1. Retail Marketing
Q1) (a) Define “Retail Marketing”, how it is emerging in Indian market?
Retailing is a business activity involving selling goods and services to consumer for their
personal use. It covers the entire range of goods and services from apparels, food products,
furniture, garments, household gadgets, automobiles, medicines, movie tickets, stationery,
services like banking, insurance etc. Retailing is the last link in the distribution process
during which goods and services are sold to the end user or the final consumer.
Retail marketing is the range of activities undertaken by a retailer to promote awareness and
sales of the company‟s products. This is different from other types of marketing because of
the components of the retail trade, such as selling finished goods to the consumer or end user,
usually from a fixed location. Retail marketing makes use of the common principles of the
marketing mix, such as product, price, place and promotion.
Retailing today is in an interesting phase. There are many opportunities to start a new retail
business or work for an existing on as a franchise. Global retailing giants have entered India,
and many more are continuing to enter, with the recent example being of that of Wal-Mart.
Emergence of retail in India has more to do with the increasing purchasing power. Retail is
going through a transition phase in India. Before 1980, the country's retail consisted only of
local Kirana stores who catered to the nearby consumers. The only organized retail chain was
the "ration" shops run by the government that used to sell groceries to the general public. 80s
saw the emergence of retail chain, mainly apparel, like Raymond, Grasim, etc. When the
economy opened up in the 90s, we saw chain departmental stores like Food World,
Subhiksha and Nilgris; also there were other chains like Music World. Titan was the first
chain store to go big by opening up hundreds of stores across the country to market their
premium watches.
More than just calling it a transition, what we are seeing looks like a retail revolution. Every
segment of retail industry; be it apparel, departmental stores, electronics, sports goods anything, you have various corporations set up chain stores across the country. The amount of
choice today's customer has in terms of different retailers or the kind of items that were not
available 10 years ago, is just tremendous.
However, the boom in retailing has been confined primarily to the urban markets, primarily
because of the presence of IT, ITES and non IT related sectors in and around the primary
cities of India. Particularly, the growth of IT industry has led to increase in the household
level incomes & increase in the employment opportunities for women, who until a decade
and a half back where primarily „home-makers‟, which in-turn has led to increasing pressure
of time. Thus very little time available for leisure. The consumer seeks the convenience of
one-stop shopping, so that they can utilize their available time better. These consumers
expect speed and efficiency in processing. Their awareness levels are comparatively high and
they are on the lookout for more information at convenience, better quality of product as well
as consumer service. All these factors has helped in nurturing the organized retail industry in
India
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2. While consumers prefer chain stores for large volume which they stock for weeks& for
convenience, and that their shopping pattern has over a period of time has witnessed a
change, they still prefer the street corner shop for their day to day needs. The size of retail
industry has more than doubled in the last 10 years. So, everybody has a share of the pie.
Loyalty is big when it comes to street corner stores. The relationship that they share with
their consumers goes to the extent where they get invited for their customers' family
occasions. These customers will never go away for these street corner stores. Inspite of that,
the fact remains that it is increasing challenging for the street corner retailers to compete with
the big fishes.
Q1)(b)Describe the functions of retailing and its place in marketing channel.
Retail in Distribution is the last stage in a channel of distribution. It comprises all of the
businesses and people involved in the physical movement and transfer of ownership of goods
and services from producer to consumer. A typical distribution channels is as below
Manufacturer
Wholesaler
Retailer
Final
Consumer
Each manufacturer wants to reach out to the final customer in the market, retailers provides
them with the opportunity, via their strategically located retail points. While on the other
hand, the final consumer, for whom, today convenience has become a key criteria is looking
for a one stop shop that can provide him with products from multiple manufacturers. The
retailer communicates with the customers and with the manufacturers.
Classic examples are More super markets for groceries and households utility, Viveks Ltd
multi brand showroom for consumer durables, Shoppers Stop OR Globus for textile and
apparel. More recently, Malls have become the gigantic version of retailing, with huge foot
space, multiple brands across categories, including entertainment areas - all at one place,
thereby adding up the convenience value for the consumer, for ex, Phoenix Mall @ White
Field, Bengaluru.
