Module 2.2- Retail Marketing

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Module –II: Retail Marketing : 

Module –II: Retail Marketing b) Retail Marketing Introduction Types of Retailers (Retail Formats) Retailer’s Marketing Decision Layout & Location Decisions Private Labels

Tata Steel has entered organized steel retailing through steeljunction® : 

Tata Steel has entered organized steel retailing through steeljunction®

Introduction to Retailing: 

Introduction to Retailing Retailing includes all the activities involved in selling goods or services directly to final consumers for personal, non-business use.

PowerPoint Presentation: 

Classification of Retail Stores Store Based Retailing Non-Store Retailing Form of Ownership Independent retailer Chain retailer Franchise Leased departments Consumer co-operatives Merchandise offered Convenience stores Supermarkets Hypermarkets Speciality stores Departmental stores Off price retailers Factory outlets Catalogue showrooms Direct selling Mail order Tele marketing Automated Vending

Types of Retailers: 

Types of Retailers Based on The level of Services offered Full service, limited service, self-service The product line variety and assortment Speciality stores, departmental stores, convenience stores, superstores, category killers, Hypermarkets Relative Prices Discount stores, Factory outlets, off-price retailers & warehouse clubs Organizational Approach Corporate Chains, Voluntary Chains, Retailers Cooperatives, Franchisee and Merchandising conglomerates Ch 1 - 5

Retailing: 

Retailing Amount of service: Self-service Limited service Full service Types of Retailers

Retailing: 

Retailing Product Line

Retailing: 

Retailing Types of Retailers Relative Prices

Retailing: 

Retailing Types of Retailers Organizational Approach

Types of retailers : Based on Organizational approach: 

Types of retailers : Based on Organizational approach Corporate chains are two or more outlets that are commonly owned and controlled Size allows them to buy in large quantities at lower prices and gain promotional economies (e.g. Bata) Voluntary chains are wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising Retailer cooperatives is a group of independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort Franchise organizations are based on some unique product or service; on a method of doing business; or on the trade name, good will, or patent that the franchisor has developed Merchandising conglomerates are corporations that combine several retailing forms under central ownership

Major Retail Formats: 

Major Retail Formats Specialty store Department store Supermarket Convenience store Discount store Off-price retailer Superstore Catalog showroom

PowerPoint Presentation: 

Copyright 2007 Prentice Hall Ch 1 - 12

Characteristics of General Merchandise Retailers: 

Characteristics of General Merchandise Retailers

Indian Retail stores based on Merchandise mix: 

Indian Retail stores based on Merchandise mix Departmental store Ebony, Globus, Shopper’s Stop, Westside, Vishal Mega Mart Discount store S- kumar’s S- Mart, Margin Free, Subhiksha, Priknit, Koutons Specialty stores Khadi speciality, Footwear speciality Supermarkets Foodworld Hypermarkets RPG’s Giant, Big Baazar, Reliance Hypermart

Characteristics of select retail formats: 

Characteristics of select retail formats Format Description Size (sq.ft) Examples Intl. India Category Killer / Specialist Narrow variety, but deep assortment 50,000+ 15,000+ Toys R Us, Nallis, The Loft Convinience stores Mix of products 3,000 – 8,000 500 – 1,000 7-Eleven, Speedmart Department stores Several product lines, largely non-food 75,000+ 5,000 – 40,000 Marks & Spencer, Shopper’s Stop, Pantaloons

PowerPoint Presentation: 

Format Description Size (sq.ft) Examples Intl. India Factory Outlets Branded merchandise at a discount 5,000 – 10,000 500 – 1000 Levi’s factory Outlet, Reebok Factory Outlet Hypermarket Large self service stores, mix of food & non food. Essentially low price 80,000 – 220,000 40,000 – 75,000 Wal-mart, Big Bazaar Single Price stores Offers a mix of branded & unbranded stores 5,000 – 20,000 2,000 – 5,000 Family Dollar, 9 to 9, 49 to 99

PowerPoint Presentation: 

Format Description Size (sq.ft) Examples Intl. India Specialty stores Focus on a brand or category, narrow product line , but good depth 5,000 – 8,000 2,000 – 5,000 Walgreens, Crossword, MusicWorld Supermarket Food,laundry and household maintainance products. Self service, low margin, low cost 8,000 – 20,000 800 – 5,000 Asda , Kroger,FoodBazaar , Food World

Nonstore Retailing: 

Nonstore Retailing Direct selling Buying service Automatic vending Direct marketing

Retailer Marketing Decisions: 

Retailer Marketing Decisions Store Atmospherics Location Layout Other retail decisions

Store Atmosphere: 

Store Atmosphere Walls Lighting Signage Product placement Floors Surface space Music Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 16- 20 The Fornarina flagship store features award-winning retail design.

