Professional Documents
Culture Documents
November 28th, 07
In 1964, communications theorist Marshall McLuhan forwarded the notion that
the, “Medium is the message.” His theory seems clearer today as we see in-
store merchandising activity receiving more attention as a medium unto itself,
rather than the recipient of benefits derived from other media. Two recent
studies and one about to be released major study have made the idea of store-
as-medium their major focus.
In a recent Times & Trends report, Information Resources Inc. (IRI) seems to
triangulate the notion of Store-As-Medium. IRI says that manufacturers are
indeed turning more-and more to in-store marketing as traditional advertising
seems to be on the decline. IRI suggests that, if the medium is the message, the
message will have to be constantly tweaked and strategies sharpened as
merchandising activity and effectiveness are already on the decline. As always,
closer communication between the manufacturer and retailer is the prescription
against any future slippage.
Emerging Retail Trend: The Role of Packaging
September 24th, 2007
One area I’ve been paying a lot of attention to in the past five years is
packaging. More often than not, packaging is the reason for the success or
failure of the product, not the actual product itself. It’s been proven that the
design of the the package is one of the top 3 reasons people buy something, just
behind the price and the primary need the product fulfills.
Take, for instance, Wrigley’s recent introduction of their new gum “5”. The effort
they have put into the package design and positioning of it is another very visual
example of the importance of packaging. Think for a minute about the issue in
rolling out a new gum. In a category that is very mature, with numerous brands
and no real value proposition to offer, Wrigley is introducing “5” with one of the
key attributes being the package itself. They designed it to be “cool” and
something a person would not hesitate to put on a conference room table next to
their Blackberry or iPod.
In the words of the vintage broadcast networks, “Stay tuned. We’ll be back
shortly.”
Emerging Retail Trend: Pricing and Wal-Mart
September 15th, 2007
This past week, Wal-Mart unveiled their new tagline, “Save More, Live Better”,
replacing their old slogan, “Always Low Prices, Always.” The fact that Wal-Mart
is changing their slogan confirms what I first began saying 4 years ago: Wal-
Mart is in trouble. The move also signals what the trend they have been
establishing in the past several years of increasing their prices on select items.
Wal-Mart is not the low price leader on every item. They are clearly moving to a
strategy of being the low-price leader on key items and taking a higher marging
on other items.
This move by Wal-Mart is going to force every retailer to improve the quality of
their price message. It doesn’t mean retailers are going to have to lower
prices. It merely means they’re going to have sharpen their message. For
retailers that choose not to compete on price, it means they will need to
emphasize service, selection, experience, or whatever their niche is.
With the continuing mortage saga moving further and further upstream in terms
of the types of mortages being impacted, I’m expecting to see fallout in early
2008. It is going to come from several retailers filing for bankruptcy at the
beginning of the year. Because of that, vendors need to consider how much
credit to extend now through the end of 2007. I’m not going to state specifically
who I expect to fall by the wayside, but there will be casualties. Stay tuned to
this blog over the next month or so as I’ll be talking more about this critical
subject and the implications it will have on the entire retail landscape.
I can’t pass up the opportunity to comment on the recent cover story in Business
Week magazine (August 6, 2007). The headline read “The Pet Economy”, with a
picture of a pampered dog on the cover. The article talks about how the the pet
industry has been booming and is continuing to grow. If you’ve been following
my annual Emerging Retail Trends reports, you’ll know that I first said this
more than 3 years ago. I’d agree that the pet economy is showing no sign of
slowing anytime soon. Thanks Business Week for commenting on whatEmerging
Retail Trends first reported on 3 years ago!
Several years ago, I talked about the need for companies to have secondary
suppliers and sources for goods and services. With all of the supply chain issues
coming out of China, the need for companies to have alternative sourcing is
more important than ever. The problem with China is only the tip of the iceberg.
The on-going issues with the transportation grid are only going to get worse. In
the next 15 months, we will be facing potential strikes on the west coast ports
and the implementation of new Homeland Security rules regarding the
movement of containers. These factors are not to be taken lightly, and
depending on how they all play out, could cause major disruptions even before
we call into play the usual issues surrounding weather, currency valuations,
energy, etc. Retailers and manufacturers alike need to be paying more than lip-
service to this issue because if and when supply-chain disruptions do occur,
there will be those who cannot recover from them and will ultimately be forced
out of business.
Wal-Mart has to keep their real estate productive and the only proven method
they have to build sales is through discounting. The vast majority of their other
attempts to go upscale have backfired. For vendors, it means the ride is going to
get rough. However, there is light at the end of the tunnel (although it is still
probably 10 years away).