Efficient Retailing and Market communicationenables the buyers to know about the
products and services from a retailer via their sales team, the window displays,
advertisements etc. On the other hand manufacturers get to know forecasts, customer
complaints, defective items, inventory turnover etc. Thus, the retailers play a key role as the
contact between manufacturers, wholesalers and other suppliers and the final consumer.
Market Reach In order to ensure reachof the product even to the smallest quantities to the
market at a very economical cost, retailers also provide assistance to the manufacturer in
multiple forms like transportation, storing, marketing, advertising, pre payments whenever
required for merchandise, in-shop branding & Point of Sale branding. The tobacco business
of ITC is a classic example. The retail distribution chain of ITC tobacco products is so strong
that it has helped the brand ITC today to distribute their food products even to a very small
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3. market without great efforts – when compared to another competitor who has to deploy a
huge foot-on-street force for retail placement of product.
Retailers buy the products in large quantities & store them, by doing it so they help the
manufacturers in better management of their Finance in the form of working capital and
better turnaround of raw material, which in-turn improves productivity and hence a positive
impact on pricing.
Wherever required, the retailer also takes up the role as After Sales Service provider for the
brand. While there are brands that have company owned service centers, due to high
investment & operating costs, lots of brands, specifically from the consumer durables vertical
prefers to retain its multi brand retailer as its service retailer ie. The authorized service center.
This helps the manufacturer to offer the service locally, promptly and in a cost effective
manner, which on a longer run helps the manufacturer in increasing customer satisfaction,
which not only helps the manufacturer to retain its consumer base but also enables a positive
word of mouth for the brand that may lead to acquiring new customers.
Apart from all this, in order to increase customer satisfaction and thereby retain the store
walk-ins, the retailers also offer certain Value added services like for example free door
delivery, free installation etc. This serves two purposes, it helps the retailer to offer more
value to its customers thereby retain them thereby increasing the probability of frequency of
purchase.
Q2) (a) Enumerate the degree of relationship between retailers and suppliers with
proper narration of conflict of interest; support your answers with suitable market
examples.
The retailers on one hand are part of the supply chain as the vital link between the suppliers
and the consumers. Therefore the suppliers are concerned about the retailers coverage of the
consumer market, the quality of display, level of customer services, store hours and retailers
reliability as business partners. On the other hand, the retailers are also major consumers of
goods and services for resale, store fixtures, computer equipment‟s, management consulting
and insurance. Hence the relationship between retailers and supplier, that is the
manufacturers and wholesalers is complex in nature.
In both the cases of retailers of high value products like a branded retail store outlet, for
example Gautier furniture, pizza hut etc who are national chains or for regional chains like
for example Viveks Limited, Jainsonsetc, the manufacturer helps the retailer with various
expert inputs to ensure the profitability and productivity of the retailing activity. A brand,
while appointing dealers, will make certain demands to the dealers in the form of
infrastructure required, stocking of the products, working capital, man power etc and in turn
commits the dealer on the Return on Investments (RoI). And for the dealer to retain the
committed RoI, the manufacturer sets certain Standard Operating Prodecures (SOP), which
will be mutually agreed upon.
For example, UNIVERCELL is a leading multi-brand retail outlet for mobile phones, who is
the leader in the space with 250+ stores across India. Now lets go a bit in detail about the
demands & SOP‟s that would have been set by the brands
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4. As first, the primary reason for why leading brands like Samsung, Sony Ericcson or Nokia
prefers a multi-branded outlet like UNIVERCELL is that, it helps the respective brands to cut
down on their cost of establishing own outlets to reach out the vast market that is India.
The demands set by the brands to UNIVERCELL could be on the following lines
Investments for the store
 The location of the store – how strategically is it located?
 What should be the size of the store, in order to cater to the given market segment?
 What are the standard store level branding elements required for the showroom?
 Ascertaining the man power required to address the consumer – for sales & post sales
activities
 Training required if any – to handle different customers from the market
 SOP‟s including Store Branding, Point of Purchase branding and advertising support
In-turn, UNIVERCELL will decide on the new showroom need basis the following factors,
which will be in line with the respective brands that the showroom will be catering to
 How is the consumer buying strength in the given market?
