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Title: Marketing and Merchandising
Description: This file contains the detailed study of Marketing and merchandising with examples in each category.
Description: This file contains the detailed study of Marketing and merchandising with examples in each category.
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WHAT IS RETAILING?
Retailing can be explained by a simple example
...
She may
be a student, who is sipping the hot beverage in the college canteen
...
5 a cup for the 1 gram coffee consumed by her
...
For
this purpose she might have purchased a bottle of coffee powder costing Rs
...
Needless to say, this is a much cheaper option then the first one, but then again you can’t carry the
coffee bottle to the college canteen
...
Of course, the price of a cup of coffee goes up to Rs
...
Coffee cup
...
The
price of a single cup now shoots up markedly to Rs
...
cup
...
FUNCTIONS OF RETAIL
However, for some time let’s go back in our search of quality coffee-at the stage where coffee is
freshly coming out from its source-the plantations
...
What is the price of coffee at this stage? Rs
...
Of course, you will not be able to buy a cup of coffee at this stage, as the orders are placed
not only in kilos but also in quintals
...
Let us have a look at the table below to grasp
these stages:S
...
PRICE (in UNIT FOR THE PRICE (in Rs
...
)
PRICE
GRAM)
1
...
1 KILOGRAM
0
...
40
3
...
00
4
...
00
5
...
00
At all the 5 stages mentioned above, although the price of the coffee has gone up, but the quantity
being dealt with has constantly come down
...
The retailer charges the money from the customer, in this case the college student for providing
the product, i
...
coffee in a quantity desired by the customer, which may be a 1 gram of coffee in
a cup, 60 grams in a glass bottle or 3 grams in a coffee sachet
...
The retailer also charges the amount for providing this quantity at the place desired, which may
be in this case, either a home, a cafeteria, a CCD/ Barista/ Nescafe outlet or a Taj Coffee shop etc
...
The retailer also delivers the product, in this case the coffee, at a time desired by the customer, i
...
right in the morning when the person moves out of bed, in the lunch time after the lunch, in the
evening or in the night
...
e
...
At various stages of this journey, the product takes different forms
...
At the second stage at the college cafeteria, it is a generic Product without any brand serving the
convenience need of the customer
...
Finally, at the CCD, Barista, Nescafe or Taj, Coffee is an Experience performing the socializing
or prestige need of the customer
...
This is a very important function, which distinguishes Retail from Wholesale
...
Thus, Retail may be defined as the journey of a product from Commodity to Experience,
including the stages of generic and brand, thereby serving the time, place and quantity utilities
of the Customer, for his/ her Final Consumption
...
Sometimes, a retailer is forced to follow a traditional approach, even if
the means of modernization are available with him
...
Consider the following case to support this
point:-
Case 1-Bata in Varanasi
In the early nineties, Bata opened up an EBO (Exclusive Brand Outlet) in Varanasi
...
Within a few days of the
inauguration of the store, the showroom staff noticed a typical customer behaviour
...
Puzzled by this
behaviour, the store and company managers decided to compare the Bata outlet with the other
outlets in the market
...
Hence the customers had a psychological fear about the
hi-fi environment, facilities, thereby leading them to believe that these costs will be leading to
high prices, which will be required to be paid by them
...
The concerned managers took up the decision to remove the closed glass doors (for the AC)
with an AC curtain, which took away the psychological barrier of something modern and not
accessible by the retailer, with something traditional and familiar to the customer
...
e
...
Hence whether the traditional or modern
approach to retail needs to be followed depends a lot on the customer in question
...
It is wrong to say that earlier to 1990, there were no
examples of modern retailing in India
...
Even, in the seventies & eighties, EBOs like Raymond, Vimal, Bata,
Nalli’s had marked their presence through the major metro cities of the nation
...
In this respect, the only change brought in by the retail
players entering post-nineties was in terms of bigger stores, not necessarily amounting to more
profitable stores
...
With 70% of India’s population residing in villages and only a miniscule
12% residing in metro & mini-metro cities, will it be right to say that modern retailing has not
touched the bulk of our country’s population
...
What is modern at one place may be
traditional at another place
...
Similarly, what is modern at one time will become traditional at a future date
...
Later on, the same store of Shoppers’ Stop, Andheri gave a
traditional picture compared to their Pune or Jaipur stores
...
IS RETAILING A PART OF MARKETING OR OTHERWISE?
Two pertinent questions which come up for discussion are: - (i
...
) Which of these is the part of the other?
To answer the first question lets take a look at the definitions of Marketing & Retailing
...
' (Source: - http://www
...
net/marketing
...
According to Philip Kotler, Retailing
includes all the activities involved in selling goods or services to the final consumers for personal,
non business use
...
For example, when a
FMCG (Fast Moving Consumer Goods) company like HUL (Hindustan Unilever
Limited) supplies its brands like Surf, Rin to a hotel chain like ITC, it is certainly
marketing but is not retailing
...
(2) A brand marketing company uses retailing activities like distributing through various
store formats to make its goods & services available to the consumers, while a retailing
company uses marketing activities like sales promotion, advertising, sales management,
etc
...
(3) A brand production & marketing company may use various retail options like EBO
(Exclusive Brand Outlets), MBO (Multiple Brand Outlets) SIS (Shop-in-Shop), EMBO
(Exclusive Multi Brand Outlets), but a retail company uses its own outlets only for
reaching its customers
...
However, a retail company like Shoppers’ Stop, Lifestyle, Westside offers
the products through its own outlets only
...
(5) Own production & raw material sourcing forms a major part of a brand company,
while finished products sourcing & retailing are the major ingredients of a retail
company
...
For instance, compare the outlets displaying the brands of
a brand company like Procter & Gamble (P&G) with that of a retail company like Big
Bazaar
...
are much more than the outlets of Big Bazaar, which is a retail
company
...
(8) A brand company offers career opportunities in the fields of Production, Design,
Marketing & Sales & R&D (Research & Development), while a retail company has
openings in Retail Store Operations, Buying & Merchandising, Visual Merchandising,
apart from Accounts & HRM (Human Relations Management)
...
For answering this question, we will consider the case of 2 companies, a brand company like
Arvind Brands and a Retail Company like Lifestyle
...
On the other hand,
Lifestyle, a retail company has retail outlets at various places in the country
...
Thus, for a brand company, retailing is one of the many activities to facilitate its reach to its
consumers, while for a retail company marketing is one of the many activities for helping it
market its store to its customers
...
INDIAN RETAILING-PAST, PRESENT & EXPECTED FUTURE
Indian Retailing-Past (Pre 1990’s)
Country of Shopkeepers
India has always been known as a nation of shopkeepers
...
) Why is it that Indians never win a football match?
Ans
...
The joke aptly describes the adage of Indians having a shop in every nook & corner of UK
...
When the East India Company came to our
country, the main intention was trade only
...
It was the art & craft of the country which was made available at an unimaginable low
cost which attracted the buyers of different countries
...
Market for cheap goods
This encouraged the foreigners not only to buy the products of our country for their personal enduse i
...
retail but also for business, i
...
by sourcing the products from our country and retailing
them in the stores abroad
...
This leads us to two features of our country-firstly, India being a supplier of low priced
goods to the International retail companies, and secondly, Indian customers have themselves been
known as primarily economy class customers falling for low priced goods
...
Retail sans stores & shops
Moreover, traditionally the place where the meeting point of buyer and seller, i
...
the market, was
not always a brick & mortar concretized structure
...
Foreigners visiting our country are often
charmed by the kaleidoscope of colours unleashed during a Nauchandi Mela in Meerut or a
Surajkund Mela at Faridabad
...
Even today, in
many parts of the country, you may find Mangal Bazaar, Som Bazaar, Budh Bazaar etc
...
And how can we forget the patri-wala market available on the footpath
...
Indian Retailing-Present (1990’s – Till date)
Indian Retail & the Economy
Not to let down the age old reputation of the Indian Retailing, the retail industry at present is
making big strides
...
India’s
National Income is Rs
...
Out of this the size of the Indian
Retail Industry is put at USD 400 billion (source: - study by ICRIER)
...
) to the country’s national income
...
No wonder then that there are innumerable
youths who want to make a career in this industry and benefit from the fruits of its growth
...
or is it?
India also boasts of the largest network of over 12 million retail outlets
...
This makes it difficult for the retailers to
benefit from the economies of scale being experienced by large retailers
...
It is actually a mystery to the foreign tourists as to how
come so much of the products like Cigarettes, Paan, Bidi, Masala, Tobacco, Candies, Condoms
etc
...
ft
...
While this small space, gives the owner the advantage of owning and running a profitable and
successful business, he faces the disadvantage of being at the mercy of the large brand
manufacturers who may make policies changing the profit margin being doled out to him
...
He is also not able to get the advantages of increased space like more options being retailed in
each of the product categories, inviting larger number of customers, thereby reducing per unit
costs and increasing his profits
...
Onslaught of Big Modern Retailers
In contrast to these small outlets is the other extreme of Indian Retailing, which is characterized
by large scale modern retail formats
...
One of the first of these formats was the Raheja Builders which
converted a space available in Andheri, Mumbai and opened up a Departmental Store by the
name of Shoppers’ Stop
...
The nineties saw the entry of Pantaloon (Kishore Biyani backed group
owning brands like John Miller, Bare), Westside (Tata Group), Globus (Rajan Raheja group),
Lifestyle (Landmark Group, Dubai) on a national level and retailers like Food World (RPG
Group), Crossroads Mall
...
); Aditya Birla
Group (More); ITC (Choupal Sagar); DCM Sriram (Hariyali Kisaan Bazaar); Modi Group
(Twenty Four-Seven); Videocon (Next) to name a few
...
For instance:- Big Bazaar, E-zone, Home Town, Food
Bazaar etc
...
The modern retail boom which had
started in early nineties had gained unprecedented momentum in this decade
...
Moreover, it is also to be noted that
the average size of the new malls has been increasing over a period of time
...
Commencing from this 1
...
ft
...
ft
...
ft
...
In April, 2010, newspapers & magazines featured various articles carrying the
headlines like “Malls Not Well” saying that over 6
...
ft
...
Destination India for International Players
Another development that took place in the present phase of Indian retailing was the arrival of
international retail players, in the nineties in the form of brands like Arrow, Flying Machine,
Louise Phillipe, Van Heusen and in the 2000’s in the form of upmarket, premium brands like
Hugo Boss, Chanel, Tommy Hilfiger and reputed retail stores like Marks & Spencer, Metro, Wal
Mart
...
No wonder then that today India ranks as the first amongst the 30 emerging markets for new
retailers to enter-for 3 years in the last 4 years, as per a study taken up by AT Kearney
...
” True to this adage, a whole lot of
predictions about the Indian Retail in the past have been proved wrong
...
30,000 crores by 2010, but hardly 1/3rd
of that amount was actually invested by them
...
Moreover, the inflationary trend persisting in the country also prompted the
consumers to tighten their purse strings
...
ft
...
In the times to come, there is bound to be a shake-out, where the loss making
retailers will start first closing down their non-profit stores and may be even start bowing out of
the business
...
According to an
estimate, there will be a tremendous demand for professionals trained specifically for retail
industry and 2,50,000 retail professionals will be required in the next 3 years
...
(1) Country with largest young population in the world
Today, India boasts of having the largest population of the youngest people in the world
...
Jawaharlal Nehru had
stated that the huge population of India is not a liability but an asset
...
Over 867
million people in India are below the age of 45 years old
...
KIDS, TEENS & TWEENS-THE IMMENSE POWER
Just consider the following facts:-
• According to a 2001 Nickelodeon study, an average 10 year old kid
memorizes 300 to 400 brands
• 92% of 8 to 12 year olds request brands by name
• USA has a high percentage of children who believe that clothes and brands
define their social status among their peers
...
Marketers spend billions of dollars each
year observing children and their purchasing behavior
...
According to James U
...
The toy
industry is in second place, with $170 billion of personal spending in 2002 – an
average of $101 a person
...
”
Because of these statistics and above facts, McNeal describes child consumers
as "the brightest star in the consumer constellation
...
"Tweens" influenced over $1 trillion in
spending worldwide in 2002 alone
...
NFL (National Football League) considers the
children to be important to them because catching the attention of a kid means
better odds of creating an adult football fan with some discretionary income
...
As they knew, that they
will not be able to beat the video game giant, EA Sports, because of their big
size and successful reach, NFL decided to join them
...
But a product can only have limited success if the parents aren't
sold too-especially with a rough game like Football
...
One of the most radical things NFL did was that they
made soccer moms the coaches to tackle football
...
e
...
This can very well give us an idea about the present
and the future potential for the retail industry as a growing middle class always has a
growing appetite for newer and better products and services which forces the retailers to
innovate their offerings to them
...
