Unit-1 Introduction and Perspectives on

Retailing
World of Retailing, Retail management,
introduction, meaning, characteristics,
emergence of organizations of retailing - Types
of Retailers (Retail Formats) - Multichannel
Retailing -Customer Buying Behaviour,
Historical Perspective, role of retailing, trends in
retailing, FDI in Retail - Problems of Indian
Retailing -Current Scenario
 Introduction
The distribution of consumer products begins
with the producer and ends at the ultimate
consumer. Between the producer and the
consumer there is a middleman—the
retailer, who links the producers and the ultimate
consumers.
The word ‘Retailer’ had been derived from the
French word ‘Re-tailer’ which means ‘to-cut
again’. Obviously then, retailing means to cut in
small portions from large lumps of goods. A
retailer is last middlemen in the chain of
distribution of goods to consumers. He is a link
between the wholesalers and the consumer.
 Retailer
A retailer is a person, agent, agency, company, or
organization which is instrumental in reaching
the goods, merchandise, or services to the
ultimate consumer.
Retailers are referred to as middlemen or
intermediaries. They occupy a middle position,
receiving and gassing on products from
producers and wholesalers to customers.
Services carried out by retailers are different
from those of wholesalers.
 Characteristics of Retailers
(i) A retailer is the link between a wholesaler and
the ultimate consumer and he is the last
intermediary in distribution.
(ii) A retailer buys goods from wholesaler in
bulk and resells them to consumers in small
quantities.
(iii) A retailer maintains a personal contact with
his customers.
(iv) A retailer makes sufficient shop display of
his wares to attract customers.
(v) Retailers perform all the marketing functions
which a wholesaler performs and in addition
emphasizes on advertisement.
(vi) Retailers deal in a variety of merchandise
and are often known as general merchants.
(vii) Usually retailers are classified into two
major groups, viz., small scale retailers and large
scale retailers.
(vii) Retailers aim at providing maximum
satisfaction to their customers in limited area.
Activities performed by Retailers
Retailers undertake various business activities and perform
functions that add value to the offerings they make to their
target segments. Retailers provide convenient location,
stock and appropriate mix of merchandise in suitable
packages in accordance with the needs of customers. The
four major activities carried out by retailers are:
• Arrange for assortment of offerings
• Breaking quantity
• Holding stock
• Extending services
1. Arrange for assortment of offerings
An assortment is a retailer’s selection of merchandise. It
includes both the depth and breadth of products carried.
Retailers have to select the combination of assortments
from various categories. The assortments must include
substitutable items of multiple brands and price points.
They should be distinguished on account of physical
dimensions and attributes e.g., colour or flavour. The small
retailer takes assortment decision on the basis of his
experience; on the other hand retailers from organized
retailing depend on a detailed study of past trends and
future projections.
Retailers need to consider certain factors while devising assortment
plans for their stores: profitability associated with particular
merchandise mix, store image, layout and the level of compatibility
between the existing merchandise. For example, FoodWorld, a
leading food supermarket positioned as a one-stop shopping centre,
deals in multiple product categories along with all possible variants
of brands, stock keeping units, and physical attributes in order to
meet the expectations of their consumers and survive in the
business. Whereas, Subhiksha, a grocery chain in south India has
impressive assortments of only the fast moving brands rather than
all available variants in the market. Their assortment plan is
governed by location, size and store image of their stores.
 2. Breaking Bulk
Breaking bulk means physical repackaging of the products by retailers
in small unit sizes according to customer’s convenience and stocking
requirements. Normally, retailers receive large quantities of sacks and
cases of merchandise from suppliers to reduce their transportation
costs. In order to meet their customers’ requirements retailers have to
break or arrange the bulk into convenient units. This entire function of
the retailers adds value to the offerings not only for the end customers
but also for the suppliers in the value chain. Even in the earlier days of
generic and commodity-based trading most of the retailers used to
perform this important function in the value chain. This function
receives negligible attention from the retailers now due the
introduction of new product categories, such as FMCG and ready-to-
wear apparel.
