1.

Definition of retailing

- The activities involved in the selling of goods to ultimate consumers for

personal or household consumption
- Retailing is the activity of selling goods direct to the public, usually in
small quantities. 

2. Retailers 

- They sell the goods in small quantities to the end-user at a higher price, theoretically
at the MSRP (Manufacturer’s Suggested Retail Price)
- Retailers have a large role in promoting sustainable consumption and production,
occupying a unique position in the lifecycle chain of products as a 'gatekeeper'
between producers and consumers. They can potentially play a big role in furthering
the sustainability of consumption and production.

Characteristics of a Retailer

 In the entire distribution chain, a retailer is considered to be the final link, who deals
directly with the customer.
 A retailer purchases in bulk from the wholesalers and sells the products to the customers
in small quantities.
 A retailer essentially maintains a variety of merchandise.
 The aim of a retailer is to achieve maximum satisfaction by exceeding their expectations
and delivering exceptional services.

Functions of retailers

1. Function of breaking bulk: Retailers break up large quantities into smaller units such as
individual canes, bottles, packets, appropriate for consumer use.
2. Function of creating place utility: Retailers create place utility by transporting goods to the
point of consumption.
3. Stocking Varieties of goods: Retailers buy varieties of goods from various manufacturers or
wholesalers. Thus, a retailer provides a wide range of choice enabling the consumers to select the
products of their choice.
4. Providing credit facilities to customers: Retailers grant credit facilities to consumers and
thus increase their short-term purchasing power.
5. Providing information to customers and wholesalers: Retailers act as a link between the
buyers and wholesalers / manufacturers. In the distribution channel, retailers are in direct contact
with customers. Retailers supply market information to manufacturers either directly or through
wholesalers.
6. Estimating the demand and arranging the purchase of the product: Retailers create
demand for products by communicating with their customers. This demand creation is quite
helpful for manufacturers and wholesalers.
7. Acting as consumer’s agent: The retailers anticipate the wants of the consumers and then
supply them the right kind of goods at a reasonable price. Their job is to make the consumer’s
buying as easy and convenient as possible.
8. Marketing functions: Retailers perform several marketing functions such as sales
promotion, advertising and point of purchase display. They induce customers to buy products of
reputed companies.
9. Connecting link: The retailers are the connecting link between the wholesaler and the
ultimate consumer.

3. E-tailing

Electronic retailing (e-tailing) is a buzzword for any business-to-consumer (B2C)

transactions that take place over the Internet. Simply put, e-tailing is the sale of goods online.
Companies like Amazon and Dell created the online retail industry by putting the entire
customer experience - from browsing products to placing orders to paying for purchases - on
the Internet. The success of these and other companies encouraged more traditional retailers
to create an online presence to augment their brick-and-mortar outlets. Electronic retailing
may also be referred to as Internet retailing.

Benefits of e-tailing:-
- It reduces the space occupied by retail outlets in the real world.
- It gives quick and easy access to a shopping space at any time and from any place where
there is access to internet.
- It saves time of the customer that is spent on travelling to a shopping place in real world.
- It creates a new platform for goods from different parts of the world which could be
imported by placing an order.
4. Super market
A supermarket may be defined as a large store which sells food and household goods and self-
service is its major characteristics. The products which are sold include grocery products, meat,
bakery and dairy products, and sometimes nonfood goods as well which includes personal care
products, home care products, apparels, footwear and sometimes nutritional supplements and
wine stores as well.
The concept of supermarkets was originated in the U.S. during the 1930s as low priced retail
stores with self-service.
The examples of supermarket in india are Reliance fresh, Spencers etc.
5. Hyper market
Vast self-service warehouse-cum-retail outlet that combines the features of a supermarket,
department store, discount store, and specialty store in one location called hypermart (or)

Hypermarket is a combination of a superstore and a department store. It covers a huge range of

products from groceries to appliances to merchandise. They are made with the purpose of
satisfying all needs of the customer in one trip to the store. Because of their large size and
footprint, they are generally located just out of town or in sub-urban areas. They typically work
on high-volume, low margins formula to make money.

6. Definition: Discount Store

Discount stores are those stores that sell merchandise, especially consumer goods, at a discount
from the manufacturer's suggested retail price. They are also called as discounter and discount
house. They usually have many name-brand products and offer a wide price range of the items.
e.g.: The world famous stores of Wal-Mart, Big Bazaar, Kmart etc. are basically discount stores.

7. Departmental store

Large retail establishment with an extensive assortment in variety and range of goods, organized
into separate departments. All departments are housed under the same roof to facilitate buying,
customer service, merchandising, and control. (or)

A departmental store may be described as a large retail organisation having number of

departments in the same building under centralised control. (or)

Characteristics of Departmental Stores:

(1) They deal in different variety of products; say from needle to a car which can be purchased at
one place.

