MK0012– Retail Marketing



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Summer 2012
Master of Business Administration - MBA Semester 3
MK0012– Retail Marketing - 4 Credits
Book ID: B1222
Assignment Set- 1 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions.

Q.1 How has the growth of retail sector helped the Indian economy?

Answer  :  Contribution of Retail:
What, How and For Whom The presence of retail sector in India has been in limelight for the last few years. Its significance has been undoubted. Policymakers are quite optimistic that the evolution and steady maturation of organized retailing will take the economy to new highs. Besides, it will also help strengthen the linkages between the different sectors so as to break the vicious circle of poverty and ensure a bright future for the next generation. The benefit of retailing to general public includes growing awareness and brand consciousness.



Indian Retail: Past Vs Present

It is widely accepted that the retail industry has undergone a drastic change in last five years and there is yet more to come. Let us compare the image of Indian retailing in 2004-05 to that of its status in 2007-08 in the following table:

Magnification of the Indian Retail Industry

Yardstick
Situation in 04-05

Situation in 07-08

Value of retail sales

Rs. 10,20,000 crore

Rs 12,00,000 crore

Annual growth rate

5%

5.7%

Value of organized market

Rs 35,000 crore

Rs 55,000 crore

Share of organized market in the sector

3.4%

4.6%

Forecasts (after 5 years) about size of organized retail market

Over Rs. 1,00,000 crore

Rs. 2,00,000 crore

Forecasts about growth rate of organized retail market

Around 30%

Around 40%

The above table clearly shows that the retail market as well as the mindset required for it has experienced a thorough revisal in the last three years. This is just the beginning and Indians are sanguine that the sector will see rosy days in the future. This confidence has helped India acquire the No.1 position among 30 most attractive retailing destinations in the world according to the Global Retail Development Index of 2005 (by AT Kearney, India). Among emerging markets, India holds the second position after China in the list of most favoured retail destinations.

The retail industry employs a huge share of the total workforce in India. It is the second largest employer after India. Presently 7 percent of the total labour force is employed in the retail sector. According to available data it is also the largest employer in the services sector and maximum growth in the non-agricultural sector has been witnessed by retail trade. According to market analysts 300 new malls, 1,500 supermarkets and 325 departmental stores are going to come up in India in the next few days. The shopping revolution that has led to this retail boom is going to continue and this is a good news for the government as well as those who wish to work in the organized sector.

Contribution of FDI in Retailing

Permitting Foreign Direct Investment in the retailing sector can have immense benefits. It can generate huge employment for the semi-skilled as well as illiterate population which otherwise can't be employed in the already confined rural and organized sector. The retail sector is highly dependent on the rural sector. Thus it can facilitate the improvement of the standard of living of farmers by purchasing commodities at a reasonable cost. It also stems out an indirect employment generation channel by training and employing people in the transportation and distribution sectors such as drivers, mechanics etc. It is also evident that real estate is a genuine challenge for organized retailing. Traditional retailers can use this situation in their favour by taking franchisees of the mega players of this industry. On the other hand, the consumer gains from the wide variety of choices and a more diversified basket of prices available under one roof. Secondly the indirect benefits like better roads, online marketing, expansion of telecom sector etc. will give a 'big push' to other sectors including the rural one itself. Last but not the least the huge tax revenue generated from these retail biggies and collected in government coffers will gradually wipe out the ugly looking fiscal and revenue deficits. Besides the transaction in foreign currencies by these MNCs will create a balance in exchange rate and will bring in stable funds in the economy as opposed to FII's hot money. This will in turn act as a boost to the developing (or 'transforming', as suggested by the USAID) economy of India.

The phobias relating to FDI in the retail sector are unfounded as neither the retailing sector in India is an infant industry, nor it can outweigh the paramount local tastes and preferences.

Let's pray that the retail sector like the IT and manufacturing sector brings happiness in the eyes of the people and help remove the regional and class-based disparities.


Q.2 Discuss different types of store based retailer. Give examples of each.

Q.3 Explain the GAP Model of service quality.

