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RETAILING DECISONS
Choice of retail locations – Internal and external atmospherics – Positioning of retail shops – Building
retail store Image – Retail service quality management – retail supply chain management – Retail Pricing
Decisions. Merchandising and category management – buying.
Introduction:-
“A store is place, retail or virtual, where the shoppers comes to buy goods and services, the sales
transaction occurs at this junction”
The location of retail store has for a long time been considered the most important ‘P’ in retailing:-
1. Product,
2. Price,
3. Place ------------ Retail Location.
4. Promotion,
PLACE:-
Location is a most important factors.
Factors affecting retail location:-
1. Size and characteristics of market potential.
Retail Location
1. Grid Layout:-
1. It is commonly used Layout.
2. It is most applied in grocery.
3. It is traditional format store.
4. It helps in free get purchase item.
5. Less space.
6. It save time and cost.
2. Free – form Layout:-
1. It is used in department store.
2. It is most convenience.
3. It is commonly used in specialty store.
4. It is also called as Boutique Layout.
5. The customer easily choice the product.
6. It Need large space.
3. Race track Layout:-
1. This layout used in impulse buying and sales promotional layout.
2. Hear expose to large number of product.
3. It is also called and Loop Layout.
4. Retail Units with multiple Department most suitable for race track unit.
5. Examples:-
Big bazaar.
Pantaloons.
4. Stored layout:-
1. It is common layout India.
2. It save time and cost.
3. It applied in super market.
4. Shopper shop.
“Retail Positioning is the process of creating and maintaining a distinctive/ valued image of
the retailer in the minds of customer”.
Examples:-
1. Only coffee.
2. Music world.
3. Walmart.
4. Toy’s R
5. KFC.
In simple Retail Positioning is position the retail shop image in the mind of customers.
STP:-
Step=> S------- Segmentation.
Step=> T------- Target.
Step=> P------- Positioning.
Product Line
Shoppers Stop Shoe Store
Low
High Low
Value
In simple retail store image is in the mind of customer and perception about particular retail store.
Expected service
Gap 1 Gap 5
Perceived service
Gap 4 External
communication
Service delivery
Gap 3
Customer driven service
design
Gap 2
Company perception of
customer expectation
Types of Gap:-
1. Knowledge gap.
2. Standard gap.
3. Delivery gap.
4. Communication gap.
Retail Supply Chain Management:-
Definition:-
Supply chain management is the management of upstream and downstream relationship with supplier
and customer, to deliver superior customer value at less cost.
Principles of Supply Chain Management:-
1. Segment customer focused and service needs.
2. Supply chain management network.
3. Match with demand and supply.
4. System oriented concept.
5. Service oriented.
6. Improved efficiency.
7. Relationship with suppler and customer.
8. Reduce transportation cost.
9. Reduce warehouse cost.
10. Minimize the time.
Scope of Supply Chain Management (or) Elements of Supply Chain
Management:-
Supplier Mgt Inventory Mgt Distribution Mgt
1.Strategic
Level
Customer
service 2.Manufacturer.
Channel Net
Design Work
2.Structural
3.Financial Level
Procedure Change
4.Implementation Level
Supplier Customer
Facility Inventory
Sourcing Pricing
Technology Demand/Supply
Retail Pricing Decision:-
What is mean by Retail Pricing Decision?
Price may be defined as the exchange of goods and services in terms of money in simple
words price means. Value for the product.
Value = benefits
Price
Pricing Objectives:-
1. Product quality objective.
2. Market share objectives.
3. Penetration objectives.
4. Skimming price objective.
5. Return on investment objectives.
6. Profit objective.
Approaches of retail pricing strategy:-
Approaches of retail pricing strategy
Mark up pricing:-
Retail price = Cost + Markup / Profit margin.
1. Initial markup pricing:-
Initial markup %
On retail price = planned operating cost + planed profit + planned reduction
Steps in merchandise:-
Step 1:- Deciding the source of merchandise.
1. Raw source.
2. Government.
3. Agent.
4. Whole sales.
Step 2:- Meeting the vendors:-
1. Time save.
2. Less cost.
3. Inventory.
Step 3:- Evaluating the vendors.
1. Personal history.
2. Quality of the product.
3. Financial strength.
Step 4:- Selection of right vendor.
Step 5:- Negotiating with vendors.
1. FOB = Free On Board.
2. CIF = Cost Insurance Freight.
3. COD = Cash On Delivery.
4. Credit terms.
Step 6:- Purchasing from vendors.
Step 7:- Establishing and maintain relationship with vendors.
Step 8:- Handling the merchandise.
Step 9:- to satisfy the customers.
Category management:-
Category management is a distinct group of product and service that the consumer perceive to be
interrelated in meeting one consumer needs.
In simple words category management is managing different group of product and services.
Functions/ Steps in category management process:-
1. Category definition.(High, Medium, Low category )
2. Define the category role:-
i. Distinction categories.
ii. Preferred categories.
iii. Seasonal categories.
iv. Occasional categories.
v. Convenience categories.
3. Category assessment:-
i. Turnover.
ii. Profit.
iii. ROI – Return on Investment.
iv. Customer.
4. Performance of measurement category:-
i. Sales.
ii. Profit.
iii. Market share.
iv. Stock turnover.
v. SKU = Stock Keeping Units.
5. Different strategies in category management:-
i. Increase transaction.
ii. Traffic building.
iii. Profit generating.
iv. Image generating.
6. Category score card:-
i. BCG matrix.
High
Sleepers Winners
Market share
Low
Questioner Opportunities
Low High
Market Growth
ii. SWOT analysis.
7. Develop category tactics.
8. Category plan implementation.
9. Periodical review / feedback.