RETAILING
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Transcript of RETAILING
RETAILING
Shailendra S.Rana presentation,RBMI
RETAILING
Distribution channel
Manufacturing wholesaler
Consumer RETAILER
• Retailing is the Last stage in Distribution Process whereas Wholesale is an intermediate where Goods and services are sold to Business customers.
RETAIL MANAGEMENT INTRODUCTION RETAILING Business activities involve Selling
Goods and Services to Consumers for their Personal, Family or Household use.
Not all retailing done in stores(e.g.direct sales of cosmetics, catalog sales, home shopping on cable TV ,haircut)
E.g. of retailing Food products, apparel, movie tickets; services from hair cutting to e-ticketing.
• Retailers are at the end of the distribution chain & involve in direct interface with the customer
• Retailers pass on products from producers & wholesalers to customers
• Key objective: availability of right product, in right quantity, at right time
RETAILER CHARACTERISTICS
1. Direct End-User Interaction2. Platform for Promotions & POP
displays3. Lower unit sales4. Retail location critical5. Services as important as Core
Products6. Large number of Retailers to meet
geographical coverage and population density
SOME OF THE BIGGEST RETAILERS OF WORLD
• WALMART• KMART• J.C.PENNEY• COSTCO• SAFEWAY
IMPORTANCE OF RETAILING
• Retailers play a key role as the contact between manufacturers,wholesellers & customers
• Retailers collect an assortment of goods from various sources in large quantities & offer to sell in smaller quantities to consumers(SORTING PROCESS)
• Communicating both with manufacturers,wholesellers & customers
• In the absence of retailers Contact between the manufacturer & customer will become complicated
• Save time & cost • Provide Place utility & time utility
FUNCTIONS OF RETAILING
• Activities: * Providing an assortment of products &
services * Breaking bulk * Holding inventory * Providing services
Providing an assortment of products
• Supermarkets carry 15000 different items made by over 500 companies
• This assortment enables customers to buy wide selection of brands,designs,sizes,colors & prices in one location
• Not the case in individual manufacture’s retail outlets
Breaking Bulk
• To reduce transportation costs, manufacturers ship whole cases of their products to retailers
• Retailers then offer the products in smaller quantities tailored to individual consumers usage pattern
• Breaking the large shipments into smaller consumer quantities – Breaking Bulk
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The Retailer’s Role in the Sorting Process
Holding inventory
• To make the availability of products when consumers want them
• Consumers can have small inventory of products at home as retailers will have the availability
• By maintaining inventory,retailers reduce customer’s cost of storing products
Providing services
• Provide services that make it easier for customers to buy & use products
• Offer products on credit• Display products for ease of use by customers
for purchase• Assistance provided by sales people on
purchase
BUILDING & SUSTAINING RELATIONSHIPS
Relationship Retailing
• Establishing long term bonds with customers, rather than act as if each sales transaction is completely new
• WHY RELATIONSHIP RETAILING?It is harder to attract new customers than to
make existing ones happy
BUILDING RELATIONSHIP WITH CUSTOMERS BY PROVIDING VALUE
• Value is a combination of quality, service & price
VALUE ORIENTED RETAIL STRATEGY
• EXPECTED • AUGMENTED• POTENTIAL
EXPECTED RETAIL STRATEGY
In expected retail strategy customers expect minimum value elements from a retailer-
E.G. Cleanliness of store Convenient store hours Knowledgeable employees Timely service Parking & return privileges If not performed properly, these elements cause
customer dissatisfaction
AUGMENTED RETAIL STRATEGY
In augmented retail strategy retailers provide extra elements for providing value
These extra elements differentiate one retailer from another
E.G.Free home deliverySuperior sales peopleCustomer loyalty programs
POTENTIAL RETAIL STRATEGY
• A potential retail strategy encompasses the value elements which are not yet perfected by any retailer in that industry-
E.G. unlimited customer return privileges7 days/24 hours store timings
DO WE RESPECT OUR CUSTOMERS?
• Do we stand behind what we sell?• Do we keep promises?• Do we value customer time?• Do we communicate with customers
respectfully?• Do we thank customers?