Q.4 Define Retail store image & describe factors influencing it.

Q.5 What is positioning? Discuss various positioning approaches.

Q.6 Explain the various elements of communication mix included in retail chain.



Summer 2012
Master of Business Administration - MBA Semester 3
MK0012– Retail Marketing - 4 Credits
Book ID: B1222
Assignment Set- 2 (60 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Q.1 How does advertising help in retail promotions? Discuss the various appeals being used.
 Answer :  Promoting a brand is more important than opening a store. It is essential to create brand awareness for the customers to know about the brand’s existence. The retailer must strive hard to communicate the USPs (Unique selling Proposition) of the brand to influence the buying behaviour of the customers. In simpler words, advertisements help the end-users to know to which brand a particular product belongs.

Advertisements play a crucial role in promoting a brand and creating its awareness amongst the masses.

They help in creating an image of a particular product or brand in the minds of the potential customers. Such a mechanism is also called Brand Positioning.

What is Advertising ?

Advertising is a medium through which an individual or organization highlights the USPs and benefits of a product or service to influence the buying behaviour of the individuals.

It helps to create a positive image of a particular brand in the minds of the customers and prompts them to buy the same.
Role of Advertising in Retail
The retailer through various ways of advertising strives hard to promote his brand amongst the masses for them to visit the store more often.
Advertisements attract the customers into the store. They act as a catalyst in bringing the customers to the stores.
The advertisement must effectively communicate the right message and click on the customers. It should be a visual treat and appeal the end-users.

Advertisements have taglines to create awareness of a product or service in the most effective way.

·         The tagline has to be crisp and impressive to create the desired impact.
·         The tagline should not be lengthy else the effect gets nullified.
·         It has to be catchy.
·         It should be simple to memorize.
·         The moment an individual hears “Just Do it”, he knows he has to visit a “Nike Store”. That’s the importance of a tagline.

Modes of Advertising
Nothing works better than promoting a brand through signboards, billboards, hoardings and banners intelligently placed at strategic locations like railway stations, crowded areas, heavy traffic crossings, bus stands, near cinema halls, residential areas and so on. Such advertising is also called as out of home advertising.
·         Out of home advertising is a way to influence the individuals when they are out of their homes. The hoarding must be installed at a height visible to all even from a distance.

·         Make sure it catches the attention of the passing individuals and influences them to visit the store.

·         Keep it simple and make sure it doesn’t confuse the customers; instead it should convey the information in its desired form.

·         Print media is also one of the most effective ways to promote a brand. Newspapers, magazines, catalogues, journals make the brand popular amongst the individuals. Retailers can buy a small space in any of the leading newspapers or magazines; give their ads for the individuals to read and get influenced.
·         Television also helps the brand reach a wider audience. Now a day’s retailers also use celebrities to endorse their products for that extra zing. Celebrities are shown using the particular brand and thus making it a hit amongst the masses.
·         Sachem Tendulkar - the famous Indian cricketer endorses Castrol India, MRF tyres, Adidas, Boost etc.A child gets influenced to drink Boost because his favourite cricketer drinks the same.

·         Radio Advertisements also help in creating brand awareness.
·         Social networking sites have also emerged as one of the easiest and economical ways to promote a product or brand.

 Two approaches may be used to increase both customer traffic in your store and the sale of specific items or merchandise lines. These approaches, best used in conjunction with each other, are:

Ø  Retail advertising - which addresses those potential customers who are not within the store

Ø  In-store promotions - which can attract the attention of customers within the store or via window displays

Ø  Retail Advertising - Retail Promotion

Although the primary purpose of this section is to discuss merchandise management, advertising is so important to the concept that its inclusion, though brief, is necessary.

There are two major types of advertising:

Advertising to acquaint potential buyers with the special features of a product. With many industries, advertising of this type is done by the manufacturer of the product. Quite often, however, the retailer must do some of this advertising. When this occurs, it is often necessary to work with an advertising agency so they may help you write the copy (wording) such that the advertising will bring the best results. Such advertising concentrates almost solely on the single featured product.