 How deep is the need for a product like mobile phone in the given market?
 How deep is the „pocket‟ of the consumer? Does the market have potential customer
who replaces his/her mobile frequently
 What is the ideal price point that will hold the maximum sales volume share?
 Competition in the market
 Opportunities for related services like gadgets, mobile talk time packages etc
In the overall scheme of things both manufacturers and retailers need to function in a
coordinated manner, as a team. This is because, the consumer buys the brand popularized by
the manufacturer, via the retail outlet. While the manufacturer may create confidence levels
for their products in the minds of the consumer, the retailer has to equally create confidence
in the consumers mind, so that the purchase of the brand happens thereby leading to regular
stocking of the brand.
While the manufacturer demands certain perquisites from a dealer, they are still dependent on
the dealer for success of the brand in the market place. At the same time, without the support
of the manufacturer in terms of timely deliveries, advertising support etc it will not be
possible for the retailer alone to attract the buyers. Inspite of the fact that manufacturers and
the retailers understand the need for interdependence for success, their relationship is still not
without conflicts though.
Conflict of Interests
There are certain factors that may lead to conflict of interest between the retailer and the
manufacturer, like
 Controlin the business While the manufacturers , for example would want the
retailers to work in a certain manner to ensure consistency of quality of service the
retailers may seek freedom in operations and would like to work the way in which
they fee comfortable. The retailer can also not be blamed, they can be right in their
own way since they know the market so well, while on the other hand, for
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5. manufacturers it is more of their RoI& maintaining or increasing their market share
vis-à-vis the competition
 Profit Sharing while the retailers would like to have maximum discount possible
from the manufacturer or maximum commission possible from the manufacturer for
every unit of sale, the manufacturer on the other hand wants to keep as much margin
for themselves as possible
 Display Spacewhile the retailers may stock the items on their shelves of display basis
their customer preference, the manufacturer would like to have prominence for his
brand than the competitor, since it works as a point of sale reminder for the consumer
about the respective brand. The very famous Pepsi – Coke war is a classic example
 Promotion Support while the retailers would want the manufacturers to provide
more advertising support, the manufacturers expect the retailers to take care of the
local market promotions by the retailer himself. In the case of mobile handset
business, for example, Samsung, a manufacturer has a standard demand that the
retailers will contribute a certain % in the regional level ad spends.
 Payment Flexibility while the retailers expect maximum credit period, the
manufacturers are under the pressure of immediate or even advance payments, so that
it doesn‟t affect their financial flow
 Number of Retailers while the retailers will expect exclusivity for themselves, the
manufacturers will want as many selling points as possible
Some of the reasons leading to the conflict is that, in the case of the manufacturer Samsung
who in India is a national player, the manufacturer is under the pressure of
 Maintaining &increasing sales, market share
 Retaining & increasing the customer base
 Creating new and successful market
 Withstanding the competition
 Maintaining & ensuring availability of stocks across all sale points (in this case,
across all multi-brand mobile handset showrooms in India, including UNIVERCELL)
 Maintaining the company‟s cash flow
While on the other hand, for a retailer it‟s more of
 Ensuring profitability for the retailer himself
 Developing his credibility in the market, since UNIVERCELL being a multi-brand
mobile handset outlet, he needs his credibility to be UP so that he gets consumers of
all mobile handsets, not stopping just with that of Samsung
 Ensure protection for his own self in case of any unavoidable or unfavorable
circumstances
The reasonable solution that may enable both manufacturers and retailers to function in a
coordinated manner, as a team will be to have selective distribution. The manufacturer will
appoint a few retailers in a given territory, so that each retailer gets a reasonable opportunity
to benefit from the market potential
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6. Q2) (b) How do you visualize the current issues in retailing? How does the retailing
affect the country’s economy?
The current issues in retailing are
 Manufactures as competitors the dynamism of technology has led to the mammoth
growth in the e-commerce business or in other words e-tailing. Manufacturers have
started adapting to web based point of sale, wherein, the consumer can browse
through the available products of his/her interest at their convenience, purchase them
through the internet by paying through a credit or a debit card for ex, OR also can opt
for a Cash On Delivery mode.
