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CU-BBA-SEM-V-Retail Management-Second Draft

Published by Teamlease Edtech Ltd (Amita Chitroda), 2022-02-26 02:31:02

Description: CU-BBA-SEM-V-Retail Management-Second Draft


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First Published in 2021 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event, Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. CONTENT 2 CU IDOL SELF LEARNING MATERIAL (SLM)

Unit 1: Retail Management ................................................................................................... 4 Unit 2: Retailing.................................................................................................................. 27 Unit 3: Retail Market Strategy............................................................................................. 49 Unit 4: Retailing And System.............................................................................................. 77 Unit 5: Retailing And Customer Support System................................................................. 94 Unit 6: Merchandise Management Process....................................................................... 109 Unit 7: Merchandise Management Process....................................................................... 121 Unit 8: Retail Communication ......................................................................................... 132 Unit 9: Retail Marketing Environment ............................................................................. 148 Unit 10: The Retail Marketing Segmentation.................................................................... 158 Unit 11: Store Location And Layout................................................................................. 168 Unit 12: Retail Merchandising.......................................................................................... 181 3 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 1: RETAIL MANAGEMENT STRUCTURE 1.0 Learning Objectives 1.1 Introduction 1.2 Retailing 1.3 Role of Retail in Marketing Channels 1.4 Characteristics of Retailing 1.5 Nature of Retailing 1.6 Importance and Scope of Retailing 1.7 Retail Classification 1.8 Retail Formats 1.9 Summary 1.10 Keywords 1.11 Learning Activity 1.12 Unit End Questions 1.13 References 1.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the retailing function  Describe the role and importance of retailing  State the nature and scope of retailing  Analyse the types of retail formats 1.1 INTRODUCTION Today retailing is one of the booming industries in the world and occupies a very important place in the economics of any country. It not only contributes to country’s GDP but also largest provider of employment in the private sector. This industry is undergoing significant transformations from last few decades. The changing consumer demands, advances in digital technology have brought several structural changes in the sector. The rise of modern retailing 4 CU IDOL SELF LEARNING MATERIAL (SLM)

over the traditional retailing and the recent emergence of online retailing are few of the many revolutionary changes the industry is witnessing today. Retailing is the last stage in the distribution process from supplier to consumer. It adds value in terms of bulk breaking and providing a wide variety of goods and services to consumers as per their needs. Retailing involves more than just selling tangible products. Hotel accommodation, doctor’s consultancy, buying of a train ticket, dry cleaning, home delivery of food, also considered as retail transactions. The selling need not necessarily take place through a store. In this chapter, we look at the framework of retailing, the growing importance of retailing in the overall marketing strategy, and the traditional and modern retail formats pursued by retailers in India and around the world. 1.2 RETAILING: ACCORDING TO PHILIP KOTLER, ‘RETAILING INCLUDES ALL THE ACTIVITIES INVOLVED IN SELLING GOODS OR SERVICES TO THE FINAL CONSUMERS FOR PERSONAL, NON BUSINESS USES’. Retailing is composed of a set of activities used to sell a product or a service to consumers for their personal or family use. It includes sales done to final consumers or end users who purchase the products for final consumption. The word ‘retail’ is derived from the French word retaillier, meaning ‘to cut a piece of’ or ‘to break bulk’. A retailer purchases goods or merchandise in bulk from manufacturers or wholesalers and then sells in smaller quantities. In this sense, ‘retailing’ is just the opposite of ‘wholesaling’ which comprises of sales in bulk. A common perception is that retailing involves only the sale of tangible products. However, it also includes the sale of services such as those offered at a restaurant, parlour, or by car rental agencies. Further, retailer can sell through store and non-store channels. 1.2.1 Definitions According to the report of the Definition Committee, America, “Retailing includes all activities incidental to selling to the ultimate consumer”. In the words of William J. Stanton, “A retailer or a retail store is a business enterprise which sells primarily to the ultimate consumers for non-business use”. “A set of business activities carried on to accomplishing the exchange of goods and services for purposes of personal, family, or household use, whether performed in a store or by some form of non-selling.” – American Marketing Association According to Candiff and still, “Retailing consists of those activities involved in the selling directly to ultimate consumers.” 5 CU IDOL SELF LEARNING MATERIAL (SLM)

1.2.2 Who is a Retailer? Any firm —manufacturer, wholesale or retail store —which sells something to ultimate consumers for non-business use, regardless of how it is sold (by person, telephone, mail or vending machine) or where it is sold (in a store or at the consumer’s home) is making a retail sale. Retailers purchase products for the purposes of reselling them to consumers in order to make a profit. Mail order business and automatic vending are also classified as a part of retailing. Retailers provide – 1) place utility, by making products available in a place where consumers want to buy them conveniently; 2) time utility, by storing and selling products at times when consumers want to buy; 3) possession utility, by facilitating transfer of ownership or use of products to consumers; and 4) form utility, retail services such as hairdressers, dry cleaners or restaurants, etc. 1.2.3 Retail Management Retail management includes all the steps required to bring the customers into the store and fulfil their buying needs. Retail managers perform specific activities, such as anticipating customer’s wants, developing assortments of products, acquiring market information, and financing. Retail management makes shopping a pleasurable experience and ensures customer comfort by aesthetically designed store atmospherics. In simpler words, retail management helps retail store to achieve its objectives while maximizing customer satisfaction. 1.2.4 Functions of a Retailer Retailer represents the final link in the distributive chain. Therefore, is responsible for the performance of several important marketing functions. Some of these functions are: 1. A retailer buys a wide range of products from different producers and offers all under one roof. 2. The physical movement and storage of goods for the supply to the final consumers. 3. The providing information concerning the nature and use of goods to the wholesalers and producers. 4. Identifying and informing about the market trends. 4. The standardization, grading and final processing of goods on behalf of producers. 5. The assumption of risk concerning the price, nature and extent of demand of goods as long as they remain unsold. 6. The financing of inventory and the extension of credit to consumers for a short period. 6 CU IDOL SELF LEARNING MATERIAL (SLM)

1.3 ROLE OF RETAIL IN MARKETING CHANNELS The distribution of finished products begins with the producer and ends at the ultimate consumer. Retailing is the last stage in a channel of distribution. A typical distribution channel is shown in Figure 1.1 shows; retailers often act as the contact between manufacturers, wholesalers, and the consumer. Manufacturer Wholesaler Retailer Final consumer Fig.1.1- A Typical Channel of Distribution Another job for retailers is communicating with both customers and manufacturers and wholesalers. To make they even more appealing, many firms now engage in omnichannel retailing, whereby a retailer sells to consumers through multiple retail formats such as physical stores, Web sites or mobile Apps to make shopping easier and to accommodate consumer desires. In present scenario, some retailers use multiple touch points: retail stores, mail order, Web sites, social media, tablets, smartphones, and a toll-free phone number, to reach out to their target customers. However, few manufacturers such as BATA, Eureka Forbes and Nike are not only manufacturers but also perform retail activities. 1.4 CHARACTERISTICS OF RETAILING: Retailing is a part of value chain and a distinguished activity in the process of marketing. It has a number of unique characteristics which make it the most important activity in the entire supply chain management. 1. A Retailer is the last link in the distribution channel. Retailer is in direct contact with the customer and has to communicate with him. Therefore the cultural factors, language, tone, style and mode of communication are to be devised in consideration of the customer. A retailer thereby serves both the customers and producer since he is the promoter and advertiser of the product and can influence the total sales in a big way. 2. It is the only point in the value chain to provide a platform for promotions. Promotional activities are performed by the retailer to a vast number of customers. Retailer provides information about features and quality of the product, convince and persuades them to buy a particular product. Here, the displays, store layout, categorization and assortment, visibility and marketing tactics of the seller play critical role in the sale of both durable and consumable products. A number of customers are influenced by the display, presentation, posters in the retailer store, since they do not have any fixed shopping list, a fixed brand 7 CU IDOL SELF LEARNING MATERIAL (SLM)

preference, a pre- determined need. This type of purchase is generally known as impulsive, unplanned or situational purchases. 3. Sales at the retail level are generally in smaller unit sizes. The average quantity of sales of products is relatively small as compared to wholesaler or producer. Mostly retailer sells products for household consumption. 4. Large number of orders. The retailer handles a large number of orders. Many products are bought on daily, weekly or monthly basis. Thus the numbers of transaction for retailer are high with a low volume. This is a tremendous task since every day a large number of customers are to be handled by the retailer and a number of products are sold. The retailer has to maintain a reasonable stock of various products and the inventory management is critical. 5. Provides a variety of products at a single place. The retailer handles a wide variety of customers and therefore keeps a large assortment of goods. The customer orientation is critical factor in retailing. 6. Location is a critical factor in retail business. The decision of location depends largely from the consumer point of view as against the economics and other rational factors. The location is determined by the needs and convenience positioning of the customers, the potential demand of products, supply of merchandise and positioning and image of the retail unit. However, retailing can also be done through online stores. 7. In most retail businesses services are as important as core products. The retailer’s service many times is more important than the brand, quality and loyalty of the product. It is the loyalty and trust of the retailer which is more important. Besides behavior of the seller, the packaging, timely service, credit verification, gift wrapping, convenient delivery, facility of buying back, prepare to change, various provision of guarantee and warranty are involved in retailing. 8. There are a larger number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density. The number of retail units is large enough since it has to ensure the accessibility of consumers in their close vicinity. The number depends upon the size and density of population along with the topography of the area. 9. Retailing can be organized (branded chain stores) or un-organized (traditional stores that we find in our neighborhood). 10. Various channels. In retailing the goods and services can be sold either in person, through mail, through telephone, through vending machines or the internet. 1.4.1 Service Based Retailing Goods retailing focuses on the sale of tangible (physical) products. Four unique aspects of service retailing, such as intangibility, perishability, inseparability and variability, affect relationship building and customer retention. The success of service based retailer lies in 8 CU IDOL SELF LEARNING MATERIAL (SLM)

