National Institute of Business Management

Chennai - 020

EMBA/ MBA

Elective: Retail Management (Part - I)

Attend any 4 questions. Each question carries 25 marks

(Each answer should be of minimum 2 pages / of 300 words)

1. Describe the problems in Retail Selling.

Retail selling problems

1. Problem of Lookers:

All those visitors who enter the shop cannot be called as customers.
Good may prospects visit the retail outlet with no intention of
buying. These prospects are the persons who are ^indulging in
"delightful" shopping. Such casual lookers or visitors extend their
keen interests in the display of goods.

Similarly, there are customers who move from shop to shop before
buying. These shop hoppers are generally found in case of shopping
and specialty goods where they want it compare price, styles,
features, specialties and so on. These gouged can be hooked and
lookers if the salesman a) shows these specialty goods openly
without any hesitation allowing them to examine from different
angles, b) proves with proof that the products are superior to others.
c) Presents with all the possible sales literature for further study
before they decide to boy. Under these circumstances, what is more
important is service than sale. He should sell the name of the firm
and himself before selling his goods. Even if the visitors do not
decide to buy this time, they prefer this selling house and salesman
during their next round of visit.

2. Problem of Simultaneous Serving:

It is not that a single customer is expected at the retail salesman's

counter. Movement of customers and visitors is on going and it
thickens during peak period and sledges at off period daily, weekly
bazaar days, festival days and so on. As he is all above on a
particular counter or a section, suddenly second or third customer
comes in waiting to be attended promptly. This adds to single-handed
salesman work load. He can neither leave in the lurch the first
customer nor forget the incoming second and third customer.

Naturally, all customers are important to him. He wants to serve all,

but one by one. It is humanly impossible to deal simultaneously with
ill of them at one stretch. Then how he solves this problem of serving
all. He has to advisee the goal of "eating the cake and having too."
The possible solutions are: (a) He is to welcome the second and third
customers, greet them, ask their kind permission to complete the deal
with the first one on hand, (b) If the first customer is yet to decide, he
can leave him to decide for a while and attend second and third
customers, (c) Those of his colleagues on other counters, their
services can be pressed in as it is natural pattern of working together,
(c) He can deal with two to three customers at time by asking each
what they want and presently them with the products. Depending on
the buying behaviour and reactions, each one can be tackled as all
three of them will not decide for no person is a perfect substitute for
another. However, no customer should have the feeling that he has
been neglected in rush. It is the situation and the ability of a salesman
that go a long way in solving the problems associates with
simultaneous serving.

3. Problem of Substitution:
There will certain unpleasant situations where the salesman is to sell
a substituted product than the one asked for by the prospect. Such
situation arises when the product is in stock or is out of stock. The
first case of substitution is not a necessity and, hence it manifests his
attempt? Of creative selling because, he is trying to win over the
customer by his persuasive tactics as to why the customers should go
in for a substitute though he has in stock the regular product. Some
customers may accept his offer if convinced, and others may not as
they insist on the regular product in stock.

Substitution becomes a necessity when the product is out of stock

Here, he has two options : (a) To tell the truth that the product is out
of stock and the customer is requested to visit the retail out after a
definite interval of time, (b) He should establish that the substituted
product is far more superior to the one existing and there is wisdom
in purchasing substitute product without any hesitation and risk.

4. Problem of Selling on Phone:

There are good many customers who prefer to contact retail salesman
on phone an; confirm their purchases. Selling on phone is now a
common feature as these is telephony revolution Selling on phone is
to be accepted when the purchaser is a busy guy and he can not come
to the shop personally because there is no parking lot or the shop is
humming centre filled with customers, the product is branded and
can be easily and clearly described. In most cases, the salesman can
appeal to the sense of hearing of a prospect; of late, vision phones
allow one more sense - that is sight.

Other senses of touch, smell and taste are not possible. The success
of sales on phone depends on hearing more from the customer and
some cases selling. Normally, the order should be accepted in case of
known customers. The partly may insist on door deliver and
 acceptance of rejected products. That is why, much care is to be
exercised while selling of phone. A salesman can very well keep
informed the customers of special offer sales or grand reduction sales
on the occasions of annual stock clearances or special events or
festivals. However, telemarketing is going much ground in these days
of high tech.

5. Problem of Second Trial Deal:

Salesman welcomes his customers, greets him and sales talk is

opened on his counter. In spite of his best efforts, he finds that he has
not been able to convert the prospect into customer or he fails to
hatch the egg. In such cases, another salesman who is seasoned or
more experience tries his hands to hatch the same egg. That is he
prevails upon the good sense of prospect and succeeds in convincing
him. There is nothing wrong in trying this because; the aim of the
firm is not to lose the valuable customer at any rate. Sales are the
result of team-work.

