1. RETAIL MANAGEMENT
PROF. R.MATHUR

2. RETAIL
MANAGEMENT ..1
INTRODUCTION –
CONCEPTS, ROLE & ENVIRONMENT
RETAILING Business activities involve Selling
Goods and Services to Consumers for their
Personal, Family or Household use.
“Every sale of Goods and Services to final
consumer” – Food products, apparel,
movie tickets; services from hair cutting to
e-ticketing.
 Retailing is the Last stage in Distribution
Process- Wholesale is an intermediate
where Goods and services are sold to
Business customers.

3. RETAIL
MANAGEMENT ..1
 Retailer is customer focused, not Product –
focused.
Manufacturer may reach customers
through:
 Dealers
 Company showrooms
 Super / Hypermarkets
Manufacturers will decide on Retail
Distribution:
 Intensive
 Selective
 Exclusive

4. RETAIL
MANAGEMENT ..1
ORGANISED RETAILING
 In India Organised Retailing is 2%
 Retail sector highly fragmented
 Retail chains like Wal Mart, Sears,
McDonalds brought Rapid Growth
and consolidation of Organised
Retail
 Rapid rise of Income levels and
accompanying changes in lifestyles
greatly contributed to growth of
Organised Retail

5. RETAIL
MANAGEMENT ..1
ORGANISED RETAILING
 In India, increase in Disposable
income, Purchasing Power of growing
Middle Class conducive conditions for
growth of Organised Retail
 Indian Retail environment different
from that of western countries:
- Cities congested, large population in
rural areas
- Smaller purchases, limited household
space

6. RETAIL
MANAGEMENT ..1
RETAILING CONCEPT
“Retaillier” French for breaking bulk
Retailer links Producers to Customers
Retailer is a person, agent, agency,
company or organisation reaching the
Goods or Services to ultimate
consumer
Retailers perform specific activities:
 Anticipate customer wants
 Stock product assortments
 Acquire market information
 Finance Retail business

7. RETAIL
MANAGEMENT ..1
RETAILING CONCEPT
Retailing may take place through:
 Retail Store
 Mail Direct
 Internet Sales
 Door-to-door
Retail services like Restaurants, Hotels,
Parlour, Health Services, car rentals,
Travel
In USA Retail generates $3 trillion
through 23 mil. Employees. Wal Mart
generates $245 Bio. sales through 1
Mio.nationally and .3 Mio. Foreigners.

8. RETAIL
MANAGEMENT ..1
 Strong economies have a strong
Retail sector
 Entry in retail sector is easy, hence
results in fierce competition
 Retail must perform its primary role
of catering to customer satisfaction
 Retail earns modest profits of 9-
10%
 Retail stores of different sizes face
distinct challenges. Their sales
volume influences:
- Merchandise purchase
- Promotion & - Expenses Control

9. RETAIL
MANAGEMENT ..1
Last decade has seen tremendous
changes in Retail Business – from
made to order to ready to wear,
from counter sales to self service,
emphasis on value addition and cost
reduction.
Family run retail business giving way
to modern professional retail.
Retail improving inventory
management through systems –
faster turnover, better profitability,
fast changing customer preferences
for assortment of goods and
services. BETTER CUSTOMER CARE

10. RETAIL
MANAGEMENT ..1
GLOBAL RETAIL INDUSTRY
1. Retail sales driven by Ability
(disposable income) and
willingness (consumer confidence)
2. Worldwide retail sales Est.$7 Trio.
3. Expenditure on Household
Consumption increased by 68%
between 1980 and 1998
4. Top 200 retailers account for 30%
worldwide demand
5. Over 50 of the Fotune 500 and 25
of Asian Top 200 are Retailers

11. RETAIL
MANAGEMENT ..1
ORGANISED RETAIL FORMAT
1. By 2006 - 200 Shopping Malls – Up
from 25 in 2003
2. Expect by 2006, to develop 40
mio.sq.ft. quality Retail Space
3. 6 A Grade cities Delhi NCR,
Mumbai, Bangalore, Hyderabad,
Chennai, Kolkata will have 34 mio.
and non metros Pune, Ahemadabad
Ludhiana, Chandigarh, Jaipur,
Lucknow, indore, Cochin 6 mio.
4. Delhi NCR will have 26 mio.,
Mumbai another 5 mio.

12. RETAIL
MANAGEMENT ..1
RETAIL CHARACTERISTICS
1. Direct End-User Interaction
2. Platform for Promotions & POP
displays
3. Lower unit sales
4. Retail location critical
5. Services as important as Core
Products
6. Large number of Retailers to meet
geographical coverage and
population density

13. RETAIL
MANAGEMENT ..1
RETAIL EVOLUTION THEORIES
Four theories of evolution are:
1. Wheel of Retailing Cyclical
2. Accordion theory Theories
3. Dialectic Process Evolutionary
4. Natural selection Theories
Cyclical: Begin with one state and
return to that state at some time
in future
Evolutionary: Changes similar to
biological evolution

14. RETAIL
MANAGEMENT ..2
Wheel of Retailing
Wheel represents phases through which
some types of Retailers pass:
Retailers attract customers – low price, low
service
Expand 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 specialists
Some Retailers don’t begin as low price,
low service entrants, e.g. Upscale fashion
specialty stores.

