The document discusses retail management and the retail industry in India. It covers topics such as the definition and functions of retail management, including creating different types of utility for customers. It also discusses the characteristics of retail management, the size and segmentation of the Indian retail industry, and factors driving changes in Indian retail. Challenges to retail development in India are also summarized, including high costs of real estate and a lack of infrastructure. Different theories of retail evolution and concepts like the retail life cycle are explained.

1. RETAIL MANAGEMENT Prof. Raghavendran.V

2. Introduction Retail management The various processes which help the customers to procure the desired merchandise from the retail stores for their end use refer to retail management. Retail management includes all the steps required to bring the customers into the store and fulfil their buying needs. Retail management makes shopping a pleasurable experience and ensures the customers leave the store with a smile. In simpler words, retail management helps customers shop without any difficulty. By Prof. Raghavendran.V

3. RM Retail is derived word from “Retaillier”, which means to cut of a piece or to break bulk. Therefore, a retailer may be defined as a dealer or trader who sells goods in small quantities. Thus retailing is final distribution of merchandise, for consumption by the end consumers. By Prof. Raghavendran.V

4. Functions of RM From the customer’s point of view, the retailer serves him by providing the goods that he needs, in the required assortment, at the required place and time. From an economic standpoint, the role of a retailer is to provide real added value or utility to the customers. This comes from four different prospective: By Prof. Raghavendran.V

5. Functions of RM ( Utility) First utility is form of a product Second in form of time utility Third in form of place utility & Last in form of ownership utility is created. By Prof. Raghavendran.V

6. Characteristics of RM Direct End-User Interaction Platform for Promotions & POP displays Lower unit sales Retail location critical Services as important as Core Products Large number of Retailers to meet geographical coverage and population density By Prof. Raghavendran.V

8. Retail sector highly fragmented

9. Retail chains like Wal Mart, Sears, McDonalds brought Rapid Growth and consolidation of Organized Retail

10. Rapid rise of Income levels and accompanying changes in lifestyles greatly contributed to growth of Organised RetailBy Prof. Raghavendran.V

12. Indian Retail environment different from that of western countries:

13. - Cities congested, large population in rural areas

14. - Smaller purchases, limited household spaceBy Prof. Raghavendran.V

15. Drivers of retail change in INDIA Socio- Economic factors Changing Income profiles The age factor The changing role of women and evolving family structure The changing consumption basket Increased credit friendliness Geographical dispersion of market potential By Prof. Raghavendran.V

16. The size of retail in INDIA In the year 2006 the INDIAN retail market was estimated at Rs 12,00,000 crores and organized sector is about 55,000 crores See chart from the text book, page number 37. By Prof. Raghavendran.V

17. Segment wise division Food and Grocery By Prof. Raghavendran.V

18. Segment Wise Division By Prof. Raghavendran.V Clothing & Textiles Consumer Durable Footwear Jewellery retail Books, music & gift Fuel/ Petro retail Write sector classification for the above:

19. Foreign Direct Investment in Retail FDI is a method of allowing external finance into an economy. FDI facilitates international trade and transfer of knowledge, skills and technology. FDI constituted a small per cent of gross fixed capital formation in 1993, which went up to 4%. INDIA is fastest emerging as a key destination of FDI, According FDI confidence index prepared by AT Kearney, India ranks second in FDI attractiveness, first being China. By Prof. Raghavendran.V

21. Social sector items

22. Medical & diagnostic items

23. Manufactured with technology provided by the foreign collaborator.

24. Two- year test marketing (Simultaneously commencement of manufacturing)By Prof. Raghavendran.V

26. Joint venture

27. Manufacturing facility in India

28. Distribution officesBy Prof. Raghavendran.V

30. The high costs of real estate

31. Very high stamp duties

32. Lack of adequate infrastructure

33. Multiple and complex taxation systemBy Prof. Raghavendran.V

34. Analysis of INDIAN Retail By using porter’s models, let us analyze the Indian retail segment. By Prof. Raghavendran.V Threat of new entrants Bargaining powers of Suppliers Bargaining powers of buyers Threat of substitute products/ services Porter’s Five Force of Competition

35. RETAIL EVOLUTION THEORIES Four theories of evolution are: Wheel of Retailing Cyclical Accordion theory Theories Dialectic Process Evolutionary Natural selection Theories Cyclical: Begin with one state and return to that state at some time in future Evolutionary: Changes similar to biological evolution Prof. Raghavendran.V

36. Wheel of Retailing/ (Cyclical Theory) Wheel represents phases through which some types of Retailers pass: Retailers attract customers – low price, low service Expand market – More expensive merchandise, More services, open More convenient locations. Trading up process increases costs & price of their merchandise, creating opportunities for new low price retailers to enter e.g. Discount stores & category specialists Some Retailers don’t begin as low price, low service entrants, e.g. Upscale fashion specialty stores. Prof. Raghavendran.V

37. Prof. Raghavendran.V

38. THE ACCORDION THEORY Retailers fluctuate from strategy of offering wide merchandise with shallow assortment to offering limited categories with deep assortment In rural markets, Retailers sell many categories under one roof: shoes, cosmetics, foods, cloth, medicines. However the assortment is shallow and customers have limited choice. Department stores have both width and depth of merchandise Specialty stores carry special categories with deep selection Prof. Raghavendran.V

39. DIALECTIC PROCESS/ CONFLICT THEORY An evolutionary theory based on premise that retail institutions evolve. The theory suggests that new Retail formats emerge by adopting characteristics from other forms of retailers in much the same way as the child is the product of the pooled genes of the parents. Specialty stores with high margins, low turnover plush operations Discount stores with low margins, high turnover low operations Both the above were synthesized to form category specialist stores. Prof. Raghavendran.V

40. DIALECTIC PROCESS/ CONFLICT THEORY Prof. Raghavendran.V Discount Store Department Store Discount Department Store

41. NATURAL SELECTION/ ENVIRONMENTAL THEORY Those Retail Institutions Succeed which adapt to changes in customers, Technology, competition and legal environment. Department stores have tried to combat specialty stores by opening specialty counters within the stores. Interest in physical fitness and increased number of women in workforce have made salad bars in grocery stores successful. Prof. Raghavendran.V

42. The concept of life cycle in RETAIL The concept of PLC as Philip Kotler is also applicable to retail organizations. This is because retail organization pass through identifiable stages of innovation, development, maturity and decline. This is what is commonly termed as the “RETAIL LIFE CYCLE” Prof. Raghavendran.V Assignment: Explain the concept of Retail Life cycle?

44. Competition, &

45. The organizational capabilitiesBy Prof. Raghavendran.V

46. Classification of retail formats By Prof. Raghavendran.V

47. Careers in Retailing It is people centric industry, which can be exposed to multi-disciplinary and skills. It offers many choices in terms as career. Buying and Merchandising Marketing Store operations Sales Finance Human Resources Technology and E-commerce Visual Merchandising Supply Chain Management & Logistics By Prof. Raghavendran.V

48. Assignment time: Sub on 20th Sept Global Challenges in Retail Industry? Brief out Traditional Business Models in Indian retail. Brief out Classification of retail formats. Classify & Differentiate b/w Super, Hyper markets & Departmental stores. By Prof. Raghavendran.V