CU-MBA-SEM-IV-Retail Management-Second Draft

and all major credit card companies provide the same consumer protection for transactions through Internet channels. Consumers also are concerned about the ability of retailers to collect information about their purchase history, personal information, and search behaviour on the Internet. 14.3.2 Multichannel Retailing Today, most retailers, typically store-based retailers,are using multiple channels to improve their offerings to their customers andbuild a competitive advantage.Traditional store-based retailers are using multiple channels, typicallyadding and placing more emphasis on their electronic channels, for five reasons.First, the electronic channel gives retailers an opportunity to overcome thelimitations of their primary existing channel such as limited assortments. Second, providing a multichannel offering increases customer satisfaction and loyalty. Third, an electronic channelenables retailers to gain valuable insights into their customers’ shopping behaviour.Fourth, by using an electronic or catalogue channel, retailers can economically enternew markets. Fifth, a multichannel offering provides the bases for building a strategicadvantage. 14.4 INTERNATIONAL RETAILING With more than 7.3 billion people and a $115 trillion economy, world markets offer many opportunities for global retailers. When embarking on an international retailing strategy, firms should consider the variousfactors. These factors are:  Institutional factors such as ownership form, goods/service category, existing channels of distribution, level of competition, level of technology, government restrictions and so on.  Consumer factors such as preferences, population trends, predominant language, level and distribution of income, level of literacy/education, cultural values and lifestyle patterns.  Store location factors include, availability of desirable areas and sites, lease/purchase terms, level of transportation facilities and hours of operation.  Operations factors such as availability and calibre of personnel, appropriate management style, facilities like of air-conditioning and expected pilferage rates.  Merchandising factors include width and depth of assortment, merchandise quality, level of innovativeness, availability and calibre of suppliers, inventory control.  Pricing factors related to level and use of set pricing versus negotiable pricing, typical purchase terms.  Image and promotion factors comprising of store atmosphere, interior layout and displays, advertising, personal selling. 14.4.1 Opportunities and Threats in Global Retailing There are wide-ranging opportunities and threats in global retailing. 201 CU IDOL SELF LEARNING MATERIAL (S1.27LM)

 Opportunities  Foreign markets may be used to complement domestic sales.  Foreign markets may represent growth opportunities if domestic markets are saturated.  A retailer may be able to offer goods, services, or technology not yet available in foreignmarkets.  Competition may be less in some foreign markets.  Tax or investment advantages in foreign markets.  Many nations today are more open to the entry of foreign firms.  The Internet enables retailers to reach customers and suppliers well outside their domestic markets and communicate with ease.  Threats  There may be cultural differences between domestic and foreign markets.  Management styles may not be easily adaptable.  Foreign governments may place restrictions on some operations.  Personal income may be poorly distributed in foreign markets.  Distribution systems and technology may be inadequate.  Institutional formats vary greatly among countries.  Currencies are different. However, countries in the European Union have solved this problem through the euro, a common currency. 14.5 LEGAL & ETHICAL ISSUES IN RETAILING 14.5.1 Ethical Issues Ethical challenges of retailers fall into three interconnected categories: Ethics relates to the retailer’s moralprinciples and values. Social responsibility involves acts benefiting society. Consumerism entailsprotecting consumer rights.In dealing with their stakeholders such as customers, the general public, employees, suppliers, competitors,and others, retailers have a moral obligation to act ethically. Furthermore, due to the media attentionand the high expectations of people, a failure to be ethical may leadto adverse publicity, lawsuits, the loss of customers, and a lack of self-respect among employees.When a retailer has a sense of ethics, it acts in a trustworthy, fair, honest, and respectful mannerwith each of its constituencies. The best way to avoid unethical actsis for firms to have written ethics codes, to distribute them to employees and channel partners,to monitor behaviour, and to punish poor behaviour. Some of the practices that are considered unethical:  Raising prices on scarce products during pandemics.  Not having adequate merchandise on hand when a sale is advertised.  Charging high prices in low-income areas because consumers there do not have alternatives. 202 CU IDOL SELF LEARNING MATERIAL (S1.27LM)

