Q1 Describe the retail life cycle and the phases of growth of retail markets..

The same concept of PLC is also applicable to any retail organization. Because retail organization pass through the stages of innovation, development, maturity and decline which is known as retail life cycle. The Retail Life Cycle is a theory about the change through time of the retailing outlets. It is claimed that the retail institution show a S shaped development through their economic life. This S shaped development curve has been classified into four stages. AINNOVATION: A new organization is born, it improves or creates other advantages to the final consumers that differ sharply from those offered by other retailers. This is the stage of innovation where the organization has few competitors. Since it is a new concept the rate of growth is fairly rapid. Levels of profits are moderate and this stage can last up to five years depending on the organization. BACCELERATED GROWTH: The retail organization faces rapid increase in sales. As the organization moves to stage two of growth which is a stage of development, a few competitors emerge. Since the company has been in the market for a while it is now in a position to establish leadership. Since growth will be there, the investment level will be high so also the profitability. Investments will be largely on system and processes. This stage can last for five to eight years. However towards the end of this phase, cost pressure tends to appear. CMATURITY: The organization still grows but competitive pressure will be more from newer forms of retailing that tend to arise. So the growth rate tends to decrease. As the market becomes more competitive the rate of growth slows down and profits start declining. Here the retail organization needs to rethink its strategy and reposition itself in the market. A change will occur not only in the format but also in the merchandising mix offered. DDECLINE: The retail organization looses its competitive edge and there is a decline. In this stage the organization needs to decide whether to continue in the market or not.Tjhe rate of growth is negative, profits decline further and overhears are high. The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 25-30% annually. The India retail industry is expected to grow from ` 35,000 crore in 2004-05 to ` 120,000 crore by the year 2012. In the Indian retailing industry, food is the most dominating sector and is growing at a rate of 9% annually. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Since at present 60% of the Indian grocery basket consists of non- branded items.

Growth of Indian Retail

It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion. According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is also expected to reach 22% by 2010. According to a report by Northbride Capita, the India retail industry is expected to grow to US$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total market share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of the total retail market.
Major Retailers in India Pantaloon:

Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket Big Bazaar. It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.

Tata Group

Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across the country.
RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Foodworld stores. Later it also opened the pharmacy and beauty care outlets Health & Glow.
Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance

Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach ` 90,000 crores by 2010.
AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of retail. It will invest ` 8000-9000 crores by 2010.
Retail formats in India

Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories.

Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. Departmental stores: are general retail merchandisers offering quality products and services. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. Shopping malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof. E-trailers: are retailers providing online buying and selling of products and services. Discount stores: these are factory outlets that give discount on the MRP. Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. Category killers: small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO's. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.

TheFuture

The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth rates, the consumer spending has also gone up and is also expected to go up further in the future. In the last four year, the consumer spending in India climbed up to 75%. As a result, the India retail industry is expected to grow further in the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%. India retail industry is progressing well and for this to continue retailers as well as the Indian government will have to make a combined effort.

Q2) Discuss retail and retailing in Indian concept. Write the functions of a retailer. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businessmen. Businessmen buying in bulk either directly or through a wholesaler for resale are known as retailers in commerce language. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The concept of Retailing The term "retailer" is also applied where a service provider services the needs of a large number of individuals such as a public utility, like electric power. According to Swapana Pradhan, Retailing includes all the business activities involved in selling goods and services to the final consumers for personal, non business use. It is the final step in the distribution of merchandise for consumption by the ultimate consumers. Some of the most common distribution channels for retailing to ultimate consumers are:

Customer orientation: The retailer determines the attributes and needs of its consumers and endeavors to satisfy them to the fullest. Co-ordinates efforts: The retailer integrates all the plans and activities to maximize efficiency. Value-driven: Retailer offers good value to the customers, whether it be upscale or discount. This means having appropriate prices for the level of products and customer service. Goal orientation: Retailer sets goal and then uses its strategy to attain them.

The major role of a retailer is to collect an assortment from various sources and act as the contact between manufacturers, wholesaler and the consumers. Classification of retail format

The store based retailing is categorized on the basis of : 1. Ownership 2. Merchandise offered

Classification based on ownership Independent Retailer: An independent retailer is one who owns and operates only one retail outlet. The owner and few other local hands or family members working as assistants in the shop manages such an outlet. Many independent stores tend to be passed on from generations to generations. A chain retailer or a corporate retail chain: When two or more outlets are under a common ownership it is called a retail chain. These stores are characterized by similarity in merchandise offered to the consumers, the ambience, advertising and promotions. Franchising: A franchise is a contractual agreement between the franchiser and franchisee which allows the franchise to conduct business under an established name as per a particular business format in return for a fee or compensation. Franchising can be a product or trademark where the franchise sells the products under franchiser's name. Leased Department: They are also termed as shop in shops. When a section of a department in a retail store is rented to an outside party, it is termed as a leased department. Consumer co-operative: A consumer co-operative is a retail institution owned by its member customer. These many arise largely because of dissatisfied consumer whose needs are not fulfilled by the existing retailers. Classification on the basis of merchandise offered Convenience store: They are relatively small stores located near residential areas. They are open for long hours, seven days a week and offer a limited line of convenience products like bread, eggs, mil k etc. Department store: It is large scale retail outlet, often multileveled whose merchandise offer spans a number of different product categories. They are defined as those establishments depending on good, clothing and home related items. The apparel retail business is flourishing full pace owing to the globalization. Consumer preferences have been changing very rapidly with regards to designs, innovation, and price competitiveness. Today's era of globalization is offering a wide range of products both nationally and internationally thus, it becomes necessary for the retailer to accentuate best merchandise at reasonable price for the consumers. The e- knowledge is essential in global era to facilitate faster communication with the suppliers. In India, retailing is moving towards the shopping malls and department's store, the speciality stores are merging up

with them to stay in existence. Number of supermarkets is coming up, where all essential products are available under roof to cater the consumer's demands. Functions of a retailer From the customer point of view, the retailer serves him by providing the goods that he needs in the required assortment, at the required place and time. 1. Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Final consumers, in contrast prefer a large variety of goods and services to choose from and usually buy them in small units. 2. Breaking Bulk: to reduce transportation costs, manufacturer and wholesalers typically ship large cartons of the products, which are then tailored by the retailers into smaller quantities to meet individual consumption needs 3. Holding stock: Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacture to regulate production. 4. Promotional support: small manufacturers can use retailers to provide assistance with transport, storage, advertising, and prepayment of merchandise. The Retailer also serves the manufacturers by

1. Accomplishing the function of distributing the goods to the end users 2. Creating and Managing a channel of information from manufacturer to the consumer 3. Act as a final link in the distribution chain 4. Recommending products where brand loyalty is not strong or for unbranded products. Q3. What is communication mix? What is the role of retailing Promotion mix. Ans. Every business organization large or small, product motive or service motive, government or non government, profit motive or non profit motive need to communicate with wide range of stakeholders The reason to communicate may be to get materials and service, understand business or to co-operate with each other with in an organization. For communicating well, companies have to use marketing tools they do this through the communication mix (advertising, sales promotion, personal selling, public relation and direct marketing). Each of these tools plays a significant role while communicating with consumer. Marketers have to make a wise decision while choosing communication mix to communicate and consider the changes that are happen in media. Furthermore companies have to be proactive and consider the change in buyer behaviour.

