Course Code:- BRL–001
Course Title:- Overview of Retailing
Assignment Code:- BRL–001/TMA/2014-15
Coverage:- All Blocks
Maximum Marks:- 100
Attempt all the questions
(A) Short Type Questions
1. Define retailing. What are the major factors influencing the growth of retail in India?
Solution:
Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser. The word retail is derived from the French word retailer, meaning to cut a piece off or to break bulk. In simple terms, it implies a first – hand transaction with the customer. Retailing can be defines as the buying and selling of goods and services. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable.
In 2004, The High Court of Delhi defined the term ‘Retail’ as a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale), a sale to the ultimate consumer.
Thus retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturers and institutional buyers such as the government and other bulk customers. Retailing is the last link that connects the individual consumers with the manufacturing and distribution chain. A retailer is involved in the act of selling goods to the individual consumer at a margin of profit.
Reasons for the growth of retail industry in India:
Emergence of Organized Retail.
Spending Capacity of Youth of India.
Raising Income and Purchasing Power.
Changing Mindset of Customers.
Easy Customer Credit.
Higher Brand Consciousness.
Increasing Disposable Income.
Increasing no. of Dual Income Nuclear Families.
Changing Lifestyle and Consumer Behavior.
Experience with Formats.
Store Design.
2. Discuss the various stages of consumer buying decision process.
Solution:
The purchase is only the visible part of a more complex decision process created by the consumer for each buying decision he makes. But what happens before and after this purchase? What are the factors influencing the choice of product purchased by the consumer?
Today, let’s focus on the Consumer Buying Decision Process and the stages that lead a shopper to purchase a new product.
1. Problem/Need Recognition This is often identified as the first and most important step in the Customer’s Decision Process. A purchase cannot take place without the recognition of the need. The need may have been triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as advertising or word of mouth).
2. Information Search Having recognized a problem or need, the next step a customer may take is the Information Search stage, in order to find out what they feel is the best solution. This is the buyer’s effort to search internal and external business environments, in order to identify and evaluate information sources related to the central buying decision. Your customer may rely on print, visual, online media or word of mouth for obtaining information.
3. Evaluation of Alternatives As you might expect, consumers will evaluate different products or brands at this stage on the basis of alternative product attributes – those which have the ability to deliver the benefits the customer is seeking. A factor that heavily influences this stage is the customer’s attitude. Involvement is another factor that influences the evaluation process. For example, if the customer’s attitude is positive and involvement is high, then they will evaluate a number of companies or brands; but if it is low, only one company or brand will be evaluated.
4. Purchase Decision The penultimate stage is where the purchase takes place. Philip Kotler (2009) states that the final purchase decision may be ‘disrupted’ by two factors: negative feedback from other customers and the level of motivation to accept the feedback. For example, having gone through the previous three stages, a customer chooses to buy a new telescope. However, because his very good friend, a keen astronomer, gives him negative feedback, he will then be bound to change his preference. Furthermore, the decision may be disrupted due to unforeseen situations such as a sudden job loss or relocation.
5. Post-Purchase Behaviour In brief, customers will compare products with their previous expectations and will be either satisfied or dissatisfied. Therefore, these stages are critical in retaining customers. This can greatly affect the decision process for similar purchases from the same company in the future, having a knock-on effect at the Information Search stage and Evaluation of Alternatives stage. If your customer is satisfied, this will result in brand loyalty, and the Information Search and Evaluation of Alternative stages will often be fast-tracked or skipped altogether.
3. What are the classifications of retail formats in India? Explain the features in details.
Retail Formats in India:
Hyper Marts/ Super Markets: large self – servicing outlets offering products from a variety of categories. Examples like Spencer’s, Big Bazaar.
Mom-and –pop Stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch.
Departmental Stores: are general retail merchandisers offering quality products and services. Examples like Ebony, Shopper’s Stop, Westside.
Convenience Stores: are located in residential areas with slightly higher prices goods due to the convenience offered. Examples like in & Out, Safal, 6ten.
Shopping Malls: the biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof.
E-trailers: are retailers providing online buying and selling of products and services.
Discount Stores: these are factory outlets that give discount on the MRP. Examples like Subhiksha, Koutons, Nike, and Levis.
