Q.1 Describe the factors influenceing the growth of retail in india. How can yo ensure success in retailing ? Substantiate you answer with examples.
Ans→ Factors influencing the growth of retail in India :-
• India is world's second most populars country.
• It's GDP, is likely to surpass GDP of us by 2050.
• Consumer expediture has been growing at a healthy 10% p.a in the past two years.
• India has the lagest young population in the world.
• Estimate reveal that there are more english speaking people in India than ewropean and Asian continents.
• The retail industry in India estimated at $270 in 2003 & in expected to grow to be about Rs. 64,22,000 crore.
• Total retail in India registered 5.7% YOY growth form 2004-o6, to range between that $ 6% YOY over the next few years.
• The energy in terms of new investment is expected towards supermarkets or Hyper markets.
• The future estimates for organized retail Rs. 1,62,000 crores by 2009 & Rs. 2,35,000 crores by 2010.
• ENSURING SUCCESS IN RETAIL :-
1. Consumer Focused Selling :-→ Focus should be on the customer, his demand & his changing tastes & preferences. Due to the diversity of country, and standardization format is possible for the entir population.
2. Simple Over Complex :-→ As life becomes more complicated & stressful, simple things will be performed over complicated difficult to understood products and services.
3. Time Savings :-→ Each customer wants to be save as much time as possible. Thus, the focus should be on Providing improved service through properly trained staff and providing customer convenience.
4. Trust :-→ The customer frequents that retailers who is able to develop a relation- ship of trust with the end customer.
Q.2 Explain the dimensions which shapes relevant counsumer attitudes for a retail store.
Ans→ CONUSMER ATTITUDES FOR A RETAIL STORE :-
→ A counsumer image of the stores is the summation of his attitudes towards various aspects of the store. Every retail store has an individuality that differentiates it from its competitors to communicate its individuality across its largest segment of consumers to build confidence in its merchandise and services.
It is the argued that where there is a degree of congruity of an individual self image of a store or brand, there is a strong possibility of positive behaviour towards the store.
→ To measure the image at a retail store, it is estimated and essential to identify and aggregate teh relevant counsumer attitude to the merchandised displayed, sales force deployed location of stores and the price levels of goods to be purchased.
The dimensions which shape relevant counsumer attitudes for a retail store are :-
• Access route
• Traffic barrier
• Travel time
• Parking availability
• Number of brands stocked.
• Quality of line of merchandise.
• Breadth of assortment.
• Depth of assortment
• Number of outstanding departments in the store.
• Price of item
• Price of some item in other store.
• Trading stamps or coupons and discounts.
• Courtesty of sales force.
• Produce knowledge of sales force.
• Reliability of advertising and match with attributes.
• Billing procedures.
• Adequacy of credit arrangemtn.
• Delivery promptness and care.
• Eating facilites in store.
• Store layout
• Store decor
• Merchandise displays
• Class of customers visiting stores.
• Store traffci and congestion.
• Satisfaction with goods in use.
• Satisfaction with return and adjustmebts.
Q.3 Describe various chain stores available in india wiht suitable examples :-
Ans→ CHAIN STORES IN INDIA :-
Besides franchising, the other major retailing format that become popular in India context is the multiples, which are better known as Chain Store
. These chains are prominant with respect to some important product.
Categories such as :-
• Food
• Health and Beauty Products
• Clothing and Footwear
• Home Furniture and house hold goods
• Durable goods
• Leisure and Personal goods.
→ If you closely obseve there are a variety of retailers store. However, traditional type of retilers, who operate small single outlet business as mainly using the family labour, dominate this sector. In compariso, supermarkets account for the simple reason that these outlets have strong competitive strength which include.
Low operating costs and overhands.
Low margins, proximity to customers.
Long opering hours and additional services to customers (home delivery).
→ Rise in incomes and the urage to look good and maintain sound health made indians spend a considerate amount on health and beauty products. As in case of other retailing sectors, Samll single - outlet retaiers also dominate sales of health and beauty products. However in the recent past a good number of retail chains specialized in health and beauty products sprung up.
3. CLOTHING AND FOOTWEAR CHAINS :-→ There is no city in india where you don't find a clothing and footwear outlet. A traditional outlet basically stocks a limited range of cheap and popular items. In contract modern outlets are more spacious with attractively displayed windows and sometimes with mannequins.
4. HOME FURNITURE AND HOUSEHOLD GOODS CHAIN :-→ The home furniture and the house hold goods retailing secotor in India. Despite teh large site teh market very few modern and large retailers have established speciablized stores for these products. looking at the increase of income leves and changing life styles of customers there is considerable, potential for entry of speciablized retail chains.
