“RETAIL MANAGEMENT OR SECTOR IN INDIA”

A PROJECT REPORT
SUBMITTED BY

MAMATHA S. G.

3RD B.COM. 6TH SEMESTER

UUCMS NUMBER : U06VA21C0160

In partial fulfillment for the award of the degree

Of

BACHELOR OF COMMERCE

In
DEPARTMENT OF COMMERCE AND MANAGEMENT

SIR M. V. GOVT ARTS AND COMMERCE COLLEGE. NEW TOWN

KUVEMPU UNIVERSITY : BHADRAVATHI – 577301

SHIVAMOGGA DISTRICT, KARNATAKA STATE

July - 2024

BONAFIDE CERTIFICATE
1
Certified that this project report on “RETAIL MANAGEMENT OR SECTOR IN INDIA”
is the bonafide work of “MAMATHA S. G. (U06VA21C0160)” Who carried out the
project work under my supervision.

SIGNATURE
MR. MANJAPPA R. (Ph.D),
HEAD OF THE DEPARTMENT, [HOD]
ASSOCIATE PROFESSOR,
Department of commerce and management,
Sir M. V. Govt Arts And Commerce College,
New town,Bhadravathi -577301

SINGNATURE
MR. GURUPRASAD B.
SUPERVISOR,
ASSOCIATE PROFESSOR,
Department of commerce and management,
Sir M.V. Govt Arts And Commerce College,
New Town, Bhadravathi – 577301

The project report submitted for the viva voce held on………………..

ACKNOWLEDGEMENTMENT

2
Motivation causing people to act in certain direction is very necessary for the
success task. “Behind every successful student there is a teacher”. I feel happy
and proud to mention those who motivated me and contributed directly or
indirectly in making this successfully.

I take this opportunity to express my sincere thanks To Mr. Manjappa R., HOD of
commerce, Sir. M. V. Government Arts and Commerce College, Bhadravathi.

My sincere thanks to Mr. Guruprasad B. , Assistant professor, Department of

Commerce, Sir M. V. Government Arts and Commerce College, Bhadravathi. My
project guide for her valuable guidance and constant encouragement throughout
the study.

I would like to offer my whole hearted gratitude to all faculty members, and non-
teaching staff, Sir M. V. Government Arts and Commerce College, Bhadravathi
and other friends for being so encouraging, supportive and for bearing
throughout the study.

I would like to offer my sincere thanks to Manager, Bank of Baroda, Bhadravathi,

with timely co-operation my endeavor would not have been success.

I am pleased to place my profound etiquette to my beloved father Mrs. Gopi S.

and mother Ganga G. and brother vignesh S. G. for their encouragement,
affection and love throughout my career. I thank all my friends who directly or
indirectly helped me in completion of this work.

Date:

Place: Bhadravathi Mamatha S. G.

Form:

Mamatha S. G.
3
6th semester B. Com
Department of Commerce and Management
Sir M. V. GovernmentArts and Commerce College
Bhadravathi – 577301, Shivamogga District, Karnataka State
UUCMS Number: U06VA21C0160

Declaration
I hereby declare that,

1. The work contained in this report is original and has been done by me
under the guidance of my supervisor, Mr. Guruprasad B.

2. The work has been submitted to any other University for any Degree or
Diploma.

3. I have followed the guidelines provided by the department in preparing

the report.

4. I have conformed to the norms and guidelines given in the ethical code of
conduct of the department.

Whenever I have used materials (data, theroretical analysis, figures, and text)
form other sources, I have given due credit to them by citing them in the text
of the report and giving their details in the references.

Date: Mamatha S. G.

Kuvempu University
Sri M. V. Government Arts and Commerce College,
4
 Bhadravathi -577301, shivamogga District,
Karnataka state

Certificate

This is to certify that Mamatha S. G. is a bonafide student of this Department

and this Project Report on “Retail Management Or Sector in India” has been
prepared by her in partial fulfillment of the requirement for the Degree of
Commerce under my guidance.

Mr. Guruprasad B.

Date: (Assistant professor)

Kuvempu University
Sri M. V. Government Arts and Commerce College,
5
 Bhadravathi – 577301, Shivamogga District,
Karnataka state

Certificate

This is to certify that Mamatha S. G. is a bonafide student of this Department

and this Project Report on “Retail Management Or Sector in India” has been
prepared by her in partial fulfillment of the requirement for the Degree of
Bachelor of Commerce under the guidance of Mr. Guruprasad B., Assistant
professor, Department of Commerce, Sir M. V. Government Arts and Commerce
College, Bhadravathi.

Mr. Manjappa R.,

Date: (HOD of Commerce)

Kuvempu University

6
 Sir M. V. Government Arts and Commerce College,
Bhadravvathi – 577301, Shivamogga District,
Karnataka State

Certificate

This is to certify that Mamatha S. G. is a bonafide student of this Department and

this project Report on “Retail Management Or Sector in Indai” has been prepared
by her in partial fulfillment of the requirement of the Degree of Bachelor of
Commerce under the guidance of Mr. Guruprasad B. , Assistant professor,
Department of Commerce, Sir M. V. Government Arts And Commerce College,
Bhadravathi.

Dr. Shailaja S. Hosaller

Date: (Principal)

 Contents
SL. No.

7
 Module Name

Page No.