The manufacturers have identified the potential of the e-tailing, by its success in
certain product verticals like books, music, gadgets, gift items etc. For example, the
entry of e-tailing has proven to be effective in the books vertical of business, so much
so that, the once upon a time thriving retail outlets specialized on books like
Landmark, Odyssey etc are now on a curtailed growth path
 Special Discountsincreased buying power & the “more-for-less” demand by the
consumer has led to price wars, mostly given in the form of special discounts. In order
to handle the price variations the retailer may buy in higher quantities than the
conventional wholesaler. Moreover, in today‟s scenario, in order to ensure increase in
purchase, brands and retailers offers attractive special discounts even during „peak
seasons‟ like festivals, where the purchasing cycle normally witnesses a huge hike.
 Retailer Branding classic examples are supermarket chains. Nilgris super market,
one of the largest in South of India started as a multi-brand one stop shop for all
groceries and household items. Having built a sizeable consumer base and loyalty,
Nilgris introduced their own branded products like rice, atta etc.
Like any business activity, retail too affects the economy in a variety of ways
As first, retail outlets are the sale point for the brands to reach out and sell to the final
consumer. Hence the health of the retail outlets is also connected to the health of the brands
that at a macro level contributes to the economy.
 Retailing as a business activity operates with its own infrastructure and employees
 In the process it also generates opportunity for transportation and various related
activities
 As a result of which many organizations/individuals benefit monetarily
 Retailing enables employment generation at a market level
 Going by the fact that retailing is the touch point for sales for any brand across the
country, retailing has the ability to generate employments across the country
 Employment generation leads to betterment of lifestyle of the individuals, leading to
development in living style, that is a change in the usual consumption and purchase
pattern
 More consumption of goods means increase in the purchases, which will generate
taxes to the government
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7.  The increase in purchase power to global players mean development of a new market
for themselves, thereby generating additional income to the government in the
form of Foreign Direct Investment
Generating
Employment
Better Living
Standard /
Lifestyle
New Brand
Entry
Economy
Increase
Consumer
Confidence
Prospective
Market
Increase
Consumption /
Purchase
Q4) (a) In case of retailing, describe the various factors which determine the entire
strategy mix of retailing.
The approach or direction of efforts that dries the entire activity of an organization towards
achieving its objective of making profits, that affects planning and implementation is known
as strategy. Strategy by its very nature touches all aspects of business. In that sense it is a
process of synthesis. In retailing, the strategy mix is a synthesis of the following factors
 Store Ownershipthis factor is important as it has a very long term impact on the way
the growth is pursued and is likely to be limited. There are 3 choices of store
ownership
o Individual Operation an entrepreneur or a group of individuals has a few
alternatives to choose from like proprietary or partnership or family run.
Within this ownership format, the owners can choose from run an
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8. independent store or become a wholesale distributor or a dealer for a
manufacturer formats
While in this format decision making is fast since the controls are close and is
easy to implement and monitor, the growth of such operations are limited by
the ability and the ambitions of the individuals who own or run the activity
and their ability to finance the business
o Franchised Operation is gaining popularity in India, with the entry and
growth of organized retail. This operation lends itself well in case of
standardized product. For example Dominos Pizza
While in this format the actual owner can create multiple location presence
without investing from his pocket & that the format is designed in such a way
to create a steady income in the form of franchise fees and revenue sharing,
the growth depends on the dynamism of the identified franchisee, along with
that, any action taken by the franchisee reflects on the franchiser which at
times can also be a threat to the business
o Co-operative Operationis the format in which a group of people come
together, raises capital and sets up a retailing activity. This format is very
popular in agricultural and related products, wherein it is used not only for sale
but for the purchases too. For example, Gujarat Cooperative Milk Marketing
Federation (AMUL)
While this format helps in reducing the buying costs, since collective buying
enables increased purchase quantity, forming and running a cooperative
involves following of too many government regulations & can also attract
political interest once it becomes a profit making unit
 Store Locationthis refers to the placement of the store in a territory of a geographical
area. The retailer can either set up the store in an independent location or a shopping
center. Both will have their long term impacts
 Operational Procedures these go a long way in delivering customer service. This
element touches management style, store timings, quality of personnel employed,
replacement and other related factors
 Product or Service Assortment over time, consumers create a value equation about
every store. This is the result of range & quality of products a store offers. The store
management always has a choice over the depth and width of products or services it
offers or intends to offer. For example, an automobile dealership will sell automobiles
while at the same it can also offer financial services along with it
 Pricing in marketing it is said that Cost is a fact & price is a policy.. pricing goes a
long way not only in attracting the customers but also caters to consumers
motivational needs, because the perception is higher price means better quality and
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9. hence higher status. Hence a store can choose to offer a competitive price or a
penetration price or a status price.