(2) There are various departments operating under one roof and each department specialises in
particular type of trade.

(3) All the departments operate under the centralised control and management.

(4) Their operational expenses are very high.

(5) They undertake extensive advertising in order to attract more customers.

(6) They are usually situated at the most crowded place and at an important place of the city.

(7) A large amount of finance is needed to start a departmental store.

(8) These are best suited for customers.

(9) The departmental store offer excellent services to their customers viz.; credit facilities, free
home delivery and replacement of disapproved goods etc.

8. Specialty store
A small retail outlet that focuses on selling a particular product range and associated items. Most
specialty store business operators will maintain considerable depth in the type of product that
they specialize in selling, usually at premium prices, in addition to providing higher service
quality and expert guidance to shoppers. (or)

Specialty stores are retail businesses that focus on specific product categories, such as office
supplies, men's or women's clothing, or carpet. It isn't the product they sell that determines if a
company is a specialty store, but rather the breadth of their product offering. If a company could
be considered an expert in a certain type of good, it is a specialty store.

9. Category Killers

A category killer is a large company that is more efficient but less specialized than other
merchants in the niche or industry.

Wal-Mart is a classic example of a category killer. By being cheaper, bigger, more convenient,
and more well-known, it has an advantage over smaller stores and specialty stores. A wide
selection of merchandise is a common characteristic of a category killer (which in this context is
often referred to as a "big box" store).

Category killers are controversial. On one hand, they are champions of capitalism -- their ability
to be more efficient often leads to lower prices for consumers. On the other hand, their low
prices sometimes come at the expense of product quality, customer service and more modestly
capitalized competitors. (or)

A category killer is the dominant company/ brand in an industry or product/service category

which accounts for a major portion of the sales in the category. It may have developed
competitive advantage over a period of time which other companies find it difficult to replicate.
As a result, other companies in the same product category not only find it difficult to compete
with the brand killers but may also find it more viable to exit the business altogether. Retail giant
Wal-Mart can be referred as a category killer as other retailers find it hard to compete with its
low prices resulting of its well-developed business model. The category killers have a high
concentration ratio and may have a near –monopoly as they are the preferred choice for majority
of the customers.
 Example : Apple iPad is termed as a category killer at times as other tablet makers are not able
to compete at all and iPad is synonymous with the term Tablet PC.

10. Assortment

The collection of goods or services that a business provides to consumers. The main
characteristics of a company's product assortment are: (1) its length or number of products, (2)
its breadth or number of product lines, (3) its depth or number of product varieties within a
product line and (4) its consistency or how products relate to each other in a retail environment.
(or)

Product Breadth + Product Depth = Product Assortment

The product breadth is the number of product lines, while the product depth is the variety within
each of those lines.

These two elements combine to make up the store's product assortment or merchandise mix.

The number and type of products displayed by retailers for purchase by consumers. The two
major components of an assortment strategy are the depth of products offered (how many
variations of a particular product a store carries), and the width of the product variety (how many
different types of products a store carries).

A deep assortment of products means that a retailer carries a number of variations of a single
product (the opposite being a narrow assortment); a wide variety of products means that a retailer
carries a large number of different products (the opposite being a narrow variety).

11. Merchandise

Merchandising is everything you do to promote and sell your products once the potential
customer is in your store. When we talk about merchandise, we are talking about products
available for sale, typically in a retail setting.

Since the sales process often starts with the eyes, merchandising typically involves presenting
products in a visually favorable light, to try and encourage purchases.

Merchandising Strategies

Some of the most popular ways to entice buyers to purchase include:

 Window and in-store displays

 Grouping related products together 
 Shelf signage
 In-store ads featuring the merchandise
 Samples and giveaways
 In-store demonstrations
 Well-stocked shelves
 Spotlighting promotional items

Benefits

Some small business owners hire professional visual merchandisers to come in and spruce up
their displays and selling floor, finding that the cost is well worth it. But merchandising goes
beyond just moving inventory around, to space planning and product staging. Effective
merchandising yields:

- Higher sales
- Faster inventory turnover
- Buyers who spend more time in the store
- More satisfied customers
- Increased customer loyalty
Stores that present products that customers are frequently looking for in a pleasing display or
tucked away neatly, will find those same customers returning for more on a regular basis.

12. Length, breadth and depth of merchandise

Product breadth is the variety of product lines that a store offers. It is also known as product
assortment width, merchandise breadth, and product line width.

For instance, a store may only stock 4 items of each SKU, but their product breadth (the variety)
may consist of 3,000 different types of products.

The other part of the retail inventory equation is product depth (also known as product
assortment or merchandise depth). This is the number of each item or particular styles that you
carry of a particular product.

