Basics of Retail Management (MBA)_unit 1.pptx

Basics of Retail Management- Unit 1

1. UNIT 1: Introduction to THE WORLD OF RETAILING 1

2. LO1 History of retail, LO2 Retail overview and present scenario LO3 Concept and Functions performed by retailers LO4 Emerging Trends and cAreer opportunities in retailing LO5 The buying process - need recognition, information search, evaluation of alternatives. LO6 Social factors influencing the buying process family, reference groups and culture. LO7 Retailer characteristics LO8 Retail Formats - Store based, Non-store based, Web based v arious format within store based retailing e.g. specialty store, hyper market, and supermarket. LO9 Draw an insight into developing a sales strategy and plan and implementing the plan. 2 UNIT 1: Introduction to the World of Retailing

3. Definition Retail and retailer, HISTORY OF RETAIL UNIT 1: Introduction to the World of Retailing 1

4. Recall…. When is the last time you went to your favorite retailer?  What store was it? Is it a clothing store, or is it a grocery store? Maybe you prefer to shop online. Why? Have you wondered about the journey those products take before making it out to the shelves?  What is your definition the word “retail.” Spend five minutes writing your responses to the following questions 4 Before we define Retail & Retailer….let us Reflect !!!

5. Retailing – includes all the activities involved in selling the goods&services to the final consumer for personal,family, householduse or for nonbusiness purpose . Retail – The word retail is derived from a french word retaillier which means to cut off a piece or to break bulk. What is Retailing?

6. Understanding Retailing Definition of Retail: sale of goods and services to the public for consumption, covering a huge range of customer needs Design to create contact efficiency Define target buyer segments, identify service outputs, and match offerings to provide value to each target Utilize structural differences among retailers that influence strategies and results 94.5% of retail companies only have one location, and more than one million have fewer than 100 employees

7. Examples of Retailers Retailers: -Reliance Retail, KFC, McDonalds, More,Subiksha,Spencers,VishalRetail,Bigbazar etc Firms that are retailers and wholesalers that sell to other business as well as consumers: -Metro,Office Depot(Stationery products).

8. Evolution of Retail

9. Learning Outcomes: Evolution of Retail 1.2 Analyze the evolution of the retail industry 1.2.1 Describe the overall change in the structure of the retail industry over the past 60 years 1.2.2 Discuss the role information systems have played in the changing retail industry 1.2.3 Explain why a willingness to adapt is essential to a retailer's survival

10. Historical Changes in Retail Pre-1800s: retail was made up of local merchants who provided full service to customers (credit, repairs, etc.) First department store was developed in 1800s, by the 1950s over 4,000 department stores operated, and by 1970s department stores closed and replaced with malls 1990s: Internet impacted retail industry, online shopping became widely popular and still is to this day

11. Historical Changes in Retail ( Contd …)  Retail comes from the Old French word tailor, which means "to cut a piece off, clip or to break bulk" in terms of tailoring (1365). It was first recorded as a noun with the meaning of a "sale in small quantities" in 1433.  The true department store in the world was founded in Paris in 1852 by Aristide Boucicaut and was named Bon Marche.  It was only after World war II that retailers began to upgrade their services, facilities and merchandise selection to offer a fascinating array of additional benefits to consumers through organised retailing. 11

12. Information Systems in Retail Frequently utilized information systems in retail: Inventory management software: tracks inventory levels, orders, sales, and deliveries Customer Relationship Management: looks at data about current and future customers in hopes of retaining and building relationships (personal profile/details, sales history, communication, feedback) Accounting Information Systems: system of collecting, storing, and processing data used by decision makers

13. Adaptation in Retail Examples that failed to adapt and why: Blockbuster Video: late fees led to its demise, and they were too slow to adapt to changes Borders Bookstore: filed for bankruptcy in 2011 because they struggled to fill stores with products consumers wanted Toys R Us: had to lay off over 30,000 employees and sold 15% of toy market, needing to make up for lost sales

14. Practice Question As you consider those shifts also think about how you, the consumer, has changed over time.  Do you shop differently then you used to a year ago or even a decade ago?  What have been some of your biggest influencing factors?  What has been a dramatic shift for you in retail?

15. Retail overview and present scenario UNIT 1: Introduction to the World of Retailing 2

16. The market after 2021 has been an eye-opening time for the Indian retail sector. The industry saw a decline of 8.5% in FY 2021, but it recovered in 2022 to reach $836 billion with 81.5% contribution from traditional retail. However, the COVID-19 disruptions led to a rapid increase in e-commerce and digital adoption. Now, brands across segments are concentrating on increased online presence and direct sales as customers continue to shop online. 16

17. Quite interestingly, shoppers from Tier II and Tier III cities make up over 61 percent of the total market share in FY 2022 in comparison to 53.8 percent in FY 2021. While Tier I cities have a lesser growth rate for e-commerce at 47.2 percent, tier II and III cities showcased growth of 92.2 percent and 85.2 percent, respectively. In 2023, tier II and III cities dominance is likely to continue. Looking at the way Indian retail industry is moving, 2023 will be the year to watch. 17