 Store Ambience the facilities and the ambience provided also contribute to the
quality image of the store. Consumers feel more comfortable in a well-lit, well
ventilated, well laid out store than a cluttered one
 Customer Service how the customer is treated, how helpful or polite the staff is,
contributes to the overall experience along with ambience.
 Promotion how well the communication strategy and reach strategy is optimized, so
that communication reaches the target consumer in the given market
Any combination of strategic mix can improve business and deliver profit. The trick lies in
identifying the needs of the people in the stores catchment area and choosing the suitable
strategy.
Q4) (b) Comment on the success of Direct Marketing in US, explain reasons and scope
of direct marketing with its advantages and disadvantages.
Direct marketing exploits the growth in new technology, and can create a completely new
distribution channel direct to the customer or end user. Direct marketing is a marketing tool
which comprises activities such as direct mail, telemarketing, mail order, direct response
advertising and email marketing.Direct marketing provides a unique range of benefits
because it enables you to engage directly with your audience – whether they are prospects,
leads, end users or existing customers.
In the United States (US) direct marketing is one of the successful non store retailing models.
The most successful example is Readers Digest. Right from its inception it has been marketed
in this way and continues to remain successful. While Direct Marketing as a medium by itself
has been effective, the quality of the product Readers Digest was anticipated by the readers to
be of good quality. Readers Digest had lived up to the expectation of the consumer and
continuous to do so
Advantages of direct marketing include:
 Flexible TargetingDirect marketing enables you to talk directly identify, isolate and
communicate with well-defined target markets. This means the brand get a higher
conversion and success rate than if it tried communicating to everyone in the mass
market. And direct marketing is also far cheaper than mass market communication.
 Multiple UsesDirect marketing doesn‟t just have to be used to sell – it can be used to
test new markets and trial new products or customers, to reward existing customers to
build loyalty, collect information for future campaigns, or segment a customer base.
 Cost-Effectiveness The cost per acquisition of direct mail can be significantly less
than other marketing methods. Plus once a customer is acquired, the brand can also
benefit from highly profitable repeat sales, gained once again through direct
marketing methods.
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10.  Ease of Management Direct marketing provides greater control and accountability
than other marketing methods. It is easy to measure results because the brand know
exactly how many people it has contacted in the first place. Once the brand runs a
direct marketing campaign and know the conversion rates involved, it can work on
refining and improving your success rates. Plus it also makes it easier to plan, forecast
and budget for future direct marketing campaigns.
 Rapid Delivery Direct marketing is both swift and flexible in achieving results. This
is especially true for telemarketing, one of the direct marketing tools, as the results of
a conversation can be logged immediately and scripts adjusted straight away to
improve results.
 Testing CapabilityDirect marketing allows the brand to test, test and test again in
order to hit upon the most successful combination of direct marketing tools. Any of
these variables such as timing, list, message, mailer and offer can be adjusted, tested
again, and measured to find the optimum direct marketing proposition.
 Relationship BuildingDirect marketing is far more effective at initiating and
developing a meaningful dialogue with new customers. From the outset the brand has
a direct relationship with them, which can also be used as part of a push pull strategy
to stimulate demand for retailers.
 Targeting of MessagesDirect marketing can enable the brand to target different
messages to different recipients. Using technology such as digital printing, it‟s even
possible to display different images, designs and offers in a direct mailer according to
who it‟s being sent to, as well as personalising the mailer to the recipient to increase
conversion rates.