For instance, a store may strategize that to keep inventory costs down, they will have a shallow
product depth. This means they might only stock 3-6 SKUs of each product in the store.
13. Central business district

-  Central Business District (CBD) is the main center of commerce and trade in the city. It
is characterized by peak land rates and intense developments. The shopping area within
this district is usually different from the main office area. It has good accessibility in
terms of transport from all the parts of the city. An example of a Central Business District
in Mumbai would be Colaba or Nariman Point. In New Delhi, the same would apply to
Connaught Place, which for long has been the center of business and commerce.

- Being a part of a CBD has its plus points as well as minus points. While the retailer may
not have to spend heavily on drawing customers, he will have to face situations where
rents are fairly high and facilities like parking for the customers in cumbersome.

- The Secondary Business District (SBD) is one, which has evolved over a period of time,
with the spread of population within the city. A city my have more than one SBD. An
SBD is characterized by a good mix of retailers, the stores are nearly smaller than those
in the CBD and public transportation is adequate. A Neighborhood Business District on
the other hand, is an unplanned shopping area that has developed to serve the needs of the
neighborhood. It is characterized by the presence of stores like a supermarket, stationery
stores, medical shops etc.

14. Unplanned business districts

An unplanned business district is a shopping area where two or more stores are located together
or nearby. Store composition is not based on long-range planning. Unplanned business districts
can be broken down into four categories: central business district (CBD), secondary business
district (SBD), neighborhood business district (NBD), and string.

An unplanned business district generally has such points as these in its favor: variety of goods,
services, and prices; access to public transit; nearness to commercial and social facilities; and
pedestrian traffic. Yet, this type of location's shortcomings have led to the growth of the planned
shopping center: inadequate parking, older facilities, high rents and taxes in popular CBDs,
discontinuity of offerings, traffic and delivery congestion, high theft rates, and some declining
central cities.

15. Planned shopping stores

A planned shopping center is centrally owned or managed and well-balanced. It usually has one
or more large (anchor) stores and many smaller stores. During the past several decades, the
growth of the planned shopping center has been great. This is due to extensive goods and service
offerings, expanding suburbs, shared strategy planning and costs, attractive locations, parking
facilities, lower rent and taxes (except for most regional shopping centers), lower theft rates,
popularity of malls (although some people are now bored with shopping centers), and lesser
appeal of inner-city shopping. The negative aspects of the planned center include operations
inflexibility, restrictions on merchandise lines carried, and anchor store domination. There are
three shopping center forms: regional, community, and neighborhood.

16. Airport retailing

Airport retail operations area a major part of business they include tax, duty free stores, arrival
shops and specialty stores.

17. Catalogue retailing

These are the retailers whose showrooms are adjacent to the warehouse. These retailers usually
specialize in hard goods such as house ware, jewelry and consumer electronics.

18. Franchising

According to International Franchise Association, a franchise is a “continuing relationship in

which the franchisor provides a licensed privilege to do business, plus assistance in organizing,
training, merchandising and management, in return for a consideration from the franchisee”.

Franchising can be divided into two formats.

Product/ trade name franchising

Business format Franchising

Examples : Pizza hut, Marks and Spencer, McDonald‟s, Holiday Inn.

19. Wheel of retailing

Concept of retailing devised by Philip Kotler which states that new types of retailers complete a
full wheel: usually beginning as low-margin, low-price, low-status operations but later evolving
into higher-priced, higher-service operations, eventually becoming like the conventional retailers
they replaced.

A process observed in retail marketing when what is originally a discount store improves its
services and products in order to boost prices once it has become established. As it cycles
through the wheel of retailing, a discount retail business might develop into a higher end
department store, leaving its former niche to be filled by newer discount businesses.

20. Vending machine retailing

- Electronic machine used to disperse a product to a consumer after a certain amount of money
has been put into the machine.

- Vending machines are commonly used to disperse beverages and snack items, but in recent
years companies have introduced vending machines that disperse other items, even including
electronic items such as digital cameras or iPods.

- A vending machine is an automated machine that provides items such as snacks, beverages,
alcohol, cigarettes and lottery tickets to consumers after money or a credit card is inserted into
the machine.
21. Shopper behavior

- Shopper Behavior is the “study of individuals, groups or organizations and the process
they use to select, secure, use and dispose of products, services, experiences or ideas to
satisfy needs and the impacts that these processes have on the consumer and society.”

Retail shopper behaviour is defined as “the activities people engage in when selecting,
purchasing and using products so as to satisfy needs and desires”.

Factors influencing the retail shopper:

Range of merchandise

Convenience of shopping at a particular outlet

Time to travel

Socio- economic background and culture

Stage of the family life cycle

22. Shopper decision making process
23. Category management
Category management is a retailing and purchasing concept in which the range of products
purchased by a business organization or sold by a retailer is broken down into discrete groups of
similar or related products; these groups are known as product categories (examples of grocery
categories

24.  Reference groups

 A reference group includes individuals or groups that influence our opinions, beliefs, attitudes
and behaviors. They often serve as our role models and inspiration. Marketers view reference
groups as important because they influence how consumers interpret information and make
purchasing decisions.