18. Let us talk about trends Retailers are deluging the market in droves to invest in cutting-edge technology and take advantage of the chance to empower the gen-Z, tech-savvy, and millennial consumer-driven market. A Forbes report says that global AR/VR investment will most certainly reach $72.8 billion in 2024. Additionally, consumers will engage in more conversational commerce, increasing the use of chatbots. The chatbot industry is anticipated to reach a market value of over $102 billion by 2026, with a CAGR of under 35%. Today’s consumers seek out white-glove customer care and demand experiences going beyond the typical shopping experience. According to various market studies, 32% of customers are more willing to interact with in-store experiencing 18

19. moments. Through experiential retail, companies can give their customers unique and cutting-edge experiences — both online and in-person. Retailers can use AR/VR technology to provide immersive shopping experiences focusing on in-person interactions, enhancing the relationship between the brand and the consumer. Virtual navigation, virtual fitting rooms, virtual shopping, and in-store displays are just a few cutting-edge ways; businesses may make the most of this technology that boosts contactless transactions and encourages interaction. 19

20. The world retailing industry is becoming increasingly competitive, forcing companies to take an innovative approach to attract consumers and encourage long-term loyalty to the customers. Department stores, for example, are increasing consumer footfalls by replacing more expensive brand-name products with less expensive private-label products. There are many market segments that are fueling the growth of this industry. The convenience store industry and the global e-commerce industry are all expected to grow significantly in the next few years especially in emerging markets such as Latin America, the Middle East and Asia. 20

21. According to Yahoo Finance, the Indian online retail market was valued at INR 4,822.80 billion in 2023. The market is expected to grow to INR 15,159.11 billion by 2028, with a compound annual growth rate (CAGR) of 24.93% from 2024 to 2028. Deloitte India and the Shopping Centre Association of India (SCAI) project that India's retail industry will grow to $4.5 trillion by the end of the decade. As of 2022, the Indian retail market is valued at around $1.3 trillion. According to BCG, India's retail market is expected to reach $1.1–1.3 trillion by 2025, growing at a CAGR of 9–11%. This growth is driven by factors such as urbanization, income growth, and the rise of nuclear families. 21

22. According to LinkedIn, the Indian retail industry is undergoing a significant transformation in 2023. Digital retail has become the focus, with e-commerce becoming more popular due to its convenience and improved internet accessibility. 22

23. Concept and Functions performed by retailers UNIT 1: Introduction to the World of Retailing 3

24. How Retailers Add Value Breaking Bulk -Buy it in quantities customers want Holding Inventory -Buy it at a convenient place when you want it Providing Assortment -Buy other products at the same time Offering Services -See it before you buy, get credit, discount etc.

25. Smartwatch can be bought on credit or cash. Smartwatch is featured on floor display Smartwatch is offered in convenient locations in quantities of one Smartwatch is developed in several styles How Retailers Add Value Smartwatch is developed at manufacturer The value of the product and service increases as the retailer performs functions.

26. Manufacturer’s Perspective The Four P’s of Marketing Distribution Retailers are part of the distribution channel Retailers are part of the distribution channel Product Price Promotion

27. Distribution Channel

28. Accounting Finance MIS Operations Marketing Human Resources Retailers are a Business Like Manufacturers

29. Decision Variables for Retailers Customer Service Store Design and Display Merchandise Assortment Communication Mix Location Pricing Retail Strategy

30. Economic Significance of Retailing Over 1lak cr in sales Employs 7% of population -about the same as manufacturing and growing. Management training opportunities Entrepreneurial opportunities

31. Nature of Retail Industry is Changing Mom and Pop Store To Today’s Retailer

32. Retailing is a High Tech Industry - Selling Merchandise over the Internet eg : ebay etc. - Using Internet to manage supply chains - Analyze POS data to tailor assortments to stores - Computer systems for merchandise planning

33. Retail Environment Differs Across the Globe US INDIA Concentration High Medium Store Size Big Small Role of Low Low Wholesaling Efficiency High Low

34. Emerging Trends and cAreer opportunities in retailing UNIT 1: Introduction to the World of Retailing 4

35. Types of Retail The retail industry covers an enormous range of consumer needs. According to the National Retail Federation, there are sixteen major segments in the industry. This diversity in size and earnings is reflected in the range of different ownership and management structures

36. Supply Chains A supply chain is system of organizations, people, activities, information, and resources that involve transformation in an efficient, nimble, and seamless way Supplier: person providing service (domestic or international) Factory: supplier has raw materials made into products Distribution Center: finished product goes here after leaving factory Regional Distribution Center: local to area with many advantages

37. Challenges in Retailing Inventory: having too much or too little can affect reputation of retailer and perception of consumer Mobile Experience and Engagement: 90% of customers use smartphones while shopping Digital Disruption: 5 stages (need recognition, information search, evaluating alternatives, purchase decision, post-purchase evaluation)

38. Careers in Retail

39. Learning Outcomes: Careers in Retail Recognize career opportunities available in the retail businesses Identify key roles within retail businesses List some challenges of working in the retail field Categorize the general role requirements of a retail manager Discuss the most valuable skills for a retail manager to possess

40. Key Roles in a Retail Business Industry offers diverse and unique career paths, and main goal includes intersecting with marketing, finance, technology, etc. fields Entry level positions don’t require worker to supervise other workers t same level Intermediate management is HR, production, strategic, marketing, and/or financial Management comprises of planning, organizing, staffing, etc.

