Q1.

Ans-Retailing is a set of activities that enables selling of goods and

commodities to the customers or end consumers in small quantities.
A retailer is a person or an outlet through which products or services are sold to
customers or the end user.
Retailing is one of the key elements of a marketing and distribution strategy;it
ensures that a product reaches the consumers.the word retailing originated from
the French word retailer which means to cut or break into pieces.In other
words,retailing is the process of buying goods or products in bulk breaking down
the bulk and selling them in smaller quantities to customers or end users.
General characteristics of consumers:
The following are few common characteristics of the consumers behaviour:

Search for information

Brand loyalty
Price elasticity of demand
Perceived needs of a product
Physiological fators
Social status
Past behaviour

Classification of retail consumers based on shopping:

Customers make purchases in order to satisfy needs.Some of these needs are
basic and must be fulfilled for everyone .for example,food and shelter.Others are
not required for basic survival and vary depending on the person.Needs that are
not a necessity can be classified as wants or desires.So understanding consumer
purchase behaviour involves not only understanding how decision are made but
also understanding the dynamics that influence purchases.The following points
will clear the classification:

Loyal customers:-These customers can influence the buying and

merchandising decisions.Loyal customers generally represent not more
than 20%of the customers base,but make up more than 50%of reatailers
sales.frequent communication channels established with them benefit the
reatailers by providing with clues on the buying and merchandising
descision they need to make.This will also make the loyal customers
happy as this makes them feel they are important,this leads to good word
of mouth about the retailer.
Cherry pickers:-There are many customers who lack loyalty towards a
single retailer,and they shop with different retailers each time.such
customers are termed as cherry pickers.These customers visit different
products retailers hunting for value.cherry pickers are always on lookout
for a good bargain.Keeping the best prices available for different products
with different retailers they tend to purchase different products from
different retailers.

Discount customers:-This category helps ensure the inventory is turning

over and,as a result,it is a key contributor to cash flow.They shop the
stores frequently but make their decisions based on the size of retailers
markdowns.
Impulse customers:-They dont plan before they come for shopping but
come into the on a whim.They will purchase what suits their situation at
that time.
Need-based customers :-They have a specific intention to buy a
particular type of item .people in this category are driven by a specific
need.
Wandering customers:-They have no specific need or desire in mind
when they come into the store.Rather ,they want a sense of experience
and/or community.for many stores,this is the largest segment in terms of
traffic,while at the same time,they make up the smallest percentage of
sales.Since they are merely looking for interaction,they are also very likely
to communicate to others the experience they had in the store.

Q2.Ans--Retailing is a set of activities that enables selling of goods and

commodities to the customers or end consumers in small quantities.
Retail buying process :-These basic psychological process play an important
role in understanding how consumers actually make their buying
decision.Marketers must understand every facet of consumers
behaviour.Marketing scholars have developed a stage model of the buying
decision process.
Problem recognition:
A)The buying process starts when the buyer recognises a problem or need.
B)The need can be triggered by internal or external stimuli.
C)Marketers need to identify the circumstances that trigger a particular need so
that they can develop marketing strategies that trigger consumer interest.
The need can be triggered by internal or external stimuli.Internal stimuli is when
the need is recognised by the consumer internally such as when a consumer
would want to buy a motor bike as there are no buses available in the locality he
stays.on the contrary if the consumer wants to buy a motorbike because one of
his neighbours has bought it,it is called an external stimuli.
Information search:
A prospective consumer will be inclined to search for information.
Consumer information sources fall into four groups:

Personal sources:Family,neighbours,and acquaintances.

Commercial sources:Advertising ,sales
persons,dealers,packaging,displays.
Public sources:Mass media,consumer-rating organisation.

Experimental sources:Experimenting with samples,handling,examining

using the product.

The relative amount and influence of these information sources vary with the
product category and the buyers characteristics.The consumer receives
maximum information about a product from commercial sources-that is,market
dominated sources.But the most effective information comes from personal
sources.
Evaluation process:
How does the consumer process competitive brand information and make a final
value judgement?Here,there is no single evaluation process used by all
consumers or by one consumer in all buying situations.An important determinant
of the extent of evaluation is whether the customer feels involved in the
product.By involvement we meant the degree of perceived relevance and
personal importace that accompanies the choice.where a purchase is highly
involving the customer is likely to carry out extensive evaluation.
Alternatives:No single process is used by all consumers or by one consumer in
all buying situations.The most current models see the process as coginitivelyoriented.First,the consumer is trying to satisfy a need.Second,the consumer is
looking for the certain benefits from the product solution.Third,the consumer
sees each product as a bundle of attributes with varying abilities for delivering
the benefits sought to satisfy this need.
Consumer outlet selection:
After choosing products consumers select the outlet for the purchase by any of
the process :