 3. Holding Stock
To ensure the regular availability of the offerings retailers maintain
appropriate levels of inventory. Consumers normally depend on the retailers
directly to replenish their stocks at home. Therefore, retailers, on periodic
basis, maintain the required levels of stock to meet the regular or seasonal
fluctuations in the demand. Retailers need to maintain equilibrium between
the range or variety carried and the sales which it gives rise to. Retailers
have to face the negative consequences of holding unwanted levels of stock
—for instance, too little stock will hamper the sales volume, whereas, too
much stock will increase the retailer’s cost of operation. Generally, in small
towns of India most retailers have arrangements with the nearby warehouses
to stock the goods. Some are so small that they have to stock only on the
shop floor. Retailers in the organized sector, to a certain extent, are using
effective software packages for maintaining adequate levels of inventory. At
the same time, retailers avail of just-in-time deliveries with the help of
efficient consumer response systems, which reduces the burden of
maintaining high levels of stocks.
 4. Extending Services
Retailing provides multiple services to immediate customers and other
members of the value chain. The set of services extended by particular
retailers may be part of their core product offerings or it may be ‘add on’ to
their product or service. Retailers offer credit, home delivery, after-sales
services and information regarding new products to their customers,
thereby making the shopping experience convenient and enjoyable. At
the same time, they provide stocking place, reach to the ultimate customers,
and information about the concerned target segment to the suppliers. For
example, Time Zone, the first organized retail chain of wristwatches in
India, started by leading watch manufacturers Titan, set up in all its stores,
service centres with proper equipment and trained manpower. This has not
only diluted the relevance of service providers in the unorganized sector but
has also enhanced the confidence of the customers in the retail services
provided by the particular retail chain, as after-sales service is considered to
be an integral ingredient of the watch purchase.
 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.
10. Guidance to Consumer
At the time of purchase, consumers rely on the advice and guidance of a
retailer. For example one consumer goes to the shop of T.V. where the
product of various firms is available. Now retailer will explain the
qualities of the various products and generally consumer is impressed
and acts upon the advice of a retailer.
 Retail
• Retail is the sale of goods to end users, not for resale, but for
use and consumption by the purchaser.
• Retail involves the sale of merchandise from a single point of
purchase directly to a customer who intends to use that
product.
• The retail transaction is at the end of the chain. Manufacturers
sell large quantities of products to retailers, and retailers
attempt to sell those same quantities of products to consumers.
• Retail involves the process of selling consumer goods or
services to customers through multiple channels of distribution
to earn a profit.
• Retail involves the sale of goods from a single point (malls,
markets, department stores etc) directly to the consumer in
small quantities for his end use.
Examples of Retail shops
• Mc Donald
• Domino’s
• Big-Bazaar
• Vishal Mega Mart
• Walmart
 Retailing
• According to Philip Kotler, “ Retailing includes all the
activities involved in selling goods or services to final
consumers for personal or business use”.
• Retailing is defined as the process of selling
merchandise to the consumers for their end use in small
quantities. The retailer sells products to the end-users
either in single units or in small quantities as per their
need and capability.
• According to William J Stantons, “ A Retailer or Retail
store is a business enterprise which sells primarily to
the ultimate consumers for non business use.”
 What is Retail Management?
Retail Management is the process which helps
the customers to procure the desired
merchandise form the retail stores for their
personal use. It includes all the steps required to
bring the customers into the store and fulfill their
buying needs. Retail management saves time and
ensures the customers easily locate their desired
merchandise and return home satisfied.
 Importance of Retailing
1. Retailing shapes the lifestyle of the people: Retailing is an
integral part of the modern society. It shapes the way of life. In
the past, trading of goods was a part of a traditional society. But
in recent times, buying and selling of goods have become a
brand dominated activity.
2. Retailing contributes to the economy: The importance of
retail sector is reflected in its contribution to the growth of an
economy. Its contribution is much more visible in the modern
era than it was in the past. As the retail sector is linked to the
significant portion of the economy, its contribution to GDP is
substantial. Retailing is the driving force of the economy and
generated employment opportunities to many. It aims at
promoting its sustained growth.
3. Retailing dominates the supply chain: Goods and
service flow from manufacturers or service providers
to consumers. Where consumers are large in number
and are widely distributed, the role of retailers
becomes crucial. Retailers serve as a connecting link
between the wholesalers and consumers. Due to its
dominant position in the supply chain, the retail
structure has steadily developed over the years.
4. Retailing is interdisciplinary: The pace of growth
within retailing is accelerating. Retailing has emerged
from a number of interrelated disciplines such as
geography, economics, management and marketing.