In these countries the number of people over and above the age of
45 is much more than the number of people below this bracket
...
The importance of the age
of 45 years is that people below this age are big spenders on products and services related
to segments like Fashion, Entertainment, Impulsive Purchase items, Home Improvement,
Electronic Durables, Automobiles etc
...
This reduces the spend on the
retailing and the industry suffers
...
(4) Growing affluence
While the population of India is young, it is also backed by purchasing power
...
While the various sectors of the
economy like Manufacturing, Services, and Infrastructure are growing and offering job
opportunities for the people, there is also a shift in the population from the rural base to
the urban base
...
Obviously, there is a growing
movement of people from villages to cities
...
In other words, due to the attraction of additional income people
move to cities and once they reach the cities they get an opportunity to fulfill their
dreams
...
As the well-known independent market strategy consultant, Ms
...
ramabijapurkar
...
From “settle for less” to “stretch for more”
In the pre nineties, the adage used to be “Remember your Roots, Spend Less Today, Save
for Tomorrow”
...
While previously the emphasis was on cutting corners
& saving, today the society is more consumerist
...
While earlier on owning a flat was old age planning, today youngsters start thinking of it
at the time of marriage
...
This increases the options of products
available to her, hence promoting retail of these products
...
He will be your best guide
...
In the early nineties when it was decided to
computerize the operations of a company at the sales level, a stiff resistance to the move
was put up by the senior staff of the company
...
It was a classic case of feeling threatened by a new
thing, in this case the technology
...
From “fear of authority” to “decreasing power distance”
Remember, the advertisement of Indica CS (Compact Sedan), where in an office, the old
boss bullies the young officer and but at the end of the day, the youngster has the last
laugh when he drives away in a more stylish car then his boss
...
One reason for the
same is the decreasing average age of the CEOs in the corporate world
...
This
means that comparatively more people are at a higher positions and are commanding
more money than earlier
...
Moreover, the age difference between
them & their subordinates as well as bosses get reduced, thereby leading to more friendly
discussions rather than formal distances and goodbye to the age old feeling “if my boss is
having it then I should go for a lesser version
...
” And talking of the
activities over there, it would include roaming here & there, playing in the fields with
cousins, swimming in the stream or river, evening walks in the local market et all
...
Moreover, every vacation needs to be a new experience, whether
the river rafting at Rishikesh-Haridwar or the Parasailing at Goa or the skiing at Manali
or even the Zorbing & Bungee Jumping at the local Shopping Mall
...
This new trend not only encourages
services like tourism and entertainment but also keeps ringing the cash registers of the
retailers at these places
...
” The
relevance of the quote in today’s times may be debated, what with female’s opting for
careers and life apart from their home fronts
...
Higher Literacy & Awareness
Those of you who would be seeing some old Hindi movies would be laughing at the
picturization of the character of mother in them
...
What’s more these characters were not altogether away from the reality
...
Today the
status of women in the Indian society has shown a marked improvement, both in films as
well as reality
...
This puts today’s women in a very commanding position with
respect to the products and services available to her
...
Consider for example, the services provided by beauty parlours
...
The need was fulfilled by occasional care at home
...
Today, you will find Fish Pedicure being provided in
shopping malls and is being used by women & even men of all ages & different
economic classes
...
Apart from the increase in number of products
and services required for a new household, the relevance of this point is in the shifting of
the decision making power from an older mother-in-law to the younger daughter-in-law
...
Once that
happens, the priorities of using money shift and the avenues of expenditure increases,
thereby driving the wheels of retailing
...
refrigerator for ten years, but
in a nuclear family, the younger daughter-in-law may opt for a 410 liters
...
Greater Outdoor Responsibilities
Females today are not satisfied with being a home-maker alone
...
Today’s women are as forthcoming in life outside home,
whether it is official or social
...
Certainly the more
the platforms for making appearances, the more the opportunities for spending money
and the more the encouragement to retailing
...
(6
...
In the
early 1990’s, when Raymond would be opening up their retail shops, it was a major point
of discussion as to whether the new store should accept credit cards or not
...
Usually, the credit cards were acceptable only at major stores
...
The sales staff was instructed to say that it
is an international practice not to accept credit card payments if a discount is being given
...
Various retailers have tied up with
different credit cards for making the facility available at all their outlets, no matter
whichever is the place
...
OF NEW CARD HOLDERS IS INCREASING BY 25-30% PER YEAR
All this and much more helps easy money in the hands of the customer, tempting him to
spend on various retailing options
...
) Variety of goods, products and brands
!
Ever noticed the inserts pouring out of a Sunday morning newspaper? Just have a look at
the various models of refrigerators, washing machines and televisions
...
The story is the
same for the other products as well
...
This has opened the field wide for brands to place their products according to the
different occasions which the same person can indulge into
...
Consider, this Brand Chart, which names the 3 major RMG
brand companies of the country, i
...
Raymond, Madura Garments & Arvind Brands along
with the brands either owned or licensed by each of them
...
The list is endless with names like Turtle, Killer, John
Players, Wills Life Style, Provogue etc
...
BRAND GLUT
...
Moreover, this increasing option for the customer is not only in Men’s Wear alone but in
Kids’ Wear & Women’s Wear as well
...
A multi variety of
these brands leaves a lot of choice with the customers of today and promotes retailing as
a business
...
Let us examine them and see as to how far is India from these landmarks and
the further momentum to the modern retailing revolution
...
a
...
While the national income itself is an indicator of the
wealth of the country, the PCI lets us know as to how is the distribution of this
income amongst the population
...
a
...
Moreover, it is not only the products
they buy but also the place that they buy from which assumes importance
...
India today has a per capita income of USD 1489 (2011-12) (Source:http://timesofindia
...
com/business/india-business/Indias-average-growthrate-to-better-Chinas/articleshow/28922659
...
Moreover this PCI has shown a
marked increase in the last 10 years, as the table below shows
...
•
PLETHORA OF BRANDS
This is yet another indication for the speeding up of modern retailing in a country
...
It is
no coincidence that the modern retailing has also gained momentum in these 2
decades
...
The reason is simple, more brands require more modern
retailing space and hence the expansion of the various modern retailing formats
...
As the players in the market increase, they compete more
fiercely for the same share of the wallet of the customer
...
Let us take the
example of India
...
•
FREQUENT REDUCTION IN PRICES
Thanks to the last 2 points, the corollary of continuous reduction in prices of these
brands follow
...
At that time, a
discount of 12
...
Also, there use to be 2 sales in the entire year-one for winter-end
& the other for summer-end
...
Moreover, any discount less than 30% is
simply not acceptable by the customers
...
of “Up to 50% Discount” are
very common from reputed departmental stores and brand stores
...
dealpals
...
Most of these offers are due to the increasing competition and a glut of brands, which force
the brands to drop prices to attract customers)
...
She is the one to decide as
which brands to select and which to reject
...
Today, if the customer does not get
the required combinations with the product or service of one brand or retailer, he
conveniently moves to the competitor, may be never ever to return back to the first
player
...
As the wheels of modern retail will keep on sliding
ahead, the customer will keep on having more choices and becoming more powerful
in her decision making
...
) The Internal Environment &
(b
...
(b) The External Retail Environment (ERE) contrary to the IRE is rarely or not at all under
the control of a retail organization
...
The ERE comprises of factors like:(i)
Political & Government Factors
(ii)
Economic Factors
(iii)
Social Factors
(iv)
Technological Factors
(v)
Environmental &
(vi)
Legal Factors
These factors are much beyond the control of a Retail Organization and influences its
decision making to a lot extent
...
As a result of this Coca Cola, which
was a established brand doing good business in India was shown the door and indigenous
brands like Double Seven, Campa cola, Thums Up were introduced
...
Speaking of more recent events, in 2009, Reliance Retail launched its retail venture with
a pan India presence
...
The state government declared that the outlets
will be adversely affecting the livelihood of small kirana (grocery) stores and hence must
close down
...
Similarly, at a national level the FDI (Foreign Direct Investment) policy of the Indian
Government prohibits direct investments by foreign players in single brand stores beyond
51%
...
For example, when a foreign brand like Gucci decides to enter India, it can
invest a maximum of 51% of the capital in the Indian venture
...
For example,
the foreign player may adapt by either entering into a partnership with an Indian firm or
entering into a licensing agreement with an Indian licensee to make its brand available
into the Indian market
...
P
...
This article shows very clearly that America passed through a similar stage and exhibited
same adverse sentiments and fears towards modern retailers in 1938 what India is
experiencing today:-
Declining prices, lower dollar sales volume, and slim profit margins characterized
the first half of 1938 for retail business
...
In addition, American retailing faced
the challenges of unionization and political attacks against chain stores
...
An article in the Journal of Retailing offered a
class-based explanation for these trends:
These [chain stores] offered more vulnerable points because their employees are drawn from
the classes that incline more definitely toward proletarian sentiment
...
These stores, moreover, cater to the
masses, whose sympathies are with the workers
...
3)
...
” Unionization was
less of a threat to upmarket department stores, and not at all to small, family-run
businesses like GBS
...
Much like Wal-Mart today, chain stores experienced political blowback in attempts
to hobble their competitiveness through legislation (Hollander and Omura, 1989)
...
About half the states, mostly in the south and west,
passed anti-chain tax legislation
...
Bader (1939)
reported a survey of 3,600 consumers in New York City and its suburbs conducted in
the winter of 1939
...
5 percent) of city respondents and 36
...
6 percent of the former
and 46
...
Anti-chain store sentiment ran highest among business owners: 66
...
3 percent new efforts to discourage their spread
...
Indicative of the scope of the issue was the publication of Beckman’s and
Nolen’s (1938) The Chain Store Problem, a book that ostensibly took the public’s point
of view in its examination of the controversy’s social, economic and political aspects
...
Witkowski Department of Marketing, California State University, Long Beach,
Long Beach, California, USA published in Journal of Historical Research in Marketing Vol
...
1, 2009 pp
...
1108/17557500910941583)
ECONOMIC FACTORS
The state of the economy in a place is another important external factor, which influences
the decisions of a retailer
...
The Indian economy has not been so
dependent on the Western countries, where the recession has been very severe
...
Apart from these, the impact
on the Indian Retail Industry is only the rub-off effect of adverse sentiments,
cautious planning, lay-offs in these slow-down sectors & inflation
...
For instance, the recent recession was dealt by some of the UK
restaurants by offering free food & major rebates on prices to attract customers
...
In the 1980s also some of the UK
eateries had followed a similar strategy during recession
...
While the Indian retailers were not so desperate, they did come up with new
focused strategies like using sms, e-mailers pamphlets, newspaper inserts etc
...
Probably to deal with the economic
recessionary trends in India, Levi Strauss Pvt
...
This unique Levi’s scheme worked very well
...
In fact, Provogue also announced its association with HDFC
Bank Ltd for an interest-free EMI scheme
...
1,500 from any Provogue Studio outlet using
an HDFC Bank credit card were able to pay the bill in three EMIs
...
SOCIAL FACTORS
While both the Political & Economic Factors are related to the government in power,
social factors are related to the central player of the retail arena, i
...
the customer
...
It is a
very important factor in the sense that it can open up vast opportunities for a new sector
...
In the early nineties, a new social trend swept the apparel industry in India
...
A
number of factors encouraged this trend
...
This last factor
categorically underlined the changing social trend of preferring convenience even at a
higher cost
...
They were already
having the Park Avenue brand in this segment
...
In the next few years, the company launched new RMG brands like Parx,
Manzoni, Zapp, BE: & acquired Color Plus
...
e
...
Just like the increasing demand for RMG sector was the changing social trend in the
1990’s, the desire to present one’s home as a personification of one’s own identity was
the new trend in the 2000’s
...
also more often
...
Home Furnishing & Paint
...
However, the Paint Industry also used this
opportunity by going more closer to the customer, rather than relying only on an opinion
leader like the white-washer
...
on which prospective customers could reach and
could ask for the various options for getting a good make-over of their home
...
Retailing is no exception to this rule
...
Practically everybody was using a
small instrument which could be used for sending short messages
...
Even when the mobile phones
came in at the end of the previous century, the demand for pagers continued as the mobile
phones were very expensive
...
Similarly, manual typewriters were replaced by electronic ones and at a later
date the electronic typewriters lost their place to PCs
...
Retailers can and have been using web as a
very effective tool for reaching a larger number of people and increasing their revenues
multifold
...
com
...
However, this meant presenting their merchandise in a very different manner on the net
as compared to the concrete store
...
The web-site had to take care of this element
in order to be successful
...
However, every
thing costs money
...
LEGAL FACTORS
Just like Government & Political Factors, Legal Factors also play a major role in
changing a retailer’s strategy
...
1 lakh being imposed
by a Delhi court on the Bata company for violation of rules for using plastic bags
...
