CHAPTER 6

Retail Oriented Marketing

The Role of Retailing

Discuss the
importance of
retailing in the Indian
economy
 Retailing

Retailing
Retailing
All the activities directly related
to the sale of goods and
services to the ultimate
consumer for personal, non-
business use.
The Role of Retailing
 Indian retailers employ nearly 4 crore people

 Retailers account for 9.4 percent of Indian

employment

 Retailers ring up almost INR 19, 00, 000 crore in

sales—nearly 30 percent of the Indian GDP

 Organized retail holds a share of just 6.5

percent of the total retail market

 Industry is dominated by a few giant

organizations, such as Future Group, Reliance
Retail Ltd., and Aditya Birla Retail Ltd.
Classification of Retail
Operations

Explain the
dimensions by
which retailers
can be classified
 Classification
of Retail Operations

Ownership
Ownership

Level
Level of
of Service
Service

Product
Product Assortment
Assortment

Price
Price
Exhibit 6.1
Types of Stores and
Their Characteristics
 Classification
of Ownership

Independent Owned
Ownedby byaasingle
singleperson
personor or
Independent partnership
partnershipandandnot
not part
partof
ofaa
Retailers
Retailers larger
largerretail
retailinstitution
institution

Owned
Ownedand
andoperated
operated as
asaagroup
group
Chain
Chain Stores
Stores by
byaasingle
singleorganization
organization

The
Theright
rightto
tooperate
operateaabusiness
business
Franchises
Franchises or
orto
tosell
sellaaproduct
product
 Level of Service

Full Self
Service Service
Product Assortment

Classification based on BREADTH

and DEPTH of product lines.
 Price

Gross
Gross
Margin
Margin The amount of money the
retailer makes as a
percentage of sales after
the cost of goods sold is
subtracted.
Major Types of Retail
Operations

Describe the
major types of
retail operations
Major Types of Retail
Operations
Department
Department Stores
Stores
Specialty
Specialty Stores
Stores
Supermarkets
Supermarkets
Hypermarkets
Hypermarkets
Drugstores
Drugstores
Convenience
Convenience Stores
Stores
Discount
Discount Stores
Stores
Restaurants
Restaurants
Types of Retail Operations
AAstore
storehousing
housingseveral
several
departments
departmentsunder
underone
oneroof.
roof.
Department
DepartmentStore
Store Each
Eachdepartment
departmentisisheaded
headedby byaa
buyer,
buyer,or
ordepartment
departmenthead
headwho
who
selects
selectsmerchandise.
merchandise.

AAretail
retailstore
storespecializing
specializingin
inaa
Specialty
SpecialtyStore
Store given
giventype
typeofofmerchandise.
merchandise.

Large,
Large,departmentalized,
departmentalized,self-
self-
Supermarket service
serviceretailer.
retailer.Specializes
Specializesin
in
Supermarket food.
food.Some
Someuseusescrambled
scrambled
merchandising.
merchandising.
Types of Retail Operations
AAcombination
combinationstore
storeof
ofaa
supermarket
supermarketand
andaadepartment
department
Hypermarket
Hypermarket store.
store.Offers
Offersthe
thebenefits
benefitsof
of
shop-under-one-roof
shop-under-one-roofandand
discounted
discountedprices
prices

AAretail
retailstore
storethat
thatstocks
stocks
Drugstore
Drugstore pharmacy-related
pharmacy-relatedproducts
productsand
and
services
servicesasasits
itsmain
maindraw.
draw.

AAminiature
miniaturesupermarket,
supermarket,
Convenience carrying
carryingonly
onlyaalimited
limitedline
lineof
of
ConvenienceStore
Store
high-turnover
high-turnoverconvenience
convenience
goods.
goods.
 Categories of
Discount Stores
Full-Line
Discounters

Specialty Discount
Stores

Warehouse
Clubs

Off-Price
Retailers
 Discount Stores

Full-line
A retailer that offers
Full-line
discount consumers very limited
discount store
store
service and carries a
broad assortment of
well-known, nationally
branded “hard goods”.
 Discount Stores

AAretailing
retailingstrategy
strategyusing
using
moderate
moderateto tolow
lowprices
pricesononlarge
large
Mass
Mass quantities
quantitiesofofmerchandise
merchandiseandand
Merchandising
Merchandising lower
lowerlevels
levelsofofservice
serviceto
to
stimulate
stimulatehigh
highturnover
turnoverofof
products.
products.

Retail
Retailstore
storethat
thatcombines
combines
groceries
groceriesandandgeneral
general
Supercenter
Supercenter merchandise
merchandisegoodsgoodswith
withaa
wide
widerange
rangeof
ofservices.
services.
 Discount Stores
A Specialty Discount Store is…
a retail store that offers a nearly complete
selection of single-line merchandise and
uses self-service, discount prices, high
volume, and high turnover.

A Category Killer is…

a specialty discount store that heavily
dominate their merchandise segment.
 Discount Stores
Limited-service
Limited-servicemerchant
merchant
wholesalers
wholesalersthat
thatsell
sellaalimited
limited
Warehouse
Warehouse selection
selectionofofbrand
brandname
name
membership
membershipclubs
clubs appliances,
appliances,household
householditems,
items,
and
andgroceries
groceriesononaacash-and-
cash-and-
carry
carrybasis
basisto
tomembers.
members.