41. Understanding Key Roles in a Retail Business Basic Functions: Planning: what needs to happen in the future Organizing: implementing pattern of relationships Staffing: job analysis, recruitment, hiring people Leading/directing: what needs to be done in a situation Controlling/monitoring: making adjustments when needed Motivating Depending on size, there will be different positions (first, middle, top levels)

42. Why Working In Retail Is Tough Inventory levels and assortment: must have right amount of product available at right times in right places Mobile engagement and experience: 90% of consumers use smartphones while shopping, mobile revenue expected to be $ 520 million in 2024 Digital disruption: need recognition, information search, evaluating alternatives, decision to purchase, post-purchase evaluation Socially conscious consumer: eco-friendly or “green” products among millennials and younger

43. Retail Management Requirements Middle managers: excellent interpersonal skills relating to communication, motivation, and mentoring Front Line Management Focus on controlling and directing specific employees Skill Sets Effective at communicating, observing/actively listening, giving/receiving feedback, prioritizing Responsibilities Expertise required, tasked with hiring, assessing performance, providing feedback, aligning teams, etc.

44. Retail Management Requirements Functional Management: authority over organizational unit within business, ongoing responsibilities General Management: focuses on entire business as a whole, formatting policies, managing daily operations, planning, managing cost revenue

45. Mintzberg’s Management Roles Interpersonal: figurehead, leader, liaison Informational: mentor, disseminator, spokesman Decisional: entrepreneur, disturbance handler, resource allocator, negotiator

46. Skills of a Retail Manager Technical Skills: Learned capacity in any given field of work, study, & play Management and communication skills Programming, website maintenance, typing, writing, giving presentations Conceptual Skills: Most relevant in upper-level thinking and broad strategic situations Ability to formulate ideas, generate values, policies, mission statements, ethics Abilities to communicate critical concepts

47. More Retail Management Requirements Defining Agendas Business application know what will be discussed in meetings Keeping minutes verbatim record of what was discussed and made available to public Relevance to management distributing in timely fashion, communication, organization skills

48. Skills of a Retail Manager (cont.) Interpersonal Skills: Leadership, manager vs. leader Communication and interpersonal skills lie at center of considerations Experiential Learning: The process is cyclical with no required starting point or end Learning through reflection, focus on learning process for individual

49. Strategic Planning in Retail Management

50. Microenvironment vs. Macroenvironment Business management: art, science, and craft of formulating, implementing, and evaluating decisions that will enable an organization to achieve its long-term objectives Strategic planning: organization’s process of defining strategy and making decisions to pursue this strategy Business environment: refers to factors and forces that affect firm’s ability to build and maintain successful customer relationships

51. Microenvironment vs. Macroenvironment (cont.) Micro: small forces within company that affect ability to serve its customers Anything in immediate environment (suppliers, customers, competitors, stakeholders Macro: larger societal forces that affect the microenvironment Outside of retailer’s control and of an economic and industry viewpoint

52. Microenvironment vs. Macroenvironment (cont. II)

53. Strategic Planning in Retail Four key elements of strategic planning : strengths and weaknesses personal values of key implementers (internal) industry opportunities/threats & broader societal expectations (external) Steps in strategic retail planning process define business mission, conduct situation audit, identify strategic opportunities, evaluate strategic alternatives, establish specific objectives, develop retail mix, evaluate performance

54. The Retail Mix Price: What is strategy for marketing? Promotion: What tools will you use to influence consumers purchase decision Place: What are hours of operation, how many employees are needed? Product: What type do you intend to carry, what is depth that you will carry in assortment? Presentation: Will there be a free-standing location? Store Image: What is layout, graphics?

55. The Retailing Concept Idea that examines the evolution of the transformation of retail life cycle, suggesting new retailers will begin with low-cost and low-margin operations Barnes & Noble example: Stage 1: began with variety of books in one location at low cost Stage 2: expanded to various locations, increasing sales, brand image, value, and profit Stage 3: established, opened new stores, greater profits Stage 4: Amazon entered market, allowing customers to browse books online and have them delivered

56. Quick Review Key challenge in retail: Inventory Adequate inventory levels imperative to retailer success Too much inventory leads to unproductive sales and lost margin due to markdowns If it doesn’t support customer demand, lost sales and negative image of retailer The Retail Mix helps with strategic planning Technology has transformed the industry in many ways

57. Consumer BUYING Process: Problem recognition, search and evaluation, purchasing PROCESSES, Post-purchase behavior. UNIT 1: Introduction to the World of Retailing 5

58. Understanding Consumer Behavior Consumer behavior consumers make purchase decisions consumers use and dispose of product = HOW

59. The Consumer Decision-Making Process The components of the consumer decision-making process

60. Consumer Decision-Making Process A five-step process used by consumers when buying goods or services. Consumer Decision-Making Process

61. Consumer Decision-Making Process Postpurchase Behavior Purchase Evaluation of Alternatives Information Search Need Recognition Cultural, Social, Individual and Psychological Factors affect all steps

62. 1. Need Recognition Result of an imbalance between actual and desired states. Need Recognition

63. 1. Need Recognition Marketing helps consumers recognize an imbalance between present status and preferred state. Present Status Preferred State Internal Stimuli External Stimuli

64. Problem/Need Recognition Consumer recognizes a gap or discrepancy between his/her current state and his/her desired state.