Module -1

Introduction on retailing

1.1 Meaning and Definition

1.2 Characteristics

1.3 Merits and Demerits

8
1.4 Wheel of Retailing

1.5 Retail life cycle

1.6 Types

1.7 Present Indian Retail Scenario

Module – 2

Retailing Strategy for Setting up Retail Organization and Planning

9
2.1 Retail Market Strategy

2.2 Components of Retail Strategy

2.3 Basic Steps in Retail Strategy

2.4 Process of Setting up a Retail

10
2.5 Mixed Organizational Pattern

2.6 Steps in the Strategic Retail Planning

Module – 3
Store Management and Visual Merchandising

3.1 store Management

3.2 Store Security

11
3.3 Store System and Procedures

3.4 Visual Merchandising Coures

3.5 Types of Visual Merchandising

3.6 Analysing of Visual Merchandising Performance

12
Module - 4
Retail Pricing

4.1 Introduction

4.2 Elements of Retail Price

4.3 MSRP and ELDP

13
4.4 Bundling, Leader, and Time Pricing

Module - 5
Relationship Marketing & Intrnational Retailing

5.1 Customer Relationship Management (CRM)

5.2 Relationship Marketing Strategy

14
5.3 Defined Intrenational Retailing

5.4 Nonstore Retailing

5.5 New Marketing Challenges

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15
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 Module – 1

 Introduction On Retailing

Overview:
- 1.1 Meaning And Definition
- 1.2 Characteristics
- 1.3 Merits and Demeries
- 1.4Wheel of Retailing
- 1.5Retail Life Cycle
- 1.6 Types
- 1.7 Present Indian Retail Scenario

16
 1.1Meaning And Definition of Retailing

Meaning: Retailing Perspectives focuses on the financially sustainable strategies

retailers use to appeal to consumers.

Retailing is seen as a contrast to wholesaling, which typically involves selling in

mass quantities at lower prices. Retailers frequently buy in bulk from
wholesalers, then repackage merchandise for individual sale.

Definition: Retailing is the selling of goods and services to consumer end users.
Retailing is seen as a contrast to wholesaling, which typically involves selling in
mass quantities at lower prices.

Retailers frequently buy in bulk from wholesalers, then repackage merchandise

for individual sale. A retailer’s profit is based in part on the difference between
the wholesale and retail prices of merchandise bought and sold.

Characterisitics of Retailing

17
Characterisitics :

Retailers are referred to as middlemen or intermediaries. They occupy a middle

position, receiving and passing on products from producers and wholesalers to
customers. Services carried out by retailers are different from those of
wholesalers. The characteristics of retailers are listed below.

1.Marketing orientation: Retailing is a dynamic industry. It keeps growing by

moving retail operations into new markets. Markets are ever-changing and
characterized by risk and threat. Retail marketing therefore, requires different
types of decisions to be made in the complexity of the situations.

2.Multi-channel retailing: Retailers act of operations is tilted more to serve

sophisticated consumers. Recently, the impact of e-retailing as received
considerable attention. The success model for, most retail sectors is multi-channel
retailing.

(a)In the extended channel of retail distribution, manufacturer, wholesaler and

retailer provide a chain of facilitating services in order to sell the right product to
the final customers.

(b)In the limited channel, a retailer works directly with the producer.

3. Innovative methods of thinking and planning: Successful retailing requires

innovative methods of thinking and planning. New idea is generated to take
advantage of opportunities or to improve existing methods of marketing.
Retailers make clear propositions of theirretail offer.

18
Right environment: A retailer has to create the right environment, offer
additional advantages and value or loyalty schemes in order to ensure that the
customer is offered a comprehensive package of benefits.

Unique characteristics’ of a retailer:

 The retailer’s interface with the customer is service-based.

 Retailers sell small quantities of items on a frequent basis.
 Retailers provide convenience in terms of location, credit facilities, range of
merchandise, after – sales service, etc.
 Retailers offer selection an assortment of merchandise related to the target
market in order to provide choice.
 Retailers trade with general public.
 Retailers normally charge higher unit prices than a wholesaler.
 A retailer’s pricing policy is simpler than that of the wholesaler.

1.3Merits and Demerits of retailing

Merits of Retailing:

 Easy access to market - in many ways the access to market for entrepreneurs
has never been easier. Online marketplaces such as eBay and Amazon allow
anyone to set up a simple online shop and sell products within minutes.
 Reduced overheads - selling online can remove the need for expensive retail
premises and customer-facing staff, allowing you to invest in better marketing
and customer experience on your e-commerce site.
 Potential for rapid growth - selling on the internet means traditional
constraints to retail growth - eg finding and paying for larger - are not major

19
 factors. With a good digital marketing strategy and a plan a scale up order
fulfilment systems, you can respond and boost growing sales.
 Widen your market/export - one major advantage over premises-based
retailers is the ability to expand your market beyond local customers very
quickly. You may discover a strong demand for your products in other
countries which you can respond to by targeted marketing, offering your
website in a different language, or perhaps partnering with an overseas
company.
 Customer intelligence - ability to use online marketing tools to target new
customers and website analysis tools to gain insight into your customers'
needs.