If you’re in the real estate end of the retail business, you are going to see major
shifts in space. Hang on! It’s going to be a wild ride for the next few years and,
as a result, it’s a great time to be part of the retail industry.
HSN and other television-driven, shop-at-home formats are going to start rapidly
declining in the next 3 years. They are already becoming very frayed around the
edges. I’m basing this on the following reasons:
1. There has always been a very high return rate on their products which have
served as a damper on their profits.
2. When compared to the speed at which people can shop online for anything at
anytime, the format moves too slow.
3. The ability to use the Internet to seek out a lower price for something that is
being shown on the television shopping channel is quickly turning these
programs into nothing more than a product showcase for the manufacturer.
4. Cable capacity / competition is forcing every cable operator to increase the
fees they charge their content providers. The continued upward spike in these
fees is another cost that must be passed along to the consumer.
I know there has been a lot of money thrown at these formats in recent years
from very smart investors like Barry Diller, but, in the end, they are going to lose
out to the flexibility of the Internet.
Internationally, the concept of Net shopping is yet to be proven. And the poor
financial performance of most of the companies offering virtual shopping has
resulted in store-based retailing regaining the upper hand. Other forms of non-
store shopping including various formats such as catalogue/mail order shopping,
direct selling, and so on are growing rapidly. However, the size of the direct
market industry is too limited to deter the retailers. For all the convenience that
it offers, electronic retailing does not suit products where `look and see'
attributes are of importance, as in apparel, or where the value is very high, such
as jewellery, or where the performance has to be tested, as of consumer
durables. The most critical issue in electronic retailing, especially in a country
such as ours, relates to payments and the various security issues involved.
Concept- To Woo the customer to the store retailers are providing a wide range
of product, Quality,and value for money, apart from creating a memorable
shopping experience. Organized retailing has made a considerable headway in
product like food & groceries, clothing books, and music. Product like food &
groceries segment has undergoing a transformation with super market chain like
foodworld, nilgiris, apana bazaar, subhiksha. The apparel sector has seen the
emergence of store like pantaloon shoppers'stop, Westside, lifestyle, etc have
gained prominence in lifestyle\fashion segment & chain like archies,musicworld
and crossword cater the books & music market.
The leading Indian retail players are Westside (Tata), Pantaloon, Big Bazaar,
food bazaar(PRIL), Food world(RPG) and Shopper's stop(Raheja Group). Book
retailing by cross word, Landmark and Oxford bookstores, watches and jewelry
by Tanishq and Titan(Tata), luggage(VIP and Samsonite), footwear by the Loft
and Bata.
International players such as Wal mart is largest retailer in world annual sale and
as well as employer in the U.S.A.. Others include Carrefour Group (France), the
Kroger Company(U.S.), Metro AG(Germany), the home depot Inc. (U.S.A.).
INDIAN PLAYERS-
1- Pantaloon retail India limited (PRIL)- Renamed itself as "FUTURE
RETAIL'' in marach 2006, as part of its restructuring and expansion plans.
Headed by Kishore Biyani include pantaloons. Big bazaar, food bazaar, gold
bazaar and the central mall.the first menswear pantaloons outlet was set up in
1992. The company sold products under the bare denim, springboard, Lombard
and John miller brand names. Pantaloons offered a wide range of clothing
options to Indian consumers . It stocked garments, accessories and life style
products. The target audience for pantaloons was upper and middle class urban
population in India. Customer feedback and customer satisfaction were the key
focus at PRIL. Company relied heavily on IT for collecting customer data and
opinions .PRIL realized the potential of huge middle class population in India,
apart from retailing lifestyle products, it ventured in to BIG BAZAAR-in 2001
PRIL opened its first big bazaar, which had an area of 30,000 sq ft. in Kolkata
.the major USP of the big bazaar store was low prices and the best price
proposition being offered to customers. The caption used in the promotion – is se
sasta aur accha kahin nahin (cheaper and better than this ? nowhere else! )
indicating value for money stores. Big bazaar stocks over 2,00,000 products that
include apparel, food products, home appliances, and cosmetics. Product are
cheaper than the the market price by as much as 5-60 %, apparel are cheaper
by 25-60% . the success of PRIL comes from cheaper sourcing of products and
lower distribution costs . In addition to big bazaar, PRIL also started 'FOOD
BAZAAR'.in 2001 . The first food bazaar store was set up in the lower parel
region of Mumbai. Food represented PRIL's foray in to yet another value retailing
business, which focused on food and grocery products. The stores were designed
based on PRIL's understanding of the domestic needs of Indian housewives . the
caption used in the promotion campaign of food bazaar was –ab ghar chalaana
kitna Aasaan ( now, it is so easy to run a house ). It had over 50,000 stock
keeping units that covered a range of products like cereals, pulses, sugar, rice,
juices, milk products and FMCG products, besides stocking vegetables and fruits.
