Structure and Nature of Retailing Channels

A PowerPoint presentation on the structure and nature of retailing channels.

1. Structure and Nature of Retailing Channels Jitha Asokan – KH.AR.P2COM20004

2. Introduction Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. A common assumption is that retailing involves only the sale of products in stores. However, it also includes the sale of services. The selling need not necessarily take place through a store.

3. Nature of Retailing Channels 1

4. Nature of Retailing Channels PART OF MARKETING - Retailing is a part of marketing activity. It helps the product to reach the final customer. CUSTOMER-CENTRIC - The whole concept of retailing revolves around the customer. Due to increased competition, all the retailers want to attract customers. MULTI-DIMENSIONAL - Retailing has many dimensions. They vary from local Kirana shops and kiosks to super malls selling multiple branded products. VARYING GEOGRAPHICAL LOCATIONS - The geographical area of reach of retailers varies widely. It may vary from a local area market to super malls. TRANSFORMATIONAL - T here have been huge transformations in retailing. These transformations generally are in the form of objectives of retailing , methods of retailing, the areas covered, the customers etc. COMPLEX MANAGEMENT PROCESS - I t is a complex management process. Retailing involves retail stores being located in convenient places, arranging goods according to different price bands, selling goods in the quantities convenient to the customers, proper after-sale services and a wide range of sales promotion measures to attract the customers.

5. Nature of Retailing Channels ASSORTMENT OF PRODUCTS AND SERVICES - Retailing involves a combination of goods and services. In order to be successful, a retailer needs to offer an assortment of goods and services. STUDYING DEMAND PATTERN - A retailer is required to study the current demand pattern of the products being offered by him in the market. By studying the demand pattern, he can ascertain the quantity of goods he needs to buy in bulk from the wholesaler. CREATION OF UTILITIES - A retailer helps in the creation of time and place utilities. Time utility is created when goods are made available at a particular time. Place utility means making the goods available at different places away from the place of manufacture. PRIVATE BRANDING AND LABELING - Private branding or labeling means buying products directly from the manufacturer and giving them their own brand name by the retailer.

6. Structure of Retailing Channels 2

7. Single Store Establishments These are generally located in localities where the population is higher. Owned by a family or individual with operations limited to the area where the store is located with a direct personal relationship with customers. Re­quires very little capital to start. Have a very low credit rating in the market or almost nil past records to prove their goodwill or financial health.

8. Corporate Retail Chains Specialize in a form of retailing (like supermarket, hypermarket, apparel store) with multiple stores across the state, country or even in the world. Have a centralized decision-making body. The number of stores may vary from 10 to over 300. They may have multiple stores for multiple brands and multiple categories. Employ a large number of people. Have same merchandise mix and merchandise across all stores.

9. Franchise Stores Franchising is an agreement between a franchiser and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchiser.  Franchiser charges franchisee a lump sum fees towards usage of brand names, retailing expertise plus a royalty Franchisee has to bear all operation cost along with above and has to earn profit. Franchisers support franchisee with merchandise planning, store management, training , man-­ power sourcing, IT support, interiors and advertising at national and re­gional level.

10. Thank You!