
buyers in a small amount with a lot of profit is called Retail. 2. Wholesale prices of goods are cheaper than the
retails.

How do you calculate the retail price?

An alternative to that is to designate the cost amount as 100% and add the markup percentage to it. For
example if your cost is Rs.10.00 and you wish to markup that price by 40%, 100% + 40% = 140%. Multiply the
Rs.10.00 cost by 140% and get the retail price of Rs.14.00.

What is list price vs retail price?

The listing price is the amount you have to pay the supplier for the product, while the retail price is just a
suggested price at which you can sell the product. However, you are free to make your retail price by editing it
in the Import List
What is a retail price example?

Retail prices are the prices that the customers buying goods at retail outlets pay. Consumers respond to a
lower retail price by switching their purchases of the manufacturer's product to the lower-priced retailer. ...
Retail prices are the prices that the customers buying goods at retail outlets pay.

What is retail price math?

The price a shop or business normally charges for an item. The shop buys at a wholesale price, then adds a
markup (to cover costs and hopefully a profit) to set the retail price.

How do you price a product for retail?

Here's an easy formula to help you calculate your retail price:

Retail Price = [(Cost of item) ÷ (100 - markup percentage)] x 100.
Retail Price = [(15) ÷ (100 - 45)] x 100.
Retail Price = [(15 ÷ 55)] x 100 = $27.
FURTHER READING: Learn how bundling your products can help you increase your retail sales.

5 common pricing strategies

Pricing a product is one of the most important aspects of your marketing strategy. Generally, pricing strategies
include the following five strategies.

[1] Cost-plus pricing—simply calculating your costs and adding a mark-up

[2] Competitive pricing—setting a price based on what the competition charges
[3] Value-based pricing—setting a price based on how much the customer believes what you’re selling is
worth
[4] Price skimming—setting a high price and lowering it as the market evolves
[5] Penetration pricing—setting a low price to enter a competitive market and raising it later

What is Retail Pricing objective?

Pricing objectives are the goals that guide your business in setting the cost of a product or service to your
existing or potential consumers. ... Some examples of pricing objectives include maximizing profits, increasing
sales volume, matching competitors' prices, deterring competitors – or just pure survival.

Objectives to Setting Pricing Strategies in Retail

When you set prices at your retail business, you have to consider several factors. You have to cover the cost of
goods, meet any federal regulations on pricing and set a price that will bring in a profit. Three common
methods for determining your prices are demand-oriented, cost-oriented and competition-oriented strategies.

About Pricing Strategy

When you set prices at your retail business, you have to consider several factors. You have to cover the cost of
goods, meet any federal regulations on pricing and set a price that will bring in a profit. Three common
methods for determining your prices are demand-oriented, cost-oriented and competition-oriented strategies.
Which one works best for you may depend, in part, on your business objectives.

Cost
The objective of cost-oriented strategies is simple: set a price that covers your costs and returns a satisfactory
profit. To do this, you first determine the cost of the items you sell, including the price you pay for them at
wholesale, or for the raw materials and the operating costs and employee expense it takes to sell them. Then
decide what sort of a profit margin you want per item, and use that as the basis of your prices.

Demand
If your objective is to tailor your prices to what the market will bear, a demand-oriented strategy is often the
best choice. If you're selling luxury goods to high-end buyers, for instance, your customers may accept a high
price, and even prefer it as a mark of quality. If your target market is more sensitive to cost, your price ceiling
will be lower. If you own stores in different neighborhoods, you may have to set different prices depending on
each neighborhood’s purchasing power.
Competition
A competitive price strategy may be the way to go when your objective is to avoid losing ground or just to
survive. To carry out a competitive strategy, you see what your competitors offer similar goods for and price
yours in the same range. This may not give you a greater market share, but it avoids a price war that could cut
into your profits during a tough time. It's particularly useful if there's no great difference between what you
and your rivals sell.

Considerations

When deciding which pricing plan to pursue, it may help to look at the goals in your business plan. If your
immediate goal is to increase profits, a cost-oriented strategy may be the right choice. If, on the other hand,
you're more focused on market share, a demand-based strategy might work better. If your short-term
objective is to keep your store open, it might make more sense to choose a cost-oriented strategy.