5. Retailing is acknowledged as a subject area
in its own right: Retailing is an accepted area of
academic debate, such as marketing and
management, developed fully as an area of
study. University research centers focus on
retailing and professional appointments in
retailing have been made. Academic journals
focusing on retailing are being published
worldwide.
6. Retailers enjoy status as major employers: In
today’s society, retailers are the major employers. It is
estimated in developed countries that retail industry
employs one in nine of the workforce. Retailers employ
a significant proportion of the overall workforce.
More than two thirds of the retail force are women.
Also, more than half of retailing employees are
employed on a part-time basis. This, highly flexible
workforce is capable of adapting to the differing labor
demands In the past, retailing employees got lower pay
and had longer working hours. But now, the retail sector
is becoming more organized with better pay scale.
7. Retailers are gatekeepers within the channel of
distribution: Retailers are becoming increasingly important in
their role as gatekeepers within the channel of distribution. In
the past, suppliers were dominant. Retailers supplied the
merchandise that was on offer and consumers selected from
them. As retailers have become significantly powerful, they are
able to influence suppliers and stock only the brands they wish
to sell. So, consumers are able to buy only what is stocked and
offered to them by the retailers. Retailers are thus considered
as shaping consumer demand.
8. Retailing has scope for expanding internationally:
Retailing offers scope for shifting retail operations outside the
home market. Retailers who focus on luxury goods markets are
expanding their business internationally. Retailers are moving
into more geographically and culturally distant markets.
 Types of Retailers
Retailers are mainly classified into :
– Itinerant Retailers
– Fixed Retailers
• Itinerant retailers comprise of Hawkers,
Pedlars, Cheap jacks, Market traders and
Street traders.
• Fixed Retailers are further classified into
Small-scale and Large-scale retailers.
• Small scale retailers constitute of second-
hand goods dealers, street stall-holders,
General shop and Special shops.
• Large-scale retailers constitute the
Departmental stores, Mail-Order Houses, Co-
operative Stores, Multiple Shops, Chain
Stores, Hire Purchase Shops, Super Markets
and Fixed-price Shops.
 Itinerant Retailers
Retailers who do not possess any shop of their own and
who move from place to place to sell their wares.
They are travelling or wandering sellers and include the
following types:
(a) Hawkers
(b) Pedlars
(c) Cheap jacks
(d) Market traders
(e) Street traders
(f) One-price shops.
Their common characteristic features are:
(i) They do not have fixed shops of their own.
(ii) They carry very little stock either on their
heads or on bicycles or on hand-carts.
(iii) Their capital investment is very small.
(iv) They do not stick to a particular line of
business throughout the year.
(v) They move from place to place in order to
sell their wares.
(vi) They do not have fixed hours of work or
even fixed days of work.
(vii) They operate at the minimum cost.
(viii) They provide door-to-door service moving
about in residential localities and selling their
wares.
 (a) Hawkers
They are itinerant traders
who move about in
residential localities with
their wares usually on
bicycles or hand-carts. They
usually deal in consumer
goods of a cheap nature.
Their range of merchandise
varies from vegetables,
fruits to toys, bangles,
plastic utensils etc.
 (b) Pedlars
They carry their wares on
their heads or on their
back and move from one
house to the other in the
residential localities of a
city. They also deal in
cheap goods and usually
cater to the needs of the
low- income class.
 (c) Cheap Jack
They do not stay long at one
place of business but differ
from pedlars and hawkers in
the sense that, they do not
have shops of their own,
cheap jacks do hire small
shops in residential localities
to display their wares. They
shift from locality to locality
according to the prospects of
getting business.
 (d) Market traders
They are a type of small-
scale sole-proprietors who
hold stalls at different places
in different localities on
fixed days known as “market
days” which may be once a
week. They deal in a variety
of cheap goods which are of
consumers interests and
which are needed in every
household daily.
 (e) Street Traders
They are “pavement
retailers” who display
and sell their products
from pavements/
footpaths. They are
usually seen in
crowded cities and
handle light goods.
 (f) One-price Shop
It is a typical retail
trading where the
distinctive feature is the
sale at uniform price of
low-priced articles of
large variety which are
in continuous demand
e.g., pens, toys,
handkerchiefs, socks,
etc.
