Sales & Retail Management 5
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The document discusses retail management and the retail industry in India. It covers topics such as the definition and functions of retail management, including creating different types of utility for customers. It also discusses the characteristics of retail management, the size and segmentation of the Indian retail industry, and factors driving changes in Indian retail. Challenges to retail development in India are also summarized, including high costs of real estate and a lack of infrastructure. Different theories of retail evolution and concepts like the retail life cycle are explained.
Sales & Retail Management 5
- 2. IntroductionRetail managementThe various processes which help the customers to procure the desired merchandise from the retail stores for their end use refer to retail management. Retail management includes all the steps required to bring the customers into the store and fulfil their buying needs.Retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile. In simpler words, retail management helps customers shop without any difficulty.By Prof. Raghavendran.V
- 3. RMRetail is derived word from “Retaillier”, which means to cut of a piece or to break bulk. Therefore, a retailer may be defined as a dealer or trader who sells goods in small quantities.Thus retailing is final distribution of merchandise, for consumption by the end consumers.By Prof. Raghavendran.V
- 4. Functions of RMFrom the customer’s point of view, the retailer serves him by providing the goods that he needs, in the required assortment, at the required place and time. From an economic standpoint, the role of a retailer is to provide real added value or utility to the customers. This comes from four different prospective:By Prof. Raghavendran.V
- 5. Functions of RM ( Utility)First utility is form of a productSecond in form of time utilityThird in form of place utility &Last in form of ownership utility is created.By Prof. Raghavendran.V
- 6. Characteristics of RMDirect End-User InteractionPlatform for Promotions & POP displaysLower unit salesRetail location criticalServices as important as Core ProductsLarge number of Retailers to meet geographical coverage and population densityBy Prof. Raghavendran.V
- 7. Retail industry in INDIAIn India Organized Retailing is 2%
- 8. Retail sector highly fragmented
- 9. Retail chains like Wal Mart, Sears, McDonalds brought Rapid Growth and consolidation of Organized Retail
- 10. Rapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organised RetailBy Prof. Raghavendran.V
- 11. Retail Industry in INDIAIn India, increase in Disposable income, Purchasing Power of growing Middle Class conducive conditions for growth of Organised Retail
- 12. Indian Retail environment different from that of western countries:
- 13. - Cities congested, large population in rural areas
- 14. - Smaller purchases, limited household spaceBy Prof. Raghavendran.V
- 15. Drivers of retail change in INDIASocio- Economic factorsChanging Income profilesThe age factorThe changing role of women and evolving family structureThe changing consumption basketIncreased credit friendlinessGeographical dispersion of market potentialBy Prof. Raghavendran.V
- 16. The size of retail in INDIAIn the year 2006 the INDIAN retail market was estimated at Rs 12,00,000 crores and organized sector is about 55,000 croresSee chart from the text book, page number 37.By Prof. Raghavendran.V
- 17. Segment wise divisionFood and GroceryBy Prof. Raghavendran.V
- 18. Segment Wise DivisionBy Prof. Raghavendran.VClothing & TextilesConsumer DurableFootwearJewellery retailBooks, music & giftFuel/ Petro retailWrite sector classification for the above:
- 19. Foreign Direct Investment in RetailFDI is a method of allowing external finance into an economy. FDI facilitates international trade and transfer of knowledge, skills and technology. FDI constituted a small per cent of gross fixed capital formation in 1993, which went up to 4%.INDIA is fastest emerging as a key destination of FDI, According FDI confidence index prepared by AT Kearney, India ranks second in FDI attractiveness, first being China.By Prof. Raghavendran.V
- 20. FDI in retailIn India FDI retail is not allowed. An international retailer can enter the Indian retail market through any of the following methods:Hi-Tech Items
- 22. Medical & diagnostic items
- 23. Manufactured with technology provided by the foreign collaborator.