15. RETAIL
MANAGEMENT ..2
THE ACCORDION THEORY
Retailers 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 merchandise
Speciality stores carry special categories
with deep selection

16. RETAIL
MANAGEMENT ..2
DIALECTIC PROCESS
An 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 operations
Both the above were synthesized to form
category specialist stores.

17. RETAIL
MANAGEMENT ..2
NATURAL SELECTION
Those 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.

18. RETAIL
MANAGEMENT ..2
RETAIL BUSINESS CLASSIFICATION
1. Ownership Business:
Proprietorship,
Partnership,
Limited liability company
2. Operational Structure:
Independent Trader,
Chain Of Stores, Franchising,
Consumer Cooperative
3. Width & Depth Of Merchandise:
Specific Product Category
Wide Range

19. RETAIL
MANAGEMENT ..2
4. Type Of Pricing:
Low pricing, minimum Service
Premium Merchandise, High Service
Premium pricing, distinctive Image
5. Consumer Interaction:
Direct interaction
Mail Order
Tele-Selling
Vending machines
Door-to-door
Mobile Vending

20. RETAIL
MANAGEMENT ..2
 GROCERS - Major business is grains,
provisions, spices, edible oils. Grocers
may be dealing in many other items.
 GENERAL STORES - Deal in items
Daily needs and stocking number of
categories, is identified as a general
store.
 CHEMIST- Deal in Ethical
Pharmaceutical Products. Require a
license and a Qualified Pharmacist.
Such outlets also deal in diverse FMCG
products.

21. RETAIL
MANAGEMENT ..2
 MODERN FORMAT STORE –
a) Part of a chain of stores with self-
service facilities
b) Part of a chain, but does not have
self-service Facilities
c) Stand-alone (not part of a chain)
with self-service facilities
FOOD STORE : Deal mainly in food
products - milk, beverages, tea,
coffee, squashes, ketchup, jams,
chocolates, biscuits, bakeries etc.

22. RETAIL MANAGEMENT ..2
 TOBACCO KIOSK : Deal in tobacco
products like Paan, Cigarettes, etc. are
called Pan Bidi shops. Many of them
also deal in packaged consumer
products like toilet soaps, toothpaste,
washing soaps, biscuits, confectionery,
batteries etc.
 COSMETIC STORE : Deal in Ladies
Personal care products / Cosmetics,
General toiletry products, Men’s
toiletry products, Baby Care Products.

23. RETAIL
MANAGEMENT ..2
RETAIL CONCEPT
 Customer Orientation:
Attributes & Needs satisfaction
 Coordinated Efforts:
Maximize Business Efficiency
 Value driven:
Good Value for Money
 Goal Orientation
Achieve Goals

24. RETAIL
MANAGEMENT ..2
RETAILING CONCEPT
 Communication with Customers
 Identify Customers Needs
 Provide Products and Services to
Satisfy Customers
 Elicit Feedback to Improve
Services – Word Of Mouth

25. RETAIL
MANAGEMENT ..2
RETAILING CONCEPT
Customer Service approach:
 Create a conducive environment
 Listen to your Customers
 Direct mail
 Relationship Marketing – Long Term
 Rewards for Regular Customers

26. RETAIL
MANAGEMENT ..2
ROLE
 Consumer spend their money at Retail
which drives the economy. Retailers
realize Revenue when Consumers buy
products or Services from them.
 The revenue passes up the Consumer
Goods distribution chain viz. to
Wholesalers, Distributors and
Manufacturers.

27. RETAIL
MANAGEMENT ..2
 Retail Industry employs 17-20% Workforce
that drives the Economy.
 Retail trends often mirror trends in a
nation’s overall economy.
 Retailers add value by Providing the Right
Product at The Right Place at the Right
Time.

28. RETAIL
MANAGEMENT ..2
 ENVIRONMENT
 Retailing is a Dynamic field with very
Competitive Environment.
 Retailers act as Filters – Strong lobby
for success or otherwise of a Product or
Services.
 Companies create Retailer Value and
Consumer Differential Advantage to
improve success rate of their Brands.
 Constraints – Multiple Brands and SKUs
for each category, Shelf Space, funds
available, Turnover of Merchandise.

29. RETAIL
MANAGEMENT ..2
New Concepts & Trends
1. Vertical Retail Concept: Traditional
stores and Shop-in-Shop concepts –
mixture of system and individuality,
e.g. Sale of Non-food items like
newspapers, magazines with snacks,
beverages
2. Consumption Related Trends:
Increasing Consumers with Purchasing
Power & More Migrant Consumers
Demand for Broad selection of Products
Demand for Good quality Products e.g.
Honest, Original and Green Products

30. Indian Economy – GDP Projections Through 2022 (2007
Prices)
2007
13,245
2,897
2,630
2,374
2,232
916
979
1,068
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
US A
Germa
China
UK
F rance
India
Rus sia
Brazil 2012
15,354
4,197
3,198
2,648
2,470
1,409
1,304
1,369
- 5,000 10,000 15,000 20,000
US A
C hina
Germany
UK
F rance
India
R uss ia
Brazil
2017
17,031
6,341
3,513
2,953
2,761
2,119
1,688
1,789
- 5,000 10,000 15,000 20,000
US A
C hina
Germany
UK
F rance
India
Rus sia
Brazil
2022
19,751
9,229
3,766
3,251
3,085
3,128
2,103
2,282
- 5,000 10,000 15,000 20,000 25,000
US A
China
Germany
UK
F rance
India
Russ ia
Brazil
US$
Billion
US$
Billion
US$
Billion
US$
Billion
India is expected to be comparable with UK & France in GDP by 2022
*GDP figures are in real terms with base year as 2007

