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Chapter 1

Introduction to the
World of Retailing

win/McGraw-Hill

vy/Weitz: Retailing Management, 4/e

Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

Definition of Retailing
Retailing is a set of business
activities that adds value to the
products and services sold to
consumers for their personal or family
use.
A retailer is a business that sells
products and/or services to
consumers for the personal or family
use.

Retail
According to Philip Kotler Retailing
includes all the activities involved in selling
goods or services to the final consumers
for personal, non business use. A retailer
or retail store is any business enterprise
whose sale volume comes primarily from
retailing.
retaillier (french word), which means to
cut off a piece or to break bulk.
A retailer may be defined, as a dealer or

PPT 1-4

Distribution Channel

PPT 1-5

Different Perspectives of Retailers


Manufacturers
Perspective
One of the Controllable
Elements in the Firms
Marketing Program -One of the Four Ps

Retailers Perspective
A Business with all the
Business Functions -Production
Buying
Merchandise, Private Label
Marketing
HR
Accounting and Finance

PPT 1-6

Value Added by Retailers


Providing Assortment

Breaking Bulk
Holding Inventory
Offering Services

Characteristics of retailing
It offers direct interaction
Sale volume is comparatively large in
quantities
Customer service
Sales promotions are offered at this point
only
Different forms
Location and layout are critical factors
More employment opportunities

Functions of a Retailer
Retailers provide important functions that
increase the value of the products and services
they sell to consumers and facilitate the
distribution of those products and services for
those who produce them. These functions are..
1) Providing an assortment of products and
services Most consumers are well aware of the
product assortments retailers offer.
2) Breaking Bulk To reduce transportation costs,
manufacturers and wholesalers ship cases /
cartons to retailers. This is called breaking bulk. It
is cost effective for both manufacturers and
consumers.

Conti
3) Holding inventory - A major function of retailers is to keep

inventory that is already broken into user friendly sizes so


that products will be available when consumers want them.

4) Providing services
a) Retailers provide services that make it easier for
customers to buy and use products.
b) They offer credit so consumers can have a product now
and pay for it later.
c) They display products so consumers can see and test
them before buying.
d) Some retailers have salespeople on hand to answer
questions and provide additional information about
products.

Conti
5) Increasing the value of products and
services By providing assortments,
breaking bulk, holding inventory, and
providing services, retailers increase
the value consumers receive from
their products and services.

Retail
According to Philip Kotler Retailing
includes all the activities involved in selling
goods or services to the final consumers
for personal, non business use. A retailer
or retail store is any business enterprise
whose sale volume comes primarily from
retailing.
retaillier (french word), which means to
cut off a piece or to break bulk.
A retailer may be defined, as a dealer or

Retail
According to Philip Kotler Retailing
includes all the activities involved in selling
goods or services to the final consumers
for personal, non business use. A retailer
or retail store is any business enterprise
whose sale volume comes primarily from
retailing.
retaillier (french word), which means to
cut off a piece or to break bulk.
A retailer may be defined, as a dealer or

Retail Evolution
a) Barter system
b) Haats periodic markets that form a major part
of the rural market system in India. This is a
location which witnesses a public gathering of
buyers and sellers at fixed times at fixed
locations.
c) Melas Melas are fairs, and they can range
from commodity fairs to religious fairs. It is
estimated that more than 25,000 melas are
held annually in the country. It is estimated
that the average outlets in every mela would be
more than 800.
d) Mandis Mandis are markets set up by the state
government for the sale of agricultural produce
directly from the farmers.

Conti..
Public Distribution system was introduced in India
in the year 1950. ( the evolution of the public
distribution of grains in India)
Kendriya bandars (1963)
Mother dairy ( foods and provisions)
Co-operative stores( In Mumbai, Bombay bazar)
From the 1950s to the 1980s, investments in
various industries was limited due to low
purchasing power and the govts policies
favouring the small scale sctor.
From 1990s the Indian economy slowly
progressed from being state led to becoming
market friendly

Conti

The first time organised retailing was noticed


in the textile sector. Viveks, Nallis,
Raymonds, Vimal, Garden etc. This was the
beginning of new era in retail in India
The vast middle class market demanded
value for money products (Post
liberalisation).
The concept of retail as entertainment came
to India with the advent of malls.
From 3 malls in the year 2000, to 25 in 2003,
220 malls in 2006, with a cumulative
estimated space of 40 million sq.ft and over
600 malls by 2010, giving cumulative
estimated retail space of as much as 100

The Evolution of Retail in


India
[
Traditional formats
Itinerant salesman
Haats
Melas
Mandis

Established formats
Kirana shops
Convenience / departmental stores
Company / multi brand showrooms
PDS / fair price shops
Co-operative stores
Pan / Beedi shops

Emerging formats
Exclusive retail outlets
Hypermarkets
Malls / specialty malls
Multiplexes
Rural oriented formats
Fast food outlets etc.