service quality, customization, differentiation and timeliness of service, technological upgradation, and consumer-oriented pricing. 1.5 NATURE OF RETAILING 1. Part of Marketing: Retailing is a part of marketing activity. It helps the product to reach the final customer. This is also the goal of marketing. Thus retailing facilitates marketing activities by targeting a wide variety of customers. 2. Customer Centric: The whole concept of retailing revolves around the customer. Due to increased competition, all the retailers want to attract the customers. Retailers use various sales promotion methods such as discounts, etc., to lure the customers. 3. Multi-Dimensional: Retailing has many dimensions. They vary from local Kirana shops and kiosks to super malls selling multiple branded products. These days there is a manifold increase in the use of internet for buying and selling the goods. 4. Varying Geographical Locations: The geographical area of reach of retailers varies widely. It may vary from a local area market selling goods to local customers only to super malls who have a large variety of customers from different areas and even different cities. These days due to the increased use of internet, the retailers have customers from all over the country and even from abroad. 5. Transformational: Since the start of retailing as a full-fledged business, there have been huge transformations in it. These transformations generally are in the form of objectives of retailing (earlier profit driven, now customer focused), methods of retailing (from simple retail shops earlier to multi brand malls), the areas covered (earlier small areas now whole country or even other countries), the customers (from simple local customers to customers from all walks of life) etc. 6. Complex Management Process: Retailing seems like a simple process. But in reality it is a complex management process. Retailing involves retail stores being located in convenient places, arranging goods according to different price bands, selling goods in the quantities convenient to the customers, proper after sale services and a wide range of sales promotion measures to attract the customers. Thereafter, there should also be proper Customer Relationship Management (CRM) programmes to maintain long healthy relationships with the customers. 9 CU IDOL SELF LEARNING MATERIAL (SLM)

7. Assortment of Products and Services: Retailing involves a combination of goods and services. It is not at all possible for a retailer to survive in today’s world by offering just a single product. In order to be successful, a retailer needs to offer an assortment of goods and services. 8. Studying Demand Pattern: A retailer is required to study the current demand pattern of the products being offered by him in the market. By studying the demand pattern he can ascertain the quantity of goods he needs to buy in bulk from the wholesaler. In case he buys a huge quantity of goods without studying the demand pattern, he may have to face the risk of obsolescence of goods. Moreover, large stocks need large areas for storage. All these have to be arranged by the retailer. 9. Creation of Utilities: A retailer helps in creation of time and place utilities. Time utility is created when goods are made available at a particular time. The retailer creates time utility by storing the goods with himself and makes them available to the customers as and when needed. Place utility means making the goods available at different places away from the place of manufacture. Retailers make the goods available to the customers at various locations away from their manufacturing locations. 10. Private Branding and Labeling: The spurt in the retailing activity as resulted in creation of private brands. Private branding or labeling means buying products directly from the manufacturer and giving them own brand name by the retailer. With the increase in retailing there has been an increase in the exclusive retail stores selling products of particular brands only. For example, Big Bazaar, Reliance Trends, Reliance Fresh, Shopper’s Stop, etc., are some of the retailers who own and manage their store brands. According to a Neilson study food continues to dominate the private label market at 76 per cent of total sales. Packaged grocery dominates this market with about 53 per cent share of total sales. 11. Various Other Services: Retailing also includes various other services. These services include: (i) Providing Finance to the Customers: Many people cannot afford to buy costly products by paying a lump sum amount. Retailers solve this problem by providing easy finance terms such as zero interest payment to their customers. By doing so, they increase their customer base. For example, providing finance for refrigerators, cars, mobile phones, furniture, automobiles, etc. (ii) Providing after Sale Services: 10 CU IDOL SELF LEARNING MATERIAL (SLM)

Retailers also provide various after sale services such as free home delivery of the goods, free gift wrapping, etc. (iii) Installing the Products: Retailers help their customers in installing the items they have purchased. For this purpose they keep technicians and specialists with them. For example, installing electric chimneys at customers’ place. (iv) Display and Demonstration: The display and demonstration of the goods also affect the buyers’ decisions. Thus, retailers specially display and demonstrate their products according to the customers. Thus it can be said that retailing is a complex, multi-dimensional, transformational activity involving a variety of activities such as targeting customers, studying their demand patterns, dividing the product into small segments, attracting customers by providing various discounts, redemption points, loyalty bonus, coupons, free gifts, etc. Apart from these, retailing doesn’t end with the sale of goods. It also includes various after sale services like providing finance to customers, etc. Thus, it is very important to understand the nature of the retail market. 1.6 IMPORTANCE AND SCOPE OF RETAILING  Retail businesses contribute to the economy - Retailing is a major part of world commerce. Retail sales and employment are vital economic contributors, and retail trends often mirror trends in a nation’s overall economy.Retail share in the World GDP is 27% and 15-20% of the organized workforce.  Retail dominates the supply chain - Retailing is the last stage in a channel of distribution. Retailers often act as the contact between manufacturers, wholesalers, and the consumer. Retailers collect an assortment from various sources, buy in large quantity, and sell in small amounts.  Retailing provides maximum employment - Retailing is a major source of jobs. Retailing is one of the nation’s largest industries in terms of employment. In the United States alone, 15 million people—about one tenth of the total labor force—work for traditional retailers (including food and beverage service firms, such as restaurants).  Retailing offers scope for expansion in other countries– Retail provides a great opportunity to expand in international markets. A retailer who wants to extend their business by selling their goods in other countries opens stores in different countries to increase the number of consumers of their products. 11 CU IDOL SELF LEARNING MATERIAL (SLM)

 Provides Comfort and facilities for shopping - Shopping has become a pleasant experience because of all the facilities and comfort provided by chain stores, shopping malls, multiplexes, etc. people now don’t think shopping as work but they look forward to it and consider it as a stress releasing and family activity.  The lifestyle of the people is shaped by retailing - People highly depend on retail stores to lead a comfortable life. In present times trading is replaced by buying and selling goods which makes retail stores an important part of the society.  Retailing is an important subject area of study - Retailing is a separate subject of studies like management and marketing. Researches have been conducted and professionals being hired to make this sector flourish. In addition to this, academic journals on retailing are being published worldwide.  Provide services to the manufacturer - Another job for retailers is communicating both with customers and with manufacturers. Manufacturers are informed with regard to sales forecasts, delivery delays, customer complaints, defective items, inventory turnover, and more.  Provision of warehousing and storage - A retailer buys goods in advance from the manufacturer and reduces the problems of warehousing and storage for the manufacturer.  Advantages of an expert and specialist - Retailers are experts and have experience in selling products to customers. They have a better understanding of customers and their likes and dislikes because of this regular contact with them. He stores products as per the need of customers and sells them to customers in different sizes and shapes.  Creates utilities and value- Retailers are more efficient at performing the activities that increase the value of products and services for consumers. These value-creating activities include (1) providing an assortment of products and services, (2) breaking bulk, (3) holding inventory, and (4) providing services. Thus, retailer increases the value of the product by creating a place, time, and form utility in the distribution of goods. 12 CU IDOL SELF LEARNING MATERIAL (SLM)

1.6.1 Scope of Retailing With the increase in the purchasing power of the people and the rural reach of the retailers, the scope of retailing has increased manifold. The Indian retail sector is currently estimated to be at USD 396 billion and is expected to grow at 12% according to the study done by Deloitte. The Indian retail industry has over 12 million outlets, which is the largest number of retail outlets in the world. Indian retail sector contributes 22% to the GDP of the country and provides 8% employment according to the research and markets. India offers a very attractive market for retail investment and is ranked world’s fifth-largest global destination in the retail space. In FDI Confidence Index, India ranked 16 and As per Forrester Research, in 2020, India's retail sector is projected to reach US$ 1.3 trillion by 2024. The demography of India has also undergone a sea of change with a large number of the population being young workers in the age group of 24 years and nuclear families in urban areas along with increasing working women population. All these factors are driving the growth of the organized retailing sector in India which is about 7% currently and growing at the rate of 22% CAGR. As per the survey conducted by Deloitte the total retail spending in India is going to double in the next five years and the organized retail is estimated to be 21% of the retail expenditure. The food and grocery segment is the highest contributor of retail sector with major contribution from the traditional retailers and the modern retail will contribute primarily in the clothing and fashion segment. 1.7 RETAIL CLASSIFICATION 1.7.1 Organized and Unorganized Retailing: In the recent years the debate of organized as well as unorganized retailing has gained ground in India. This debate is in relation to the introduction of Foreign Direct Investment (FDI) in retailing. To understand all this, it is important to understand the concept of organized as well as unorganized retailing. i. Organized Retailing: In the past few years, the concept of organized retailing has also gained ground in India. It is a sector which has tremendous growth potential due to the favorable business environment and government policies. The organized retail includes big shopping malls, big complexes offering huge variety of branded goods and services. They provide quality products and try to provide value for money and make shopping a memorable experience. This type of retailing is known as organized retailing due to the fact that the trading activities in this sector are registered under some or the other act such as Sales Tax Act, etc. Due to this reason, the activities are guided by the provisions of the act under which a particular business is registered. 13 CU IDOL SELF LEARNING MATERIAL (SLM)

The scope of organized retailing is much wider as compared to unorganized retailing. It is more modern as well as customer centric in its approach. Such type of retail uses advanced technology for Management Information System (MIS), Supply Chain Management (SCM), as well as Customer Relationship Management (CRM). ii. Unorganized Retailing: As the name suggests the unorganized retailing is the kind of retailing that was traditionally prevalent in India. It is the kind of retailing which does not follow any statute or legal provisions and hence is not under the compulsion to maintain proper accounts. The types of retailers operating in unorganized sector are local Kirana shops, pavement vendors, mobile vendors, etc. Therefore the products and services may be sold at fixed locations or the vendor may be mobile. The maximum of the retailing business in India traditionally from unorganized sector and even today these continue to dominate primarily in the small cities and towns. The unorganized retailing provides employment to many people in the form of salesmen, helpers, etc. But as compared to the organized retailing, the employment generation capacity of the unorganized sector is much less. Moreover, the products and the services being sold by them may not be comparable to international products and services. 1.8 RETAIL FORMATS The basic characteristic which describes the different types of retailers is the retail mix or the various elements retailers use to satisfy their customers’ needs. These elements which are particularly important for classifying retailers are: the type of merchandise or services offered; the variety and assortment of merchandise; the level of customer service; store ambience and atmosphere and the price of the merchandise and soon. The retailing formats can be classified into following types as shown in the diagram: Fig. 1.2 - Classification of Retailing Formats 14 CU IDOL SELF LEARNING MATERIAL (SLM)

1.8.1 Ownership Based Retailing i. Independent Retailers: They own and run a single shop, and determine their policies independently. Their family members can help in business and have no paid workers. The ownership of the unit is generally passed on from one generation to next. The high number of independent stores is associated with the ease of entry into the marketplace, low capital requirements and no or simple licensing provisions. The biggest advantage is they can build personal rapport with consumers very easily. For example, stand-alone grocery shops, florists, stationery shops, book shops, etc. Competitive Advantages and Disadvantages of Independent Retailers: The following are among the advantages:  There is flexibility and ‘independence’ in choosing retail formats and locations strategy.  Investment costs for leases, fixtures, workers, and merchandise can be held down.  They frequently act as specialists in a niche of a particular goods/service category.  Strong control over their operations and strategies.  Decisions are centralized and layers of management personnel are minimized.  There is a certain image attached to independents, particularly small ones that chains cannot readily capture.  They can easily sustain consistency in their efforts since only one store is operated.  They are often free from unions and seniority rules.  Owner-operators typically have a strong entrepreneurial drive.  Their personal interaction with customers, flat organizational structure, and limited resources lead to efficient and effective customer oriented planning that improves profitability. There are some of the disadvantages of independent retailing:  In bargaining with suppliers, independent retailers may not have much power because they often buy in small quantities.  They generally cannot gain economies of scale in buying and maintaining inventory.  Due to financial constraints, small assortments are bought several times per year. Transportation, ordering, and handling costs per unit are high.  Operations are labour intensive, sometimes with little computerization.  They are limited in their access to certain media such as print and TV ads.  Overdependence on the owner as all decisions is made by one person, and there may be no continuity when the owner/boss is ill, or retires.  A limited amount of time is spent on long-run planning because the owner is continuously involved in daily operations. ii. Chain Stores: When multiple outlets are under common ownership it is called a chain of stores. Chain stores offer and keep similar merchandise. They are spread over cities and regions. These usually engage in some level of centralized purchasing and decision making. 15 CU IDOL SELF LEARNING MATERIAL (SLM)

The advantage is that the stores can keep selected merchandise according to the consumer preferences in a particular area. Chain dominance varies by type of retailer such as department stores, discount stores, grocery stores, stationery, beauty salon, furniture, and book store chains. For example, Big Bazaar, Pantaloons, BIBA, Westside, Shopper’s Stop, etc. There are also many large foreign chains such as Starbucks, KFC, McDonald’s, etc. Competitive Advantages and Disadvantages of Chain Stores: There are numerous competitive advantages for chain retailers:  They have more bargaining power due to their purchase volume and often obtain quantity discounts.  Large chains may also gain exclusive rights to certain items and have private-label goods produced under their brands.  Chains achieve cost efficiencies when they buy directly from manufacturers and in large volume.  Efficiency is also gained by sharing warehouse facilities, purchasing standardized store fixtures, and so on.  Chains use computers in ordering merchandise, taking inventory, forecasting, ringing up sales, and bookkeeping. This increases efficiency and reduces overall costs.  The chains with national or regional presence, can take advantage of a variety of media, from TV to magazines to newspapers to online blogs.  Most chains have defined management philosophies, with detailed strategies and clear employee responsibilities.  There is continuity when managerial personnel are absent or retire because there are qualified people to fill in and succession plans in place.  Many chains expend considerable time on long-run planning and opportunities and threats are carefully monitored. Chain retailers also have a number of disadvantages:  After chains are established, flexibility may be limited. Consistent strategies must be maintained throughout all units, including prices, promotions, and product assortments. It may be difficult to adapt to local diverse markets.  Investments are higher due to multiple stores and fixtures. There is higher investment in inventory too.  Managerial control is complex, especially for chains with geographically dispersed branches.  Lack of communication and delays in making decisions are particularly problematic. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

 Personnel in large chains often have limited independence because there are several management layers and unionized employees. Very few chains empower personnel and them more authority. iii. Franchises: These are stores that run business under an established brand name or a particular format of others based on franchising agreement. Franchising involves a contractual arrangement between a franchisor (a manufacturer, wholesaler, or service sponsor) and a retail franchisee, which allows the franchisee to conduct business under a brand name and a given pattern of business. The franchisee typically pays an initial fee and a monthly royalty (percentage of gross sales) in exchange for the exclusive rights to sell goods and services in an area. Small businesses benefit by being part of a large, chain-type retail institution. They can be of two types:  Business format. The entire business model is recreated for franchisee. Uniform stores, standardized product lines, and cooperative advertising foster a level of coordination. Good for restaurants and other food outlets and service retailing. For example, Pizza Hut, McDonald’s, Starbucks.  Product format. Here a franchisee gets the license to sell the products of franchisor. Franchisee operates independently with few rules from the other party such as sets hours, chooses a location, and determines facilities and displays independently. For example, Ice cream parlours of Amul, Nandini, Petrol Bunks, etc. Competitive Advantages and Disadvantages of Franchising: Franchising has many advantages to both franchisor and franchisee.  National or global presence is possible for franchisor much quickly.  Small capital required  Franchisee acquire well-known names  Operating/management skills taught by franchisor  Franchisee gets exclusive selling rights  Co-operative marketing possible Disadvantages of franchising are:  Oversaturation could occur sooner  Franchisors may overstate potential  Both the parties are locked into long term contracts  Agreements may be cancelled or voided  Royalties are based on sales, not profits  Ineffective franchised units may damage resale value, profitability 17 CU IDOL SELF LEARNING MATERIAL (SLM)

iv. Co-operative stores: owned and managed by consumers with the intention of selling necessity goods at lesser price. Consumer cooperatives are most popular in food retailing. Cooperatives are only a small part of retailing because they involve consumer initiative and drive; consumers are usually not experts in retailing functions, cost savings and low selling prices are often not as expected, and consumer boredom in running a cooperative frequently occurs. 1.8.2 Merchandise Based Retailing Merchandise based retailer are basically classified as food retailers and general merchandise retailers. The food-oriented retail formats are: convenience store, conventional supermarket, and food-based superstores. More staff is required to provide information, and demonstrate merchandise. For example, department stores have higher prices than discount stores because of their higher costs. Let us see some of these retailers in detail: i. Convenience Stores: Convenience stores offer only limited assortments and variety, and they charge higher prices than supermarkets. They target consumers who want to make quick and easy purchases. They also are exploring the use of technology to increase shopping convenience. The ease of shopping at convenience stores and the impersonal nature of many large supermarkets make convenience stores particularly appealing to their customers. For example, a mom-and-pop store, stores located near petrol pumps, 7-Eleven from US, etc. ii.Supermarkets: These are large stores with high volume and low profit margin. A conventional supermarket carries about 30,000 SKUs, limited assortment supermarkets, only stock about 2,000 SKUs. Self-service has enabled supermarkets to cut costs as well as increase volume. Personnel costs have reduced, and impulse buying increased. The car and the refrigerator have contributed to the supermarket’s success by lowering travel costs and adding to the life span of perishables. For example, Food Bazar and Tesco. iii. Hypermarkets: A hyper market is a combination of a departmental store and a super market. Thus, hyper market offers a huge variety of goods and services ranging from stationary items to groceries, from kitchen ware to electronic appliances, from furniture to jewellery, etc. It therefore provides a one stop shop to the customers. They target consumers over large area, and often share space with restaurants and coffee shops. The hypermarket can spread over the space of 80,000 sq. ftto 250,000 sq.ft. A hyper market usually offers huge discounts to the customers. The structure of the hypermarket resembles that of a huge warehouse and has a lot of parking space. Example- Big Bazaar, Hyper City, Vishal Mega Mart, Walmart from US. 18 CU IDOL SELF LEARNING MATERIAL (SLM)

iv. Specialty Stores: Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service. Specialty stores tailor their retail strategy with narrow assortment categories with high depth. Among the most popular categories of specialty stores are apparel, personal care, auto supply, home furnishings, electronics, books, toys, home improvement, pet supplies, jewellery, and sporting goods. They occupy at least 8000 sq.ft. Selling space. For example, Croma from India, High & Mighty from UK. v. Departmental Stores: they carry broader assortment categories with limited depth and offer good customer services. The store is divided into various departments such as and cosmetics, books and stationary, housewares goods, electronics, etc. The major departments are women’s, men’s, and children’s apparel, home furnishings, cosmetics, kitchenware, and small appliances. Examples are Shoppers Stop, Ebony, etc. vi. Discount Stores: Discount stores are retailers that offer a broad assortment at lesser price. Full-line discount stores confront intense competition from category specialists that focus on a single category of merchandise. They operate as a high-volume, low-cost outlet selling a broad product assortment for less than conventional prices. It is more apt to carry the range of general merchandise once expected only at department stores, including electronics, furniture, and appliances as well as auto accessories, gardening tools, and housewares. Less fashion-sensitive merchandise is often carried. Buildings, equipment, and fixtures are less expensive; and operating costs are lower than for traditional department stores and specialty stores. vii. Factory Outlets: A factory outlet is a manufacturer-owned store that sells closeouts, discontinued merchandise, irregulars, cancelled orders, and sometimes in-season, first-quality merchandise. Manufacturers can control where their discounted merchandise is sold. Outlets are profitable despite prices being up to 60 percent less than customary retail prices. viii. Category Specialists: By offering a complete assortment in a category, category specialists can “kill” a category of merchandise for other retailers and thus are frequently called category killers. Using their category dominance and buying power, they buy products at low prices and are ensured of supply when items are scarce. For example, Home Depot, Office Depot, Sapna, Decathlon, etc. ix: Flea Market: It is traditional, street selling where shoppers touch and sample items, and haggle over prices. Vendors used to sell only antiques, bric-a-brac, and assorted used 19 CU IDOL SELF LEARNING MATERIAL (SLM)

merchandise. Today, they also frequently sell new goods, such as clothing, cosmetics, watches, consumer electronics, housewares, and gift items. x. Shopping Mall: A shopping mall is a retail establishment whereby there is a mix of stores, food court, entertainment zones including gaming zones, movies and parking facilities. They occupy the place in the mall as tenants. Examples of malls are Ambience Mall, Gurgaon, Elante Mall, Chandigarh, etc. 1.8.3 Non-Store Based Retailing Non store based retailing means a retail format that is not confined to the walls of a particular area. It is the form of retailing where the retailer is in direct contact with the consumer at the workplace or at home. The consumer becomes aware of the product via email or phone call from the retailer, or through an ad on the television, or Internet. The seller hosts a party for interacting with people. Then introduces and demonstrates the products, their utility, and benefits. Buying and selling happens at the same place. The consumer itself is a distributor. For example, Amway and Herbalife multi-level marketing. Non-Store based retailing includes non-personal contact based retailing such as: i. Internet Channel: Online retailing creates an ‘endless showroom’ to help customers browse through thousands of products in all varieties, sizes, colours, and fabrics and to get contextual information. This endless showroom enables the customers to make a more informed decision and buy faster. All Web site elements including navigation, information search, product and price offerings, product availability, order processing, and shipment tracking, impact the informational and experiential value customers seek. For example, Amazon, Flipkart, Myntra. ii. Mail Orders: This is also called Catalogue store where a printed or electronic catalogues are sent to the customers through mail or other forms. The consumer can refer a product catalogue on internet and place order for purchasing the product via email/post. The use of catalogues is coming under attack from consumer groups that believe these are an unnecessary waste of natural resources. But catalogues are not going away. Their role is shifting from primarily generating sales to driving traffic to the Internet and physical stores. iii.Television Home Shopping: these are programs designed for cable channels where the product information along with demo is provided to customers at home. The three forms are 20 CU IDOL SELF LEARNING MATERIAL (SLM)

(1) cable channels dedicated to television shopping, (2) infomercials, and (3) direct-response advertising. Infomercials are longer ad programs, which are typically run for half an hour to forty five minutes. Direct-response advertising is shorter advertisements providing product information and contact numbers to place orders. Although most consumers with cable or satellite television access can patronize a television shopping channel, relatively few watch on a regular basis. Furthermore, most of the purchases are made by a relatively small proportion of viewers. The major advantage of TV home shopping is that customers can see the merchandise demonstrated either on their television screens or through streaming videos on the Internet. In response to the increase in cooking, decorating, do-it-yourself, and other lifestyle programming, home shopping retailers have incorporated more demonstrations into their programming in an attempt to educate their potential customers and create more drama. For example, Asian Sky shop. iv. Automated Retailing: also known as vending machine, are typically placed at any convenient places such as in offices or university campuses. The vast majority of automated retailing sales are from cold beverages, candy, and snacks. It is most convenient to the consumers and offers frequently purchased items round the clock. It eliminates use of sales personnel and allows 24-hour sales. Machines can be placed wherever convenient for consumers—inside or outside stores, in motel corridors, at train stations, or on street corners. v. Direct Selling: Direct Selling is a retail format which as the name suggests is a form of selling which involves personal contact with the customer. Further it can be divided into three types: (i) Party plan in which the seller invites his friends, neighbors and other acquaintances to his home for a party and displays the goods there. People see the displayed goods and buy them, (ii) Multi-level networks where there is a network of people who further appoint other people to work with them for distribution of goods for a commission. Many cosmetics selling firms are largely using this multi-level networks to sell their products, and (iii) Door to door selling where the salesmen are sent door to door to sell the goods to people. Sometimes this form of selling becomes a part of academic curriculum and helps to train students to sell their products. Mainly the articles like books, housewares items, kitchenware items, cosmetics, imitation jewellery are sold by this method. Tupperware and Amway use this method of selling their products. 21 CU IDOL SELF LEARNING MATERIAL (SLM)

1.8.4 Other Nontraditional Forms of Retailing i. Kiosk: A kiosk is a small shop generally seen at malls, airports, railway stations, bus stands, etc. They offer some specialized services. A kiosk can be one side or two sides open. At some places, they are not operated by human beings like ATMs.The video kiosk is a freestanding and interactive system that displays products and related information on a screen. It often has a touch screen for consumers to make selections. They can be placed anywhere, occupying less spaces are cost effective techniques for retailers. ii. Airport Retailing In the past, the leading airport retailers were fast-food outlets, tiny gift stores, and newspaper/ magazine stands. Today, airports are a major space of retailing. At virtually every large and medium airport, there are full-blown shopping areas. And most small airports have at least a fast-food retailer and vending machines for newspapers, candy, and so forth. The potential of this retail market is huge. Airport stores are expensive as they pay more rent. With growth in domestic and international air travel and many travellers waiting at airports after check ins and waiting for connecting flights, these locations are becoming more lucrative. 1.9 SUMMARY  Retailing includes selling of goods and services to final, personal or household consumers.  Retail formats can be grouped on the basis of ownership, store-based strategy mix, and non-store-based and non-traditional retailing.  Independent retailers have more flexibility, low investments, specialized offerings, direct strategy control, image, consistency, independence, and entrepreneurial spirit. However, have limited bargaining power, few economies of scale, labour intensity, and reduced media access.  Chains are multiple stores under common ownership, with some centralized buying and decision making. The advantages of chain stores are bargaining power, functional efficiencies, multiple store operations, computerization, media access, and planning. The problems are inflexibility, high investments, reduced control, and limited independence of personnel.  Franchising embodies arrangements between franchisors and franchisees that let the latter do business under established names and according to detailed rules. Franchisees benefit from small investments, popular company names, standardized operations and training, cooperative marketing, exclusive selling rights, and volume purchases. 22 CU IDOL SELF LEARNING MATERIAL (SLM)

 Consumer cooperatives are owned by their customers who invest, elect officers, and manage operations, and share savings or profits. They account for a tiny piece of retail sales.  Store based institutions may be classified into food-oriented and general merchandise. Food-oriented, store-based retailers include convenience store, supermarket, and a food-based superstore.  A wide range of general merchandise retailers involved with store-based strategy are: specialty store, category killer, department store, discount store, factory outlet and a traditional flea market.  Each of the major channels (stores, catalogue, and Web sites) offers unique benefits to customers. The store channel enables customers to touch and feel merchandise and use the products immediately after they are purchased. Catalogues and Electronic channels offer customer convenience of shopping from home. 1.10 KEYWORDS  Retailing: The business of selling services or products that will ultimately be sold to consumers. Includes manufacturers, wholesalers, and retailers.  Retailer: A fixed location, including store fronts, the internet, kiosks, and vending stations, that sell products or services to consumers.  Wholesaler: An individual or company that buys a product or service directly from manufacturer and sells to a retailer but does not sell this product or service directly to consumers.  Franchise: This is a way some businesses expand by distributing their goods and services through a licensing relationship. A franchisee uses the brand name and business format of a franchisor in this agreement.  E-tailing: Short for electronic retailing, this is the practice of selling products on the internet. It is a modern word and widely used by people.  Breaking Bulk: selling the products in smaller quantities tailored to individual consumers and household consumption patterns and thereby reducing transportation and inventory costs. Consumers: The final purchaser, or end user, of any product or service.  Retail chain: A retail chain is a group of stores that are owned by the same company. They have many stores in the across country or globe which are all similar in appearance and in the product selection they offer. Ex: Bata stores. 23 CU IDOL SELF LEARNING MATERIAL (SLM)

1.11 LEARNING ACTIVITY 1. Visit a local supermarket, and list all the categories of goods sold. ___________________________________________________________________________ _____________________________________________________________________ 2. Compare and contrast the Websites of Amazon and Flipkart. ___________________________________________________________________________ ___________________________________________________________________________ 1.12 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define retailing. 2. What do you mean by non-store retailing? 3. What are the advantages of a chain store? 4. What do you mean by breaking bulk? 5. How retailing is different from wholesale business? 6. Who is a consumer? Long Questions 1. Explain the various functions of retailing? 2. Describe the various forms of non-store retailing. 3. What are the unique characteristics of retailing? 4. Describe advantages and disadvantages of Independent retailers. 5. Explain different formats of food retailing. 6. Write a note of service retailing. B. Multiple choice questions 1. In retailing there is a direct interaction with——-. a. Producer. b. Consumer. c. Wholesaler. d. All of these. 24 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Retailing creates following utilities. a. Time utility b. Place utility c. Form utility d. All the above 3. Retailers do not perform the following activities a. Display of goods b. Promotion of goods c. Production d. Stock keeping4. 4. The key task for both large &small retailers. a. Risk management. b. Crisis management c. Inventory management d. All of these. 5. Identify the food retailer a. Superstore. b. Mom & Pop store c. Hypermarket d. Kirana shop Answers 1-b, 2-d, 3-c. 4-d, 5-a 1.13 REFERENCES References book  Levy, M. and Weitz, B., (2012). Retailing management. Boston: McGraw-Hill Irwin. New York. 25 CU IDOL SELF LEARNING MATERIAL (SLM)

 Berman, Barry; Evans, Joel R.; and Chatterjee, Patrali, “Retail Management: A strategic approach”. (2018). New Delhi: Pearson India Textbook references  Anand Thakur, (2002). RETAIL MANAGEMENT (Ed), EXCEL BOOKS PRIVATE LIMITED, New Delhi. Website   market.html  26 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 2: RETAILING STRUCTURE 2.0 Learning Objectives 2.1 Introduction 2.2 Theories of Retail Development 2.3 The Global Retail Scenario 2.4 Retail Industry in India 2.5 Factor Responsible for growth of India 2.6 Gathering Information 2.7 The Marketing Research Process 2.8 Summary 2.9 Keywords 2.10 Learning Activity 2.11 Unit End Questions 2.12 References 2.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Describe retail theories  Identify the levels of wheel of retailing  Explain the scope of retail sector in India  Analysing the trends prevalent in the retail sector  Explain the global retail scenario and opportunities available. 2.1 INTRODUCTION Technological advances, changing demographics, and shifts in consumer preferences and shopping expectations are expected to bring about undreamt of changes in the structure of the retail industry. A key impact of technology has been availability of vast information to the customer. This has left the retailers with few or no opportunities for price differentiation. Hence, a big challenge for the retailer in this information savvy world is differentiation either qualitatively by superior customer services, or better value for money to the customer. With the wealth of information that the present-day customer now has, it becomes imperative for 27 CU IDOL SELF LEARNING MATERIAL (SLM)

retailers to constantly improvise their customer services or re-design its value pack to stay ahead of competition. Simultaneously, technology is also propelling efforts towards product and service differentiation. This throws up a major challenge to re-design and realign the service and store experience with the support of latest available technologies and, thus, make the overall customer experience more satisfying and fruitful. In India too, banks, airlines, and hotels are enabling customers to pay bills and plan their vacations from home through cable TV and videotext systems. It is now possible to buy a variety of products and services without even entering a store. Electronic inventory systems have spawned discount stores that offer the same merchandise as traditional department stores at much lower prices. Specialty stores have carved out a niche for themselves by offering greater selection and better services than those offered by department stores with limited merchandise lines. Off-price retailers have made a year round business out of leftover merchandise and factory overruns. 2.2 THEORIES OF RETAIL DEVELOPMENT All dynamic developments in retailing, from the birth of department stores in the last century to the recent emergence of hypermarkets have been in response to a changing environment. Retailing firms that once occupied a unique position, such as traditional department and discount stores, are now being squeezed by more innovative firms. Changing customer demands, new technologies, intense competition, and social changes create new opportunities even as they shake up existing businesses. In fact, the retail business formats have been changing very rapidly, mainly as a result of technological influences. The Web and Internet technologies have created a plethora of opportunities for the Web-based business model of retailing. This has triggered a competition of sorts among many a retailers with their own selves. Besides, the challenge for the retailers now is to keep abreast of the latest formats to maintain and grow their market share and compete within their respective bands. To understand the changes in retailing business in a better way, we will now examine the theories of change in retailing. 2.2.1 Theories in Retail Like every other industry new retail firms have brought innovative approaches in retailing. Retail development can be looked at from different theoretical perspective, as no one theory is universally acceptable. The reason for this unacceptability is mainly because of different market conditions, different socio-economic conditions in the market. The important theories of retailing are; • Wheel of Retailing • Retail Accordion Theory • Theory of Natural Selection • Retail life cycle 28 CU IDOL SELF LEARNING MATERIAL (SLM)

2.2.2 Wheel of Retailing • High-end strategy • High prices • Excellent facilities and • Low prices services Vulnerable Entry • Limited facilities and services • Upscale consumers Phase Phase • Price-sensitive consumers Trade-up Phase • Medium strategy • Moderate prices • Improved facilities • Broader base of value- and Figurseerv2ic.e1c:oTnshcieouWs cohneseuml oerfs Retailing This theory talks about the structural changes in retailing. The theory was proposed by Malcomb McNair and according to this theory it describes how retail institutions change during their life cycle. When new retail institutions start business they enter as low status, low price and low margin operations. As the retail firms achieve success they look in for increasing their customer base. They begin to upgrade their stores, add merchandise and new services are introduced. Prices are increased and margins are raised to support the higher costs. New retailers enter the market place to fill the vacuum and competition increases. A new format emerges when the store reaches the final stage of the life cycle. Then the cycle begins again. New retailers enter the market to fill the low-status, low-margin, and low- price niche. This theory is diagrammed as a large wheel with three spokes dividing the wheel into three segments and states that the evolution process comprises three stages: 1. Entry Phase Starts with offering limited merchandise with low prices and retail organizations, as a strategy, have low margins in order to increase penetration of the market. When these retail outlets are successful, others rival retailers rapidly imitate and adapt those characteristics. 29 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Trade-up Phase As the store progresses in its growth, the organization enters the second stage, which is the trade-up stage where the organization offers full services and a range of merchandise in full prices, without any discounts. These retail institutions simultaneously increase their margins and prices and appeal to more middle and upper income consumers rather than bargain hunting and lower income consumers. It is during this stage that the firms have an increase in sales, high profits and a strong cash flow due to the improvement of their store mix. 3. Vulnerable Phase In the third stage, according to the Wheel of Retailing Theory, the wheel turns as the store matures in its growth and faces more competition. The innovative store matures into an established firm and becomes vulnerable to the new innovator who enters the market. The strategy is to drop prices and continuous innovations and sound management practices will help the retailer to sustain growth in this phase. An example of this theory is that the Kirana stores being replaced by supermarkets and big stores like Big Bazar and D-Mart. 2.2.3 Retail Accordion Theory This theory of retail institutional change, evolved by Hollander (1966), suggests that retail institutions go from outlets with wide assortments to specialized narrow line store merchants and then back again to the more general wide assortment institution. This theory was also known as the general-specific-general theory and describes how general stores move to specialized stores and then again become more of a general store. The wheel of retailing and the accordion theory are known as the cyclical theories of retail revolution. The switch to the specialist store from the old time ‘general’ store occurred because: (a) The greater variety of customer goods available could not be accommodated in the old general store (b) Growth of cities meant that consumer markets allowed profitable segmentation (c) It provided a social content to the shopping trip, which was required as society became more complex and impersonal. The tendencies helping to create the new ‘general’ store (superstore or hypermarket) include: (i) Combining complementary lines, e.g. meat, groceries and produce (ii) Creaming, i.e. taking the most popular lines from other retail outlets’ ranges, e.g. paperbacks, confectionery, to create small but sure profits (iii) Scrambling, i.e. the taking of risky merchandise from other outlets means buying high margin, lower stock-turn lines, e.g. unit audio, expensive toys 30 CU IDOL SELF LEARNING MATERIAL (SLM)

(v) The growth of shopping centres. Large modern air-conditioned centres, particularly those with a substantial food complement, are somewhat like huge general stores. 2.2.4 Theory Of Natural Selection This can be stated as ‘retail types (or units), which best adjust to their environment, are most likely to survive’. In this theory environmental factors play major role in survival of retail type. According to this theory retail stores evolve to meet change in the microenvironment. The retailers that successfully adapt to the technological, economic, demographic and political and legal changes are the ones who are more likely to grow and prosper. This theory is considered as a better one to wheel of retailing because it talks about the macro environmental variables as well, but the drawback of this theory is that it fails to address the issues of customer taste, expectations and desires. The major environmental factors affecting retailing are: changes in the consumer character, changes in technology, and changes in competition. If a retail outlet or type does not address to these factors, it may have the fate of dinosaurs. Today, these once successful retailers have almost died out. The variety store is often cited as an example of a retail format that failed to adapt to changing times. In contrast, television home shopping networks are likely to expand and grow because they are responding to changes in the lifestyles of the consumers. Similarly, the department store is often cited as an example of a retail type failing to adapt quickly to changes in external condition like suburban growth and congestion in town centres. However, these very factors have helped the growth of out-of-town stores. 2.2.5 Retail Life Cycle The concept of product life cycle as explained by Philip Kotler, is also applicable to retail organizations as they pass through identifiable stages of: Innovation / introduction, Growth, Maturity and Decline. This is commonly known as the retail life cycle. 31 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 2.2 - Retail Life Cycle It is claimed that the retail institutions follow ‘s-shaped' development through their economic life, that has been classified into four main phases. 1. Innovation A new organization is born —when in the innovation stage is nascent and has few competitors. They try to create a distinctive advantage to the final customers. Since the concepts are new at this stage organizations try to grow rapidly and the management tries to experiment. Profits will be moderate and the stage may last for a couple of years. E-tailing or online shopping is in the innovation stage currently in India. 2. Accelerated Growth Rapid In the accelerated growth phase the organizations face rapid increase in sales, competitors begin to emerge and the organizations begin to use leadership and their presence as a tool in stabilizing their position. The investment level will be high as there is a lot of competition. Hypermarkets, Dollar stores are in this stage. 3. Maturity In the maturity stage as competition intensifies newer forms of retailing begin to emerge, the growth rate starts to decline. At this stage firms should start work on strategies and reposition techniques to be in the market place. Supermarkets, cooperative stores are in this stage. 4. Decline In the final stage of the retail life cycle is the declining phase where firms begin to lose their competitive advantage. Sales and profits fall as new, more innovatory retailers are developing and growing. Profitability starts to decline further and the overheads starts to rise. 32 CU IDOL SELF LEARNING MATERIAL (SLM)