31. Rapid Transformation
Anticipated
Current Size & Future Projections for Indian Retail Market
336 376 421 471 527
590
1011
12 17 29 51 74 97
282
0
200
400
600
800
1000
1200
2007 2008 2009 2010 2011 2012 2017
US$Billion
Total Retail Organized Retail
28% share
Reach a share of 28% by 2017

32. 9.0%
6.8%6.0%
6.0%
5.6%
5.2%
6.4%
6.6%
5.4%
9.4%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Projections of 8% sustainable real GDP growth rate till 2020 promise high
growth potential for Indian Retail
HIGH GDP GROWTH

33. Radical Transformation Anticipated
In Indian Retail
Country Share of
Organized
Retail
Years taken to
reach the level
from < 5%
China 20% 10
Poland 20% 8
Brazil 36% 15
Thailand 40% 18
US 85% 50
India 17% (estimated)
27% (estimated)
5
10
India looking at rapid GROWTH compared to other countries

34. Growth Of Indian Retail …
Indian Retail expected to grow close to 12% p.a. in the next 10
years
*Projected
Source: Technopak Analysis, CSO & Other Sources

35. RETAIL
MANAGEMENT ..3
WITH HIGH PRIVATE CONSUMPTION
 Private Consumption US $568 Bn
(62%)
 Retail US $352 Bn (62%)
Urban US $158 Bn (45%)
Rural US $194 Bn (55%)
 Non-Retail US $358 Bn (38%)
• Public Spending +Gross Capital
Formation 38%

36. RETAIL
MANAGEMENT ..3
 Rural India consists of 720 Million
consumers across 627,000 villages
 17% of these villages account for 50%
of the rural population and 60% of the
rural wealth implying reaching out to
almost 100,000+ villages to address
even 50% of this rural opportunity
WITH HIGH PRIVATE CONSUMPTION

37. RETAIL
MANAGEMENT ..2
RAPID TRANSFORMATION
 Investments in the range of US$ 20+ Billion
expected in the next 5years in Retail & its
Supply Chain alone
 Size of modern retail likely to touch US$ 74+
Billion by 2011
 At least 2.5 Million additional direct jobs
likely to be created in the next 5 years
 Hyper-competition is expected to set in by
2008-9.

38. RETAIL
MANAGEMENT ..3
TRADITIONAL RETAILERS
 Retail market is growing from US$ 336
billion to US$ 590 in 2012
 That means an additional market of US$
254 billion
 Even if the modern retailing can go from
US$ 12 billion to US$ 74 billion in 2011
Still US$ 180 billion is left to be addressed
by traditional retailers
 The growth of modern retail will be more in
urban as compared to rural

39. RETAIL
MANAGEMENT ..3
BOOKS FOR REFERENCE
1. Retail Management By Chetan Bajaj
2. Retail Management By Berman &
Evans
3. Retail Management By Levy & Weitz

40. RETAIL
MANAGEMENT ..3
CASE STUDY:
 Facts Of the Case – No assumptions
 Key Issues
 List alternatives
 Evaluate alternatives
 Recommend Course Of Action

41. RETAIL
MANAGEMENT ..2
TOTAL RETAIL EXPERIENCE
 Merchandising & Display
 Brands and Quality Of Goods
 Inventory Carried
 Customer Service
 Pricing
 Support Functions: Parking
 Create Customer Excitement

42. RETAIL
MANAGEMENT ..2
TOTAL RETAIL EXPERIENCE
Possible Pitfalls:
Discount stores – Ample Stock
Neighborhood Store – Overly
Trendy Products
Full Service Store – Knowledgeable
Theme Restaurants – Novelty
wears off, food so-so, Prices high
MEET CUSTOMER NEEDS

43. RETAIL
MANAGEMENT ..2
OPPORTUNITIES:
 Management –
Raise capital
Purchase
Use MIS to Control Operations
Employ for Sales Counters, Stores
and Cash Counters
Undertake Marketing Activities
 Entrepreneurial Opportunities

44. RETAIL
MANAGEMENT ..3
RETAIL STRATEGY
OVERALL ACTION FRAMEWORK
 Mission
 Goals
 Consumer Market
 Overall Activities
 Feedback and Control Mechanism

45. RETAIL
MANAGEMENT ..3
Forward Retail Planning – FOCUS
 Analysis Of Requirements Of Business
 Set realistic Goals
 Differentiate Itself for Target Customers
- Benchmarking
 Knowledge Of Business Environment –
Legal, Economic, Competitive
 Synergize efforts
 Reduce Business Risk – Feedback and
Control

46. RETAIL
MANAGEMENT ..3
MISSION
 Commitment to A Business –
Business Decision
 Around Goods and Services sold or
around Consumer needs.
 Specific or Generic approach

47. RETAIL
MANAGEMENT ..3
 Distinctive Role In Market –
A Leader or a Follower
Leader – Unique strategy
Follower – Emulate standard Practices
with better execution than competitor.
 Market Scope – Customer Base
 Dynamic Decision In Sync. With Retail
Environment

48. RETAIL
MANAGEMENT ..3
Ownership and Management:
 Sole Proprietorship –Individual accrues
Profits, Risks, Costs. Is Liable for Legal
Claims. Limited Capital and Expertise.
 Partnership – Share Profits, Risks,
Costs. Owners Liable for Legal Claims.
Better Capital Investments and
Capabilities.