Vending: it is a relatively new entry in the retail sector. Here beverages, snacks and other small items can be bought via vending machines.
Category Killers: small specialty stores that offers a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO’s.
Specialty Stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai’s Crossword Book Store and RPG’s Music World is a couple of examples. (Sunita Sikri, Ms. Dipu Wadhwa).
4. Describe relevant acts pertaining to retail industry. (10)
Solution:
Following acts are applicable to retail industry
1) Shops & Establishment
2) PF & Misc. Provisions Act
3) ESI Act
4) Bonus Act
5) MW Act
6) MB Act
1) Shops & Establishment
While planning to step into the world of business, you need to draw up not only your business plan, product/service model, financing options, but also make a comprehensive list of all the compulsory regulations that your business entity will have to comply with such as the taxation legislations, licensing requirements, etc.
One such important legislation is the Shops and Establishments Act, enacted by every state in India to regulate conditions of work and to provide for statutory obligations of the employers and rights of the employees in un-organized sector of employment and other establishments in their jurisdiction.
Which businesses come under the purview of Shops & Establishments Act?
A Commercial Establishment including:
• A commercial or trading or banking or insurance establishment, or
• An establishment or administrative service in which persons employed or mainly engaged in office work, or
• A hotel, restaurant, boarding or eating house, a cafe or any other refreshment house or
• A theater, cinema or any other place of public amusement or entertainment.
Regulations under the Act:
This act lays down the following rules:
• Working hours per day and week.
• Guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work.
• Rules for employment of children, young persons and women.
• Rules for annual leave, maternity leave, sickness and casual leave, etc.
• Rules for employment and termination of service.
• Maintenance of registers and records and display of notices.
• Obligations of employers as well as employees.
2) Provident Fund & Miscellaneous Provisions Act
The umbrella legislation relating to provident fund is the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act). The Act was enacted with the main objective of making some provisions for the future of industrial workers after their retirement and for their dependents in case of death. It provides insurance to workers and their dependents against risks of old age, retirement, discharge, retrenchment or death of the workers. It is applicable to every establishment which is engaged in any one or more of the industries specified in Schedule I of the Act or any activity notified by Central Government in the Official Gazette and employing 20 or more persons.
However, the Act shall not apply to any establishment:-
Registered under the Co-operative Societies Act 1912 or under any other law for the time being in force in any State relating to co-operative societies employing less than fifty persons and working without the aid of power; or
Belonging to or under the control of the Central Government or a State Government and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed by the Central Government or the State Government governing such benefits; or
Set up under any Central Provincial or State Act and whose employees are entitled to the benefits of contributory provident fund or old age person in accordance with any scheme or rule framed under that Act governing such benefits; or
Newly set up until the expiry of a period of three years from the date on which such establishment has been set up.
The Act is administered by the Government of India through the Employees’ Provident Fund Organization (EPFO). EPFO is one of the largest provident fund institutions in the world in terms of members and volume of financial transactions that it has been carrying on. It is an autonomous tripartite body under the control of Ministry of Labour with its head office in New Delhi. It aims to extend the reach and quality of publicly managed old-age income security programs through its consistent efforts and ever-improving standards of compliance and benefit delivery system to its members. This way it seeks to contribute to the economic and social well-being of the country.
3) ESI Act
The Employees’ State Insurance Act, 1948 (ESI Act) provides for health care and cash benefit payments in the case of sickness, maternity and employment injury. The Act applies to all non-seasonal factories run with power and employing 10 or more persons and to those factories which run without power and employing 20 or more persons. The appropriate Government may after notification in the Official Gazette, extend the provision of the Act to any other establishment or class of establishments, industrial, commercial, agriculture or otherwise.
Under the Act, cash benefits are administered by the Central Government through the Employees State Insurance Corporation (ESIC), whereas the State Governments and Union Territory Administrations are administering medical care.
The Employees’ State Insurance Corporation (ESIC) is the premier social security organization in the country. It is the highest policy making and decision taking authority under the ESI Act and oversees the functioning of the ESI Scheme under the Act. The corporation comprises members representing Central and State Governments, employers, employees, Parliament and the medical profession. Union Minister of Labour functions as the Chairman of the Corporation. A Standing Committee constituted from among the members of the Corporation acts as the Executive Body for the administration of the Scheme.