USA is one country where the consumer is really considered to be the king
...
There has been a famous case where a lady bought a camera from a
store, went on a vacation, used it by loading the film in the camera, got the photographs
developed on her return from the vacation and returned the camera to the store before the
expiry of 30 days
...
Recently, in India a change in the FDI rules also forced some retail players to give a
thought to their strategic arrangements with their foreign partners
...
For instance, Bharti –Wal Mart
opened up the Cash & Carry stores in Punjab, which were selling the merchandise at
wholesale prices to other retailers as well as to the Easy Day retail outlets run by Bharti
...
Similar arrangement was also there between Tata and TESCO
...
e
...
This
change in the rules will be forcing the retail companies to think of another strategy for
their retail tie-ups
...
” (Source:- http://www
...
com/E-marketing-Glossary/
Retail-format
...
As this group runs
various retail entities, for our purpose we will consider only 3 of these retail entities, viz
...
While all 3 stores retail various products, they are
different from each, because of their merchandise (products & services being retailed), their
prices, their promotions, their operations, their store layout or floor plan & their visual
merchandising or the visual display of merchandise
...
As by Mr
...
”
Similarly, Trent, the retail arm of Tata has retail interests in different retail formats, viz
...
While, Westside deals with apparel & life style products like cosmetics,
footwear, neckwear, home furnishing & household products, Croma transacts in Electronic
Durables & Star Bazaar doles out Grocery & Non-Food products at low prices
...
Retail Format Classifications
There are different bases for classifying the retail formats
...
On the basis of Ownership
(a) Independent Stores/ Mom & Pop Stores/ Father & Son Stores
(b) MBO (Multi Brand Outlets)
(c) Shop-in-shop (SIS)
(d) Franchising & Licensing
2
...
On the basis of Ownership:-
(a) Independent Stores/ Mom & Pop Stores/ Father & Son Stores
These stores are the most in number in any country
...
e
...
They are
characterized by ease of operation in terms of low capital required, small retail area
covered, less of manpower required etc
...
These stores are typical family business stores, as in the western countries it
is the husband & wife team who manage the store, hence the name Mom & Pop stores &
in our country the male members of the business family manage the store, hence the
name father & son store
...
One can find umpteen numbers of outlets of
these independent stores in any residential locality
...
For instance, a fabric & garment store in a market or a fruit vendor stall may also
be independent stores, provided they are having the mentioned features
...
However, what is ignored is the fact that in every country, independent stores have
survived these modern retailers
...
e
...
Let us consider the case of a household, where guests have come
and the home-maker realizes that a 3 litres bottle of Pepsi is required
...
The modern retailers, with
the variety, comfortable ambience, professional salesmanship will not be of any help to
this customer
...
However, keeping
in view the changing times, some of these independent retailers are also changing their
appearances
...
In fact, some of these independent stores are able to generate
higher sales and profits, on a per store/ per sq
...
area covered basis as compared to many
of their modern retail counterparts
...
Started in 1963, it was a small shop selling sweets
...
Today, the store not only retails sweets & namkeens but also
sells pastries, ice creams, candies etc
...
Today, in the Green Park
market place, the Evergreen rubs shoulders and competes with the likes national &
international brands like Mc Donald, Costa Coffee, Pizza Hut, Café Coffee Day etc
...
Nagar, Chennai, this
independent store, today boasts of catering to the customer’s varying needs with
merchandise ranging from RMGs for Men, Women & Kids; Fabrics; Sarees; Blouse
Materials; Dhotis; Towels; School Uniforms; Baby Dresses, Cosmetics to Footwear, Gift
Articles, Stationery, Bags, Floor Mates etc
...
!
JEYACHANDRAN TEXTILES, CHENNAI:- Although, this store is also located at T
...
However, just like Saravana
Stores and Evergreen, it is another example of how an independent store can grow and
make it big
...
The store
deals in various products like grocery, eatables, plastic-wares, FMCG products
etc
...
All said & done, these stores serve
the customers of surrounding residential area/s by providing them with a variety
of products & services, especially in the FMCG & Grocery product categories
...
Although, some people also term a department store to be an MBO, actually an
MBO is n independent store who has started keeping a few brands in order to attract a
better clientele compared to the ones who are coming only to shop for the generic
(unbranded) goods
...
(c) Shop-in-shop (SIS)
SIS is a concept where a brand gets a designated space in a department store for its
display and retailing
...
For instance, some brands may ask for only the space, while others may
negotiate for space along with their own staff with their own uniform, separate from the
rest of the department store
...
When Shoppers’ Stop opened its showroom in Pune at the MumbaiPune highway, the top floor of the department store acted as the SIS of Gautier furniture
...
These kinds of SIS serves the interest of both
the brand, as they get exposure at a reputed department store, as well as the Department
Store as they can exhibit the full product mix of a new range, with the operations being
managed by the said brand
...
!
Shop-in-shop-Notice the demarcated space provided for brands like Arrow, Van Heusen,
Stori, Freelook, Allen Solly etc
...
These SIS give the concerned brands a better positioning
then the other brands
...
The
reason is that through Franchising, brands spread their EBOs far and wide, and through
Franchising, the international brands enter a country at the least of the risk of failure, low
investment in manpower & capital and without waiting for the government to open up the foreign
capital doors
...
While Licensing is the permission given by the Licensor to the Licensee to manufacture the
goods of the concerned brand with in a particular region, Franchising is the permission given by
the Franchisor to the Franchisee to market the concerned brand from a particular site owned/
leased and managed/ operated by the franchisee
...
Let us make this distinction clear with the help of two examples
...
It was the biggest producer of denim
fabrics, not only in India but also in the world
...
At the
same point of time, Arrow, a reputed RMG brand of the USA wished to enter India
...
Hence, Arvind Mills started manufacturing Arrow product range in
India
...
With the passing of the time Arvind Mills got the license for other brands like
Lee, Wrangler, Flying Machine, Tommy Hilfiger etc
...
Arvind Brands
...
During the same time, Raymond, a leader in fabric manufacturing was contemplating to start its
chain of RR Shops (Raymond Retail Shops)
...
However, in order to expand further they used franchising as a
modus operandi
...
Once these franchisees were selected, after the due
cross-checking and training, they were given the permission to retail the Raymond brands from
the site/ location owned/ leased by them
...
This arrangement again helped the three
parties in question, Raymond expanded its RR Shop chain of stores with the help of these
franchisees, the franchisees got the benefit of Brand Pull & the customer got easy access to EBO
(Exclusive Brand Outlets) at a convenient location in their cities
...
Fir instance, Tommy Hilfiger appointed Arvind-Murjani group as the licensee
for its garments range and Titan for its watches range
...
Keeping in mind the importance of Franchising, the topic has been dealt separately as a distinct
chapter in itself
2
...
) Department Store
Large retail unit with an extensive assortment of goods & services that is organized into separate
departments for purposes of buying, promotion, customer services & control
...
It deals in apparel, home furnishing, appliances, electronics-mainly non-grocery
products
...
Due to its wider selection of products, it acts A few
examples of these from India are Shoppers’ Stop (Raheja Group), Westside (Trent-A Tata
Enterprise), Lifestyle (Landmark Group, Dubai), Pantaloon (Future Group), Globus (Rajan
Raheja Group) etc
...
Akbarally’s & Amarsons at Mumbai, Ebony & Big JO’s at Delhi are classic examples of
Department Stores operating in the pre-1990 era
...
Let us consider for example one famous department store:- Gallerie La’ Fayette of Paris
...
Spanning across three separate
buildings and covering an area of
showcasing 18 floors of merchandise of unimaginable
variety of products and services, this is a store which draws as its visitors not only the indigenous
residents of the city, but also the national and international tourists visiting the fashion city of
Paris
...
Here is a list of the products available at this mecca of retailing:Accessories
Agendas
Babywear
Books
Bathroom Accessories Bath Towels
Beauty (Aides) Beds
Belts
Cameras
Candles
Children’s Fashion
Chinaware
Coats (Women’s)
Curtain
Cutlery
Art Gallery
Artificial Flowers
Cards Carpets
Computers/ Multimedia
Dinnerware
Cosmetics
Duvets/ Covers
Fashion Designers & Luxury Collections
Furnishing Fabrics
Gloves
Furniture
Haberdashery Hats
HIFI/ TV/ Video
Crystalware
Electrical Appliances
Food Department
Furs/ Leather
Gift Wrap
Hosiery
Exhibitions
Framings
Glassware
Housewares
Infant Jeans
Jewelry
Junior Fashion Kitchenware/ Cookware
Leather Goods Lighting
Linens
Lingerie
Luggage
Men’s Fashion Office Supply
Pens
Perfumes
Photos Album Photo Processing
Raincoats
Records
Scarves
Luxury pens
Shirts
Plastic Arts/ Paintings
Shoes Silverware
Sofas
Souvenirs of Paris
Sportswear
Stationary
Stocking
Suits
Sunglasses
Sweaters
Games
Swimwear
Table’s Cloth
Telephones
Ties
To y s
Umbrellas
Underwear
Watches/ Clocks
Weddings Dresses
Women’s Fashion
Apart from these diverse products, the store also offers the following services:-
&
American Express Services
Art Gallery
ATM
Currency Exchange
Cloakroom
Customer Service
Hair Salons
Lost & Found Service Photo Processing
SPA (Beauty Centre)
Baby’s Changing Station
Gourmet Food Hall
Post Office
Shop Hands Free
Skywalk
Tourist Tax Refund
Restrooms
Telephones (on every floor)
Travel Agency Watch & Jewelry Repair
A look at the departments & products being retailed at Gallerie La’ Fayette will let us know as to
where the Indian Department stores are in terms of the area covered and the products retailed
...
While Shoppers’
Stop, Westside, Pantaloon, Lifestyle, Akbarally’s, the Indian Department Stores retail Men’s
Wear, Women’s Wear, Kids’ Wear, Household Products, Furniture, they do not include products
like Carpets, Computers, Multimedia, Hats, HIFI/ TV/ Video
...
Similarly, services like Art Gallery & Exhibitions are not
present in the Indian Department Stores, while they form a major portion of a store like Gallerie
La’ Fayette
...
For instance, in
2004, the Exhibition department of Gallerie La’ Fayette put up the display of Louis Vuitton to
celebrate the 150 years of the renowned brand
...
Amsterdam is having 3 major department stores, where a visitor gets a variety of different
brands under the same roof
...
) Peek & Cloppenburg; (b
...
) de
Bijenkorf (pronounced as Beyenkof)
...
It is spread over 4 levels
...
The I Floor stocks more of Women’ Wear and the II Floor
more of Men’ Wear
...
For example-the shirts are in the range of Euros
20-30 (private labels) and Euro 60 (other national brands)
...
Spread over 5 levels
...
Oliver, Yes or No & store
label V&D
...
Oliver, Wrangler, Levi’, Westbound, MEXX, Adidas and
private label V&D
...
It has 6
levels
...
Private Label- Bijenkorf, priced
at half the price of leading brands like Tommy Hilfiger, Jacques Britt, Hugo Boss, Ralph
Loren, YSL, Armani, D&G, Gucci, CK, CD, Arrow, Esprit etc
...
) Variety Store
It handles wide assortment of inexpensive & popularly priced goods, such as stationary, gift
items, women’ accessories, health & beauty aides, toys, housewares, confectionary items etc
...
Do not carry full product lines, may not be departmentalized &
do not deliver products
...
These low prices are not as a matter of discount but due to the
nature of products being retailed
...
Another example of Variety Stores in our country is a store named “49 & 99”
...
49, Rs
...
149
...
49, Rs
...
In front of each price point, the number of products purchased is mentioned and the total amount
is collected from the customer
...
(c
...
of items
...
These stores are located as part of Gas
Stations/ Petrol Pumps and are very prevalent in the western countries
...
In India, although stores like “In & Out”, “Convenio” have opened up near
Indian Oil and Bharat Petroleum petrol pumps, they are not that successful due to 2 reasons:First, in the western countries most of the times people need to fill the petrol tanks themselves as
the petrol pump attendants are not there, due to expensive manual labour wages, so filling the
tank, parking the car in the available space, purchasing from the convenience store and driving off
is a convenient exercise
...
Moreover, the
merchandise available is products like Cooking Oil, Atta, Noodles and other daily need grocery &
FMCG products which may easily be ordered from the nearby Grocery Store
...
Other examples of Convenience Stores are 6-Ten (the Indian
avatar of 7-Eleven) and 24/ 7
...
) Specialty Store
It concentrates on selling one goods or service line
...
This
also allows them to control investment & exercise flexibility
...
For example, Raymond Retail Shop is a Specialty Store
specializing in selling only Men’s Wear Fabrics & Garments
...