65. Stimulus Any unit of input affecting one or more of the five senses: sight smell taste touch hearing Stimulus

66. Recognition of Unfulfilled Wants When a current product isn’t performing properly When the consumer is running out of a product When another product seems superior to the one currently used

67. 2. Information Search Internal Information Search Recall information in memory External Information search Seek information in outside environment Nonmarketing controlled Marketing controlled

68. 2. Information Search (Contd.) Deliberate attempt to gain knowledge about a purchase decision; goal is to reduce uncertainty. Internal search Retrieve information from long term memory External search Gather information from external sources, e.g., ads, media, friends, stores

69. Determinants of External Search

70. External Information Searches Need More Information More Risk Less knowledge Less product experience High level of interest Lack of confidence Less Risk More knowledge More product experience Low level of interest Confidence in decision Need Less Information

71. 3. Evaluation of Alternatives and Purchase Evoked Set Purchase! Analyze product attributes Rank attributes by importance Use cutoff criteria

72. 3. Evaluation of Alternatives and Purchase (Contd.) Occurs either separately or in conjunction with information search. We rely on internal processes to help us organize the evaluation process. Consideration (evoked set) Decision rules (heuristics)

73. Consideration Set

74. Decision Rules Strategies used by consumers to guide decision making. Some decision rules use product characteristics to guide decisions. Compensatory Noncompensatory Some decision rules rely on stored information in consumers’ memories to guide decisions.

75. Compensatory Decision Rule Select the best overall brand Consumer evaluates brand options in terms of each relevant attribute and computes a weighted or summated score for each brand. The consumer chooses the brand with the highest score. A compensatory model because a positive score on one attribute can outweigh a negative score on another attribute.

76. Noncompensatory Decision Rules Conjunctive Decision Rule Consumer sets a minimum standard for each attribute and if a brand fails to pass any standard, it is dropped from consideration. Reduces a large consideration set to a manageable size. Often used in conjunction with another decision rule.

77. Noncompensatory Decision Rules Disjunctive Decision Rule Consumer sets a minimum acceptable standard as the cutoff point for each attribute--any brand that exceeds the cutoff point is accepted. Reduces large consideration set to a more manageable number of alternatives. Consumer may settle for the first satisfactory brand as final choice or may use another decision rule.

78. Noncompensatory Decision Rules Lexicographic Decision Rule The consumer ranks the attributes according to importance and then selects the brand that is superior on the most important attribute. If one brand ranks sufficiently high on just one attribute, it will be selected regardless of how it scores on other attributes.

79. Affect-Referral Rule Synthesized decision rule Consumers maintain overall evaluations of brands in their long term memories. Brands on not evaluated on individual attributes but on the highest perceived overall rating.

80. Frame of Reference Another way in which consumers evaluate information is the frame of reference from which s/he subjectively evaluates messages related to a decision problem. “Percent lean” vs. “Percent fat” “Sale” vs. “Clearance”

81. Hypothetical Use of Popular Decision Rules in Making a Decision to Purchase an Ultralight Laptop DECISION RULE MENTAL STATEMENT Compensatory rule “I selected the computer that came out best when I balanced the good ratings against the bad ratings.” Conjunctive rule “I selected the computer that had no bad features.” Disjunctive rule “I picked the computer that excelled in at least one attribute.” Lexicographic rule “I looked at the feature that was most important to me and chose the computer that ranked highest on that attribute.” Affect referral rule “I bought the brand with the highest overall rating.”

82. Cognitive Dissonance Cognitive Dissonance Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions.

83. 4. Purchase Decision

84. 5. Postpurchase Behavior Consumers can reduce dissonance by: Seeking information that reinforces positive ideas about the purchase Avoiding information that contradicts the purchase decision Revoking the original decision by returning the product Marketing can minimize through: Effective Communication Follow-up Guarantees Warranties

85. Post-Purchase Evaluation Consumers evaluate purchases during consumption process. Three possible outcomes. Postpurchase cognitive dissonance. Complaining behavior.

86. Outcomes Actual product performance matches prepurchase expectations Neutral Feeling

87. Outcomes Actual product performance exceeds prepurchase expectations. Positive disconfirmation of expectations Satisfaction

88. Outcomes Actual product performance is below prepurchase expectations. Negative disconfirmation of expectations Dissatisfaction

89. A Continuum of Satisfaction Dissatisfaction Delighted Satisfaction

90. If dissatisfied…. Alternative actions Do nothing Avoid seller/brand in the future Negative WOM to friends Seek redress of problem from seller Complain to outside agency PORTABILITY! (If possible)

91. Decision to complain... Is based on: Level of dissatisfaction Importance of decision/purchase Costs/benefits of actions Personal characteristics Attribution of blame

92. Managerial Implications Related to Consumer Decision Making Understanding decision making process enables marketers to assist consumers along decision pathway. Offer products that meet needs/wants Advertising Making information available Making product available Follow-up sales calls, good service

93. Consumer Buying Decisions and Consumer Involvement Identify the types of consumer buying decisions and discuss the significance a of consumer involvement?