25.   Food falls

Fall short. 1. To fail to attain a specified amount, level, or degree: an athlete whose skill fell far
short of expectations. 2. To prove inadequate: Food supplies fell short.

26. Current ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term and
long-term obligations. To gauge this ability, the current ratio considers the current total assets
of a company (both liquid and illiquid) relative to that company's current total liabilities.

27.   Liquidity ratio

The ratio between liquid assets and liabilities of bank or any institution. It shows the liquidity
position of the business.

28.   Quick ratio

The quick ratio is a measure of how well a company can meet its short-term financial liabilities.
Also known as the acid-test ratio, it can be calculated as follows: (Cash + Marketable Securities
+ Accounts Receivable) / Current Liabilities.

29.   Balance sheet

A statement of the assets, liabilities, and capital of a business or an organization at a particular
point of time, detailing the balance of income and expenditure over the preceding period

30.   BEP
The break-even point (BEP) in economics, business—and specifically cost accounting—is the
point at which total cost and total revenue are equal.

31.   Merchandise turnover

In accounting, the Inventory turnover is a measure of the number of times inventory is sold or
used in a time period such as a year. The equation for inventory turnover equals the cost of
goods sold divided by the average inventory.

32. Return on Investment

 ROI is usually expressed as a percentage and is typically used for personal financial decisions, to
compare a company's profitability or to compare the efficiency of different investments. The
return on investment formula is: ROI = (Net Profit / Cost of Investment) x 100.

33.   Return on capital employed

Return on capital employed (ROCE) is a financial ratio that measures a company's
profitability and the efficiency with which its capital is employed. ROCE is calculated as:
ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employed.

34.   Convenience goods

The items which are bought frequently, immediately and with minimum shopping efforts are
convenience goods. These include candy, ice-cream, cold drinks, cigarettes, magazines,
medicines etc. the shops which keep the convenience goods are called convenience stores. Often
convenience goods are non durable. (or)
A convenience good is a consumer item that is widely available and purchased frequently with
minimal effort. Because a convenience good can be found readily, it does not require the
consumer to go through an intensive decision-making process.

35.   Specialty goods

Speciality goods are a class of consumer goods. Consumer goods can be categorized into
convenience goods, shopping goods, and speciality goods. The classification scheme is based on
the way consumers purchase. (or)

The specialty goods incur special purchasing efforts and the items posses some special features.
The buyers are willing to spend a lot of time & money to buy them in contrast with the shopping
goods. The rare arts collections, antiques, prestige brands, style goods, automobiles etc. are the
examples. The particular hotel, restaurant, hair salon, spa & resorts are examples of services. The
comparison factor is absent in specialty goods. Some common features
1. Limited demand and limited number of buyers
2. Costly products generally
3. Sold at few places
4. Aggressive promotion is required.

36. Shopping goods

Shopping is the activity of examination and selection of the goods or services from retailers with
the intent to purchase at that time. The selection & purchasing is a result of a comparison of
products based upon their suitability, quality, price, style and so on.. Examples are furniture’s,
dresses, electronic items & appliances etc. Most of the shopping goods are durable. Some
common features:
1. Generally durable
2. Generally high price in contrast with convenience goods.
3. Comparison is main factor in making purchase decisions.
4. Purchase is generally pre planned
5. Retailers have very important role to play. (or)

A higher end product occasionally bought by consumers that are usually compared for their
appropriateness, quality, cost and features before purchase occurs. Consumers tend to take more
time when purchasing a shopping good produced by a business, and they might even travel to
buy such goods.

37. Traffic count – i) Pedestrian traffic and ii) automobile traffic

A traffic count is a count of vehicular or pedestrian traffic, which is conducted along a particular

road, path, or intersection. Traffic counts provide the source data used to calculate the Annual
Average Daily Traffic (AADT), which is the common indicator used to represent traffic volume.

Up-to-date traffic and pedestrian volume counts reflect the characteristics of traffic. These volume
counts, when compared to the established warrants, help determine the appropriate type of traffic
control device, if any.

Pedestrian volume counts for each cross walk should be made during the same period as the
vehicle volume count. Tallies should be recorded for each quarter hour for the duration of the
count.

Pedestrian counts are not required in sparsely settled rural areas or at other locations where it is
apparent that pedestrian movement is negligible. The signal installation must comply with the
latest version of the Americans with Disabilities Act and the Texas accessibility standards.

38. Visual Merchandising

Visual merchandising is the practice in the retail industry of developing floor plans and 3D
displays in order to maximize sales. Both goods and services can be displayed to highlight their
features and benefits.