On another level, Home Saaz is a Specialty
Store dealing in various products like Bed Covers, Bed Sheets, Aquariums, Candle Holders,
Clocks, Blinds, Curtain Accessories, Carpets & Rugs, Door Mats, Bath Robes, Towels & Towel
Accessories, Cookware, Cutlery, Bed Room & Drawing Room Furnitures, Sofa Fabrics,
Upholstery, Wall Papers, Wall Stickers etc
...
Hence, even though the level of specialization
varies but all the 4 stores are specialty stores only
...
(e
...
Customers are drawn from a wide geographic area, pulled by
the vast range of merchandise of the concerned product category
...
Customers get amazed with multi-levels of this vast store devoted only to a
single product category, i
...
toys
...
We may call it a
Saree Store, but what qualifies it to be a category killer store is the fact that it is a store
specializing in the category of not only sarees but also only silk sarees
...
We also have yet another store, viz
...
This store retails only shirts and hence the apt punchline
“Charagh Din-The Shirts People
...
ft, this store offers 25,000 shirts and is an apt example of a category killer store
...
e
...
Pic
...
charaghdin
...
aspx)
(f
...
It is a store characterized by large
scale operations combining volume sales, self service & low prices
...
However,
exceptions by way of experimentation exist in both these formats
...
Similarly, in the
early 2000’s, at the Pune outlet of Piramyds, a departmental store, the basement started
showcasing the grocery products and when the trial succeeded, the grocery became an
integral part of the department store
...
(g
...
It got people interested in low-prices & one-stop-shopping
...
ft, in India their area may range
between 75,000-1,50,000 sq
...
Wal Mart, Carrefour & Tesco are the major players
around the globe who are having their presence in various countries by this format
...
)
Food Bazaar, taking care of the economy supermarket format, dealing in FMCG,
Grocery, Fruits, Vegetables & Eatables etc
...
) the remaining portion of Big Bazaar,
representing the discount department store part, thereby dealing in products related with
Fashion (Garments, Jewelry, Watches, Sunglasses); Electronics, Footwear, Toys &
Stationery, Bags & Luggage; Home ware & Kitchen ware etc
...
While the latter deals with only a single product category, the former retails a
wide array of products from its retail store premises
...
Payment methods between the retailers & manufacturers
A simple supply chain between a product manufacturer and customer is as follows:MANUFACTURER!WHOLESELLER!RETAILER!CUSTOMER
In certain cases, where a retailer is appointed as the authorized dealer/ retailer of a manufacturing
company, the company may supply the goods directly to him also
...
There are broadly speaking 2 major payment methods between the manufacturer/ vendor/ supplier
and the retailer:(A) CONSIGNMENT BASIS
(B) OUT-RIGHT PURCHASE BASIS
There are the following major differences in these 2 kinds of payment methods:BASIS
O F O U T- R I G H T P U R C H A S E CONSIGNMENT BASIS
DIFFERENCE
BASIS
1
...
This
payment may be in cash or credit,
depending on the terms of trade
The payment of the goods may be
made by the retailer to the
supplying manufacturer at a later
date-maybe after the goods have
been sold to the customer from the
retailer’s counter
2
...
However, the
damaged/ defective goods may be
returned back
...
3
...
In Consignment basis, the
ownership of goods is transferred
from the manufacturer to the
retailer only when the latter makes
the payment of the goods to the
former
...
ACCEPTANCE The retailer needs to accept the
OF GOODS
delivery of all the goods that have
been dispatched by the
manufacturer
...
By having a look at these differences, we may conclude that a retailer would always prefer the
consignment basis and the manufacturer may give preference to out right purchase method
...
In the long run either both of them
would prefer graduating to the out right purchase method or may part ways
...
For this purpose, he contacts a well-known national brand company’s
regional office, so that he may get regular supply of the brand for his retail outlet
...
Hence, he would like to commence the
dealings with the consignment basis, i
...
paying for the merchandise depending upon their sales
from his counter
...
Here comes the role of a
mediator, which may be a wholesaler, whose function is to buy the merchandise from the brand
company in bulk and then supply it to the small retailer as and when required by him for further
selling to the final consumer
...
This will help
both the company and the retailer, as the former will get a good direct retailer and the latter will
get continuous, regular supply of goods, at a lower price, as the margin of the wholesaler will get
reduced from the cost paid by the retailer to the company
...
Since the store is a established one, they would first like to
testy the product and may start dealing on a consignment basis
...
Over a period of time, either the response to the brand in these stores may not be good, in
which case the stores will stop stocking the brand, even on consignment
...
This will
create the situation that some of the stores would like to shift from Consignment to Out-Right
Purchase
...
Hence, although in the short run a Retailer prefers to make payments on consignment basis and a
manufacturer like to follow out-right purchase system, but in the long run both either move to
out-right purchase, if the brand is well-appreciated or stop dealing with each other, if the brand is
not accepted
...
It uses the strength, power & experience of the chain or network of a
large organization & the entrepreneurial skills and commitment of a proprietor/ SBU (strategic
business unit)
...
”
Having a look at the above definitions, we realize that Franchising is an agreement between at
least 2 parties:- 1
...
e
...
The Land (Real Estate) Owner/
Provider, i
...
the Franchisee, where the former agrees to provide his/ her company’s brand name
and the style of functioning along with the merchandise and the latter takes the responsibility of
manning, operating & functioning the store in an exclusive manner, i
...
without the display of any
other whether competing or non-competing products or services, as per the former’s guidelines
...
:•
•
•
Product Franchising
Process Franchising &
Service Franchising
Product Franchising is prevalent for finished category of products
...
Here, the only value addition at franchisee
level outlet is in terms of display and packaging, which facilitates easy accessibility of product to
customers and actual sales transaction
...
Some of the companies which follow Product Franchising
are Raymond, Samsung, Sony etc
...
Process Franchising is mostly used in products which require a major part to be made at the
franchisor’s end and the balance to be processed at the franchisee’s outlet
...
For instance, first Mc Donald (the franchisor) supplies
the ingredients like Burger, Vegetables, Salad Leaves etc
...
which is enjoyed by the consumer
...
Here, the franchisee outlets are granted the rights
to the brand name and process by the parent company
...
For example:- KFC, Mc Donald, Hadiram’s etc
...
So, if we take the case of Habib’s Hair Saloon’s franchisee
outlets, then the persons employed need to be trained in haircutting to the same level across all
their outlets to provide the haircutting service, which needs to vary as per the choice of the
customers
...
For
example:- Shehnaz Hussain’ Beauty Parlours, Lakme Beauty Salons etc
...
Benefits to Franchisor
1
...
It may not always be possible for an organization to
deploy capital for simultaneously setting up retail outlets units in different geographical locations,
but through franchising, several franchisees can concurrently invest in setting up different units
simultaneously
...
Spreading of risk:- By appointing different franchisees, the franchisor spreads the risk of
conducting business amongst them rather than taking the risk all by himself
...
Rapid increase in market share of franchiser in a short time:- As a result of the previous 2
points, a company is able to increase its market share rapidly in a short time
...
Savings in terms of real estate cost:- Since the investments in terms of the real estate is that of
the franchisee, so the franchisor saves the costs of rentals
...
Better commitment and dedication than employed manpower:- As the franchisee invests not
only his/ her time but also the money and works for maximizing profits, so the commitment level
is higher than an employee who only works for more or less a fixed salary,
6
...
7
...
However, Franchising & Licensing are the
easiest roots for entering a foreign market with least of the risk
...
8
...
Benefits to Franchisees
1
...
2
...
3
...
4
...
Most of the times, when a Franchisor puts up an
advertisement, especially in the print media, the lower part of the ad
...
As it is in the interests of the franchisors, they
mention the franchisee’s details also over here and the franchisee benefits from this advertising
...
Advantages of brand pull:- Other things remaining the same, if one shoe store is having the
Signage of ABC & Co
...
This Brand Pull advantage can be achieved by a
franchisee and not by an MBO or by a retailer selling unbranded merchandise
...
Less start-up risk:-In order to make a franchisee start and operate the retail business
successfully, the franchisor provides different assistance
...
This way the franchisee is saved from the immediate
financial burden at the time of the store launch, even before the sales have started being made
...
Loans easily available:- Retailers find it difficult to attain loans from Banks, Financial
Institutions, NBFCs and other financial bodies, but as soon as the retailer associates the name of a
well-known brand as the Franchisor, they are forthcoming in providing loans, due to the
profitable model existing of the Franchisor
...
Let us now see the possible difficulties faced by the
Franchisors & Franchisees
...
Less control over day to day operations:- Since the franchisee is not an employee but an
entrepreneur, so the day to day operations may not be so easily controlled as that of the
company’s own stores
...
Reputation may be damaged by some franchisees:- While speaking to a senior personnel of a
well-known jewelry brand, we were told that one of their franchisees was caught by the company
siphoning the gold jewelry of the company and replacing it with not-so-pure gold jewelry, which
was later on being sold to the customers
...
3
...
Hence the
franchisor always needs to be treating the franchisee as one of the most important channel
members
...
Some franchisees may take short term view:- It is very important to select the franchisees very
carefully, since for a customer there is no difference between a company owned store and a
franchise store, as for him/ her both the stores are presented as an EBO
...
Hence, if the franchisee is a fly-by-night operator having
only a short term view, then the closure of store will reflect badly on the brand
...
Franchisees may become too powerful:- Nothing is more easy (and at the same time more
dangerous) than giving a single entrepreneur, the permission to open up more than one franchise
stores
...
Moreover, the franchisee may
become more powerful and try to arm-twist the company to its advantage
...
Restricts use of other channels, if exclusive geographic area agreed upon:- Since franchising is
an exclusive arrangement, i
...
in that particular retail outlet no competing or even non-competing
product or service can be sold, the franchisee may also request the company not to open up any
other channel for a time period, of say 3-5 years, thereby restricting the use of alternate channels
...
Turnover & income may not meet expectations:- If the franchisee’s expectations are not being
met with the actual financial returns then the franchisee may lose interest
...
May start to resent restrictions:- Since the franchisee is not an employee of the company, the
report transmission or the regular operational requirements may not be liked by the franchisee
...
Less scope for initiative and localization:- As the franchisee would like to treat the franchisee
business as his SBU, he may take initiative by trying to localize the store according to the
requirements of the store’s target customers, but the franchisor may discourage this, since all the
stores of the company are required to give a uniform image and this may leave the franchisee
demotivated and discouraged
...
Cheaper supplies may be available from other sources:- On of the oft repeated complaint of the
franchisee is that while other channel members like MBOs may give discounts and offer
merchandise to customers at lower prices, he being a franchisee is always expected to sell the
products at MRP so as to maintain uniformity amongst all the EBOs of the company
...
Paying franchisee fees, even after establishing of a loyal customer base:- Although in the initial
stages of setting up the franchise business, the franchisor helps the franchisee, but when the
business is set and the operations are rolling, then the franchise fees being paid may irk the
franchisee………
...
and what is worse is that this fees keeps on increasing with the turnover, as it
may be a percentage of the turnover-so the more the turnover the more the fees
...
Elements of Franchising are the basic
essentials without which the franchising arrangement can’t survive
...
PRODUCT
BRAND &
SYSTEM
PRODUCT
It is essential that before the franchisor even considers looking for a franchisee, the
product involved should have been successfully tested in the market-place
...
And for this it is imperative that it has not only been test-marketed (operation
under controlled conditions) but also successfully sold in the market place, preferably
through multiple outlets/ units & in different geographical markets, thereby generating a
body of satisfied customers who have actually returned for a repeat purchase, thereby
implying that the product is appropriate and acceptable to the consumer, for better
confidence of future franchisees
...
Ensuring Regular Supply of merchandise from the franchisor to the franchisee
Sales promotion schemes to be offered from time to time t the franchisee retail
counters
Franchisee’s responsibilities:Just like the franchisor should fulfill the above mentioned tasks, the franchisee should
also take up the accountability for the following activities with respect to the feature of
Product:•
•
•
2
...
Usually, branding is supposed to be franchiser’ responsibility
...
Franchisor’s responsibilities:•
•
Brand promotion, so that customers are aware about the brand and know from
where to purchase it
...
Franchisee’s responsibilities
•
3
...
SYSTEM
It defines all aspects involved in setting up an outlet and the manner of conducting the
business
...
All elements of system have to be clearly
documented on basis of expertise and know-how available with franchiser
...
Franchisor’s responsibilities:•
•
•
•
Arrangement of uninterrupted flow of Raw material to ensure timely delivery of
merchandise
Ensuring availability of at least Minimum level of merchandise stocks with the
franchisee
Preparing & implementing an effective Customer Loyalty Programme
Proper Training of the Franchisees and his staff members so that they conduct
the retail operations as per the expectations of the franchisor
...
customers
• Proper stocking of merchandise, so that the sale to customer is not adversely
affected
...
