MKT 3831

Retail Buying and Merchandising

A. Ratikarn
Semester 1/2007

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2007 : Ratikarn

OVERVIEW OF RETAIL BUSINESS

IN THAILAND

Overview of Retail Business :

How many types of retailer in Thailand?

Where do you buy food or snack?

Where do you buy Coca-Cola?
Where do you shop shirts/dresses?
Where do you buying shampoo?
Where do you buy food for your pets?
Where do you buy books?
Where do you buy medicine?

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Types of Retail Business for FMCG in Thailand

Department Stores
Central
Robinson
The Mall
Siam Paragon
Emporium
Isetan
Tokyo
Tang Hua Seng
Jusco

CVS + G-stores
7-Eleven
Family Mart
Jiffy (Jet)
Select (Shell)
Tiger Mart (Esso)

Specialty Stores

Hypermarket
Tesco-Lotus
Big C
Carrefour

Personal Care
or HBC Stores
Watsons
Boots
Guardian

Warehouseclub
Makro

Open Trade
Pop & Mom Shop
Minimart

B2S
Supersports
Powerbuy
Powermall
Homeworks
Homepro
Index
ToysRus

Supermarket
Tops
Home Fresh Mart
Foodland
Villa
Tang Hua Seng

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Retail Definition by AC Nielsen

North

Northeast
Central

Nationwide
Greater Bangkok, Central,
North, Northeast and South
Defined Retail Outlets
Super/Hypermarkets / Personal Care Stores
Convenience / G-Stores
Open Trade (Pop&Mom Shop)
Licensed Pharmacy

Greater Bangkok
Bangkok, Samut Prakarn, Nonthaburi
Pathumthani

South

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Department Stores

A department store is a retail establishment which specializes in selling a

wide range of products without a single predominant merchandise line.
Department stores usually sell products including apparel, furniture,
appliances, electronics, and additionally select other lines of products such
as paint, hardware, toiletries, cosmetics, photographic equipment, jewellery,
toys, and sporting goods. Department stores are usually part of a retail chai
n of many stores situated around a country or several countries.

Department Stores:
Carry a wide variety of product linestypically
clothing, home furnishings, and household goods.
Each line is operated as a separate department
managed by specialist buyers or merchandisers.

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Hypermarket

In commerce, a hypermarket is a superstore which combines a

supermarket and a department store. The result is a gigantic retail facility
which carries an enormous range of products under one roof, including full
lines of groceries and general merchandise. When they are planned,
constructed, and executed correctly, a consumer can ideally satisfy all of his
or her routine weekly shopping needs in one trip to the hypermarket.
Hypermarkets, like other big-box stores, typically have business models
focusing on high-volume, low-margin sales. Due to their large footprints -- a
typical Wal-Mart Supercenter covers 150,000 square feet, a typical
Carrefour 210,000 square feet -- and the need for many shoppers to carry
large quantities of goods, many hypermarkets choose suburban or out-oftown locations that are easily accessible by automobile.
Hypermarket:
Carry a wide variety of product lines under one roof
(one stop shopping), focusing on high-volume, low
margin sales.

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Supermarket

A supermarket is a departmentalized self-service store offering a wide

variety of food and household merchandise. It is larger in size and has a
wider selection than a traditional grocery store.
The supermarket typically comprises meat, produce, dairy, and baked
goods departments along with shelf space reserved for canned and
packaged goods as well as for various nonfood items such as household
cleaners, pharmacy products, and pet supplies. Most supermarkets also sell
a variety of other household products that are consumed regularly, such as
alcohol (where permitted), household cleaning products, medicine, clothes,
and some sell a much wider range of non-food products.

Supermarket:
Self-service store that carries a wide variety of food,
laundry, and household products.

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Specialty Stores

Specialty stores are small stores which specialise in a specific range of

merchandise and related items. Most stores have an extensive width and de
pth of stock in the item that they specify in and provide high levels of service
and expertise. The pricing policy is generally in the medium to high range, d
epending on factors like the type and exclusivity of merchandise and owners
hip, that is, whether they are owner operated or a chain operation which has
the advantage of bulk purchasing and centralised warehousing system. The
y differ from department stores and supermarkets which carry a wide range
of merchandise.

Specialty Stores:
Carry narrow product lines with deep
Assortments within those lines.

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Warehouse Club

A warehouse club is a retail store, usually selling a limited variety of

merchandise, in which customers pay annual membership fees in order to
shop. The clubs are able to keep prices low due to the no-frills format of the
stores. The concept is similar to the many consumers' cooperative
supermarkets found in Europe, though using bigger stores and not cooperatively owned. The use of members prices without co-operative
ownership is also sometimes used in bars and casinos.

Warehouse Club:
Off-price retailer that sells a limited selection of
brand-name grocery items, appliances, clothing,
and a hodgepodge of other goods at deep
discounts to members who pay annual
membership fees.

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Personal Care Stores/Health & Beauty Stores

A personal care store is a retail that sells perfumeries & cosmetics to

grocery, and some store is also selling drugs & medicine. This store format
is compact and situated in office buildling or shopping center. This store
carries a wide variety of health & beauty products. Product Consultant
service and Pharmacist are provided at this stores.

