MBA (MK0012) Retail Marketing

Q1. List the various techniques used for consumer promotions, Sampling Free samples of a new product or a new version of a product are distributed in small packs to induce trials. This method, though being expensive, brings in new customers. Couponing Coupons are the most popular sales promotion technique as they are used by nearly all the packaged goods firm. Coupons also make it possible to reduce the retail price of a product without relying on retailers for co-operation, which can often be a problem. Coupons can encourage repurchase after initial trial. Premiums A premium is an offer in which some other items are given either free or at a lower price on purchase of a particular item of merchandise or services that acts as an extra incentive for purchasers. Free premiums usually include small gifts or merchandise included in the product package or sent to consumers who mail in a request along with proof of purchase Contests and sweepstakes A contest is a promotion wherein consumers are asked to answer some questions or complete slogans and the winners are awarded prizes or money. In sweepstakes, another variation of contests, the winners are determined purely by chance; it doesnt require a proof of purchase as a condition for entry. Refunds and rebates Refunds (also known as rebates) are offered by the manufacturer to return a portion of the product purchased, usually after the consumer supplies some proof of purchase. Rebates are used by makers of all types of products, ranging from packaged goods to major appliances, cars and computer software. Refund offers can also encourage repeat purchase. Rebates have become a widely used form of promotions for consumer durables. Bonus packs Bonus packs offer the consumer an extra amount of a product at the regular price by providing large containers or extra units. Price-off deals Price-off deal, leads to a reduction in the prices. They are offered on the package through specially marked price packs. Generally, price-offs range from 10 to 25 percent off the regular price.

Frequency programmes Frequency programmes also referred to as continuity or loyalty programmes were initially introduced by airlines as frequent-flyer programmes. Frequency programmes have become particularly popular among super markets.

Event marketing Marketers often promote their product by associating it with some popular activity such as a sporting event, concert, fair, or festival. However, nowadays marketers also conduct their own events to use for promotional purpose.

Q2. What are the different types of retail store locations? What are their pros and cons? Retailers have many store location factors to consider when choosing a place for their business. Here are a few of the more common types of retail locations. Mall space A mall has many retailers competing with each other under one roof. It hosts a variety of stores and retail formats, from anchor stores to kiosks. There are generally 3 to 5 anchor stores, or large chain stores, and then dozens of smaller retail shops. Typically the rent in a mall location is much higher than other retail locations. This is due to the high amount of customer traffic a mall generates. Free standing locations This type of retail location is basically any stand-alone building. It can be located in a neighbourhood or right off a busy highway. Depending on the landlord, there are generally no restrictions on how a retailer should operate his business. It will probably have ample parking and the cost per square foot will be reasonable. Downtown area This type of store location may be another premium choice, just like malls. However, there may be fewer rules and more freedom for the business owner. Many communities are hard at work to revitalize their downtown areas and retailers can greatly benefit from this effort. However, the lack of parking is generally a big issue for downtown retailers. Shopping center Strip malls and other attached, adjoining retail locations also have some guidelines or rules for their tenants directing their conduct of business. These rules are probably more lenient than a mall, but make sure you can live with them before signing a lease. Home-based Home based businesses or stores are an inexpensive option but in such a business, growth may be restricted. It, may a times, becomes really hard to separate business and

personal life in this setup and the retailer may run into problems if there isn't a separate address and/or phone number for the business. Office building The business park or office building may be another option for a retailer, especially when they cater to other businesses. Tenants share maintenance costs and the image of the building is usually upscale and professional.

Q3.Discuss the strategic retail planning process in brief. The strategic planning process, after considering the HR potential and the Unique Selling Proposition (USP) of a particular store, takes proper shape.

Formulation of retail strategy After analysing the stores capabilities in terms of HR, finance, physical and intangible resources, a store manager formulates a retail strategy with regards to marketing retail positioning and retail mix. Retail positioning is a plan of the stores action for how the retailer will enter the target market and will compete with its main competitors Retail positioning is made possible under these circumstances: 1. By differentiation of stores merchandise from that its competitors. 2. By offering a high level of service after sales at nominal cost 3. By adopting low pricing policies. Retail mix The retail mix is the blend of various retail activities that in totally present the whole concept of retailing. The retail marketing and retail positioning strategies are put into effect by this retail mix, the set of controllable elements that a retailer can use to satisfy customers needs and to influence their buying behaviour and compete effectively in the target market. Utmost care is required on the part of retail manager to select the various elements for a perfect retail mix. The main elements of a retail store that the manager has to consider are: 1. 2. 3. 4. 5. 6. 7. 8. The stores location Merchandise assortment Pricing policy Customer service mechanism Visual merchandising Personal selling efforts Advertising efforts The stores internal and external environments.

Strategy implementation and control

It is concerned with the designing and management of retail system to achieve the best possible combination of human, financial, physical and service resources of a retail store; to achieve the formulated objectives, without timely and effective implementation also requires scheduling and coordination of various retail activities. The implementation of new retailing strategies sometimes require changes in the way of functioning and duties that can lead to resistance from employees. Therefore, stores should take positive steps to reduce this resistance to change and to convince the employees that it in the long term will be beneficial for both the store and the employees. Strategy control deals in three basic concepts 1. Inspection 2. Detection 3. Correction Retailer should assess retailers inspect the implemented strategies from time to time and detect any fault in the implementation of various retail elements. If any deficiency is found during the inspection process that has to be corrected with immediate effect without any further loss to the store.