About Pricing Strategy

Pricing is a major element of marketing and can help determine how successful your product or service will be.
Pricing affects product positioning as well as product features, promotion, and sales strategies. There are
several different pricing strategies, and the one you chose should reflect your overall sales strategy and the
current state of the market.

Developing a Price

There are many considerations to take into account when developing a pricing strategy. First, examine the
overall marketing strategy to determine the target buyer and product position. Promotional tactics and
distribution should be taken into account, as well as how demand will alter at different prices. Calculate all the
costs involved, to determine your bottom line. You should also consider the prices charged by competitors and
the pricing objectives for the product. For example, do you want to maximize profit or keep the price at a
particular level?

What Pricing Strategy Reduces the Emphasis on Price As a Competitive Weapon?

Pricing is a major element of marketing and can help determine how successful your product or service will be.
Pricing affects product positioning as well as product features, promotion, and sales strategies. There are some
different pricing strategies, and the one you chose should reflect your overall sales strategy and the current
state of the market.

Developing a Price

There are many considerations to take into account when developing a pricing strategy. First, examine the
overall marketing strategy to determine the target buyer and product position. Promotional tactics and
distribution should be taken into account, as well as how demand will alter at different prices. Calculate all the
costs involved, to determine your bottom line. You should also consider the prices charged by competitors and
the pricing objectives for the product. For example, do you want to maximize profit or keep the price at a
particular level?

Pricing Objectives

To set the best pricing strategy, determine your company pricing objectives. In some cases, the goal may
simply be to recover costs and survive, while in others, the objective may be to maximize unit profit, the
number of units sold or the number of customers served. Some companies set prices high to signal that the
product or service is a quality leader. Or a company may want price stabilization to maintain a steady profit.
For example, in late 2009, the Dallas Morning News increased its online subscription prices by 43 percent to
boost revenue and signal that it is a high-quality product. At the same time, editors admitted earlier strategies
to keep the paper cheap were based around increasing circulation, not revenue.

Pricing Method

In an article in Bloomberg BusinessWeek, Rafi Mohammed states that 90 percent of companies simply mark up
costs and do not take into account the value the product may offer compared to rival products. Mohammed
argues that price should be set instead based on overall sales strategy and objectives. Different pricing
methods can be used to achieve different objectives. For example, in cost-plus pricing, price is set at cost plus
a set profit margin. In target-return pricing, the price is set to achieve a target return. Value-based pricing sets
the price at a good value relative to similar products, whereas psychological pricing sets the price at what the
consumer will pay.

New Product Pricing

For new products, a pricing strategy is usually chosen to either maximize profit or maximize market share. A
common strategy to maximize profit is called skim pricing. In this strategy, companies set a high price to
attract customers who do not care as much about price and to signal the product or service is high quality. To
maximize market share, companies set a low price. This works well if there are cost savings from selling in
volume.

Price Discounts
Offering price discounts is another strategy used to meet marketing objectives. This strategy involves offering
discounts to some customers. The discount could be based on quantity purchased or method of purchase. For
example, cash purchasers could be offered a discount. Discounts may also be seasonal or promotional--for a
short time only--to increase short-term sales. Trade discounts may be used to increase the number of outlets
selling the product.

GMROI

Calculate Your Gross Margin Return on Inventory Investment – GMROI/GMROII

An important tool in analyzing inventory, sales, and profitability is gross margin return on inventory
investment (GMROI)—also known as GMROII. The GMROI calculation assists store owners and buyers in
evaluating whether a sufficient gross margin is being earned by the products purchased compared to the
investment in inventory required to generate those gross margin Money

Retail companies often find that the majority of their money can be tied up in inventory. It can be a company's
biggest asset and biggest liability at the same time. Retailers underestimate the cost of inventory in their
stores and often fail to realize that a product on the shelf that's not selling—known as not turning—and can
cost them money.

Understanding GMROI

Let's say that within the same year, XYZ Shoe Store sells boots for $100, which were purchased for $75. The
firm's gross margin is $25 per pair of boots and the inventory's median value throughout the year is $20. The
average inventory is the item price minus discounts plus freight and taxes.