There are 2 types of financial outgo from the franchisee to the franchisor:1
...
Royalty
Franchise Fees is a one-time payment that a franchisee makes to the franchisor in the
form of start-up fees
...
b
...
d
...
The various ways by which Royalty may be calculated are:i
...
) Fixed amount per unit sale of product
iii
...
) A fixed royalty, irrespective of business done at the unit
v
...
a
...
They are as follows:•
•
•
•
•
•
•
•
•
Media used
Magazines
Newspapers
Technical & Trade Journals
Radio/ TV
Research Agencies
Marketing Material
Advertisement copy
Direct Mailer
Attractive detailed franchise brochure
Good presentation/ brief to be used during the selling process containing:-product details with data on success/ sales
-Company & parent organization details
-Desired profile of the potential franchisee
-Broad investment requirements
-Locations where franchisees are sought
-Contact details of franchisor
•
Franchisee Information Form
SELECTION OF FRANCHISEE
The selection of franchisee is a very important task and must be undertaken very
carefully
...
The different aspects that need to be focused upon as part of
Franchise Manual are as follows:-
•
•
•
•
•
•
•
•
•
•
Products being dealt with –their features & benefits
Corporate Brand/ Identity
Start-up process, i
...
the intricacies involved in setting up the retail unit
Manpower recruitment & training for the retail unit
Logistical process with respect to the Merchandise Purchase
Marketing process for Reaching the customers
Making sales and providing the customers with service solutions
Details & Modus Operandi for After sales service
Handling customer grievances
Details of Accounting procedures between the 2 parties
THE OFFER DOCUMENT
The offer document contains all the particulars of the franchisor and is used for
introducing the franchisor to the franchisee, so that the franchisee may have first hand
information about the company, brand, operations etc
...
We
now take a view at the other side, i
...
What a franchisee needs to know about a franchisor
before taking the franchise
...
Traits of a good Franchisor/ Franchisee Relationship
For a healthy Franchisor-Franchisee Relationship, it is important that the following points
are kept in mind by both the parties:-
•
•
•
•
•
•
•
Developing incentive programs for performance in sales
Developing an award structure for achievers
Developing an effective promotional advertising packages and flyers
Providing financial and managerial reports that can be used to improve the franchise
business
...
CAUSES OF CONFLICT
In spite of the best efforts, the equation between the franchisor and franchisee sometimes
get spoiled
...
Some of the reasons for conflict between the franchisor and
franchisee are as follows:-
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Inappropriate or poor site selection
Poor initial training
Incomplete franchise manual
Inadequate access to franchisor for advice
Inadequate marketing research
Poor advertising & promotional material
Lack of disclosure of operational information
Overlapping territories
Discount coupons payable by franchisee
Price cutting by other franchisees or dealers
High expectations of franchisor
Lack of marketing support by franchisor
Excessive restrictions (quality, price, competition)
Lack of financial support
Lack of interactive two-way communication
...
DANGERS OF CHANGING THE LOCATION OF A STORE
...
While the Communication Mix of a store refers to its Advertising, Sales Promotion,
Personal Selling, Publicity & In-Store promotions, which keeps on changing from time to
time, the Pricing of the store’s merchandise is also open to change
...
The same can also be said about the Store Design & Display
...
However, a change in the location of a store is a very risky proposition as this
can pose the following dangers:•
•
•
Loss of efficient employees:- When a reputed store was thinking of changing its
location from Connaught Place (CP) to Gurgaon, one of the major thoughts to ponder
was as to whether it would be able to retain its loyal customers & efficient employees
at this changed location
...
Loyal customers may get disappointed:- Continuing the previous example of the
store shifting from CP to Gurgaon, in today’s competitive times, when it is very
difficult to retail the existing customers, just imagine the reaction of a loyal customer
when he finds that her favourite store has a store closing down or closed
...
2
...
This is more so in India, where the
cost of location is as much as 30% of the total retail cost, compared to USA & UK, where this
cost is 10-12 % of the total retail cost
...
3
...
”
or “Is that shopping mall actually having that brand’s store? How in the world did I miss it?”
These and many other reactions like these underline the importance of Location for a retail
store
...
4
...
Consider the fact that
players like Shoppers’ Stop, Westside, Pantaloon, Globus, Big Bazaar, Food Bazaar etc
...
Indeed, this has been
a major factor in their success while comparing them to their late entrants
...
STRATEGIC IMPORTANCE FOR LONG TERM COMPETITIVE ADVANTAGE
This point flows from the previous point
...
This gap also prompts the early innovators to enter the real estate business and use the
acquired sites as a business model to make a fast buck by selling them to the laggards at a
high price
...
6
...
For at the end of it, the retail venture must be
profitable and profit will elude the organization if a location is paid for more than the revenue
that may be earned from it
...
7
...
A brand opening up an
outlet contrary to that image will adversely get effected as either the right customer will not
come to that market, and even if they come, they may not shop for that product in that
market
...
The stores were merchandising Designer-wear apparel, and 70% of the
merchandise was targeted towards woman customers
...
Their merchandise was targeted
towards upper middle class customers and was stocking the apparel designed by wellknown designers
...
The reason was that Karol Bagh as a market has an image of traditional wedding
wear apparel, jewelry and related products
...
5,000 to Rs
...
Certainly it was a case of wrong location
for BE:
...
Interested parties for a store location & their respective interests
Some of the persons who are interested in an appropriate location & their respective interests
are as follows:1
...
What can be his/ her interest/s for selecting a right location? Let’s have a look
at some of these interest areas of a retailer:• Increased Customer Traffic:- The better the location, the more the customer traffic
...
• Sales:- Increased customer traffic leads to better sales of the retailer
...
• Future Growth Prospects:- The success of a store outlet paves the way for the retail
company to come up with more such stores and acts as a new chapter in their growth
story
2
...
His interests may range as follows:• Convenience:- A customer shopping for necessities may consider a conveniently
located store more than another
...
• Prestige:- The reputation associated with a retail location may decide as to whether a
person decides to shop there or not
...
May be that is the reason that the clientele
which shop at DLF-Emporio would not like to visit Sarojani Nagar market, as they
give importance to the prestige associated with a location
...
Although, with today’s increasing traffic problems that looks to be a far-fetched
dream, but customers certainly do pay attention to the facilities available at a store
location, where they go shopping
...
For instance, ever observed how small the wash-room was at
the last fast-food joint you went to with your family
...
The whole fun-filled experience may end in an irritable
situation, which could best have been avoided by the retailer
...
The Employees
According to Philip Kotler, Happy Employees bring in Happy Customers & Happy
Customers Lead to Increased Profits, thereby culminating in Happy Shareholders
...
An employee may reflect about the following factors while considering the location of
his/ her workplace in a retail store:• Safety of the location is certainly an important factor for an employee to consider
while choosing a retail store to work at
...
This safety may not relate only to the crime rate in
that area
...
Certainly, a potential employee may not
consider joining the place, provided a better choice is available
...
Just like a retailer would like to earn
more profit, an employee would like to save money and what better way to save
money then by reducing cost & time involved in commuting to the work place
...
4
...
And what better way to find that than to have a check on the location of the
company’s retail stores
...
5
...
These strategic partners may be as follows:• Vendors or suppliers
• Brand Owners whose merchandise is stocked by the retailer
• Manufacturers, taking up production on behalf of store for their exclusive
merchandise
...
C
...
S
...
)
NEIGHBERHOOD CENTRE
REGIONAL CENTRE
OUTLET CENTRE
COMMUNITY CENTRE
SUPER-REGIONAL
CENTRE
THEME/ FESTIVAL
CENTRE
FASHION/ SPECIALTY
CENTRE
SEAMLESS MALL
Carts & Kiosks
RMU (Retail Merchandising
Unit) &
TWU (Tall Wall Unit)
MXD (Mixed Use
Development)
SHOPPING MALLS
POWER CENTRE
FSU (Free Standing Unit)
Other retail location
opportunities
Types of Retail Locations
Having discussed the importance of the right location and the interested parties in a good location
as well as their interests, we now move to the various types of retail locations from which a
retailer may select the appropriate location for his/ her retail store
...
Let’s now discuss them along with their characteristics
and a few national & international examples
...
CBD (Central Business Districts)
It is a traditional downtown business area in a city or town and is also referred to as the High
Street
...
People usually visit the area for work
...
Successful CBDs
have large number of residents living in and around the area
...
Going by this definition, lets us compare some of the CBDs of an Indian city (Delhi) with that of
an American City (New York):DELHI:- Some of the CBDs of Delhi are Connaught Place, South Extension-I & II, Karol Bagh,
Greater Kailash (M-Block) Market, Khan Market etc
...
Since the retail revolution in India has recently gained momentum, only 2 of these CBD markets,
viz
...
This
CBD contrary to the Delhi CBDs have the presence of leading Department Stores like:• Bloomingdale’s
JC Penny
• Macy’s
Neiman Marcus
• Nordstrom
Saks Fifth Avenue
as well as reputed brands like
• Abercrombie & Fitch (A&F)
Apple
• Armani
Banana Republic
• Burberry
Bvlgari
• Cartier
Chanel
• Christian Dior
Ermenegildo Zegna
• Escada
Fendi
• Gap
Gucci
• Hermes
Hugo Boss
• Lacoste
Louis Vuitton
• Prada
Salvatore Ferragamo
• Tiffany
Versace
• Victoria’s Secret
Disadvantages of CBD
Although a CBD is a big attraction for residents of the city as well as the tourists and visitors
from outside the city, it has the following disadvantages:•
•
Higher security required to avoid shoplifting:- Contrary to shopping malls (as we will see
in the later part of this section), a CBD has less or no central security system and hence
the cases of shoplifting are much more in CBDs then in Shopping Malls
...
A case in point is that of the 2 of the CBDs
of Delhi, viz
...
cannaughtplace
...
in/history/construction
...
cannaughtplace
...
in/
history/construction
...
Just compare the facilities of a shopping mall with that of CBD,
in terms of ample shopping space, properly divided shopping & entertainment zones,
security & parking, and we find CBDs to be lagging behind)
• Suburb shoppers may get discouraged:- There used to be a time, when a CBD like
Connaught Place (CP) was visited by customers from suburban areas like Ghaziabad,
Noida, Faridabad and even Gurgaon
...
With the spared of retail activity in all places big or small, these suburban areas are
having markets and malls of their own and people have hence stopped visiting CP or
other CBDs of Delhi
...
C
...
•
•
•
This street is the Down Town, Up-Market Fashion Street of Amsterdam
...
Major brands are:- Hugo Boss (3 Showrooms), Armani, Cartier, Gucci, Louis Vuitton,
Bally, Salvador Ferragamo, Armangaldo Zegna, UCB, Scaba, Ralph Loren, Tommy
Hilfiger (2nd showroom being opened), Max Mara, D&G, Oilily, Lacoste, Harley
Davidson etc
...
Shopping Centres
Unlike CBDs, Shopping Centres are owned and managed as a single entity
...
There are 2 types of Shopping Centres:- (a
...
) Shopping Malls
(A
...
These centres offer the following advantages:• Convenient Location
•
Easy Parking
•
Low real estate prices
•
Less time consuming for shoppers
•
Sometimes, low prices
There are 3 types of Strip Shopping Centres:(i
...
Although, in western countries,
these neighborhood centres may witness the presence of a supermarket, in India, they are
earmarked by the presence of 1 or 2 Mom & Pop Kirana (Grocery) Store, 1 Chemist
(referred to as Drugstore in western countries), unbranded eateries, Barber shop,
drycleaners and other family owned retailers dealing in daily use products and services
...
Presence of RMG (Ready Made Garments) and other fashion products is
practically absent in these centres-even if they are there and they are present in the form
of unbranded or generic products or retailed by way of MBOs owned by family owned
retailers in these centres
...
(ii
...
Common retail outlets being stores dealing in products like apparel,
home improvement/ furnishing, toy, shoes, electronics, sports goods etc
...
Community Centre offers the widest range of retail formats in Strip
Shopping Centres
...
(iii
...
It has been observed that usually a CBD has an SBD in close vicinity
...
For instance, Connaught Place, a CBD in Delhi is
having Tibetan Market (Janpath), an SBD closeby; VN Road (Fort), a CBD in Mumbai is
having Fashion Street, an SBD closeby and South Extension, another CBD in Delhi is
having Sarojani Nagar, an SBD closeby
...
For instance, Mahipalpur as well as Kalindi Kunj are the
2 locations which witness the presence of Power Centres, where a row of factory outlet
stores are located next to each other
...
) Shopping Malls:They are shopping centres having a pedestrian focus
...
Shopping Malls offer the following advantages and features:• They are a One-stop destination for food, entertainment, outing, socializing, hanging out
etc
...