Retail evolution and consumer choice

At home shopping and electronic commerce
Store positioning
Purchase decision
Post purchase evaluation

Q3.Ans-Retail merchandising is a marketing practice in which the brand or

image from one product or service is used to sell another.Merchandising,as
commonly used in marketing,also means the promotion of merchandise sales,as
by coordinating production and marketing and developing
advertising,display,and sales strategies to increase retail sales.This includes
disciplines in pricing and discounting,physical presentation of products and
displays,and the decisions about which products should be presented to which
customers at what time.
Retail Merchandising Management Process(RMM Process):
Following are five steps in RMM

Define Merchandise policy:-For a retail strategy to be successful,it has to be

better than the competition in one of the following three key areas:price,service
and product.
Every retail organisation must have a vision so as to provide its buyers with
some insight into the following business components:

Demographics of current and potential customers.

Image of the store
Quality levels of merchandise
Price point policy.
Marketing approach.
Customer service levels.
Desired profit margins.

Gather Historical information:-In building a six-month plan,the objective is

to prepare a total monthly purchasing schedule for the company.Then,repeat
this process for the next level of detail,i.e the departmental level.Depending
onthe sophistication of company information systems,each department can
then be broken down into smaller segment,i.e.classes,for which a similar
sales plan is prepared.
Perform qualitative analysis:-Most professionals will agree that the buying
process is 90% analytical and 10% intuitive.In other words,retailers must do
the homework to achieve any level of success.As the most critical aspect of a
successful operation,buying/merchandise management is what retail is all
about.Qualitative Analysisrefers to identifying the proper components in a
mixture.In this case the mixture is the merchandise plan and the
components that affect this plan are as follows:
a)Cuctomer profile analysis
b)Department Analysis
c)Key department trends
d)Major vendor analysis
e)Advertising review
f)Visual presentation analysis
Merchandise planning:-The merchandise planning process helps the retail
buyer in forecasting,with some degree of accuracy,what to purchase and
when to get it delivered.This will greatly help the company to attain its sales
and gross margin goals.Buyers must heavily rely on past sales data,along
with personal experience and their own intuition about the trends in the
market.Purchasing on time to ensure availability of merchandise during
season refers to the methods,practices and operations carried out to promote
and sustain certain categories of commercial activity.

Identifying the vendors or sources of supply:-Retailers often handle

thousands of brands,and the bigger the reatailer,the broader his vendor
base.Retailers have to constantly move inventory to keep pace with the everchanging marketplace that thrives on change.Top retailers know that to stay
on top,they must get the right merchandise at the right price point,and get it
on the shelf as quickly as possible.However there are number of hurdles that
retailers must overcome before an item gets sold.
Q4.Ans-Electronic retailing,also known as e-tailing,deals with selling products
and services online via the world wide web.Internet retailing or e-tailing,as it
is usually referred to,covers retailing using a variety of different technologies
or media.it may be broadly a combination of two elements.one is combining
new technologies with elements of traditional stores and direct mail models
and the second is using new technologies to replace elements of store or
direct mail retail.
Advantages & disadvantages of e-tailing
A.Advantages of e-tailing/multi-channel retailing
There are advantages of e-tailing which cannot be found inother forms of
reatailing:
1.Cost:e-tailware software helped retailers in updating the information against
competition & avoids the expenses by creating online catalogues instead of
paper catalogue.
2.E-tailing creats a global bazaar style market place that gathers many
consumers and many retailers.
3.Access(no physical location):travelling is not required to see and compare
products since all information about the products are available online.
4.Inventory:Inventory of the products can be placed in larger quantity with all
ranges available with a particular retailer without worrying about the space
limitation and shelve availability for that product.
5.Flexible time:time flexibility in accessing the shop is a significant advantage
of e-tailing.A customer can access the shop 24/7 according to their need and
comfort.
B.Disadvantages of e-tailing/multi-channel retailing
1.Shopping is still a touch-feel-see-hear experience:In india,shopping is still
considered to be a family outing and people do not feel the lack of time while
going out for shopping.so e-tailing faces the problem of customer retention.
2.Customer service,distribution and logistics related issues:e-tailing faces
issues relating to smooth and flawless delivery in stipulated or said time.