49. RETAIL
MANAGEMENT ..3
 Corporation – Incorporated under law.
Funds through Sale of Stocks.
Ownership Transfer is easy. Private
Limited Company – Limited number of
Individuals with Limited Liability. Public
Limited Company – Open to Public to
Invest In Stocks. Profits and Dividends
attract Taxes. Managed by professional
managers.

50. RETAIL
MANAGEMENT ..3
Business:
 Start A New Venture – Flexibility of
retailing Factors
 Buy an Existing Business – Balance Of
Advantages should be Positive – weigh
the negatives carefully
 Become A Franchisee – Combines
Enterprise with Known Brands. Brand
also puts a number of rigid Quality and
Business Restrictions.

51. RETAIL
MANAGEMENT ..3
Types Of Retail Goods & Services
 Durable Goods
Furniture, Electrical Appliances,
Hardware, Timber, Jewelry,
Automotive and Spare Parts
 Non-Durable
Apparel – Cloth, Garments, Food Group –
Green Grocers, Packaged Foods,
General Merchandise, Eating Places,
Petrol Stations, Chemists, Stationery

52. RETAIL
MANAGEMENT ..3
Service Establishments
 Personal Services
Dry Cleaning, Health Care,
Photographic Goods, Barber Shops,
Amusement Services, Movie Theatres,
Clubs, Amusement Parks, Game
Arcades
 Repair Services
Automobile, Electrical Gadgets, Watch
& Jewelry, Electronic Gadgets

53. RETAIL
MANAGEMENT ..3
 Hotel Services
Hotels, Resorts
 Professional Services
Lawyers, Doctors & Surgeons,
Chartered Accounts, Stock brokers,
Real Estate Agents
Potential Retail Business Owners
Aptitude for a Particular Business

54. RETAIL
MANAGEMENT ..3
 Personal Aptitude
Knowledge, Experience, Qualifications,
Inborn Skills and Acquired Skills
 Financial Resources
Land and Building, Fixtures, Equipment
 Time Demands
Owner’s Availability
 Personnel
Sales People, Inventory, Cashiers

55. RETAIL
MANAGEMENT ..3
RETAIL OBJECTIVES – STRATEGY
 Sales – Growth, Market Share
 Profit – Level, ROI, Efficiency
 Satisfaction – Total Retail Experience
 Positioning – Up-market, Mid-Priced,
Discount Oriented, Mass Market, Niche
Value Scale-Quality, price
Fashion Scale-Fashion, Style,
Assortment
Image Projected

56. RETAIL
MANAGEMENT ..3
Target Market – Customer Group To Be
Attracted and Satisfied.
Mass – Broad Spectrum of Customers
Concentrated – Specific group
Differentiated – Two or more distinct
Groups with Different Retail Approaches

57. RETAIL
MANAGEMENT ..3
TARGET MARKET TECHNIQUES
STRATEGY MASS MARKET CONCENTRATED DIFFERENTIATED
LOCATION Near Large
Population
Near Small
Medium Pop.
Near Large
Population
RETAILMIX Wide
Assortment,
Medium Qual.
Deep
Assortment,
High/ Low
Qual.
Distinct Goods
for Target
Market
PROMOTION Mass Advtg. Direct mail Different
Media for
Target Groups
PRICING Popular High or Low High, Medium
and Low
STRATEGY Large
Homogeneous
Group
Specific
Strat.
Directed at
Specific Gr.
Strategies
directed at
Heterogeneous
Groups

58. RETAIL
MANAGEMENT ..3
CONTROLLABLE
VARIABLES
RETAIL
STRATEGY
UNCONTROLLABLE
VARIABLES
Store Location Consumers
Managing a
Business
Competition
Merchandise @
Pricing
Technology
Communicating Economic
Conditions
Seasonality
Legal Restrictions

59. RETAIL
MANAGEMENT ..3

Mission
 Situation Analysis Ownership
 Goods/Services category
 Sales
 Objectives Profit
 Customer satisfaction
 Image
 Mass
 Target Customer Concentrated
 Differentiated
 Controllable
 Overall strategy Uncontrollable
 Short Term
 Specific activities Competition
 Evaluation
 Control Adjustment

60. RETAIL
MANAGEMENT ..4
 RETAILERS MARKETING DECISIONS:
-Target Market: Focus resources & Retail Mix
-Product Differentiation Strategy: Product
Assortment Breadth & Depth
-Services: Pre-purchase, Post-purchase,
Ancillary
-Price: Target market, Product Mix,
Competition
-Promotion: Promote & Reinforce Image
-Location: Vicinity of Target market

61. RETAIL
MANAGEMENT ..4
 MARKET SEGMENTATION- TARGET
MARKET
Sex, Age, Family Size -Type, Marital, Status,
Socio-economic Class, Occupation,
Geographic: Metros, large Towns
Psychographic: lifestyles, Personality,
Values
 Services: Advertising, Displays, Special
Offers; Delivery, Gift Wrapping, Returns,
Tailoring, Installation; Cheque Cashing,
Parking, Restaurants, Rest rooms