The firm's GMROI, then, is Rs.25 for the boots divided by the median value of Rs.20, which equals 1.25%
(GMROI is Rs.25/Rs.20 = 1.25).

To calculate the median inventory value the firm would calculate the total value of all goods on hand at
specific dates throughout the year. If they do this calculation four times a year, they would total the four
values together and divide the result by four.

GMROI demonstrates whether a retailer can make a profit on their inventory. As in the above example, GMROI
is calculated by dividing the gross margin by the inventory cost. Keep in mind that gross margin is the net sale
of goods minus the cost of goods sold.

As long as the GMROI is higher than 1 (i.e., not in the negative), the company in question is selling its
merchandise for more than its cost. So, in XYZ Shoe Store's case, the revenue they earn on those boots is
1.25% of their cost.

Calculating GMROI
Find the average inventory at cost. Remember, the average inventory is item price minus discounts plus freight
and taxes. To calculate the average value, add the beginning cost inventory for each month plus the ending
cost inventory for the last month of the period in question. If calculating for a season, divide by 7. If calculating
for a year, divide by 13.
Calculate the gross margin of the item—or the net sale of goods minus the cost of goods sold. This is the
difference between what an item costs and what it sells for. It's also known as the gross percentage of profit,
or the margin.

Divide the sales by the average cost of inventory and multiply that sum by the gross margin percentage to get
GMROI.

The result is a ratio indicating the inventory investment 's return on gross margin.

Here's how that looks:

Annual Sales = Rs.150,000

Avg Inventory Cost = Rs.65,000
Gross Margin = 49%
Rs.150,000 / Rs.65,000 X 49% = Rs.1.13
So in this scenario, the retailer is making Rs.1.13 for every Rs.1.00 invested in inventory. Which is not great.
GMROI highlighted an issue. The retailer might consider a 49% gross margin satisfactory, but the numbers
imply otherwise.

Why GMROI Matters for Retailers

 Retailers need to be well aware of the GMROI on their merchandise because it allows them to
determine how much they are earning on for every dollar they invest. If the inventory isn't selling, it
may be priced too high, but marking it down too much will lead to a smaller gross margin.

 Of course, if XYZ Shoe Store wants to increase its GMROI on those boots, they could try selling them
for Rs.200. But then they run the risk of overpricing them and hurting potential sales. It's not worth
the risk if the boots are a good seller at that price, but it may be worth it if sales are slowing, or if the
demand is so great that the firm thinks customers would pay more.

 Performance Measure

 The GMROI calculation can be used to measure the performance of the entire store. However, it is
more effective if used for a particular department or category of merchandise.

 For example, XYZ would check GMROI for boots and shoes and accessories individually to ensure she
is getting the most return on her investment. Calculating GMROI by category is powerful because
overall numbers may initially seem good. However, the closer examination could show products that
are a "drain" on investment. If this is the case, the retailer can take action to resolve the problem.

MANAGING RETAIL BRAND: Branding strategy in Retails

Retail branding is a strategy based on the brand concept and which transfers it to a retail company. ... Retail
branding can be understood as a comprehensive and integrated marketing management concept, focusing on
building long term customer loyalty and customer preference.

Retailers as Brands

While in the past, the term brand has been applied mainly to manufacturer brands (such as Coca-Cola, Nokia
or Gillette), the brand concept can be applied to all kinds of products and services, including retailers. Some
authors define a brand as a name or formal sign. According to the American Marketing Association, a brand is
a “name, term, design, symbol, or any other feature that identifies one seller’s good or service as distinct from
those of other sellers”.

Other definitions, therefore, encompass the brand name (or brand logo, brand sign) and the branded product
to define a brand: “A brand is, therefore, a product, but one that adds other dimensions that differentiate it in
some way from other products designed to satisfy the same need”. Retail branding is a strategy based on the
brand concept and which transfers it to a retail company. A retailer’s “products” are his stores that can be
marketed in a similar way to a branded good. A retail brand is then a group of the retailer’s outlets which carry
a unique name, symbol, logo or combination thereof. While all retailers constitute brands to some extent,
some retail brands are strong, while many are not.
The term retail brand has to be distinguished from the term store brand. While retail brand refers to stores,
the term store brand refers to the product level and is used synonymously with private label.

