Retail and supply introduction

1. RETAIL AND SUPPLY CHAIN
MANAGEMENT

2. MODULE – 1
RETAILING MANAGEMENT

3. Retailing
Retailing: Definition
• Retailing is derived from the French word retailier, which means, "to cut a piece off.”
• A set of business activities that adds value to the products and services sold to the final
consumers for their personal, family or household use.
• From a marketers point of view, retailing can be defined as a set of marketing activities
designed to provide satisfaction to the end consumer and profitably maintain the customer
base by continuous quality improvements across all areas concerned with selling goods and
services.
• A retailer is any business establishment that directs its marketing efforts towards the end users
for the purpose of selling goods and services.
• Retailers comprise street vendors, local kirana stores, supermarkets, food joints, saloons,
airlines, automobile showrooms, video kiosks, direct marketers, vending machine operators,
etc.

4. Evolution of Retailing
Early Eighties
• Retailing in India was synonymous with peddlers, vegetable vendors, neighbourhood kirana stores (small
grocery stores) or sole clothing and consumer durable stores in a nearby town.
• These retailers operated in a highly unstructured and fragmented market. Very few retailers operated in
more than one city.
Before 1990
• Organized retailing in India was led by few manufacturer owned retail outlets, mainly from the textile
industry., Ex: Bombay Dyeing, Raymonds, S Kumars, and Grasim.
Evolution of Retailing Nineties:
• Liberalization of the Indian economy led to the dilution of stringent restrictions.
• Entry of few multi-national players like Nanz into the Indian market.
• Changing profile of the Indian consumers,
• Increasing wages of the employees working in Greenfield sectors with higher purchasing power.
• Setting up of retail chains by domestic retailers like Cotton World (Mumbai), Nirulas (Delhi) and the Viveks
and Nilgiris in the South.

6. Nature of Retail Marketing
• The key aspects of retail marketing is an attitude of mind.
• In making retail marketing decisions, retailers must consider the needs of
the customers.
• Retail marketing decisions are driven by what the shoppers need and want.
• Retail marketing is therefore a philosophy and is all about satisfying the
customers
• The nature of retail marketing Retailers must take the customers’ needs
into consideration in retail operation.
• Retail marketing is stimulating, quick paced, and influential.
• It encompasses a wide range of activities including: Environmental
analysis, Market research, Consumer analysis, Product planning etc.

7. SCOPE OF RETAIL MANAGEMENT
• Retail Management has become one
of the fastest growing career in the
industry with tremendous growth in
the economy.
• Retail Market of India is the most
attractive and emerging market in the
world.
• In the past years, it has demanded
more number of trained professionals
in this field.
• It strives to create a new generation of
smart retail professional of
international calibre and aims to
equip them with the best practices
being followed across the globe.
Source: career.webindia123.com

8. Functions of Retailer
• Sorting
• Breaking bulk
• Holding stock
• Form utility
• Time utility
• Place utility
• Ownership utility
• Additional services
• Channel of Communication
• Transport and advertising
function
• Staff Management
• Merchandising
• Vendor Management
• Inventory Management
• Customer Service
• Facilities Management
• Cash Handling and Accounting

9. Building and Sustaining Relationships

10. Retailer-Supplier Relationship
Retailers are part of distribution channel, so manufacturers (wholesalers) are concerned about:
• Caliber of displays
• Customer service Store hours
• Retailer‘s reliability as business partners
• Retailers are also major customers of goods & services for resale, store fixtures,
computers, management consulting ,& insurance.
Retailers and supplier have different priorities on:
• Control over distribution channel
• Profit allocation
• No. of competing retailers handling supplier‘s products Product display
• Promotion support Payment terms Operating
flexibility

11. Retailer-Supplier Relationship contd..
Channel Relations
Exclusive Distribution
Suppliers make agreements with one or a few retailers that designates them the only one to carry
certain brands/products in a specific geographic region.
Both parties work together to maintain an image, assign self space, allot profits & costs, &
advertise.
This is the smoothest channel relationship.
Intensive Distribution
Suppliers sell through as many retailers as possible.
This maximizes suppliers‘ sales & lets retailers offer many brands & product versions. Retailers
may assign little self space to specific brands, set high price on them, & not
advertise them.
This is most volatile channel relationship.
Selective Distribution
Suppliers sell through a moderate no. of retailers carrying some competing brands. This
combines aspects of Exclusive & Intensive Distribution
ISB&M Retail Management