The basic provisions of the Act are:-
Every factory or establishment to which this Act applies shall be registered within such time and in such manner as may be specified in the regulations made in this behalf.
It provided for an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity.
It also provided for six social security benefits:-
Medical Benefit
Sickness Benefit (SB)
Maternity Benefit (MB)
Disablement Benefit
Dependants’ Benefit(DB)
Funeral Expenses
The Central Government may, by notification in the Official Gazette, establish a Corporation to be known as the ‘Employees’ State Insurance Corporation’ for the administration of the scheme of Employees’ State Insurance in accordance with the provisions of the Act.
The Corporation may, in addition to the scheme of benefits specified in this Act, promote measures for the improvement of the health and welfare of insured persons and for the rehabilitation and re-employment of insured persons who have been disabled or injured and may incur in respect of such measures expenditure from the funds of the Corporation within such limits as may be prescribed by the Central Government.
The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer and contribution payable by the employee and shall be paid to the Corporation. The contributions shall be paid at such rates as may be prescribed by the Central Government.
All contributions paid under this act and all other moneys received on behalf of the Corporation shall be paid into a fund called the ‘Employees’ State Insurance Fund’ which shall be held and administered by the Corporation for the purposes of this Act.
Whoever, for the purpose of causing any increase in payment or benefit under this Act, or for the purpose of causing any payment or benefit to be made where no payment or benefit is authorized by or under this Act, or for the purpose of avoiding any payment to be made by himself under this Act or enabling any other person to avoid any such payment, knowingly makes or causes to be made any false statement or false representation, shall be punishable with imprisonment or with fine or with both.
If the person committing an offence under this Act is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
4)Bonus Act
The Payment of Bonus Act, 1965 was enacted to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or productivity and for the matters connected therewith. The Act applies to:- (i) every factory as defined under the Factories Act, 1948; and (ii) every other establishment in which twenty or more persons are employed on any day during an accounting year. However, the Government may, after giving two months’ notification in the Official Gazette, make the Act applicable to any factory or establishment employing less than twenty but not less than ten persons.
The Act is enforced through the Central Industrial Relations Machinery (CIRM). CIRM is an attached office of the Ministry of Labour and is also known as the Chief Labour Commissioner (Central) [CLC(C)] Organization. It is headed by the Chief Labour Commissioner (Central).
The key provisions of the Act are:-
According to the Act, the term ‘employee’ means “any person employed on a salary or wage not exceeding three thousand and five hundred rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied”.
An employee is entitled to be paid by his employer a bonus in an accounting year subjected to the condition that he/she has worked for not less than 30 working days of that year.
An employer shall pay minimum bonus at the rate of 8.33% of the salary or wages earned by an employee in a year or one hundred rupees, whichever is higher. Here it is not required that the employer has any allocable surplus in the accounting year. However, where an employee has not completed fifteen years of age at the beginning of the accounting year, the minimum bonus payable is 8.33% or sixty rupees, whichever is higher.
In any accounting year, if the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer shall in lieu of such minimum bonus, be bound to pay bonus (maximum bonus) equivalent to the amount which shall not exceed 20% of the salary or wages earned by employees.
In computing the allocable surplus, the amount set on or the amount set off shall be taken into account. In other words:- (i) If, in any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment, then the excess surplus is carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year for the purpose of payment of bonus; or (ii) If there is no or less allocable surplus in respect of that year, then such a shortfall is carried forward for being set off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year.
Where in any accounting year, any amount has been carried forward and set on or set off, then in calculating bonus for the succeeding accounting year, the amount of set on or set off carried forward from the earliest accounting year shall first be taken into account.
All amounts payable to an employee by way of bonus under this Act shall be paid in cash by his employer within a month from the date on which the award become enforceable or the settlement comes into operation, in respect of any dispute regarding payment of bonus. But, in any other case, it shall be paid within a period of eight months from the close of the accounting year.
However, the Government may order, upon receiving application made to it by the employer and for sufficient reasons, to extend the said period of eight months to such further period or periods as it thinks fit, such that that the total period so extended shall not, in any case, exceed two years.