Brand architecture refers to the internal structuring of the retailer’s brands and revolves around how many
and what kinds of offers are provided under a certain brand. Within the brand hierarchy, a retailer’s brands
can be divided into different levels. Retailers have brand names at the level of the retail company as a whole
(“corporate brand”), the retail stores, the merchandise (e.g. the store brands), and specific retail services (i.e.
banking services or loyalty programs).

Three general branding strategies can be distinguished at the level of the retail brand:

[1] An umbrella brand strategy, where all the stores of the company carry the same brand, in most cases
differentiated by a sub-brand;

[2] A family brand strategy, in which groups of stores of the retail company (usually different retail
formats) carry different brands, i.e. the brands are strictly separated;

[3] A mixed strategy, which applies an umbrella brand for some store formats and separates others by
using different brand names.

Principles of Successful Retail Branding

All retail marketing instruments affect the retail brand, as illustrated by the notion of the comprehensive retail
brand image, which is made up of a universe of interconnected associations. To develop a strong and
successful brand, three basic principles are mentioned in the literature:

• differentiation from competitors

• long term marketing continuity
• coherence of different marketing components.

BRAND EQUITY

FEW QUESTIONS AND ANSWER

What is brand equity with example?

Brand equity refers to the value added to the same product under a particular brand. This makes one product
preferable over others. This is brand equity which makes a brand superior or inferior to that of others. Apple:
Apple is the best example of brand equity

Brand Equity
Definition: Brand Equity refers to the additional value that a consumer attaches with the brand that is unique
from all the other brands available in the market. In other words, Brand Equity means the awareness,
perception, loyalty of a customer towards the brand.

What is brand equity in simple words?

Brand equity is a marketing term that describes a brand's value. That value is determined by consumer
perception of and experiences with the brand. If people think highly of a brand, it has positive brand equity. ...
Positive brand equity has value: Companies can charge more for a product with a great deal of brand equity

What is brand equity and why is it important?

Brand Equity is the value of a brand or can be summarized as the perceived value by consumers over other
products. The equity of your brand is important because, if your brand has positive brand equity, you can
charge more for your products and services than the generic products or other competitors.

What is Nike's brand equity?

Brand equity is a multidimensional concept that allows consumers' to evaluate a brand and determine its
perceived benefits. Nike has successfully created a strong brand by fulfilling the pillars of brand equity, which
include: brand loyalty, brand awareness, brand associations, and perceived quality.
What are the five benefits of brand equity?

Here are five of the major benefits you can expect to see when you have a strong brand:

[1] Customer recognition. Having a strong brand works to build customer recognition. ...
[2] Competitive edge in the market. ...
[3] Easy introduction of new products. ...
[4] Customer loyalty and shared values. ...
[5] Enhanced credibility and ease of purchase.

What is Apple's brand equity?

The brand equity is the value of customer preconceptions. A third of the value of Apple of the company is the
value of its brand. For example, Apple has a market cap or company value of $703.5 B, and a brand value of
$214.5 B, so 30% of the total value of Apple is wrapped up in its brands.

How do you value brand equity?

Determine the economic value of your brand's premium market position
Determine the price difference between your offering and generic offerings or offerings from lesser-known or
less-respected brands. ...
Multiply the price difference by the number of units sold.

What are the key elements of brand equity?

How to Build Your Brand Equity. Brand Equity, the value of a brand, is largely determined by four key
elements: brand awareness, brand attributes and associations, perceived quality, and brand loyalty.

How do you build brand equity?

These steps build from a base to form a brand equity pyramid.
Step 1 – Identity: Build Awareness. ...
Step 2 – Meaning: Communicate What Your Brand Means and What It Stands for. ...
Step 3 – Response: Reshape How Customers Think and Feel about Your Brand. ...
Step 4 – Relationships: Build a Deeper Bond With Customers.

How do you measure brand equity?

As you know, brand equity is the value of your customers' perceptions of your organization.

Ways to measure brand equity through related financial aspects include:

[1] Price premium over competition.
[2] Average transaction value.
[3] Customer lifetime value.
[4] Rate of sustained growth.