Introduction Building excellent customer relationships requires more than making a good product, pricing it effectively and making it available to target customers. companies should communicate their significance proposals to customers, and should not be left to chance what they communicate. Excellent communication plays a key role in building and continuing of good relation with customer; building a profitable consumer relationship is essential component of the companys in which it have to focus on. A business has to communicate not only with consumer but also with intermediaries and variety of public. The intermediaries communicate with their consumers and publics. In the meantime, each group gives comment to each individual group. Therefore, the business has to handle multifaceted marketing communication system What is communication mix? Promotion or communication mix is the combination and types of personal and non personal communication that an organization uses to influentially communicate with consumer and build good relationship with them (Lamb, 2008). There are five elements of communication mix; among them advertisement, sales promotion, direct marketing and public relation are impersonal and personal selling is personal. : Element of promotion mix To communicate well, organizations often employ advertising departments to develop the advertising, sales promotion experts to plan sales encouragement programmes, direct marketing experts to widen database and network with consumers and projection and public relationships firm to expand cooperate images. They guide their sales people to be friendly, helpful and persuasive. Kotler et al assumes that for most of the organizations, the question is not whether to communicate or not; but is how much to spend and in what ways. All attempts for communication should unify into a reliable and corresponding communication programs Role of Retail Promotion mix Lamb, 2008 states that few goods and services, no matter how well developed, priced or distributed, cannot survive in the market place without effective promotioncommunicated by the marketer that inform, persuades and reminds potential buyer of the products in order to influence their opinion or elicit a response. At the same time, marketer critics argue that promotion raise the price to be higher than they would be under more sensible market (Kotler et al, 2008). For example: differentiated products- cosmetics, detergents, toiletries- consist of promotion and package cost that can amount to 40% or more prices to retailer. The overall role of retail promotion mix are: Informing: When a company have to introduce a new product in a market, marker used marketing communication mix to inform about the product in the market. Communication mix explain how to product work, suggest new user for a product. For example: Philips advertisement for Magnavox flat screen television showed that young, urban consumers trying the flat TV all over the house, including the ceiling. The ad focuses on how to use rather than its technology. (Lamb, 2008)

Persuading: Communication mix build a selective demand encourage the brand by persuading consumer that it offer the best quality for money. For example: after establishing the Sony DVD in market, it began to persuade its consumer that the brand offers the best quality their money which they spend. (Kotler et al, 2008) Reminding: Communications mix maintains a customer relationship and keep consumers thinking about product. For Example a Nike television ad in which well recognized athletes just do it never directly ask for sales, but remind the consumer about the product or brand. (Kotler et al, 2008) Advertising: Adverting is a paid form of non personal communication about an organization, its products, services or its activities that is transmitted through mass medium to a target audience Advertising generally engage mass media such as newspapers, magazines, television, radio, and also include computerized form of communication such as web blogs, CDs, DVDs, etc The characteristic of advertising are: it is efficient for reaching many buyers simultaneously; efficient way to create a brand loyalty; flexibility in nature; impersonal communication; variety of media to choose. Role of Adverting: According to (Saunders, 2008) and (Guinn, 2008) the role of advertisement: Advertising reach masses of geographically dispersed buyer at a low cost per exposure. Advertising alter optimistic message about product, company, supplier, size, popularly and success. Despite good advantage advertising have some weakness it reaches to many people who are not potential buyer; subject of too much criticism; people tend to screen out advertisement; and total cost may be high Sales promotion: Sales promotion is an activity or a material that offers customers, personnel or reseller a direct inducement for purchasing a product. These inducements which add value or incentive for the product might be in a form of a coupon, sweepstakes, refunds or display (Peter, 2004). (Peter, 2004) states characteristics of sales promotion which are: hold up short term drops of goods, designed to stimulate require demand of the goods, successful in altering short term performance, simple to connect to other communication; impersonal communication, short term incentives (Peter & Donnelly, 2004). While Donney , 2004 argue sales promotion is the risk which include brand loyal customer to stock up while not influencing other, the impact of the sales promotion may be limited to short-term, it may also hurt the brand image, etc. Personal selling Personal selling is face to face communication with prospective consumer to inform individual and influence them to buy an organizations product. William M Pride, 2008 assume that personal selling is the most adaptable of all the promotion mix because the people who are transforming the message can adjust it to the suit of individual buyer

however it is expensive method (Peter & Donnelly, 2004). Avon is an example of personal selling. Characteristics of personal selling are: sales people can be influential and significant in making customer to buy product; personal selling have two way communications which tolerate for the question and feedback; message can be targeted to definite consumer Public relation Public relation is the non personal form of communication that look to persuade the approaches, feeling and belief of the consumers, non consumers, stock holder, dealer, workforce and political bodies about the company A popular form of the public relation which is non paid form of the non personal communication about organization and its product is transmitted through mass media in form of news story. News (press release), events, written materials, audio visual materials, speech and cooperate identity are the form of mass media in public media. Characteristic of public relation are: cost of public relation may be low; media generated message seen as more creditable than market sponsored message; very little control over the message; impersonal communication Direct marketing Direct marketing used the direct form of the interaction with the consumers. It can take in form of the direct mail, online marketing, catalogue, telemarketing and direct response advertising. Similar to the personal selling it make consist of the interactive, dialogs between the company and consumers. For example Dell, Amazon, DHL (service motive) are doing direct marketing. Characteristics of the direct marketing are impersonal; flexibility, target ability, measurability, accountability and privacy, promote (Wymer, 2006). Despite a lot of advantage direct market have some drawbacks managing and maintaining up to the date database can be costly and often low customer response give response to direct marketing. Q4) What are the criterias for selecting right communication mix? Criteria for Selecting Right communication mix Success of the marketing plan and strategies depends largely on the design, development and execution of effective communication strategy. Developing an effective communication is a challenging task. This task requires the technical support of many creative people. In fact, an effective marketing communication is developed with a combined effort of marketing executives, creative manpower and media personnel. The criteria for are selecting right communication mix: Identify the target audience: Target audience may be an individuals, groups, specific public or general public. They critically influence the communication decisions. According to (Kotler et al, 2009) the target audience can be: Current buyer: Current user of the product.