• Tenant mix, which refers to the different retailers present in the mall, can be planned
...
For instance, a DLF-Emporio, which
is positioned as a luxury shopping mall may not rent out space to even the well-known
national brands, as they would not be fitting the profile of target customers of this mall
...
Hence, you may find an economy brand next to a high-profile international player or a
reputed shoe brand next to an unbranded eatery
...
CAM (Common area Maintenance) is a very important factor for a
Shopping Mall
...
Due to this CAM, a mall is able
to maintain these facilities to attract the customers
...
Similarly, in a CBD like CP, some retailers keep their
stores open on Sundays while others remain closed, which gives a very confused picture
to the visitors
...
Disadvantages of Shopping Malls:•
Higher rents:- All the above mentioned advantages of Shopping Malls come at a heavy
price, especially when we compare with other retail locations like Community Centre
and even some of the CBDs
...
For instance, a retailer may like to operate for long
hours as part of its Sales Promotion activity, for which the Shopping Mall may find it
difficult to give him the permission
...
• May lead to tough competition within the malls:- Unlike a Community Centre, a
Shopping Mall gives rise to tough competition as almost all the major players vie for
customers’ attention as well as pocket money within the given space
...
Location Decisions
The major location decisions can be divided into 4 distinct stages:1
...
• Contiguous
• Cluster/ Carpet Bombing
• Beach Head/ Hub & Spoke
• Skim
2
...
Trading Area Analysis, involving the decision to locate the store as a
• Destination Stores
• Intercept Stores
4
...
e
...
Regional Analysis
Regional Analysis is the first step taken up by a retailer, where he/ she decides upon regions
where they would like to take up their expansion plans
...
The various Expansion Strategies that may be undertaken by retailers are as follows:•
Contiguous Expansion Strategy:This strategy emphasizes on the expansion of retail stores in a particular geographic
region only
...
While Contiguous Expansion Strategy offers the advantages Cost Saving due to
Central Warehousing, Lower Transportation Costs, Concentrated Sales, Similar
Advertising etc, the big disadvantage is that there is a complete neglect of all other
areas of the country
...
•
Cluster Expansion Strategy:This Expansion Strategy is also known as Carpet Bombing Strategy, which derives its
name from the military strategy of heavily bombing a very small but critically
important area
...
This strategy was used by Subhiksha, a retail chain started in 1997,
with a small investment of Rs
...
Over the next few years, more than 150
stores of Subhiksha came up in and around the metro-city of Chennai
...
R
...
This strategy is very appropriate for Convenience Stores as it saves the high
inventory and transport costs and makes the merchandise available almost at the
doorstep of the customer
...
•
•
Beach Head/ Hub & Spoke:After opening their first store in Mumbai, Shoppers’ Stop launched the next few
stores not in Mumbai but in other main metro cities of Hyderabad, Bangalore,
Kolkata and the mini-metro of Jaipur
...
This strategy is diametrically opposite to the previous 2 strategies,
as here the company doesn’t want to limit their growth to a region or city but expands
with a national perspective
...
Later on these stores become the Hubs or the Regional Centers, from which
the Spokes or Satellite stores in the concerned regions open and operate
...
Thus, a Beach Head/ Hub & Spoke
strategy helps the company plant its footsteps on a national level, thereby developing
its regional centers in the process
...
For
attracting their target customers, they look for locations which denote exclusivity, just
like the merchandise that their store offers
...
They hence chose
some of the 5 Star Hotels in Delhi, as their clients would not shy away from visiting
these places
...
But, as soon as a Fashion Centre like DLF Emporio came up, both the
brands along with other similar brands opened up shop there as well
...
Market Area Analysis
After deciding zeroing in on the city in which they would be opening up their next store,
the next task for a retailer is to decide upon the market in which they would like to
commence their retail operations and this task is accomplished by undertaking Market
Area Analysis
...
•
•
•
Unplanned business districts
Planned shopping centers
Unplanned Business Districts are not exactly markets
...
This happened in case of the small strip opposite Bhikaji Cama
Place in Delhi, where when Maruti-Suzuki opened its showroom, it was the
first outlet in that row, but it success drew other players like Ford, Chevrolet
and Volkswagen to the strip making its to be an unplanned business district
...
Although a big advantage of these Unplanned Business District is that the
real estate prices are lower and hence the rent cost is pretty low, sometimes
they suffer from the lacuna of being declared unauthorized for commercial
purposes by the concerned authorities and the retailers are asked to shut shop
here
...
1, MG Road & 2
...
•
However, there are instances where the retailers have not only survived the
odds themselves, but also attracted other retailers to make the place to be a
successful Unplanned Business District
...
Seasons Furnishings, Roshan’s, Harisons etc
...
(Although, some authors term CBD & SBD also as Unplanned Business
Districts, but according to us, it is not that CBD & SBD are unplanned,
in fact, they were planned quite a long time back, which makes them
look to be older and not as well planned as Shopping Malls, which are
termed as Planned Shopping Centers by these authors)
...
In fact, they come up as markets or shopping centers,
properly authorized, permitted and planned by government, municipal, state
authorities
...
Trading Area Analysis
After taking a decision about which markets they should locate their stores at, i
...
Planned Shopping Centers or Unplanned Business Districts, the retailer does a Trading
Area Analysis
...
”
(Ref:- Retail Management: A Strategic Approach (12th Edition) [Hardcover]
Barry R Berman, Joel R
...
It can be the part of a city or it can extend
beyond the city’s boundaries, depending on the type of store and density &
settlements surrounding it
...
Importance of Trading Area Analysis
It is important for any retailer to study its trading area due to the following reasons:• Insight about customers’ demographic as well as socioeconomic features
...
This can give an idea about their income
levels, occupation, education background, social standing/ status etc
...
• Promotional activities can be well-targeted
...
For instance, if the customers of a store belong to a section that are not
having much TV-viewing or Newspaper reading habits, then the store should go for
Radio advertising or may be even use the traditional media choices like WallPaintings
...
Retail companies are able to ascertain as to whether the competitors will
open up a store at a particular location of they do not do so
...
•
The situation of trading area overlaps can be prevented
...
This way,
although the retailer is spending the money as expenses or both the stores, but gets
the return from only one of Subhiksha and led to its insolvency (consider the case
mentioned below)
...
Considered to be one of the success stories of Modern Retailing in India,
Subhiksha, the brain-child of Mr
...
Subramanian, kicked off with much promise in
1997
...
Hence, it was clubbing the advantages of both a Convenience Store as well
as a Supermarket, i
...
making the products of a convenience store available at the
prices of a supermarket and at a location of a convenience store
...
So, while a convenience store would have
been located in a residential located but sold at MRP (without discount) and a
supermarket would have required the customer to travel a longer distance but
offered discounts to the customers, a Subhiksha was required to offer both the
advantages and that also with a lower revenue stream
...
As per its founder, Mr
...
Subramanian, the day the first Subhiksha store
opened, he was pleasantly surprised to find a huge crowd, which he thought to be
the customers, gathered in front of the store
...
However, in spite of all these odds, by the year 2006, Subhiksha had
opened more than 150 stores in and around Chennai and was able to generate a
business of Rs
...
a
...
Moreover, these stores were
located with the view of not allowing the customer to travel more than 100 mtrs for
reaching the store
...
Hence, while the expenses in the operation of these stores multiplied, the
revenue from them either stagnated or even dipped
...
Finally, when the store shelves were empty the customers
started returning empty handed and whatever revenue was coming stopped and the
company reached the stage of financial collapse
...
•
•
•
Finding the optimum number of stores for a specific area
...
e
...
e
...
Topographical limitations are emphasized
...
This Achilles’ Heel may become evident due to a Trading Area
Analysis
...
Ansal Plaza, South Delhi has
taken up the latter route and helped its customers
...
)
The effect and utility of internet may be properly examined
...
CHARAGH DIN
ONE BRICK & MORTAR STORE, MULTIPLE CLICK & MOUSE
SOLUTIONS
In the year 2000, on a visit to Mumbai, I visited the Charagh Din(CD) retail outlet
and met its proprietor Mr
...
While interacting with this second
generation entrepreneur, I came to know that although CD was a single brick &
mortar store, without any branch, the store was successful because of a customer
base, which was completely satisfied with the product quality of CD
...
Daswani said that there were customers who are staying abroad in USA and Europe
and make it a point to visit his retail outlet whenever they were visiting Mumbai
just to buy the CD shirts or ask some of the relatives to bring them these shirts
while visiting them or even request the store to parcel the merchandise to them
abroad
...
Daswani was looking for a computer based solution to ease their
difficulty so that they may get the desired merchandise, just at the click of a few
buttons
...
A couple of years after this meeting, www
...
com,
the company’s web-site was launched and the difficulty of distance for serving the
loyal customer of CD was solved
...
•
Additional Dynamics like competitor’s activities, interests of financial institutions,
available transport, labour obtainability, vendor identification etc
...
Concepts related to Trading Area
There are 2 important concepts related to the trading area, viz
...
Let us understand them with the help of the given cases
...
When Crossroads, touted as Modern Retailing’s first Shopping Mall, opened its doors to
public as part of a soft-launch on 15th August, 1999, it became the talk of the town
...
This may be termed as the Curiosity Factor that was
tempting people to visit this first of its kind mall
...
The idea was that the visitors, who were not shoppers, should not disturb the actual
buyers who wanted to have a look at & buy the merchandise
...
Over a period of time, 2
developments took place:- First, other malls started coming up in different parts of
Mumbai and nearby cities & Second, the Curiosity Factor of the people died away
...
We call this concept as Shrinkage of
Trading Area
...
In the early 2000’s, when Big Bazaar opened up its Hypermarket store at Sahara Mall,
Gurgaon, a similar kind of euphoria was there in the people
...
People used to travel not
only from within Gurgaon, but also from areas like South Delhi, West Delhi and even
East Delhi or Faridabad
...
Just like the previous case, the 2 developments
took place here as well and the Shrinkage of Trading Area took place here as well
...
e
...
The impact of this shrinkage of trading area is that for better
reach, the mall or store needs to come up with newer stores at other places in the city
...
Expansion of Trading Area
Case-1- Transformation of Green Park market
...
However, in 1999-2000, with the opening of the Provogue Studio,
things started changing, as for the first time a well-known RMG brand had entered this
neighborhood center with an EBO
...
Slowly, other well-known brands starting entering the Green Park Market, and with their
entry the Trading Area of the market started expanding, as people started visiting the
place from a wider radius of localities
...
Thus, 2 developments help in transforming a Neighborhood Centre into a Community
Centre, thereby expanding the market’s original trading area
...
) opening up of EBOs and (ii
...
Once, these events
occur, people start visiting the market, not only from neighborhood localities, but also
from a wider area, thereby resulting in the Expansion of Trading Area
...
Although,
today the brand is not there in the market, but it was the first one to show the other retail
players the possibility of putting up an EBO and the growing potential of the market
...
Types of stores
At the end of the trading area analysis, 2 types of stores, viz
...
Destination Stores are stores for reaching which, the visitors need to make an extra effort
and are required to go out of the way
...
A destination store is the ideal place
for an FSU, but need to offer something exceptional to attract its customers from their
usual travel route
...
Hence, a
store falling on the busy office-residence way would be an ideal example of an intercept
store
...
For instance, a store
located on the side of the road, where the flow of the traffic in the evening is from office
to home, will certainly be at an advantage, as compared to the other side, since the
customer may stop en-route to their homes, as they would not like to take a U-Turn in the
busy Office-Home traffic rush hours
...
Vehicular traffic:- Number of vehicles visiting the market, both at lean hours &
peak hours
...
e
...
•
•
•
•
•
•
•
•
•
Growth of business district:- In the last few years what has been the growth or in
the next few years what s the expected growth
...
Accessibility:- How easy it is to reach the site in the market/ mall
Visibility/ Façade:- How attractive or visible is the store’s façade, so that visitors
to the market may not find difficult in locating the store
...
Size/ shape/ layout of the site:- The specific site being considered should have
the characteristics desired by the retailer in terms of its size, shape, planned
layout etc
...
e
...
Location advantages within a center:- In a shopping mall, stores at the front have
the advantage of easy accessibility visibility then at the back
...
Terms of occupancy, i
...
Types of lease, Terms of lease etc
...
3 years
...
In countries like USA, this lease
period is of 15 years
...
Legal considerations:- A retailer must keep in mind the legal considerations
associated with a site
...
Similarly, it needs to be ascertained that the site should not be
part of an ongoing legal complication
...
Let us study them one
by one:1
...
These types of malls have a single anchor store (the main store of the
mall which invites maximum number of customers and sales)
...
For
instance, while the Ansal Plaza Shopping Mall at Khel Gaon Marg is having Shoppers’
Stop (Department Store) as its anchor store, the Sahara Mall at Gurgaon has Big Bazaar
(Hypermarket) as its anchor store
...