62. RETAIL
MANAGEMENT ..4
Pricing: High Profit %, Low Volume & Low
Profit %, High Volume
Loss Leader, Discounts -Clear Merchandise
EDLP Every Day Low pricing vs. Discounts
 Promotion: Frequent Shopper Rewards,
Coupons, Sampling, Ads.
 Location: Sales effectiveness –
Number of people pass by - % Enter –
% Buy- Average Amount per Sale
CASE STUDY – CONVENIENCE STORE

63. RETAIL
MANAGEMENT ..5
MERCHANDISE MANAGEMENT:
 A Key Strategy: Develop & Implement
Merchandising - Plans Of Proper Assortment Of
Goods & Services As In Demand, make them
Available at Places, Times, Prices & Quantity to
Satisfy Target Customers
 Merchandising Decisions dramatically affect
Performance.
 Investments in Merchandising Skills & Talent
produce Better results than Investments in
Technology or other Skill Specialties. 70 -80 %
Results Depend on Merchandisers.

64. RETAIL
MANAGEMENT ..5
MERCHANDISING PLAN:
 All Merchandising Decisions Based on
Plans-
1. Needs Of Target Market
2. Type Of Retail Business
3. Marketplace Positioning
: Mass - Wide & Deep Assortment – Broad
Customer Market
:Niche –Specific Market Segment – High
Customer Loyalty – Shields against
Conventional Competitors

65. RETAIL
MANAGEMENT ..5
4. Defined Value Chain – (Trends )
- Expected: Hygiene, Timely Service,
Knowledgeable, Stock Popular Products,
Returns/ Redressal
-Augmented: Special Services,
Differentiated Brands, Loyalty Prog.
-Potential: Elements not yet Perfected or
Opportunities not yet exploited.
5. Product Trends

66. RETAIL
MANAGEMENT ..5

Merchandising Plans will drive
Decisions:
Product Lines to Carry
Shelf Space to Allot to Different Products
Inventory Turnover
Pricing – Across Categories & Within
Promotions
Assortment – Breadth: Narrow or Wide
Depth: Deep Or Shallow

67. RETAIL
MANAGEMENT ..5

Scope Of Responsibility for Personnel:
Full Merchandising Functions – Buying &
Selling: Selection Of Merchandise,
Pricing Displays, Customer
Transactions.
Separate Buying & Selling Functions.
Micro Merchandising – Shelf space Basis
Demand Pattern
Cross Merchandising – Carry
Complimentary Goods & Services
Water, Soda, Soft Drinks, Juices, Ethnic

68. RETAIL
MANAGEMENT ..5
Merchandise Plan - Forecasting :
 Staple Merchandise – Regular Daily Need
Products, Stable Sales – List Of products,
Inventory Level, Colours, Brands, Style Size
 Assortment Merchandise – Apparel,
Furniture, Autos. Variety Of products to
enable Customers a Selection. Demand
Varies, Forecast difficult. Decision On
Product Lines, Styles Designs & Colours.
Model Stock Plan - Colour, Size, Qty.

69. RETAIL
MANAGEMENT ..5

Fashion Merchandise – Cyclical sales
due to Changing tastes and Life Styles

Seasonal Merchandise – Seasonality In
Sales – Summers Cottons, Winters
Woolens – Forecasting for Season

Fad Merchandise – High Level Of Sales
In a Short Time. Toys, Games are short
lived Fads. Extended fads – Residual
sales Continue for longer Periods. Never
Out List – Always in stock

70. RETAIL
MANAGEMENT ..6
PRICING STRATEGY IN RETAILING:
Retailer Prices Goods & Services to:
- Achieve Profitability
- Satisfy Customers
- Be Consistent with Overall Image, Sales,
Profits, ROI
Pricing Options:
- Discount Orientation
- At-the-market Orientation- Average Pricing
- Upscale Orientation

71. RETAIL
MANAGEMENT ..6

Discount Orientation:
- Low pricing as competitive advantage
- Low status Image, Fewer shopping
frills, Price based customers, Low
operating costs, High Inventory T/O.

At-the-market Orientation:
Middle Class shoppers
- Offers excellent service, Good
atmosphere

72. RETAIL
MANAGEMENT ..6
- Profit margins > = Moderate
- Quality > = Average
- Price Range Difficult to Expand as
Competition from Discount Stores or
Prestige Stores Squeezes the Range

Upscale Orientation:
- Prestige Major Competitive Edge
- Smaller Target Market, Higher
Operating Costs, lower Inventory T/O
Means Customer Loyalty,

73. RETAIL
MANAGEMENT ..6
Distinctive Services & Product Offerings,
High unit Profit margins
PROVIDE A GOOD VALUE IN
CUSTOMERS’ MIND FOR THE
CHOSEN PRICE ORIENTATION.
CUSTOMER NOT NECESSARILY
LOOKING FOR THE BEST PRICE BUT
FOR GOOD VALUE – REAL &
PERCEIVED -FOR MONEY.

74. RETAIL
MANAGEMENT ..7
Research on price In Buying Decisions
reveals Different Motivations for
Different market Segments.
CONSUMER PURCHASE & PRICING:
Price Elasticity Of Demand – Sensitivity to
Price Changes. Small % Change in
Price Substantial % Change in Demand
– High Price Elasticity. Urgency to
purchase is low or acceptable
substitutes exist.