Potential buyers: Have potential to buy the product in future. Influencers: Influence buying decision. Deciders: Make decision about buying product. According to effective communication can be developed through understanding of the demographic, psychographic and media graphic characteristics of the target audience. In this stage, the marketing firm needs the support of market research to conduct a detailed survey to properly develop a profile of the target audience. Determine the communication objectives: Communication objective are desired outcomes or end result to be achieved. The marketers need to design more effective and interesting communication in order to achieved common objectives. According to the effectiveness of marketing communication is measured in the term of how successful it has been to meet its goal communication is measured in terms of how successful it has been to move of the following goal as prescribed in the hierarchy of communication effects model. Brand awareness: Most marketing communications are targeted at achieving recognition and recall of the brand name by buyers. This is the most basic objectives of promotion Knowledge: The second level objective of marketing communication is to provide knowledge to the buyer about the brands characteristics, utilities and benefits Preference: The third level of marketing communication aims to develop a positive feeling on a brand aiming the potential buyers to have preference for the brand. Conviction: At the forth level, the marketing communication aims to develop a conviction among the buyers to purchase the brand. Such convictions are measure on buyers favourable purchase intention. Purchase: the final objective of the marketing communication is to make the buyers actually purchase the brand. Designing the message- Marketer should design the effective message to gain the attention from desired audience. The design message should obtain attention, grasp produce desire and get action (AIDA). AIDA model suggest ideal way of look and buy identify. The marketer should decide the message content and structure and format using the framework of AIDA model (Kotler et al, 2008). Attention: Draw the attention of the customer. Interest: Raise customer interest by focusing on benefits of the product. Desire: Persuade customers about desire give confident to consumer product will satisfy their needs. Action: Encourage the consumer to purchase the good (Koirala, 2005). Selecting Channels: The channels are the pathways for message transmission. Effective channels should be selected to carry the message. The channel of communication should be selected in term of objectives as different media have varying effectives in meeting the various communication objectives (Koirala, 2005). Kotler & Scheff, 2007 assumes there are varieties of communication media available to reach to the target audience, which are personnel communication and non personnel communication.

Personnel communication: Personal communication channel are based on face to face contact, telephone or emails. Indirect personal communication includes communication through expert or communication in service marketing. For example: doctors, beautician restaurant, and opinion leaders. Non-personnel communication: Non personal communication carry message without the personal contact or it is one way communication. Non personal communications include the Medias, events, newspaper, radio and television, blogging, etc. Most of non personal communications come from paid media. Company Philosophy: Choosing best communication mixes also depend on the company philosophy. Company philosophy refers to the company culture and beliefs, companies believe that adverting is best tool for promotion while other may believe personal selling is the best tool. For this reason the best tool for communication mix depend on company. Skills within the company: Every company have their manpower which company good. For example some companies with well trained salesperson, can used personal selling as the promotion tool and companies with skill advertising campaign, can used advertising as the promotional tool. Depending on the skill manpower companies should choose the promotion tools (Kotler et al, 2008). Feature of the Product: Choosing effective communication mix depend on the feature of product/ service. Some product may go well with adverting and some with other promotion tools such as sales promotion, personal selling, direct marketing and public relation. For example: For food and baggage industry advertising is best way to promote and for insurance, credit card facilities, etc personal selling is the best way to promote. And at the same for luxurious brand like Tom Ford, Paul Smith public relation may be best idea to promote. Objective of Campaign: The communication budget is allocated to following tools of the marketing communications: advertising, personal selling, sales promotion, direct marketing and public relation (Kotler et al, 2009). According to the objective which was determined earlier communication mix is selected. If the objective is awareness building a mixture of publicity, newspaper advertisements, displays and some informative television commercials can be very effective. If the objective is to develop consumer liking for the brand; the mixture of endorsed television advertisement magazine and electronic sign are more effective (Koirala, 2005). Product life cycle: With the phase of product life cycle the effects of various promotion tools also differ. In introduction phase of product, advertising and sales promotion are good for creating high awareness and sales promotion is useful in reaching early trial. Personal selling effort must be used to get the trade carry to the product. In growth phase advertising and sales promotion persist to have powerful impact whereas sales promotion may not be effective tool. In mature phase, sales promotion plays a significant role relative to advertising. In this phase consumer are familiar with brand, advertising is needed to remind consumers about the product. And in decline phase public relation and personal selling are not necessary, advertising is still needed to remind and sales promotion may be effective

way to continue the sales. Marketer should consider phase of product life cycle for using best promotion tool Establishing Budget- Budgeting determines the ultimate limit to spend on communication. According to the methods for allocating communication budget can be: Affordable method: Budget is based on what organizations think they can afford. It is generally based on hunch. It is uncertain. Incremental method: A percentage is added to previous years expenditure. Percent of sales Method: Budget is set as a specified percentage of sales. This is most popular method in practice. Competitive parity method: Budget is based on level of competitive spending. Objective and task method: In this method: tasks are defined to achieve communication objective and cost are estimated to perform the tasks. Conclusion Promotion is one element of marketing mix. Traditional tool of marketing communication mix such as advertising, personal selling, sales promotion, direct marketing and public relation played an importance role in developing the effective plan and strategies. Not only in product but also in service marketing promotion mix play an important role. Service marketing sale their service and customer service is the main element in service marketing. Promotion tool such as advertisement, sales promotion, public relation, direct marketing and personal selling are used in service marketing also. Consumer especially the young are moving away from traditional media. They spend more time in using YouTube, using facebook, MySpace, reading instant message, texting. And at the same, they are spending more time online shopping and online booking of flight. At the same time, changes are happening service marketing, it is moving from mass marketing to individual marketing and focus loyal customer and promote them by giving discount voucher, personal selling, direct marketing. Marketer should consider these changes happening in media and used social site, blogs and other tool according to demand of customer as a promotional tool ,whether it is product/ service organization. Furthermore, along with change of technology and pattern of the communication the company should be dynamic and flexible while communicating with the consumer. And the buyer behaviour is also changing with change in technology, therefore companies should be proactive and use aggressive channel of communication and always think of new ideas to pull consumers. Q5) What do you understand by store lay out and design? Elaborate on different foor plans and design. Opening a retail store is no joke and requires meticulous planning and detailed knowledge. Location Make sure your store is in a prime location and is easily accessible to the end-users. Do not open a store at a secluded place.

Floor Plan The retailer must plan out each and everything well, the location of the shelves or racks to display the merchandise, the position of the mannequins or the cash counter and so on. Straight Floor Plan The straight floor plan makes optimum use of the walls, and utilizes the space in the most judicious manner. The straight floor plan creates spaces within the retail store for the customers to move and shop freely. It is one of the commonly implemented store designs.

Diagonal Floor Plan According to the diagonal floor plan, the shelves or racks are kept diagonal to each other for the owner or the store manager to have a watch on the customers. Diagonal floor plan works well in stores where customers have the liberty to walk in and pick up merchandise on their own.

Angular Floor Plan The fixtures and walls are given a curved look to add to the style of the store. Angular floor plan gives a more sophisticated look to the store. Such layouts are often seen in high end stores.

Geometric Floor Plan

The racks and fixtures are given a geometric shape in such a floor plan. The geometric floor plan gives a trendy and unique look to the store.

Mixed Floor Plan The mixed floor plan takes into consideration angular, diagonal and straight layout to give rise to the most functional store lay out.

