321 33 Powerpoint Slides Chapter 2 Retail Organization
Transcript of 321 33 Powerpoint Slides Chapter 2 Retail Organization
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RETAIL MANAGEMENT, 2/ERETAIL MANAGEMENT, 2/E
Chetan BajajChetan Bajaj, Director, Sona School of Management, Salem, Tamil Nadu
Rajnish TuliRajnish Tuli, Director, Millward Brown, South East Asia, Singapore
Nidhi Varma SrivastavaNidhi Varma Srivastava, Director, Millward Brown, India
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Chapter - 2Chapter - 2RETAIL ORGANIZATIONRETAIL ORGANIZATION
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The changing structure of retailing• All dynamic developments in retailing (department stores,
warehouse clubs, and hypermarkets) are responses to a changing environment
• Changing customer demand, new technologies, intense competition, and social change create new opportunities even as they shake up existing business
• The Internet and web technologies have itself created a myriad of opportunities for web based business model of retailing
• This has created competition for the retailer in order to maintain and grow its share of market and compete within its band of retailers
• For e.g.: Bharat Petroleum - Making A Difference through Innovative Retailing
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Theories of structural change in retailing
Retailing has always been a dynamic industry. There are certain theories of how firms evolve and change the industry in the process. They are:
The wheel of retailingThe dialectic processNatural selection
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The wheel of retailingIt was proposed by Malcomb McNair at Harvard University. It is basically a theory of cyclical or circular development. The wheel of retailing concept describes how retail institutions transform during their evolutionary life cycles.
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The dialectic process
This second theory holds that retailing evolves through a dialectic process- the blending of two opposite store types into a superior form. For example- Fabindia and Nalli offer both a wide array of customer services and a broad assortment of specialized merchandise.
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Natural selection
According to this theory, retail stores evolve to meet changes in the micro-environment. The retailers that successfully adapt to technological, social, demographic, economic, and political changes are most likely to grow and prosper.
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Classification of retail units
Bases for classification of retail unitsNature of ownershipOperational structureLength and depth of merchandiseNature of serviceTypes of pricing policyTypes of retail locationMethod of customer interaction
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Retailers classified on the basis of ownership
Sole proprietorshipPartnershipJoint ventureLimited liability company (public and private)
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Retailer’s classification on the basis of operational structure
Independent retail unitRetail ChainFranchiseSize and structural arrangements in franchising:
1. Manufacturer-retailer2. Wholesaler-retailer franchise3. Service sponsor-retailer
• Leased departmentsCo-operatives
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New areasLeased department or Shop-in-shopCo-operative outletsLargest consumer cooperative societyMajor initiatives Benefits To ConsumersTarget market Revised positioning
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Types of retail location
Retailers at freestanding locationsRetailers in business-associated locationsRetailers in specialized marketsRetailers at airports
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Variety of merchandise mixDepartmental stores
For e.g: Ebony, Globus, Lifestyle, Pantaloon, Shoppers Stop, and
Westside Discount Stores
For e.g.: S Kumar’s S-MART Discount Chain, Margin Free Market, and Subhiksha
Specialty StoresFor e.g.: Footware - Speciality Store
Khadder- Khadi Specialty , Gautier , Vivek , and Titan Hypermarkets
For e.g. : Pantaloon’s Big Bazaar ,Giant, and FoodWorld
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Methods of customer interaction
Retail transactions are carried out through face-to-face interaction between retailers and customers in the case of retail stores.
There are certain methods:Store retailers like candles for sale during a Diwali
mela at Dilli Haat.Non-store retailersElectronic retailing like Internet and Mobile
Association of India (IAMAI)
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Catalogue and direct mail retailing
Factors for the success of catalogue retailing:- Convenience: customers can shop when it is convenient for them in accordance to their schedule - Time saving: one save resources on account of time and travelling cost and parking problems - Information: relevant product information is available in detail- No time limits: no undue pressure to buy unlike as in
retail store shopping
For example – FABMALL --- E-RETAILER
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Direct selling
Person-to-person selling:
- Party-plan or group presentations
- Multilevel network
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Television shopping
Television shopping is retail format where existing and prospective customers watch a TV programme demonstrating a product and then place an order for the same by telephone, e-mail or Internet
Three types of television shopping: cable channels meant for shopping, infomercials, and direct-response advertising shown on TV (For example: Asian Sky Shop, TSN, TVC, TSNM)
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Vending machine retailing A form of non-store retailing where products or services
are placed in a machine and are dispensed to customers when they deposit cash or use plastic money (credit or debit card)
Vending machines vending machines offer consumers greater convenience 24 hours a day, and have replaced many services formally requiring a human interface