Example: Mass display is a technique that groups larger quantity of merchandise together in one
place to attract attention to it.
39. Staple merchandise

Staple merchandise is the basic stock of a store. it is stocked year. round and comprises a good
portion of store sales. These items are what. customers need on an ongoing basis and tend to sell
well year after year.

Staple merchandise consists of the items that are regularly purchased, displayed and sold by the
retailers. For a grocery store, staple merchandise will be bread, butter, milk, salt, eggs, tissues
and so on. Similarly, most of the merchandise at sports store and home improvement centers are
staple.

For a departmental store, staple merchandise is camera rolls, stapler pins, pens, notebooks,
briefcase, gift items and house wares.

The reason behind forecasting demand for staple merchandise easily is that these are the items of
daily/regular use and are not influenced by season and other factors. A retailer can easily predict
the quantity required for these items. Usually for this purpose, retailers prepare a ‘basic stock
list’ that clearly outlines the inventory levels, size, colour, style, packaging, fragrance and so on
for various staple items.

40. Fashion merchandise

Fashion merchandise consists of the items those usually have unpredictable demand and
limited sales record. Demand forecasting as discussed earlier, in the absence of any sales
history for specific fashion store keeping unit (SKU) becomes difficult.

The reason behind this is that these items have cyclical sales and become outdated very
easily with the changes in customers’ taste and preferences, liking and disliking. Therefore,
for few seasons, the demand for such merchandise is high, become outdated for a while and
then again becomes fashion of the day.

For instance, ‘Yoga and meditation’ that was part and parcel of Indians’ lives before
seventies, was replaced by gym, spa and health centers, has again entered in Indians’ lives
and becoming popular among youths too.

41. Fad merchandise

Fad merchandise is the merchandise items that generate a high level of sale for a short
period of time. Learn more in: Customer Experience Impacting Retail Management: Study
of Customer Centricity Strategy by Retailers. (or)
 Fad merchandise is the merchandise items that generate a high level of sale for a short
period of time. (or)

A fad's life cycle is often different. A fad typically has a brief introduction period as its
popularity skyrockets, followed by a very brief maturity stage. The product enters decline
almost as quickly as it rose in popularity.

42. EDI (Electronic data interchange)

- Electronic data interchange (EDI) is the computer-to-computer exchange of business

documents between companies. EDI replaces the faxing and mailing of paper documents.
- EDI documents use specific computer record formats that are based on widely accepted
standards. However, each company will use the flexibility allowed by the standards in a
unique way that fits their business needs. (or)
- EDI (Electronic Data Interchange) is the transfer of data from one computer system to
another by standardized message formatting, without the need for human intervention.
EDI permits multiple companies -- possibly in different countries -- to exchange
documents electronically. Data can be exchanged through serial links and peer-to-
peer networks, though most exchanges currently rely on the Internet for connectivity.
43. Push and Pull Supply chain

Push Strategies
A push-model supply chain is one where projected demand determines what enters the process.
For example, warm jackets get pushed to clothing retailers as summer ends and the fall and
winter seasons start. Under a push system, companies have predictability in their supply chains
since they know what will come when -- long before it actually arrives. This also allows them to
plan production to meet their needs and gives them time to prepare a place to store the stock they
receive.
Pull Strategies
A pull strategy is related to the just-in-time school of inventory management that minimizes
stock on hand, focusing on last-second deliveries. Under these strategies, products enter the
supply chain when customer demand justifies it. One example of an industry that operates under
this strategy is a direct computer seller that waits until it receives an order to actually build a
custom computer for the consumer. With a pull strategy, companies avoid the cost of carrying
inventory that may not sell. The risk is that they might not have enough inventory to meet
demand if they cannot ramp up production quickly enough. (or)
Push strategy depends on forecasting, forecasting of customers demand and it tries to push as
many products into the market. Its generally supply driven. Long term forecasting helps the
company to manufacture optimum level of products. The speculative nature of the push process
results in high production cost, high inventory cost and high transportation cost because firms
would like to have buffer at every stage. Sometimes in push strategy firm may not be able to
meet changing demand pattern immediately.

A classic example of push strategy is when you visit a super market and products/ consumable
products which are available on shelves are example of push strategy.

Pull Strategy depends on customer orders. In pull strategy supply chain demand is real and firm
react to the demand. It helps the company to produce required number of products. drawback of
pull strategy is if there is excess demand from the customer and company do not have capacity
results in loss of opportunity cost.Production and distribution in the firm are depending on the
demand. 

44. Cross docking

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer

truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail
cars, with little or no storage in between.

Cross docking is a logistics procedure where products from a supplier or manufacturing plant are
distributed directly to a customer or retail chain with marginal to no handling or storage time. 
Cross docking takes place in a distribution docking terminal; usually consisting of trucks and
dock doors on two (inbound and outbound) sides with minimal storage space.  The name ‘cross
docking’ explains the process of receiving products through an inbound dock and then
transferring them across the dock to the outbound transportation dock.
Advantages of cross-docking

 Reduces material handling.