Q4.What do you mean by store layout? Discuss various types of layouts.

Store Design and Layout A well-planned retail store layout allows a retailer to maximize the sales for each square foot of the allocated selling space within the store. Store layouts generally show the size and location of each department, any permanent structures, fixture locations and customer traffic patterns. Each floor plan and store layout will depend on the type of products sold, the building location and how much the business can afford to put into the overall store design. There are a number of different types of layouts commonly found in retail stores. The layout used will be dependent on the width and depth of the product range, the nature of the product categories sold, the type of fixturing used and the constraints of the outlet in terms of size and shape. The objective of a store layout is to maximize the interface between customers and merchandise. Some of the common layouts are Straight Floor Plan: The straight floor plan is an excellent store layout for most any type of retail store. It makes use of the walls and fixtures to create small spaces within the retail store. The straight floor plan is one of the most economical store designs. Diagonal Floor Plan: The diagonal floor plan is a good store layout for self-service types of retail stores. It offers excellent visibility for cashiers and customers. The diagonal floor plan invites movement and traffic flow to the retail store. Angular Floor Plan: The angular floor plan is best used for high-end specialty stores. The curves and angles of fixtures and walls, makes for a more expensive store design. However, the soft angles create better traffic flow throughout the retail store.

Geometric Floor Plan: The geometric floor plan is a suitable store design for clothing and apparel shops. It uses racks and fixtures to create an interesting and out-of-the-ordinary type of store design without a high cost. Mixed layout: The mixed floor plan incorporates the straight, diagonal and angular floor plans to create the most functional store design. The layout moves traffic towards the walls and back of the store.

Q5

Discuss the different types of store based retailers. Give examples for each.

Department stores A department store is a multi-level store which is split up into clearly defined areas or departments according to product category. Any department stores offer width and depth in the product range so that almost every shopping need can be met, but other department stores concentrate on fewer categories and aim to offer a great choice within those categories, example Pyramid Retail, Pantaloons Retail and Shoppers Stop, Specialist stores Although some department stores might be considered specialist stores because of the restricted product range, example Harvey Nichols Category killers The term category killer, which originated in the USA, describes the large specialist retailer that is typically found in an out-of town or edge-of-town retail park or site. The product range is geared to a restricted merchandise area, but the large size of store allows a very extensive selection within that classification. Comet, PC World, Toys RUs, IKEA, B&Q, Petsmart and Staples are all examples of this type of retailer. Convenience stores (C-stores) 1,000-3,000 sq. ft. selling area, parking facilities, open 7 days a week for long hours, a wide range of goods, but limited brand choice, including groceries, Other products and services that might be offered are take-away foods, toys, video hire, film processing and petrol (Nielsen, 2001). Supermarkets, superstores and hypermarkets Supermarkets, superstores and hypermarkets can be considered in the same 'family' of retail format, in that the stores are self-service, usually on one level and laid out in a functional grid pattern of aisles and shelving. Supermarkets are the smaller variant, usually located in a town centre or neighbourhood location, with a product range that concentrates on food and household consumables. Example: Haldiram, Bikaneervala, reliancefresh Warehouse clubs

A warehouse club is a retail outlet that stocks a limited range of grocery and household products, some home-orientated goods and some clothing products (usually 3,000-4,000 product lines). For example Costco Discount stores Discount store is not an easy task, because the key characteristic is the price of the merchandise, which is subject to individual customer perceptions. Discount stores are sometimes run on the basis of a product range geared by opportunistic buys by the retailer, Examples - Reliance, West Side, Factory outlets: Factory outlet retailers offer customers a range of Seconds-quality and/or previous season's. Charity shops Charity shops are usually run on the basis of selling stock that has been donated, although some, for example Oxfam

Q6.Discuss the stages in retail environment analysis. The purpose of studying corporate environment or analysing industry structure is to gain an understanding of the competitive relationship among groups of firms that compete for a specific market. Demographic Environment 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 retailers business. The ripples of these changes will reach the organisation forcing it to alter or amend the existing marketing practices in vogue. In short, Retail firms, will have to continuously measure the changes qualitative as well as quantitative that are taking place in the population structure. To avoid negative consequences brought on by active consumer groups, a retailer must communicate with consumers, anticipate problems, respond to complaints and make sure that the firm operates properly. Market size/age Is the market relatively small or large, and can it be broadly characterized by its stage of development (start-up, emerging, growth, maturing, declining) Number of competitors What is the level of competition for the market? Are there many small rivals or a few large? How easy is it for new players to enter the industry? Rule of the game

How do firms compete in this market? Do they compete on price, quality, technology, service etc.? What is the average level of profitability? Is it a profitable market or is it a high volume, low margin field? Industry trends/driving forces What are the industry trends and how rapidly do they change? Is the industry growing and innovative or stable or slow to change? The rate of market growth is a critical factor because it influences the equilibrium between demand and supply. Industry attractiveness The overall attractiveness of an industry is determined by the interaction of these key structural forces. The higher the rate of growth and the weaker the competition, the more attractive the industry. Industry structure analysis The initial analysis of industry structure provides a snap of the competitive environment. The strategists also need to anticipate future trends; new development that may change the existing structure.