Retail marketing

04/10/2023 copyright@CSE_SMVDU 1

RETAIL MARKETING

2011CSE-16,24,27,33,37,41,45,51,52,53,55,2K10-38


Retail MarketWhat it is:-Sale of goods to end user not for resale but for use & consumptionImportance:-Economic Growth-Emploment Opportnities-Move the Economy into Motion

Statistics of Indian Retail Market:-Fastest Growing Sector in India-Contribute 8% of the total Economy-It will grow from US$400 in 2011 to US$785 billion in 2k14

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Retail Sector

Organised

WholeSale Specialist

Unorganised

Traditional Stores

Handcart Vendors

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Timeline of Retailing in India


Nature of Retail Marketing

The key aspects of retail marketing is an attitude of mind.

In making retail marketing decisions, retailers must consider the needs of the customers.

Retail marketing decisions are driven by what the shoppers need and want.

Retail marketing is therefore a philosophy and is all about satisfying the customers


What the customers regard as value and what they buy is decisive.

What the customers buy determines the nature of the retailer’s business.

The essence of retail marketing is developing merchandise and services that satisfy specific needs of customers, and supplying them at prices that will yield profits.

Retailers must take the customers’ needs into consideration in retail operation


Retail marketing is stimulating, quick-paced, and influential.

It encompasses a wide range of activities including:

Environmental analysis Market research Consumer analysis Product planning etc.


Concept of Retail Marketing The retail marketing concept is the acceptance by

the retailer that it is the “customer” and not “demand” that lie at the core of the retail organisation.

The retail marketing concept is a philosophy, not a system of retailing or retail structure.

It is founded on the belief that profitable retailing and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires.

It is an attitude of mind that places the customer at the very centre of retailing activities


Retail Marketing Objective

The retail marketing objective is a performance parameter which has been explicitly stated.

It can be stated in quantifiable terms and time terms so that results can be measured against it.

Three types of retail objectives include:1. Basic objective – those which defines retailer’s

long-term purposes.2. Goals – those which the retailer must achieve

to be successful3. Targets – short-term goals that require

immediate achievement.


Retail Marketing Mix Retail marketing mix is the term used to describe

the various elements and methods required to formulate and execute retail marketing strategy.

Retail managers must determine the optimum mix of retailing activities and co-ordinate the elements of the mix.

The aim of such coordination is for each store to have a distinct retail image in consumers’ mind.

The mix may vary greatly according to the type of market the retailer is in, and the type of product/services.


The Mix Planning

The retail marketing mix is the vehicle through which a retailer’s marketing strategy is implemented and, in planning the mix, retailers should be guided by three basic principles:

1. The mix must be consistent with the expectation of target customers;

2. Elements must be consistent with each other to create synergy; and

3. The mix must be responsive to competitive strategy.


Retail Marketing Planning Retail marketing plan consists of:

Setting objectives

Systematic way of identifying a range of options.

Formulation of plans for achieving goals

Logical sequence of retailing activities.


Importantce of Retail Marketing Planning

Hostile and complex retail marketing environment External and internal retail organisation factors

interact Maximising revenue Maximising profit Maximising return on investment Minimising costs

Each element has conflicting needs All these variables interact All these variables result in optimum compromise


Approaches to planning

Top down approach Retail management sets goals and plans

for all levels of management.

Bottom up approach Various units prepare own goals and

plans sent up for approval.


Types of Planning

Annual plan – short term and tactical.

Long range – three to five years relating to strategic retail management.

Strategic plans – five to ten years long term plans relating to the adaptation of the retailing approach.


Short-term Retail Planning

Tactical planning relating to:

Current retail marketing position

Strategy for the year

Objectives for the year

Action , budgets and controls.

Coordinating retail activities within departments.


Long-term Retail planning

Medium range planning relating to:

Major factors and forces affecting the retailer.

Long-term objectives.

Resources required.

Reviewed and updated regularly.

Deals with current business


Retail Marketing Strategy

When retailers understand customer needs, they can create niche in marketplace by building a retail strategy

Effective strategies consider the target market, set formats to reach target market, and plan growth of competitive advantage over time

Retailers with a strong, proven strategy and stick to it do better than those who don’t


The strategic retail planning process gives steps retailers follow to meet strategic goals:

1. Define Mission: describe stores objectives and activities1. Situational Audit: also called a SWOT assessment, it looks at Strengths, Weaknesses, Opportunities, and Threats in the retail environment


3. Identify Opportunities: based on SWOT assessment, identify opportunities to increase sales

4. Evaluate Alternatives: now that opportunities are identified, decide which best establish a sustainable competitive advantage

5. Establish Specific Objectives and Allocate Resources: set specific goals, define the timeframe to meet these goals, and decide the level of investment dedicated to the goals


6. Develop Retail Mix to Implement Strategy: decide specifically how each objective will be merchandised, advertised, marketed, etc.