What is the difference between brand value and brand equity?

Brand equity and brand value are measures that estimate how much a brand is worth. The difference between
the two is that brand value refers to the financial asset that the company records on its balance sheet, while
brand equity refers to the importance of the brand to a customer of the company.

Is Apple a luxury brand?

Answer: No. Apple is just one of those brands who targeted at upper-mid class/10% class in Developing
countries. They cannot be called as Luxury.

What is Apple's value proposition?

Apple's value proposition. ... The value proposition convinces customers that the company's products and
services are the best among all the rivals so that they will buy the products. Apple is a company which has such
a great brand and a great value proposition

What are the 10 most valuable brands in the world?

Technology, finance, and retail brands dominated the list.

Here's a closer look at the 10 most valuable global brands:

1. Amazon.
2. Apple.
 3. Google.
4. Microsoft.
5. Visa.
6. Facebook.
7. Alibaba.
8. Tencent.
9. McDonald
10. AT&T

Brand Equity can be seen in the way the customer thinks, feels, perceives the product along with its price and
market position and also the way brand commands profit and market share for the organization as a whole.

Customer Brand Equity can be studied in 3 different ways:

Brand Equity can be seen in the way the customer thinks, feels, perceives the product along with its price and
market position and also the way brand commands profit and market share for the organization as a whole.

1. The Different Responses of a customer towards the product or service helps in determining the brand
equity. The way customer thinks about the brand and considers it to be different from the other
brands will generate a positive response for that brand and will contribute to its goodwill.
E.g., Customer, have a positive response towards Mac laptops because of its anti-virus software.

2. The responses can be generated only if customers have sufficient knowledge about the brand; thus,
Brand Knowledge is essential to determine the brand equity. The Brand knowledge includes the
thoughts, feelings, information, experiences, etc. that establish an association with the brand.
E.g., Brand Association reflects the knowledge about the product such as woodland is recognized for
its rough and tough styling.

3. The different customer’s response that adds to the brand value depends solely on the Marketing of a
Brand. The strong brand results in substantial revenues for the organization and a better
understanding of the product among the customers.

Thus, the marketers study the Customer-Based Approach wherein they study the response of a customer
towards the brand that can be reflected in their frequency of purchase. It focuses on customer’s perception
i.e. what they have read, felt, thought, seen about the brand and how it has helped them to satisfy their urge
of need.

RETAIL BRAND EXTENTION

Brand extensions are now a commonplace growth strategy for many companies. ... Some authors suggest that
brand extensions involve the use of a brand name established in one product class to enter another product
class, whereas a line extension uses the established brand name for a new offering in the same product
category.

What is brand extension example?

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-
developed image uses the same brand name in a different product category. The new product is called a spin-
off.

To provide value to companies, brands must first provide value to customers. But how do companies make
their brands valuable to customers? Several scholars claim that brand success hinges on creating an
uncontested market space. ... As such, brands can only compete on product quality and price.

Following are descriptions of the four primary ways you can extend a brand:
 Line Extension. The easiest way to extend a brand is to add branded products within the existing
product line.
 Category Extensions.
 Market Extensions.
 Geographic Extensions.
What are the types of brand extension?

Following are a few types of brand extension

 Companion product extension :

 Product form extension :
 Extension of company expertise :
 Customer franchise extension :
 Extension of brand prestige :
 Extension of brand distinction :
 Component brand extension :
 Customer base extension :

Why is brand extension important?

Brand Extension is the use of an established brand name in new product categories. ... Extending a brand
outside its core product category can be beneficial in a sense that it helps to evaluate product category
opportunities, identifies resource requirements, lowers risk, and measures the brand's relevance and appeal.

What is the difference between line extension and brand extension?

In short, line extension adds variety to its existing product for the sake of reaching a more diverse customer
base and enticing existing customers with new options. Brand extension refers to the expansion of the brand
itself into new territories or markets.

What is Multiple branding?

A Multi Brand strategy is defined as the approach of the company to market several similar and competitive
brands of the same company under the guise of different brand names. The idea of Multi-brand strategy is to
restrict or end the competition and increase the market share.