AAretailer
retailerthat
thatsells
sellsat
atprices
prices25
25
percent
percentor ormore
morebelow
below
traditional
traditionaldepartment
departmentstore
store
Off-price
Off-priceretailer
retailer prices
pricesbecause
becauseititpays
payscash
cashfor
for
its
itsstore
storeand
andusually
usuallydoesn’t
doesn’t
ask
askfor
forreturn
returnprivileges.
privileges.
 Restaurants
• Straddle the line between retail and
service establishments
• Sell tangible products (food, drink) but
also services (food prep, food service)
• Many could be considered specialty
retailers
Nonstore Retailing

Discuss nonstore
retailing techniques
Nonstore Retailing
Kiosks
Kiosks

Automatic
Automatic Vending
Vending

Direct
Direct Retailing
Retailing

Direct
Direct Marketing
Marketing

Electronic
Electronic Retailing
Retailing
 Kiosks
Kiosks are….
small, freestanding pavilion, usually placed in a
mall, within stores, stations, and airports.

Essentially used for the purpose of sales,

promotion activities, or giving information.
 Automatic Vending
Automatic Vending is…
the use of machines to offer goods for sale.

Vending is the most pervasive retail business in

the United States, with 1.15 crore vending
machines selling billions of dollars worth of
goods annually.
Direct Retailing

Door-to-Door
Door-to-Door

Office-to-Office
Office-to-Office

Home
Home Sales
Sales Parties
Parties
Types of Direct Marketing
Telemarketing
Telemarketing

Direct
Direct Mail
Mail

Catalogs
Catalogs and
and Mail
Mail Order
Order

Electronic
Electronic Retailing
Retailing
Franchising

Define franchising
and describe its
two basic forms
 The Basic Forms of
Franchising

Product
Productand
and Dealer
Dealeragrees
agreesto
tosell
sellin
in
Trade
TradeName
Name products
productsprovided
providedbybyaa
Franchising
Franchising manufacturer
manufactureror
orwholesaler.
wholesaler.

Business
Business An
Anongoing
ongoingbusiness
business
Format
Format relationship
relationshipbetween
betweenaa
Franchising
Franchising franchiser
franchiserand
andaafranchisee.
franchisee.
Top Franchisors
Retail Marketing Strategy

List the major tasks

involved in developing

a retail marketing
strategy
Retail Marketing Strategy

Define & Select

a Target Market

Develop a Retailing
Mix
Defining a Target Market

Demographics
Demographics

STEP
STEP 1:1: Geographics
Geographics
Segment
Segment the
the Market
Market

Psychographics
Psychographics
Choosing the Retailing Mix

Product
Product Place
Place
STEP
STEP 2: 2:
Choose
Choose the
the Promotion
Promotion Price
Price
Retailing
Retailing Mix
Mix
Personnel
Personnel Presentation
Presentation
 Exhibit 6.3
The Retailing Mix
Choosing the Retailing Mix

The mix of products

Product
Product
Offering
offered to the consumer
Offering
by the retailer; also called
the product assortment or
merchandise mix.
Retail Promotion Strategy

Advertising
Advertising

Public
Public Relations
Relations

Publicity
Publicity

Sales
Sales Promotion
Promotion
The Proper Location

Choosing a Community
Economic
Economic growth
growth
potential
potential

Competition
Competition

Geography
Geography
LO6
The Proper Location
Choosing the Type of
Choosing a Specific Site
Site
Socioeconomic
Socioeconomic
characteristics
characteristics
Freestanding
Freestanding Store
Store
Traffic
Traffic flows
flows

Land
Land costs
costs Shopping
Shopping Center
Center

Zoning
Zoning Regulations
Regulations
Mall
Mall
Public
Public Transportation
Transportation
 Retail Prices

Low Price High Price

Good Value Quality

Single Price Point Image
 Presentation
of the Retail Store

Atmosphere The overall impression

Atmosphere
conveyed by a store’s
physical layout, décor,
and surroundings
 Presentation
of the Retail Store
Employee
Employee type
type and
and density
density

Merchandise
Merchandise type
type and
and density
density

Fixture
Fixture type
type and
and density
density

Sound
Sound

Odors
Odors

Visual
Visual factors
factors
 Personnel and
Customer Service

Trading
Trading Up
Up
Two Common
Selling
Techniques
Suggestion
Suggestion Selling
Selling
 Customer Service
for On-Line Retailers

Easy-to-use
Easy-to-use Web
Web site
site

Product
Product availability
availability

Simple
Simple returns
returns
New Developments
in Retailing

Describe new
developments
in retailing
New Developments in Retailing

Consumers
Consumersare are
Interactivity
Interactivity involved
involvedin
inthe
the
retail
retailexperience.
experience.

Purchasing
Purchasinggoods
goods
M-commerce
M-commerce through
throughmobile
mobile
devices.
devices.