 Selling alcohol and tobacco products to children.  Defaming competitors.  Selling refurbished merchandise as new.  Pressuring employees to push high-profit items, even if these items are not the best products.  Selling information from a customer database to other parties. 14.5.2 Social Responsibility A retailer exhibiting social responsibility acts in the best interests of societyas well as itself. However, the challenge is to balance corporate citizenship with a fair level of profits for stockholders,management, and employees. Some forms of social responsibility are virtually cost-free, suchas having employees participate in community events or disposing of waste products in a morecareful way. Some are more costly, such as making donations to charitable groups or giving awaygoods and services to a school. Few examples of socially responsible retailers include: Ronald McDonald HouseCharities has served 5.7 million children and their families in its RMHC facilities.Walmart has specific environmentalgoals related to reducing waste sent to landfills, obtaining electricity from renewableenergy resources, reducing emissions, and developing a more sustainable food system. 14.5.3 Consumerism Consumerism involves the activities of government, business, and other organizations to protectpeople from practices infringing on their rights as consumers. These actions recognize thatconsumers have basic rights that should be safeguarded. Consumers have the right to safety; the right to be informed; the right to choose; and the right to be heard.Therefore, retailers and their channel partners need to avoid business practicesviolating these rights as some of these are protected through legislation. 14.6 SUMMARY  The effective management of employees can produce a cost advantage in retail. The customers experience with a retailer is determined by the activities of employees who select merchandise; provide information and assistance, and stock displays and shelves. Thus, employees can play a major role in differentiating a retailer’s offering from its competitor’s and developing sustainable competitive advantages.  A unique benefit offered by the electronic channel is the opportunity for consumers to search across a broad range of alternatives, develop a smaller set of alternatives based on their needs, get specific information about the alternatives they want, and make an order with a few clicks.  By offering multiple channels, retailers overcome the limitations of each channel. Web sites can be used to extend the geographic presence and assortment offered by the store channel. 203 CU IDOL SELF LEARNING MATERIAL (S1.27LM)

 Ethical retailers act in a trustworthy, fair, honest, and respectful way. Firms are more apt to avoid unethical behaviour if they have written ethics codes, communicate them to employees, monitor and punish poor behaviour, and have ethical executives.  Retailers perform in a socially responsible manner when they act in the best interests of society through recycling and conservation programs and other efforts.  Consumerism activities involve government, business, and independent organizations.Four consumer rights are basic: to safety, to be informed, to choose, and to be heard. 14.7 KEYWORDS  Human Resource Management - Recruiting, selecting, training, compensating, and supervising personnel in a manner consistent with the retailer’s organization structureand strategy mix.  Compensation - Includes direct monetary payments to employees (such as salaries, commissions, and bonuses) and indirect payments (such as paid vacations, health and life insurance benefits, and retirement plans).  Multichannel Retailing - A distribution approach whereby a retailer sells to consumers through multiple retail formats. Multichannel retailing is characterizedby having few linkages among the channel alternatives  Ethics - Involves activities that are trustworthy, fair, honest, and respectful for each retailer constituency.  Consumerism - Involves the activities of government, business, and other organizations that protect people from practices infringing on their rights as consumers. 14.8 LEARNING ACTIVITY 1. List the unethical practices you have observed/experienced with retailers. ___________________________________________________________________________ _______________________________________________________________________ 2. Discuss some of the employee actions which have satisfied and actions which have dissatisfied in a retail outlet. ___________________________________________________________________________ _______________________________________________________________________ 14.9 UNIT END QUESTIONS A. Descriptive Questions 204 CU IDOL SELF LEARNING MATERIAL (S1.27LM)

Short Questions 1. Define HRM. 2. What do you mean by web retailing? 3. What are the advantages of anonline store? 4. What do you mean by ethics? 5. What is consumerism? Long Questions 1. Why is human resource management more important in retailing firms than in manufacturing firms? 2. Differentiate between social responsibility and consumerism from the perspective of a retailer. 3. Describe three unethical, but legal, acts on the part of retailers 4. Describe the pros and cons of multichannel retailing. 5. What are the unique characteristics of online retailing? 6. Describe advantages and disadvantages of international retailing. B. Multiple Choice Questions 1. Which of the following is not part of the special human resource environment faced by retailers? a. few part-time workers b. inexperienced workers c. long hours d. variable customer demand 2. The Benefits of multi-channel retailing for the retailer include;- a. Offering convenience and a variety of touch points for the consumer to make a purchase b. fiercely competitive c. differentiates in a crowded market, d. All the above 3. Electronic retailing permits________ a. Touch and feel factor b. Reduction in set up cost c. Point of sales d. Visual merchandising 205 CU IDOL SELF LEARNING MATERIAL (S1.27LM)

4. ________is a major component of solid waste that a retailer generates in the environment a. branding b. labelling c. packaging d. naming Answers 1-a, 2-d, 3-b. 4-c 14.10 REFERENCES References book  Levy, M. and Weitz, B., (2012). Retailing management. Boston: McGraw-Hill Irwin.New York.  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  https://www.tutorialspoint.com/retail_management/retail_market_segmentation_strate gies.htm  https://www.marketing91.com/importance-of-retailing/ 206 CU IDOL SELF LEARNING MATERIAL (S1.27LM)