An employee shall be disqualified from receiving bonus if he/ she is dismissed from service for: – (i) fraud; or (ii) riotous or violent behavior while on the premises of the establishment; or (iii) theft, misappropriation or sabotage of any property of the establishment.
5) MW Act.
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers, mostly in the unorganized sector by providing for the fixation of minimum wages in certain specified employments. It binds the employers to pay their workers the minimum wages fixed under the Act from time to time.
Under the Act, both the Central Government and the State Governments are the appropriate Governments to fix, revise, review and enforce the payment of minimum wages to workers in respect of ‘scheduled employments’ under their respective jurisdictions. There are 45 scheduled employments in the Central sphere and as many as 1530 in State sphere.
In the Central sphere, the Act is enforced through the Central Industrial Relations Machinery (CIRM). CIRM is an attached office of the Ministry of Labour and is also known as the Chief Labour Commissioner (Central) [CLC(C)] Organization. The CIRM is headed by the Chief Labour Commissioner (Central). While, the State Industrial Relations Machinery ensures the enforcement of the Act at the State level.
The appropriate Government is required to appoint an Advisory Board for advising it, generally in the matter of fixing and revising minimum rates of wages. The Central Government appoints a Central Advisory Board for the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages as well as for coordinating the work of Advisory Boards.
Minimum wage and an allowance linked to the cost of living index and is to be paid in cash, though payment of wages fully in kind or partly in kind may be allowed in certain cases. The minimum rate of wages consists of a basic wage and a special allowance, known as ‘Variable Dearness Allowance (VDA)’ linked to the Consumer Price Index Number. The allowance is revised twice a year, once in April and then in October.
Under the Minimum Wages Act, there are two methods for fixation/revision of minimum wages, namely:-
Committee method – Under this method, committees and sub-committees are set up by the appropriate Governments to hold enquiries and make recommendations with regard to fixation and revision of minimum wages, as the case may be.
Notification method – Under this method, Government proposals are published in the Official Gazette for information of the persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals will be taken into consideration.
After considering the advice of the Committees/Sub-committees and all the representations received by the specified date in Notification method, the appropriate Government shall, by notification in the Official Gazette, fix/revise the minimum wage in respect of the concerned scheduled employment and it shall come into force on expiry of three months from the date of its issue. The Government may review the minimum rates of wages and revise the minimum rates at intervals not exceeding five years.
The fixation of minimum wages depends on a number of factors such as level of income and paying capacity, prices of essential commodities, productivity, local conditions, etc. Since these factors vary from State to State, the wages accordingly differ throughout the country. Hence, in the absence of a uniform national minimum wage, the Central Government introduced a ‘national floor level minimum wage’. Initially, this minimum wage level was fixed at Rs. 35/- per day and has been revised periodically. The last revision being Rs. 66/- per day with effect from 1.2.2004, on the recommendations of the Central Advisory Board. All the States/UTs Governments are required to ensure that fixation/revision of minimum rates of wages in all the scheduled employments is not below this national minimum wage.
Also, in order to bring uniformity in the minimum wages of scheduled employments, the Union Government has requested the States to form regional Committees. Hence, five Regional Minimum Wages Advisory Committees have been formed in the country. These include:-
Region
States/UTs covered
Eastern Region
West Bengal, Odisha, Bihar, Jharkhand and Andaman & Nicobar Islands.
North Eastern Region
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Sikkim, Nagaland and Tripura.
Southern Region
Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pondicherry and Lakshadwadeep.
Northern Region
Punjab, Rajasthan, Himachal Pradesh, Jammu & Kashmir, Haryana, Uttar Pradesh, Uttarakhand, Delhi and Chandigarh.
Western Region
Maharashtra, Gujarat, Goa, Madhya Pradesh, Chhattisgarh, Dadra & Nagar Haveli and Daman & Diu.
6) MB Act
The Maternity Benefit Act, 1961 regulates employment of women in certain establishments for a certain period before and after childbirth and provides for maternity and other benefits. Such benefits are aimed to protect the dignity of motherhood by providing for the full and healthy maintenance of women and her child when she is not working. The Act is applicable to mines, factories, circus industry, plantations, shops and establishments employing ten or more persons, except employees covered under the Employees’ State Insurance Act, 1948. It can be extended to other establishments by the State Governments.