Demerits of retailing:

 Website costs - planning, designing, creating, hosting, securing and

maintaining a professional e-commerce website isn't cheap, especially if you
expect large and growing sales volumes.
 Infrastructure costs - even if you aren't paying the cost of customer-facing
premises, you'll need to think about the costs of physical space for order
fulfilment, warehousing goods, dealing with returns and staffing for these
tasks.
 Security and fraud - the growth of online retail market has attracted the
attention of sophisticated criminal elements. The reputation of your business
could be fatally damaged if you don't invest in the latest security systems to
protect your website and transaction processes.
 Legal issues - getting to grips with e-commerce and the law can be a challenge
and you'll need to be aware of, and plan to cope with, the additional
customer rights which are attached to online sales.
 Advertising costs - while online marketing can be a very efficient way of
getting the right customers to your products, it demands a generous budget.
This is especially true if you are competing in a crowded sector or for popular
keywords.

20
Customer trust - it can be difficult to establish a trusted brand name, especially
without a physical business with a track record and face-to-face interaction
between customers and sales staff. You need to consider the costs of setting up a
good customer service system as part of your online offering.

1.4Wheel of Retailing

Definition: The Wheel of Retailing is a theory to explain the institutional changes

that take place when innovators, including large business houses, enter the retail
arena. Description: The Wheel of Retailing is a hypothesis that describes how
retailers approach to capture market share and create brand value.

 1.5Retail Life Cycle

A theory of retail competition that states that retailing institutions, like the
products they distribute, pass through an identifiable cycle. This cycle can be
partitioned into four distinct stages:

o innovation
o accelerated development
o maturity
o decline

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 1.6 Retailing Types in India

 Malls: The largest form of organized retailing today. Located mainly in metro
cities, in proximity to urban outskirts. Ranges from 60,000 sqft to 7,00,000sqft
and above. They lend an ideal shopping experience with an amalgamation of
product, service and entertainment, all under a common roof. Examples
include Shoppers Stop, Piramyd, Pantaloon.
 Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai
books retailer Crossword, RPG's Music World and the Times Group's music
chain Planet M, are focusing on specific market segments and have
established themselves strongly in their sectors.
 Discount Stores: As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching economies of
scale or excess stock left over at the season. The product category can range
from a variety of perishable/ non perishable goods.
 Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to
a variety of consumer needs. Further classified into localized departments
such as clothing, toys, home, groceries, etc.
 Hyper marts/Supermarkets: Large self service outlets, catering to varied
shopper needs are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all food &

22
 grocery organized retail sales. Super Markets can further be classified in to
mini supermarkets typically 1,000 sqft to 2,000 sqft and large supermarkets
ranging from of 3,500 sqft to 5,000 sq ft. having a strong focus on food &
grocery and personal sales.
 Convenience Stores: These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the
day, seven days a week. Prices are slightly higher due to the convenience
premium.
 MBO’s: Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy
market places and Metros.

1.7 Present Indian Retail Scenario

Indian retail sector has been growing rapidly with various factor effecting to its
rise. The few vital factors would be the increase in digitization, purchasing
power of consumers, urbanization and rapidly changing lifestyle of the
consumers.

A sharp rise and improvement in the consumption pattern of Indians has been
noted that has resulted in the retail sector grow and the sector is expected to
record a growth of $1.3 trillion by 2020. There is a positive impact seen in the
section of organized retail. At present the organized retail penetration is 7
percent and its expected to reach 10 percent .Also the organized retail market is
also going to grow and reach the level of 19 percent which is currently at the
level of 9 percent, according to reports published.

23
When closely observed, its seen that there has been a great penetration of the
bigger brands in smaller cities and people of India are able to enjoy the top MNC
brands that previously were not in their reach. This can be directly linked to the
increase in purchasing power of consumers. Superior customers experience has
noted elevated intensity and the consumers are looking up to goods that a
decade ago was not a part of their lifestyle.

In years there have been many foreign brands which have understood the Indian
market and have established firmly in the Indian market. They continue to flourish
as the consumers are buying their products. This is a very good & positive sign
which shows the changes occurring in retail industry. Foreign Direct Investment is
another vital reason for increasing consumerism. With the liberalization of FDI,
there will be a hike in investments pumped in by major companies. With this we
can also see a positive change in the lifestyle of consumers. The taste and
preferences of consumers in India has been changing. And this is bringing India, at
par with the consumption pattern of the developed nations. Changes in
Government policy have attracted many international giants to look for a
favorable chance of prosperity in Indian retail market.

The ease in government norms regarding FDI has made India relish & enjoy the
consumption pattern that is being followed across developed nations. Goods and
Services Tax (GST) is another major step that has been taken in terms of retailing.
This has impacted & given a boost to the foreign brands and they are keen in
investing into Indian market. When there is one single framework applicable to a
huge variety of investment procedure then the foreign brands are highly keen in
24
making a penetration. Present scenario of Indian retail industry is the replica of
the same.

From unorganized retail there has been a transition to the organized retail that
has streamlined the process. With this we can predict that the Indian retail
industry is heading steadily towards a new era.