Most products were sold at Disounts ranging between 2- 20 % . Due to its
focused Mareting and merchandising strategies, the food bazaar stores soon
became popular among customers.
PRIL,s central malls are targeted towards the up-market segment of urban
population . In 2005 PRIL had three central malls located at Hyderabad,
Bangalore & Pune . Each central mall has different departments for home
Products, fashion, leisure, food, health, restaurant, beauty parlours, a pub and a
nightclub.
2- RPG Group- the Ramah Prasad Goenka group – one of the entrants in to the
organized retail sector in India . They launched the 'FOOD WORLD' chain of
grocery stores in 1999. By 2005, there were more than 90 Food world stores
across India, making it the largest food & grocery retail chain. Food world has
been growing at an annual growth rate of 30 % over last 5 years. Food world
stocks almost 5000 items. In each outlet. Suppliers can deliver products directly
to warehouse, from warehouse the products than be distributed to individual
food world. This shortens the distribution channel, resulting saving and saving
passed on to the customer, providing quality goods at lower costs.
RPG too used IT for running operation smoothly and also hi- tech
RPG also owns spencer's hyper market – a chain of retail hyper market in India.
Spencer's hypermarket stock a wide range of products right from groceries, food
items, home needs, fresh food, garments and consumer durables.
MUSIC WORLD- launched in 1997 is another RPG retail venture, largest music
retail chain in India with over 170 outlets. It stocks music videos, audios,
accessories etc. the store ambience and presentation of products have
contributed strongly to music world's success.
'Health & Glow'- joint venture between RPG & Dairy farm international. Launched
in 1997- it is the first retail chain catering exclusively to the health and beauty
requirement .the health & glow outlets offer cosmetic and medicinal products
and services, all under one roof.
3- Tata Group
The group started its Retail Bussiness in 1998 with the purchase of the little
woods Retail stores, originally owned by a UK based firm. The company was
renamed Trent limited and the littlewoods store was called westside. As of 2005,
there were 16 west- side stores across India about 20,000 sq ft in size. The
Westside outlets are in apparel stores a cross India about 20.000 sq .ft in size.
The Westside out lets are in appored and accessories retailing and offer
international shopping experience with value for Money. Offer quality products
with latest designs. Each Westside store has two divisions, one apparel division
and other product division. These divisions are further classified in to seven
departments (catering to men, women, kid's wear and needs)
Titan entered in to jewelry segment under the brand name 'Tanishq' in 1995.
Tanishq jewelry is sold exclusively by 69 outlets spread over 53 Indian cities and
also exported to US, Europe, Australia, and Middle East.
4-K.Raheja Corp. Group of Companies-
India's largest real estate players. They launched Shopper's Stop in 1991 & its
outlets stock apparel, accessories, household items, perfumes and cosmetics,
coffee shops and book stores to give consumers a complete shopping
experience.
On june 26, 2006, mukesh Ambani, C & MD, Reliance industries limited,
announced his plans to foray in to the retail sector with an initial investment of
US$ 5.6 bn. RRL was expected to have its presence across India withdifferent
retailing formats such as warehouse clubs, hypermarkets, supermarkets,
specialty stores and convenience storess . Reliance also had plans to open
restaurant outlets within its stores.
In Nov 2006, RIL launched its first retail store 'RELIANCE FRESH' at Hyderabad.
The store catered to consumer needs by providing fresh fruits, vegetables,
groceries and dairy products.
Calvin Klein Inc., the clothing design and marketing studio formed in 1968, is to
set up a retail operation in India. The clothing empire and Murjani India Ltd.
have announced an agreement for the latter to market and distribute the brand's
various labels throughout India and open dozens of retail stores planned for the
subcontinent.
The agreement authorises Murjani to market the Calvin Klein lineup through
exclusive retail outlets and select department stores approved by the company.
It includes the original Calvin Klein Jeans line and the unisex ck Calvin Klein
label, which the company introduced in the mid-1990s.