The Central Industrial Relations Machinery (CIRM) in the Ministry of Labour is responsible for enforcing this Act. CIRM is an attached office of the Ministry and is also known as the Chief Labour Commissioner (Central) [CLC(C)] Organization. The CIRM is headed by the Chief Labour Commissioner (Central).
The main provisions of the Act are:-
No employer shall knowingly employ a woman in any establishment during the six weeks immediately following the day of her delivery or her miscarriage. Also, no woman shall work in any establishment during the six weeks immediately following the day of her delivery or her miscarriage.
Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day. The ‘average daily wage’ means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, or one rupee a day, which ever is higher.
No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery. For the purpose of calculating the days on which a woman has actually worked in the establishment, the days for which she has been laid off during the period of twelve months immediately preceding the date of her expected delivery shall be taken into account.
The maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks, that is to say, six weeks up to and including the day of her delivery and six weeks immediately following that day.
No deduction from the normal and usual daily wages of a woman entitled to maternity benefit shall be made by reason only of – (i) the nature of work assigned to her by virtue of the provisions of the Act; or (ii) breaks for nursing the child allowed to her under the provisions of the Act.
If a woman works in any establishment after she has been permitted by her employer to absent herself for any period, during such authorized absence, she shall forfeit her claim to the maternity benefit for such period.
If any employer contravenes the provisions of this Act or the rules made there under, he/ she shall be punishable with imprisonment or with fine or with both; and where the contravention is of any provision regarding maternity benefit or regarding payment of any other amount and such maternity benefit or amount has not already been recovered, the court shall, in addition recover such maternity benefit or amount as if it were a fine and pay the same to the person entitled thereto.
5. Explain the importance of technology in retail industry. How is technology helpful in customer relationship management? (5+5)
Solution:
The rapid speed of technology development and rising adoption of mobile digital devices on a global scale, such as Smartphone’s and tablets, have a profound transforming impact on consumer behavior and retail businesses
at large(Bain, 2012; Nielsen, 2013). Accenture (2013 a, p.3), in its Technology Vision annual series, supports this claim. Technology is part and parcel of every aspect of business today and “serves as a primary source of market differentiation, business growth, and profitability.”Nowadays, keeping pace with technological developments and innovations, and putting technology successfully to use play a decisive role for businesses, retailers included. Mobile digital technologies, for instance, help create and provide targeted ads, new on-the-go services, and engage the customer. Relationships between customers and retailers are thus extended beyond the physical store into the digital sphere. Retailers contribute and are an inseparable part of new digital connections among customers themselves by creating and participating in discussions on social media.
Apart from mobile digital technologies, some other technological innovations introduced in the retail industry include Quick Response (QR) codes, electronic price tags, digital advertising displays, self –check -out systems, persona l selling assistants, smart kiosks, and an overall interconnection of all of these innovations with social media platforms and retailers’ customized platforms and applications.
Figure: Interrelationship among Technology, Customers and Retailers. Source: Own Figure
TECHNOLOGY AND CRM
Building relationships with customers requires data on the customer. If data is to be used, it has to be clean and timely, and the impression is gained that organisations have extensive data on their customers. It has been suggested that organisations are not ready for the implementation of CRM as their data is not good enough. In research conducted in the UK in 2000, none of the organisations had data that was completely up to date, clean and usable or a fully implemented CRM strategy.
Technological developments continue to affect the organisation and the marketing of its products and services. These technological applications include the computer (specifically the World Wide Web) and mobile telephone technology. CRM needs to be seen as more than just technology with the technology being regarded as the enabler of the CRM strategy.
In using technology, a number of technology applications can be identified that are used in the development of CRM strategy. Three main components of CRM systems can be identified
SPECIFIC TECHNOLOGY APPLICATIONS WITHIN CRM
The development of CRM technology can be viewed from the perspective of the level of information technology applied in building customer relationships. Four stages can be identified in this development process. These four stages are illustrated in Figure 2.
Figure: The phases in the development of CRM
6. Describe various ethical dimensions of retail with suitable examples.
Solution:
Ethical decisions ensure society’s sense of order and justice. But trying to determine what falls into that sense of order and justice can be difficult.