Module – 2

Retailing strategy for setting up Retail Organization and

Planning

Overview:
- 2.1 Retail market stratrgy

- 2.2 Components of retail strategy

- 2.3 Basic Steps in retail stratrgy

25
- 2. 4 Process of setting up a retail organization

- 2.5 Mixed organization Pattern

2.1 Retail market strategy

Retail marketing strategies are methods for campaign design and management
that enhance brand and product visibility in the market for increased sales
performance. These strategies consider factors such as product pricing, store
placement and promotional materials to meet the needs and wants of their
consumers in terms of cost, convenience and communication. A marketing
strategy focused on retail products and performance aims to establish a reliable
and trustworthy brand image that offers a certain customer experience that's
different from its competitors. As the retail market constantly fluctuates with
trends and consumer behaviors, companies adapt their strategies to remain
relevant.

Consider the following strategies to enhance your retail marketing campaigns:

1.Customer communication:

Allowing open communication with your customers is a useful approach for

developing trust and customer loyalty.

2. Customer surveys:

Including surveys for customer satisfaction on company websites, product

purchase emails, and in-store receipts allows you to analyze and predict trends in
sales performance and consumer buying habits.

3. In-store interaction

With interactive in-store displays and features, you can encourage shoppers to

26
promote your company or product with things such as photo booths, wall murals,
and other attractive imagery.

4. Launch events

Hosting product launch events in-store or online can attract new or returning
customers to view the launched product and other products from your brand.

2.2 Components of Retail strategy

Whether you are a small boutique or a large multinational corporation, having a

clear and well-defined retail strategy is crucial to long-term success in the
competitive retail landscape. So let’s dig deeper and explore in more detail the
core components of a retail strategy.

1.Customer segmentation for targeted marketing:

In addition to understanding the target market, customer segmentation is
another crucial component of a successful retail strategy.

2.Strong brand positioning for differentiation:

A crucial aspect of a sound retail strategy is brand positioning for differentiation.
By differentiating themselves from the competition, companies can establish a
unique identity and stand out in the crowded retail marketplace.

3.Data-driven information to drive decision making:

In today’s fast-paced and highly competitive retail industry, data-driven insights
play a crucial role in driving decision making.

2.3 Basic steps in retail strategy

Strategic planning is a formal process. Thus, it is marked by specific activities in

which firms engage to build a marketing plan, ensuring that the entire

27
organization is aligned on strategic priorities. The actions included in strategic
planning are:

1. Objective Setting
2. Situational Analysis
3. Customer Analysis
4. Tactical Planning
5. Implementation and Control

1. Objective Setting:

A firm might pursue any number of objectives for any number of reasons. For
example, an objective around sales could be expressed by total revenue, total
units, or YOY (year over year) growth.

2. Situational Analysis:

Situational analysis helps decision-makers in the firm understand what to do and

how to do it.

3. Customer Analysis:

Customer analysis is a critical activity that ultimately helps focus marketing and
sales resources more efficiently. It includes research into and analysis of
consumer behavior, the results of which inform segmentation, targeting, and
positioning.

4. Tactical Planning:

Tactical plans are the short-term actions the firm takes to affect the controllable
elements of the strategy. For example, if a firm has the objective to “grow
category sales by 4% by increasing merchandising and promotional activity,” a
relevant tactic might be to plan robust promotional activity in key seasons.

28
 5. Implementation and Control:

Implementation and control refers to how the firm puts its strategic plan into
place, including how it organizes cross-functionally and communicates priorities.
Further, it also includes how the firm tracks progress toward its objectives,
measuring performance so that adjustments can be made, if necessary.

2.4 Process of setting up a retail Organization

The process of setting up a retail organization is divided into five steps. These are
discussed as follows:

(1) Tasks to be performed:

The general tasks in a retail organization vary from organization to organization

and size to size but these are some common retail activities that are usually
applicable to all sorts of retail distribution channel.

(2) Division of tasks among channel members and customers:

Although the above mentioned various activities take place in a retail channel but
a retailer is not supposed to accomplish all the tasks. Some of these activities are
usually performed by the manufacturer, wholesale professional, customer or
retailer itself.

(3) Grouping tasks into responsibilities:

After considering and finalizing various retail activities necessary to be performed

in a store, a retailer groups these activities into job profiles those will be handled
by a particular employee/group of employees.

(4) Classification of jobs:

After grouping tasks into jobs, next step in setting up a retail organization is to

29
classify the jobs under functional, products, geographical, or combination
classification system.

(5) Developing an organizational chart:

This is the last step of organizing a retail firm. For the purpose of understanding
the concept, various organizational patterns are given as under:

30
 2.5 Mixed Organizational pattern

In project management, a mixed organization refers to a structure that combines

elements of both functional and projectized organizations. This type of
organization allows for a more flexible and efficient approach to managing
projects within the construction industry. Here are a few examples of mixed
organizations in project management:

1️⃣ Matrix Organization: This structure blends functional departments with

project teams. Construction professionals in a matrix organization report to both
a functional manager (such as a civil engineer) and a project manager. This allows
for better resource allocation and coordination between different projects.

2️⃣ Composite Organization: In a composite organization, project teams are

composed of members from different functional departments. This enables cross-
functional collaboration and knowledge sharing among construction professionals
with diverse expertise.

3️⃣ Virtual Organization: This type of organization brings together professionals

from different companies or locations to work on a project. Through virtual
communication tools and technology, construction professionals can collaborate
effectively, even if they are physically dispersed.