Thus we see that organizations needs to adopt different strategies at each level in order to sustain in the marketplace 2.3 THE GLOBAL RETAIL SCENARIO The Retail industry is one of the world's largest and booming industries. It is currently, US$ 26 trillion industry and still growing. Presently, 47 of the Global Fortune 500 companies & 25 of Asia's Top 200 companies are retailers. Further, Wal-Mart, the world's leading retailer from U.S. is heading the Global Fortune 500 list in 2021. Retail is a significant contributor to the overall economic activity the world over: the total Retail share in the World GDP is 27% and 15-20% of the organized workforce in any developed economy. Despite Covid-19 pandemic, the retail market is expected to grow at a CAGR of 5% from 2021 and reach $25122.2 billion in 2023 and to reach $29361.95 billion in 2025 at a CAGR of 7% (Business Insider, 2020). The outbreak of Coronavirus disease (COVID-19) has acted as a massive restraint on the retail market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally. 2.3.1 Key Market Trends  E-commerce is the Fastest-growing Segment in the Retail Industry With the growing penetration of smartphones and mobile devices and internet services, e- commerce has emerged as a major shopping platform in the world. The rise of online fresh groceries sales along with growing numbers of prepared food delivery companies entering this space could propel category growth by several-fold times in the next five years. Mobile- first sites, dedicated apps, emerging payment methods, and other tools are making shopping on smartphones much easier. Many retailers operate an omnichannel model, which aims to integrate both offline and online channels.  Asia-Pacific is Expected to Witness the Fastest Growth A steady growth of disposable incomes and the spending power of the Chinese population have made it as one of the largest and still growing consumer markets worldwide. It is highly competitive and diversified. In India, government policies, like FDI up to 100% allowed in single-brand retail and FDI up to 51% in multi-brand retail, are further expected to fuel up the competition in the country’s retail market. The growth of the tourism sector in Asia-Pacific countries, including Thailand and Indonesia, is expected to increase the demand for imported products. Additionally, supporting growth in the tourism sector and widespread country-level government-led investments in transport infrastructure are driving the region's growth.  Competitive Landscape The retail market is highly competitive, with few key players occupying the major market share. The organized retail market has been growing significantly with companies expanding and considering the business potential in new areas. Most of the unorganized retail outlets are increasingly being replaced with big retail hypermarkets, supermarkets, and other retail 33 CU IDOL SELF LEARNING MATERIAL (SLM)

chains. This is expected to continue on a large scale and will significantly lead to market growth. 2.3.2 Major Players Fig. 2.3 - Top 10 Retailers in the World (Source: 2021) With the rapid growth in retail data and the availability of technologies to analyze data it will become easier for retails to identify and meet the needs and expectations of their customers; thus, it is expected to drive the market going forward. Data has become critical for most retail operations worldwide. Many retailers are adopting a robust and cohesive strategy for data analytics in management. This technology is being deployed to enhance supply chain efficiency, streamline operations to engage customers and building loyalty. 2.3.3 Global Retailing Trends To enter the new markets and avail the business opportunities, the organizations need to understand the presently prevailing flow of global retailing. Following are some of the most recent trends of global marketing adopted by business entities:  Internationalization: The companies these days prefer international markets due to the saturation of the domestic markets and seeking expansion and economies of scale.  Improvising Service Offerings: In today’s highly competitive market, global retailers are also focusing on adding value to the consumer experience by providing some assistance or services with their products. 34 CU IDOL SELF LEARNING MATERIAL (SLM)

 Boutiques: The business organizations are moving towards specialty stores concentrating on a single product line or category to get global recognition for their expertise in a particular product or service.  Mass Merchandizers: Also, some of the large retail organizations are expanding globally by selling a variety of products or services and having a diversified product line to target high volume of sales at minimal margin or profit.  Retail Format Migration: There has been a massive transformation in the retailing sector due to the emergence of e-commerce. Therefore, it has become a necessity for companies to adopt e-retailing for creating a global presence.  Private Brand Expansion: It has become an essential platform for private companies to introduce their products to consumers spread across the globe and also to gain global recognition. 2.3.4 Challenges Faced By Global Retailers When an organization moves from domestic to the global market, it has to deal with many problems and complexities. Given below are some of the global retailing challenges commonly faced by the companies:  Coping Up with Changing Technology: The organizations today are judged more based on their efficiency receiving and transmitting information. Therefore, the companies operating on an international level need to depend upon the technology and e-retailing platforms.  Language and Communication Barriers: While selling goods or services overseas, the organization faces difficulty to connect with locals or potential consumers. This is due to the difference in language, preference of communication modes, translation errors, etc.  Consumer Empowerment: With the rapid change in technology, lifestyle and demand has led to consumer empowerment and thus, made it difficult for the companies to generate customer loyalty.  Cultural Complexities: Every market is culturally diverse, and the consumers’ values define their priorities for the goods or services, purchasing power and modes of shopping and making payments. Understanding the culture of the potential market is a complicated task.  International Shipping Policies: The overseas trading policies like licence, excise duty, taxes and rates, import-export policies, exchange rates, etc. act as a considerable challenge for the companies going global. 35 CU IDOL SELF LEARNING MATERIAL (SLM)

2.4 RETAIL INDUSTRY IN INDIA With population of 1.3 billion, India has become a sought-after retail destination with a growing base of young and affluent shoppers. Today, it is the world’s fifth-largest global destination in the retail space and ranked 16 in FDI Confidence Index. The country is among the highest in the world in terms of per capita retail store availability. India’s retail sector is experiencing exponential growth with retail development taking place not just in major cities and metros, but also in tier II and III cities. Currently, the sector contributes 10% to India's gross domestic product and accounts for 8% of India's employment, according to Invest India. After 9% growth between 2016 to 2018, India ranked 2nd in A.T. Kearney’s 2019 Global Retail Development Index (GRDI). According to the Retailers Association of India (RAI), the retail industry achieved 93% of pre-COVID sales in February 2021; consumer durables and quick service restaurants (QSR) increased by 15% and 18% respectively. Consumer spending increased to US$ 245.16 billion in the third quarter of 2020 from US$ 192.94 billion in the second quarter of 2020. 2.4.1 Market Size As per Forrester Research, India's retail market was worth an estimated $883 billion last year, of which grocery retail accounted for $608 billion. By 2024, the market is expected to grow to $1.3 trillion. At present, ninety-two percent of the revenue is generated by the unorganized sector, according to a report by KPMG. Modern trade accounts for $60 billion and E- commerce is worth $6 billion. India’s direct selling industry recorded sales of US$ 2.47 billion in 2019. Also notable is the fact that 85% of India's urban Retail market is concentrated in the country's large cities such as Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad. Healthy economic growth, changing demographic profile, increasing disposable income, urbanization, changing consumer tastes and preferences are some of the factors driving growth in the organized retail market in India. Fig 2.4 - Retail Market in India 36 CU IDOL SELF LEARNING MATERIAL (SLM)

(Source: The main segments of the overall retail industry are food and grocery (60%); apparel (8%); telecom (6%); food service (5%); jewellery (4%), pharmacy (3%); consumer electronics (3%); and “others” (11%). However, the apparel segment tops the list of organized sector segments at 33%, followed by food-grocery and telecom (11% each) and consumer electronics (8%) for the second and third ranks. Most of India's grocery retail happens at Kirana’s or mom-and-pop outlets. Fig. 2.5 – segment-wise retail sales 2.4.2 Retail Jobs India is the second largest employer in the India after agriculture and the largest private sector employer. However, the traditional outlets dominate with few corporate chains contributing to the employment opportunities. As per certain reports, there are more than 6 million retail establishments in India providing career and livelihoods to millions of households. Majority of them sell food and related items. The data also shows that grocery stores and general stores dominate rural India landscape. Further, urban landscape shows significant growth in service retailers. This indicates that this sector is employing about 15- 20% of the organized work force, which is in line with global averages. 2.4.3 Development Scenario The Government of India has introduced reforms to attract Foreign Direct Investment (FDI) in retail industry. The Government has approved 51% FDI in multi-brand retail and 100% FDI in single-brand retail under the automatic route, with plans to allow 100% FDI in E- commerce. The Indian retail trading has received Foreign Direct Investment (FDI) equity inflow totaling US$ 3.44 billion during April 2000-December 2020, according to Department for Promotion of Industry and Internal Trade (DPIIT). India’s retail sector attracted US$ 6.2 37 CU IDOL SELF LEARNING MATERIAL (SLM)

billion from various private equity and venture capital funds in 2020. 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. 2.4.4 Government Initiatives The Government initiatives to improve the retail industry in India include; 1. Proposed change in Foreign Direct Investment (FDI) rules in food processing. 2. 100% FDI in online retail of goods and services through the automatic route. 3. Improving digital infrastructure in Tier 2 and Tier 3 markets. 2.5 FACTORS RESPONSIBLE FOR GROWTH OF RETAIL SECTOR The following are the factors that have played a key role in the development and growth of the retailing industry in India 1. Consumer Pull: Customers are seeking products at affordable prices that not only offer value but also convenience. The modern retailers provide a range of products, attractive prices, ambience, value added services like credit and debit card payment, etc. thereby making themselves attractive to all the buyers. The growth of population in rural and urban markets is further affecting the retail industry. In addition, increase in the number of double income families has also increased the demand. 2. Changes in Social structure and Consumer Behaviour: Indian women especially in the urban areas are highly educated, professionally qualified and employed. They look for one- stop shopping and look for more information, assortment, quality, attractive ambience and good customer service. Nuclear families are common concept in the urban areas. Today the malls offer a large variety in terms of categories, formats, movies and food courts which add convenience and fun to the shopping. 3. Retailer proximity to Consumers: Retailers are able to understand the market and the needs of the consumers and communicate the same to the manufacturers. Indian consumers prefer to touch and feel the products before they buy. They also prefer to buy fresh vegetables and fruits and consume less of processed and packaged food. Food retailers such as Reliance, Nilgiris has captured this trend and stock more of fresh food in their outlets. 4. Evolution of family owned establishments: With the exposure and increase in the income many households prefer to have a different lifestyle and a good shopping experience. This emerging need of the consumer is catered to by the family owned retail stores like Reliance retail. 5. Emerging Rural Markets: Indian rural markets are emerging as retail consumption units. 38 CU IDOL SELF LEARNING MATERIAL (SLM)

