1_1_retailing_retailing_retailing

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RETAILING:

RETAILING

RETAILING:

RETAILING Retailing is the set of business activities that adds value to the products & services sold to the consumers for their personal or family use. It is not only sale of products in stores but also sale of services Not all retailing done in stores - direct sales of cosmetics, catalog sales, home shopping n/w on cable TV ,haircut

RETAILING:

RETAILING Distribution channel Manufacturing wholesaler Consumer RETAILER

Retailer :

Retailer Retailers are at the end of the distribution chain & involve in direct interface with the customer Referred as intermediaries – pass on products from producers & wholesalers to customers Provision of channel in a convenient location to provide a successful channel of distribution Key objective : availability of right product, in right qty, at right time – successful channel Annual sales of Wal – mart, kmart.Sears are much greater than annual sales of P&G,Pepsico

Wal – Mart by Sam Walton:

Wal – Mart by Sam Walton Walton majored in economics –university of Missouri in 1940 Considered selling insurance,but an with J.C.Penney attracted him to retailing Worked as mgt trainee in Des Moines stores for $85 a month 1942 left to join military & after world war II sought a retail business from his savings in military Bought Ben Franklin variety store franchise in New port,Arkansas On refusal for renewal of lease period, he relocated to Bentonville,Arkansas(remains wal-mart’s corporate head quarters) 1962 – raised to 15 stores 1960’s pioneer’s of modern discounting were building their business

Wal – Mart by Sam Walton:

Wal – Mart by Sam Walton He visited those stores,observed their merchandising techniques & convinced that discounting would revolutionize retailing After failing to get Ben franklins upper mgt to join him in opening discount stores,he opened his 1 st Wal- Mart discount store in Rogers,Arkansas in 1962 1800 discount city stores & 200 Sam’s warehouse clubs in all 50 states & 5 countries Initial strategy: To offer name brand merchandise at discount prices to small communities Key success: customers & employees – associates Died in 1992, his spirit & ideas remain a driving force at wal – mart with annual sales over $100bn –largest retail merchant in the world

Wal – Mart by Sam Walton:

Wal – Mart by Sam Walton Saying : “ our goal in our business is to be the very best. We believe completely that in order to be the very best you’ve got to make the best situation & put the interest of your associates first. If we really do that consistently, they will in turn cause our business to be successful” – Sam – Walton Sam Walton's understanding of his customers & employees was instrumental in building Wal-Mart into the world’s largest retailer

Functions of Retailing :

Functions of Retailing Retailers perform business activities that increase the value of product & service they sell to customers Activities: * Providing an assortment of products & services * Breaking bulk * Holding inventory * Providing services

Providing an assortment of products:

Providing an assortment of products Supermarkets carry 15000 different items made by over 500 companies This assortment enables customers to buy wide selection of brands,designs,sizes.colors & prices in one location Not the case in individual manufacture’s retail outlets

Breaking Bulk:

Breaking Bulk To reduce transportation costs, mfrs ship whole cases of their products to retailers Retailers then offer the products in smaller quantities tailored to individual consumers usage pattern Breaking the large shipments into smaller consumer quantities – Breaking Bulk

Holding inventory :

Holding inventory Function of retailers – to make the availability of products when consumers want them Consumers can have small inventory of products at home as retailers will have the availability By maintaining inventory,retailers reduce customer’s cost of storing products

Providing services :

Providing services Provide services that make it easier for customers to buy & use products Offer products on credit Display products for ease of use by customers for purchase Assistance provided by sales people on purchase

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