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 Module – 3

Store Management and Visual Merchandising

Overview:
- 3.1 Store management
- 3.2 Store Security
- 3.3 Store Systems and procedures
- 3.4 Visual merchandising Courses
- 3.5 Types of Visual Merchandising
- 3.6 Analysing of Visual Merchandising Performance

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 3.1 Store management

Store management involves operating and monitoring all aspects of a retail

or wholesale store. This means working with employees, suppliers and customers.
Effectively managing a store can boost sales and improve the customer
experience. This role involves many retail elements, including inventory, sales and
marketing. Understanding each component of managing a store can help a
business run an efficient and successful store.

3.2 Store Security

Retail security refers to the actions that retailers take to keep shoppers and
colleagues safe and to reduce the risk of theft. Strategies for achieving this
include installing CCTV cameras, hiring retail security guards and implementing
various merchandising or store layout techniques proven to reduce theft risk.

The type of security a retailer implement depends on what they sell, their
location, and the characteristics of the retail unit. Some premises are at a higher
risk of theft than others, particularly those that sell small, high-value items, such
as jewellery stores.

3.3 Store systems and procedures

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 The systems and procedures in stores can be broadly studied under four heads,
viz. identification system, receipt system, storage system and issue system. The
overall system of store functioning along with the major input-output documents
at each state is shown in Figure I. A substantial amount of information is required,
at every stage, for checking, controlling and feedback purposes. The stores
systems have been discussed with reference to the physical system as well as the
recording or information system.

To have effective control and proper accounting of materials, a professionally

managed Stores has the following main functions:

 Receiving
 Custody
 Inventory Control
 Disposal
 Receiving

3.4 Visual merchandising Courses

Visual Merchandising is the art of presenting a product or service creatively to

clients to boost sales. With the malls, retail outlets and boutiques mushrooming
across the country, visual merchandising has become a lucrative career field.
Candidates who wish to make their career in visual merchandising can pursue
diploma/degree/post-graduation/certificate courses in this field. The basic
eligibility required to apply for visual merchandising courses in various
institutes/colleges/universities is 10+2. The course would cost candidates
approximately 4 lakh to 5 lakh (varies from institute to institute). The career
choices in the field of visual merchandising are visual merchandiser, visual
merchandising manager, visual merchandising coordinator, visual manager etc.
Visual Merchandising Courses
The visual merchandising course is available in many specialisations for
candidates to choose from. These specialisations are mentioned in the table
below.

34
 3.5 Types of Visual merchandising

 Interior displays: Interior displays are displays arranged

inside the store that can include products and decor.

 Store layout: Visual merchandising includes how a store

is laid out, including where certain products are placed,
the flow of products from front to back of store, where
points of sale are and where dressing rooms are.

 Mannequins: The type, styling and positioning of

mannequins can communicate messages to your
customers.

 Point of purchase display: The signage, decor and

physical structure of points of purchase are part of visual
merchandising.

 Bundling: Bundling refers to displaying products together

to show customers how they might use multiple products.

 Store environment: The atmosphere of your brick and

mortar or digital space can create a tone for your brand,
such as loud and fun or serene.

 Window displays: Window displays are an important part

of visual merchandising that can catch the attention of

35
 people passing your store, which can lead to more
customers.

 Outdoor signage: Outdoor signs communicate what your

business is and set the tone for your space.

 Exterior fixtures: Exterior fixtures, such as marquees,

banners and awnings, provide the customer's first
impression of your store.

 Seasonal displays: Seasonal displays can show off new

merchandise, encourage add-on purchases and create
interest.

 Product information: Where and how you communicate

product details, including size of labels and signs,
typeface and tone of content, can reflect on your
company's brand.

 Design decisions: Design decisions, like flooring, textiles

and other materials can create a physical representation
of your brand's aesthetic.

3.6 Analysing of Visual Merchandising Performance

There are three methods of analyzing merchandising performance:

1.ABC ANALYSIS- ABC analysis ranks merchandise by a pre-determined

performance measure. This helps determine which items should never be out of
stock, which items should occasionally be allowed to be out of stock and which
items should be deleted from the stock selection. An ABC analysis can be done at
any level, for merchandise classification from Stock Keeping Unit(SKU) to
department. ABC analysis utilizes the 80:20 principles, which implies that 80% of
the sales come from 20% of the products.

36
 The first step in the ABC analysis is to rank orders SKUs, using one or more
criteria. The most important performance measure for this type of analysis is
contribution margin, where Contribution margin = Net Sales – Cost of Goods Sold
– Other variable expenses. Other variable expenses can include sales
commissions. Sales can be the sales per square foot, the gross margin or the
GMROI.

2.SELL THROUGH ANALYSIS - A sell through analysis is a comparison between the

actual and the planned sales, to determine as to whether early markdowns are
required or whether more merchandise is needed to satisfy demand. There is no
reel, which can determine when a mark down is necessary. It depends on factors
like the past experience with the merchandise whether the merchandise is
schedule to feature in advertising, whether the vendor can reduce the buyer’s risk
by providing markdown money, etc.

3.MULTIPLE ATTRIBUTE METHOD - This method uses a weighted average score

for each vendor. Thefollowing steps are followed:

1.Developed a list of issues to consider for decision – making – vendor reputation,

service, merchandise quality, selling history, etc.

