Retail Management

A. K. Kher
Strategic Retail & Planning
Process
1. Define the business mission
2. Conduct a situation audit, market
attractiveness analysis, competitor analysis,
self analysis
3. Identify strategic opportunities
4. Evaluate strategic alternatives
5. Establish specific objectives & allocate
resources
6. Develop a retail mix to implement strategy
7. Evaluate performance & make adjustments
Retail Format
 Merchandise  Visual
 Location merchandising - 610
 Layout  Promotion
 Interior design  Advertising
 Exterior design  Personal selling
 Services - 62  Pricing
Vendors - Relative Advantages &
Disadvantages
Impact on Mfr Pvt. label Licensed Generic
Store

Loyalty ? + ? +

Image + + + +

Traffic + + + +

Selling & + - + ?
Promo exp
Restrictions - + - +

Differential - + + ?
Advantage
Margins ? ? ? ?
Vendors - Buyer Relationships
1 2 3 4

Time horizon short long long long

Concern for low low medium high

other party

Trust low low medium high

Investment in low low low high

relationship

Nature of Conflict / cooperation accommodation coordination

relationship bargaining

1= One time market transaction 2 = Functional

3 = Relational 4 = Strategic
Communication Process
 The idea of a source process of
encoding to produce a message to be
carried by people or media in the form
of promotional methods to receivers
who go through the process of decoding
the idea or message.
Communication Process
 The idea of a source process • Product
of encoding to produce a • Price
message to be carried by • Where to
people or media in the form buy
of promotional methods to
receivers who go through the
• Brand/store
image
process of decoding the idea
or message. • Services
offered etc
Communication Process
 The idea of a source process • Retailer
of encoding to produce a
message to be carried by
people or media in the form
of promotional methods to
receivers who go through the
process of decoding the idea
or message.
Communication Process
 The idea of a source process • Signs
of encoding to produce a • Symbols
message to be carried by • Color
people or media in the form
of promotional methods to • Picture
receivers who go through the • Voice
process of decoding the idea • Written
or message.
Communication Process
 The idea of a source process • Sales people
of encoding to produce a • In-store
message to be carried by displays
people or media in the form
of promotional methods to
receivers who go through the
process of decoding the idea
or message.
Communication Process
 The idea of a source process • Advertising
of encoding to produce a • Sales
message to be carried by promotions
people or media in the form • Personal
of promotional methods to selling
receivers who go through the
• Publicity
process of decoding the idea
or message.
Communication Process
 The idea of a source process • Customers
of encoding to produce a
message to be carried by
people or media in the form
of promotional methods to
receivers who go through the
process of decoding the idea
or message.
Communication Process
 The idea of a source process • Selecting
of encoding to produce a • Sorting
message to be carried by
people or media in the form
of promotional methods to
receivers who go through the
process of decoding the idea
or message.
Communication Process
 The idea of a source process • Desired
of encoding to produce a outcome?
message to be carried by
people or media in the form
of promotional methods to
receivers who go through the
process of decoding the idea
or message.
Personal Selling - why sales are
lost
1. Show disinterest - talking to other
customers/employees
2. Making mistakes - acknowledge and
say sorry
3. Appearing too anxious
4. Talking down other brands/outlets
5. Arguing
6. Being too long winded
7. Lack of courtesy
Personal Selling - why sales are
lost Cont’d

8. Showing favoritism
9. Too hurried
10. Embarrassing the customer
11. Misrepresentation
12. Lack of product information
13. Wasting time
14. Getting too personal
Strategic Management
 Develop retail strategy
 Identify the target market
 Determine the retail format
 Design organizational structure
 Select locations
Merchandise Management
 Buy from vendors - locate, evaluate,
negotiate, place order
 Control merchandise inventory -
develop budgets, allocate to stores,
review stock positions
 Price merchandise - set initial prices,
adjust prices
Store Management
 Recruit & train personnel
 Plan work schedule
 Evaluate performance
 Maintain store facilities
 Locate and display merchandise
 Sell merchandise
 Repair and alter merchandise
 Provide customer service
 Handle complaints
 Take physical inventory
 Prevent shrinkage
Admin/Operations Management
1. Promote the firm, its merchandise and
services:
• Plan communications
• Develop budgets
• Select media
• Special promotions
• Design displays
• Public relations
Admin/Operations Management
cont’d
2. Manage human resources:
• Personnel policies
• Recruit, train, manage
• Plan career paths
• Keep employee records

