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RETAILING

Retailing is the set of business activities that


adds value to the product and services sold to
consumers.
It include all the activities involved in selling
goods or services to the final consumer for
personal ,non-business use.

Concepts
Variety(Breadth of merchandise): It is the
number of merchandise category a retailer
offers.
Assortment (Depth of merchandise): It is the
number of different item in a merchandise
category.
Stock keeping unit(SKU)is the each different
item of the merchandise.

Functions
Providing an assortment of product and
services.
Breaking Bulk
Holding Inventory
Providing Services
Convenient location


Economic significance of retailing
Effective distribution channel(Vertical
Integration)
Developing innovative products
Support for community
Social Responsibility
The retail management decision
process
The world of Retailing :
Introduction
Types of retailers
Multichannel Retailing
Customer buying behavior
Retailing Strategy:
Retail marketing strategy
Financial strategy
Retail location
Site location
Organization structure and HRM
Information system and supply chain management



The retail management decision
process
Merchandise Management:
Managing merchandise assortment
Merchandise planning system
Buying merchandise
Pricing
Retail communication mix
Store Management:
Managing the store
Store layout design and visual merchandising
Customer service

Evolution of retails
Traditional Formats:
Haats
Mandis
Established Formats:
Kirana shops:
Convenience stores
Department stores
Company showrooms
Cooperative stores
Pan/ beedi shops





Evolution of retails in India
Emerging Formats:
Exclusive retail outlets
Hypermarket
Speciality malls
Multiplexes
Fast food outlets
Service galleries

Classification of retail format
(Types of retails )
Store based retailing:
Non-store based retailing
Service retailing
Classification of Retail formats
Store based Retailing:
1)Form of ownership:
Independent retailer
Chain retailer
Franchise
Leased Department
Consumer cooperatives
Store Based Retailing
2)Merchandise offered:
Convenience store
Supermarkets
Hypermarkets
Speciality Stores
Departmental stores
Off price retailers
Factory Outlets
Catalogue showrooms
Category killers
Warehouse clubs


Convenience store
The product range covers the basic
requirements in food and grocery.
The store size ranges from3000-8000 sq.ft.

Super markets
Large , low cost, low margin ,high volume, self
service operations designed to meet the need
for food groceries and other non food items.
It ranges from400 sqm to 2500 sqm ,selling at
least 70% of food items.



Hyper market
It is the combination of supermarket and a
department store selling wide range of food
and non food items.
Sales area between 5,000 and 15,000 sq m .
Discounted price.
A destination offer.
At least 35% of selling space devoted to non
grocery product is termed as a hyper market.
Specialty Store
A store specializing in a particular type of
merchandise.
It would operate in an area under 8,000 sq feet .
Narrow product line , with deep assortments in
the product line.
Clearly defined target market.

Eg:Chamosa,Viveks
Department store
It varies from20,000 to 40,000 sq ft and stock
anywhere between 50,000 to 1,00,000 SKUs
They have separate departments on several
floors.
They depend on food ,clothing and home
related items for at least 10% but less than
70% of their sales.

Non-store retailing
Direct selling
Mail order
Telemarketing
E-tailing
Information kiosks
Automated vending
The cash and carry


Service retailing
Banks
Car Rentals
Video Rentals
Airlines
Education
Health care
Features of service retailing
Intangibility
Simultaneous production and consumption
Perishability
Inconsistency
Drivers of retail change in India
Socio economic factor
Changing Income profiles
The age factor
The changing role of women
The changing consumption basket
Increase credit friendliness
Geographical dispersion of market potential
FDI policy
51 per cent foreign investment in single brand
Retail with prior Government permission.

Single-brand retailers such as Nike, Damro,
Louis Vuitton, can operate now on their own.
FDI is allowed through any of the
following methods:
Hi-Tech items
Social sector items
Medical and diagnostic items
Item sourced from Indian small sector with
technology provided by foreign collaborator
Two-year Test marketing
FDI
100% FDI is allowed on specific approval basis
In case of trading companies in India for carrying
out any of the following:
1)Export Trading
2)Bulk imports
3)Cash and carry
4)Sales substantially to group companies.
Franchising
Joint Ventures
Manufacturing facility
Distribution offices
Wholesale trading
FDI
FDI
Franchise agreements Most widely used
entry route by multinational retailers
Cash and Carry wholesale trading
100% FDI is allowed in wholesale trading
which involves building of a large distribution
infrastructure to assist local Manufacturers
Metro AG of Germany
FDI
Strategic licensing agreements
Foreign company enters into a licensing
agreement with a domestic retailer

Porters five forces with respect to
Indian retail sector
Threats of new entrants
Threats of substitutes
Bargaining power of suppliers
Bargaining power of buyers
Intensity of rivalry
Indian retail market
Highly fragmented
Low entry barriers
Absence of economies of scale
High transportation cost
Diverse market need
High cost of real estate
Lack of adequate infrastructure

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