2. Give importance weights to each attribute.

3. Make judgment about each individual brand’s performance on each issue.

4. Combine the importance and performance scores.

5. Add all to arrive at the brand scores.

37
 Module – 4
Retail Pricing

Overview:
- 4.1 Introduction
- 4.2 Elements of retail price
- 4.3 MSR and EDLP
- 4.4 Bundling, Leader and Time pricing

4.1 introduction

Introduction: We as customers, often get to read advertisements from various

retailers saying, “Quality product for right price!” This leads to following questions

38
such as what is the right price and who sets it? What are the factors and
strategies that determine the price for what we buy? The core capability of the
retailers lies in pricing the products or services in a right manner to keep the
customers happy, recover investment for production, and to generate revenue.
What is Retail Pricing? The price at which the product is sold to the end customer
is called the retail price of the product. Retail price is the summation of the
manufacturing cost and all the costs that retailers incur at the time of charging
the customer.

marketing expenses, and desired profit margin. The formula for calculating retail
price is:

Retail Price = Cost of Goods + Markup.

crucial for the success of any business and is something many small business
owners need help with.

4.2Elements of retail price

PRICE: Thrift-conscious behavior kicked into high gear in 2008, and now it’s
become standard for price-conscious consumers who want to be sure that they're
getting a good value for their hard-earned rupees.

LOCATION: Selection of fuel retail locations is a complex process with many

angles to consider. Site location must be understood relative to consumers and
their habits — where they live, work, go to school, run errands and play.

MARKET:Every fuel retail site exists in the context of a broader competitive

landscape. Successful fuel retailers understand their key competitors and have
insight into how they might react to marketplace changes. Although the
hypermarkets have proven to be fierce competition to many, best-of-practice
retailers — those who manage all 7 Elements — are thriving against them.
39
MERCHANDISING:Offering the right products and services, at the right time and
with the right attitude, is the art and science of merchandising. Success depends
on the correct product mix, adequate inventory, fresh merchandise and a clean,
neat appearance.

FACILITY: A facility must fulfill the needs and demands of customers. That goes
well beyond considerations about the physical building. Efficient flow through the
shopping and purchase experience is crucial.

OPERATIONS:Site-specific, personal and often intangible aspects of

management and customer service should complement the investment at any
specific site.

BRAND:Whether a local hero or multinational giant, a company’s ethos, quality

and consistency is reflected in its brand. Retailers should understand the position
of their brand relative to critical mass and saturation.

4.3MSRP and EDLP

MSRP: The manufacturer’s suggested retail price (MSRP) is the price that a
product's manufacturer recommends it be sold for at the point of sale. Any retail
product can have an MSRP, but the term is frequently used with automobiles. An
MSRP is sometimes informally known as the "sticker price."

The MSRP is also referred to as the list price by some retailers. Other higher-
priced goods, such as appliances and electronics, may have an MSRP as well.

The MSRP is designed to keep prices at the same level from store to store.
However, retailers are not required to use this price, and consumers do not
always pay the MSRP when they make purchases. Items may be sold for a lower

40
price so a company can reasonably move inventory off shelves, especially in
a sluggish economy.

The manufacturer’s suggested retail price (MSRP) is the price that a product's
manufacturer recommends it be sold for at the point of sale. Any retail product
can have an MSRP, but the term is frequently used with automobiles. An MSRP is
sometimes informally known as the "sticker price."

KEY TAKEAWAYS

 The manufacturer’s suggested retail price (MSRP) is the sticker price

recommended by a product's producer to retailers.
 They are frequently used in the sale of automobiles, although most retail
products come with an MSRP.
 MSRP is different from the invoice price, the price a dealer or retailer pays
a manufacturer.
 Many retailers will sell products below the MSRP to reduce inventory,
attract more consumers, or during a sluggish economy.
 Conversely, some retailers will set prices higher than the MSRP for
products in high demand.

ELDP: The Executive Leadership Development Program is designed for high

potential employees at the GS-13 and 14 levels or equivalent whose career plans
include moving into upper management positions. It is one of the “flagship”
leadership development programs managed and funded by the Department of
Commerce that support the Human Capital Management Plan and workforce
succession planning.

The Executive Leadership Development Program (ELDP) was commissioned by the

U.S. Department of the Interior’s Office of Insular Affairs in 2008 to assist the

41
 insular governments with developing and retaining the qualified and skilled staff
needed to lead insular governments into the future. Today, the ELDP serves as the
premier leadership development program for government employees throughout
the U.S. affiliated Pacific Islands. For the past twelve years, the ELDP has provided
insular government participants with the skills and strategies they need to lead.
Energized by their program experience, the 149 ELDP alumni represent an
extraordinary group of Islanders with diverse professional backgrounds,
exceptional personal qualities, and an enduring commitment to public service.
ELDP alumni represent virtually every government agency, and serve the insular
governments as elected representatives, ambassadors, judges, cabinet members,
directors, and dedicated public servants.

4.4 Bundling, Leader and Time pricing

Bundling pricing: Bundle pricing is a business sales strategy that involves offering
two or more related products and services as a package at a discounted price.

The goal of bundle pricing is to increase customer satisfaction by providing access

to multiple products while also improving profitability by increasing the average
deal size. An added benefit is that it increases customer spending as well.

Several business models use some form of bundle pricing in their overall pricing
strategy:

 Business-to-Business (B2B): Businesses that sell products and services to other

businesses often bundle items that fit into their customers’ overall business
processes.
 Business-to-Consumer (B2C): Retailers often bundle items that are
complementary to each other in order to increase the overall value of the
purchase for customers.