Tips for Store Design and Layout

The signage displaying the name and logo of the store must be installed at a place where it is visible to all, even from a distance. Dont add too much information. The store must offer a positive ambience to the customers. The customers must leave the store with a smile. Make sure the mannequins are according to the target market and display the latest trends. The clothes should look fitted on the dummies without using unnecessary pins. The position of the dummies must be changed from time to time to avoid monotony. The trial rooms should have mirrors and must be kept clean. Do not dump unnecessary boxes or hangers in the dressing room. The retailer must choose the right colour for the walls to set the mood of the customers. Prefer light and subtle shades. The fixtures or furniture should not act as an object of obstacle. Dont unnecessary add too many types of furniture at your store. The merchandise should be well arranged and organized on the racks assigned for them. The shelves must carry necessary labels for the customers to easily locate the products they need. Make sure the products do not fall off the shelves. Never play loud music at the store. The store should be adequately lit so that the products are easily visible to the customers. Replace burned out lights immediately. The floor tiles, ceilings, carpet and the racks should be kept clean and stain free.

There should be no bad odour at the store as it irritates the customers. Do not stock anything at the entrance or exit of the store to block the way of the customers. The customers should be able to move freely in the store. The retailer must plan his store in a way which minimizes theft or shop lifting. i. Merchandise should never be displayed at the entrance or exit of the store. ii. Expensive products like watches, jewellery, precious stones, mobile handsets and so on must be kept in locked cabinets. iii. Install cameras, CCTVs to have a closed look on the customers. iv. Instruct the store manager or the sales representatives to try and assist all the customers who come for shopping. v. Ask the customers to deposit their carry bags at the entrance itself. vi. Do not allow the customers to carry more than three dresses at one time to the trial room.

Q6) What are the principles of store design? Before we move on to understanding the components of store design, we need to understand the principles of store design. Given that the ultimate aim of the retailer is to bring the customer to the store and creating an environment which makes the customer to the store and creating an environment which makes the customer come back, it is necessary to keep certain basic principles in mind while creating the store environment. These may be termed as the principles of Store Design which do draw from the Principles of Design but also from sense of whatmakesastoreshoppable. The first principle of store design is Totality. The entire store has to be conceived as one unit which draws upon the retailers very reason for existence, i.e. his vision and mission statement. Who does the retailer seek to be and which is the target audience that he seeks to tap. At the same time the type of merchandise to be retailed in the store and its price points have to be kept in mind. The entire store, right from the store entrance to the type of fixtures used to display the merchandise has to come across as one entity this is the principle of totality The second principle is of focus wherein while aspiring to create beautiful places for the consumer to shop in, the retailer should not forget that the primary focus within the store has to be the product or the merchandise. While in a store, a customer should feel comfortable he should not be awed by the ambience of the store, achieving sales is the primary step towards being sustainable in the long run. The third principle is of Ease of Shopping. The store has been created for the customer, it has to be easy for him navigate, easy to access and most importantly simple to understand. No one wants to visit a store where shopping is cumbersome and tedious. The last principle is of change and Flexibility. Store designs increasingly, have to be adaptable to the environment that they are a part of. The fast moving world of the consumer means that retailers are having to think more and more about how the design of their stores will cope with the short and long term future demands of their business, and the wants of their consumers. Change and flexibility have to be considered from the point of the ever changing consumer needs and store design has to be adaptable to that change. Q7) What are the elements of store design? For a consumer, the design of a retail store appears simple and straightforward. We quickly absorb thousands of pieces of sensory information and make a snap judgment

on whether or not we "like" the store and its products. To properly understand this process and design a store that will welcome the customer, drive sales and run efficiently is anything but simple. In this article I'll attempt to describe a few of the key strategic elements to be considered when designing a retail store. In Part 2 I'll describe the strategies that we're planning to implement in Adagio's pilot retail store. Effective retail store designs require an understanding of work-flow, consumer behavior, and functional aesthetics. Work-flow in this case refers to the interaction of each of the moving parts in the operation. I'll give just a few of the key questions that must be answered prior to creating a simple floor plan: - where does the customer enter the space and what display do they see first? - How and where do employees interact with the customer? - How many transactions will the store complete in an hour during slow periods and peak periods? - How many cash registers and employees will be needed during slow periods and peak periods? - How many categories of products will exist and how many products will be within each category? -Where is product stored and how are the shelves replenished? I could continue for several pages, but you start to get the idea. You need a VERY well defined vision for exactly how your store will run in order to make even basic decisions like how many square feet you need and how to set up your displays. Consumer Behavior refers to the way your target customer will react to the store layout, merchandising strategies, design elements, customer service strategies, etc. You will need a solid understanding of your customer, what they like, and WHY they are in your store. Are you targeting tea connoisseurs or novices? Is the store set up to drive food service business (brewed tea and food or pastries) or retail business? Is your customer a luxury buyer who expects a clean, brightly lit store with professional packaging and slick merchandising or is your customer more of a "buy local" type who will be turned off by an environment that is too professional and expensive looking? Another important question: will most of your customers expect to be helped by a sales associate or do they prefer browsing on their own? The answer to this one question will completely change your store design and staffing strategies. I refer to this balance as "Consultation vs. Convenience". The truth is that different people prefer shopping in different ways. I am the type that automatically rejects any offer of assistance from a sales person whether I really need help or not. It's just instinctive for me. I don't want to be sold. Others will walk up to the counter and ask the sales person to do their shopping for them. For example, I've had many customers (especially men) walk up to my counter and tell me that they need to buy a tea gift for a tea lover but know nothing about tea themselves and really don't care - what do I recommend? Functional Aesthetics refers to the often difficult to predict way that design elements and products will appear when in use in the store. I combine these two words intentionally because store design is all about balancing efficiency with appearance. The refrigerator for iced teas, milk and pastries is incredibly useful but may also be

unattractive and noisy. The clean lines and uncluttered appearance of your tea displays may look beautiful, but is enough information being presented so that an unfamiliar customer can quickly and easily navigate the product collection and find what they are looking for? I'll give a specific example that is a pet peeve of mine: Round bulk storage containers have a terrible functional aesthetic! When first designed, your store may look fantastic, but an hour after the doors open on the first day your displays already look like a cluttered mess with labels facing all different directions. Or consider a round sample jar with a label on one side... how often will the customer put that jar back on the shelf with the label facing backwards? It's a small, simple problem, but solving it may be far more important than you realize. The number one obstacle that you must overcome in designing your store is the customer's natural tendency to get overwhelmed when walking into an unfamiliar environment. A customer that is overwhelmed, uncertain and embarrassed by their own lack of knowledge will never be a profitable customer. Consider two very different strategies for merchandising clothing: In a discount store you will often find a large, round rack of clothing jam-packed with all manner of different colors and designs that are, theoretically, organized by size (S,M,L). Walk into a luxury boutique and you find a single display dedicated to a single design with different rows for each different size. The discount store lends itself towards frustration and is highly inefficient in connecting the customer with what they are looking for. The luxury boutique is beautiful and easy to navigate, but is highly inefficient in terms of the square feet of space dedicated to a single item. The right answer for your store is likely somewhere in between, but understanding how all of the elements in the store will work together and appear (sight, smell and sound) when actually in use is critical. Q8) What is the concept of service retailing? Discuss the strategy of service retailing. Customer service is the provision of service to customers before, during and after a purchase. According to Turban et al. "Customer service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation." Its importance varies by products, industry and customer; defective or broken merchandise can be exchanged, often only with a receipt and within a specified time frame. Retail stores often have a desk or counter devoted to dealing with returns, exchanges and complaints, or will perform related functions at the point of sale; the perceived success of such interactions being dependent on employees "who can adjust themselves to the personality of the guest," From the point of view of an overall sales process engineering effort, customer service plays an important role in an organization's ability to generate income and revenue. From that perspective, customer service should be included as part of an overall approach to systematic improvement. A customer service experience can change the entire perception a customer has of the organization. Some have argued that the quality and level of customer service has decreased in recent years, and that this can be attributed to a lack of support or understanding at the executive and middle management levels of a corporation and/or a customer service policy. To address this argument, many organizations have employed a variety of methods to improve their customer satisfaction levels. Customer service as a part of Retail Strategy