3. Distribute Merchandise:
• Locate warehouses
• Receive, mark, label, store and ship
• Return merchandise to vendors
Admin/Operations Management
cont’d
4. Establish financial controls
• Forecast sales, cash flow and profits
• Provide financial information
• Raise capital
• Bill and provide credit to customers
Retail Manager - Required Skills
 Management skills
– Master your job
– Understand authority and responsibility
– Develop a policy of honesty and integrity
– Deal with problems immediately
– Explain procedures and changes clearly
– Look for better methods
– Learn willingly and accept criticism
– Think positive
Retail Manager - Required Skills
Cont’d
 Leadership skills
– Develop an ability to influence others to achieve
goals
– Have human skills: motivate people, understand
needs & promote cooperation

 Technical Skills - knowledge to perform

various duties, tasks, jobs etc

 Conceptual skills - ability to see the “big

picture”
Cues Customers Use To Evaluate
Retail Services
 Tangibles
– Appearance of store
– Display
– Appearance of sales people

 Understanding & knowing customer

– Providing individual attention
– Recognizing regular customers
Cues Customers Use To Evaluate
Retail Services Cont’d
 Credibility
– Honoring commitments
– Trustworthiness of sales staff
– Guarantee/warranty provided
– Return policy

 Courtesy
– Friendliness
– Respect
– Interest shown
Cues Customers Use To Evaluate
Retail Services Cont’d
 Information provided to customers
– Explanation of services and cost
– Communications re: special offers
– Assurance re: problem solving

 Access
– Convenient location
– Shopping hours
– Access to manager
Cues Customers Use To Evaluate
Retail Services Cont’d
 Competence
– Knowledge of skills and employees

 Responsiveness
– Returning customer calls
– Giving prompt service

 Reliability
– Accuracy in billing
– Performing service as promised
Retail Manager - Some Do’s &
Do Not’s
 Demonstrate organized thinking
 Know what and when to delegate
 Be fair
 Give recognition
 Let people know how they are doing
 Answer questions fully and honestly
 Set goals and build work schedules
 Accept changes
 Treat everyone as individuals
 Do not pass the buck
Retail Manager - Causes of
Discontent
 Failure to receive credit for ideas and
suggestions
 Where does one stand with regard to
performance
 Not being kept informed
 Failure to settle grievances
 Favoritism
 Criticism in presence of others
 Remaining aloof - not accepting opinions
 Not being held accountable
Personal Characteristics Needed To
Start & Manage Own Business
 Are you a leader?
 Do you like to make your own
decisions?
 Do others turn to you for help in making
decisions?
 Do you enjoy competition?
 Do you have willpower and self-
discipline?
 Are you well organized?
Personal Characteristics Needed To
Start & Manage Own Business cont’d
 Do you plan ahead?
 Do you like people?
 Do you get along well with others?
 Do you like being your own boss?
 Are you physically fit?
 Are you a hands-on manager?

 If you answered YES to most of the

questions, then you have it in you.
Demands Of Starting Your Own
Business
 It may require 12-15 hour days without a
break
 Huge workload and rigorous schedule
 Require emotional strength to handle strain.
 Temporary lowering of living standard
 Will you family go along?
 May lose your savings?
 Do you believe in your capabilities?

 Is the answer YES to the above questions?

Questions For Checking
Marketing Plan’s Feasibility
1. Can you clearly identify and briefly discuss
the business you plan to start?
2. Can you clearly define the retail format and
mix you plan to offer?
3. does your retail offering satisfy an unfilled
need?
4. Will you be competitive based on
merchandise quality, assortment, price and
quality?
5. Will your retail offering serve an existing
market where demand exceeds supply?
Questions For Checking
Marketing Plan’s Feasibility cont’d
6. Do you know who your customer will be?
7. Do you know where your customers live?
8. Will your promotional programmes be
effective?
9. Do you know how your business compares
with your competition?
10. Will you be conveniently located for people
you plan to serve?
Supply Chain Management
 This is an integrated approach towards
managing the flow of physical goods right
from sourcing of raw materials to the
delivery of finished goods.
 The main objective is Customer
Satisfaction.
The necessary ingredients are:
1. Information access
2. Training
3. Confidence building
Salient Features of SCM
1. Customer is the focus of all operations.
2. Retaining existing customers and adding
value to them on a continuous basis
through closer interaction and
understanding of their problems.
3. Streamline operations and remove road
blocks between customer and raw material
supplier.
4. Keep fixed costs minimal by out sourcing
non core activities.
5. Eliminate paperwork
Salient Features of SCM Cont’d

6. Reduce inventories and facilitate J.I.T.

7. Ensure transparency at all levels and
operate as single integrated unit.
8. SCM is a customer synchronize positive
technique.
9. Avoid multiple sourcing. Build confidence
through long-term supply contracts.
10. Help continuous product improvement and
cost reduction.
SCM - Logistics For Customer
Satisfaction
1. Network design
2. Information technology
3. Transportation
4. Inventory and storage
5. Warehousing
6. Material handling
7. Packaging