 Fixed Retailers
1. Small Independent
Retailer
(i) Street stall-holders
Such retailers operate on a small-
scale from small shops placed in
busy market places. They buy
goods in bulk from wholesalers and
also from local sellers, and resell
them to customers. Their field of
operations is very small and
limited. They are usually sole
traders and deal in goods needed by
customers in their day-to-day use.
(ii) Second-hand goods
dealers
They deal in used second-hand
goods like books, garments
(readymade), utensils etc. They
get their supplies from private
or public auctions and even
from private households. Such
retailers usually cater to the
needs of poor people who
cannot afford to buy new
articles.
(iii) General shops
Such retailers also known as
General Merchants and deal in a
variety of merchandise. They have
established shops in the market
place and stock goods ranging from
food products to daily house needed
articles. They are managed by
owners and often employ counter-
salesmen to assist them in their
selling activities. They even sell on
credit to established and old
customers and also provide free-
home delivery facility.
(iv) Speciality Shops
They are retailers who deal
only in one line of goods,
e.g., books, drugs, shoes, etc.
They operate from established
shops by owners themselves,
and since they deal in a
particular line of product
only, the retailers often
possess sufficient specialised
knowledge about the product.
2. Large Scale Retail Organizations
Some of the more prominent large-scale retail
organizations are as follows:
• Departmental Stores
• Multiple Shops or Chain Stores
• Mail Order Houses
• Super Markets
• Consumer Co-Operative Stores
• Hire-Purchase Trading Houses
• Vending Machines
a) Departmental Stores
A departmental store is a
large-scale retail organisation
having a number of
departments under one roof.
Each department specializes
in one particular kind of
trade. All these departments
are centrally organized and
are under one united
management and control.
b) Multiple Shops or Chain Stores
A multiple shop system is a network of branch
shops, situated at different localities in the city or
in different parts of the country, under a
centralized management and dealing in similar
lines of goods. Such multiple shops are very
common and popular in the West and are known
as Chain Stores.
c) Mail Order Sale Houses
Mail order sale is a retail business where orders are
placed by post or mail and goods are received
either by registered parcel or V.P.P. i.e., Value
Payable Post. Under such a type of selling, the
seller advertises his products in the leading dailies
and magazines of the area and the intending buyers
respond to such advertisements by requesting for
catalogues and price lists from the seller.
d) Super Markets
The super market is a
large-scale retail
institution specializing in
necessaries and
convenience goods. They
have huge premises and
generally deal in food and
non-food articles.
e) Consumer Co-Operative Stores
A consumer co-operative is a retail business which
is owned by the consumers themselves. Their basic
objective is to eliminate middlemen. The consumer
join together and manage the business and the
profit thus earned is retained among themselves in
the proportion of their contribution.
The society purchases in bulk and avails the
discounts and sells in small lots to the members.
Some of the co-operative stores are run on a large-
scale basis while others are small in size and nature.
1
f) Hire-Purchase Trading Houses
An agreement is made between the buyer and
the seller and shall make payments in
installments at regular intervals. The ownership
lies with the seller until the last installment is
paid by the buyer, and in case the buyer fails to
make the payment in full, the seller is free to
take back the goods from the buyer.
g) Vending Machines
Such selling machines are extensively used in the West. The
vending machine is operated by inserting a coin and the
buyer can get the articles. Vending machines are usually
acquired to sell articles like cigarettes, soft drinks,
chocolates, candles etc. Railway platform and bus tickets are
also sold by this method. The articles sold by a vending
machine are pre-packed and labeled and are usually of
reputed brands. The goods should be uniform in size and
shape and less bulky in weight. The installation of such
machines is an expensive affair and it needs regular
maintenance also. Such machines are quite attractive in
appearance and installed at busy shopping centers.
 Emergence of Organizations of
Retailing
Retail Industry, one of the fastest changing and
vibrant industries that, has contributed to the
economic growth of our country. Within a very
short span of time, Indian retail industry has
become the most attractive, emerging retail
market in the world.
Scope for the growth of Retail Industries in India/
Reasons for the growth of organized retail in India/
Factors influencing retail business in India

1. Growth of middle class consumers:

In India the number of middle class consumer is
growing rapidly. With rising consumer demand
and greater disposable income has given
opportunity of retail industry to grow and prosper.