- 24. Two- year test marketing (Simultaneously commencement of manufacturing)By Prof. Raghavendran.V
- 25. FDIForeign owned companies cannot own and run retail shops to sell other category of goods to consumers in INDIA.Some popular entry options for foreign players are:Franchising operations
- 26. Joint venture
- 27. Manufacturing facility in India
- 28. Distribution officesBy Prof. Raghavendran.V
- 29. Challenges to retail development in INDIAOrganized retail is little over a decade old. It is largely an urban phenomenon and the pace of growth is still slow and reasons are:Retail not being recognized as an industry
- 30. The high costs of real estate
- 31. Very high stamp duties
- 32. Lack of adequate infrastructure
- 33. Multiple and complex taxation systemBy Prof. Raghavendran.V
- 34. Analysis of INDIAN RetailBy using porter’s models, let us analyze the Indian retail segment.By Prof. Raghavendran.VThreat of new entrantsBargaining powers of SuppliersBargaining powers of buyersThreat of substitute products/ servicesPorter’s Five Force of Competition
- 35. RETAIL EVOLUTION THEORIESFour theories of evolution are:Wheel of Retailing CyclicalAccordion theory TheoriesDialectic Process EvolutionaryNatural selection TheoriesCyclical: Begin with one state and return to that state at some time in futureEvolutionary: Changes similar to biological evolutionProf. Raghavendran.V
- 36. Wheel of Retailing/ (Cyclical Theory)Wheel represents phases through which some types of Retailers pass:Retailers attract customers – low price, low serviceExpand market – More expensive merchandise, More services, open More convenient locations. Trading up process increases costs & price of their merchandise, creating opportunities for new low price retailers to enter e.g. Discount stores & category specialistsSome Retailers don’t begin as low price, low service entrants, e.g. Upscale fashion specialty stores.Prof. Raghavendran.V
- 38. THE ACCORDION THEORYRetailers fluctuate from strategy of offering wide merchandise with shallow assortment to offering limited categories with deep assortment In rural markets, Retailers sell many categories under one roof: shoes, cosmetics, foods, cloth, medicines. However the assortment is shallow and customers have limited choice.Department stores have both width and depth of merchandiseSpecialty stores carry special categories with deep selectionProf. Raghavendran.V
- 39. DIALECTIC PROCESS/ CONFLICT THEORYAn evolutionary theory based on premise that retail institutions evolve.The theory suggests that new Retail formats emerge by adopting characteristics from other forms of retailers in much the same way as the child is the product of the pooled genes of the parents.Specialty stores with high margins, low turnover plush operations Discount stores with low margins, high turnover low operationsBoth the above were synthesized to form category specialist stores.Prof. Raghavendran.V
- 40. DIALECTIC PROCESS/ CONFLICT THEORYProf. Raghavendran.VDiscount StoreDepartment StoreDiscount Department Store
- 41. NATURAL SELECTION/ ENVIRONMENTAL THEORYThose Retail Institutions Succeed which adapt to changes in customers, Technology, competition and legal environment.Department stores have tried to combat specialty stores by opening specialty counters within the stores. Interest in physical fitness and increased number of women in workforce have made salad bars in grocery stores successful.Prof. Raghavendran.V
- 42. The concept of life cycle in RETAILThe concept of PLC as Philip Kotler is also applicable to retail organizations. This is because retail organization pass through identifiable stages of innovation, development, maturity and decline. This is what is commonly termed as the “RETAIL LIFE CYCLE”Prof. Raghavendran.VAssignment: Explain the concept of Retail Life cycle?
- 43. Business Models in RetailCritical factors, which affect the retail model areTrends in the market positioning
- 44. Competition, &
- 45. The organizational capabilitiesBy Prof. Raghavendran.V
- 46. Classification of retail formatsBy Prof. Raghavendran.V
- 47. Careers in RetailingIt is people centric industry, which can be exposed to multi-disciplinary and skills. It offers many choices in terms as career.Buying and MerchandisingMarketingStore operationsSalesFinanceHuman ResourcesTechnology and E-commerceVisual MerchandisingSupply Chain Management & LogisticsBy Prof. Raghavendran.V
- 48. Assignment time: Sub on 20th SeptGlobal Challenges in Retail Industry?Brief out Traditional Business Models in Indian retail.Brief out Classification of retail formats.Classify & Differentiate b/w Super, Hyper markets & Departmental stores.By Prof. Raghavendran.V