When a customer walks into a retail store, he can examine the merchandise, check the price and quality compare various products and offers and then make a decision on buying. While these are tangible elements, he is also influenced by factors like the image of the store, the ambience, music and the level of service offered by the store. While most of the elements of the retail mix, like products, price, place and promotions can be duplicated or copied by the competitors, the total experience the customer gets in the store can stay unique. This many a times becomes the differentiating factor and a source of competitive advantage.Many retailers world over have effectively used customer service for building this advantage. To be able to effectively use customer service as the unique proposition, a retail organization needs to create some principles of distinctive service. Step 1.Identify the key customers and listen and respond to them: As the retailer cant be every thing to everybody, the expectation of various class of customers is bound to be different. The retailer needs to identify its customers and prioritize them. Once the organization has identified its key customers it is easy to understand their buying habits and occasion for purchase and then service them accordingly. Needs and expectations of customers change due to various factors. A change in the life style of the consumer would result in a change in his needs and accordingly expectations. The need and wants of youth will be different from those of the middle aged and the elderly. Similarly as one moves up in the income ladder, his needs and wants would again change. The organization needs to track and be clear about the expectations of its customers in the present context. This is critical for the organization to be able to plan future business and pre-empt the competitors. Listening to customers helps the organization understand the moments of truth and the service experience that he has had. Comments and complaints, interaction with the sales staff etc are all methods in which a retail organization can listen to what customers have to say. Customers complaints or suggestions are a powerful tool for developing product improvements and new services to be introduced. Step 2. Define superior service and establish a service strategy. A strategy created needs to have goals specified and the method by which these goals can be spelled out. In order to provide superior service, the parameters have to be defined clearly and communicated to the persons in the organization. Step 3. Set standards and measure performance: After having identified the key customers and their expectations, and linking them to business objectives, arises the need for a system to capture, analyse, measure and track the performance of the organization on various parameters. For example Dominos Pizza is passionate about its 30 mnts delivery commitment. International retailers like Nordstrom, L.L Bean and Lands end have clear satisfaction gurantees: If you dont like the product they will take it back and no questions asked. Setting standards for performance not only ensures compliance with the targets, but also help improve credibility every time standards set are met and surpassed. This is the stepping stone to customer delight. At the same time inability to meet targets help identify the gaps in service that can then be rectified. Step 4:Select ,train and empower Employees to work for customers. In order to provide superior service, the retailer needs to create a work force of employees who are dedicated and empowered to make decisions. Training needs to be on customer skills, communication

and product skills. Customers who typically return goods to a store or are dissatisfied with a product or service are bound to get disillusioned if the management decision has to be waited for taking the action. Step 5: Recognize and reward accomplishments. While money is an important factors for most individuals, recognition of the work done and praise can go a long way in motivating employees to put in their best. The retail organization needs to lay special emphasize on this and in most cases, the face of the retail organization to the customer is the sales person. Rewards do not have to be monetary, they can be symbolic, like holidays, lapel pins, special nametags, etc.In the retail environment, it is necessary that the frontline staff are ambitious about providing a superior level of service to their customers. Q9) Describe Brand positioning and strategic brand management process. Brand positioning refers to target consumers reason to buy your brand in preference to others. It is ensures that all brand activity has a common aim; is guided, directed and delivered by the brands benefits/reasons to buy; and it focusses at all points of contact with the consumer. Brand positioning must make sure that:

Is it unique/distinctive vs. competitors ? Is it significant and encouraging to the niche market ? Is it appropriate to all major geographic markets and businesses ? Is the proposition validated with unique, appropriate and original products ? Is it sustainable - can it be delivered constantly across all points of contact with the consumer? Is it helpful for organization to achieve its financial goals ?

Is it able to support and boost up the organization ? In order to create a distinctive place in the market, a niche market has to be carefully chosen and a differential advantage must be created in their mind. Brand positioning is a medium through which an organization can portray its customers what it wants to achieve for them and what it wants to mean to them. Brand positioning forms customers views and opinions. Brand Positioning can be defined as an activity of creating a brand offer in such a manner that it occupies a distinctive place and value in the target customers mind. For instanceKotak Mahindra positions itself in the customers mind as one entity- Kotak - which can provide customized and one-stop solution for all their financial services needs. It has an unaided top of mind recall. It intends to stay with the proposition of Think Investments, Think Kotak. The positioning you choose for your brand will be influenced by the competitive stance you want to adopt.

Brand Positioning involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. Brand Positioning is the key of marketing strategy. A strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and its similarity with the competitive brands, as well as the reasons for buying and using that specific brand.

Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors. For instance- Kingfisher stands for youth and excitement. It represents brand in full flight. There are various positioning errors, such as1. Under positioning- This is a scenario in which the customers have a blurred and unclear idea of the brand. 2. Over positioning- This is a scenario in which the customers have too limited a awareness of the brand. 3. Confused positioning- This is a scenario in which the customers have a confused opinion of the brand. 4. Double Positioning- This is a scenario in which customers do not accept the claims of a brand. S t r a t e g i c b r a n d m a n a g e m e n t i n v o l v e s t h e d e s i g n ing implementation of marketing programs and activities to build, measure, and manage brand equity. T h e s t r a t e g i c b r a n d m a n a g e m e n t p r o c e s s i s defined as involving four main steps: 1) Identifying and establishing brand positioning and values2) Planning and implementing brand marketing programs3 ) M e a s u r i n g a n d i n t e r p r e t i n g brand performance4) Growing and sustaining brand equity Strategic Brand Management Process STEPS KEY CONCEPTS

Identifying and establishing brand positioning and values - Mental maps, Competitive frame of reference, Points-of-parity and points-of-difference, Core brand values, Brand mantra Planning and implementing brand marketing programs- Mixing and matching of brand elements, Integrating brand marketing activities, Leveraging of secondary associations. M e a s u r i n g a n d i n t e r p r e t i n g b r a n d p e r f o r ma n c e - associations, Brand Value Chain, Brand audits, Brand tracking, Brand equity management system G r o w i n g a n d s u s t a i n i n g b r a n d e q u i t y - system, Brand-product matrix, Brand portfolios and hierarchies, Brand expansion strategies, Brand reinforcement and revitalization Q10) Explain the concept of retail logistics and briefly discuss the emerging trends. In the highly competitive retail marketplace, typified by changing consumer preferences, different formats as well as large geographical stores spread, the onus on retail logistics to

ensure efficiency and cost margins is quite substantial. Hence, it would not be inappropriate to state that oftentimes the viability of a retail operation hinges as much on achieving efficient logistics and supply chain as it does on attaining success in the front end. The compulsion of retailers, which necessitate seamless logistics function, can be summarised as follows:

To ensure perfect coordination among various entities involved in the supply chain such as suppliers, manufacturers and vendors. To ensure that consumers get the right product at the right time and at the right place. To ensure that supply to retail stores across various geographies is seamless and consistent. To be flexible in order to allow for changes in the product mix owing to changes in consumer demand. To constantly improve operating margins. To achieve profitable and sustainable growth of retail operations in the long run. To achieve optimal inventory levels and reduce wastage of products.

