Summer 2013 MK0012

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Summer 2013 Master of Business Administration- MBA Semester 3 MK0012 Retail Marketing - 4 Credits (Book ID: B 1723) Assignment (60 marks) NAME: MANGESH RAMRAO GHULE Roll No.511224090

Q1. Define e-tailing. Explain the future of electronic retailing (Definition- 2 marks; Future of electronic retailing- 8 marks) 10 marks Answer : e- telling : The sale of goods and services through the Internet. Electronic retailing, or e-tailing, can include business-to-business and business-to-consumer sales. E-tailing revenue can come from the sale of products and services, through subscriptions to website content, or through advertising. E-tailing requires businesses to tailor traditional business models to the rapidly changing face of the Internet and its users. E-tailers are not restricted solely to the Internet, and some brick-and-mortar businesses also operate websites to reach consumers. Online retailing is normally referred to as e-tailing. Future of electronic retailing : 1. Technology : The investment and improvements in the communication infrastructure will lead to the mass offering of electronic services in the home from several appliances. Established appliances, including the television and telephone will be equipped to provide simple access to electronic products and services. Furthermore, the increased power and portability of computers will facilitate easy, carefree, and daily use of electronic shopping options. 2. Consumers : As e-shopping becomes the most sensible alternative to procuring needed goods and services, consumers will abandon their traditional views of shopping. No longer will a routine trip to a supermarket or mass retailer, such as Wal-mart, satisfy the e-consumers expectations. The effort of the trip will require an experience that appeals to ones social needs, entertainment needs, creativity, and curiosity . 3. Brick and Mortar Retail : This new shopping experience segues into the changes required by suppliers. As stated above, retailers and manufactures will have to rethink their physical selling strategies. Existing retail shops will not survive if the fail to adapt the changes in consumer needs and behaviors. Stores may become a place to showcase new products and services that will be purchased later electronically.

4. e-Marketing : In time, however, the dominance of electronic purchasing is inevitable. Suppliers should bet their lives on it, especially if the product is not particularly differentiated or unique. Marketers must rethink their strategies and target audience. 5. Suppliers : Manufactures and retailers must also evaluate their relationships. Manufactures have spent the past twenty years dominated by their retail customers . The chain of products to consumers has been drastically altered already. Manufactures are no longer separate from their consumers. They have new opportunity to establish a direct link with the end-consumer Companies, such as Dell Computers, have proven that direct selling to the consumer is more efficient and satisfying to the customer. 6. Vision : The future of electronic retail is indeed the future of retail. However, electronic shopping will transcend the mere transaction and become a pillar of daily virtual activities. On-line purchasing activities will be only a part of a new elifestyle. It is the transition and acceptance of the virtual world as part our concrete world that will allow e-shopping to conquer the retail consumer market. Electronic shopping will be faster and cheaper. Q2. Explain the factors which are leading to the growth of retail sector. (Listing and explanation 10 marks) 10 marks Answer : Factors leading to the growth of retail sector : 1. Increase in per capita income: Per capita Income means how much an individual earns, of the yearly income that is generated in the country through productive activities. India has marked growth in per capita income by 10.5% which shows tremendous increase in GNP (Gross National Product) of the country. Increase in per capita income reflects hike in income of Households which in turn will consume more, thus leading to growth of retail sector. 2. Demographical changes: India is having huge young age working population which is generating huge income and high savings. For any developing country young age group, income, savings are key factors for its growth. Presence of these key factors has RD helped in attracting big retail giants to India

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Q3. Describe the tools of Integrated marketing communication. ( Definition of Integrated marketing communication- 1 mark; Indirect marketing tool- 4 marks; Direct marketing tool- 5 marks) 10 marks Answer : Definition of Integrated marketing communication : Integrated Marketing Communication (IMC) is a term that emerged in the late 20th century regarding application of consistent brand messaging across myriad marketing channels. The term has varying definitions depending upon the source cited. These definitions continue to form an ongoing discussion in marketing - and therefore are included here for review, as the differences in these discussions can play a part in how IMC is viewed and utilized. Tools of integrated marketing communication :

