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Master of Business Administration Assignment Set- 1 MK0012 Retail Marketing - 4 Credits Q1. Discuss the role of retail sector in fostering the growth of Indian economy Ans.1.Indian Retail Sector: India is expected to be among the top 5 retail markets in the world in 10 years. The growth and potential of the sector is being widely acknowledged both in the domestic as well as international forums. India topped AT Kearneys Global Retail Development Index 2007 for the third consecutive year, retaining its position in the global market as the most preferred retail destination amongst emerging markets. Indians were judged the worlds most optimistic consumers, with large sections of the population considering now a good time to spend. Total estimated investment opportunity of US$ 5-6 billion in next five yrs . Evolution of the Retail Sector The origins of retailing in India can be traced back to the emergence of Kirana stores and mom-andpop stores. These stores used to cater to the local people. The first few companies to come up with retail chains were in textile sector, for example, Bombay Dyeing, S Kumars, Raymonds, etc. Later Titan launched retail showrooms in the organized retail sector. Shopping malls emerged in the urban areas giving a world-class experience to the customers with facilities like car parking targeted to provide a complete destination experience for all segments of society. Eventually hypermarkets and supermarkets emerged with to provide customer with 3 Vs i:e Value, Variety and Volume. Following characteristics are observed in retail environment: Highly developed market Highly concentrated market International players High density of outlets Fierce price competition Discounter expansion The evolution of the sector includes the continuous improvement in the supply chain management, distribution channels, technology, back-end operations, etc. this would finally lead to more of consolidation, mergers and acquisitions and huge investments. It also resulted in expanding target consumer segment: The Sachet revolution example of reaching to the bottom of the pyramid witness the tremendous growth of retail sector through variety and assortment.

Q2. List the differences between organised and unorganized retailing in Indian context. Ans.2. Customer relationship marketing in organised vs. unorganised retail sector Broadly the organized retail sector can be divided into two segments: . In-store retailers, who operate in fixed point-of-sale locations, located and designed to attract a high volume of walk-in customers, and . Non-store retailers, who reach out to the customers at their homes or offices. The organized retailers provide various standardized services to their customers. Large retail formats with high quality ambience and courteous and well-trained sales staff is the distinguishing features of these retailers. In most of the cases, they have a wide range of merchandise stocked with them so that the customers can enjoy a wider choice. People visit these stores not only for shopping but also for having a nice time outside their homes. The unorganized retailers in India, on the other hand, comprise of the kirana or small independent stores located in neighborhoods centres and central business districts of a city. These stores have a limited reach in the sense that people living in a particular locality visit stores in their own colony. The USP of these stores is the locational convenience they provide to their customers. They provide customized services to their customers and also go to the extent of procuring merchandise and delivering them to their customers on order. In the context of Indian traditional retail formats, one -can comfortably establish the significance of relationship marketing in the success of a retail store, particularly the relationship between retailers and customers. The existence of a sound relationship between these two entities (retailers and customers) comprehensively suggests the importance of the present unorganized retail network in India in the entire value chain. The strength of the relationship enjoyed by retailers with customers has provided them with the bargaining power in the value chain, particularly in developing economies where organized retailing is at a growing stage. Sound relationship between the two is mutually beneficial both economically and non-economically.

Q3. Describe the characteristics that define the new age consumers Ans.3. New Age Characteristics of Consumers The consumers have certainly become more aware and involved in their purchases. Here are few characteristics that define the new age consumers. 1. Young demographics -Indian market is characterized by a young demography. In India, 60% of the population is below the age of 30. The young consumers demand a new set of products and services. The rapid growth of Indian economy has created lot of opportunities for the younger consumers, which have enabled them to earn handsome amounts of money from a very young age. 2. Aspirational consumer -There is a growing demand for aspirational products in India, which the Indian marketers need to understand and analyse. Aspirational products need not be expensive products. Consumers now look for better designed products at a price that offers excellent value. That is why firms now increasingly understand the importance of design in marketing of products. 3. Value consciousness -It is true that propensity of spending has increased over the years and is still increasing but the Indian consumers have not let go of the value conscious nature. Even at the luxury end of the markets, consumers look for value in their purchases. There is an increased amount of time spent by consumers on product features and comparisons with competing brands. 4. Networked consumer-The number of networked consumers is increasing all over the globe. It is true for India also. Indian consumers are more connected with each other than ever before. While most of the consumer connection is happening in the worldwide web, the scope of networking is not limited to online. 5. Socially conscious -Indian consumers are also becoming more and more socially conscious. There is an increased awareness about good practices, trust, honesty, transparency and ethics. Soft values have become more important in the mind of the consumers. 6. Brand switchers -The ever increasing competitors have spoiled Indian consumers with choices. Be it automobiles, mobiles or toothpastes, Indian consumers have got plenty of brands to chose from. This choice has in a way allowed consumers to switch brands without much suffering. 7. Thinking beyond categories -Indian consumers have started thinking beyond product categories. Product categories are largely becoming irrelevant. The divisions between different categories are vanishing. Take the example of mobile phones which are now acting as a camera, music player, organizer, e-mail gadget and gaming device. In such an environment, the task of marketers has become more complex and critical than ever before. Faced with a rapidly changing market environment coupled with increased competition has created a need for a new set of marketing stills. Marketers now need to think beyond products in order to survive for the long term.