The broad plan is to open at least 40 Calvin Klein-branded stores during the first
five years of the operation, with construction beginning as early as March 2007.
The Ravi Jaipuria held company RJ Corp has signed an exclusive master
franchise agreement with Disney Consumer Products to source and market
Disney character branded cards, stationery, arts, crafts and party products
through exclusive Disney Artist stores in India . The first of the stores is to open
in Mumbai in January 2007.
Under the Disney Artist brand in India, RJ Corp will sell as vast range of Disney
character-led products aimed at the kids and youth categoryThe Ravi Jaipuria
held company RJ Corp has signed an exclusive master franchise agreement with
Disney Consumer Products to source and market Disney character branded
cards, stationery, arts, crafts and party products through exclusive Disney Artist
stores in India . The first of the stores is to open in Mumbai in January 2007.
Under the Disney Artist brand in India, RJ Corp will sell as vast range of Disney
character-led products aimed at the kids and youth category
12 -Vishal Group - launched their first hyper market Vishal Mega mart in
Udaipur this month. Spread over 25,000 sq.ft, the store offers extensive range
of men's, women's and kids' range of fashion clothing. Beside fashion attire, it
will also have separate sections and counters for watches, sunglasses, fashion
accessories, gifts and novelties, electrical appliances, digital diaries, perfumes,
cosmetics and grocery items etc. Currently, Vishal Mega Mart operates 29 fully
integrated and self-owned stores spread over a total shopping area of 5,70,000
sq.ft in 21 cities across India
1- Wal-Mart Stores Inc- is the largest retailer in the world and is based in
Bentonville, Arkansas, USA. For the year ended Jinuary 2006, Wal-Mart had
revenues of US$ 315.65 bn and a net income of US$ 11.23 bn (source:
finance.google.com).it tied up with Bharti mittal group to launced its product in
India. It is also the largest employment provider in USA.
3- TESCO Plc- is the largest retailer in UK. For the year ended February 2006,
the group's sales were 57.93 bn and a net income of 2.31 bn (source:
www.hoovers.com)
5- LVMH Group - Dior, the well known watch brand from the Louis Vuitton Moet
Hennessy (LVMH) Group is planning to include India among its top 12 world
markets, most global players were opting for the franchisee route.
However, despite the restriction on FDI, Foreign retailers had other modes of
entry in to the Indian retail market. This included franchising, strategic alliances
and the wholesale trading. It was reported that Tesco had plans to enter the
Indian retail market through a joint venture through Homecare Retail Mart
Pvt.Ltd. for opening 50 stores by 2010.
Facts-
REFERENCES-
Retail Marketing
The essence of retail marketing is developing merchandise and services
that satisfy specific needs of customers, and supplying them at prices that will
yield profits. Thereby the concept is a philosophy, not a system of retailing or
retail structure. In today's CRM landscape the old analogy comparing the rifle
and shotgun approaches to message and / or offer delivery is perhaps more
appropriate than ever, as more retail organizations struggle to achieve one-to-
one marketing-communications with customers and prospects.
Targeting allows a retail enterprise to channel its marketing budget4ere
there is the greatest (and fastest) possibility of Return On Investment (ROI)
Marketing strategy
A marketing strategy is a process that can allow an organization to
concentrate its
limited resources on the greatest opportunities to increase sales and achieve a
sustainable competitive advantage'. A marketing strategy should be centred
around the key concept
/ that customer satisfaction is the main goal.
A strategy consists of a well thought out series of tactics to make a
marketing plan more effective. Marketingstrategies serve as the fundamental
underpinning of marketing plans designed to fill market needs and reach
marketing. Plans and objectives are generally tested for measurable results.
• Retail marketing decisions are driven by what the shoppers need and
want.
• What the customers regard as value and what they buy is decisive.
• What the customers buy determines the nature of the retailer's business.
• The essence of retail marketing is developing merchandise and services
that satisfy
specific needs of customers, and supplying them at prices that will
yield profits.
• The retail marketing concept is the acceptance by the retailer that it is the
"customer"
and not "demand" that lie at the core of the retail organization.
v Retailers must dig deep to learn who their customers are, so they
can develop Niable customer segments.
Global retailing:
The world has entered the digital information age. Retailers in a variety
of industries are now using advanced computer systems to enhance their ability
to understand, communicate with and evaluate their market place and to
anticipate and respond to their customer’s needs, Retail shops are using bar
code scanners at their check out point to gauge the types of product their
customers are buying.