INTRODUCTION

Brand extension is using an existing brand to promote a product or a brand in a different category altogether.
It is also known as brand stretching which is a form of marketing strategy in which the company uses existing
brand equity to increase the brand equity of a new product.

[1] Companion product extension :

Companion products are a form of an extension which is very popular in the market with the
customers. the ultimate aim behind company product extension is to materialize or capitalize on the
complementary products, customers view both of them as together or jointly and therefore it offers a
scope of brand extension. For example, getting a Google cloud drive free with Gmail.

[2] Product form extension :

Line extension is when the brand is launched in a different form from the present form. If the
different product formed is an entirely new product category, it will be termed as a brand extension
rather than a product from the extension. For example, Google is extended now to the mobile phone
industry and called as Google Pixel.

[3] Extension of company expertise :

The extension can take a different form of product category since the expertise remains the same the
new product category also is equally good terms of quality. the expertise of a particular company in
extended to a new product category or a brand category is called an extension of company expertise.
For example, Sony which started as a player in Walkman is now serving mobile phones,
Smartwatches, speakers, headphones and other extended product categories.

[4] Customer franchise extension :

When a specific customer group has specific needs for the product the range which is extended is
called customer franchise product range. Customer franchise focuses on the needs of the customer
and ensures that customer satisfaction is obtained from the group. For example, Johnson and
Johnson have offerings for all ranges of customers like baby products, baby shampoo, etc.
 [5] Extension of brand prestige :

When new products are introduced into unrelated and entirely new product categories, under the
brand extension, it is termed an extension of brand image or brand prestige. The same popular name
is used for a range of unrelated products. usually, the names have been associated with the different
products for a long-time recharge now been extended with a new product category but using the
same old name. Allen Solly has a range of garments for men and women but when it extends into
footwear it would be termed an extension of brand prestige or brand image.

[6] Extension of brand distinction :

Brands have been unique in terms of an attribute or in terms of the benefit that they offer. And it is
this uniqueness that attracts the customer to the brand. The company that works backward to launch
a different product and obviates this distinction.

Example Apple has always promoted security and they have achieved this distinction by launching a
variety of products with amplified security. Apple tries to leverage new products on the same brand
distinction. Some might argue that innovation has been the brand extension of Apple but that was
true until 2017.

[7] Component brand extension :

A brand develops a close association with taste. since it is been in the market for a long time it enjoys
the proprietary association of the brand with the unique and distinctive taste. and this is the property
that the brand could leverage on in other products as well. example head and shoulders shampoo
which now comes in different flavors.

[8] Customer base extension :

The customer base is something that brands acquire over a long period and it is easier to extend that
bass to new product categories. This is effective when the customer base is huge and captive to some
extent. Example launch of Prepaid ForEx cards by Thomas Cook for its travelers. The customer base, in
this case, is extended to the new product.

Advantages of brand extension

[1] New entrant

The primary advantage of brand extension is it enters into entirely Newmarket which has scope for
growth. The new market offers increase profits and additional revenue generation for the
organization.

[2] Higher returns

Whenever an organization jumps into a new category of products with not only stretches itself but it
also ensures that in the long run the organization would be termed as a conglomerate with diverse
experience in different categories of products. This gets the organization higher profit levels which in
turn means better financial stability.

[3] Conglomerate:
If the brand extension works in the favor of the company will have a new product to the into manage
which will establish its status as a conglomerate. This grows the overall organization in every way
which pushes it into the big league of competitors.

Disadvantages of brand extension

[1] High risk

Venturing into the unknown always has higher risk and it is no different for brand extension. While
going into a new product may help to grow the revenue of the organization it may also backfire and
causes the organization higher losses. Hence before extending any brand, the organization should
ensure that the market is prepared to receive such an extension and should thoroughly know the
market of the extended product.
 [2] Failure

Failure of a brand extension will prove very costly to the company. This usually happens in the case of
the product extension which is not related to the company. Recent examples of brand extension
officers would be the acquisition of a medical device company Alcon by another multinational
pharmaceutical company Novartis. Novartis had the intention of extending the product line into
medical device markets but since they had no expertise in managing a medical device industry turned
out to be a failure. Alcon will be spun off in 2019.

