Date post: | 17-Jul-2015 |
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Type of merchandise sold
Variety and assortment of merchandise
Level of customer service
Price of the merchandise
Variety is the number of different merchandise categories a retailer offers (breadth).
Assortment is the number of different items in a merchandise category (depth)
Each different item of merchandise is called a stock keeping unit (SKU).
Customers expect retailers to provide some services--accepting credit cards, proving parking, and displaying merchandise.
Some retailers go beyond this and provide other services such as gift wrapping and home delivery, at a charge.
Offering more depth and breadth of merchandise is appealing to customers.
Offering services attracts customers.
To make a profit with more depth and breadth or services retailers must charge higher prices.
Conventional Supermarket
Limited Assortment Supermarket
Supercenter
Warehouse Club
Convenience Store
Fastest growing sector of food retailer.
150,000 to 200,000 sq. ft. stores that combine a superstore and a full-line discount store.
Sell groceries at low prices to build store traffic.
One stop shopping
Large ( about 100,000 sq. ft.) and located in low rent districts.
Little service at low prices to ultimate consumers and small businesses.
Reduce costs by carrying a limited assortment of fast-selling items.
Members must pay an annual fee
Modern versions of the neighborhood mom-and pop stores.
Convenient location in a 2,000 to 3,000 sq. ft. store with a speedy checkout.
Limited variety and assortment of merchandise.
Department stores
Full-line discount stores
Specialty stores
Drug stores
Category specialists
Extreme Value Retailers
Off-price retailers
Home Improvement Centers
Type Variety Assortment Service Prices Size(000 sq. ft.)
Location
Department Stores
Broad Deep to average Average to low Average to low 100-200 Regional malls
Discount Stores Broad Average to shallow
Low Low 60-80 Stand alone, power strip centers
Specialty Stores Narrow Deep High High 4-12 Regional malls
Category Specialists
Narrow Very deep Low to high Low 50-120 Stand alone, power strip centers
HomeImprovement Centers
Narrow Very deep Low to high Low 80-120 Stand alone, power strip centers
Drugstores Narrow Very deep Average Average to high
3-15 Stand alone,strip centers
Off-price stores Average Deep but varying Low Low 20-30 Outlet malls
Extreme value retailers
Average Average and varying
Low Low 7-15 Urban, strip
Carry a broad variety and deep assortment
Organized stores into distinctly separate departments
Offer Customer services
It attracts consumers by offering a pleasing ambience, attentive service and wide variety of merchandise.
E.g. Big Bazaar
Offer a broad variety of merchandise
Limited services
Low prices
Offers both private as well as national labels
E.g. Wal-Mart, Brand Factory
Concentrate on a limited number of complementary merchandise
Provide high level of service
Offers deep but narrow assortment
E.g. Apparel- Wills Lifestyle, ZodiacElectronics- Croma, Bose
Concentrate on health and personal grooming merchandise.
E.g. Apollo Pharmacy(Apollo hospitals group), Dial for health(Zydus Cadilla)
Big box discount stores
Offer narrow but deep assortment
Low price
They are also called as category killers
E.g. Apparel – PantaloonsBooks – Odyssey
Small, full line discount stores
Offers limited merchandise assortment
Very low prices
One of the fastest growing segment in retailing
Target low-income consumers, whose shopping behavior differs from typical discounts stores
E.g. family Dollar and Dollar general
Offer an inconsistent assortment of brand name merchandise at low prices
Sell brand name and even designer label merchandise at low prices
E.g. Brand Factory
Combines the traditional hardware store and lumberyard.
Focuses on providing material and information.
Merchandise is displayed in a warehouse atmosphere.
Salespeople are available to assist customers in seeking merchandise and to tell them how to use it.
Electronic Retailers
Catalog and Direct-Mail Retailers
Direct Selling
Television Home Shopping
Vending Machine Retailing
Also called as e-tailing, online retailing and internet retailing
Retailers communicate with customers offers products and services for sale over the internet
E.g. Online retail banking, flipkart, eBay
Catalog is a non store retail format in which the retail offering is communicated to a customer through a catalog
Direct-Mail retailers communicate with their customer using letters and brochures
Most successful with rural consumers
19% of US population orders merchandise or services by mail
E.g. JCPenney – General merchandiseBrylane – Apparel, home
Direct selling is a retail format in which salespeople, independent businesspeople, contact customers directly in a convenient location, either at customer’s home or at work, demonstrate merchandise benefits and explain service, take an order, deliver the merchandise and perform the service
Highly interactive form of retailing
Face to face discussion with sale people
E.g. Cooking and Kitchen wareCosmetics and fragrances
Customers watch a TV program that demonstrate merchandise and then place orders for the merchandise by telephone
Three forms of electronic home shopping retailing-1. Cable channels dedicated to television shopping2. Infomercials3. Direct response advertising
Direct response advertising includes advertisement on TV and Radio that describe products an provide an opportunity for consumers to order them
Infomercials are TV programs, typically 30 mins long, that mix entertainment with product demonstrations and then solicit orders placed by the telephone
E.g. Home shop 18, Telebrands
It is a non store format in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use the credit card
Placed at convenient high traffic locations
E.g. vending machine for cold beverages, candy, snacks, coffee, ect
Type of Service Service Retail Firms
Airlines Air India, Indigo, Jet Airways
Automobile maintenance and repair
Reliance AutoZone
Automobile Rental Hertz India, Eco Rent A Car, Avis India
Banks HDFC, ICICI, SBI
Child Care Centers Angel Heart, Shemrock
Credit Cards America Express, ICICI, VISA
Education Sinhgad College
Entertainment Parks Appu Ghar, Essel World
Express package delivery Blue Dart, Gati
Financial Services Reliance Money, Airtel Money
Fitness FitnessOne, Gold’s Gym
Health Care Fortis, Max
Type of Service Service Retail Firms
Home maintenance Unicorn Services
Hotels and Motels Taj, ITC Maurya Sheraton
Income Tax Preparation Protax
Insurance LIC
Internet access/electronic information
Airtel, Vodafone, BSNL
Movie Theater ADLABS, PVR
Real Estate DLF, Unitech, Indiabulls
Restaurants Nirula’s, Kamat
Truck Rentals Asatguru Packers and Movers
Weight Loss VLCC
Video Rentals Movie Mart, Big Flix
Vision centers Centre for Sight, Venu Eye Institute
This type of retailing is owner managed, which means management has direct contact with customers and can respond quickly to their needs
They are very flexible
React to quickly to market changes and customers needs
E.g. local Kirana Shop
It is a company that operates multiple retail units under common ownership
Usually has centralized decision making for defining and implementing its strategy
E.g. Taj Hotels, Kamat restaurants
Franchising is a contractual agreement between a franchisor and a franchisee that allows a franchisee to operate a retail outlet using a name and format developed and supported by the franchisor
The franchisee pays a lump sum plus royalty on all sales for the right to operate the outlet in accordance with procedures prescribed by the franchisor
The franchisor provides assistance in locating and building the store, developing the products or services sold, training managers and advertising
To maintain each franchisee’s reputaion, the franchisor also makes sure that all outlets provide the same quality of services and products
E.g. KFC, Mc Donels, Haldiram, DominozPizza