Indirect marketing tools : Indirect marketing (IM) is a term that seems to be gaining popularity these days. Stamat's Steven Kappler referred to IM in his recent Quick takes brief, titled The i Phone and Indirect Marketing. So, according to Kappler, IM is defined by the method or medium you use to approach a student. Th is is somewhat of a defining moment for Stamat's since the term indirect marketing does not appear in their online glossary. (However, after reading their glossary, direct marketing doesnt appear either while elevator speech doesoops.) Nevertheless, IM is not generally used in the Stamats vocabulary. indirect marketing is just another word for advertising mediums (like cell phones and social networks), which can RD

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Q4. Discuss the Retail pricing strategies. (Explanation- 1 mark; Retail Pricing Strategies- 9 marks) 10 marks Answer : Retail pricing strategies :

1. Mark-up Pricing : Markup on cost can be calculated by adding a pre-set (often industry standard) profit margin, or percentage, to the cost of the merchandise. Markup on retail is determined by dividing the dollar markup by retail. Be sure to keep the initial mark-up high enough to cover price reductions, discounts, shrinkage and other anticipated expenses, and still achieve a satisfactory profit. Retailers with a varied product selection can use different mark-ups on each product line. 2. Vendor Pricing : Manufacturer suggested retail price (MSRP) is a common strategy used by the smaller retail shops to avoid price wars and still maintain a decent profit. Some suppliers have minimum advertised prices but also suggest the retail pricing. By pricing products with the suggested retail prices supplied by the vendor, the retailer is out of the decision-making process. Another issue with using pre-set prices is that it doesn't allow a retailer to have an advantage over the competition. 3. Competitive Pricing : Consumers have many choices and are generally willing to shop around to receive the best price. Retailers considering a competitive pricing strategy will need to provide outstanding customer service to stand above the competition. Pricing below competition simply means pricing products lower than the competitor's price. This strategy works well RD

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Q5. Write a short notes on: A. Types of retail store location with examples(any five) (Types- 3 marks; examples- 2 marks)

Answer : Types of retail store location with examples : 1. Department Stores : A department store is a set-up which offers wide range of products to the end-users under one roof. In a department store, the consumers can get almost all the products they aspire to shop at one place only. Examples : Shoppers Stop, Pantaloon 2. Discount Stores : Discount stores also offer a huge range of products to the end-users but at a discounted rate. The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores. Example : Wal-Mart currently operates more than 1300 discount stores in United States. 3. Specialty Stores : As the name suggests, Specialty store would specialize in a particular product and would not sell anything else apart from the specific range. Example : You will find only Reebok merchandise at Reebok store and nothing else, thus making it a specialty store. You can RD

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B. Factors affecting retail store location(any five) (Factors 5 marks) 5+5 = 10 marks Answer : Factors affecting retail store location : 1. Population and Your Customer :

If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. 2. Accessibility, Visibility and Traffic : Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if that shopper meets the definition of their target market. Small retail stores may benefit from the traffic of nearby larger stores.

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Q6. Write a short notes on: A. Classification of retail consumers based on shopping. (Classification- 6 marks) Answer : Classification of retail consumers based on shopping : In retail, this idea of focusing on the best current customers should be seen as an on-going opportunity. To better understand the rationale behind this theory and to face the challenge of building customer loyalty, we need to break down shoppers into five main types: Loyal Customers: They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales. Discount Customers: They shop our stores frequently, but make their decisions based on the size of our markdowns. Impulse Customers: They do not have buying a particular item at the top of their To Do list, but come into the store on a whim. They will purchase what seems good at the time. Need-Based Customers: They have a specific intention to buy a particular type of item. People in this category are driven by a specific need. When they enter the store, they will look to see if they can have that need filled quickly. If not, they will leave right away. They buy for a variety of reasons such as a specific occasion, a specific need, or an absolute price point. As difficult as it can be to satisfy these people, they can also become Loyal Customers if they are well taken care of. Wandering Customers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community. RD

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