12. Characteristics of Retailing
The average amount of a sales transaction for retailers is much less than
manufacturers.
• This low amount creates the need to tightly control the cost associated with each
• transaction like sales personnel, credit verification, & bagging.
• To maximize the no. of customer the retailer has to emphasize more on ads & special
promotions.
• Increase impulse sales by more aggressive selling.
Final consumers make many unplanned or impulse purchases.
• Large %age of consumers do not look at ads before shopping. They do
not prepare shopping list.
• Make fully unplanned purchases.
• This indicates the value of in-store displays, attractive store layouts,
& well organized stores, catalogs, & website.
• Retailer‘s ability to forecast, budget, order merchandise, & sufficient
personnel on the selling floor becomes difficult.
ISB&M Retail Management

13. Retail customers usually visit a store, even though mail, phone, & web sales
has increased.
• Most retail transactions happen in stores & will continue in future.
• Many people like to shop in person, want to touch, smell, and/or try on
products. Many people to browse for unplanned purchases.
• They feel more comfortable talking a purchase home with them than waiting
for a delivery.
• Desire privacy while at home.
• Retailers must work to attract shoppers to stores & consider such factors such as
store location, transportation, store hours, proximity (nearness) of competitors,
product selection, parking & ads.
ISB&M Retail Management
Characteristics of Retailing

14. Retail Organization Structure
Setting Up A Retail Organization
• Through a retail organization, a firm structures and assigns functions,
policies, resources, authority, responsibility, and rewards to effectively
and efficiently satisfy the needs of its target market, employees and
management.
• A firm can not survive unless its organization structure satisfies the
target market, regardless of how well employee and management
needs are met.
• Although many retailers do similar tasks or functions(buying, pricing,
displaying, and wrapping merchandising) there are many ways of
organizing to perform these functions.

15. Retail Organization Structure
Process of setting up a retail organization
• Specifying tasks to be performed
• Dividing tasks among channel members and customers
• Grouping tasks into jobs
• Classifying jobs
• Developing an organizational chart

16. Retail Organization Structure
Specifying tasks to be performed
• Buying, shipping, receiving, checking merchandise
• Setting prices, marking merchandise, inventory control
• Preparing merchandise and window display
• Cleaning, repairing, follow up, complaint handling
• Billing, handling receipts, financial records, credit management
• Gift wrapping, delivery, returning unsold or damaged merchandise
• Personnel management, coordination, sales

17. Retail Organization Structure
Dividing tasks among channel members and customers
• Retailer
• Manufacturer/ wholesaler
• Specialists (buying office, delivery firm, warehouse, marketing
research, ad agency, credit bureau etc.)
• Consumer (delivery, cash/credit purchase, self service, do it yourself)

18. Retail Organization Structure
Grouping tasks into jobs
• Display, customer contact, gift wrapping, follow up –Sales personnel
• Entering transaction data, cash handling, credit – Cashier
• Receiving, handling, checking, shipment, returning and control of
merchandise – Inventory manager
• Window dressing, interior display, mobile display – Display personnel
• Employee management, sales forecasting, budgeting, pricing,
coordinating – Management personnel

19. Retail Organization Structure
Classifying jobs
• Functional classification – Buying, sales promotion, store operation
• Product classification – goods or services
• Geographic classification- location, area
• Combination classification – location + goods

20. Retail Organization Structure
Developing an organizational chart
• Flat organization
• Tall organization
• Hierarchy of authority
• Coordination and control

21. Retail Management Process
• Retailing is a complex business as it involves the detailing and
precision involved in implementing each of the decisions.
• The core of the framework is the Retail Value Proposition.
• The proposition is derived keeping in mind the market profile and
expectations, opportunities present in the market, competitive
stances and activities and the retailer’s objectives and resources.
• Based on the proposition, retailers decide the formats, merchandise,
location, supply chain, pricing, promotion and other aspects of
retailing mix.