 Reduces need to store products in warehouse.
 No need for large warehouse areas
 Reduced labour costs (no packaging and storing).
 Reduced time to reach customer.
 Transportation has fuller loads for each trip therefore a saving in transportation costs
while also being more environmentally friendly.
 Products are moved more quickly through a cross dock. 
 Easier to screen product quality.
 Elimination of processes such as ‘pick-location’ and ‘order picking’
 Cross docking terminals are less expensive to construct than your average warehouse.
 High turnover of products with everything moving quickly through the cross docking
terminal.  Products usually spend less than 24 hours here. 
 Products destined for a similar end point can be transported as a full load, reducing
overall distribution cost.

Disadvantages of cross-docking

 Much management attention, time and planning is necessary to make it work effectively.
 Setting up the cross docking terminal structures would take quite a bit of time and capital
to start with.
 Some suppliers would not be able to deliver customer ready products to the cross docking
terminal. 
 A sufficient number of transport carriers are necessary for the cross docking terminal to
run smoothly, therefore is mainly dependent on trucking. 
 A high volume of product is necessary to be cost effective.
 The organisation has to have a confortable reliance that their suppliers will deliver the
right product in its right amount to the cross docking terminal on time which doesn’t
leave too much room for error. 

45. CPFR (Collaborative, planning, forecasting and replenishment)

Collaborative Planning, Forecasting, and Replenishment (CPFR), also known simply

as Collaborative Planning, refers to the following:

1. A collaboration process whereby supply chain trading partners can jointly plan key supply
chain activities from production and delivery of raw materials to production and delivery of final
products to end customers. Collaboration encompasses business planning, sales forecasting, and
all operations required to replenish raw materials and finished goods.
2. A process philosophy for facilitating collaborative communications. CPFR is considered a
standard, endorsed by the Voluntary Interindustry Commerce Standards. (or)
Collaborative Planning, Forecasting and Replenishment (CPFR) is "a business practice that
combines the intelligence of multiple trading partners in the planning and fulfilment of customer
demand". The CPFR links best practice in sales and marketing (e.g. such as category
management) to supply chain planning and execution processes to increase availability while at
the same time reducing inventory, transportation and logistics costs (Voluntary Interindustry
Commerce Standards Association, 2004). (or)

CPFR refers to a business model for cooperative planning, forecasting and management of goods
flows and stock between retailers and consumer products manufacturers. The purpose is to
jointly forecast the sales of goods to consumers and to plan promotion measures (for example,
promotions by vendors, retail promotions and product price reductions). Having more
information available reduces the markup risk for everyone involved in the supply chain. The
vendor benefits by making optimum use of production capacity, whereas the retailer benefits
from increased availability of merchandise and reduced risk of overstocking or understocking.

46. RFID

RFID (radio frequency identification) is a technology that incorporates the use of

electromagnetic or electrostatic coupling in the radio frequency (RF) portion of the
electromagnetic spectrum to uniquely identify an object, animal, or person.

RFID (radio frequency identification) is a technology that incorporates the use of

electromagnetic or electrostatic coupling in the radio frequency (RF) portion of the
electromagnetic spectrum to uniquely identify an object, animal, or person. RFID is coming into
increasing use in industry as an alternative to the bar code. The advantage of RFID is that it does
not require direct contact or line-of-sight scanning. 

At present, RFID tags and systems are relatively costly, and are not yet found on inexpensive
items. However, some interesting retail pilot projects are already under way:
  Continuous "live" store inventory. Retailers can gain real-time detailed information on
their stock through an on-going automatic scan system in warehouses and stores. This is
much more efficient than having an employee manually check inventory on shelves, and
could eventually cut costs and improve consumers' experiences in stores, through better
stocking and supplies.

 Simultaneous "one shot" scanning of goods at the cash. For example, everything in a
consumer's grocery cart can be scanned all at once, while still in the cart-no need to
remove items for check-out. This could speed things up at the grocery store.

47. Reverse logistics

 Reverse logistics stands for all operations related to the reuse of products and materials. It
is "the process of planning, implementing, and controlling the efficient, cost effective
flow of raw materials, in-process inventory, finished goods and related information from
the point of consumption to the point of origin for the purpose of recapturing value or
proper disposal. More precisely, reverse logistics is the process of moving goods from
their typical final destination for the purpose of capturing value, or proper disposal.
Remanufacturing and refurbishing activities also may be included in the definition of
reverse logistics." The reverse logistics process includes the management and the sale of
surplus as well as returned equipment and machines from the hardware leasing business.
Normally, logistics deal with events that bring the product towards the customer. In the
case of reverse logistics, the resource goes at least one step back in the supply chain. For
instance, goods move from the customer to the distributor or to the manufacturer.
 When a manufacturer's product normally moves through the supply chain network, it is to
reach the distributor or customer. Any process or management after the sale of the
product involves reverse logistics. If the product is defective, the customer would return
the product. The manufacturing firm would then have to organise shipping of the
defective product, testing the product, dismantling, repairing, recycling or disposing the
product. The product would travel in reverse through the supply chain network in order to
retain any use from the defective product. The logistics for such matters is reverse
logistics.

