Introduction of Retailing
The word ‘retail is derived from the French word ‘retailer’, meaning cut a piece off or ‘to break bulk’. In simple terms, it implies a first-hand transition with the customer.
“Retailing is the sale of goods and services to the ultimate consumer for personal, family or household use.”
* The word retail has its origin in French word retaillier and means “to cut a piece’’ or “to break bulk’.
* “Retailing is the sale of goods and services to the ultimate consumer for personal, family or household use.”
* According to Kotler: “Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use”
* Retailing may be understood as the final step in the distribution of merchandise for consumption by the end consumers.
* Retailing is responsible for matching final consumer demand with supplies of different marketers.
* Retailing is high intensity competition industry, The reasons for its popularity lie in its ability to provide easier access to variety of products, freedom of choice and many services to consumers.
* The Indian retail is dotted by traditionally market place called bazaars or haats comprises of numerous small and large shops, selling different or similar merchandise
According to Kotler:
“Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use”
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Retailing can thus be defined as consisting of all such activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use. Retailing involves a direct interface with the customer and the coordination of business activities from end to end, right from the concept or design stage of a product or offering, to its delivery and post delivery service to the customer.
Retailer: Retailer can be defined as a dealer or trader who sells goods in small quantities, or one who repeats or relates.
Manufactures: Manufactures business whose primary economic role is the production of goods.
Wholesaler: Wholesaler, which acts as market intermediaries between producers and end users of products and services.
Retail Market: Retail Market refers to a place where a group of consumers with similar needs and group of retailer meet using a similar retail format to satisfy those consumer needs.
Retail Marketing: Retail Marketing can be defined as the process by which a retailer tries to identify the target market in order to satisfy the target market’s needs and build up a sustainable competitive advantage.
Functions of a retaillier
* From the customer point of view, the retailer serves him by providing the goods that he needs in the required assortment, at the required place and time.
* From an economic standpoint, the role of a retailer is to provide real added value or utility to the customer. This comes four different perspectives
* Form: First is utility regarding the form of a product that is acceptable to the customer.
* The retailer does not supply raw material, but rather offers finished goods and services in a form that the customers want.
* The retailer performs the function of sorting the goods and providing us with an assortment of product in various categories.
* Time: He cerates Time utility by keeping the store open when the consumers prefer to shop.
* preferable shopping hours.
* Place: By being available at a convenient location, he creates place utility.
* Ownership: Finally, when the product is sold, ownership utility is created.
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* Apart from these functions retailer also performs like:
* Arranging Assortment: manufacturers usually make one or a variety of products and would like to sell their entire inventory to few buyers to reduce costs. Final consumers, in contrast prefer a large variety of goods and services to choose from and usually buy them in small units.
* Retailers are able to balance the demands of both sides, by collecting an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units
* Breaking Bulk: to reduce transportation costs, manufacturer and wholesalers typically ship large cartons of the products, which are then tailored by the retailers into smaller quantities to meet individual consumption needs
* Holding stock: Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacture to regulate production.
* Promotional support: small manufacturers can use retailers to provide assistance with transport, storage, advertising, and pre- payment of merchandise.
Major type of retail stores
There is no universally accepted method of classifying retailer. Various schemes have been proposed to categories retailers based on
* Number of outlets
* Margin vs. turnover
Because of overlap of classification criteria, some stores may qualify as under two different categories.
1. General merchandise retailer: general merchandise retailer carry a variety of product lines, with considerable depth. Some major types of these stores include supermarkets and hypermarkets , discount stores and department stores.
* Super market: A supermarket is a large self service retail store that carries a wide variety of consumer products under one roof , such as complete line of food products , laundry requirement, household maintenance items. In India cooperative have managed some supermarkets for quite sometime like super bazaar in Delhi, apna bazaar shakari bhandar etc.
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* Discount store: these stores are self service, standard general merchandise retailers regularly offering brand name and private brand items at low price, earn lower margins and push for high sales turnover. The characteristics of true discount stores include
* Selling products at discounted price
* Carry standard international , national, or store brand toi build image
* Self service stores to minimize operational costs
* Preferred store location are low rent areas.
Like best known discount store is Wal-Mart. In India almost all retail stores offer discounts, subhiksha
* Department store: a department store is larger retail store organized into several departments, offering a broad verity and depth of product lines. The product mix may include food products, appliances, clothing, furnishing and other household goods.
* Like Pantaloons, shoppers’ stop,
* department store only for kids is Kids Kemp.
* Fashion related department stores in India are Ebony, Globus, pantaloons, lifestyles.
2. Specialty Stores: specialty stores carry a narrow product mix with depth of assortment within the line.
* The emphasis is on a limited number of complimentary products and high level of customer service
* Specialty store often sell shopping goods such as Jewelry, apparel, computers, music systems, sporting goods.
* Like; Tanishq, Titan watches, Van Heusen, Raymond’s.
3. Shopping Malls: shopping malls typically deal with several bases and product categories and provide a large variety of merchandise abs service. There are 96 operational malls in India and expected to grow 158 by this current year.
* Ansal plaza (Delhi), Garuda mall (Bangalore) Sahara plaza Gurgaon Spenser Plaza Chennai
Prominent sector in Indian retail
1. Clothing, textiles and fashion Accessories:
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2. Food & food Services:
3. Consumer Durables:
4. Books & Music:
Other emerging sectors
5. Jewellery retail
6. Footwear retail
7. Time Wear Retail
8. Fuel Retail/ petro retail
Challenges to retail Development in India
* Retail not being recognized as an industry in India.
* The high costs of real estate.
* Lack of Adequate infrastructure.
Multiple and complex taxation system. | |
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| Trade ($ bn) | Employment (%) | Shops (million) | Organized Sector share (%) |
India | 180-394 | 7 | 12 | 2-3 |
China | 360 | 12 | 2.7 | 20 |
US | 3800 | 12.6-16 | 15.3 | 80 |
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