5. DURABLE GOODS CHAINS :-→ We have witnessed a large number of foreign consumer durable companies in to the indian markets durin the 1990s. Thanks to the government decision of inviting foreign investment and import policies, a much wider variety of counsumer electronics items and house hold appliances are now available to the indian consumer competition among the companies to sell their brands provided strong inputs to the growth retailers operating in this sector.
6. LEISURE AND PERSONAL GOODS CHAIN :-→ A shop rise in the household income due to economic growth spurred consumer expenditure on leisure and personal goods in india. It is vey common to see specialized retailers for each category of products in this sector. A few retailing of books and music products.
Q.4 Explain the factors which play significant role in the choice of the store location. How can you evalute the factors for the store location.
1. DECISION OF STORE LOCATION AND INFLUENCING FACTORS :-
→ The following factors play a significant role in the choice of the store location in a particular city :-
2. SIZE OF THE CITY'S TRANDING AREA :-
→ A city's trading area from which customers come to the city for shopping. A city's trading area could include its suburbs as well as is neighbouring cities and towns for example - mumbai attracts customers from all over India with its large number of trading centers.
→ High growth in the population of an area can alos increase teh retail potential.
4. THE PURCHASING POWER OF THE CUSTOMERS :-→ Cities with a large population of high income group can be an attributes location for stores selling high priced services and lifestyle products such as designer clothes or even high value cars which have limited retail outlets.
5. DISTRIBUTION NETWORKS :-→ A city may become speciablized in certain lines of trade and attract customers from other cities.
6. COST OF LAND, RENT AND OTHER RETATL DEVELOPMENT COSTS :-This is one of the key factors affecting the sutiability of a city as a prospective retail location. If the retail or the cost of land is very high it would be difficult for a retailer to break even, especially if he is dealing in product with lower margins.
7. EVALUATE OF FACTORS FOR STORE LOCATION :-→ Factors that need to evaluatd for identifying the oppropriate location of a store are as follows :-
• Qualitative and quantitative dynamics of competitive stores.
• Prospective retaiers to evaluate the product lines carried by other stores, number of stores in that area etc.
• Whether the area or shopping centre provides easy access routes.
• Whether there are many traffic jams or congestion on the rotes to the selectd location.
• Whether there are any zoning regulators in the city as per plans of zoning commission and municipal corporations regarding the development of shopping centers, residential area, flyovers, etc.
• Complementary aspects of adjacent stores.
• Sufficient parking space.
• Vulnerability of the site of unfriendly location.
Q.5 What do you mean by visual merchandising Discuss various components of display.
Ans VISUAL MERCHANDISING :-
→ Visual merchandise, also referred to as display, is defined as the presentation of products in order to sell them. Goods displayed shout to the world that the retailer cares about his image and merchandise and most importantly, about entertaining, informing and educating his coustomers.
→ Visual merchandising includes, various aspects like:
Store floor plan, store windows, signs, merchandise display, space design, fixtures and hardware and the elements that come with it which may be too many to mention.
→ When merchandise for a retail store, a number of factors must be considered to be able to make the keys factors are discussed below:-
→ Characteristic of merchandise needs to be considered while deciding teh fixtures to be used for display. Wooden rocks or shelves can be effectively used for appeal ro packaged FMCG products.
• CUSTOMERS PROFILE :-→ Retailers have to take into consideration the profile and the expectations of the targeted segment. Stores which primarily cater to functional rather than hedonic needs do not require very fancy fixtures.
• LEVEL OF COMPETITION :-→ Level of competition is a significant factor in determining the kind of fixtures to be used by the retiler since it provides a unique selling proposition (USP).
• COMPONENTS OF DISPLAY :-→ With a theme of the display determined and the location for it planned, the retailer needs to examine the components of the display. The various components of the display are as follows :-
• Wall displays refer to saltwall panels and fixtures, grid wall panels and display, grid wall panels and display, slotted wall standards, face - outs, hangrails and shelving.
• Floor fixtures are grid wall panels and accessories, garment racks, display cases and counters, metal shelving gendals, floor and cube merchandisers. Shelving gendals, floor and cube merchandisers.
• Display products refer to mannequines and body forms, clear acrylic displays and counter top and jewellery displays.
• Supplies and equipment include hangers and streamers tagging supplies and labelers, packing and shopping bags, etc.
• Promotional items include window signs and banners sign holders and sign cards, sales tags and tickets.
• Lighting fixtures include track lighting and accessories such as rope lights. It is important to use proper lighting for enchancing and merchandise and incandescent lights are more effective.
• Signage should be professionaly written and never hand written. Big tags, bin labels, pentades, pen labels, shelf lables and plano gram are some of the singage.
Q.6 How can you monitor performmance of retail store ? Discuss with exampls.
Ans MONITORING PERFORMANCE OF RETAIL STORE :-
→ The retail performance can be measured through several ratios. A retailer can compare his performance oganist industry overage or ratios achieved by similar retaiers to judege effectiveness along with defined parometers.