However, this practice of second trial deal has psychological

implications both on the salesman and the customer. The first
salesman who tries and could not succeed, feels it as case
encroachment upon him; again the second salesman who succeeded
feels that he is really superior and, therefore, more efficient and
effective than the first. This generates frustration heart burning
between the salesmen which is really dangerous for the firm as a
whole. Further, the custom also feels that he is being compelled to
buy and may not accept the offer and even if he accepts now, he may
not revisit. In both the cases, it the firm that loses. Hence, second
trial deal should be avoided at any rate, which is better for all the
three parties namely the customer, salesman and the firm.
2. Explain the role of advertisement in the promotional mix of a
store.
Promotion refers to raising customer awareness of a product or
brand, generating sales, and creating brand loyalty. To promote
means to publicize something in order to sell it. Promotion refers to
all those communication activities intended to increase the sales of a
product. Thus, the Promotion Mix has now come to be known as the
Communication Mix.
• Advertising • Public relations • Sales promotion • Direct
marketing • Personal selling
What is Advertising? Advertising is any paid form of non personal
presentation and promotion of ideas, goods or services by an
identified sponsor. Paid Form Non-personal Promotion Identified
Sponsor Persuasive Mass Communication
Inform •To provide information and create awareness about a new
product, brand, new usage of an existing product. Persuade •To
persuade customers to buy a particular brand. •It encourages Brand
switching and creates preference for a particular brand. Remind •To
remind the customers about a product that they may overlook.
•Advertising a mature product.
Advertising seeks to move potential buyers through these stages:
A – Gain Attention and create Awareness  I – Create and hold
Interest D – Develop a desire A – Actions that Encourage
customers to buy AIDA
Classification of Advertising  On basis of Demand :  Primary
demand  Selective demand  On Geographical basis :  Global
 National  Regional  Local  On Target Group basis : 
Consumer  Industrial  Trade  Professional  Based on
objectives:  Product Advertising  Service Advertising 
Institutional Advertising  Public service Advertising  On Timing
of response basis:  Direct action Advertising  Indirect action
Advertising
5 M’s of Advertising Mission Money MessageMedia Measure
Product Life Cycle Introduction Growth Maturity Saturation
Decline Advertising Informative Persuasive Reminder AIDA
Attention Interest Desire Action All 4 Objectives Increase in sales
Increase in market share Corporate Image
Provides Information Induces Trial and Repetitive buying.
Builds Brand Image Helps to build Brand preference and
 Loyalty Reduces Product Price Persuades and Reminds people
Reinforces Buyer’s decision
Advertisement is essential in today’s cut throat competition of
Business world because of the following reasons: • To inform
consumers of various goods or products and what these goods or
products can do for them. In a market of Perfect Competition
consumers are required to have Perfect knowledge. Advertisements
helps consumers in gaining this knowledge. •In order for a new
business to penetrate an already saturated market, a systematic
regiment of advertising plan is of utmost importance.
•Advertisements are also necessary for many forms of media to
survive. Television programs are mainly funded through advertising,
as are most websites.
3. What are the criteria’s to be kept in mind while making a
Advertising Budget?Explain.
4. What is the impact of derived demand in a high-tech industry?
Explain..
5. Define Communication applied to retailing. Explain the different
communication channels.
Communication is an integral part of the retailer’s marketing
strategy. Primarily, communication is used to inform the customers
about the retailer, the merchandise and the services. It also serves as
a tool for building the store image. Retail communication has moved
on from the time when the retailer alone communicated with the
consumers. Today, consumers can communicate or reach the
organizations. Examples of this include toll free numbers, which
retailers provide for customer complaints and queries. Another
example is the section called Contact Us on the websites of many
companies.

It is believed that every brand contact delivers an impression that can

strengthen or weaken the customer view of the company. The retailer
can use various platforms / channels for communication. The most
common tools are:
1) Advertising
2) Sales Promotion
3) Public Relations
4) Personal Selling
5) Direct Marketing

The tools are illustrated in Figure below

Retail Communication Mix >>

Sales promotion>> Advertising >> Direct marketing>> Personal

Selling >> Public Relations

Let us now examine each of these tools in detail:

Advertising can be defined as any paid form of non-personal

presentation and communication through mass media. It is popularly
believed that one of the main aims of advertising is to sell to a wide
mix of consumers and also to induce repeat purchases. However, a
retailer may use advertising to achieve any of the following
objectives:

1) Creating awareness about a product or store

2) Communicate information in order to create a specific image in
the customer’s mind in terms of the store merchandise price quality
benefits etc.
3) Create a desire to want a product.
4) To communicate the store’s policy on various issues.
5) Help to identify the store with nationally advertised brands.
6) Help in repositioning the store in the mind of the consumer.
7) To increase sales of specific categories or to generate short term
cash flow – by way of a sale, bargain days, midnight madness etc.
8) Help reinforce the retailer’s corporate identity.