75. RETAIL
MANAGEMENT ..7
Large % Change in Price Small %
Change in Demand – Demand In-
Elastic. Urgency to purchase is high or
there are no acceptable substitutes.
Occurs with Brand or Retailer Loyalty.
Unitary Elasticity - % Change in Price
directly off-set by % Changes in Quantity
Demand

76. RETAIL
MANAGEMENT ..7
In Retailing computing Price Elasticity is
Difficult due to other factors of Product
Mix also interplay. Demand hard to
predict. Price Sensitivity varies by
Market Segment based on Shopping
Orientation:-Economy: Shop around for
Lowest Price. Segment Growing rapidly.
- Status: Perceive Retailers as different,
Look for Prestige Brands and customer
Service.

77. RETAIL
MANAGEMENT ..7
- Assortment oriented: Seek Retailers
with Strong Assortment in Product
Categories and look for Fair Pricing
- Convenience Oriented: Shop only when
they Must at nearby locations with long
hours. Prepared to pay higher Prices.
- - Loss Leaders: Price below cost to
attract more customers.
- - Predatory Pricing: Seek to Reduce
Competition by selling at very low Pricing

78. RETAIL
MANAGEMENT ..7
Unit Pricing: Indicate Pricing at a unit,
e.g., per Kg – to enable quick
comparisons by customers.
Sharp Practices:
Bait and Switch Advertising:
Lures customer with exceptionally low
prices. On contact customer informed of
stock-out and offer another product.

79. RETAIL
MANAGEMENT ..7
Conflicts In Pricing:
Manufacturer Wholesaler
Retailer
Co. Price Distributor’s Price (a-b%)
Wholesale Price (a-w%)
Price To Retailer (a)
Price To Consumer (a+ c%)
Gray Market Goods: Imported Goods at
Lower Prices.

80. RETAIL
MANAGEMENT ..7
Market Pricing:High Competition,
customers seek lowest pricing. Price
increase leads to brand switching.
Administered Pricing: Strong product
Differentiation, Control by retailer on
Price charged. For customers Image,
Assortment, Personal service more
important than Price, e.g. Fashion
apparel stores, upscale restaurants.

81. RETAIL
MANAGEMENT ..7
PRICING OBJECTIVES:
Market Penetration – Achieve large
revenues by setting Low prices and sell
high unit volumes – an aggressive
strategy to discourage competition
Market Skimming – Profit is Objective.
Charge Premium Prices and attract
Customers seeking Service, Assortment
& Status. Does not maximize Sales. ROI
or early Cash Recovery Objectives met.

82. RETAIL
MANAGEMENT ..7
Selling Pr. Demand Sales Av .Cost Op. Exp. Tot. Cost
9 114000 1026000 7.6 104000 970400
10 104000 1040000 7.85 94000 910400
11 80000 880000 8.25 88000 748000
12 60000 720000 8.75 80000 605000
Selling Pr. Tot. Profits Markup % Av. Inv. Hold Inv. T/O R O Inv.%
9 55600 16 12000 9.5 61
10 129600 22 13000 8 127
11 132000 25 14000 5.7 114
12 115000 27 16000 3.8 82
Unit Sales Sales Goal ROInv. %
Profit Profit/Unit

83. RETAIL
MANAGEMENT ..7
Prestige Pricing:
Premium pricing to convey exclusive
image for the product or Service. Evoke
perceptions of Quality and Prestige.
Habeebs Parlour, Delhi Golf Club,
Luxury hotels.
Odd – Even Pricing:
Odd Pricing to indicate lower “Good” deal.
Even Pricing to indicate higher quality.

84. RETAIL
MANAGEMENT ..7
Bundled Pricing:
Offering two or more Products or Services
at one price.
Fixed & variable Pricing:
Variable pricing for highly differentiated or
unbranded products. Fixed pricing for
Branded products.

85. RETAIL
MANAGEMENT ..8
PLANNING & CONTROL
Retailer forms a New Strategy or Adjusts
an Existing one, gathering and analyzing
feedback reveals effectiveness of
Operation. Feedback can be obtained
for:
- Attributes, Buying Behaviour
- Alternative Store location
- Inventory Planning
- Product Mix Offering

86. RETAIL
MANAGEMENT ..8
- Pricing
- Promotion
- Store image
Research efforts related to risk involved:
- Higher risk : Store Location
- Lower risk: Introduction of New Product
Line
Information Gathering and Processing is
ongoing for Feedback & Control

87. RETAIL
MANAGEMENT ..8
Non-systematic or Incomplete ways of
obtaining information due to constraints
of Time, Costs or Lack of Research
Skills:
- Using Intuition: Gut feel
- Assuming Past Trends to Continue and
follow past practices
- Copy Competition
- Devising a Strategy based on few
individuals perceptions

88. RETAIL
MANAGEMENT ..8
Example: Movie tickets cost –weekdays
vs. weekends and matinee vs. evenings
Toy store orders for holiday season basis
last year’s demand +. Research
indicated higher optimism and desire to
gift. Stock-out before peak, unable to get
delivery of extra stocks.
Chain Store in new Location – doing 40%
of expected business. Research shows
Store name and Image unknown, ad
media choice incorrect

89. RETAIL
MANAGEMENT ..8
Retailer’s Objectives direct Strategic
Planning – some Routine. Non-routine
require careful evaluation
Strategy outlined, new data required for
its operation acquired and files updated
or retrieved from storage, analyzed and
interpreted. All this at Information
Control Centre. Decisions made and put
into operation.