 Geographic Targeting Direct marketing can be used for any level of geographic
targeting, whether it‟s the local area surrounding a shop or restaurant, regional
targeting by postcode or county, national targeting and even international – when
direct marketing can prove a far cheaper way of testing the market than a costly
personal sales visit.
Disadvantages of direct marketing include:
 Image Factors Direct marketing suffers from poor image factors. Direct mail is often
treated as junk mail. Direct-response ads on TV are often low-budget ads for lowpriced products. This contributes to the image that something less than the best
products are marketed although home shopping channels do promote some expensive
products. Telemarketing and spam are irritating to many consumers thus lowering the
image of the direct marketing industry.
 AccuracyOne of the advantages of DM is targeting specific, potential customers. But,
the effectiveness depends on the accuracy of the lists used which is very often
inaccurate. Lists must be continually updated. Selectivity decreases if lists are not
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11. kept current. Computerization has improved the currency of lists, yet the ability to
generate lists remain a problem.
 Content Support Direct-response advertising requires the creation of mood but it is
limited to the surrounding program and/or editorial content. Direct mail, online
services also unlikely to create a desirable mood.
 Rising CostsThe Rising costs of direct marketing program serves as a disadvantage to
the marketer.
Q6)What is Retail information system (RIS)? Explain in detail by drawing a suitable
figure.
To succeed and remain successful, any business activity has to take many decisions. These
can be intuitively taken or can be taken based on hard core data gathered in a systematic way.
Any decision made can have two possible outcomes, a desirable outcome and a non-desirable
account. Having maximum facts on which decisions will be based on will help to increase the
probability of desirable outcomes.
The retailer can study the following to improve and fine tune the retailing effort
 Store Image
 Pricing
 Product & services assortments
 Buying behavior
 Suitability of alternate store locations
 Store operations
 Store management
 Suitability of promotions
 Effects of promotional offers
Depending on the decision situation on hand, many other factors can be added to the study
with the bottom line being, more the data; better the decision
Retail Information System (RIS) is a systematic way of gathering information that flows
from the mission and objectives of the organization. The following figure shows the
relationship between various components of the RIS.
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12. Environmentthere is an environment in which an organization exists and reacts to. Whatever
changes happen in the environment, it has an impact on the mission and the objectives and
hence the entire functioning of the organization. The organization consists of various
components such as competitors, government (local & regional, national), state of economy,
consumers and technology. Competitor‟s activity, modifications in government rulesang
regulations like taxation, employment regulations etc, the state of economy like inflation,
GDP, interest rates etc, shifting consumer trends, technological developments have a major
impact on how an organization functions. For example, many retailers today do not carry any
communication products, but are seen to sell SIM cards, pre-paid card and so on for mobile
phones. This modification in assortment was done because of proliferation of mobile phones
that happened as a result of government regulations.
Mission & Objectivethough profit is a default objective, what means to follow is often
defined in the mission statement. Modifications in the ways of doing business is a
compulsion that is imposed by changing environment, thereby the mission and the objectives
may get modified
Strategic Plans the long term strategic plan flow from this and how to achieve the objectives
is determined. Relevant decisions are taken and implemented.
Data collection/updation/feedback/information control the plans are only as good as the
results it generate. Therefore it is important that the data be gathered during implementation
of plans to ensure that the plans are generating desired results. To do so, data collection,
updation and retrieval systems are to be put in place after deciding what data will give
necessary information. This is a feedback process which helps in correcting any deviation as
well as gives inputs for modification in strategy and plans. For controlled and ease of access,
this data harvesting activity is usually centralized.
Retail Operation based on the data so gathered and analysed, fresh decision are taken and
implemented, which will have an impact on retail operations.
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13. Benefits of RIS
 Disciplined Information Collection the bar code system used for product
identification is an excellent source of information about stock movements. Each time
the bar code reader reads the bar code at the delivery counter the stock information is
updated. This not only helps in managing inventory and avoiding stock outs but also
helps in analyzing the seasonal trends.