22. Retail Management Process

23. Retail Management Process
• Retailing is a complex business as it involves the detailing and
precision involved in implementing each of the decisions.
• The core of the framework is the Retail Value Proposition.
• The proposition is derived keeping in mind the market profile and
expectations, opportunities present in the market, competitive
stances and activities and the retailer’s objectives and resources.
• Based on the proposition, retailers decide the formats, merchandise,
location, supply chain, pricing, promotion and other aspects of
retailing mix.

24. Types of Retail stores
1. Departmental stores
2. Convenience Store
3. Full Line Discount
4. Conventional Supermarket
5. Specialty Stores
6. Food Based Superstore
7. Off Price Retailer
8. Combination Store
6. Variety Store
7. Super Centres
8. Flea Market
9. Hypermarket
10. Factory Outlet
11. Limited Line Stores
12. Membership Club

25. Non Store Retailing
• 1. Direct Marketing
• 2. Electronic/Internet/E- Direct Selling.
• 3. Vending Machines
• 4. catalogue Marketing
• 5. Franchising

26. Market Structure and Control,
Planning and Development

27. Retail market strategy
• Retailing strategy outlines the mission & vision.
• It is a systematic plan which provides the retailers overall framework
for dealing with its competitors, technological and international
movements.
• Strategic management actually is of recent origin as far as retailing is
concerned.
• Retailing strategy sets the tone for creating sustainable competitive
advantage through the optimization of available resources.

28. Strategic Retail Planning Process

29. Strategy development phase of planning
• Strategies are a result of deliberate planning process or they may
emerge as the result of a set are the result of a combinations of
purely deliberate and purely emergent strategies. Two types of
strategies follows:
• Company's current mission and strategies.
• SWOT (Strengths, weaknesses, opportunities, threats) model
• The external environment

30. Strategy development phase of planning
• The following are generic strategies that can evaluate by the:
• Forward Integration: Gaining ownership or control over distributors or
retailers.
• Backward Integration: Seeking ownership or control of suppliers.
• Horizontal Integration: Seeking ownership or control over
competitors.
• Diversification Concentric: Adding new or related product lines
• Conglomerate: Adding new, but unrelated product lines
• Joint Venture: Two or more sponsoring firms forming a separate
organization for applications, unfulfilled customers needs, etc.

31. Strategy development phase of planning
• Develop functional strategies that support the overall business level
competitive unit strategy.
• A control system (organizational structure) is designed to insure that
operational decisions are the Intended strategy becomes an
unrealized strategy.
• Emergent Strategy: Emergent Strategies are the result of incremental
decision making that achieve some degree of consistency over time
and launch the have potential strategic impact.

32. Strategy development phase of planning
The execution of strategy happens across the corporate-level, business-level
a functional Corporate Level Strategy: This involves answering questions like:
In particular retail segment bus corporate level team: Integration cooperative
purposes.
Some of the other strategies that can be evaluated are as follows:
• Market Penetration: Seeking increased market share for present products.
• Product Development: Seeking increased sales by improving present
products.
• Retrenchment: Regrouping through cost and asset reduction to reverse
declining.
• Liquidation: Selling off tangible assets, in parts for their tangible worth.

33. Theories of Retail Development
• The changing structure of retailing.
• All dynamic developments in retailing (department stores, warehouse
clubs, and hypermarkets) are responses to a changing environment.
• Changing customer demand, new technologies, intense competition,
and social change create new opportunities even as they shake up
existing business.
• The Internet and web technologies have itself created a myriad of
opportunities for web based business model of retailing.
• This has created competition for the retailer in order to maintain and
grow its share of market and compete within its band of retailers.

34. Theories of Retail Development
• Retailing has always been a dynamic industry. There are certain
theories of how firms evolve and change the industry in the process.
They are:
• The wheel of retailing
• The dialectic process
• Natural selection

35. The wheel of retailing

36. The dialectic process

37. Natural selection
• According to this theory, retail stores evolve to meet changes in the
micro-environment.
• The retailers that successfully adapt to technological, social,
demographic, economic, and political changes are most likely to grow
and prosper.

38. Thank You!