Components Traditionally, retail logistics had two major components transportation and storage. But with the increasing complexity of modern retail supply chains, the scope of logistics has also expanded beyond the traditional definition. An efficient retail logistics function has become a significant instrument for retailers to ensure competitive advantage, and its scope now includes plans and processes that allow the back end to effectively meet consumer demand. Currently, retail logistics is a holistic concept that involves coordinating the following main processes among others:

Inbound and outbound transportation Warehousing Packaging and labelling Shipment consolidation Tracking/Tracing the products Inventory management Quality checking Planning for cost control On Point Retail Distribution Warehousing 5 Distribution of merchandise Reverse handling and flow of products (reverse logistics)

The main processes and activities of retail logistics listed above are aimed at making sure that the shelves in a retail front-end store are never vacant and are filled with the right products at the right time and at the right place. Apart from maintaining an efficient supply

chain, which keeps the stores filled with the correct products, it is also important that retail logistics increases operational efficiencies to allow retailers to run a viable retail operation. Delivery Models For decades, retail logistics has evolved through various models. Years ago, retailers and manufacturers had to rely on a traditional distribution channel composed of transporters, clearing and forwarding agents and stockists. Since mid-1990s, the emergence of alternative modern distribution channels has allowed retailers to choose from a range of logistics service providers to achieve an efficient storage and flow of products. As of now, there are four logistics delivery models that retailers can choose from:

Entirely self-managed logistics and warehousing network Partly outsourced to traditional service providers like transporters, clearing and forwarding agents and stockists Partly or completely outsourced to third-party logistics service providers (otherwise known as PL players) Completely outsourced to fourth-party logistics providers (otherwise known as 4PL players)

Whilst the above four are broad delivery models available to manufacturers, retail chains and retailers, it has been observed through interactions with retailers and warehouse users during this study that oftentimes, hybrid models of distribution are preferred. For example, a retail chain may choose to manage the transportation of its goods while the warehousing may be outsourced to a PL provider. The first two models listed above are more or less selfexplanatory, while the following definitions further explain the 3PL and 4PL delivery models: 3PL A third-party logistics provider (3PL) is an entity that provides services to companies for some or all of their supply chain management functions. PL providers typically specialise in integrated warehousing and transportation services that can be scaled and customised to the clients needs based on market conditions and the demands and delivery service requirements for their products and materials. In India, a large number of professional 3PL players like DRS, Gati, DHL, OM Logistics, Indo Arya, Sical Logistics, Reliance Logistics, SafeExpress, Agility, M J Logistics, AS Cargo, Kuehne+Nagel, Panalpina, Expeditors and AFL among others have been providing services to retailers and other sectors for their logistics requirements. 4PL As retailing in India is expanding and reaching new heights in terms of both geographical coverage and volume of products, there is an emerging requirement for an integrating logistics firm to assemble various resources, capabilities and technologies of its own as well as other companies to provide a complete logistics package to clients. Such firms are typically known as 4PL players. Typically, the resources used by a 4PL player are of other service providers, and its fundamental role is to manage all the PL players and other independent agencies employed for a logistics function, providing a turnkey logistics solution to retail chains and to other sectors.

Whilst this model is quite prevalent in developed countries, the 4PL sector in India is at a nascent stage, with a few players emerging such as Future Logistics (which is a 4PL for Future Group). In order to better comprehend and appreciate the respective range of services under each of the outsourced delivery models, the table below is a compilation of the typical spread of services delivered under each respective model. It is pertinent to note that the table below is an indicative compilation based on the feedback received from meetings with logistics service providers and not a comprehensive listing of all possible logistics services. The organised PL sector in India has been consistently growing over the last few years, mirroring the growth witnessed in the retail logistics sector overall. The sector comprises of global as well as Indian companies that are ramping up their operations on a Pan-India level to cater to retail as well as other sectors. According to a Technopak study, the total outsourced logistics revenue in 00 was INR 1,151 billion, of which 5% or INR 58 billion was attributed to revenue gained from the PL sector. Revenue generated from retail 3PL was estimated at INR billion. The retail PL revenue has been predicted to continue to grow at a CAGR of around 1 % for the next few years. The entry of large 3PL players has led to significant improvement and organisation within the retail logistics and modern distribution warehousing sector in the country. Over the years, the range of services of PL players has expanded to cover the service lines depicted in the table below. In some cases, it has been observed that PL players have even gone beyond their main service offerings to provide logistics network planning to clients as well. EMERGING TRENDS IN INDIAN LOGISTICS INDUSTRY Growth within the organized sector The logistics and warehousing sector in India, till now, has been h i g h l y f r a g m e n t e d a n d characterized by the presence of numerous unorganized players. A large number of players have been providing services in individual segments like transportation, warehousing, packaging etc.In 2007, organized players accounted for only 6 per cent of the total US$ 100 billion Indian logistics industry However, changing business dynamics and the entry of global third party logistics players (3PL) has led to the remodeling of the logistics services in India. From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions that improve efficiencies. Entry and expansion plans of logistics firms DHL and India-based the Lemuir Group entered into a 76: 24 joint v e n t u r e D H L Lemuir Logistics Private Ltd. Germany-based Rhenus AG and Hyderabad based Seaways Shipping Ltd have set up a joint venture Seaways Rhenus Logistics Ltd. The UAE-based Swift Freight has forayed into the Indian market.