 Pragmatic decision makingsince the data is gathered with regularity it is possible to
plot the trends with accuracy and stock outs as well as excessive stocks can be
avoided. Harvesting consumer complaints and analyzing them can save the situation
from going out of hand
 Improved coordinationit is easier to improve the coordination between various
activities, resulting in better efficiency of operations
 Quick decision making availability of data at the press of a button makes it easy to
take decisions in a short period of time
Limitations of RIS
 Expert support developing and maintaining an RIS is a specialized field. One must
know what questions to ask, to whom and how to analyze the data
 High costs expertise as well as necessary infrastructure does not come cheap
 Time setting up the system and making modifications based on simplicity or
complexity of decisions to be taken, needs a lot of time
Many times it happens so that the data is collected based on present scenario and by the time
it is analysed and is now able to give sufficient input for decision making, the time has passed
and relevance of the data as well as the decision may be lost
Q7) Write Short notes on any Five:(a)Electronic Retailingis the concept of selling of retail goods using electronic media, in
particular, the internet with the transaction model of e-commerce. E-Retailing stores sell
online promotion only for goods that can be sold easily online, e.g., Amazon did for Books &
CDs, etc. The online retailing require lots of displays and specification of products to make
the viewers have a personal feel of the product and its quality as he gets while physically
present in a shop.E-Retailing refers to retailing over the internet. Thus an e-Retailing is a
B2C (Business to customer) business model that executes a transaction between businessman
and the final consumer. E-Retailers can be pure play businesses like amazon.com or
businesses that have evolved from a legacy business such as tesco.com. The e-retailing is a
subset of e-commerce. Thus, e-commerce is the master domain defining the e-retailing
operation.
(b)Demographic and life style factors in Retailing the demographic data are those data‟s
which are objective data that can be measured, quantified & verified. The demographic
factors strongly affect the consumers shopping. Within the same city some locals have larger
population and are more affluent, older and better educated residents than others. Since most
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14. retailers caters to the local market they must compile data about the people living in their
particular trading area and those most likely to patronize them
On the other hand, the data sets that helps to understand things like how a household lives? ie
living style or how does a family spend money and time, basis the consumers social factors
and psychological factors is called lifestyle factor
(d) Marketing Research Processin retailing entails the collection and analysis of
information relating to specific issues
Define the Issue or the Problem this is the most critical and important step. A problem well
defined is half solved. The manner in which the issue or the problem is defined guides the
entire research activity.
Examine the secondary Data the secondary data has already been gathered via external
sources like telephone directories, census data, RTO records etc and internal sources like
company records, past research data, sales data etc
Gather Primary Data the primary data is gathered first hand in relation to a specific issue
being researched, via sources like surveys, observation, experiments etc
With the help of the secondary and primary data analysis are done in order to arrive at the
solution for the defined issue or problem. The arrived solution will be implemented on
careful analyzing the pros & cons of the arrived solution.
(e) Reilly’s Law of retail gravitationWilliam J. Reilly‟s work and theory, The Law of Retail
Gravitation, allows us to draw trade area boundaries around cities using the distance between
the cities and the population of each city.
Reilly realized that the larger a city the larger a trade area it would have and thus it would
draw from a larger hinterland around the city. Two cities of equal size have a trade area
boundary midway between the two cities. When cities are of unequal size, the boundary lies
closer to the smaller city, giving the larger city a larger trade area.
Reilly called the boundary between two trade areas the breaking point (BP). On that line,
exactly half the population shops at either of the two cities.
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15. The formula is used
between two cities to find
the BP between the two.
The distance between the
two cities is divided by
one plus the result of
dividing the population of city b by the population of city a. The resulting BP is the distance
from city a to the 50% boundary of the trade area.
One can determine the complete trade area of a city by determining the BP between multiple
cities or centers.
(f) Merchandising a retailers success depends upon carrying the proper assortments of goods
and services when they are in demand and sell them in a manner that is consistent with its
overall strategy. The assortment attracts the buyers to the retail store. In that sense
merchandising makes for one of the critical success factors in retailing.
Merchandising as a function consists of the following activities
 Acquiring goods and services
 Storage in adequate quantity
 Logistics of receipts of goods and delivery
The merchandising decisions affect the performance of the retailer. The investments in
merchandising skills produce better ROI than in technology of other skills. This is because in
retailing merchandise and hence the merchandiser is responsible for bringing the products
that will excite the buyers
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