 Hospitality: Hotels and resorts often bundle services such as spa treatments,
meals, or activities into a package deal. Restaurants and fast-food chains may also
bundle a meal or snacks into one offer.

42
 Service Providers: Cloud services, hosted IT services, and other service-based
providers often bundle their services into packages with different levels of access
or features. Internet, cable, and cell phone providers use the same strategy to
offer different combinations of services and features.

Leader pricing: Leader pricing is a strategic approach used by retailers to offer

certain products or services at a price lower than their competitors. This method
is employed to attract customers, increase foot traffic, and encourage additional
purchases while capturing a larger market share. The primary purpose of leader
pricing is to create a competitive advantage and establish the retailer as a market
leader in terms of pricing.

Some of the essential components of leader pricing include:

 Strategic Product Selection: Retailers carefully select specific products to be

marked at a substantially lower price than the competition. These products
are usually essential or frequently purchased items, enticing consumers to
visit the store.
 Temporary Price Reductions: Leader pricing is often temporary, with the aim
of capturing customer attention, driving higher sales volumes, and
potentially retaining customers for future purchases.
 Perceived Value: By offering products at a lower price, retailers aim to
create a perception of greater value among consumers, building trust and
loyalty to the brand.

Time pricing: Time based pricing is more appropriate for the hospitality industry.
For instance, a client charged a price for staying a night at a hotel is the most
apparent example of time based pricing.

In such a context, there is another crucial distinction between time based pricing
and value based pricing. The prices fluctuate depending on the time clients book
services in the system.

43
Finally, time based pricing is most commonly used in the following industries:

 Airline. Booking tickets in advance costs less.

 eCommerce. In the industry, prices heavily depend on the season and days
of the week.
 Ride-hailing. The price changes depending on weather conditions,
stemming from dynamic pricing principles.
 Bnb. Prices are correlated to holidays, events, and special days.

Module – 5

Relationship Marketing & International Retailing

Overview:
- 5.1 Customer Relationship Management (CRM)
- 5.2 Relationship marketing strategies
- 5.3 Defined Intrenational ratailing
- 5.4 Nonstore retailing
- 5.5 New marketing challenges

5.1Customer Relationship Management (CRM)

44
Let's define CRM

Customer relationship management (CRM) is a system for managing all of your

company’s interactions with current and potential customers. The goal is simple:
improve relationships to grow your business. CRM technology helps companies
stay connected to customers, streamline processes, and improve profitability.

When people talk about CRM, they’re usually referring to a CRM system: software
that helps track each interaction you have with a prospect or customer. That can
include sales calls, customer service interactions, marketing emails, and more.

CRM tools can unify customer and company data from many sources and even
use AI (artificial intelligence) to help better manage relationships across the entire
customer lifecycle, spanning departments like marketing, sales, digital commerce,
and customer service interactions.

5.2 Relationship Marketing Strategies

1. Event marketing

Event marketing involves using in-person or digital events like conferences,

webinars, and product launches to connect with your customers and prospects.

To host the best event you possibly can for your customers and prospects, here
are some things you should do:

 Consider your marketing strategy. There are many types of events—

45
 conferences, seminars, webinars, networking events, trade shows, product
launches, and more— all of which have their unique uses. To get good
results, let your marketing strategy determine the kind of event you host.
 Schedule networking opportunities to help your attendees get to know one
another and share ideas.
 Partner with other non-competing businesses in your industry to attract
more attendees.
 Gather your attendees’ contact information and follow up with them after
the event.

2. Public relations

Public relations is an aspect of marketing that focuses on creating and maintaining

a positive brand image with the masses, existing customers, prospects, partners,
employees, investors, and other stakeholders.

Here are some tips for using Public Relations to market your business:

 Control the messaging you send into the world about your business.
 Create great content that positions you as a subject matter expert.
 Keep up with industry trends through media channels and social media
platforms.
 Align your long-term PR plan with your business marketing strategy to
ensure that your messaging is consistent across the board.

3. Social media marketing

Social media platforms are the holy grail of relationship marketing as they give
you access to millions of people in your industry—many of which you can convert
if you do things right.

Here are some tips for using social media:

 Include social media buttons in your blog posts and emails to make it easier
for your audience to connect with you
46
  Do giveaways and share freebies to encourage your audience to engage
with your content
 Share user-generated content, customer/client reviews, and testimonials
 Respond quickly to people’s comments on your social media posts.

4. Email marketing

Despite the massive reach social media has, it is vulnerable. They can shut down
at any time, and popular accounts can also take a blow due to algorithm changes.

Here are some tips for email marketing:

 Create lead magnets to encourage people to sign up for your email list.
 Send relevant and helpful emails to your subscribers.
 Optimize your emails for mobile. Most people check their emails on their
smartphones.
 Use email automation tools to save time and ensure that your emails reach
the right people. This is especially important if the emails go out based on
triggers like cart abandonment and subscription renewal.
 Run split (A/B) tests on your emails to see what CTAs, colors, and styles
resonate most with your audience.