→ A sales per square feet (SPF) is a measure of how well teh retail outlet is using the space allocated. SPF is typically much higher for merchants in a destination mall, than for similar stores in a local shopping centre.
• RELEVANCE OF SALE PER SQUARE FEET IN RETAIL OPERATIONS :-An upward trend in SPF is almost a positive sign of a retailers's health.
→ Assuming the store size resonable, there are many reasons for a poor SPF relative to competitors, there are many reasons for a poor SPF - These are considerations for retailers of all sizes :-
1. Poor product / merchandize mix.
2. Insufficient floor inventory (i.e. empty shelves)
3. Un - Competitive pricing
4. Poor sales and customer service personnel.
5. Poor location and non- optional store hours.
6. Poor store layout and design.
7. Insufficient / poor marketing.
8. Fixed consumer perception.
→ An important monitoring technique aport from all the above ratios used to monitor performance in retail operations, the ideal ration is considered to be the return on investment.
As an accounting valuation method, it is popularly calculated as:
Net Income
ROT = _____________________
Book value of assets
Simple ROI works well in situation where both the gains and the costs of an investment are easily known.
ROI is the better investment.
In complex business settings, however, it is not always easy to match specific returns with the specific costs that bring them, and this makes ROI less turst worthy as a guide for decision support.
Q.7 Writes notes on the following :-
(i) Franchising(ii) Non- ethical behaviour in retail business
(i) FRANCHISING :-
→ Franchising is one of the most successful marketing concepts. The basic aim of franchising is the expanison of business, by distribution of products / service. Frachising outlets account for about 40 to 60% to retail sales within organized sector in developled economies. In india franchising is growing rapidly after economic liberalization.
According to webster's dictionary, the definition of the world 'franchise' is that authorisation granted by a manufacturer to a distributor or dealer to sell his/her products
.
The international franchise association defines, a franchise is a continuing relationship in which the franchisor provides a licensed priviledge to do business, plus assistance in organising, training merchandising, and management, in return for a consideration from the franchise
from these definitions, it is clear that franchising is not a business but it is method used for the marketing and distribution of products/ services.
Frachising enables the franchisor that has developed a successful business concept to expand its operations to new geographical areas rapidly with a minimal investment. The franchise on other hand reduces its risks by adopting a proven and tested business model, However, buying a franchise can be very expensive and involve a big investment.
The franchisor of KFC, for example, needs to have permises in a prime location, should invest in furnisining as per predetermind specifications given by KFC and play an initial invest in furnishing as predetermind lumpsum as franchise fee for acquiring the rights to use KFC brand name and trade mark.
→ After knowing the ethical practices in retailing functions and ethical responsibilites of a retailer, it is new appropriate and equality, important to identify broadly teh non-ethical activites and behaviour in retailing :-
• Retailers who keep the retail stores open beyond the time pescribed by the law.
• Retailers employing young persons or children in shops or offices ( agains the law ).
• Improper price stickering on products.
• Deliberately with holding information regarding a product form the customer, such as ingredients in food stuff.
• Misuse of company assets/ money by employees/ manners.
• Salepersons collect free gifts meant for customer, and use it themselves.
→ Occurs when a misleading price is used to lure customers into the store; usually there are hidden chagres or the item advertised may be unavailable.
Palming Off :-→ Occurs when a retailer represents that merchandise is made by a firm other than the true manufacturer.
Deceptive Sales Practices :-→ Failing to be honest or omitting key facts in either of the sales presentation.
Shoplifting by Customers :-→ Retail stores suffer huge losses each year due to shoplifterss
Q.8 Explain various methods for setting retail prices with suitable examples.
Ans METHODS FOR SETTING RETAIL PRICES :-→ Following are the various pricing strategies followed by the retailers to meet their short term and long term objectives :-
• Every Day Low Pricing (EDLP)
• High - Low Pricing
• Loss Leader Pricing
• Skimming Pricing
• Penetrating Pricing
• Price Lining
• Psychological Pricing.
→ This strategy entails continuity of retail prices below MRP mentioned on the goods - in - words, at a level somewhere, between the regular prices at which the goods are sold and deep discount prices offered when a sale is hold. In case of EDLP, these low prices are stable and not subjected to a one - time sale.
For Example :-
→ Wal mart, Amazon, Procter & Gamble, Winn - dixie and Trade Joe's who are offering everyday low pricing approach. According to a study 26% American retailers follow EDLP and 74% follow high low promotions.
→ High - low pricing, as the name indicates, means that the retailer changes his prices based on seasons.
In high low pricing, retailers offer prices that are sometimes above the EDLP, but they reduce prices during periods of sale and use advertisements to promote teh frequent sales.
