retail & dm

DistributionRetailing : Consists of the activities involved in selling goods and services to ultimate consumers. A retail sale is one in which the buyer is an ultimate consumer and the buying motive for a retail sale is always personal or family satisfaction derived from the final consumption of item being purchased.Wholesalers: Wholesaling is concerned with the activities of those persons or establishments which sell to retailers and other merchants , and/or to industrial , institutional and commercial users , but who dont sell in significant amount to ultimate consumers.

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Distribution StrategiesEXCLUSIVE DISTRIBUTION : Distributing through company outlets or franchisee e.g. : HONDA Showrooms:- only company products are available.

INTENSIVE DISTRIBUTION : Placing the products in as many outlets as possible.

Products : Soaps, cigarettes, toothpaste , BPL MOTS etc. ( each outlet has various brands )

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Distribution StrategiesSELECTIVE DISTRIBUTION :

Here companies select a combination of Exclusive distribution (only companys products) & Intensive Distribution (some important outlets which are multibrand outlets) e.g. SAMSUNG , VIDEOCON

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Classification of retail stores

B) merchandise offeredSpecialty stores: : narrow product line with deep assortment . E.g : apparel stores like Arrow, Planet Fashionsporting goods stores like Planet Sports, furniture stores like Living Room , Style Spabook Stores like Strand Book Stall

Department Stores : A department store carries several product lines typically clothing, home furnishings , cosmetics , shoes, household goods etc. where each line is operated as a separate department managed by specialist buyers.e.g Shoppers Stop, Lifestyle, Wills Lifestyle, Westside

Supermarket : relatively large , low cost , low margin high volume self service operation designed to serve the consumers total needs for food, laundry, household-maintenance products.Approx size : 10000-25000 sq.feet with 10000 items E.g Food World, Food Bazaar, Reliance Farm fresh, Godrej Nature Basket

Store FormatsConvenience Stores: relatively small stores that are located near residential areas , are open long hours , seven days a week and carry as limited line of high turnover convenience items.

Combination stores: represent a diversification of supermarket stores into the growing drug and prescription field.(40000-60000 sq feet area)E.g Subiksha

Hypermarket: combines supermarket , warehouse and discount store principles. Around 80000-300000 sq. feet area. They have in addition to the routinely purchased goods, items like furniture , large appliances etc. e. g Carrefour, Spencers , Big Bazaar, Shoprite, Hypercity

Store FormatsSuperstore:Usually twice the size of supermarket it also offers goods and services like a dry cleaning, flower shop , bakery shop etc.(around 30000 sq. feet)

Shopping mall : an arrangement of retail stores and places for leisure activities like dining (food court), entertainment (multiplex, games etc.)A mall is spread over a large area (200000 -500000) sq. feet area.E.g IN-ORBIT MALL Nirmal Lifestyle Atria Mall Center one

Category specialists: is a discount store that offers a narrow variety but deep assortment of merchandise.Also called as specialty discount stores and as category killers e.g Ikea and ToysRus, Vijay sales

Factory outlet : owned and operated by the manufacturer selling discontinued merchandise, factory seconds, cancelled orders, over sizes/undersizes at lower prices located in the vicinity of the factory.

Store FormatsEvery day low price (EDLP) : discount stores that operate an every day low pricing strategy.e.g WalmartStopover store format: store which rides piggyback on another retail outlet ( e.g petrol pump) BPCL has in & out, HPCL has Convenio stores (akbarallys)

Classification of retail Stores 2) Non store retailingA) Direct selling : involves the making of a personal contact with the end consumer at his home or at his place of work.Cosmetics, jewellery, home appliances, food and educational materials are some of the products sold in this manner.E.g Amway, Herbalife, Eureka Forbes, TupperwareMethod used is either a party plan or multilevel network or direct home to home selling.

B) mail order / catalogC) Telemarketing: finance productsD) Television retailing : Asian sky shopE) E-tailing : Amazon.com, dell computers.

DMDefn : An interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location.

There are three main elements in this definition1)Interactive :It is an interactive system in the sense that there is a two way communication between the marketer and the target market- the response or non response of the customer completes the communication loop in the direct marketing program. e.g When a consumer fills in the response coupon in an advt. Or a catalogue and mails it , he/she communicates to the marketer and hence completes the communication loop.

There are three main elements in this definition2)Measurability of response-- The number of coupons received in the above example indicates the response rate to the marketers communication3)Direct marketing activities are not location specific: It is not necessary for the customer to physically interact with the marketer; he/she can establish a contact through mail, phone, and fax, Internet.

The goal of direct marketing is always a response from the customer

Direct marketing has also been known by other terms like direct selling, mail order selling or catalogue selling.Today direct marketing uses all these tools and is based on a customer database.The key to successful direct marketing is the development of this database.

DELL ComputersMichael Dell marketed its computers directly to end users through direct response advertising in selected computer magazines. Later it took to telemarketing activities and still later a direct sales force.As a PC manufacturer it competed with IBM, Compaq . To fight competition Dell increased its media expenditures . The direct response print advertisements are used to to build awareness , generate leads and even sell products through newspapers like USA Today, Wall Street Journal and PC magazines like PC week, PC world etc.

DELL ComputersThe company established a catalog Dellware in 1992 and mails to around 800,000 names , six times a year plus special editions. This encourages repeat purchases , broadens product penetration and optimizes lifetime value.Dell also takes advantage of direct channels like interactive Kiosks at Sams club (Wal-Mart ) and online services such as CompuServe.

Amazon.com--- heralded the era of online retailing . Amazon.com retails only through the internet . At the firms website , customers can search for a specific book , topic or author or they can browse through the book catalog featuring 40 subjects or search for music albums. Consumers can browse , fill up a virtual shopping basket and then complete the sale by entering their credit card information. Once the order has been shipped , customers are notified by email.

Amazon.comThe company provided upto 40% discount on the best sellers.Due to low cost structures , the firm is able to provide deep discounts.Thus the firm provides its customers four value propositions--- convenience, selection, service, and broad discounts.

Dominos PizzaEntered the Indian market post 1996In 7 years they have been able to redefine the paradigms in food business and service sectorThe success of Dominos is attributed to1) clearly defined and communicated service delivery standards.2) effective implementation of direct marketing strategy.3) empowering the customer so that he/she can create their own product

Dominos PizzaTheir ads initially showed the telephone numbers of their different outlets and promised to deliver fresh pizzas at customers doorstep in 30 minutes.Once MTNL and BSNL came up with the toll free number 1-600 , the company only advertised this number for order placement. This number was named by Dominos as the Hunger Help Line.On receipt of the call , the order was transferred in a seamless manner to the outlet nearest to the caller -- order processed and delivered within 30 minutes.Along with the order , the menu card was also delivered.

Emerging trendsAutomated Vending machines : tea, coffee, soft drinks.1996- Tata coffee launched 18 coffee vending machines at various retail points and office locations in Bangalore and chennai.In a weeks time it was selling 100 cups per day. In high traffic areas like railway stations, sales are as high as 400 cups per day.The coffee machines branded Jiffy are at present in 4000 locations (august 2006)ATM (Automated teller machines ) are the best example of automated vending in India.

Airport retailing : duty free zones DDF.

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