ReverseLogistics™ (RL) are Aftermarket Logistics, Retrogistics, or Aftermarket Supply Chain.

The reverse supply chain is also a term used in the industry. RL is not to be confused with
forward logistics or getting the product to market commonly known as the forward supply chain.
Types of activity common with reverse logistics includes: logistics, warehousing, repair,
refurbishment, recycling, e-waste, after market call center support, reverse fulfillment, field
service and many others.
48. Vendor managed inventory

Vendor-managed inventory (VMI) is an inventory management technique in which a supplier of

goods, usually the manufacturer, is responsible for optimizing the inventory held by a distributor.

VMI requires a communication link—typically electronic data interchange (EDI) or the Internet
—that provides the supplier with the distributor sales and inventory data it needs to plan
inventory and place orders. In contrast, under the traditional arrangement the distributor handles
those tasks. The inventory can be owned by the distributor, or by the supplier, often under
consignment. 
The benefits of a vendor managed inventory system may include better inventory accuracy,
forecasting, and service, though it can present challenges in communication, cultural resistance,
and setting clear lines of responsibility.

49. Plannogram

A planogram is a tool used by the retailer that helps determine the location of merchandise
within a department. It is a diagram that visually communicates how merchandise and props
physically fit onto a store fixture or window, to allow for proper visibility and price point
options. Historically, planograms have been distributed in the form of schematic diagram or
drawing , but increasingly , planogram are managed digitally using tables and mobile phones and
photographic images.

50. Private labels

The Private Label Marketing Association defines store brand products as, “ all merchandise sold
under a retail stores private label. That label can be the stores own name created exclusively by
that store. They can be classified as,

Store brand

An umbrella brand

Individual brands

51. Copy cat store brand

Copycat store brands carry the name of the retailer and tend to have packaging and price points
very close to the products that they compete with. The retailers tend to target branded products
that are already successful then produce a copycat that has similar ingredients, packaging and
pricing. Copycat retailers can thereby cash in on the success of the branded product without
having to incur the costs associated with developing the product and researching the market.
Marketing costs are also kept down since the product is instantly recognisable as being
associated with the product it is copying. With copycat brands there is no cost of failure to
absorb since only successful products are targeted. The retailer tends to produce a similar
product and offer it at a lower price than the branded product – so the message to the consumer is
that it is as good but cheaper.

The advantages of having copycat brands is not only to make profit on the sale of the product
itself, but it creates competition for the existing manufacturer branded products as well as
increasing the retailer’s bargaining power with the manufacturers, since the retailer has the
option to promote its own brand in competition with the original brands.

52. Scrambled merchandising

Definition of scrambled merchandising. When a shop sells goods that are usually sold by
another type of shop, in order to increase profits or attract new customers. For example, a food
shop might start to sell some types of clothing.

53. Seasonal merchandise

A line of goods sold in a specific season or period, e.g. summer, winter, Christmas and Easter.

Seasonal merchandising refers to the process of merchandising that is the management of

products and stocks according to the seasonal trends or fashions prevailing in the market.
Seasonal merchandising is fast becoming the mantra in the Indian retail scenario. 

 54. EDLP (Everyday Low Pricing)

Everyday low price (also abbreviated as EDLP) is apricing strategy promising consumers a low

pricewithout the need to wait for sale price events or comparison shopping.

55. POP display meaning

A point-of-purchase or POP display is marketing material or advertising placed next to the

merchandise it is promoting. These items are generally located at the checkout area or other
location where the purchase decision is made.
56. Atmospherics and Aesthetics

Retail-store factors such as display design and fixtures, flooring, smell, sound level, store
lighting and temperature, wall coverings, and other elements of store's ambience, which can be
studied and controlled by a retailer to influence the consumer's buying mood.

Atmospherics: Retail-store factors such as display design and fixtures, flooring, smell, sound
level, store lightning and temperature, wall coverings, and other elements of stores ambience
which can be studied and controlled by a retailer to influence the customers buying mood.

Aesthetics: Aesthetics element includes factors like size, color and texture within the store.

57. Publicity
Type of promotion that relies on public relations effect of a news story carried usually free by
mass media. The main objective of publicity is not sales promotion, but creation of an image
through editorial or 'independent source' commentary. While the publicist can control the content
of the story, he or she may not have any control over its placement or interpretation by the
media.