Apart from the above 2 mentioned names, some of the other examples of Regional
Shopping Centres are Pacific Mall, EDM Mall, Metropolitan Mall etc
...
Super Regional Centre
Super Regional Centres have larger size than regional centres
...
The population base from which their
customers are drawn is much larger and spread out
...
For instance:- GIP (Great India Place), a Superregional centre at Noida has the anchor stores like Big Bazaar, Globus, Home Centre,
Home Town, Lifestyle, Max Lifestyle, Pantaloon & Shoppers’ Stop, while Centrestage
Mall, a regional Centre has only Westside as the anchor store
...
Fashion/ Specialty Centre
While Fashion Centre shopping malls are composed of upscale apparel shops,
boutiques & gift shops, carrying selected fashion or unique merchandise of high quality
& price, with sophisticated design, emphasizing rich décor & high-quality landscaping,
Specialty Centre Shopping Malls include a tenant Mix dealing with a single product
...
An apt example of Fashion Centre is Crescent Mall at The
Qutab, Lado Sarai, which deals with only the fashion designers’ retail outlets, while the
Gold Souk , Gurgaon dealing only in Jewelry outlets, a single product, is a Specialty
Centre
...
Outlet Centre
An outlet centre consists mostly of manufacturers’ factory outlet stores selling their own
brands at a discount
...
Although, years back
in the year 2000, a basic attempt at factory outlet mall was made when the factory outlets
of reputed brands of India were opened under a single roof at Destination Point,
Faridabad, but in the new millennium, Ansal Plaza FOM (Factory Outlet Mall) has come
up at Vaishali, with the existence of factory outlets of reputed brands (refer details
below)
...
Apart from the
reputed brands the mall has Vishal Mega Mart, a hypermarket, as its anchor store)
(Source:- http://www
...
com/ansal-plaza/brand-ansal-plaza
...
2 Million Sq
...
mall located near Niagara Falls
...
Theme/ Festival Centre
A Theme/ Festival Centre employs unifying theme, carried out by individual shops in
their architectural design and merchandise and mainly appeal to tourists
...
The mall is usually anchored by restaurants/ entertainment
...
Although, Theme Centre may appear to be similar to Specialty Centre, the basic
difference between the 2 is that while the former witnesses the presence of retailers
dealing with various products revolving around the same theme, the latter has retailers
dealing with only a single product
...
Jewelry
...
http://www
...
in/index
...
Source:http://www
...
in/index
...
It is the
responsibility of Mall Management to manage the Shopping Mall in an effective manner so
that the following objectives get achieved:•
The Mall stands out as an attractive destination for the target customers
•
•
The Retail Tenants, i
...
the store occupants within the Mall feel satisfied (as we say
in Hindi business language, get a Paisa Wasool feeling)
...
Over the last decade and a half, Mall Management in India has come up very strongly as a
sunrise area, giving rise various activities like Mall-Brands tie-ups, Mall Marketing &
Promotion, Mall Maintenance, Links with various agencies for support services like Security,
Housekeeping, Entertainment etc
...
e
...
e
...
A Mall Audit focuses on the following major parameters:-
1
...
Exterior Design
➢ Façade (Frontage) Design
➢ Main Entrance Design
B
...
Mall management
A
...
Maintenance
➢ CAM charges
➢ Housekeeping
➢ HVAC (Heating, Ventilation & Air
Conditioning)
➢ Maintenances of Services and Access
C
...
Functionality
A
...
Store Size & Area
➢ Carpet Area (Floor Area)
➢ Built up Area (Carpet Area + area
occupied by walls and doors of the unit)
...
)
➢ Design
4
...
Tenant Mix
➢
Tenant Mix
➢
Anchor Store
➢
Zoning
B
...
Toilet
Size of Toilet
Other Retail Location Opportunities
Apart from the conventional retail location options like CBD and various Shopping Centres,
modern retailing has thrown some new retail location opportunities and transformed some
traditional options into modern retail choices
...
) FSU (Free Standing Unit)
A Free Standing Units is a retail location that is not connected to other retailers
...
Since these FSUs suffer from the flaws
of lack of synergy with other stores, they can be successful only if they are positioned as
a primary destination point for customers or are offering something special in terms of
merchandise, price, promotion, services or a combination of all these
...
However, still these FSUs do get the first mover advantage
...
The Jagdish Store
outlet at Ring Road (near Moolchand crossing) was probably one of the first examples of
FSUs
...
) Carts & Kiosks
A cart offers the simplest presentation, is mobile and is often on wheels
...
Traditionally, we are familiar with lots of examples of Carts & Kiosks
...
Today, a sophisticated
version of Carts are used inside shopping malls, where attractive carts are moved from
one place to another inside a shopping mall, thereby drawing customer attention and
making sales
...
Now, we find the existence of these Kiosks in Shopping Malls also,
where typical Salad Bars or Cookie Corners come up as Kiosks along the walkways of
the malls
...
) RMU & TWU
Retail Merchandising Unit is a new and sophisticated location alternative offering the
compactness and mobility of a cart, but the more sophisticated features of a kiosk
...
Tall Wall Unit:-They are 6-7 feet selling spaces, placed against a wall instead of in the
middle of an aisle
...
(iv
...
Although MXDs
are popular as they bring additional shoppers to stores and space can also be used
productively, they require huge investments and hence are relatively newer concept in
India
...
Let
us now examine as to which location is more suitable for each of these retail formats:(1
...
For instance, when the Ansal
Plaza mall opened in the year 2000, at a stone’s throw distance from South Extension,
people were apprehensive about the survival of latter
...
For the Department Stores, the Shopping Malls & CBDs come up as
the foremost options
...
) Specialty Stores/ EBOs
Although, CBDs and Shopping Malls do witness the presence of Specialty Stores/ EBOs,
Community Centres also offer a good and reasonably economical option to these retail
store formats
...
(3
...
Some of these formats may also be found in Community Centre
...
) Supermarket
Community Centres and Shopping Malls often house these formats, retailing grocery,
food, non-apparel, daily use and FMCG products at low prices
...
) Variety Store
Although, Community Centres are the right place for Variety Stores, but this retail format
is also found in Shopping Malls and sometimes even in CBDs
...
) Hypermarket
Going by the sheer size of this retail format, the ideal location is either the Shopping
Malls or an FSU (Free Standing Unit)
...
) Convenience Store
Out of all the retail formats, this is the format most suitable to be located at a
Neighborhood Centre-both in terms of the day-to-day merchandise available as well as
the customer base who visit the store
...
MERCHANDISE
Merchandise is a product or service in which an organization is dealing in
...
com, the merchandise will be Furniture, while
for a retail store like Westside, the merchandise will be a whole range of products
which may broadly include Apparel & Non-Apparel categories
...
Hence, broadly speaking Merchandising covers 3 major aspects, viz
...
On the basis of Types of Merchandise
(a) Soft Merchandise, which includes merchandise like apparel, grocery, bed
linen, home furnishings etc
...
2
...
3
...
For example:- Park Avenue, Parx,
Color Plus, Louise Phillip, Van Heusen, Allen Solly, Arrow etc
...
For
instance:- Stop, Life, Karrots, Kashish by Shoppers’ Stop; Annabele,
Srishti, Ajile, AFL by Future Group etc
...
4
...
(b) Fashion is where the merchandise is latest offering giving the store the
image of a fashion leader
...
Hence, a garment manufacturing
company, takes up product merchandising of raw materials like fibres,
fabrics, yarns etc
...
2
...
For instance, all the direct dealers/ retailers
of Raymond Ltd
...
This exercise of retail merchandising, referred to as order
booking is taken up twice a year, known as Summer Booking & Winter
Booking
...
Export Merchandising
As the name suggests, Export Merchandising is undertaken by an export
house
...
C
...
1
...
The following are the major differences between a
Buyer & a Merchandiser:•
•
•
•
A Buyer decides “What to buy?” while a Merchandiser decides “How much
to buy?”
A Buyer must have thorough knowledge of the latest fashion, trends in
vogue, forecasting techniques etc, while a Merchandiser should have
numerical ability and number crunching skills
A Buyer should have studied Fashion Designing, while a Merchandiser
should have the Merchandising knowledge and background
A Buyer takes care of the communication with the vendor, while a
Merchandiser is in touch with the store operations personnel, who in turn
deal with the final customers
...
Having a look at these differences, one need to understand that both the Buyer &
the Merchandiser need to work as a team for the growth and success of their retail
store
...
It is the breaking down of the merchandise in
the minutest component
...
A
shirt is made up of different components like Fabric, Colour, Design etc
...
3,000/YARN- 2 PLY
BRAND- COLOR PLUS
Now, this shirt constitutes 1 SKU
...
Let us call this SKU as SKU-X
...
For instance, if everything else in above SKU remains the same, but only the colour
changes to Blue, then another SKU will be created, say SKU-Y, and the resulting
shirt will be as follows:FABRIC-100% COTTON
COLOUR-BLUE
SLEEVES - FULL SLEEVE
COLLAR-BUTTON DOWN COLLAR
POCKET-SINGLE POCKET
DESIGN- PLAIN/ SOLID
PRICE- Rs
...
e
...
Hence, if a grocer is keeping (i
...
) 3 bottles of Coke 200
ml, (iii
...
) 8 cans of Pepsi, then he is carrying 18 pieces
(5+3+2+8 pieces) of 4 SKUs
...
These levels are as follows:(i
...
For instance, in
the company Raymond Ltd, Fabrics Division and Apparel Division are present
...
) Category is a major grouping of merchandise that includes the following:(iii
...
For example:- A
Department Store has different Departments like Kids’ Wear, Men’ Wear, Women’s
Wear departments in the clothing category
...
) Classification is a group of items (or the same general type of merchandise) that
is housed within a department, like sportswear, swimwear or evening wear
...
) Sub-classification is a group of merchandise within a classification that is closely
related to styling, like Bottoms and Tops
...
Planning the retail sales
For doing sales planning a retailer can take help of any one or a combination of
following figures:• Past year’ sales
• Previous rate of growth patterns
• Environmental information
• Local business conditions
• Trends
• Industry data
2
...
e
...
One of the major tools used for
this purpose is STO
...
It ensures that the amount of merchandise available is
adequate to meet the sales
...
Mathematically, STO is calculated by the following formula:STO=Net sales for the period/ Avg
...
Planning the reductions
Reductions are a means of lowering or marking down the retail price of
merchandise
...
•
Discounts are for specific groups like employees, customers, shareholders etc
...
Planning the mark-up (on cost)
After planning the retail sales, inventory stock and reductions, the next step in
Merchandise Planning is to plan the markup on the cost
...
For instance, the markup (on cost) for a fashion retailer
dealing in national apparel brands is 30-35%
...
1,000, then its MRP may be Rs
...
1350
...
Mark-up is profit expressed as a percentage of cost, while Margin is profit expressed
as a percentage of price
...
1,000 (CP
or retailer’s cost price), whose MRP is Rs
...
1,215 (SP or selling price after 10% discount), then the retailer’s
mark-up and margins are calculated as follows:-
Mark-up (on cost)= (Profit/ Cost Price) * 100 = ((SP-CP)/ CP) * 100
= ((Rs
...
1,000)/ 1000) * 100
= (215/1000) * 100
= 21
...
P
...
1215-Rs
...
2%
5
...
It is based on amount of planned sales, opening & closing stocks &
amount of reductions that are being planned and is calculated on a monthly basis
...
St
...
It is an adjustment to planned
purchases that takes into account what stock is already on order
...
OTB=Planned purchases- outstanding orders for the month
CATEGORY MANAGEMENT
Category Management is a retailing concept in which the range of products sold by a
retailer is broken down into discrete groups of similar or related products; these groups
are known as product categories (examples of grocery categories might be: tinned fish,
washing detergent, toothpastes)
...
Each category is run as a "mini
business" (business unit) in its own right, with its own set of turnover and/or profitability
targets and strategies
...
Category management is a process that involves managing product categories as business
units and customizing them [on a store by store basis] to satisfy customer needs
...
marketing strategy in which a full line of products (instead of the individual products or
brands) is managed as a strategic business unit (SBU)
...
e
...
For example, in a category containing brands A and B, the situation could arise such
that every time brand A promoted its products, the sales of brand B would go down by the
amount that brand A would increase, resulting in no net gain for the retailer
...
were beneficial to the retailer and the shopper in the store
...
A third reason was that the collaboration with the supplier meant that supplier's expertise
about the market could be drawn upon, and also that a considerable amount of workload
in developing the category could be delegated to the supplier
...
The Nielsen definition also includes a
provision that products placed together in the same category should be logistically
manageable in store (for example there may be issues in having room-temperature and
chilled products together in the same category even though the initial two conditions are
met)
...
wikipedia
...