E-tailing:
Retailing on the net is known as E- tailing. Internet has changed the way
we do shopping. It has brought the commerce will play a crucial role in shaping
the future of Indian retailing. The real challenge for retailing would be laurching
and managing a highly irnovative click business that works along with a more
stable bricks business. For shoppers and retainers it is increasingly a hybrid
world.
Emerging Trends:
The single most important evolution that took place along with the
Retailing evolution was the rise and fall of the dotcom companies, more
importantly, the very nature of the customer segment being addressed was
almost the same. The computer – Sawy individual was also a scale- sector of the
store.
Retail Strategy:
According to the wheel of retailing theory, retail innovators often appear
as low – price operators with a low-most structure and low-profit margin
requirements. Over time, these innovators upgrade the products and become
high price orators. This meant enlarging the sales force, improving locations,
upgrading fixtures, carrying lower thrower merchandise and granting credit etc…
These improvements lead to higher cost which tern lead to higher prices.
Retail image:
Image refers to how a retailer is perceived by customers and others
succeed, a firm must communicate a distinctive, clear and consistent image.
Once its image is established in consumer mind, a retailer is placed in a riche
relative to competitors.
Thus retail marketing strategy would not only yield benefits for
consumers. Manufacturers and wholesalers but also creates economic utility.
Conclusion:
Author : C. PAVITHIRA
Shevapet, SALEM – 2.
Globalization,
Deregulation.
RETAILING
Retailing includes all the activities involved in selling goods or services directly to
final consumers for personal and non business use. A retailer or retail store is
any business enterprise, whose sales volume comes primarily from retailing,
TYPES OF RETAILERS
Retail Organizations exhibit great variety and new forms keep emerging. Some
major types of retailers are specialty store, department store, Supermarket,
Convenience store, Discount Store, Off Price retailer etc., Some of the major
stores considered for the study are described below:
Department Store:
Supermarket:
Relatively large, low – cost, low – margin, high volume, self - service operation
designed to serve total needs for food, laundry and household maintenance
products.
Convenience Stores:
Relatively small store located near residential area, open long hours, seven days
a week and carrying limited line of high turnover convenience products at slightly
higher prices. Many have added takeout sandwiches, coffee and pasties.
Discount Store:
Standard merchandise sold at lower prices with lower margins and higher
volumes. True discount stores regularly sell merchandise at lower prices and
offer mostly national brands. Discount retailing has moved into specialty
merchandise stores, such as discount sporting – goods stores, electronics stores
and books stores.
1. Self Service:
Self service is the cornerstone of all discount operations. Many customers are
willing to carry out their own locate – compare – select process to save money.
2. Self Selection:
Customers find their own goods, although they can ask for assistance.
Customers complete their transactions by paying a salesperson for the term.
3. Limited Service:
These retailers carry more shopping goods, and customers need more
information and assistance. The stores also offer services such as credit and
merchandise – return privileges
4. Full Service:
Sales people are ready to assist in every phase of the locate – compare – select
process. Customers who like to be waited on prefer this type of store. The high
staffing cost, along with the higher proportion of specialty goods and slower
moving items and the many services, results in high – cost retailing.
TYPES OF GOODS
The vast array of goods consumers buy can be classified on the basis of
shopping habits as follows:
Convenience goods can be further divided into the following as staples - these
are goods consumers purchase on a regular basis. Impure goods – these are
purchased without any planning or search effort. Eg; Candy bars, magazines etc.
Emergency goods - are purchased when a need is urgent eg umbrellas.
Manufactures of emergency goods will place them in many outlets to capture the
sale when the customer needs them.
Shopping Goods:
These are goods that the customer in the process of selection and purchase,
characteristically compares on such bases as quality, price and style, Eg .
furniture, clothing, electronic appliances etc.
Specialty Goods:
These are goods with unique characteristics or brand identification for which a
sufficient number of buyers are willing to make a special purchasing effect. Eg .
cars , stereo components, jewellery etc.
Need recognition
Information research
Evaluation of alternatives
Purchase decision
The Indian retailing sector can be divided into unorganized and the organized
retailing sector. Its characteristics can be presented as follows:
Evasion of taxes
Further the rise in new channels like organized retailing have given marketers
fresh hope in understanding how consumers behave at the retail level and
precisely what triggers them to choose a store / brand. Research tools track
purchase behaviour and can help marketers alter packaging, pricing, promotion
and develop new strategies to influence at the point of purchase.
The future isn’t ahead of us. It has already happened” - Kotler on Marketing.
Bibliography : Various websites, books, journals and materials refered.