They expect quality products at decent prices.
Modern retailers offer a wide range of products
and value added services to the customers.
2. Increase in the number of working women:
Today the urban women are literate and
qualified. They have to maintain a balance
between home and work. The purchasing habit
of the working women is different from the
home maker.
They do not have sufficient time for leisure and
they expect everything under one roof. They
prefer one-stop shopping Modern retail outlets
therefore offers one store retailing.
3. Value for money:
Organized retailers offer quality products at
reasonable prices. Example: Big Bazaar and
Subhiksha. Opportunity for profit attracts more
and more new business groups for entering in to
this sector.
4. Emerging rural market:
Today the rural market in India is facing stiff
competition in retail sector also. The rural
market in India is fast emerging as the rural
consumers are becoming quality conscious.
5. Entry of corporate sector:
Large business tycoons such as Tata’s, Birla’s,
and Reliance etc. have entered the retail sector.
They are in a position to provide quality
products and entertainment.
6. Entry of foreign retailers:
Indian retail sector is catching the interest of
foreign retailers. Due to liberalisation
multinationals have entered out country through
joint ventures and franchising. This further is
responsible for boosting organised retailing.
7. Technological impact:
Technology is one of the dynamic factors
responsible for the growth of organised retailing.
Introduction of computerization, electronic
media and marketing information system have
changed the face of retailing.
8. Rise in income:
Increase in the literacy level has resulted into
growth of income among the population. Such
growth has taken place not only in the cities but
also in towns and remote areas.
As a result the increase in income has led to
increase in demand for better quality consumer
goods.
9. Media explosion:
There has been an explosion in media due to
satellite television and internet. Indian
consumers are exposed to the lifestyle of
countries. Their expectations for quality products
have risen and they are demanding more choice
and money value services and conveniences.
10. Rise of consumerism:
With the emergence of consumerism, the retailer
faces a more knowledgeable and demanding
consumer. As the business exist to satisfy
consumer needs, the growing consumer
expectation has forced the retail organizations to
change their format of retail trade. Consumer
demand, convenience, comfort, time, location
etc. are the important factors for the growth of
organised retailing in India.
 Challenges faced by Retailers/ Problems
of Indian Retailing
1. The organized retail industry in India is faced
with stiff competition from the un-organized sector.
2. There is a shortage of infrastructure requirements
in our country.
3. Opposition to Foreign Direct Investment from
small traders affects retail industry.
4. Shortage of retail space in central and down-town
locations also hinders the growth of retail industry.
5. For settling property disputes, it consumes lot of
time.
6. Rigid building laws makes procurement of retail
space difficult.
7. Prohibition of Foreign investment in real estate
business.
8. Customs duties are levied on import of goods in
India.
9. Lack of trained workforce has been crucial factor
preventing many retailers from getting a firm grip in
their operations.
 What is Multi-Channel?
Retailers traditionally maintained a single department,
offering sales and support via a single mode of customer
interaction like the physical store. Over time this has
expanded to include multiple ways of selling to, engaging,
and interacting with the customer, primarily via mail,
catalogue and telephone.
Advancing technology however, has led to a number of
new ways of inter-personal interaction like the internet,
mobile phones, and interactive TV; and as these embed
deeper into social culture, subsequently new channels for
offering product and service.
• Multi-Channel then refers to the delivery
of customer propositions via multiple
channels
• Complete integration and sharing of
information and experience across all
channels is now being referred to as
Merged-Channel retailing
 Benefits
There are a huge number of both organizational and customer
related benefits to be gained from implementing a multi-
channel strategy. Here’s a few:
Organizational Benefits
• Increased revenue and growth opportunities – more touch
points into target market
• Better responsiveness and sensitivity to changing
environments
• Competitive advantage
• Organizational efficiency and effectiveness opportunities
through sharing of processes, technology and information
Customer Related benefits
• Better and wider customer interaction with a
greater variety of information available for
improved understanding of customers
• Increased customer loyalty
• Better customer experience
• Opportunities and the ability to switch
channels as convenient.
 Consumer buying behavior
Definition
Consumer buying behavior is the sum total
of a consumer's attitudes, preferences,
intentions and decisions regarding the
consumer's behavior in the marketplace
when purchasing a product or service.