One department that is frequently maligned for unethical acts in business is marketing.
A major reason for this negativity is that marketing tends to be the most visible or conspicuous department to the public at large. For example, fictitious pricing, deceptive advertising and false sales pitches from sales personnel often become cannon fodder for aggrieved customers and the media. Studies have confirmed that unethical marketing decisions can engender considerable personal, organisational and social costs. There are moral constraints built into the very dynamics through which marketing works. For example; contemporary marketing practitioners often argue that dishonest marketing will be unsuccessful marketing, that the market will weed out those who violate the common morality. After all, ethics functions as a form of social control, something that is especially critical to customers, salespeople and the organisation.
The concept of Corporate Social responsibility (CSR) is often associated with the concept of corporate ethics and according to many definitions, CSR appear to be the ethical expression of the business. Consequently retailers’ ethics may be focused on the notion of ethical responsibility to contribute to sustainable economic development; working with employees, their families, the
local community and society at large to improve their quality of life. The retailers’ ethics may be analyzed from the standpoint of ethical practices, seen as “Good Actions”.
Retailing plays a vital role in the economy. The retail industry is the first link in the distribution chain, from the customer’s point of view. It is therefore vital for retailers to act in an ethical manner because they affect the lives of many people.
One area in marketing where ethical misconduct can easily occur is the selling area. Sales personnel tend to be guided by their professional demands for bending ethics. Marketing personnel are the unfortunate victims of the ethics gap. Institutional support for encouraging ethical behaviour is more useful than a punitive or reformatory approach. If ethicality is measured, sales and marketing personnel may be as ethical as other groups in the organisation.
This however needs to be reinforced organisationally. Failure to structure supportive ethical work environment is a case of managerial malfeasance.
7. Write short notes on:
a) E-retailing
b) Rural Retailing
a) E-retailing
Solution:
E-Retailing is the use of technology such as computers and the internet to sell a range of products and services online to the world.
What opportunities does E-Retailing provide?
E-Retailing opens up many doors for companies.
E-Retailing provides a greater range of people to sell the products to.
This can lead to increase in profits and a decrease in costs.
The web site can also lead to opportunities of better and cheaper products to sell thought globalization.
How can products and service be made available to the global market?
There are ranges of ways to make your web site be well known by people. This includes:
Using banners on others sites to advertise
Using word of mouth
Using social networking sites to advertise such as twitter to alert people when a new product is available
Use of existing contacts with customers to alter the to the store either by putting pallets out thought the physical store and through email.
If the funds are available use television advertisement and radio advertisement.
Benefits for the Company
There are range of benefits to the company:
Lowered cost- there is a lowered cost due to not having to pay shop rent and wages of people working in the actual store.
Less chances of stock being shop lifted when the physical store is running and also after hours.
A greater range of customers which can lead to greater profits. As shown by the table below there is increase assess to the internet .
b) Rural Retailing
Solution:
The world’s economic centre is shifting away from the established, wealthy economics of Europe Japan, and North America towards the Asia pacific.
India is one of the fastest -growing large economics in the world. Over the last 15 years India has changed much faster than many predicted.
Overall, competition and structural changes within the economy have raised the bar in terms of what consumers have come to expect.
Retailing is the largest private sector industry. Retail is the sale of merchandise in small quantities to the ultimate consumer.
Retailing can be defined as the set of activities that markets products or services to final consumers for their own personal or house hold use. This is done by organizing the availability of goods and then supplying them to consumer on a relatively small scale.
The mix of variables including price, location, communications, merchandise, physical attributes, services and personnel form the retail mix and these components form the overall strategic marketing components of retailing
INDIAN RURAL RETAIL MARKET
Rural Retail
Pillars of Indian economy
Rural markets are Virgin markets.
Retailing is part time.
Low maintenance cost.
High Transportation and traveling cost.
Penetration is facilitated through intermediaries.
98% of traditional retailing is handled by local kirana stores
(B) Essay Type Questions
8. Discuss the key issues of financial management in retail industry.
Solution:
Click Here to get the Answer for this Question no. 8
9. How can you justify that store design and visual merchandising play an important role in modern retail. Substantiate your answer with suitable examples.
Solution: N/A