The rural consumers are willing to shed their inhibitions in order to try different product categories. The middle class population among the rural areas is increasing and amount to 17 percent of the total rural population. 6. Changes occurring in the Retail Scenario: Retailers are trying to incorporate a number of innovations with maximum focus on customer, minimum price interventions, and maximum value for money and minimum problems. Some of the techniques used by the retailers include introducing design labels, revenue sharing formulae, and new return on investment models, enhancing the sales staff quality and increasing overall operation efficiencies. 7. Foreign Direct Investment: Foreign direct investment has helped organized retail grow significantly in several countries including India. 8. Corporate Interest in Retailing: A number of corporates are showing keen interest in setting up retail stores. Reliance industries, Tata group and Aditya Birla group have set up their outlet, which offer a range of merchandise including food, apparels, electronics, household utilities and so on. 2.6 GATHERING INFORMATION One of the challenges of a retail business is the need to purchase inventory well in advance of customer demand. Therefore, identifying the characteristics of their customers and understanding their behaviour patterns are vital tasks for retailers to devise and implement the strategy. The success of a retail strategy depends on how well a firm identifies and understands its customers and how well it forms a strategy mix to appeal to them. This entails identifying consumer characteristics, needs, and attitudes; recognizing how people make decisions; and then devising the proper target-market plan. When a retailer sets a new strategy or modifies an existing one, gathering and analyzing information is crucial because it reduces the chances of wrong decisions. Traditionally, retailers have relied on observation and even intuition to guide their purchasing decisions. Now, data-driven technology is at the core of retail business. Thus, Information gathering and processing should be conducted in an ongoing manner, yielding enough data for planning and analysis. 2.6.1 Information Flows in A Retail Distribution Channel 39 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 2.6 - Information Flows in a Retail Distribution Channel In an effective retail distribution channel, information flows freely and efficiently among the three main parties: supplier, retailer, and consumer. This enables the parties to better anticipate and address each other’s performance expectations. A supplier needs to know different kinds of information. From the retailer, the supplier needs estimates of category sales, inventory turnover rates, feedback on competitors, the level of customer returns, and so on. From the consumer, the retailer needs to know about attitudes toward given styles and models, the extent of brand loyalty, the willingness to pay a premium for superior quality, and the like. A retailer also needs to know different kinds of information. From the supplier, the retailer needs advance notice of new models and model changes, training materials for complex products, sales forecasts, justification for price hikes, and so on. From the consumer, the retailer wants to know why people shop with the retailer, what they like and dislike about the retailer, where else people shop, and so on. And the consumer needs different types of information. From the supplier, the consumer needs assembly and operating instructions, the extent of warranty coverage, where to send a complaint, and so forth. From the retailer, the consumer needs to know how various alternatives compare, where specific merchandise is stocked in the store, the methods of payment accepted, the rain check policy when a sale item is out of stock, and so on. For the best information flows, collaboration and cooperation are necessary—especially between suppliers and retailers. Retailers often play a crucial role in collecting data for other members of the value delivery chain because they have the most direct contact with shoppers. 2.6.2 The Retail Information System Data gathering and analysis should not be regarded as a one-shot resolution of a single retailing issue. They should be part of an ongoing, integrated process. A retail information system (RIS) anticipates the information needs of retail managers; collects, organizes, and stores relevant data on a continuous basis; and directs the flow of information to the proper decision makers. It is explained in chapter 4. 2.7 THE MARKETING RESEARCH PROCESS Marketing research in retailing entails the collection and analysis of information relating to specific issues or problems facing a retailer. At farsighted firms, marketing research is just one element in a retail information system. At others, marketing research may be the only type of data gathering and processing. Figure 2.7 - The Marketing Research Process 40 CU IDOL SELF LEARNING MATERIAL (SLM)

The marketing research process embodies a series of activities: defining the issue or problem to be studied, examining secondary data, generating primary data (if needed), analyzing data, making recommendations, and implementing findings. It is a systematic process as shown in Figure 2.7. Once the issue, the problem to be studies is identified, the secondary data are examined first and the primary data are generated only if secondary data do not yield actionable information. 2.7.1 Secondary Data Secondary data are the data that have been gathered for purposes other than the current problem under study. Secondary data may be internal (such as company records) or external (such as government reports and trade publications). Primary data are data that are collected to address the problem under study. This type of data may be generated via survey, observation, experiment, and simulation. Secondary data are sometimes relied on; other times, primary data are crucial. In some cases, both are gathered. 2.7.2 Advantages and Disadvantages of Secondary Data Secondary data have several advantages:  Data assembly is inexpensive. Company records, trade journals, and government publications are all rather low cost. No data collection forms, interviewers, and tabulations are needed.  Data can be gathered quickly. Company records, library sources, and Web sites can be accessed immediately. Many firms store reports in their retail information systems.  There may be several sources of secondary data—with many perspectives.  A secondary source may possess information that would otherwise be unavailable to the retailer. Government publications often have statistics no private firm could acquire.  When data are assembled by a source such as reputed research organisations, or the government, results are usually quite credible.  Secondary data can also help define issues more specifically. In addition, background information about a given issue can be gathered. Secondary data also have several potential disadvantages:  Available data may not suit the purposes of the current study because they have been collected for other reasons.  Secondary data may be incomplete.  Information may be dated. Statistics gathered every 2 to 5 years may not be valid today. 41 CU IDOL SELF LEARNING MATERIAL (SLM)

 The accuracy of secondary data must be carefully reviewed. A retailer needs to decide I the data have been compiled in an unbiased way. The purpose of the research, the data collection tools, and the method of analysis should each be examined.  Some secondary data sources are known for poor data collection methods; they should be avoided.  In retailing, many secondary data projects are not retested and the user of secondary data has to hope results from one narrow study are applicable to his or her firm. 2.7.3 Sources of Secondary Data. The major distinctions are between internal and external sources.  Internal secondary data are available within the company, sometimes from the data base of a retail information system.  External secondary data are available from sources outside the firm. These sources are comprised of government and nongovernment categories. They contain all kinds of written materials, and typically available through the Internet. These include government statistics, industry associations with websites full of useful information, trade publications, news articles, company websites and published market research reports are possible resource. 2.7.4 Primary Data - Advantages and Disadvantages After exhausting available secondary data, a defined issue may still be unresolved. In this instance, primary data are needed. There are several advantages associated with primary data:  They are collected to fit the retailer’s specific purpose.  Information is current.  The units of measure and data categories are designed for the issue being studied.  The firm either collects data itself or hires an outside party. The source is known and controlled, and the methodology is constructed for the specific study.  There are no conflicting data from different sources.  When secondary data do not resolve an issue, primary data are the only alternative. There are also several possible disadvantages often associated with primary data:  They are normally more expensive to obtain than secondary data.  Information gathering tends to be more time-consuming.  Some types of information cannot be acquired by an individual firm.  If only primary data are collected, the perspective may be limited.  Irrelevant information may be collected if the issue is not stated clearly enough. In sum, a retailer has many criteria to weigh when evaluating the use of primary data. In particular, specificity, currency, and reliability must be balanced against high costs, time, and limited access to materials. 42 CU IDOL SELF LEARNING MATERIAL (SLM)

2.7.5 Sources of Primary Data The first decision is to determine who collects the data. A retailer can do this itself (internal) or hire a research firm (external). Internal collection is usually quicker and cheaper. External collection is usually more objective and formal. Second, a sampling method is specified. Instead of gathering data from all stores, all products, and all customers, a retailer may obtain accurate data by studying a sample of them. This saves time and money. With a probability (random) sample, every store, product, or customer has an equal or known chance of being chosen for study. In a nonprobability sample, stores, products, or customers are chosen by the researcher—based on judgment or convenience. A probability sample is more accurate but is also more costly and complex. Third, the retailer chooses among four methods of data collection: survey, observation, experiment, and simulation. All of the methods are capable of generating data for each element of a strategy. 2.7.6 Methods of Collecting Primary Data  SURVEY With a survey, information is systematically gathered from respondents by communicating with them. Surveys are used in many retail settings. A survey may be conducted in person, over the phone, by mail, or online. Typically, a questionnaire is used. A personal surveyis face-to-face, flexible, and able to elicit lengthy responses; unclear questions can be explained. It may be costly, and interviewer bias is possible. A phone surveyis fast and rather inexpensive. Responses are often short, and nonresponse may be a problem. A mail survey can reach a wide range of respondents, has no interviewer bias, and is not costly. Slow returns, high nonresponse rates, and participation by incorrect respondents are potential problems. An online surveyis interactive, can be adapted to individuals, and yields quick results. Yet, only certain customers shop online or answer online surveys. The technique chosen depends on the goals and requirements of the research project. A survey may be no disguised or disguised. In a no disguised survey, the respondent is told the real purpose of the study. In a disguised survey, the respondent is not told the true purpose so that person does not answer what he or she thinks a firm wants to hear. Disguised surveys use word associations, sentence completions, and projective questions.  OBSERVATION The form of research in which present behaviour or the results of past behaviour are noted and recorded is known as observation. Because people are not questioned, observation may not require respondent cooperation, and survey biases are minimized. Observation may be used in real situations. The key disadvantage of observation is that attitudes are not elicited. Retailers use observation to determine the quality of sales presentations, to monitor related- 43 CU IDOL SELF LEARNING MATERIAL (SLM)

