Retail Management Functional Principles and Practice

BY

GIBSON G. VEDAMANI
By : Roohi Kanwal Shaikh Session-1 Class-BBA.1V

Lecture 1

CHAPTER 1. INTRODUCTION TO RETAILING CHAPTER 2. TRENDS IN RETAILING

By : Roohi Kanwal Shaikh Session-1 Class-BBA.1V

RETAIL MANAGEMENT

WHAT IS THE NATURE OF THE SUBJECT ?

Retail Management

Case Studies

Concepts Case Studies Applications

Concept

Retail Management

Application

CHAPTER 1 & 2 : INTRODUCTION

1. 2. 3. 4.

What is Retailing? Retailing and Marketing Mix Retailing at Global level Prospects of Retailing in Central Asia (Pakistan / India)

WHAT IS RETAILING?
The word retail came from French word RETAILLIER which mean to cut a piece off or to break bulk. In simple it means the first hand dealing with customer Retailing is defined as selling products to consumers for their personal use. A retailer is a reseller (i.e., obtains product from one party in order to sell to another) from which a consumer purchases products.

WHAT IS RETAILING?
Retailing

consists of the sale of goods or merchandise for personal or household consumption either from a fixed location such as a department store or kiosk.
Customer
Wholesaler Retailer

Manufacturing

Retailers

are at the end of the supply chain. Marketers see retailing as part of their overall distribution strategy Some Companies use Vertical Integration : Wal Mart, HKB, KMart

RETAILING
Retailing Role in Distribution
Manufacturer Brand A Manufacturer Brand B Manufacturer Brand C

Wholesaler
Retailer Brand A Brand B Brand C Brand D

Wholesaler
Manufacturer Brand D

WHAT IS RETAILING?
Retailing

involve business activities from end to end. (Mean retailing starts right from the design stage to selling stage) EXAMPLES: Motels, Videotape Rental, home delivered Pizza, CDNOW, PKMall, Cash-n- Carry, Makro, HKB, Wal Mart, Kmart, Larkana Backers, City Bakers, Fashion Valley, Cable TV, Karachi etc.

FUNCTIONS PERFORMED BY RETAILER

Providing

an assortment of Goods and Services Bulk

Breaking

Holding

Inventory Services

Providing

PROVIDING GOODS AND SERVICES

Normally

a super market carry 20,000 to 30,000 different products for customers to choose from wide selection

Variety What

will happen if each manufacturer will open his own store?

New

trends : Play it Again Sports,

BREAKING THE BULK

Reduce cost for manufacturers and wholesalers

Important for both consumer and manufacturer

HOLDING INVENTORY
Keep

the inventory for all products which already broken into user friendly sizes and quantities for consumer as he has limited place

Important

Really

important in the case of perishable items

PROVIDING SERVICES
Easier to buy and use products Offer Credit Testing of Products before buying Salespeople to answer any question Multi channel Retailer (24 hour Service) Seven Eleven Home Delivery

RETAILING AND MARKETING MIX

Retailing

is important part of marketing mix Retailing it self include all elements of product, place, price, presentation and promotion. Place is related to the distribution of products through many locations Products are introduced through Retail stores Products performance is checked through sale at stores

RETAILING AND MARKETING MIX

Retail

Stores are Point of Sale (POS) or Point of Purchase (POP) How? stores are Communication Hubs

Retail They

spread information through different channels

Retailing

has great Channel Power

PAKISTAN RETAIL INDUSTRY

With

an estimated 150 million consumers, Pakistan is the worlds ninth largest market. Economic growth, which was averaged about 5 percent annually for the past decade. One of the major objectives of Pakistans government is to restore investor confidence and to implement broad economic reforms. Although per capita income remains low (about $1085), there is a large and growing consumer class (estimated at about 25 percent of the total population). The average Pakistani consumer spends 42% of her income on food only.

RETAIL AT GLOBAL LEVEL

Most

of big economies depends upon retail sector. By 2010 around 17% of total US work force (26 Million people) are employed in retailing and it has growing trend World total sale $6.6 trillion , Ist in the world 50 fortune 500 companies are in retail 25 of the Asian top 200 firms are retailers Wal Mart s turnover is 1/3 of India's GDP 10% of the worlds billionaires are retailers

RETAIL AT GLOBAL LEVEL

Retail formats have evolved in three phases

Category & Quality

Super market, Dept, Specialty Stores / Metro/ Tesco Discount Stores / Kmart

Category & Price

Ist Phase 2nd Phase

Product Rang & Price

Hypermarkets/ Carrefour

3rd Phase

GLOBAL FACTORS AFFECTING THE RETAILER

Cross Border Movement Consolidation

Migration of format

KEY DRIVERS OF RETAILING

Consumer Pull Rising Incomes Explosion of Media Change in Consumer behavior Consumerism Cycle Rural Market are waking up Establishment of Supply Chain

KEY DRIVERS OF RETAILING

Emergence of Hubs of Retail Activity Change in Scale of Operation Entry of Corporate Sector Expansion of Family Owned business New Entrepreneurs Foreign Retailers Technological Impact

PAKISTAN RETAIL SECTOR

60 50 40 30 20 10 0 Market Share Supermarkets Traditional Wet 60

PAKISTANS RETAIL INDUSTRY

The development of true supermarket chains is still required.

Most "semi-supermarkets" are located in Pakistans two major cities, Karachi (population 10 million) and Lahore (population 7.5 million) and their popularity is increasing slowly largely because Pakistani consumers assume prices in supermarkets must be higher due to higher overhead and investment costs. A fast expanding distribution infrastructure has helped to improve marketing in rural areas. Cold storage and freezer space remains in short supply

PAKISTANS LABOR FORCE

Pakistans

labor force is still concentrated in agriculture (48.4%); only 17.4% are employed by the industrial sector with 11.5% in the manufacturing industry. This figure shows that albeit the success of the industrial sector, it has not been able to produce a comparable amount of jobs.

ASSIGNMENT 1

Search the other new trends in retailing and make report.