Q4. List the factors that affect the consumer buying decisions. Ans.4. Factors influencing consumer buying decisions 1.Cultural factor- Cultural factor divided into: . Culture: it is the set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. . Sub-culture: it represents a group of people with shared value systems based on common life experiences and situations . Social Class: Almost every society has some form of social structure, social classes are societys relatively permanent and ordered divisions whose members share similar values, interests and behaviour. 2.Social factors - A consumers behaviour also is influenced by social factors, such as the: . Reference Groups: It can be two or more people who interact to accomplish individual or mutual goals. These groups influence a persons behaviour . Family: Family is perhaps is the most important group influencing buyer behaviour. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services. . Roles and Status: A person belongs to many groups, family, clubs, and organizations. The persons position in each group can be defined in terms of both role and status. Personal factors - It includes: . Age and Life Cycle Stage: People change the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. . Occupation: A persons occupation also affects the goods and services bought. . Economic Situation: A persons economic situation will affect product choice. . Life Style: Life Style is a persons pattern of living, understanding these forces involves measuring consumers major AIO dimensions, i.e. activities (Work, hobbies, shopping, support etc.) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products). . Personality and Self Concept: Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to ones own environment. Psychological factors - It includes these factors: . Motivation: Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need. . Perception: The processes by which people select, organize, and interpret information to form a meaningful picture of the world. . Learning: Changes in an individuals behaviour arising from experience.

. Beliefs and Attitudes: Belief is a descriptive thought that a person holds about something. Attitude, a persons consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea. Q5. List the factors that influence retail store image. Write short note on visual merchandising. Ans.5.Visual Merchandising- Visual merchandising also referred to as display, is defined as the presentation of products in order to sell them. The initial point of interaction with a potential customer is in the window displays of the storefront. Hence, Visual merchandising is also known as Silent salesman, is the science and art of suggestive selling by display and presentation. Visual merchandising includes various aspects such as store floor plan, store windows, signs, merchandise display, space design, fixtures and hardware and the elements that come with it. Visual merchandising focal points are located strategically to circulate the customer in the store, and communicate the features and benefits of the merchandise besides the in-store promotion in vogue. This is done by converting a passer by to a browser with an effective window display, a browser to spender through the process of conversion, a spender to a big spender by increasing the ticket size assisted by the process of cross-merchandising. Following are the benefits of effective visual merchandising; Entertains, informs and educates the customer about the product / service in an effective and creative way Encourages a customer to wander about to discover novelties Re-affirms the stores image Arranges merchandise for easy access Draws the attention of the customer to enable him to take purchase decision within the shortest possible time and thus augment the shopping process Establishes a creative medium to present merchandise in a retail environment thereby creating a lasting impact and recall value Highlights merchandise to promote its sale Introduces and explains new products Gives ideas on how to use the products Encourages the customers to enter the store and shop Enhances the shopping experience Acts as an effective communication tool to customers Helps customers make buying decisions

Visual merchandising today has become more sophisticated and all encompassing than was arranging of merchandise for easy access to customers. Specifically, it combines and integrates an understanding of merchandise presentation, display and retail design.

Q6. Explain the limitations of Market Segmentation Ans.6. The concept of market segmentation is based on the fact that all consumers are not alike. They differ in their needs, wants, desires, income, education, lifestyles and so on. Market segmentation is the process of dividing the heterogeneous market into relatively homogenous sub-groups of consumers with somewhat similar characteristics. When a marketer selects one of more segments and develops a distinct marketing programme to accomplish marketing objectives, it is called target marketing. There are certain conditions that must exist for segmentation to be meaningful. Many approaches are used for segmenting the market. Some of the popular bases for segmentation are geographic, demographic, psychographic and behavioural. Other specific approaches have been used and found to be quite effective, such as segmentation based on lifestyles. Lifestyle approach is based on studying how consumers spend their spare time, what they consider important in their surroundings, what are their beliefs on broad issues and their self image. Such data is generally combined with demographic variables to furnish a clearer picture about consumers. The marketer generally has options either to adopt undifferentiated marketing, differentiated marketing, or concentrated marketing. Limitations of Market Segmentation Market segmentation has certain limitations too. Some of them are as follows: . Targeting multiple segments increases marketing costs. . Segmentation can lead to proliferation of products. . Narrowly segmenting a market can hamper the development of broad-brand equity.