94. Consumer Buying Decisions and Consumer Involvement More Involvement Less Involvement Routine Response Behavior Limited Decision Making Extensive Decision Making

95. Five Factors Influencing Decisions 1. Level of consumer involvement 2. Length of time to make decision 3. Cost of good or service 4. Degree of information search 5. Number of alternatives considered

96. Continuum of Consumer Buying Decisions

97. Routine Response Behavior Little involvement in selection process Frequently purchased low cost goods May stick with one brand Buy first/evaluate later Quick decision

98. Limited Decision Making Low levels of involvement Low to moderate cost goods Evaluation of a few alternative brands Short to moderate time to decide

99. Extensive Decision Making High levels of involvement High cost goods Evaluation of many brands Long time to decide May experience cognitive dissonance

100. Factors Determining the Level of Consumer Involvement Situation Social Visibility Interest Perceived Risk of Negative Consequences Previous Experience

101. Marketing Implications of Involvement High-involvement purchases require: Extensive and informative promotion to target market Low-involvement purchases require: In-store promotion, eye-catching package design, and good displays. Coupons, cents-off, 2-for-1 offers

102. Postpurchase Processes, Customer Satisfaction, and Customer Commitment

103. Postpurchase Consumer Behavior

104. Class Discussion Based on those characteristics that contribute to postpurchase dissonance, discuss several product purchases that are most likely to results in dissonance and several that will not create this effect.

105. Postpurchase Dissonance Postpurchase Dissonance: a consumer reaction after making a difficult decision that involves doubt and anxiety Probability of experiencing dissonance increases based on: Degree of commitment or irrevocability Importance of the decision Difficulty in choosing Individual’s tendency to experience anxiety

106. Postpurchase Dissonance Approaches to reduce dissonance: Increase the desirability of the brand purchased Decrease the desirability of rejected brand Decrease the importance of the purchase Reverse the purchase decision (return before use)

107. Consumer Insight What ethical issues, if any, are there with state lotteries encouraging counterfactual and prefactual thinking about winning the lottery? Why is counterfactual thinking so common among consumers (it is common)?

108. Disposition Alternatives

109. Expectations, Performance, and Satisfaction

110. Social factors influencing the buying process family, reference groups and culture UNIT 1: Introduction to the World of Retailing 6

111. Culture The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society. 113

112. Culture Culture offers order, direction, and guidance in all phases of human problem solving: When to eat, Where to eat, What to eat for each meal, What to serve guests at a dinner party, picnic, or wedding. Culture is a learned behavior. 114

113. Culture… . . is adaptive, i.e. it changes as a society faces new problems and opportunities... . . . satisfies needs by providing norms (rules of behavior)... . . . provides values which delineate what is right, good, and important to a society. 115

114. Characteristics of culture Culture is a learned response. Culture includes inculcated values. Culture is a social phenomenon. Culture is gratifying and continues for a long time. Cultures are similar and yet different. Culture prescribes the ideal standards of behavior. 116

115. 117

116. Culture Includes: The Material Objects of a Society Ideas and Values Institutions Symbols The Ways We Dress, Think, Eat, and Spend Our Leisure Tim 118

117. :::Beliefs::: Consist of the very large number of mental or verbal statements that reflect a persons particular knowledge and assessment of something “I believe this is a good restaurant to eat” “I believe she is a nasty person” 119

118. :::Values::: 1) Values are also beliefs in a way but they differ due to 2) They are relatively few in number 3) Serve as a guide for behavior 4) Difficult to change 5) Not tied to specific objects or situations 6) Widely accepted by society 120

119. The beliefs, values, customs… Influence of culture 1. ON cultural values systems. - Ethics-good, moral, immoral. - Aesthetics-beautiful, ugly, pleasant, unpleasant. - Doctrine- political, social, ideological 121

120. 2-Culture exist & reveals at different levels. Supranational level- Reflects different dimensions of multiple cultures/ different society of nations National level- dimensions of culture of country and national characters. Group level- Held with in a country with various sub-divisions of the society like family, reference group, & other closely held group. 122

121. Levels of Culture Level 1: Cultural differences that cross national boundaries or can be seen to be present in more than one country Level 2 : Unique to a particular country Level 3 : Basically subcultures can also be Families, shopping groups, friendship groups 123 Group National Supranational

122. Forms of Cultural Learning Formal Learning: what the elder family member teach the younger one how to behave. Informal Learning: what the child learns primarily by imitating the behavior of selected others such as family, friend, or TV heroes. Technical Learning: In which teacher instruct the child in an educational environment about what should be done, how it should be done, and why it should be done. 124

123. The Movement of Cultural Meaning 125

124. Issues in Culture Enculturation: the learning of one’s own culture. Acculturation: The learning of a new or foreign culture. Language and symbols: Marketers must choose appropriate symbols in advertising. Ritual: A ritual is a type of symbolic activity consisting of a series of steps (multiple behavior) occurring in a fixed sequence and repeated over time. Rituals extend over the human life cycle Marketers realize that rituals often involve products. Sharing of Culture: Culture is transferred through family, schools, houses of worship, and media 126

125. 127

126. Culture and Advertising Is it the role of advertising to socialize readers on how to dress, decorate their homes, celebrate festivals and food for parties, etc.? 128

127. American Core Values Achievement and success Activity Efficiency and practicality Progress Material comfort Individualism Freedom External conformity Humanitarianism Youthfulness Fitness and health 129 Indian Core Values Family orientation Saving orientation Festivities Shopping as a ritual Mythology Food Habits

128. Criteria for Value Selection The value must be pervasive. The value must be enduring. The value must be consumer-related. 130

129. Changing cultural trends in Indian urban markets Achievement orientation Work Ethic Material Success Middle of the road approach to tradition Impulse Gratification Use of hi-tech products 131

130. 132

131. 133

132. Culture The sum total of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society. 134

133. Culture Culture offers order, direction, and guidance in all phases of human problem solving: When to eat, Where to eat, What to eat for each meal, What to serve guests at a dinner party, picnic, or wedding. Culture is a learned behavior. 135

134. Culture… . . is adaptive, i.e. it changes as a society faces new problems and opportunities... . . . satisfies needs by providing norms (rules of behavior)... . . . provides values which delineate what is right, good, and important to a society. 136

135. Characteristics of culture Culture is a learned response. Culture includes inculcated values. Culture is a social phenomenon. Culture is gratifying and continues for a long time. Cultures are similar and yet different. Culture prescribes the ideal standards of behavior. 137

136. 138

137. Culture Includes: The Material Objects of a Society Ideas and Values Institutions Symbols The Ways We Dress, Think, Eat, and Spend Our Leisure Tim 139

138. :::Beliefs::: Consist of the very large number of mental or verbal statements that reflect a persons particular knowledge and assessment of something “I believe this is a good restaurant to eat” “I believe she is a nasty person” 140

139. :::Values::: 1) Values are also beliefs in a way but they differ due to 2) They are relatively few in number 3) Serve as a guide for behavior 4) Difficult to change 5) Not tied to specific objects or situations 6) Widely accepted by society 141

140. The beliefs, values, customs… Influence of culture 1. ON cultural values systems. - Ethics-good, moral, immoral. - Aesthetics-beautiful, ugly, pleasant, unpleasant. - Doctrine- political, social, ideological 142

141. 2-Culture exist & reveals at different levels. Supranational level- Reflects different dimensions of multiple cultures/ different society of nations National level- dimensions of culture of country and national characters. Group level- Held with in a country with various sub-divisions of the society like family, reference group, & other closely held group. 143

142. Levels of Culture Level 1: Cultural differences that cross national boundaries or can be seen to be present in more than one country Level 2 : Unique to a particular country Level 3 : Basically subcultures can also be Families, shopping groups, friendship groups 144 Group National Supranational

143. Forms of Cultural Learning Formal Learning: what the elder family member teach the younger one how to behave. Informal Learning: what the child learns primarily by imitating the behavior of selected others such as family, friend, or TV heroes. Technical Learning: In which teacher instruct the child in an educational environment about what should be done, how it should be done, and why it should be done. 145

144. The Movement of Cultural Meaning 146

145. Issues in Culture Enculturation: the learning of one’s own culture. Acculturation: The learning of a new or foreign culture. Language and symbols: Marketers must choose appropriate symbols in advertising. Ritual: A ritual is a type of symbolic activity consisting of a series of steps (multiple behavior) occurring in a fixed sequence and repeated over time. Rituals extend over the human life cycle Marketers realize that rituals often involve products. Sharing of Culture: Culture is transferred through family, schools, houses of worship, and media 147

146. 148

147. Culture and Advertising Is it the role of advertising to socialize readers on how to dress, decorate their homes, celebrate festivals and food for parties, etc.? 149

148. American Core Values Achievement and success Activity Efficiency and practicality Progress Material comfort Individualism Freedom External conformity Humanitarianism Youthfulness Fitness and health 150 Indian Core Values Family orientation Saving orientation Festivities Shopping as a ritual Mythology Food Habits

149. Criteria for Value Selection The value must be pervasive. The value must be enduring. The value must be consumer-related. 151

150. Changing cultural trends in Indian urban markets Achievement orientation Work Ethic Material Success Middle of the road approach to tradition Impulse Gratification Use of hi-tech products 152

151. 153

152. 154

153. RETAILER CHARACTERISTICS UNIT 1: Introduction to the World of Retailing 7

154. Retailers Characteristics

155. 157

156. RETAIL FORMATS: Store & Non Store Retailing: Franchising, Unconventional channels, E-retailing UNIT 1: Introduction to the World of Retailing 8

157. 159

158. Types of Retail Formats 160

159. Types of Store Retail Department Stores Specialist Stores Categories Killers Convenience Stores Supermarkets, Superstores and Hypermarkets Catalogue Shops Discount Stores Factory Outlets 161

160. Department Stores A department store is a multi-level store (at one time six or seven stories were common, but today there tend to be from two to three stories). Department stores offers width and depth in the product range so that almost every shopping need can be met. Department stores in principal cities around the world are not only retailers; they also act as tourist attractions and sources of entertainment. 162

