Retailing Management •
Michael Levy, Barton A. Weitz and Ajay Pandit
Retail Retail may be defined as the first point of customer contact.
Retailing According to Philip Kotler “ Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non-business use. •
Retailing is the set of business activities that’s add value to the products and services sold to consumers for their personal or family use. •
Retailer •
Retailer Retailer is a business that sells products and services to consumers for their personal and family use. Retailers Retailers are the final business in a distribution channel that th at links manufactures to consumers.
The retailer is the final business in a distribution channel that links manufacturers with consumers. Distribution Channel Is a set of firms that facilitate the movement of products from the point of production to the point of sale sale to ultimate consumer consumer..
The Distribution Channel PPT 1-4
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Distribution Channel
Manufacturing, Wholesaling and Retailing Vertical Integration – firm performs more than one set of activities
Ex: retailer invests in wholesaling wholesali ng or manufacturing manufactu ring (Wal-Mart (Wal-Mart)) performs some distribution and Backward Integration – retailer performs manufacturing activities Ex: Westside Forward Integration – manufacturers undertake retailing activities
Ex: Bata, Raymond's, Titan Watches 1-7
How Retailers Add Value • Providing Assortment - Enables customer to choose
from a wide selection of brands, designs, sizes, colours, and prices in one location. • Breaking Bulk - Buy in large quantities then offer to
consumer in smaller quantities. • Holding Inventory - Keep inventory so that products
will be available when consumers want them. • Offering Services - Provide services ser vices that make it
easier to buy and use products.
Significance of Retailing Retailing •
12-15 million outlets.
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Contributes over 9-10% to India’s GDP
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Largest employer after agriculture, with over 18 million people employed. Generates 8% of country’s employment.
India is the third-most attractive retail market for global retailers among the 30 largest emerging markets, according to US consulting group AT Kearney’s report published in
June 2010.. 2010.. 1-9
Economic Significance •
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(1). Retail Sales:An aggregated aggregated measure of the sales of retail goods over a stated time period, typically based on a data sampling. Retailing affects every part of life. Just think of how many daily contracts you have with retailers when you eat meals, furnish your apartment, have your car fixed, and buy clothing for a part or job interview.
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The total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12 billion by 2015, according to the BMI India Retail report for the third quarter of 2011.
BMI : BUSINESS MONITOR INTERNATIONAL Business Monitor International (BMI) was founded in 1984 by Richard Londesborough and Jonathan Feroze, the company's joint CEOs, who both continue to play a full role within the company. BMI's customers and clients span more than 140 countries worldwide, including more than 400 of the Global Fortune 500 companies. Businesses, banks, financial service companies, governments, academia and research centres have all come to rely on BMI's analysis, data and forecasts – and have done so for 25 years. The company was awarded the Queen's Award for Export Achievement in 1997. BMI is a wholly independent company, headquartered at Blackfriars, London, with foreign offices in Singapore and New York. BMI's corporate mission is to become the world's No.1 Independent Information Provider in its field (Country Risk & Industry Research).
(2). EMPLOYMENT •Retailing also is one of the nation
largest industries employment.
in
terms
of
•Largest employer after agriculture,
with over employed.
18
million
•Generates
8%
of
employment.
people country’s
(3). GLOBAL RET RETAILERS AILERS With worldwide retail sales estimated at $8 Trillion, the 20 largest retailers represent a 12 percent share of the world market.
(4). Support for Community: Retailers are also responsible for developing many innovative products and services.
Examples of Service Retailers Type of Service
Service Retail Firms
Hotels and motels
Hyatt, Sheraton, Marriott,
Insurance
LIC, Tata AIG
Internet access/ access/Elec Elec info.
Sify, Airtel Broadband
Movie theater theaterss
PVR, Fun, Big Cinemasl
Real estate
DLF, Ansals
Restaurants
TGI Friday’s, Pizza Hut
Investment
Sharekhan, India Bulls
Home entertainment Telecom
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Dish TV, Tata Sky BSNL,, Airtel, Tata Indicom BSNL
India Retail Industry Retailing is one of the pillars of the economy in India and accounts for 13% of GDP. The retail industry is divided into organised and unorganised sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sq ft in size. Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporatebacked hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement pavement vendors, etc. [ Most Indian shopping takes place in open markets and millions of independent grocery shops called kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008. Regulations prevent most foreign investment in retailing. There are taxes for moving goods to states, from states, and even within states.
Major Indian Retailers • • • • • •
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Next retail India Ltd (Consumer Electronics) Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe Deposit Lockers PGC Retail -T-Mart India , Switcher , Respect India , Grand India Bazaar ,etc., REI AGRO LTD LTD Retail-Formats:6TEN Hyper & 6TEN Super RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s Super, Daily & Fresh Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Factory, Depot, aLL, EZone etc. Marks & Spencer: Clothing, lifestyle products, etc. The Tata Group-Formats: Westside, Star India Baz aar, Steeljunction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma. K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores. Pyramid Retail-Formats: Pyramid Megastore, TruMart Nilgiri’s Nilgiri’s-Formats: Nilgiris’ supermarket chain Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain. Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out Reliance Retail-Formats: Reliance Fresh Reliance ADAG Retail-Format: Reliance World German Metro Cash & Carry Shoprite Holdings-Formats: Shoprite H yper Paritala stores bazar: honey shine stores Aditya Birla Group - more Outlets Kapas- Cotton garment outlets
Opportunities in Retailing Management Opportunities: To cope with a highly competitive and challenging environment, retailers are hiring and promoting people with a wide range of skills and interests. Students often view retailing as a part of marketing because the management of distribution channels is part of a manufacturer's marketing function. But retailers operate businesses and, like manufacturers, undertake most traditional business activities. Retailers raise capital from financial institutions; purchase goods and services; develop accounting and management information systems to control operations; manage warehouses and distribution systems; design and develop new products and undertake marketing activities such as advertising, promotions, sales force management, and market research. research. •
Entrepreneurial Opportunities: Retailing also provides opportunities for people who wish to start their own business. Some of the world's richest people are retailing entrepreneurs. •
Innovative Retail Entrepreneurs Kishore Biyani (CEO, Future Group)
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Kishore Biyani, Biyani, born in a middle class marwari mar wari trading family, was not satisfied with family business. While in college, he noticed one of his fashion conscious conscious friend wearing trousers trousers made out of a new material called ‘Stonewash’ fabric, which looked l ooked fashionable, fashionable, simply
because it was so different. This gave him an idea and he started selling ‘Stonewash’ fabric to small shops in
Mumbai. It was a big success and he made his first profit. Thereafter, nothing could stop his entrepreneurial entrepreneurial instincts and he ventured to redefine the retailing business in India with the launch of Pantaloons, Big Bazzar and many more retail formats.
Today, Kishore Biyani’s Future Group, with 3550 crore turnover, turnover, is one of the country’s leading business groups
present in retail, consumer finance insurance, retail media, retail spaces and logistics.