FOUR FACTORS FOR APPLYING RELATIONSHIP RETAILING
• THE CUSTOMER BASE• CUSTOMER SERVICE• CUSTOMER SATISFACTION• LOYALTY PROGRAMS & DEFICTION RATES
THE CUSTOMER BASE
Retailers must analyze their customer base in terms of-
Population & life style trendsAttitude & reasons for shoppingThe level of loyaltyNew versus old customers
CORE CUSTOMERS
• Most loyal• Pay their bills timely• Reasonable in their service request
CUSTOMER SERVICE
Customer service refers to the identifiable but intangible activities undertaken by a retailer.
Customer service comprises of two components-
EXPECTED CUSTOMER SERVICEAUGMENTED CUSTOMER SERVICE
CUSTOMER SERVICE
• EXPECTED CUSTOMER SERVICE-the level of service that customers want to receive from a retailer such as basic courtesy
• AUGMENTED CUSTOMER SERVICE-something extra from the customers expectations. It gives retailer a competitive advantage over other retailers
DEVELOPING A CUSTOMER SERVICE STRATEGY
Decisions regarding customer service strategy are-• RANGE-WHAT SERVICES ARE EXPECTED & WHAT
SERVICES ARE AUGMENTED FOR A PARTICULAR RETAILER?
• LEVEL-WHAT LEVEL OF CUSTOMER SERVICE IS PROPER TO COMPLEMENT A FIRM’S IMAGE?
• CHOICE-SHOULD THERE BE A CHOICE OF CUSTOMER SERVICES?
• PRICE-SHOULD CUSTOMER SERVICES BE FREE?• MEASUREMENT-MEASURING BENEFITS OF PROVIDING
CUSTOMER SERVICES AGAINST THEIR COSTS• RETENTION-TERMINATION OF SERVICES?
CUSTOMER SATISFACTION
• Customer is satisfied when- VALUE & CUSTOMER SERVICE =CUSTOMERS’EXPECTATIONS
• Customer is dissatisfied when-VALUE & CUSTOMER SERVICE <CUSTOMERS’EXPECTATIONS
REASONS OF CUSTOMER DISSATISFACTION
• TRUE LIES-dishonesty or unfairness• BROKEN PROMISES-don’t show up as promised• I JUST WORK HERE-powerless employees who lack the
authority to solve basic customer problems• WAITING-some of the checkout lanes or service counters are
closed• AUTOMATIC PILOT-emotionless,no eye contact,impersonal
service staff• SILENCE-employees who don’t bother to communicate with
customers • DON’T ASK-employees unwilling to make an extra effort to
help customers
REASONS OF CUSTOMER DISSATISFACTION
• RED ALERT-Retailers who assume customers are stupid or dishonest & treat them disrespectfully
• CLUELESS EMPLOYEES-who don’t know the answers to customers’ common questions
• MISPLACED PRIORITIES-employees visit each other or do personal tasks while the customers wait. Employees who refuse to assist a customer because they are off duty or on a break
WHY CUSTOMERS DON’T COMPLAIN
• Customers feel complaining produces no result
• Customers don’t find the complaining easy• They have lot of options
HOW TO GET CUSTOMER FEEDBACK?
• Complaining process should be easy• Make customers assure that their problems
are being addressed• Ongoing customer satisfaction surveys
BASIC QUESTIONS FOR A CUSTOMER SATISFACTION SURVEY
1. How satisfied are you with our customer service?(very satisfied,satisfied,indifferent,dissatified,very dissatisfied)
2. Please rate our customer service(excellent,very good,fair,poor)
3. We provide good customer service(strongly agree,agree,indifferent,disagree,strngly disagree)
4. How often does customer service exceed your expectations?(very frequently,frequently,same verytime,infrequently,very infrequently)
5. What do you like most about our service?6. What do you like least?
CONSUMER LOYALTY PROGRAMS
• Consumer loyalty programs(frequent shopper)reward retailer’s best customers with whom it wants long lasting relationships
FEATURES OF A GOOD CUSTOMER LOYALTY PROGRAM
• Useful & appealing to customers• Attainable in a reasonable time frame• Honor shopping behavior
ELEMENTS OF A GOOD CUSTOMER LOYALTY PROGRAM
• REWARDS• VALUE ADDED BENEFITS• CUSTOMER RECOGNITION
INTERPLAY BETWEEN RETAILERS’ ETHICAL PERFORMANCE & RELATIONSHIP IN RETAILING
For building & sustaining long term relationships retailers have three challenges-
1. Obligation to act ethically (ETHICS)2. Act in the best interest of society(SOCIAL
RESPONSIBILITY)3. Avoid business practices that violates customers
rights(CONSUMERISM)
ETHICS