Personal Care Stores:

Focusing on health & beauty products or
product for daily usage.

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Convenience Stores (C-Store or G-Store)

A convenience store is a small store or shop. They are often located

alongside busy roads, or at gas/petrol stations. This can take the form of
gas stations supplementing their income with retail outlets, or convenience
stores adding gas to the list of goods that they offer. Railway stations also
often have convenience stores. They are also frequently located in
densely-populated urban neighborhoods.

Convenience Stores:
Small stores located near residential areas that
are open long hours 7 days a week and carry
a limited line of high-turnover convenience goods.

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Convenience Stores
Differences from supermarkets
Although larger newer convenience stores have quite a broad range of
items, the selection is still limited compared to supermarkets, and in many
stores only 1-2 choices are available.
Prices in a convenience store are typically higher than at a supermarket,
mass merchandise store, or auto supply store (with the exception of the
goods such as milk, soda and fuel in which convenience stores traditionally
do high volume and sometimes use as loss leaders).
The stores will sometimes be the only stores and services near an interstate
highway exit where drivers can buy any kind of food or drink for miles. Most
of the profit margin from these stores comes from beer, liquor, and
cigarettes. Although those three categories themselves usually yield lower
margins per item, the amount of sales in the categories generally makes up
for it. Profits per item are much higher on deli items (bags of ice, chicken, etc
), but sales are generally lower.
At least in some countries most convenience stores have longer shopping
hours, some being open 24 hours.

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Organizational Classification
Chain Stores:
Two or more outlets that are owned and controlled, have central buying and
merchandising, and sell similar lines of merchandise.
Voluntary Chain:
A wholesaler-sponsored group of independent retailers that engages in bulk
buying and common merchandising.

Retailer Cooperative:
A group of independent retailers that bands together to set up a jointly owned,
Central wholesale operation and conducts joint merchandising and promotion effor
Franchise:
A contractual association between a manufacturer, wholesaler, or service
organization (a franchiser) and independent businesspeople (franchisees) who
buy the right to own and operate one or more units in the franchise system.

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Retailer : a middlemen between Producer & Consumers

Manufacturer

Wholesaler/Retailer

Consumers

Push Strategy

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Business Objective -> To have a Healthy Business

We can create a Healthy Business by...

-> have a good quality in sell-in
-> have a good quality in sell-out
Sell-Out
61,000,000
Consumers

Sell-In

Manufacturer

294,000
Retail Outlets

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Channel of Distribution :
A Retailer is an important aspect of successful marketing
Wholesalers: a multi-level service
The advantages of using a wholesaler actually make it a much more costefficient route for most MFG than direct delivery.
Their sales force can reach many small stores far more economically
than the MFG could.
They cut the MFGs inventory costs and risks by holding goods in
warehouses.
They help finance MFG by ordering early and paying promptly.
They even absorb risks, by carry the cost of theft, damage and spoilage.
Their transportation network is fastest & cheapest way of getting more
products into more stores.
Retailers: Point of sales Where buying begins

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Organization of Retail Business

Example : Supermarket
President

Vice President
Buying &
Merchandising

Food

Vice President
Business
Development

Vice President
Store Operation

Non Food

Regional Regional
Manager Manger

Category Manager or
Merchandising Manager

New Store
Location

Vice President
Finance &
Accounting

Finance

Store Manager

Vice President
Information
Technology

Accounting
Programmer

Help desk

Staff at Store
Buyer
Buyer

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Buyers Roles & Responsibilities:

Buying & Merchandising

Merchandising Presentation

Advertising

Shortage Control

Staff Development & Training

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Buyers Roles & Responsibilities:

Buying & Merchandising

Follow the company policy and quality/image

positioning, develop a merchandising strategy for
the departments.
Develop an achieved planned goals in sales,
mark-up, profits
Analyze sales/stock/vender performance reports
and take action
Forecasting sales for Promotion items
Negotiate with vendors for favorable terms,
discounts, and transportation allowances.
Participate in product development for private
labeling, importing goods.
Stay current on new trend and exploring new
merchandising trends.
Shop & analyze competitive stores with price,
assortments and display in mind.

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Buyers Roles & Responsibilities:

Merchandising Presentation

Define a point of view toward merchandise presentation (displays)

Work with a Vendor to maximize the excitement of displays

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Buyers Roles & Responsibilities:

Advertising

Prepare advertising and promotion plans, budgets, and schedules

Inform branch stores of advertised promotion well in advance, so they can
plan ahead for them. Schedule deliveries to make sufficient stock available
for all advertised goods.
Track & analyze the results of any advertising, for use in future planning
Conform to the requirements of country laws & regulations

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Buyers Roles & Responsibilities:

Shortage Control

Ensure that all purchase orders, requests for price revisions, transfers of
goods, and vendor returns and processed promptly and according to
company procedures
Review purchase journals regularly and take appropriate action
Maintain good working relationships with operating divisions to promptly
resolve problems in those areas as they arise.
Participate fully in all shortage control audits and loss prevention programs

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The End

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