58. Public Relations (PR)

Public relations is the art of managing the spread of information about an individual or company
is disseminated to the public, and attempting to frame that information in a positive light.  

59. Grid layout means

Creates a grid layout with the specified number of rows and columns. All components in
the layout are given equal size. One, but not both, of rows and cols can be zero,
which means that any number of objects can be placed in a row or in a column.

60. Race track layout means

A race track (or 'racetrack', 'racing track' or 'racing circuit') is a facility built for racing of
vehicles, athletes, or animals (e.g. horseracing or greyhound racing). A race track also may
feature grandstands or concourses. Racetracks are also used in the study of animal locomotion.
 61. Freeform Layout

Advantages of free form layout are as follows:

1. Allowance for browsing and wandering freely.
2. Increased impulse purchases.
3. Visual appeal.
4. Flexibility
Disadvantages of free form layout are as follows:
1. Loitering encouraged
2. Possible confusion
3. Waste of floor space
4. Difficulty of cleaning

62. Store layout

The logical design of the layout of a multi-storey building is a conceptually and
numerically complex task which, if an acceptable algorithm can be devised, is ideally
suited to a computer-aided approach. ... The principles of the computer program are
described and its use in multi-storey layout planning is assessed.
 63. Price bundling
Price bundling is a strategy whereby a seller bundles together many different goods/items
being sold and offers the entire bundle at a single price.
 It involves combining several products, usually complementary, and then selling it as
a single product.
 It is a common feature in imperfectly competitive industries such as
telecommunications, fast food and financial services.
 Product bundling can be used for market expansion
 Example: The McDonalds Happy Meal (which is a bundle of items such as a burger,
fries and a cold drink)..

 Product bundling decision usually involves four factors:

• Volume:  • Margins:  • Exposure• Risk
64. Flea market
 A flea market, also known as a swap meet, is a type of bazaar or merchandising area
where space is rented out to those people who want to sell merchandise, or exchange it in
return for other merchandise as in a barter system. They are, Product offerings, Location,
Time, Vendors, Attraction.

65. Skimming pricing

Price skimming is a product pricing strategy by which a firm charges the highest
initial price that customers will pay. As the demand of the first customers is satisfied, the
firm lowers the price to attract another, more price-sensitive segment.

66. Penetration pricing

Penetration pricing refers to a marketing strategy used by businesses to attract customers
to a new product or service. Penetration pricing is the practice of offering a low price for
a new product or service during its initial offering in order to lure customers away from
competitors.

67. Multi unit pricing

 Consumers often encounter multiple unit price promotions whereby a price reduction is
presented as a reduced total price for multiple units of the same item (e.g., an item
regularly priced at $1.25 each is promoted as “5 for $5”).

A price reduction is presented as a reduced total price for multiple units of the same

item
68. Multi - channel retailing
Multichannel retailing is when a company provides numerous ways for customers to
purchase goods and services. This marketing strategy could include selling through
traditional outlets such as catalogs, brick-and-mortar stores, mail, and telephone. But, it
also includes nontraditional electronic and mobile outlets like websites, chats, emails,
apps, and social networks.
Multichannel retailing is a way to build a brand and reach a lot of consumers. You want
to target channels that give you the most return on your investment.

Benefits of Multichannel Retailing:-

 Flexibility for consumers when purchasing and paying for goods and services
 More opportunities to build a brand among diverse audiences
 Additional chances to solicit and use consumer testimonials
 24-hour access to customers to build brand loyalty
 A greater degree of visibility among various demographics
 Improved analytics to help understand consumer behaviors

69. Raillys law of retail gravitation

 Proposed by William J.Reilly in 1931,it says that people in a larger city will travel 
farther to shop than people in a smallercity.
 Reilly created a formula for calculating the precise point of geographical equilibriu
m between two nearby trade areas
 The point at which onehalf of the population shops in either trade area. Its weaknes
s is that it assumes no natural or human made boundaries.
 Modern retail theory recognizes that populations will usually not cross boundaries,
such as major highways, bridges, or even some streets in order to shop on the
other side, even if more convenient than perceived “local” choices.
 70. Hubs law of shopper attraction
Huff's model provides a series of probabilities of consumers choosing to visit one center
as opposed to another in terms of the attractiveness of each center (measured by floor
space) and a deterrence factor (measured by traveling time to the center).

71. Video kiosk

Video kiosks are small computer terminals placed at key locations in malls and retail
stores displaying multimedia messages to attract customers. These kiosks are owned by
the companies which want to advertise and market their products in locations where the
customer foot fall is quite high.

72. Primary trading area

Primary Trade Area is usually the geographic area in which between 55% and 70% of
customers originate.

73. Secondary trading area

Secondary Trade Area represents a further 15-20%. Combined, these trade areas equal the Main
Trade Area (MTA), which usually represent 70-85% of customer origin