MM2_CHAPTER 16 (1).pptx for mba marketing

iThis PowerPoint presentation provides an in-depth overview of managing retailing, focusing on modern retail environments, key retailing decisions, omnichannel retailing, managing private labels, and wholesaling. It covers various trends in retail, such as mobile and omnichannel retailing, fast retailing, and the increasing role of technology. Additionally, it explores crucial retailing decisions regarding target markets, product assortment, pricing, incentives, and communications. The presentation also discusses the importance of private labels and strategies manufacturers can use to compete with them. Finally, it differentiates between wholesalers and retailers and outlines the roles of merchant wholesalers and brokers/agents.

1. MM2 CHAPTER 16 MANAGING RETAILING PRANAY SINDHU IMTH 23-25

2. 1. MODERN RETAIL ENVIRONMENT

3. MODERN RETAIL MARKETING ENVIRONMENT – COMPETITIVE RETAIL MARKET STRUCTURE NEW RETAIL FORMS AND COMBINATIONS To better satisfy customers’ need for convenience, a variety of new retail forms have emerged. EXAMPLES: Bookstores with coffee shops and vice-versa Gas stations with food stores – Nainital Momos on Hindustan Petroleum Petrol Pumps Hospitals with Starbucks Coffee

4. RETAILER CONSOLIDATION “ Concentration of market power in the hands of a few large retailers. ” Giant retailers such as Reliance Smart, Vijetha , Ratnadeep and Walmart can deliver good service and immense volumes of product to masses of consumers at appealing prices because of: Superior information systems Logistical systems Buying power

5. GROWTH OF MOBILE RETAILING Consumers are fundamentally changing the way they shop, increasingly using a cell phone to DM a friend/relative/public about a product while shopping in stores. GROWTH OF OMNICHANNEL RETAILING Retailing has evolved from a purely brick-and-mortar format to a scenario in which retailers have augmented their physical locations with online stores designed to cater to consumers who prefer shopping online – SHOWROOMING.

6. GROWTH OF FAST RETAILING An important trend in fashion retailing, but with broader implications as well, is the emergence of fast retailing. Retailers offer consumers constantly changing product choices. Requires thoughtful decisions in several areas: new product development, sourcing, manufacturing, inventory management, and selling practices. H&M, ZARA, Forever 21

7. INCREASING ROLE OF TECHNOLOGY Technology is profoundly affecting the way retailers conduct nearly every facet of their business. Nearly all now use technology to produce forecasts, control inventory costs, and order from suppliers, reducing the need to discount and run sales to clear out languishing products. DECLINE OF MIDDLE-MARKET RETAILERS (Verify the validity of this concept in a country like India) (Central, Pantaloons) The retail market today is hourglass shaped : Growth seems to be centered at the top (with luxury offerings from retailers like Hamleys and Tiffany) and at the bottom (with discount pricing from retailers like D-Mart, V-Mart, SMART Bazaar and Flipkart).

8. 2. KEY RETAILING DECISIONS With the new retail environment as a backdrop, there are some key areas where retailers make marketing decisions: TARGET MARKET PRODUCT ASSORTMENT AND PROCUREMENT SERVICES STORE ATMOSPHERE AND EXPERIENCE PRICING (T) INCENTIVES (T) COMMUNICATION (T)

9. 2.1 TARGET MARKET Until it defines and profiles the target market, the retailer cannot make consistent decisions about: product assortment, store décor, advertising messages and media, price, and service levels. Factor BATA INDIA SKECHERS INDIA TARGET MARKET Mass-market consumers, with a focus on family footwear Mid-market and premium consumers, with a focus on lifestyle and performance footwear STORE DÉCOR Simple and functional Modern and trendy PRICE Affordable prices, catering to a broader range of consumers Moderate to premium prices, catering to a more style-conscious and performance-oriented consumer base

10. 2.2 PRODUCT ASSORTMENT AND (2.3) PROCUREMENT The retailer’s product assortment must match the target market’s shopping expectations in both breadth and depth. Product differentiation is crucial for retailers to attract and retain customers (Retailer KNOWN for its BEST QUALITY/PROFESSIONALISM) EXAMPLE: Destination categories , which are product categories that significantly influence shoppers' store choices, play a vital role in a retailer's success (Reliance Fresh known for its FRESHEST PRODUCE drives customers to buy groceries from that store itself).

11. After deciding on the product-assortment strategy, the retailer must establish merchandise sources, policies, and practices. ‘Merchandise managers’ are responsible for developing product assortments and listening to presentations from their suppliers’ salespeople.