90. RETAIL
MANAGEMENT ..8
Retail Information System – RIS
Environment Mission, Objectives
Competitors, Economy
Strategic Plans
(a) DATA COLLECTION INFORMATION (b) DATA
STORAGE+
ANALYSIS CONTROL RETREIVAL
INTERPRETATION CENTRE © UPDATING
DATA
FILES
FEEDBACK Retail Operation
IMPLEMENTATION

91. RETAIL
MANAGEMENT ..8
Performance results are fed to ICC and
compared with objectives set. Regular
and Exception reports ( Giving reasons
for deviation) generated and sent to
Operational Managers for necessary
action.
Building RIS
How active RIS role – Reports in routine
or as-and-when

92. RETAIL
MANAGEMENT ..8
Internal or Out-sourced- Some Specific
Researches can be out-sourced.
Cost Of RIS – 0.5 to 1.5% of revenue
Quanta of Data – Edit raw data and
share interpretation
Frequency of Data dissemination – who
receives which report
Data Storage – Easy retrieival, adequate
Longitudinal analysis (Period to Period)

93. RETAIL
MANAGEMENT ..9
RETAIL PROMOTION
All communication that informs,
persuades and reminds the target
market about marketing mix of the Retail
business.
Objectives of Communication:
- Increase customer Flow
- Increase Purchase BY Target Market

94. RETAIL
MANAGEMENT ..9
- Increase sale of Specific product
or Product Category
- Develop Store Image
Communication Promotion Mix:
- Advertising
- Sales Promotion
- Publicity
- Personal Selling

95. RETAIL
MANAGEMENT ..9
Department or Large Stores manage
through Promotion department of the
store. Small Retailers pool resources
with manufacturers for Promotions.
Advertising – Paid Communication using
Impersonal mass media: Print – news
papers, magazines, direct mail and AV
media like TV, radio.
Local, vernacular language Print media
used by small retailers.

96. RETAIL
MANAGEMENT ..9
Cable TV is also used by small retailers.
Large retailers use a combination of
media.
Sales Promotion is a paid Impersonal
communication offering additional value
to customer. Encourages customer visits
and Promotes trial and repeat Purchase
of focus Products or Services
Special events, In-store Demonstration,
Contests

97. RETAIL
MANAGEMENT ..9
Publicity -Un-paid form of Communication
that provides Information about the retail
through media.
A Powerful Business strategy evolves
through knowledge of Target
Customers, Clarity of Business
Objectives. Effective selection of media
for Promotion Strategy.
Major shift to Nuclear families in ’90’ s
have shifted focus on to kids in
Promotional strategies

98. RETAIL
MANAGEMENT ..10
ATMOSPHERICS & RETAIL SPACE
MANAGEMENT
REFERS TO THE PHYSICAL
CHARACTERISTICS OF THE RETAIL STORE
LIKE EXTERIORS, INTERIORS, LAYOUT
PLANNING AND VISUAL MERCHANDISING.
PLAY A SIGNIFICANT ROLE IN

ATTRACTING CUSTOMERS AND RETAINING
THEM

IMPROVING QUALITY OF SERVICE
EXPERIENCE

POSITIONING THE RETAIL OUTLET

99. RETAIL
MANAGEMENT ..10
DIMENSIONS OF ATMOSPHERICS:

PRESENTATION LIGHTING

STYLING COLOUR
PLANNING

DESIGN USE OF WALLS/ MATERIALS
APPEAL TO CUSTOMERS
EXTERIORS – STORE FRONT, DISPLAY
WINDOWS
INTERIORS – LIGHTING, COLOUR,
FACILITIES
ENHANCES DISPLAY & PROVIDES
RELEVANT INFORMATION

100. RETAIL
MANAGEMENT ..10
ATMOSPHERICS PLANNING RELEVANT FOR
ALL RETAIL SET-UPS, ESPECIALLY:
- PLANNED SHOPPING CENTRES
- LIFESTYLE STORES
A TIDY WORK ENVIRONMENT ATTRACTS A
HIGH STORE PATRONAGE
ATMOSPHERICS PLAY AN IMPORTANT ROLE:
- CREATE POSITIONING FOR RETAIL OUTLET
- ATTRACT NEW CUSTOMERS
- ORGANIZE STORE AND MERCHANDIZE
- ENRICH SHOPPING EXPERIENCE

101. RETAIL
MANAGEMENT ..10
ATMOSPHERICS ROLE IN RETAIL
STRATEGY

ATTRACTS NEW CUSTOMERS

CREATES A USP

FACILITATES EASY MOVEMENT INSIDE
THE STORE

FACILITATES ACCESS TO MERCHANDISE
INSIDE THE STORE

ENSURES OPTIMUM SPACE UTILIZATION

ENSURES EFFECTIVE & DESIRED
PRESENTATION INSIDE THE STORE

REDUCES PRODUCT SEARCH TIME
INSIDE THE STORE

102. RETAIL
MANAGEMENT ..10
CHOICE OF FIXTURES, DÉCOR,
SIGNAGE ENABLE CUSTOMERS
PERCEPTION. PROPER PLACEMENT OF
SIGNAGES INDICATING PRODUCTS
OFFERED INCREASE EFFECTIVENESS.
CUSTOMERS NECESSITY TO ASK
QUESTIONS INCREASE STRESS LEVELS.
UNIFORMS WORN BY STORE EMOLOYEES
ALSO REDUCE CUSTOMER STRESS AND
ANXIETY TO ASK QUESTIONS.
QUALITY OF STORE FIXTURES SIGNIFY A
RETAILER CUTTING CORNERS OR
MAKING LARGE PROFITS.

103. RETAIL
MANAGEMENT ..10
SIGNAGE, LAYOUT AND FURNISHINGS ADD
TO AMBIENCE AND EFFECTS STORE-
BROWSING COMFORT OF CUSTOMERS.
IN STORE ELEMENTS SUCH AS COLOUR,
LIGHTING AND MUSIC MAY AFFECT
PURCHASE DECISIONS MORE THAN POP
AND DISPLAYS. TO IMPROVE IN STORE
ATMOSPHERE, PERFUMES GET DESIRED
EFFECT – ESPECIALLY TO GET RID OF
CERTAIN ODOURS. IF THESE ARE
COMPLEMETARY TO THE STORE, THE
SERVICE QUALITY EXPERIENCE

104. RETAIL
MANAGEMENT ..10
MUSIC PLAYS AN IMPORTANT ROLE IN
ENHANCING CUSTOMER’S TIME SPENT
IN THE RETAIL OUTLET – ESPECIALLY
SOOTHING MUSIC, NOT THE FAST
PACED.
STIMULATE RETAIL ENVIRONMENT
PLEASURE EFFECT: CLASSICAL HINDI
MUSIC ENHANCES SHOPPERS’
ENJOYMENT
AROUSAL EFFECT: SLOW
INSTRUEMENTAL MUSIC RESULTS IN

105. RETAIL
MANAGEMENT ..10
DOMINANCE: CUSTOMERS FEEL DOMINANT
( IN CONTROL). ENVIRONMENTAL ASPECTS
- COLOUR OF INTERIORS, HEIGHT OF
CEILING DETERMINE CUSTOMER
DOMINANCE. FURNITURE AND FIXTURES
MAY IMPACT THE DURATION OF TIME
SPENT IN-STORE.
PHYSICAL ENVIRONMENT
STORE LAYOUT/DESIGN EMOTIONS SHOPPING
MERCHANDISE DISPLAY BEHAVIOUR
MUSIC
AROMA CUSTOMER’S
SENSES

106. RETAIL
MANAGEMENT ..10
KEY COMPONENTS OF RETAIL
ATMOSPHERICS

EXTERIOR ATMOSPHERICS

INTERIOR ATMOSPHERICS

STORE LAYOUT

VISUAL MERCHANDISING

107. RETAIL
MANAGEMENT ..10
EXTERIOR
ATMOSPHERICS
STOREFRONT
MARQUEE
ENTRANCES
DISPLAY WINDOWS
SIZE OF BUILDING
ACCESSIBILITY
VISIBILITY

108. RETAIL
MANAGEMENT ..10
INTERIOR ATMOSPHERICS
FLOORING
LIGHTING
ODOUR/ AROMA
FIXTURES
WALLS
TEMPERATURE
AISLES
CONVENIENCES/HYGIENE

109. RETAIL
MANAGEMENT ..10
STORE LAYOUT
SHOPPING FLOOR SPACE
TRAFFIC FLOW
DEPARTMENTS LOCATION
SPACE / MERCHANDISE
CATEGORY
SIGNAGE

110. RETAIL
MANAGEMENT ..10
VISUAL MERCHANDISING
ASSORTMENT
THEME
ENSEMBLE
RACKS AND SHELVES
CASH COUNTERS

111. RETAIL
MANAGEMENT ..11
CONTROL RETAIL STRATEGY
Rules to stay Competitive:
Commitment – Enthusiasm in Business
Share – Staff Involvement in Decision making
Listen & Communicate – Customers and Staff
Appreciate – Good efforts
Celebrate – Good Achievements
Motivate – Challenging goals and rewards for
High performers
Exceed – Deliver more than promises
Control – Operating Costs
Swim Upstream – Evaluate Competition and do
something Different.

112. RETAIL
MANAGEMENT ..11
INTEGRATING RETIAL STRATEGY
Situation Analysis Objectives
Strategy Target Market
Specific Activities
Control

113. RETAIL
MANAGEMENT ..10
OPPORTUNITY ANALYSIS
Overall Direction & Goals: Top Down
Middle Level: Inputs from Internal and
External Sources. Generate Ideas early.
Generate Specific Plans with Deadlines.
S ALES OPPORTUNITY GRID
Rates the promise of New and Established
Goods, Services, Store outlets
RETAIL PRICE, FLOOR SPACE, DISPLAY
COSTS, OPERATING COSTS, MARKUP;
SALES ESTIMATES, GROSS AND NET
PROFITS IN Rs. AT FIRST, SIX AND 12
MONTHS.

114. RETAIL
MANAGEMENT ..11
DEFINING PRODUCTIVITY
Efficiency with which a Retail Strategy is carried
out. Reach Sales and Profit Goals keeping
Operating Costs under control.
PERFORMANCE MEASURES
Criteria used to assess effectiveness and
setting standards for each performance.
Measures used: Total Sales Turnover,
Average Sales per store, Sales by Goods/
Service Category, Gross Margin/ ROInvst.,
Op.Income, Inventory T/O, Financial ratios,
Profitability

115. RETAIL
MANAGEMENT ..11
RETAIL INSTITUTION BY OWNERSHIP
Retail Institution refers to basic format or
structure of a Business.