 Consumer Buying Behavior Purchase
Process
Introduction
The consumer buying process is a complex matter
as many internal and external factors have an impact
on the buying decisions of consumers. Consumers
do not spend much time thinking about the purchase
of low value products which are bought on impulse.
When consumers purchase high value products or
non impulse products, they often go through a set
process. This process is discussed below.
 1. Problem or Need Recognition
How do you decide which particular product or
service to purchase? It could be that your DVD
player stops working and you now have to look
for a new one; otherwise you will not be able to
play your videos' So you have a problem or a
new need. This is the first step in the consumer
buying process.
 2. Information search
• Consumer often go on an information search to help them choose
their product.
• Sources of information include family, friends, retail staff and in this
digital age the internet. The internet contains information about
products (specifications), product reviews and online product
forums.
• Information search may involve a visit to a retail store to view
products that the consumer is interested in purchasing.
• Consumers also acquire and store information for future purchases.
Firms will take such consumers into account when designing their
marketing strategies, in the hope that when such a consumer is ready
to buy they will use the "stored" information about their product into
account and buy their products.
 3. Evaluation of different purchase
options
• Consumers often create a point system in their minds where
products are scored based on how many of their features appeal to
them.
• So for one customer, brand may be more important than price and
for another customer product appearance may be important.
• In the case of a DVD player consumers may be reviewing sound and
picture quality. An evaluation system is particularly useful when
there is a large number of options.
• Marketing strategies will try and influence this stage of the process
by highlighting product features that they think will appeal to
consumers. Appealing product features will be emphasized on
product packaging, promotional materials and the manufacturer's
websites.
 4. Purchase decision
• After the evaluation process consumers will select the
product they would like to purchase.
• The job of the seller is to ensure that the purchase process
is simple and effective. Even at this stage the purchaser
could change their mind and select a competitor product or
cancel the purchase altogether.
• A long queue, impolite sales staff or complicated sales
process can all dissuade consumers from buying. Even if a
consumer buys on this occasion a negative buying
experience could stop them buying in the future. Therefore
sellers need to make the buying process as simple and
enjoyable as possible to safeguard this and future
purchases.
 5. Post Purchase Behavior
• Manufacturers of products clearly want
purchasers to feel proud of their purchase, so
that they will purchase from them again and
recommend them to family and friends.
• Promotions should make purchasers feel that
they have bought their product from a strong
and reputable organization with "good"
products.
 Role of Retailing
Retail marketing is an essential component of an overall
marketing strategy. It supports the use of external
marketing campaign efforts including advertising, events
and promotions. Retail marketing tactics include in-store
signage, copies of newspaper sales circulars, coupons,
demonstrations and in-aisle promotions and displays.
Effectively executed, retail marketing serves to “close” the
sale once shoppers come inside the store. Incentives and
navigational devices are strategically used to sell specially
advertised products and cross-sell additional products and
services.
1. Support Advertising
Retail advertising is used inside of stores to
support national, regional and local advertising.
For example, if a national manufacturer for
detergent is conducting a television commercial
campaign offering consumers 20 percent off for a
limited time, the role of retail marketing is to
provide support via signage and displays inside of
stores when shoppers arrive to support the effort.
2. Drive Category Sales
Manufacturers and distributors for products sold
in stores are "categorized" by the type of product
they offer to retail customers. Products sold in
grocery stores are defined in terms of categories
for food, beverage, laundry, snacks and other
categories. Department stores are categorized in
terms of clothing, furnishings, décor, perfume
and more.
3. Cross-Selling and Up-Selling
Retail marketing also includes strategies and tactics
to cross-sell and "up-sell" products and merchandise
to increase overall expenditures by each shopper.
Example:
During the summer season a grocery store might
combine and "cross-sell" a promotion that gives
shoppers 50 percent off on the purchase of A
product with the purchase of a B Product. The up-
sell strategy could be to give the A Product free
with the purchase of a B Product.
 4. Shopper Navigation
• Category signage and other devices to direct shoppers to
locate products is a role of retail marketing whose
importance should never be underestimated.
• A busy mom needs clear directional signage to get to the
right store rack to purchase what she wants.
• A husband depends on store navigation to guide him to the
right shelf to purchase a drug medication needed for his
children, while the wife is at home giving care.