Location Decision: 

Location Decision Central business districts Regional shopping centers Community shopping centers Shopping strips Location within a larger store

PowerPoint Presentation: 

General business districts . This is the oldest and most heavily trafficked city area, often known as "downtown." Store and office rents are normally high. Most downtown areas were hit by a flight to the suburbs in the 1960s, resulting in deteriorated retailing facilities; but in the 1990s, a minor renaissance of interest in downtown apartments, stores, and restaurants began in many cities. Regional shopping centers . These are large suburban malls containing 40 to 200 stores. They usually draw customers from a 5- to 20-mile radius. Typically, malls featured one or two nationally known anchor stores, such as JCPenney or Lord & Taylor, and a great number of smaller stores, many under franchise operation. The department store's role, however, is increasingly taken over by a combination of big box stores such as Petco, Circuit City, Bed Bath & Beyond.27 Malls are attractive because of generous parking, one-stop shopping, restaurants, and recreational facilities. Successful malls charge high rents and may get a share of stores' sales. Community shopping centers . These are smaller malls with one anchor store and between 20 and 40 smaller stores. Strip malls (also called shopping strips). These contain a cluster of stores, usually housed in one long building, serving a neighborhood's needs for groceries, hardware, laundry, shoe repair, and dry cleaning. They usually serve people within a 5- to 10-minute driving range. A location within a larger store . Certain well-known retailers—McDonald's, Starbucks, Nathan's, Dunkin' Donuts—locate new, smaller units as concession space within larger stores or operations, such as airports, schools, or department stores.

Types of locations: 

23 Types of locations The Isolated store / Freestanding location Part of a Business District The Central Business District The Secondary Business District The Neigh-bourhood Business District Part of a Shopping Center (a group of retail and other commercial establishments that is planned, developed and managed as a single property)

Types of Shopping Centers: 

7/16/2012 Swapna Pradhan 24 Types of Shopping Centers Neighbourhood Shopping Center Community Shopping Center Regional Shopping Center Super Regional Center Fashion / Speciality Center Power Center Theme Center Outlet Center

Steps involved in choosing a retail location: 

7/16/2012 Swapna Pradhan 25 Steps involved in choosing a retail location Step 1: Identifying the Market Step 2: Determining the Market Potential Step 3: Identifying alternate sites Step 4: Selecting the site

Factors affecting the choice of market: 

7/16/2012 Swapna Pradhan 26 Factors affecting the choice of market Demographics of population & area Competition Laws & Regulation Trade area analysis

Factors affecting the choice of a store site: 

7/16/2012 Swapna Pradhan 27 Factors affecting the choice of a store site The traffic – pedestrian and vehicular The accessibility of the market The total number of stores in the area The type of stores in the area The amenities available The product mix to be offered by the retailer The cost of buying / leasing the property

Methods of Evaluating a Trading Area: 

7/16/2012 Swapna Pradhan 28 Methods of Evaluating a Trading Area The Herfindahl-Herschman Index The Index of Retail Saturation Reilly’s Law of Retail Gravitation Central Place Theory Huff’s Model of Trading Area Analysis

Trends in Retail Property Development in India: 

7/16/2012 Swapna Pradhan 29 Trends in Retail Property Development in India Trends in the NCR Trends in the major metros Spread of organised retail in India

The spread of organised retail in India: 

7/16/2012 Swapna Pradhan 30 The spread of organised retail in India Bangalore Mumbai Chennai Delhi Pune Kolkata Gurgaon Noida Chandigarh Nagpur Bhubaneshwar Jaipur Udaipur Indore Bhopal

Private Labels: 

Private Labels Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 16- 31

Private Label Brands: 

Private Label Brands Private labels are ubiquitous Consumers accepts private labels Private-label buyers come from all socioeconomic strata Private labels are not a recessionary phenomenon Consumer loyalty shifts from manufacturers to retailers

Challenges to Retail Development in India: 

33 Challenges to Retail Development in India Lack of industry status High cost of real estate High stamp duties Lack of adequate infrastructure Multiple and complex taxation system