item buying, to determine store activity by time and day, to make pedestrian and vehicular traffic counts, and to determine the proportion of patrons using mass transit. With mystery shoppers, retailers or their market research partners hire people to pose as customers and observe a service or a brand through visits, telephone calls, or Web site interactions. These mystery shoppers may evaluate operations, customer service experience, and compliance with service standards, product availability, price, service calls, sales presentations, and how well store environments and displays are maintained. Some firms prefer video mystery shopping to address complex and challenging aspects of a service business. Observation may be disguised or non-disguised, structured or unstructured, direct or indirect, and human or mechanical. In disguised observation, the shopper or company employee is not aware he or she is being watched by a two-way mirror or hidden camera. In no disguised observation, the participant knows he or she is being observed—such as a department manager watching a cashier’s behaviour. Structured observation calls for the observer to note specific behaviour. Unstructured observation requires the observer to note all of the activities of the person being studied. With direct observation, the observer watches people’s present behaviour. With indirect observation, the observer examines evidence of past behaviour, such as food products in consumer pantries. Human observation is carried out by people. It may be disguised, but the observer may enter biased notations and overlook behaviour. Mechanical observation, such as a camera filming in-store shopping, eliminates viewer bias and does not missbehaviour.  EXPERIMENT An experiment is a type of research in which one or more elements of a retail strategy mix are manipulated under controlled conditions. An element may be a price, a shelf display, store hours, or some other feature. If a retailer wants to find the effects of a price change on sales, only one item price is varied. Other strategic elements (location, quantity, etc.) stay the same, so the true price effect is measured. An experiment may use survey or observation techniques to record data. Experimentation can be difficult because many uncontrollable factors (such as weather, competition, and the economy) come into play. A well-controlled experiment yields good data. The major advantage is an experiment’s ability to show cause and effect (a lower price results in higher sales). It is also systematically structured and enacted. The major potential disadvantages are high costs, contrived settings, and uncontrollable factors.  SIMULATION A type of experiment whereby a computer program is used to manipulate the elements of a retail strategy mix rather than test them in a real setting is called simulation. Two kinds of 44 CU IDOL SELF LEARNING MATERIAL (SLM)

simulation are now being applied in retail settings: those based on mathematical models and those involving “virtual reality.” In the first kind of simulation, a model of the expected controllable and uncontrollable retail environment is constructed. Factors—such as effects of a price cut or longer store hours—are manipulated by computer (rather than the marketplace) so their effect on the overall strategy and specific elements of it are determined. No consumer cooperation is needed, and combinations of factors can be analyzed in a controlled, rapid, inexpensive, and risk-free manner. This format is gaining popularity as reliable software is increasingly available. However, it is still somewhat difficult to use. In the second kind of simulation, a retailer devises or buys interactive software that lets participants simulate actual behaviour in as realistic a format as possible. This approach creates a “virtual shopping environment.” For example, Facebook’s Oculus Rift VR headset now makes it possible to render virtual shopping environments at lower costs; and the glasses can be enhanced with eye-tracking capability to make it an efficient shopper research tool. Participants virtually interact with signs and products displayed in the VR headset as a natural experience; findings can be used to devise real-life store campaigns. The simulated space can easily compare several conditions of in-store campaigns and shelf placements. 2.8 SUMMARY  Traditional retail institutions have changed in response to the new types of retailers. For example, drugstores carry merchandise associated with convenience stores. Supermarkets are focusing more attention on meal solutions and perishables. The theories of retailing help us in understanding these changes.  During the past 30 years, retail markets have been characterized by the emergence of many new retail institutions. Traditional institutions (supermarkets, convenience stores, drugstores, and department, discount, and specialty stores) have been joined by category specialists, supercentres, hypermarkets, extreme-value retailers, warehouse clubs, and off-price retailers. In addition, there has been substantial growth in services retailing.  In an effective retail distribution channel, information flows freely and efficiently among the three main parties (supplier, retailer, and consumer). As a result, the parties can better anticipate and address each other’s performance expectations.  Retailers often have a vital role in collecting data because they have the most direct contact with shoppers.  Marketing research in retailing entails the collection and analysis of information relating to specific issues or problems facing a retailer. At farsighted firms, marketing research is just one element in a retail information system. 45 CU IDOL SELF LEARNING MATERIAL (SLM)

2.9 KEYWORDS  Marketing Research in Retailing - Collection and analysis of information relating to specific issues or problems facing a retailer.  Marketing Research Process - Embodies a series of activities: defining the issue or problem, examining secondary data, generating primary data (if needed), analysing data, making recommendations, and implementing findings.  Simulation - Type of experiment whereby a computer program is used to manipulate the elements of a retail strategy mix rather than test them in a real setting.  Survey- Research technique that systematically gathers information from respondents by communicating with them.  Observation - Form of research in which present behaviour or the results of past behaviour are observed and recorded. It can be human or mechanical.  Experiment -Type of research in which one or more elements of a retail strategy mix are manipulated under controlled conditions.  Internal Secondary Data - Available within a company, sometimes from the data bank of a retail information system.  Information Search - Consists of two parts: determining alternatives to solve the problem at hand (and where they can be bought) and learning the characteristics of alternatives. It may be internal or external.  Probability (Random) Sample - Approach whereby every store, product, or customer has an equal or known chance of being chosen for study.  Non-probability Sample - Approach in which stores, products, or customers are chosen by the researcher—based on judgment or convenience. 2.10 LEARNING ACTIVITY 1. Analyze the reasons for growth of online retail industry in India. ________________________________________________________________________ ________________________________________________________________________ 2. Compare and contrast the Kirana store and a supermarket. List your observations. ________________________________________________________________________ ________________________________________________________________________ 2.11 UNIT END QUESTIONS 46 A. Descriptive Questions CU IDOL SELF LEARNING MATERIAL (SLM)

Short Questions 1. Define information. 2. What do you mean by simulation in retailing? 3. What are the theories of retailing? 4. What do you mean by market research? 5. How retailing is changing in India? 6. Who is a consumer? Long Questions 1. Explain the various reasons for growing need for information in retailing? 2. Describe the various factors influencing the growth of retailing India. 3. What are the unique characteristics of global retailing? 4. Describe advantages and disadvantages of global retailing. 5. Explain the significance of food retailing in India. 6. Write a note on FDI in retailing. B. Multiple Choice Questions 1. The copying of a competitor's successful strategy and the assumption that a successful business can easily expand are examples of a. Secondary data. b. Non-systematic attempts at research. c. Marketing research in retailing. d. Intuition. 2. A disadvantage of secondary data is a. Its lack of speed. b. Its cost. c. That data collection forms, interviewers, and tabulations are necessary. d. The fact that the accuracy of secondary data must be evaluated. 3. Which of the following is not an advantage of primary data? a. They are less expensive to obtain than secondary data. b. Primary data are collected to fit the specific purposes of the retailer. c. Primary data are current. d. The data source is known and controlled. 47 CU IDOL SELF LEARNING MATERIAL (SLM)

4. A data collection technique used to gather information about consumer attitudes without revealing the actual intent of the study is a. Contrived observation. b. Disguised observation. c. Natural observation. d. A disguised survey. 5. Which of the following statements concerning the wheel of retailing is not correct? a. The wheel of retailing assumes that price-sensitive shoppers are store loyal. b. The wheel of retailing assumes that shoppers are price-sensitive. c. The wheel of retailing suggests that retailers should be cautious in adding services. d. Retail innovators begin with lower operating costs than those of existing institutions. Answers 1-b, 2-d, 3-b. 4-d, 5-a 2.12 REFERENCES References book  Levy, M. and Weitz, B., (2012). Retailing management. Boston: McGraw-Hill Irwin. New York.  Berman, Barry; Evans, Joel R.; and Chatterjee, Patrai, \"Retail Management: A Strategic Approach\" (2018). New Delhi: Pearson India Textbook references  Anand Thakur, (2002). RETAIL MANAGEMENT (Ed), EXCEL BOOKS PRIVATE LIMITED, New Delhi. Website   market.html 48 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 3: RETAIL MARKET STRATEGY STRUCTURE 3.0 Learning Objectives 3.1 Introduction 3.2 Elements of Retail Market Strategy 3.3 Growth Strategy 3.4 The Strategic Retail Planning Process 3.5 Financial Strategy 3.6 Retail Location 3.7 Summary 3.8 Keywords 3.9 Learning Activity 3.10 Unit End Questions 3.11 Reference 3.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the concept of retail value chain  Explain the steps in strategic planning for retailers  Discuss the retailing growth strategies  Develop a strategic plan for a retailer  Discuss the analysis of financial strategy  Develop the location based retail strategy 3.1 INTRODUCTION The retailing strategy outlines the mission and vision of a retail organization. It is a systematic plan that provides the retailers the overall framework for dealing with competitors as well as technological and global movements. In the past traditional retailers mainly reacted to changes in the business environment, but with increasing business complexities, this is no longer valid. The reason of this, competition in all the disciplines of retailing is increasing and changes in the consumer’s tastes, need, wants, technological environment and other 49 CU IDOL SELF LEARNING MATERIAL (SLM)

external environmental variables are taking place very fast. Long term strategies and continuous examination of strengths, weaknesses, opportunities and threats (SWOT analysis) is required to ensure that the growth opportunities are not missed and action is taken at the right time to combat potential threats in the prevailing business environment. Retailers need to devote more attention to long-term strategic planning to cope effectively with the growing intensity of retail competition as well as shifts in customer needs. These changes in the retail environment are the result of the emergence of new competitors, formats, technologies, and globalization. The retail strategy indicates how retailers will deal effectively with their environment, customers, and competitors. As the retail management decision-making process indicates, retailing strategy is the bridge between understanding the world of retailing and the more tactical merchandise management and store operation activities undertaken to implement the retail strategy. A retail strategy is the overall plan guiding a retail firm. It influences the firm’s business activities and its response to market forces, such as competition and the economy. Any retailer, regardless of size or type, should utilize these six steps in strategic planning: 1. Define the type of business in terms of the goods or service category and the company’s specific orientation. 2. Set long-run and short-run objectives for sales and profit, market share, image, and so on. 3. Determine the customer market to target on the basis of its characteristics and needs. 4. Devise an overall, long-run plan that gives general direction to the firm and its employees. 5. Implement an integrated strategy that combines such factors as store location, product assortment, pricing, and advertising and displays to achieve objectives. 6. Regularly evaluate performance and correct weaknesses or problems when observed. 3.1.1 The Retailing Concept The retailing concept is a retail management orientation that focuses on determining the needs of the target market and satisfying those needs more effectively and efficiently than competitors do. Successful retailers are customer centric. The four principles form the retailing concept as depicted in Figure 3.1. 1. Customer orientation -The retailer determines the attributes and needs of its customers and endeavors to satisfy these needs to the fullest. 50 CU IDOL SELF LEARNING MATERIAL (SLM)

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