161. Specialist Stores Specialist stores are smaller, in line with the size of the product range offered. The majority of stores found in shopping centres or central retail areas are specialist stores. Specialist store targets a narrowly defined customer market segment. 163

162. Category Killers The term category killer, which originated in the USA Category Killers is described as a large specialist retailer that is typically found in an out-of town or edge-of-town retail park or site. 164

163. Convenience Stores Convenience Stores generally apply this criteria to this format: self service. 1,000-3,000 sq ft selling area. Parking facilities. Open 7 days a week. A wide range of goods. 165

164. Supermarkets, Superstores and Hypermarkets Supermarkets, Superstores & Hypermarkets a store concept imported from the USA in the twentieth century. It is based on principal method ‘every day goods'. Instead of requesting products over a counter, It allowed the customer to get involved with the product prior to purchase. The space and labour-saving factors allowed retailers to offer a wider choice of product at lower prices. 166

165. Supermarkets, superstores and hypermarkets can be considered in the same 'family' of retail format, in that the stores are self-service 167

166. Catalogue Stores In Catalogue Stores very little product is displayed in the outlet in comparison to the range as a whole. The catalogues are available for customers to browse through. In today's era of flexible shopping methods, the catalogue shop is a cost-effective way. The format, however, introduces some problems in terms of product interaction and display, because of the reliance on the catalogue for representation rather than 'real' products. 168

167. Discount Stores A discount store is a retailer that sells merchandise at a price level that is lower than 'typical high-street stores'. Discount Stores uses an everyday low pricing policy, where prices remain constantly low, rather than a high-low pricing policy where prices only drop at promotion times. 169

168. Factory Outlets Factory outlet retailers offer customers a range of seconds quality and/or previous season's goods. Factory outlets gives manufacturers and retailers an opportunity to sell off unwanted merchandise without damaging the image of the main product or retail brand, It allows accessibility to customers who might not normally be able to afford the brands. 170

169. Types of Non-Store Retail Mail Order Direct Selling Personal Retailing Telesales Internet Retailing 171

170. Mail Order Mail order retailers rely on printed media as the basis for their format. Catalogues are sent to consumers who order from the catalogue either by telephone, by post or online. 172

171. Direct Selling Direct selling is the term used to describe one-to-one proactive offers from producers to consumers. 173

172. Personal Retailing Under Personal Retailing sellers not only earn commission on sales, but also on the people they persuade to join the organization. 174

173. Telesales & Telemarketing (or Teleshopping) 175

174. Telesales & Telemarketing (or Teleshopping) TeleSales Product offerings are made by a personal telephone call from a seller to a consumer. The telephone is a common method of consume response to non-store retail offerings and so with call centers playing an increasingly major part in many retail transactions. Telemarketing The products are advertised on the television. The price, warranty, return policies, buying schemes, contact number etc. are described at the end of the Ad. The consumers can place order by calling the retailer’s number. The retailer then delivers the product at the consumer’s doorstep. For example, Asian Skyshop . 176

175. Internet Retailing The internet provides a channel of discovery for the consumer, and a way of providing home shopping services for a wider target market for the retailer. The internet is also an efficient homeshopping device, enabling time-poor or less mobile consumers to order and take delivery of routinely purchased items such as basic groceries and household items. 177

176. Automated Vending/Kiosks Automated Vending/Kiosks: It is most convenient to the consumers and offers frequently purchased items round the clock, such as drinks, candies, chips, newspapers, etc. The success of non-store based retailing hugely lies in timely delivery of appropriate product. 178

177. Service Based Retailing These retailers provide various services to the end consumer. The services include banking, car rentals, electricity, and cooking gas container delivery. The success of service based retailer lies in service quality, customization, differentiation and timeliness of service, technological upgradation, and consumer-oriented pricing. 179

178. FRANCHISING Franchising is seen as both an expansion strategy as well as a distribution strategy. Numerous companies that have successfully exploited franchising as a distribution strategy in their home market are adopting the same strategy to exploit opportunities abroad also. Burger King, McDonalds and other US fast food chains with operations in Latin America, India and European countries are good examples of such firms. Another common form of franchising is where the franchisor supplies an important ingredient (part, material, etc.) for the finished product. Example: Coca Cola and Pepsi foods have franchise arrangement with their bottling units all over the world. They supply the concentrated syrup to the bottlers. Similarly, in India you can notice NIIT training centres all over India, which look similar and provide the same training programmes with same fee structure. All these training centres are the franchisees of NIIT. 180

179. FRANCHISING ( Contd …) Some of the major forms of franchising are: manufacturer-retailer systems (such as automobile dealership), manufacturer-wholesaler systems (such as soft drink company with its bottlers), and service-retailer systems (such as fast food outlets). Franchising is basically a specialized form of licensing in which the franchiser not only sells intangible property (normally a trademark) to the franchisee, but also insists that the franchisee agree to abide by strict rules as how it does business. The franchiser will also often assist the franchisee to run the business on an ongoing basis. While licensing works well for manufacturers, franchising is often suited to the global expansion efforts of service and retailing. Example: McDonald’s, Tricon Global Restaurants (the parent of Pizza Hut, Kentucky Fried Chicken, and Taco Bell), and Hilton Hotels have all used franchising to build a presence in foreign markets. 181