7. Evaluate Performance and Make Adjustments: review each objective, decide if performance met expectations, and course-correct as needed


FDI in Indian Retail Sector India ranked fifth in the Global Retail

Development Index 2012 (AT Kearney, leading global management consulting firm).

An estimated 35 million people are employed in the Indian retail industry, which makes it the second largest employer in the country (Bisaria, 2012


India’s retail industry, which currently accounts for around 15% of the nation’s GDP, is expected to grow almost three times to $660 billion by 2015

India, with its exploding population has always been an exciting market for multinational companies, which have been eyeing to invest in the Indian retail sector for years


The Government of India denied foreign direct investment both in single-brand and multi-brand retailing

The Indian government announced the opening of FDIs both to single and multi brand retail sectors

The Ministry of Commerce and Industry was seeking cabinet approval for allowing 51% FDI in multi-brand retail trading and for increasing the FDI limit in single-brand retail trading from 51% to 100%

The cap on FDI in single-brand retail was finally lifted to 100%

This allowed foreign single brands, like Louis Vuitton, Gucci and Adidas, to get full control on their retail operations in India, subject to the condition that they should source 30% of their goods from India

Until 2006

Nov 2011

Jan 10, 2012


Organized Retail Penetration Across Categories (in %)

Foot

wea

r

Cloth

ing

Book

s & M

usic

Jwel

lery

& A

cces

sory

Durab

les

House

(Fur

nish

ing)

Med

ical

Ser

vice

s

Food

& G

roce

ry

Health

& B

eaut

y0

5

10

15

20

25


Terms and Conditions

Minimum limit for FDI in the country’s multi-brand retail sector

Minimum population of the city in which investment in multi-brand retail is allowed

Minimum sales to be made to small retailers

Minimum value of manufactured items procured that should be sourced from small and medium enterprises in India

FDI in retail is subject to the state government’s permission.

$100 million

1 million

30 percent

30 percent


How FDI in Retail May Benefit India

Indian farmers get only around 30-35% of the ultimate retail price. The rest is consumed by middlemen, wholesalers & retailers. After the opening of FDIs, retail giants will purchase goods directly from the farmers, who will receive a much better price for their products.

A huge amount food grains and vegetables go waste due to the lack of infrastructure and proper storage systems. Foreign direct investment in multi-retail is expected to significant reduce this wastage.

FDI in retail is likely to create about 10 million jobs in the span of a decade (Indian Staffing Federation report, Sept 2012). Over these years, there would be 4 million direct jobs & about 5 million indirect jobs created in the Indian economy.

FDI in retail will benefit Indian consumers with a wide choice of brands and products.

Benefit to Farmers

New Employment

Benefit to Consumers

Reduced Food Wastage


Single Brand Retail in India Meaning :Single brand retail is one in which a single item is

sold across all outlets. Such as Reebok, Titan, Puma etc.

Policy before 2011: FDI up to 51 %, with prior Government approval, is allowed

in retail trade of single brand products, subject to the following conditions:

FDI up to 51 % would be allowed, with prior Government approval, for retail trade of Single Brand Products;

Products to be sold should be of a ‘Single Brand’ only. Products should be sold under the same brand internationally. ‘Single Brand’ product-retailing would cover only products

which are branded during manufacturing


Multi brand retail in India Meaning :Marketing of similar and competing

products by the same firm under different and unrelated brands. For example: walmart, big bazar, tesco

FDI in multi brand retail was not permitted in India.however, the Government of India proposed some policy changes inlate 2011.

they are as follows:


A decision has been taken by the Government to permit FDI in all products, in a calibrated manner, subject to the following conditions:

• FDI in Multi Brand Retail Trade (MBRT) may be permitted up to 51%, with Government approval;

• Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh

poultry, fishery and meat products, may be unbranded. • Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million.

• At least 50% of total FDI brought in shall be invested in 'back-end infrastructure’.

Back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging,

logistics, storage, ware-house, agriculture market produce infrastructure etc. Expenditure

on land cost and rentals, if any, will not be counted for purposes of backend infrastructure


FDI POLICY- OVER THE YEARS

The retail marketing mix is the vehicle through which a retailer’s marketing strategy is implemented and, in planning the mix, retailers should be guided by three basic principles:

1. The mix must be consistent with the expectation of target customers;

2. Elements must be consistent with each other to create synergy; and

3. The mix must be responsive to competitive strategy.


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