[3] Parent brand failure

If the brand extension does not work out well, there are very high chances that the parent brand may
take the hit. The brand equity in the market goes down and both the child and parent product fail. For
example, in 2018, when Facebook CEO Mark Zuckerberg was accused of data scam, and the selling of
customer data to various companies, it took a hit for other brand extensions of Facebook like
WhatsApp and Instagram.

What are the brand values?

To some extent, finding the answer to the question “What are brand values?” means looking at your brand as
a whole. Most brands consist of a range of “external” attributes, including a verbal identity, which outlines
your tone of voice and personality, and your visual identity, which includes logos, colors, and fonts.

Four steps for finding your brand value proposition

It’s tempting to think of your brand value proposition as a bragging opportunity, but there’s more to a
company’s ideals than a list of powerful words and phrases. Your brand values definition has to mean
something if you want to give it power, which means that simply telling people that your company is generous,
thoughtful, and environmentally-conscious isn’t enough.

When you ask yourself “What are brand values?” you need to think about what truly matters not only to you,
but your co-workers, shareholders, investors, and customers too. The best brand value examples work
because they’re reflective of customer ideology, but they still embrace the passions of the business in
question.

Step 1: Discover what matters

To start the search for your core brand values, you’ll need to move beyond the preset box full of dime-a-dozen
company terms like “reliable”, “trustworthy”, or “friendly”. Those words might sound positive, but they don’t
describe what makes your company powerful and unique. If you want your brand values to help you stand out
from the crowd, then leave the idealized terms behind, and think about what you’re truly passionate about.

Do you hate thoughtless brands, and want to make sure your company always cares for its customers? Do you
love the planet, and want to give something back with environmental measures? Choose ideals that appeal to
both your co-workers, and your customers, and start building a community based on them.

Step 2: Know your customers and competitors

As you’re going through your branding process, try to think impartially about the needs and expectations of
your customers, while considering the pre-existing solutions that your competition has to offer. You might find
that a quick competitor analysis helps you to find a gap in the market, or informs you that you need to re-think
your values to better differentiate yourself from existing offers.

The most powerful brand values are those that respond to an existing need in the marketplace. Rather than
trying to tell your customers that they should feel the same way as you about a particular concept, find out
what your customers already believe, and what they want to see from their favorite brands.
Step 3: Stand for something

How would your customers describe you to someone who was planning on using your brand? Would they say
that you have exceptional customer service? Would they tell their friends that you have the cheapest products
on the market – or the best quality this side of the UK? Find out what your customers already associate with
your company, and try to grow your brand values from that.

For instance, if you know your customers appreciate your personalized approach to customer service and
email marketing, then make “personalization and a willingness to go the extra mile” your brand value. Once
you’ve established it, fight for it with everything you do. Innovate new ways to customize your customer
experience, and advertise your efforts.

Step 4: Stay consistent

As we mentioned above, a brand value proposition is something that should remain the same over time. While
your logos, colors, and even your business name could change with time, the principles that you embody need
to stay strong if you want the best chance of real brand loyalty.

When constructing your brand values definition, think about how you can simplify what you stand for into a
few keywords and phrases that can act as guidance points for your business team. The more your workforce
understands your values, the more they can ensure that you maintain a consistent company image in
everything from your social media posts, to your offline events.

Brand value examples: Companies with killer core brand values

When you’re trying to find your core brand values, it can sometimes be helpful to look elsewhere in your
industry for a little inspiration. After all, some of the biggest brands in the world got to where they are today
because they understood how to portray their company ideals in the most efficient, and effective manner.

Sure, Apple, Coca-Cola, Nike, and similar brands all have powerful products and services to sell, but it’s their
brand value proposition that helped them to create a marketing and awareness plan that resonates with their
audience.

Here are just a few amazing brand value examples, to help you find your muse.

Brand values examples: Apple brand values

Apple has long had a reputation as an innovative, forward-thinking brand. However, the company has seen a
few hurdles on the way to success. Back in 1997, Apple was struggling to earn its share of the marketplace, so
they launched the “Think Different” campaign to clarify their brand values for their audience, employees and
shareholders alike.