For Example :-
→ Consider a product with a normal selling price of $ 15. A 50% discount is applied, resulting in a low
price of $ 7.50. In this context the $ 15 price is the refrence price.
→ Once the customers are in the stores, they can be persuaded to buy more profitable products. Sometimes the fast moving products are sold at a cost price or even at a loss. so, these are called as loss - leaders.
For Example :-
→ Loss - leaders include selling low cost computer printers that need expensive ink and discounting hot dog buns by a grocer who than raises the price of hot dogs.
→ Price skimming is a pricing strategy in which a retailer sets a relatively high prices for the products or services at first, then lowers the price over time.
For Example :-
→ Price skimming include innovative electronic products, such as teh Apple iphone and sony playstation 3 for e.g, the playstation 3 was originally sold at $599 in the us market, but it has been gradually reduced to below $200.
→ The expectation is that the inital low price will secure market acceptance by breaking down existing brand loyalities. Penetrating pricing is most commonly associated with the marketing objective of increasing market share rather than short term profit maximization.
For Example :-
→ Penetration pricing examples include on online news website offering one month free fro a subscription - based service or a bank offering a free checking account for six months.
→ The prices may be hold constant over a period of time and changes in market conditions are adapted to by changing the quality of the merchandise.
For Example :-
→ Take coca-cola for example - its products line up includes a variety of beaverages like fants, sprite etc. and even within these product lines, there are products set at different prices because they vary by their ingredients or quantity ro taste. This segregation within the product line is price lining.
→ The idea behind Psychological pricing is that customers will read the slightly lowered price and treat it lower than the price actually is.
For Example :-
→ Psychological pricing is an item that is priced $3.99 but conveyed by the consumer as 3 dollar and not 4 dollar, treating $3.99 as a lower price than $4.00
Q.9 Explain various prouisions of legislation related to retail industry.
Ans PROVISIONS OF LEGISLATION :-→ Let us briefly understand the provision of legislation and the way they impact the retail industry :-
• The Shops and Establishment Act.
• Sales Tax Act.
• The Consumer Protection Act, 1986.
• The Prevention of food adulteration Act, 1954.
• The Standard of Weights and Measures Act, 1976.
• The Sale of Goods Act, 1930.
• The Essential Commodities Act, 1955.
• The Factors Act.
• Professional Tax.
• Service Tax.
• Labour Act.
• Provident Fund Act.
• Employee State Insurance Act.
• The Employees Provident Funds and Miscellaneous Provision Act.
1. THE SHOPS AND ESTABLISHMENT ACT :-
→This act is in essence a state legislation seeking to regulate working conditions of workers in the largely unorganized sector. This includes all types of shops and establishments which do not fall under teh purview fo the factories Act Regulation.
2. SALES TAX ACT :-→ According to this act, a dealer who is engaged in activity of manufacturing, importing, buying and selling of goods needs to register under the sales tax Act, 1959.
3. The CONUSMER PROTECTION ACT, 1986 :-→ This act was legislated to provide protection to consumer's interests through consumer councils for settlement of diputes and other relevant issues.
4. The PREVENTION OF FOOD ADULTERATION ACT, 1954 :-→ This act aims at making provision for the provention of adulteration of food.
• If the article contains any substances that are injurious to health.
• If false claims are made for it upon lable.
→ This Act was enncted to establish standards of Weights and measure, regulating inter - state trade or commerce in weights and measures.
6. THE SALES OF GOODS ACT, 1930 :-→ This Act governs the contract relating to sale of goods. It is subjected to the general principles of the law relating to contracts.
7. THE ESSENTIAL COMMODITIES ACT, 1955 :-→ This is an act to provide the consumer protection from disruptions in production, supply, distribution, trade and commerce in certain commodities.
8. THE FACTORS ACT :-→ This acts requires that any retail establishment having more than 40 employees ( permanets / temporary ) needs to get registered under teh factories act and not under shops and establishment act.
9. PROFESSIONAL TAX ACT :-→ This act requires that any retail establishment having more than to employees obtain a license from the local municipality ro corporations office.
10. SERVICE TAX ACT :-→ This Act requires that any retailers providing transportation services needs to obtain a license from local excise department.
11. LABOUR ACT :-→ This Act is applicable to any retail establishment employing individuals permanently temporarily. The enforcement of this falls under the jurisdiction of the area labour officer.
12 PROVIDENT FUND ACT :-→ This Act is applicable to any retail entity employing 10 or more employees where the retailers is bound to maintain a separate provident account with the central provident fund department either organization.
13. EMPLOYEE STATE INSURANCE ACT :-→ This Act states that any organization having more than 10 employees and earnings less than Rs. 10,000 per month needs to have license from teh local ESIC office.
14. THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT :-→ This Act states that any organization having more than 20 employees needs to obtain a Provident fund with regional Provident fund office.
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