180. FRANCHISING ( Contd …) There are different types of franchise systems: _ Territorial franchise: This kind of franchise is for a very specific geographical area with territorial override for the franchisee. _ Mobile franchise: The privilege to sell store merchandise extends to many other areas. _ Co-management: The franchiser and franchisee jointly manage the franchise business, with more involvement in the day-to-day affairs by the former. _ Co-owned: Going against the tenet of the franchise system, the franchiser has a greater stake in the business by jointly owning it with the franchisee. _ Lease: The involvement of the franchisee is limited only to the extent of renting out the premises to the franchiser. 182

181. FRANCHISING ( Contd …) Advantages of Franchising   The advantages of retail franchising are as follows: Your business is based on a proven idea. You can check how successful other franchises are before committing yourself. You can use a recognised brand name and trademarks. You benefit from any advertising or promotion by the owner of the franchise - the “franchisor”. The franchisor gives you support - usually including training, help setting up the business, a manual telling you how to run the business and ongoing advice. You usually have exclusive rights in your territory. The franchisor won’t sell any other franchises in the same region. Financing the business may be easier. Banks are sometimes more likely to lend money to buy a franchise with a good reputation. Risk is reduced and is shared by the franchisor. If you have an existing customer base you will not have to invest time looking to set one up. Relationships with suppliers have already been established. 183

182. Franchising Trends in India Following are the franchising trends in India: The Education sector dominates the Indian franchising scenario, although Retail is fast catching up. Most of the franchisors are relatively new and small. Several large Indian corporate houses are also going the franchising way. Newer and innovative concepts being introduced. Substantial interest from international franchisors as well as Indian business houses for master franchises. Franchising is now spread across the country, thereby providing opportunities to entrepreneurs everywhere. 184

183. Retail Franchising within India Grew initially in the apparel and footwear sectors has gradually grown to cover a wide variety of sectors including food, consumer durables, jewellery , books, home decor etc. Two varieties of Retailers: The manufacturer-retailers-typically Product Distribution Franchises-have been around for a while. The aggregators-typically Business Format Franchises-only now beginning to show up Existent and likely to be successful only in smaller formats Substantial action also happening in non-metro locations. Thereby spreading organized retailing over a larger footprint Has had to contend with the peculiarities of the India real estate markets Result-MG (Minimum Guarantee) has become the key driver 185

184. EMERGING TRENDS IN RETAIL FORMATS (UNCONVENTIONAL CHANNELS) 186

185. EMERGING TRENDS IN RETAIL FORMATS (UNCONVENTIONAL CHANNELS) 187

186. EMERGING TRENDS IN RETAIL FORMATS (UNCONVENTIONAL CHANNELS) 188 Purple Awards 2020 - 8th Mar, 2020 Blind Date for Dogs - 15th Feb, 2020 Children's Art Competition -15th - 16th Feb, 2020

187. EMERGING TRENDS IN RETAIL FORMATS (UNCONVENTIONAL CHANNELS) 189

188. EMERGING TRENDS IN RETAIL FORMATS (UNCONVENTIONAL CHANNELS) 1. Van/Mobile Van Retailing Static retailing Raving retailing 2. Conference/Party/Event/Festive Retailing 3. Distant Retailing a customer place the order from a remote location by telephone, SMS, internet, pager etc , instead of visiting a store. 4. Forecourt Retailing Example: Vishal Mega Mart has tied up with Hindustan Petroleum Corporation Ltd (HPCL) for opening forecourt retail stores chain, which has been branded as “Vishal Corner Mart”. Apollo Pharmacy had tied up and set up ‘ convenio ’ stores at Indian Oil Corporation (IOC) petrol pump outlets for supplying groceries and medicines. 5. Trade Parks Example: India Exposition Mart set up by Handicraft Export Promotion Council in Greater Noida, International Home Deco Park (IHDP) set up by a group of private investors in Noida and World Trade Park coming up in Jaipur. 190

189. ELECTRONIC-RETAILING / (E- RETAILING) / (E-TAILING) / ONLINE – RETAILING E-tailing is the selling of retail goods on the Internet. E-tailing is synonymous with business-to-consumer (B2C) transaction. E-tailing has resulted in the development of e-tail ware - software tools for creating online Catalogs and managing the business connected with doing e-tailing. In the year 2003, clothing and apparel segment clocked online revenues to the tune of $ 3.6 billion. 191

190. Three types of online Retailing Online retailing is classified into three main categories: ❖ Click: The businesses that operate only through the online channel fall into this category. Prominent examples in this category include: Dell, Amazon.com and e-Bay.   ❖ Click and Brick: The businesses that use both the online as well as the offline channel fall into this category. Common example includes: Barnes and Noble’s.   ❖ Brick and Mortar: This is the conventional mode of retailing. The businesses that do not use the latest retailing channels and still rely upon the conventional mode belong to this category. 192

191. Online Retailing – Advantages No Real Estate Costs Easy and Comfortably Customer Interaction Mass Media Search Option User Friendly Effective Price Discrimination Customized Product Placement Global Reach 193