Advertising the availability and price of nationally known merchandise. Much retail advertising is merely directed at letting potential customers know that the product is available and informing the customer of special prices or promotions which may encourage her/him to buy, at your store. This is perhaps best done through 'Omnibus' ads which feature many products, their prices, and brief slogans about their benefits. Consumers very often "shop" such ads and will come into your store to buy one or two of the items listed. While there, they buy other things on impulse.

Whatever your message may be, there are many ways to advertise - depending on how much information you wish to impart to prospective consumers, what kind of information (audio and/or visual), and how many consumers you wish to reach.

Retailers who cater to local clientele may use advertising methods such as:

·         In-house flyers indicating products and bargains

·         Signs both internal and external to the store

·         Informative in-house displays of merchandise

·         Direct mail advertising

·         Local newspapers

·         Distribution of flyers by hand or using the local newspaper deliveries (some papers have such arrangements)

·         Those retailers who wish to launch a large scale campaign may, of course, resort to advertising via radio, television, or widely circulated newspapers.

It is very important to remember that for any kind of advertising, single ads bring very sparse results. In order to make an advertising campaign successful, it is usually necessary to advertise repeatedly (five or six times during a one to two week period) to acquaint consumers with your service or product and, most important, with your store. It is also necessary to maintain a regular program of advertising throughout the year in order to continue bringing customers into the store.

Continual experimentation is necessary to determine which approaches are best. Although proper advertising may involve an initially high expense, if it succeeds both in drawing more clientele into your store and in increasing sales in both advertised and unadvertised products, the initial investment may more than pay for itself.

Once advertising has brought the consumer into your store, promotion and sales efforts must transfer the customer's attention and interest into desire and action to buy.

Ø  In-Store Promotion

Promoting merchandise may often be achieved by special arrangements with a manufacturer or a wholesaler. Often new merchandise will be offered at low introductory prices and the manufacturer or wholesaler will provide the retailer with special informative displays of the product as well as offer special rewards to the consumer.

Many times a manufacturer will not offer displays but you will want to promote certain merchandise nevertheless. Basic ways through which you may create your own in-store promotions are:

·         window displays

·         special in-store displays

·         signs and posters

·         personal selling efforts

·         Retail Displays

·         Both in-house displays of merchandise and advertising displays should be:

·         attention getting in coloration and layout

·         informative in regard to the product

·         either a direct or subtle sales pitch to convince the customer that he or she needs the product

·         informative of price, especially if it is a 'special price'

·         Both display advertising and in-house displays often do well to feature a number of related products, some of which may or may not be on sale.

Past studies in advertising have shown that a person's eye is generally attracted to the center of a display, then off to the right of center and lastly reaches the edge of the display. It is therefore good practice to place a featured item, which may be on sale, at the center of the display and another product for which you most wish to generate sales, to the immediate right of the featured item. Other related products may be placed outward from around the center of the display.

When creating a display, it is important to tie-in merchandise lines with one another wherever possible. In this way, customers who are in the market for a specific product are also exposed to many related products and accessories which they will often buy. Such tie-in displays also create a more organized appearance of your store and will make products easier to find. For example, a person looking for toothpaste might be more likely to buy a toothbrush, dental floss, or mouthwash if those products are in close proximity to the toothpaste.

Tie-in displays also help to generate impulse buying. Quite often an advertised or 'sale' product will draw people into the store who will buy not only the advertised product but will also buy, on impulse, other unadvertised merchandise. Sales are often helpful to impulse buying since, when people feel they are getting a good bargain, they are often likely to reciprocate by purchasing other merchandise from you with money saved from the sale.

Sales Effort.....................


Q.2 What is the significance of proper merchandise presentation? What is cross-merchandising?
Q.3 What is psychological pricing? Determine its effectiveness.
Q.4 Differentiate relationship marketing and transaction marketing.





Q.5 Explain the concept of social marketing. Discuss the P’S under social marketing.
Q.6 Discuss the advantages and disadvantages of E-Tailing.

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