The “Think Different” campaign showed that Apple is focused on making the best, most creative products in
the world while keeping technology simple for the masses. The Apple brand values identify the business as one
that focuses on quality over quantity. Today, Apple workers are more united than ever, creating seamless
experiences for customers both online and offline.

Brand values examples: Nike brand values

The Nike brand values link back to their motivational tagline “Just do it”. Originally, the tagline was designed to
fight back against the growing US obesity problem, but it also captures the company ideals of heroism and
drive.

Nike’s mission statement outlines that the business wants to “Bring inspiration and innovation to every athlete
in the world”. However, the Nike brand values further identify that anyone who has a body is an athlete in
their eyes. In other words, Nike is about encouraging success, motivating athletes, and reminding everyone (no
matter their fitness level) that they can achieve their goals.
Brand values examples: BMW brand values

Most customers associate BMW with high quality, premium products, and experiences. Part of that identity
can be linked to the products that BMW designs and produces. However, it’s worth noting that BMW has
worked to create a brand image that screams luxury. The BMW brand values revolve around a mission
statement that focuses on providing premium products and services to the automobile industry.

BMW doesn’t just make great cars, they create “sheer driving pleasure“. The brand holds itself to ideals of:

 Integrity: Asking customers for frequent feedback.

 Respect: Treating each customer with dignity and courtesy.

 Responsibility: Holding themselves accountable for their performance.

 Growth: Focusing on constant innovations and creativity.

 Each of these brand values comes together to create the idea of a truly sophisticated brand.

FEW QUESTIONS AND ANSWER

What gives a brand value?

According to Interbrand's website, their valuations are based on three key components: “the financial
performance of the branded products or services, the role the brand plays in purchase decisions, and the
brand's competitive strength.”

What are examples of brand values?

 Brand values examples: BMW brand values
 Integrity: Asking customers for frequent feedback.
 Respect: Treating each customer with dignity and courtesy.
 Responsibility: Holding themselves accountable for their performance.
 Growth: Focusing on constant innovations and creativity.

How does a brand create value for an organization or company?

To provide value to companies, brands must first provide value to customers. But how do companies make
their brands valuable to customers? Several scholars claim that brand success hinges on creating an
uncontested market space. ... As such, brands can only compete on product quality and price.

What are core brand values?

Your core brand values are the beliefs that you, as a company, stand for. They serve as the compass that
guides your brand story, actions, behaviors, and decision-making process. ... Building your brand around your
core values allows you to grow a business that you can be proud of and be passionate about.

What are the 4 branding strategies?

Branding consists of a set of complex branding decisions. Major brand strategy decisions involve brand
positioning, brand name selection, brand sponsorship, and brand development. Before going into the four
branding decisions, also called brand strategy decisions, we should clarify what a brand is.

What is branding and examples?

Branding often takes the form of a recognizable symbol to which consumers easily identify, such as a logo.
Common examples include the Nike "swoosh," the golden arches of McDonald's and the apple used by Apple
Computers.

What are the top 5 brands in the world?

Below are the top 7 global brands in 2019.

 Microsoft — brand value: $108.8 million.

 Coca-Cola — brand value: $63.4 million.
 Samsung — brand value: $61 million.
  Toyota — brand value: $56.2 million.
 Mercedes-Benz — brand value: $50.8 million.
 McDonald's — brand value: $44.53 million. ...
 Disney — brand value: $44.3 million. ...

What are the 8 core values?

Some Types of Core Values
 Dependability.
 Reliability.
 Loyalty.
 Commitment.
 Open-mindedness.
 Consistency.
 Honesty.
 Efficiency.

What are the methods of branding?

Four Methods Of Strategic Brand Building

 Branding By Thinking. In this method, brand strategy is approached in a rigorous, centralized and
formal business planning process. ...
 Branding By Imagery. ...
 Branding By User Experience. ...
 Branding By Self Expression.

What is a branded product?

A branded product is one that is made by a well-known manufacturer and has the manufacturer's label on it.
[business] Supermarket lines are often cheaper than branded goods.

What is the difference between marketing and branding?

In a nutshell, branding is who you are—and marketing is how you build awareness. Branding is your strategy,
while marketing encompasses your tactical goals. To determine who your brand is, you need to ask yourself
several questions.

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