The retailers for advertising may use any one or a combination oft
the following mediums:

1) Press advertisements
2) Posters and leaflets, brochures booklets
3) Point of purchase displays
4) Advertising can also be done through mediums like radio,
television, outdoor hoardings and the internet.

Determining the Advertising / Promotional budget

While there is no definite formula for determining the advertising or

the overall promotion budget the following are the main methods that
may be employed to determine the advertising budget. ‘

The percentage of Sales method:

This is perhaps the most commonly used method for determining the
budget. Here, the budget is a fixed percentage of sales. The biggest
advantage of this method is that it is simple to apply and it allows he
retailer to set an affordable limit on promotional activity. This
 method however, takes little consideration of the market conditions
of any special advertising needs.

The Competitive Parity Method

Here the budget is based on the estimated amount spent by the

competition. There is risk that it could be based on wrong
information and again there is little consideration for market
conditions or growth opportunities.

6. Explain the basic differences of leadership styles between a boss

and a leader?

Some people might use the terms “boss” and “leader” interchangeably, but that’s not
entirely accurate.

The truth is, some bosses are simply that – a boss. They have attained a position in the
management section of the corporate pyramid. They have a nice office and a designated
parking space. They make decisions that affect the direction of the company and often
control how money is spent.

None of that makes them a leader, however.

The good news is that bosses can become leaders, and doing so should become a priority
for those who want to effectively lead in the workplace.

By learning the key differences and applying them to the job, bosses can become the type
of leaders who recruit and retain top talent while also cultivating employee growth and
increasing a company’s bottom line.

So what characteristics differentiate a boss from a leader? The following represents some
key distinctions between the two.

Leaders Lead, Bosses Push

Leaders motivate their employees, which then inspires them to follow their leader’s
example. Bosses tend to push employees instead of directing them. This type of manager
tends to never make decisions, which forces employees to work without guidance and
expectations while their manager hides behind a wall of inaction.
True leaders frequently present ideas and work alongside their employees. They clearly
communicate objectives to the team and their actions are aimed at achieving goals
together. This is the difference between inspiring team members and losing their respect.
When a team has confidence in a leader, it can help improve team culture and motivate
employees to contribute.

Leaders Listen, Then Speak

Good leaders spend time listening to their employees rather than talking above them.
They understand the value of seeking and incorporating the opinions of others into the
decision-making process.

Bosses tend to dominate conversations. They expect employees to listen and carry out
their commands, with little or no direction. This type of attitude is not a sound approach
to building a team of engaged employees who want to be valued for their knowledge and
skills.

Leaders Offer Equality

The business world is not elementary school – although the idea of a “teacher’s pet” is as
unattractive in the office as it is in the classroom. Bosses can sometimes pick a favorite
employee or two, which can result in unfair treatment, such as devoting more time to
certain employees than others, giving them more benefits and creating an inner circle.
This typically does not sit well with other employees, and often will decrease team
productivity and morale.

Good leaders treat everyone equally, giving one person’s ideas the same weight as
everyone else on the team. Strong leaders don’t let personal preferences get in the way of
creating a dynamic environment.

Leaders Roll Up Their Sleeves

When a company launches a major project, true leaders get “in the trenches” with their
teams. Leaders take initiative, while bosses tend to stand aside and “supervise” others
doing the work.

Seeing that a leader is as invested in a project as the team can inspire others to do their
best work. Bosses like to sit on the sidelines and only interact to give orders. This hurts
team motivation, collaboration and creativity.

Leaders Don’t Scold

A time and place exists for communicating wrongdoing and corrective action. However,
the vast majority of matters involving an employee can be handled with a dose of
constructive criticism, not harsh scolding, whether in private or in front of peers.
Leaders offer sound advice in a private setting, while bosses tend to scold and may even
threaten their employees, which can leave them feeling concerned, embarrassed and
defeated. Leaders can deliver discipline too, but their approach in doing so should be a
learning experience for employees to redirect their efforts away from what is not
working.

Leaders Don’t Need Fear

The old adage that says a person would rather be feared than respected is not going to
work in the modern office (if it ever truly did). Leaders understand that intimidating
employees and attempting to control them with fear will not work in any setting. Fear
leads to doubt, poor morale and productivity loss. Smart leaders inspire with trust,
enthusiasm and empathy, and display confidence in their employees to make decisions on
their own.

Leaders Invest Time

Some bosses – especially those who have chosen favorites – tend to ignore a majority of
their employees. This can give other workers the sense they are drifting with an uncertain
future. Leaders don’t ignore. They invest time and effort into developing employees in
their profession, teaching them new skills and helping them advance in their career.

These represent some of the differences between a boss and a leader. They seem simple
enough, but simple does not always mean easy. True leaders make a commitment to
assess their management styles, understand these key differences and then make a
concerted effort to put these good leadership characteristics into action

25 x 4=100 marks