5.3 Defined Intrenational Retailing

International retail is the operation of retail outlets in more than one country. The
internationalization of retailing activity has two dimensions: the firm (direct
internationalization) and the market (indirect internationalization). The
internationalization of retailing formats and operational systems is not dependent
on international retail firms. Indirect internationalization occurs when domestic
retailers adopt international practices. When firm's engage in direct
internationalization it is a market serving activity, it is not a resource seeking
activity. International retailer activity is hosted by most global markets. Entry
methods most commonly used are acquisition, organic growth, joint-venture, and
franchising. Since the 1980s, international retail activity has been characterized by

47
the international expansion of firms that have retailing as their primary function.
Earlier forms of international retail activity were often associated with other
organizational characteristics where retailing was not the primary activity in the
domestic market.

5.4 Nonstore Retailing

Non-store retailing is the selling of goods and services outside the confines of a
retail facility. It is a generic term describing retailing taking place outside of shops
and stores (that is, off the premises of fixed retail locations and of markets
stands).

Types of Non-Store Retailing

Generally, non-store retailing is classified into six further types:

 Direct selling

 Telemarketing

 Online retailing

 Automatic vending

48
  Direct marketing

 Electronics retailing

5.5 New Marketing Challenges

Here are some challenges that marketing teams may face, along with potential
solutions:

1. Recruiting talent

A marketing team's combined levels of experience and expertise are often

important factors in creating effective strategies. Because talented marketers are
often in high demand, recruiting and maintaining an accomplished staff can
sometimes be a challenge.

2. Maintaining a sufficient budget

One common challenge marketers may face is a lack of funding or resources. This
can occur if a company is experiencing losses or if marketing campaigns aren't
providing a return on investment.

3. Generating leads

Leads are individuals or companies who show an interest in your products or

services. A primary goal of marketers is to find leads and convert them into paying
customers.

4. Finding the right tools

Marketing tools and tactics often change rapidly, along with customer

49
expectations. It's important for marketing professionals to use the most effective
and current tools for attracting and retaining customers.

5. Being risk-averse

Like many other aspects of business, marketing can involve occasional risks.
However, some marketing teams may be excessively reluctant to change
strategies they've used for years.

6. Moving into new markets

Growth is often a primary goal of many businesses, but it may bring new
challenges. For example, a company's expansion into new markets may lead to
marketing teams' existing strategies, goals and structure becoming ineffective .

7. Retaining customers

Customer retention can be an important goal for marketing teams. This is because
it's often more cost-effective than acquiring new customers or converting leads.

8. Retaining and training staff

The expertise of your marketing team is an important asset that can help you stay
productive. Hiring new staff can pose challenges to productivity and may divert
valuable resources away from your team's goals.

50


Conclusion
The retail sector has played a phenomenal role throughout the world in increasing
productivity of consumer goods and services. It is also the second largest industry
in US in terms of numbers of employees and establishments. There is no denying
the fact that most of the developed economies are very much relying on their
retail sector as a locomotive of growth. The India Retail Industry is the largest
among all the industries, accounting for over 10 per cent of the country’s GDP and
around 8 per cent of the employment. The Retail Industry in India has come forth
as one of the most dynamic and fast paced industries with several players
entering the market. But all of them have not yet tasted success because of the
heavy initial investments that are required to break even with other companies
and compete with them. The India Retail Industry is gradually inching its way
towards becoming the next boom industry. The Retail Industry in India has come
forth as one of the most dynamic and fast paced industries with several players
entering the market. But all of them have not yet tasted success because of the
heavy initial investments that are required to break even with other companies
51
andcompete with them. The India Retail Industry is gradually inching its way
towards becoming the next boom industry.

REFERENCES

 Akash, S.B. (2009), Opportunities and challenges of retailing Business In

India-An Explanatory Study, KAIL Journal of Management And Research,
2(1).
 Biyani, K. (2007), CEO, Future Group “Retailing in the creative economy”,
India Retail Report, An Images F&R Research, pp.330-333. Available at:
www.indiaretailing.com
 Gellner, A. (2007), The sportswear Retail segment: Problems & Prospects,
India Retail Report, An Images F& R Research, pp.202-204. Available at:
www.indiaretailing.com Gibson,G. (2007) ’Who will buy the Most? Business
Line, (Brand Line) p.1.
 Kearney, A.T. (2007) India: The next retail growth story’, India retail report,
An Images F&R Research,pp.228-233. Available at: www.indiaretailing.com
Mohanty, A.K.& Panda, J. (2008), Retailing in India: Challenges and
Opportunities, The Orissa Journal of Commerce, Vol. XXIX, NO.2,
Bhubaneswar, July, pp. 69-79.
 Nagesh, B.S (2007), Indian Retail The Way Forward, India Retail Report, An
Images F & R Research,pp.246-248,www.indiaretailing.com.
Panda,A.K.&Mohanty,S.(2008),Emerging Retail Trends in India, The Orissa
Journal of Commerce, Vol.XXIX, NO.2, Bhubaneswar, July, pp.81-89.
 Sahu, R.P. (2010), Higher Sales Boost Retail, Business Standard, section II,
21. Shivkumar, S(2009),Executive Director, Retail and Consumer Practices
Price Warehouse Cooperative, India Retail Report, An Images F&R
Research, pp.6. Available at: www.indiaretailing.com
 Yuvarani, R. (2010), Future Trends of Retail in India, edit online article:
www.articlesbase.com

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Introduction: What is retail Sector inIndia

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