3.Mode of payment related issues:Credit cards are the preferred mode of

payment for all online purchases,hence there is always possibility of misuse
of the card details as the e-tailers cannot capture any signatures of the
cardholder.
4.Weak financial structure:Three elements determine whether e-tailing
operation is profitable are:

Average transaction size

Gross margins
Marketing costs

5.Integrating online and offline orders:From an operations perspective,the

easiest route for
companies with a foot in both real and virtual world
might be to enter electronic orders manually into the offline order management
system.This option makes most sense when the volume of online orders is
higher;companies must decide how much integration they need.
6.Technical issues:The other major concerns are related to technical problems
like security and confidentiality of information,speed of access,disconnection
during transaction,mass penetration,and lack of navigation standards.
7.Personal information:While shopping through the online media consumers are
confronted with a lot of security issues.customers are sceptical about giving any
personal and private information to online retailers as they fear a possible
misuse.
Q5.Ans-Retail pricing can be stated in following points:

Establish a simple yet effective pricing structure taking into consideration

all your business costs.
Choose a pricing strategy to establish a market presence
Fine-tune and adapt your general pricing policy in response to
trends,industry practices and new innovative pricing strategies to help
solidify your competitive position within the market place.

Retail pricing strategies can be stated as:

Every day low pricing:-This strategy entails continuity of retail prices below the
MRP mentioned on the goods at a level somewhere between the regular price at
which the goods are sold and the deep discount price offered when a sale is held.
Loss leader pricing:-Retailers sometimes price particular fast-moving product
at a lower price to attract customers to the store.Once customers are persuaded
to buy more profitable products.Those items are priced higher whose prices
cannot easily compared by the customers.The retailer normally chooses his own
store brands for higher pricing.
Skimming pricing:-The pricing is similar to premium pricing,calling for a high
price to be placed on the product you are selling when the product is

new.However ,with this strategy the price eventually will be lowered as

competitors enter the market.
Penetration pricing:-This strategy deliberately chooses a low price for a
product in order to gain a higher market share or to attract new customers who
are price conscious or to gain entry into a new markets.
Price lining:-It refers to the offering of merchandise at a number of specific but
predetermined prices.ones set the prices may be held constant over a period of
time and changes in market condition are adapted to by changing the quality of
the merchandise.A limited number of predetermined price points are set at which
merchandise may be offered for sale.
Psychological pricing:-It is method of setting prices intended to have special
appeal to the customers.There are different types of psychological pricing.Like
most common method is odd-pricing using figures that end in 5,7or 9.It is
believed that consumers tend to round down a price of $5.95 to 5 rather than 6.
Positioning:-If you want to be the low-cost leader,you must be priced lower
than your competition.if you want to signal high quality,you should probably be
priced higher than most of your competition.
Popular price points:-There are certain prices at which the customers become
more willing to buy a specific products,referred to as price points.
Fair pricing:-There are times when the value delivered by the products doesnt
matter,even if you dont have any direct competition.There is simply a limit to
what consumers perceive as fair.A sufficient amount of market testing can help
the retailers estimate the fair price.
Q6.Ans-Rural retailing is a set of activities that enables selling of goods and
commodities to the customers or end consumers in small quantities for the
people of rural areas.
Rural retail strategies are :
1.Customise the store and location:-The companies with the best rural
networks are pragamatic,patient and strategic.They focus first on locations with
the highest growth potential and the lowest cost to serve;then uses these as
base to reach out into more remote locations.There are more than 120,000
different rural settlements in southwest india.Single product building company
found that 10% of villages accounted for 90%of sales.Census and MGI data
support that impression.Reaching only those villages with electricity and 3,000 or
more people those that we prefer calling regional economic centres and able
villages will take companies a long way towards creating a useful footprint in
rural india.
2.Customise the price:-For retailers the challenge is to affordability of the
product or service.with low disposal incomes,products need to be affordable to
the rural consumer,most of whom are on daily wages.some companies have

addressed the affordability problem by introducing small unit packs.LG roll out
several new models in low-end segments like direct cool refrigerators,twin-tub
washing machines,solo microwave and TVs in the rural areas.Godrej Aadhar,with
an objective to improve productivity,higher returns and improved cost-benefit
ratio at present,offers crop advisory services,crop finance,etc.A rural store should
also provide access to modern retail banking and farm credit through a simplified
and transparent process as also other financial services like insurance,etc.
3.Customise communication:-The most effective rural campaigns focus on
creating absolute demand,not simply winning market share.working at the
village level requires connecting with the community.putting up advertising at
major junctions;painting murals at gathering places like wells and water
holes;running product demonstration at local gathering;and publishing the use of
products by high profile or influential individuals these are all good,inexpensive
ways to build stature and awareness.
It obviously makes sense to time marketing campaigns to coincide with the end
of the local harvest,when purchasing power is highest.The number of languages
and dialects varies widely from state to state,regions to regions and probably
from district to district.The messages have to be delivered in the local languages
and dialects.even though the number of recognised languages is only 16,the
dialects are estimated to be around 850.it would be better if visual
symbols,graphics and rich media applications are used.The rural market holds a
tremendous potential for any media.however,for the internet to flourish in rual
india,the applications need to be in vernacular languages,preferably with text to
speech capabilities.