Blue Dart Express is planning to add 1 million square feet of w a r e h o u s i n g s p a c e t o develop 58 warehouses across the country by 2010. The Future Group plans to develop 3 million square feet of warehouses by 2010. National Bulk Handling Corporation plans to set up 200 warehouses across the country by 2012. Another trend witnessed over the last few years has been the entry of s e v e r a l l a r g e I n d i a n corporate houses such as the Bharti group, Tatas and Reliance Industries Limited into the logistics sector. The Indian conglomerates foresee huge potential for specialized logistics and warehousing facilities, particularly in industries like retail. Companies like Bharti, Tata Realty &Infrastructure, GE Equipment Services and Reliance Logistics cater to the logistics needs of their own group companies as well as provide services to the other companies. The growth of the organized sector would enable the industry to provide costeffective and integrated logistics solutions in order to meet the ever-increasing demand. As per estimates, the market share of organized logistics players is expected to double from 6 per cent in 2007 to approximately 12 per cent by 2015. Emerging concept of third party logistics Third party logistics or 3PL is a concept where a single logistics service provider manages the entire logistics function for a company. Although still at a nascent stage, the Indian 3PL industry i s g r o w i n g a t a r a p i d p a c e . G l o b a l s o u r c i n g a c t i v i t y a n d f i e r c e c o m p e t i t i o n a m o n g s t manufacturers to cut costs have made movement of materials rather complex, giving rise to the emergence of several third party logistics players.Fuelled by the increasing trend of outsourcing, coupled with the rapid growth in the Indian manufacturing sector, 3PL is estimated to grow at about 30 per cent annually and become a US$40 billion industry by 2012. Rapid growth of the warehousing sector The role of a warehouse has also transformed from a conventional storehouse to an inventory management set-up with a greater emphasis on value added services. Warehouses now provide additional services like consolidation and breaking up of cargo, packaging, labeling, bar coding, reverse logistics etc. It has emerged as a critical growth driver, leading to large investments by logistics companies for the development of warehouses and logistics parks. Warehousing and related activities currently account for about 20 per cent of the total logistics industry. However, it is estimated that by 2010, this proportion would increase to approximately. The traditional concept of establishing warehouses in the proximity of manufacturing facilities and raw material sourcing centers is also undergoing a transformation. Today, there is an increased trend of relocating warehouses near consumer markets. Currently, the organised warehousing industry in India has a capacity of approximately 80million metric tonnes (MT) and is growing at 35 to 40 per cent per annum. An investment of a p p r o x i m a t e l y U S $ 5 0 0 m i l l i o n i s b e i n g p l a n n e d b y v a r i o u s l o g i s t i c s c o m p a n i e s f o r t h e development of about 45 million square feet of warehouse space by 2012. Logistics parks One-stop shop for logistics needs

The concept of a consolidated logistics centre can be traced back to the Foreign Trade Policy of 2004, which led to the development of Free Trade Warehouse Zones (FTWZ). While FTWZwere aimed at facilitating import and export of goods, the need for a one-stop shop that could additionally cater to the domestic market led to the development of logistics parks as a part of the infrastructure industry in 2005-6. A logistics park is a notified area that facilitates domestic and foreign trade by providing services like warehousing, cold storage, multimodal transport facility, container freight stations etc. This area also acts as a place where a company cans unload cargo for distribution, redistribution, packaging and repackaging. RECENT TRENDS IN INDIAN LOGISTICS INDUSTRY: When comparing US logistics with the global logistics it accounts US$900 billion which is valued 25% of total global logistics 3.5US$ trillion. where as India is estimated to be around13% of its GDP, which is valued around US$94 billion in 2006-07. -Air transport industry contributes over 0.2% of the GDP k e e p i n g t h e p r i c e s constant (1999-2000) Domestic air cargo has growing at CAGR of 12.80% where as i n t e r n a t i o n a l c a r g o t r a f f i c h a s b e e n m o v i n g a t 1 3 % . . A c c o r d i n g t o t h e p l a n n i n g commission, countrys cargo movement would grow about CAGR of 11.5% from2007-08 to 2011-12. Marine sector contributes over 0.2% of the GDP at a constant prices(19992000)major ports in India have handled about 463.84 tonnes of cargo in 2006-07 a growth of 9.51 that of the previous year. According to the planning commission of India , the shipping fleet will be increased up to 15mGRT by the end of 2011-2012. -The major plan of Indian railways is to develop Logistic p a r k s w h i c h i t h a s a potential to optimize the supply chain and r e d u c e s t h e c o s t . T h e I n d i a n r a i l w a y s would have to innovate the new train services so that the customer shifts from road to rail. -Almost 80% of the products in India is transported through roads. One innovation could be the introduction of time tabled parcel trains and container trains which is essential to have few time tabled freight trains because it reduces the inventory levels and thereby improves customer satisfaction Q11) What is the concept of SCM? Explain the issues involved in developing supply chain frame work. A supply chain is a network of facilities and distribution options that performs the function of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these products to the customers. Ellram and Cooper have defined supply chain mgt as an integrating philosophy to manage the total flow a distribution channel from supplier to ultimate customer. So the objective of SCM are to ensure that the right product reaches the right place at right time and for the right price and profit for the retailers ensures a smooth and efficient flow from raw materials to finished goods, into hands of the customers. It is a concept which has replaced traditional mgt approaches to buying, storing and moving goods. Supply chain exists both

in service and manufacturing organizations, although the complexities may vary from firm to firm. It aims to integrate activities across the entire merchandise flow,to achieve quick response in supplying products and services to customers who need them. Issues involved in developing supply chain framework According to Cooke matching demand characteristics to supply chain capabilities in order to capture sales opportunities and to satisfy customer needs in terms of speed, location and product variability is the purpose of supply chain planning. In the year 1997, Fisher presented a framework for selecting the appropriate supply chain for a product. This framework was further developed and refined by Li an OBrien in 2001, and De Treville et al in 2004. Fisher recommends that the features of product demand define whether the product is functional or innovative. The assets of demand to be considered are: 1) Demand predictability 2) life cycle 3) product variety and lead time and 4) service requirements The author states that the above mentioned factors determine the availability and inventory needs, which in turn determine demand. On the basis of the above mentioned factors, products can be categorized as either primarily functional such as those bought in supermarkets or primarily innovative like many products in the fashion or technology sector. The type of supply chain expertise required would be dependent on the type of product. For functional products, an efficient supply chain that focuses on delivering products at the lowest possible cost to customers should be developed. Selection of, suppliers, capacity usage and product design all need to aim gaining effective low cost solutions. The second type is a market responsive process, where speed and flexibility are required from suppliers, manufacturers and from product design solutions. For innovative products, the demand for which is difficult to predict, market responsive processes ought to be developed. A useful framework for analyzing the issues involved in developing a supply can be represented as a pyramid. At the strategic level the retailer can focus on service levels required to support the unique value proposition that the retailer has developed. The retailer can then evolve appropriate channels and networks to achieve the uniqueness desired. A framework for analyzing issues in SCM IMPLEMENTATION Customer Service Strategic 1) Channel Design 2) Network Strategy Structural 1) Warehouse design and operations 2) Transportation Management 3) Materials management Functional 1) Information systems 2) Policies and Procedures

