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What is retailing?
Retailing: a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use Retailer: a person, agent, agency, company or organization instrumental in reaching the goods, merchandise, or services to the ultimate consumer Countries that have enjoyed the greatest economic and social progress have been those with a strong retail sector Over the last decade there have been sweeping changes in the general retailing business
Oxford University Press 2010
contributes over 8 per cent of GDP in the western countries Over 50 of the Fortune 500 and about 25 of the Asian Top 200 companies are retailers Today, in some developed countries, retail businesses have shares as large as 40 per cent of the market The significance of the retail business has increased with the fast growth in the service sector
Contd
50 million square feet of total mall space in India,
expected to sprout in six metros (Delhi and Mumbai) and seven non-metros in 2008 40 per cent of the total mall space to be concentrated in the National Capital Region
Characteristics of retailing
Direct end-user interaction Sole point in the value chain to provide platform for
promotions Sales at the retail level is generally in smaller unit sizes Location is a critical factor for retail business Retail services are as important as core products A larger number of retail units as compared to other members present in the value chain
Oxford University Press 2010
Functions of retailing
Sorting Breaking bulk
Holding stock
Additional services Channel of communication
Categorizing retailers
Number of outlets
Margin vs Turnover
Location Size
Department Stores
Discount Stores Category Killers
Specialty Stores
E-tailers
Oxford University Press 2010
effective operation and the profitability of its business Several socio-economic and demographic factors are considered by manufacturers for identifying the ideal retail format mix for its products This is illustrated by the washing soap category in India and the resultant retail format preferences
Retail strategy
Define the business of the firm in terms of orientation
towards a particular sector Set short-term and long-term objectives with regard to image and profitability Identify the target market and direct efforts on the basis of the customers characteristics and needs Decide the broad direction the company must take in future Implement an integrated plan that encompasses all aspects of retailing like pricing, location, and channel decisions Evaluate and revise the plan depending on the nature of the internal and external environment
Oxford University Press 2010
Retail concepts
An essential part of the retailing strategy, the retailing concept is essentially a customer-centred, companywide approach to developing and implementing a marketing strategy. The retailing concept covers four broad areas: Customer orientation Goal orientation Value driven approach Coordinated effort
Oxford University Press 2010
- Does the size of the retail organization play a big part in adapting easily to the Internet? - Is the product/service offering also a prime determinant of cyber retailing? Branding through retailers - How do retailers choose which brands to display? - Why do many new products fail in the marketplace - How can manufacturers maximize the brand opportunity in a given retail outlet? - What is future of Lifestyle Clustering? - Vertical retail concepts are increasing in popularity Consumption related mega trends
Oxford University Press 2010