• Shopper marketing experts estimate that a shopper can
spend less than four seconds in making a decision on what
to purchase on a retail shelf. Providing proper navigation
to the appropriate store shelves helps guide customers to
products and generate merchandise sales.
5. Customer Relationship Management
Customer relationship management (CRM) is the term
used to describe information captured about shoppers.
The information is used to develop databases that can
be mined to target consumers based on their
geography, product preferences, expenditures and
more. CRM is a tool that savvy retail marketers use to
develop advertising, promotions and events by offering
products and services that align with the tastes and
preferences of their customers and shoppers.
Customer Relationship management

Customer Relationship management is the

strongest and the most efficient approach in
maintaining and creating relationships with
customers. Customer relationship management is
not only pure business but also ideate strong
personal bonding within people. Development of
this type of bonding drives the business to new
levels of success.
Once this personal and emotional linkage is
built, it is very easy for any organization to
identify the actual needs of customer and help
them to serve them in a better way. It is a belief
that more the sophisticated strategies involved in
implementing the customer relationship
management, the more strong and fruitful is the
business.
Why a CRM System is always important
for an organization?
• A CRM system consists of a historical view and analysis of all the
acquired or to be acquired customers. This helps in reduced
searching and correlating customers and to foresee customer
needs effectively and increase business.
• CRM contains each and every bit of details of a customer, hence it
is very easy for track a customer accordingly and can be used to
determine which customer can be profitable and which not.
• In CRM system, customers are grouped according to different
aspects according to the type of business they do or according to
physical location and are allocated to different customer managers
often called as account managers. This helps in focusing and
concentrating on each and every customer separately.
• A CRM system is not only used to deal with the existing
customers but is also useful in acquiring new customers. The
process first starts with identifying a customer and maintaining all
the corresponding details into the CRM system which is also
called an ‘Opportunity of Business’. The Sales and Field
representatives then try getting business out of these customers by
sophistically following up with them and converting them into a
winning deal. All this is very easily and efficiently done by an
integrated CRM system.
• The strongest aspect of Customer Relationship Management is
that it is very cost-effective. The advantage of decently
implemented CRM system is that there is very less need of paper
and manual work which requires lesser staff to manage and lesser
resources to deal with. The technologies used in implementing a
CRM system are also very cheap and smooth as compared to the
traditional way of business.
• All the details in CRM system is kept centralized
which is available anytime on fingertips. This
reduces the process time and increases productivity.
• Efficiently dealing with all the customers and
providing them what they actually need increases
the customer satisfaction. This increases the chance
of getting more business which ultimately enhances
turnover and profit.
• If the customer is satisfied they will always be
loyal to you and will remain in business forever
resulting in increasing customer base and
ultimately enhancing net growth of business.
In today’s commercial world, practice of dealing
with existing customers and thriving business by
getting more customers into loop is predominant
and is mere a dilemma. Installing a CRM system
can definitely improve the situation and help in
challenging the new ways of marketing and
business in an efficient manner. Hence in the era
of business every organization should be
recommended to have a full-fledged CRM
system to cope up with all the business needs.
 CRM in organized and unorganized
retailing
Organized retailing:
The Organized retailing refers to the trading
activities undertaken by licensed retailers that is
those who registered themselves for sales tax,
income tax, etc. These include the corporate –
backed hypermarkets and retail chains and also
the privately owned large businesses.
The various forms of organized retail are
a)Hypermarkets: They store products of multiple
brands comprising food items and non-food items.
b) Supermarkets: These are self service stores
selling food and personal care products.
E.g. Subhiksha.
c) Departmental Stores: Retails branded goods in
non-food categories. E.g. Shoppers stop.
d) Speciality Chains: These focus on branded
product or product category. E.g. Bata Convenience
Stores.
e)Malls: A huge enclosure which has different retail
formats. E.g. Pantaloon Retail.
Unorganized retailing:
Indian retail is dominated by a large number
of small retailers consisting of the local
kirana shops, owner-manned general stores,
chemists, footwear shops, apparel shops,
paan and beedi shops, hand-cart hawkers,
pavement vendors, etc. which together make
up the so-called “unorganized retail” or
traditional retail.
• Organized retailing is based on the principle of unity
and unorganized retailing is based on the principle of
singularity.