3) Facilities and Equipment 4) Organizational and Change Management The next level the structural level, allows the retailer to identify suppliers, stock points and to develop an appropriate transportation model. The extent of outsourcing is also determined at this level. At the functional level, the operational details are worked out. This includes developing policies and procedures around the facilities and equipment to be deployed implementing information systems to support the operations and ensuring that the right organizational and training inputs are provided. The consumers developed using any framework must be successfully implemented. Successful implementation usually requires a programming approach to ensure that the implementation is effective and helps the retailer achieve its goals. Q12) What is the need for SCM? During the past retail stores existed to cater to the needs of local markets. When one needed bread and eggs one visited the local grocery store. To buy garments one simply bought fabric and got it tailored or bought what is available in the market. Buying for the retail organization was an easy task then. It meant dealing with few products and a limited number of suppliers who existed at that time. However as markets expanded the retailers business grew, the number of products that were offered by the retailer also increased. While the number of suppliers increased, there was also an increased pressure on margins. Retailers needed to think of ways of cutting costs. In order to be able to cut down on costs it was necessary to integrate the complete supply chain. SCM today, links demand mgt, resource mgt and supply mgt and hence plays an important role in retailing. Today retailers operate in a dynamic world. Customers buying habits are constantly changing and competitors are continually adding and improving their product offerings. Change in demand means a shorter life cycle for the companys products and inventory. The cost of holding inventory may restrict the company from providing a reasonably priced product as funds are tied up in inventory. The number of suppliers to an organization may vary from a few hundreds to thousands depending on the range of products offered to the consumers. Sourcing, vendor mgt and logistics play a major role in getting the right product to the right place at the right time and in right condition. The second reason for SCM becoming crucial ,partially is the increased national and international competition. Customers have multiple sources from which to choose to satisfy demand, locating the product throughout the distribution channel for maximum customer accessibility at a minimum cost becomes crucial. Thirdly the shift in emphasis to to the supply chain is the increasing pressure on the profit margins earned. Companies are becoming aware that they need to look at the whole picture and not at the functional excellence of individual departments alone. Finally, it is a technology driven world today, advances in technology enables companies to know sales, inventory and production data across various locations, not only within the country but internationally. Information is the key enabler of SCM. Q13) What is merchandising? What are the different stages of merchandising Planning? Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products

available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase. Stages of Merchandising Planning: Stage 1: Developing the sales forecast: Forecasting involves prediction, what the consumer may do under a given set of conditions. A sales forecast may be done by the merchandiser based on the target given by the top mgt depending on the type of retail organization. A sales forecast is the first step in determining the inventory needs of the product or category. A sales forecast is usually made for a specific period of time. It may be for a short term-up to 1 year or long term-more than a year. The process of developing a sales forecast involves the following steps: 1. Reviewing past sales: Reviewing past sales record is necessary to establish if there is any pattern or trend in the sls figure.A look at the sls figure of the past year for the same period would give an indication of the sls in the current year given the conditions are constant. 2. Analysing the changes in the economic conditions: This has a direct impact on the consumers spending pattern. Economic slow down, increase in unemployment levels etc affect business. 3. Analyse the changes in the sales potential: It is necessary to relate the demographic changes in the market to that of the store and the products to be sold. 4. Analysing the changes in the marketing strategies of the retail organization and the competition: While creating the sls forecast it is necessary to take into consideration the mktg strategies to be adopted by the organization and the competition. heather a new line of merchandise is to be introduced, anew store to be opened or an existing store to be remodeled? 5. Creating the sls forecast: After taking into consideration the above points an estimate of the projected increase in sls is arrived at. This is then applied to the variousproducts/Catagories to arrive at the projected sls. Stage 2: Determine the merchandise requirement: To provide the right goods to the consumer at the right time and place one has to plan the course of action. Planning in merchandising is done at two levels 1. The creation of merchandising budget 2. The assortment plan. Merchandising Budget: It is a financial tool for planning and controlling retailers merchandising inventory investments. Merchandising budget refers to a financial plan that indicates how much to invest in product inventories, usually stated in terms of rupees per month. To ensure profitable operation the retailer must use a merchandise budget in which sales volumes, stock levels, purchase orders, profit margins are planned and controlled. The four components of merchandising budget are projected sales, inventory plan, estimated reductions and estimated purchases. Projected sales: Budget planning starts with the development sales plan, this shows the expected or projected rupee volume of sales for each merchandise or department. Sales forecasting helps the mgt to forecast expected sales. Without having information on how much to be sold, the retailer cant determine how much to buy. While making sls forecast a

retailer should be aware of the consumer segment for the offer, nature of competition, variety, promotion and price range. Inventory Plan: It provides information regarding sales velocity, inventory availability, ordered quantity, inventory turn over, sales forecast and quantity to order for specific Stock keeping unit (SKU).Inventory plan assists retailers in scheduling orders to vendors after considering the trade off between carrying cost verses the cost of ordering and handling the inventory. The inventory plan helps to devise the stock support levels for a specific sales period. Estimated reductions: It is the anticipated sales below the list price. Retail reductions are classified into three types of sales below price. Mark downs, discounts and shortages. Mark down is defined as reductions in the original price to encourage sales. Discounts are reductions in the original retail price given to special customers. Shortages are reductions in the total volume of inventory that results from damages, pilferage. Estimated purchase level: At this stage a retailer is suppose to devise an actual budget for planned purchase. Planned purchase means the purchase that must be made at the beginning of each month (BOM) planned purchases are calculated as follows: Planned monthly sales+planned monthly reductions+ Desired end of month stock (EOM)=Total stock needs for the month- planned BOM stock=Planned monthly purchase. Stage 3: Merchandise control-The open to buy (OTB): The purpose of the concept OTB is two folds, first depending on sales of the month and the reductions on which the merchandise buying can be adjusted. Secondly the planned relation between the stock and sales can be maintained. OTB=Planned EOM stock-Projected EOM stock. OTB is always calculated for current and future periods. Stage 4: Assortment Planning: It is important for retailers. The term assortment can be defined as the combination of all products made available in the store and a set of products offered within a product category. Assortment planning involves determining the quantities of all products made available in the store and a set of products offered within a product category. Assortment planning involves determining the quantities of each product that will be purchased to fit into the overall merchandising plan. Details of colour, size, brand, material etc have to be specified. The main purpose of assortment plan is to create a balanced assortment of merchandise for the customers. Merchandise may be classified as basic or staple merchandise, fashion, convenience or specialty goods. Buying staples merchandise is relatively easier as it can be done by analyzing the past sales record. Seasonal staple are those products which are in demand only at a particular time of the year every year. For example decorative diyas sold during diwali, decorative ornaments of the Christmas tree sold before Christmas or umbrellas and rain coats/shoes in the rainy season. The Range Plan: The aim of range plan is to create a balanced range for each category of products that the retailer chooses to offer. The process of range planning should take care of the following. -The number of items/options available to consumers should be sufficient at all times. -The range planning process should ensure that over/under buying is limited. -Sufficient quantities of the product should be available at all stores across various locations. A good range plan ensures customer satisfaction.

Model Stock Plan: After determining the money available for buying, a decision needs to be taken on what to buy and in what quantity. The monthly sales plan gives the precise items and quantities that need to be purchased for each merchandise line.To arrive at the monthly sales plan the buyer needs to identify the attributes that the customer would consider in buying the product, then decide on the levels under each attribute and finally allocate the total money available. Technology tools and merchandise Planning: The merchandise planning process is a complex process. The assortment plan must relate directly to financial plans, space plans, brand strategies and more. This merchandise plan must be accurate hence a number of softwares are being used. The tools used may range from simple excel sheets to specialized softwares like Retail Pro and JDA.