12. 2.4 SERVICES Another differentiator – reliable customer service , whether face to face, across phone lines, or via online chat. Retailers position themselves as offering one of three levels of service: Self-service —Self-service is the cornerstone of all discount operations . For customers willing to carry out their own “locate–compare–select” process. Limited service —These retailers carry more shopping goods and offer services such as credit and merchandise-return privileges . Customers typically find their own goods, though they can ask for assistance. Full service —Salespeople are ready to assist in every phase of the “locate–compare–select” process. The high staffing cost and many services, along with the higher proportion of specialty goods and slower-moving items, result in high-cost retailing - CROMA

13. 2.5 STORE ATMOSPHERICS AND EXPERIENCE Retailers must consider all the senses in shaping the customer’s experience. Varying the tempo of music affects average time and dollars spent in the supermarket; slow music can lead to higher sales. Target Market – Young adults :: Store Music – Trending songs on IG reels Name some stores whose store atmospherics are just BETTER than others.

14. 2.6 PRICING Prices are a key positioning factor and must be set in relationship to the target market , product-and service assortment mix, and competition. All retailers would like high sales volumes and high gross margins, but the two do not usually go together. Most retailers fall into the high-markup, lower-volume group (fine specialty stores) or the low-markup, higher-volume group (mass merchandisers and discount stores). In addition to managing their prices, retailers must manage their price image , which reflects the overall perception that consumers have about the level of prices at a given retailer.

15. 2.7 INCENTIVES Retailers vary in the degree to which they use incentives. Two extreme strategies stand out: everyday low pricing and high–low pricing. A retailer using everyday low pricing (EDLP) charges a constant low price with little or no price promotion or special sales. Constant prices eliminate week to-week price uncertainty. In high–low pricing , the retailer charges higher prices on an everyday basis but runs frequent promotions featuring prices temporarily lower than prices at the EDLP level.

16. 2.8 COMMUNICATIONS Retailers use a wide range of communication tools to generate traffic and purchases. They place ads , run special sales , issue coupons , send e-mail promotions , present frequent-shopper reward programs and in-store food sampling , and put coupons on shelves or at check-out points.

17. 3. MANAGING OMNICHANNEL RETAILING Retailers must decide which channels to employ to reach their customers — increasingly, the answer is multiple channels . This increased reliance on multiple channels means that channels should be designed to work together effectively . THREE TYPES OF RETAILERS: BRICK-AND-MORTAR RETAILERS (DEPARTMENT/OFFLINE/PHYSICAL) ONLINE STORES (PURE-CLICK) OMNICHANNEL COMPANIES ( BRICK-AND-CLICK STORE)

18. OMNICHANNEL RETAILING: “seamlessly integrating multiple sales channels, including brick-and-mortar stores, online platforms, and mobile apps, to provide a consistent and personalized customer experience across all touchpoints.” Nykaa , Pepperfry , Lenskart

19. 4. MANAGING PRIVATE LABELS “A private label is a brand owned by a retailer and sold exclusively under its own name, often as a lower-priced alternative to established brands.” Why retailers go the private label way? these brands can be more profitable – manufacturers with higher capacity can develop these products for a small price – promotion, advertising, research costs are marginal in comparison to others.

20. MANUFACTURER VS PVT LABEL: STRATEGY 01 FIGHT SELECTIVELY Manufacturers can successfully compete against private labels by focusing on innovation OR brand building OR premiumization. By creating strong brands and offering high-quality products that meet the needs of consumers, manufacturers can maintain their market share and protect their profits. HUL, ITC PARTNER EFFECTIVELY Manufacturers can effectively partner with retailers by seeking win-win relationships that complement the retailer's private labels. By working together, manufacturers and retailers can expand their reach, improve their product assortment , and offer more value to consumers. Titan partnering up with Reliance Retail MANUFACTURER VS PVT LABEL: STRATEGY 02

21. MANUFACTURER VS PVT LABEL: STRATEGY 03 INNOVATE BRILLIANTLY Innovate brilliantly with new products to help beat private labels. Continuously launching incrementally new products keeps the manufacturer brands looking fresh, but the firm must also periodically launch radically new products and protect the intellectual property of all brands. Create winning value propositions by imbuing brands with symbolic imagery as well as functional quality that beats private labels. Hindustan Unilever's Lux soap, Dabur India's Dabur Red Paste, and ITC's Aashirvaad Atta have all created strong brands by combining meaningful imagery with superior functional quality, appealing to consumers on both an emotional and rational level. MANUFACTURER VS PVT LABEL: STRATEGY 04

22. 5. WHOLESALING Includes all the activities in selling goods or services to those who buy for resale or business use Wholesaler vs retailer : wholesalers pay less attention to promotion, atmosphere, and location because they are dealing with business customers rather than final consumers. wholesale transactions are usually larger than retail transactions, and wholesalers usually cover a larger trade area than retailers.

23. Two types of wholesaler: Merchant wholesaler: Buy directly from the manufacturer, take title to the merchandise they handle, store the product, and then sell it to the customer Brokers and agents: Do not take ownership of the goods they buy and sell

24. ----END OF CHAPTER 16----