The bargaining power of organized retail translates directly into higher gross margins for the retailers. At present there are a large number of independent retailers with little bargaining power vis-ĆĀ -vis manufacturers, distributors and wholesalers. The manufacturers have been promoting their brands and generating consumer demand for branded products. This makes it necessary for all varieties of stores especially in urban areas to stock branded products. The manufacturers take advantage of the consumer pull to limit margins to the retailers. The retailers manage their profitability by operating on a very low cost basis. This is possible because of low rental expenses due to historical reasons and low labor costs due to employment of family members in the store. The modern stores have somewhat higher gross margins, but their net margins are not very significant for providing the cash flow required to fuel rapid growth in outlets. The retailers can increase theirĀ Continue reading
Retail Management Concepts
Increased Investment in Retailing
The prospects for significant modernization and development in retailing will depend on the nature of investment in this sector. The investment will be of two types-foreign and domestic. The quantum and nature of investment will depend on the factors outlined earlier namely economic development; civic situation; consumer needs; attitudes and behavior; and government policies. Although FDI is not yet permitted in retailing, a number of global retailers are testing the waters by signing technical agreements and franchises with Indian firms. Fast food chains like McDonaldās and Pizza Hut are already operating in the metros. A Marks and Spencer store is already operational in Mumbai. Several global retailers are awaiting a change in policy. However, the development of the Indian retail sector is dependent not just on foreign investment but on Indian investment as well. Since the 1980s, industrial groups such as Reliance and Raymonds have been active in encouraging developmentĀ Continue reading
Category Management Concept in Retailing
Retail is often termed as a business of responding to change. Todayās retailer is faced with a rapidly changing and demanding consumer, intense competition, and pressures on costs. The combinations of the business condition that exist today and the advances in technology have created an opportunity for the development of new management approaches. One such approach is that of category management. The need to reduce costs, control inventory levels and replenish stock efficiently, led to the concept of Efficient Consumer Response (ECR) taking shape in the grocery retail industry in Europe and America. By focusing on a superior understanding of consumer needs, category management provides renewed opportunities for meeting consumer needs, and at the same time, for achieving competitive advantage as well as lower costs through greater work process efficiencies. Category Management can be defined as the distributorās / supplierās process of managing categories as strategic business units, producing enhancedĀ Continue reading
Retail Selling Process ā Personal Selling Process
Retail selling as the name suggests involves personal contacts. Advertising, on the other hand, involves no personal contact. Sales promotion is different from both these techniques. Now let us briefly explain about the Retail selling, its definition, qualities of retail seller and objectives . Salesmanship and Retail Selling The success of a marketing firm really depends on its effectiveness in creating a demand for its products and how effectively it satisfies its customers. To create a demand for the product, usually three techniques are employed by the marketing firms, namely, Personal Selling, Advertising and Sales Promotion. Of them personal selling has assumed an ever increasing importance than other techniques. The number of people employed in advertising is in thousands whereas in personal selling (retail selling) the number is in millions. Personal selling occurs where an individual salesperson sells a product, service or solution to a client. Salespeople match Ā the benefitsĀ Continue reading
Macro Enviornment Factors in Retailing
What do you mean by retail environment? A retail marketing environment consists of the external actors and forces that affect the retailers ability to develop and maintain successful transactions and relationships with its target customers. We can distinguish between the retailersā micro environment and macro environment. The macro environment consists of legal, social, economic and technological forces. Demographic Enviornment The first environmental fact of interest to retailers is population because people make up markets. Retailers are keenly interested in the size of the population, its geographical distribution, density, mobility trends, age distribution and social ethnic and religious structure. Demographic structure is seldom static for long and changes in its composition often test the residency of a marketing firm. Further, these changes influence the behaviour of consumers which, in turn, will have a direct impact in the retailerās business. The ripples of these changes will reach the organisation forcing it toĀ Continue reading
Micro Enviornment Factors in Retailing
What do you mean by retail environment? A retail marketing environment consists of the external actors and forces that affect the retailers ability to develop and maintain successful transactions and relationships with its target customers. We can distinguish between the retailersā micro environment and macro environment. The micro environment consists of the actors in the retailerās immediate achievement that affect its ability to serve its markets: Suppliers, intermediaries, customers, competitors and publics. Micro Enviornment Factors Every retailersā primary goal is to profitably serve and satisfy specific needs of chosen target markets. To carry out this task, the retailer links himself with a set of suppliers and a set of intermediaries to reach its target customers. The suppliers / intermediaries / customers chain comprise the core marketing system of the retailer. We will now look at the forces which after the retailers micro environment. Suppliers: Suppliers are business firms and individualsĀ Continue reading