The eight steps are shown in the diagram on
the right; they are:
1
...
e
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
The 8-step process, whilst being very comprehensive and thorough has been criticized for
being rather too unwieldy and time-consuming in today's fast-moving sales environment;
in one survey only 9% of supplier companies stated they used the full 8-step process
...
Market research company Nielsen has a similar process based on only 5 steps : reviewing
the category, targeting consumers, planning merchandising, implementing strategy,
evaluating results
...
The category captain will be expected to have the closest
and most regular contact with the retailer and will also be expected to invest time, effort,
and often financial investment into the strategic development of the category within the
retailer
...
The category
captain is often the supplier with the largest turnover in the category
...
In order to do the job effectively, the supplier may be granted access to a greater wealth
of data-sharing, e
...
more access to an internal sales database such as Walmart's Retail
Link
...
For example the UK
Competition Commission has raised their issues on market distortion in principle
...
Category Management Association
The Category Management Association (CMA), is a professional association formed in
2004 with members that come from a broad range of strategic insights and planning
functions
...
BUYER’ DECISION CRITERIA
• Profitability & Sales
Overall profitability
Turnover rate
Sales potential
• Financial terms
Supplier’ price
Gross margin
Allowances, rebates, credit terms
• Assortment considerations
Existence of private brands
Relation to other products
• Consumer evaluation
Overall consumer value
Retail price
Product’s physical characteristics
Packaging
• Supplier Marketing
Introductory campaign & continual marketing
• Supplier characteristics
Supplier representative
Reputation & reliability
Sales force organization
Services & functions
• Competitive considerations
• Distribution factors
Transport adaptation
Flexibility to store needs
BRAND
According to Philip Kotler “Brand is a name term, sign, symbol or design or a combination of
these intended to identify the products or services of one seller or group of sellers and to
differentiate them from those of competitors
...
”
(Source:- Kotler, P
...
), Prentice-Hall International, Englewood Cliffs, NJ)
...
Needless to
say, from this early civilization stage Branding has evolved a lot to the modern times
...
(Source:- Lindstrom, Martin (2005), Brand Sense (First South Asian Edition,
2006), Kogan Page, London, UK)
...
In the 1960’s- ESP (Emotional Selling Proposition):Similar products were perceived to be different mainly because of emotional attachment
...
80’s- OSP (organization behind the brand became the brand)
90’s- BSP (brand stronger than physical dimensions of product)
Late 90’s- MSP (consumer ownership of brands)
•
•
•
•
For example, the recently inaugurated The Arvind Store in Hyderabad, launched by textile leader,
Arvind Limited brings together custom tailoring with ready-made apparel retailing
...
This is nothing but implementing the concept of
MSP,
where
a
a brand in the manner
consumer gets the freedom to own
that he/ she wishes
...
A brand offers something in addition to its
functional purpose
...
The
relation between a brand & a product, may be denoted by the under-mentioned formula:Brand = Product + Identity + Reputation,
where Reputation=Promise + Performance
...
This is very different from a product which is being
retailed on a footpath, where it becomes a generic product not backed by any distinctive
identity & reputation
...
But not all products
are brands
...
but the shirt being retailed from a footpath is not a brand
...
There may be a counter
argument to this point of distinction, where it may be said that fakes or copies of original
brands are also available in the market
...
If a fake of Hugo Boss is being bought by a customer, he/ she is buying it being
fully aware that it is an imitation of the original and sooner or later the people coming in
touch with the user will be knowing of the bogusness of not only the product but also of
the person using it
...
An intangible asset may be defined as
something of value which can not be touched
...
WORLD’s TOP 10 CORPORATE BRANDS
•
•
•
•
•
•
•
•
•
•
Coca Cola-USD 66667 Million
IBM-USD 59031 Million
Microsoft-USD 59007 Million
GE- USD 53086 Million
Nokia-USD 35942 Million
Toyota-USD 34050 Million
Intel-USD 31261 Million
Mc Donald- USD 31049 Million
Disney-USD 29251 Million
Google-USD 25590 Million
(Source:- http://business
...
com/slide-show/2009/sep/10/slide-show-1-worldstop-10-brands
...
MAJOR BRANDING
DECISIONS
TO BRAND OR NOT TO BRAND
BRAND SPONSOR
BRAND NAME SELECTION
BRAND STRATEGY
MAJOR BRANDING DECISIONS
1
...
The reason being that like all good things, branding also comes at a
cost-in fact, a huge cost, i
...
the cost of Packaging, Labeling, Advertising, Legal
Protection, Registration etc
...
It’s precisely these reasons
because of which the first step to be taken by a manufacturer is to decide as to
whether to brand their product or not
...
Following are the advantages offered by Branding:•
•
•
•
•
Easier to process orders and track down complaints
Brand name and trade mark provide legal protection of unique product features
...
However, there are manufacturer who state that it is not a bed of roses and branding has
the following costs attached to it, which makes the product more expensive and less
profitable:-
•
•
•
•
•
Packaging
Labeling
Advertising
Legal Protection, Registration etc
...
Brand Sponsors
This step explores the options available in front of those manufacturers, who do not want
to brand their product
...
(a
...
Thus, our country has garment
manufacturer/ national brands like Park Avenue, Parx and Color Plus by Raymond
and Louise Phillip, Van Heusen, Allen Solly by Madura Garments
...
) Distributor / Store / Retailer / Private Brands are brands developed and
marketed by retailers
...
These manufacturers find the branding part to be a big hassle
and supply them to Shoppers’ Stop, who then brands them and market them
through their own stores
...
) Licensed Brand is a special type of manufacturer brand, in which the owner
of a well-known brand name (licensor) enters a contract with a licensee to
develop, promote and sell the branded merchandise
...
The latest being, Arvind Brand
being the Licensee for Tommy Hilfiger
...
3
...
What will happen if tomorrow by a legislation you are not allowed to be
identified by your name, but by some other person’ name which is different from
yours? It would seem as if an inseparable part of yours has been taken away from
you
...
No wonder then that a Lacoste
and a Crocodile are fighting tooth and nail over the right to use the emblem
...
It’s not as
simple as saying that one alligator is facing to the right and another to the left
...
Companies spend a major portion of their Branding budget on picking a right
name for their brands
...
These tests intend to find as to what name will click the best with the said target
audience
...
Brand Strategy
The next step in branding is to select the right brand strategy out of the following
options:• Line extension
•
Brand extension
•
Multi brands
•
New brands
Line Extension takes place when an existing product category with the existing
brand is given a new look with some minor changes
...
Here, the brand owner’ investment
is the least compared to other strategy alternatives
...
Thus a Philips follows brand extension when it extends the
brand name from electrics to electronics
...
Ponds always associated with beauty soap, cream and powder launched a toothpaste with the same brand name and it bombed
...
That’s the reason as to why companies are advised to avoid the brand
extension trap
...
The logic being that every new brand brings in a new
wave of enthusiasm amongst company’ sales staff, as well as it gives better
opportunity for segmenting the market
...
However, unless and until the brands are positioned clearly
and distinctively, there is the danger of Brand Cannibalization, i
...
company’
Brand A eating into the share of company’ another Brand B
...
A BRAND TREE concept is a tool to
resolve these issues
...
Just by having a
look at this brand tree it should be clear as to whether a brand is overlapping the
position of another brand or not
...
THE PANTALOON BRAND TREE
BIG
BAZAAR
Pantaloon
I n d i a ’s F a m i l y S t o r e s
Is se sasta aur acha kahin nahin
Pantaloons-corporate brand
Credo: India’s family store
Big Bazaar - hypermarket brand
Credo: Is se sasta aur acha kahin nahin
Apparel
BARE
Bare - Casual range for men
women and children wear
Age group: 0 to 45
AFL
John"
Miller
John Miller - Men’s shirts
Age : 18 to 35
PANTALOON
T2OOO
Pantaloon - India’s number one trouser
Age : 20 to 45
srishti
!
Kkjkkjk
Dfdffffffff
Fics your Style & Budget
AFL - Men’s shirts and trousers
Age : 18 to 50
!"
SCOTSVILLE
!"
Scotsville Winter wear
Age : 20 to 50
Srishti - Men’s and ladies wear
Age : 20 to 35
!!
AJILE
More than Sportswear
Annabelle - Women’s wear - salwar
kameez and blouse
PANta
LENGTH
Ajile Men’s knitwear (t-shirts)
Age : 18 to 25
Fabric - Men’s trouser
Credo: Ready to wear trouser lengths
As can be seen from this Brand Tree, first of all both the stores, Big Bazaar and
Pantaloon are distinctively positioned-one as hypermarket, being a mix of
economy supermarket and discount departmental store and the other as a family
departmental store
...
Coming to the nine
brands, while the Bare is positioned as a family brand for Men, Women &
Children, a John Miller is for shirts for men in the age-group of 18-35 years
...
While the AFL (Apparels for Less)
as the name suggests is for Men’s shirts and trousers for people looking at low
prices, a Pentalength is for Ready-to-Wear trouser lengths
...
New Brands
Under this strategy new brand names are given for a new product category
...
In a nutshell, Brand Strategy can be explained with the help of following 4
quadrants:EXISTING PRODUCT
LINE EXTENSION
BRAND EXTENSION
MULTI BRANDS
NEW PRODUCT
NEW BRANDS
EXISTING BRAND NAME
NEW BRAND NAME
BRAND OR A STORE?
The distinction between a store and a brand is becoming more and more blurred
...
Other retailers like Gap and its
sister store Banana Republic have such a strong brand name that the average customer
cannot make a distinction between store and brand
...
It now sells
personal care products like perfume, lotion and lip gloss
...
The Limited takes a slightly different tactic,
selling multiple private label brands to reach different target markets
...
In our own country, Westside started as a combination of stocking both national brands
and private labels
...
As the awareness and acceptance of
their private labels increased, Westside at some of these stores have completely made the
store a private label store
...
This gives the
store an exclusivity as well as a store image not enjoyed by the competitors
...
For
instance, Tiffany’, the upscale jewelry store with its flagship store in Manhattan and other
outlets around the country, now sells its products to other jewelry stores
...
The coffee
shop retailer has teamed up with PepsiCo to market the Frappuccino-a coffee-and-milk
blend sold through traditional grocery channels
...
On the other side of the distribution spectrum, several firms that have traditionally been
exclusively manufacturers have become retailers
...
Why have these manufacturers chosen to become retailers?
First, by becoming retailers they have total control over the way their merchandise is
presented to the public
...
They don’t have to worry about retailers cherry-picking certain items or
discounting the price, for instance
...
Based on these tests’ results, they can better advise other retailers what to buy and how to
merchandise their stores
...
The Sony and Nike stores in Chicago and Ralph Lauren’ flagship store in
Manhattan have an atmosphere that enhances the manufacturer’s image as well as helps
to sell merchandise
...
P
...
Last but not the least, although these stores often compete with stores that carry the same
merchandise, some would argue that having a stronger retailer pressure creates a name
recognition and synergy between the manufacturer and retailer that benefits both parties
...
” This quote has directed the
route of retail marketing since time immemorial
...
But what exactly is the brand of a retail
store? Is it the grand total of all the brands put together in a store? Or Is it
concerned with the efforts put in by the store to carve out a separate identity of its
own, together with, or maybe-in some cases, in spite of the brands it is displaying?
Does the brands displayed by a store adversely or favourably affect the brand image
of the store? What do the customers expect when they visit a store-exclusivity or
variety? Lets try to have a look at these and some other questions
...
Needless to say, that the brands marketed by the store are of
immense importance in deciding the merchandise of the store
...
(i
...
) Store Brands and
(iii
...
All the 3 brands play an
important role in shaping the brand identity of the store
...
The store brands, which are owned by the retail store
and are available only at these store locations, gives the store the advantage of
exclusivity
...
For instance, a
Westside store stocks national brands like Killer, Jealous, Pepe, Levis, Blackberry,
Provogue
...
Once this first
time visitor is in the store, he is also exposed to the Store Brands like SRC,
Westsport, Westside
...
The store also has designer labels to give a contemporary
and fashion conscious look
...
It is the
dream of every store to give the major chunk of its merchandise to store brands as
they offer the advantages of enhancing store image, building customer loyalty,
distinctive corporate image, a strong competitive edge and last but not the least, in
the absence of advertising overheads and due to strict cost control, higher profits
and better margins
...
Price difference is a major attraction that
few shoppers can resist
...
At a Wal Mart outlet, the store’ own label of baby oil is
priced $2 lesser than the Johnson & Johnson product and marketed from the same
Title: Marketing and Merchandising
Description: This file contains the detailed study of Marketing and merchandising with examples in each category.
Description: This file contains the detailed study of Marketing and merchandising with examples in each category.