• Both organized and unorganized retailing is found in
most of the countries throughout the world.
• India and China are strong examples of countries in
which unorganized retailing dominated their markets.
Today these countries have a growing economy because
of the influx of organized retailers into their markets. The
last 3-4 years have witnessed the entry of a number of
organized retailers, opening stores in various modern
formats in metros and other important cities. The growth
in organized retailing in recent years can also be gauged
by the rise of shopping malls as well as the rising number
of modern retail formats.
 Trends in Retailing
In today’s era, the places in the cities have
become congested, infrastructure has changed,
transport facilities have increased, and the speed
of exchanging information has become
extremely fast. Retailers are adopting new
technology. Society is changing, consumers are
changing and so are the retailers. Retailing has
managed to keep itself paced with the changing
times.
• Retailers are changing their business formats,
store designs, modes of communication with
customers and ways of handling commercial
dealings.
• Modern retailers are adapting new technology for
marketing, retail operations, and business
transactions.
• Forward-thinking retailers are using social media
to communicate with the consumers.
• With the space crunch, modern retailers have
learnt how to use every inch of the floor
constructively.
• Apart from opening online retail store, the retailers
take the help of Augmented Reality (is the
integration of digital information with the user's
environment in real time.) such as 3D mock-ups to let
the customer try the products on themselves.
• Retailers are working progressively on delivery of
orders that customers placed through online shopping.
• Retailers are bringing something new now and then to
charm the customers. Those places where internet is
still not accessible, retailers are exploiting the power
of mobile phones to advertise their products.
• Today, the Internet has changed the way
products are advertised and the manner of
selling-buying transactions.
Here are some modern innovations in retail −
• Modern retail businesses such as malls,
specialty stores, and hypermarkets are using
micro development and contemporary
technology to increase customers’ shopping
experience and in turn generate business
revenue.
• Around the year 2000, online retail startups
started changing the face of retail businesses
around the world.
• Social media websites such as Facebook changed
consumer behavior as well as made retailers sweat
out to take the benefits and develop their brands.
• Modern e-commerce facilities enable faster
transactions and allow purchase on a simple 30-
day credit facility.
 FDI in Retailing
FDI can be defined as a cross border investment,
where foreign assets are invested into the
organizations of the domestic market. It brings
private funds from overseas into products or
services. The domestic company in which
foreign currency is invested is usually being
controlled by the investing foreign company.
Retailing is one of the worlds largest private
industry. Liberalizations in FDI have caused a
massive restructuring in retail industry. The
benefit of FDI in retail industry is its cost
factors. Opening the retail industry to FDI will
bring forth benefits in terms of advance
employment, organized retail stores, availability
of quality products at a better and cheaper price.
 Advantages of FDI in retail sector in
India
Growth in economy:
Due to coming of foreign companies’ new infrastructure will be
build, thus real estate sector will grow consequently banking
sector, as money need to be required to build infrastructure would
be provided by banks.

Job opportunities:
Estimates shows that this will create about 80Lakh jobs. These
career opportunities will be created mostly in retail, real estate.
But it will create positive impact on others sectors as well. Read
about career options in Retail sector…..
Benefits to farmers:
In most cases, in the retailing business, the intermediaries
have dominated the interface between the manufacturers or
producers and the consumers. Hence the farmers and
manufacturers lose their actual share of profit margin as the
lion’s share is eaten up by the middle men. This issue can
be resolved by FDI, as farmers might get contract farming
where they will supply to a retailer based upon demand and
will get good cash for that, they need not to search for
buyers.
Benefits to consumers:
Consumer will get variety of products at low prices
compared to market rates, and will have more choice to get
international brands at one place.
 Disadvantages of FDI in retail sector in
India
• FDI will drain out the country’s share of revenue to
foreign countries which may cause negative impact
on India’s overall economy.
• The domestic organized retail sector might not be
competitive enough to tackle international players
and might lose its market share.
• Many of the small business owners and workers
from other functional areas may lose their jobs, as
lots of people are into unorganized retail business
such as small shops.
 Assignment Topics
• Emergence of modern Indian retail: An
historical perspective
• Retailing- Current Scenario/ Status of the
retail industry in India.
• Trends in retailing
• Importance of CRM in the context of retail
Industry.
• CRM in organized and unorganized retailing.
• FDI in retailing