Scribd
Upload
24 views5 pages

Retail Management Notes 1

Retailing is a crucial end-point in the marketing distribution channel, derived from the French word 'retaillier', meaning 'to cut a piece'. It encompasses the sale of goods and services to consumers, significantly contributing to global GDP and employment, with India ranking as the fifth most attractive retail destination. Retailers perform essential functions such as providing assortments, sorting, breaking bulk, rendering services, bearing risks, holding inventory, and acting as a communication channel between manufacturers and consumers.

Uploaded by

dobby.swarning12
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
24 views5 pages

Retail Management Notes 1

Retailing is a crucial end-point in the marketing distribution channel, derived from the French word 'retaillier', meaning 'to cut a piece'. It encompasses the sale of goods and services to consumers, significantly contributing to global GDP and employment, with India ranking as the fifth most attractive retail destination. Retailers perform essential functions such as providing assortments, sorting, breaking bulk, rendering services, bearing risks, holding inventory, and acting as a communication channel between manufacturers and consumers.

Uploaded by

dobby.swarning12
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

INTRODUCTION

Retailing comes at the end of the marketing distributive channel. The word ‘retail’
has been derived from the French word “retaillier” and means ‘to cut a piece’ or
‘to break bulk’. It covers all the activities involved in the sale of products and
services. Retailing is a high-intensity competition industry and the second largest
globally. The reason for its popularity lies in its ability to provide easier access to
a variety of products, freedom of choice, and many services to consumers. The
size of an average retail store varies across countries depending largely on the
level of a particular country’s economic development. The largest retail store in
the world is Walmart in the USA.

Retailing is the world’s largest private sector contributing to 8% of the GDP and
it employs one-sixth of the labor force. The estimated retail trade is expected to
be 7 trillion US $. Many countries have developed only due to retailing and
presently we see there is a vast change in the retail industry. As far as India is
concerned it contributes to 14% of our GDP and it is the second largest sector
next to agriculture which employs more number of persons.

Now according to a survey, India is classified in to the fifth most attractive retail
destination and second among the countries in Asia. Worldwide it is ranked as
fifth most attractive retail destination.

What is Retailing

Retailing is the business activity of selling goods and services to the final
consumer.

Retailing can be defined as the business products and services to consumers for
their own use.
According to Kotler, “Retailing includes all the activities involved in selling
goods or services to the final consumers for personal, non-business use”.

Retailing is the activity of selling goods and services to last-level consumers for
their use. It is concerned with getting goods in their finished state into the hands
of customers who are prepared to pay for the pleasure of eating, wearing, or
experiencing particular product items. Retailing is all about the distribution of
goods and services because retailers play a key role in the route that products take
after originating from a manufacturer, grower, or service provider to reach the
person who consumes. Retailing is also one of the key elements of a marketing
strategy facilitating the targeting process, making sure that a product reaches
particular groups of consumers. It is important in a marketing strategy to match
the arena in which a product is purchased to the benefits and characteristics of the
product itself and its price. Retailers provide a collection of service benefits to
their customers such as being in convenient places, editing product ranges
according to shopping tasks, and selling goods in quantities that match personal
consumption levels. Ensuring that this process runs smoothly presents a host of
managerial challenges. Retailing is therefore a deceptively simple management
process - yet fascinatingly complex in its detail.

Retailing may include subordinated services, such as delivery. Purchasers may be


individuals or businesses. In commerce, a retailer buys goods or products in large
quantities from manufacturers or importers, either directly or through a
wholesaler, and then sells smaller quantities to the end-user. Retail establishments
are often called shops or stores. Retailers are at the end of the supply chain.
Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term “retailer” is also applied where a service
provider services the needs of many individuals, such as a public utility like
electric power.
Functions of Retailing

Retailers are crucial players in the emerging market scenario. Large brands are
running first to get into the desired retail formats to cater to the growing middle
class of India. Retailers perform various functions like providing assortments,
sorting, breaking the bulk, rendering services, bearing risk, serve as a channel of
communication, transportation, advertising and holding inventory. They
significantly contribute towards increasing the product value and satisfying the
consumers. The following are the functions of a retailer/retailing:

1. Providing assortments: Offering an assortment enables customers to


choose from a wide selection of brands, designs, sizes, colors, and prices
in one location. Manufacturers specialize in producing specific types of
products.

Example: Kellogg makes breakfast cereals, Knorr makes soups.

If each manufacturer had its own stores that only sold its own products,
consumers would have to go to many different stores to buy groceries to prepare
a single meal. Retailers offer an assortment of multiple products and brands for
consumer convenience.

2. Sorting: Manufacturers make one single line or multiple product lines and
will always prefer to sell their entire output to few buyers to reduce their
costs. Final consumers will prefer to choose from a large variety of goods
and services and then usually buy in smaller quantities. Retailers have to
strike a balance between demands of both the sides, by collecting a
combination of goods from different producers, buying them in large
quantities and selling them to individual consumers in smaller quantities.
The above process is called sorting and under this process, the retailer
undertakes activities and performs functions that add value to the products
and services while selling them to consumers
Example: A shopping supermarket of Pantaloon Retail in the name of ‘Big
Bazaar’ sells more than 20,000 assortments from 900 companies. Customers can
choose from such a basket in just one location. There are specialized retailers like
Nilgiris or Barista, which offers specialized assortments of a single product line.

3. Breaking Bulk: Retailers offer the products in smaller quantities tailored


to individual consumers and household consumption patterns. This reduces
transportation costs, warehouse costs and inventory costs. This is called
breaking bulk.

4. Rendering Services: Retailers render services that make it easier for


customers to buy and use products. They provide credit facilities to the
customers. They display products, which attract the customers. Retailers
keep ready information on hand to answer queries of the customers. They
provide services by which the ownership can be transferred from
manufacturer to the end consumers with convenience. They also provide
product guarantee from owner’s side, after sales service and also deal with
consumer complaints. Retailers also offer credit to consumers and develop
hire purchase facilities to enable them to buy a product immediately and
pay the price at their ease. Retailers also fill orders, promptly process,
deliver and install the product at customer point. Retail sales people answer
the customer complaints and demonstrate the product for the customer to
evaluate before making a choice. They also help in completing a
transaction and realizing the sale.

5. Risk Bearing: Retailers bear a different kind of risk to the manufacturers


and wholesalers. Even the customers can come back to the retail point and
return the product. In that case, the risk of product ownership many times
rests with the retailers. Many companies have buy back schemes and return
schemes whereby the retailers can always return the unsold items to the
manufacturer.
6. Holding Inventory: A major function of retailers is to keep inventory so
that products will be available for consumers. Thus, consumers can keep a
much smaller inventory of products at home because they can easily access
more from the nearby retailers. Retailer’s inventory allows customers
instant availability of the products and services.

7. Channel of Communication: Retailers are the bridge between the


manufacturer or his representative and the end customers. They serve as a
two-way channel of communication. The manufacturer collects customer
choice and preference data and provides information about existing and
new products through the retailers. The point of purchase displays provide
serve as advertisements that provide information about new products and
many times retailers inform the consumers about likely date of availability
of a product or entry of variants into the market. The shoppers get a chance
to learn about products and services from the stores and even acquire trial
habits by seeing others buying a product or service in the store. The
manufacturer too collects customer data, data on gaps in demand and
supply cycles and customer satisfaction from retail points.

8. Transportation: Retailers also help in transport and advertising function.


The larger assortments are transported from wholesaler’s point to retailers
point by retailer’s own arrangements and many times, the retailer delivers
the goods at final consumer’s point. So, retailers provide assistance in
storage, transportation and prepayment merchandise.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy