The Retail marketing Mix

The set of variables that the retailer can use to satisfy the customers needs to
influence their buying behavior and compete effectively in the market Retail
managers must determine the optimum mix of retailing activities and coordinate the elements of the mix. The aim of such coordination is for each
store to have a distinct retail image in consumers mind.
Elements of Retail Marketing Mix:
Elements of Retail Marketing Mix The best combination of different elements
of the mix are Merchandise Assortments, Location, Price, Visual
merchandising, Store atmosphere, Customer service, Advertisement
Promotions and Personal Selling
1. Product/ Merchandise Assortments:
Products are also termed as merchandise. The different products that the store
offers is termed as the merchandise mix.
A merchandise line consists of a group of product that is closely related
because they are intended for the same end use, are sold to the same customer
group or fall within the same price range. The variety of the merchandise mix
refers to the number of different lines that the retailer stocks in the store.
Breadth or Width of merchandise - The number of merchandise categories
(E.g.: food stuff, textiles, electronics, jewelry and other accessories available
in a retail outlet- Department stores) Depth of merchandise -the number of
items in a category - Stock Keeping Units (SKUs) (E.g.: Wide rage of mobile
available in a mobile sales and service unit in a retail outlet- Specialty stores)
2. Price: Pricing is an integral part of the retail marketing mix. The price
policy that the organization decides to follow depends on the customer profile
that is the target audience for its range of products. It also depends on whether
the product offering is unique or has other substitutes available. For example
designer clothing is always expensive as compared to the prt lines offered.
The ability of a product to customer satisfaction is determined by its value_
price tag A retailer needs to consider the role of a product in terms of its
contribution to the overall profitability to the retail business Thus prices are
visible & highly sensitive part of Retail Marketing Mix Prices are subject to
individual interpretation in terms of value representation, and so deeply
affected by consumer behaviour

3. Place/ location: For a very long time the location of the retail store was
considered to be the most important element of the retail marketing mix.
However, with the advances in technology and the advent of television
shopping and the Internet many retailers are now going in for a click and
mortar approach.
The issues that affect Location analysis & Location decisions are: Consumer
choice- customers decision of where to shop. The need for competitive
advantage- best locations can give scope for further growth Consideration of
trends- recent social and structural changes High investments- high
investment and long lead times, involves long term financial implications
Property asset- final property of company can be valued high as their annual
turnover Declining number of sites- restricted number of new sites,
government policy guidelines and less opportunity to obtain planning
permission
4. Promotion: Retail promotion is descriptive term for the mix of
communication activities which retail companies carry out in order to
influence those publics on whom their sales depend on. Retailers need to
develop a communication strategy in line with target market and the products
that they stock in store. Retailing promotion has the main objective of
influencing customer perceptions, attitudes, behaviours, in order to increase
store loyalty, store visits and store purchase And there is also need to
influence trade contactors such as agents and suppliers and opinion formers
such as journalists and writers. Each local, national and international
politicians and important professionals may also needed to be influenced
5. Visual merchandising/Presentation: Visual Merchandising In short, its
the Retailers Display. The manner in which the merchandise is presented at
the store level is very important. The use of Visual Merchandising includes
visual materials and window displays used in retail outlets to stimulate sales.
Visual Merchandising is the orderly systematic and intelligent way of putting
stock on display in the retail store. This: Ensures maximum exposure
Enhances product appearance and creates interest Provides sales and product
information Allows storage and security of stock Generates additional sales
through impulse purchase
6. Customer service: An agreement to service provision is concerned with
creating levels of service to be offered Such as self- service requires no
attention to customer, while personalised service means specialised services
to customers 5 dimensions to measure service quality: Tangibles uniforms,
toilet supplies, mirrors, fitting rooms Reliability based on the ability to

perform the service dependably and accurately Responsiveness by reaching

in a timely manner with the right knowledge & courtesy Empathy
demonstrated by providing caring , individualised services Assurance to
provide credibility that the service standard will be upheld.
7. People: Retailers operate in a unique environment. The retail industry is
characterized by a large number of inexperienced workers, who need to put in
ling hours of work. Most of the time, these employees are in direct contact
with the customer and may face irate or unreasonable customers. The people
who work at the front end of a retail organization are very important, as they
are the face the organization for the customers. Their attitude behavior
manners and product knowledge play a very important role in building long
term relations with the customers.
8. Store atmosphere:
The environment and physical aspects of the place _ includes atmospherics of
the store and the stores location The social surroundings_ possibility of
interaction among customers for judgment, avoiding crowding behaviour The
temporal aspects of the occasion in terms of the time of the day, week or
even, may be based on seasonal aspects(eg: Onam, Christmas, etc) The
objective of the shopping trip may be either small or significant and this
decides the mood of the shoppers. (customers coming to purchase home
appliances will have a serious aspect) The predisposition of the individual
(specific mooSds will lead to distinct purchasing behaviour).

between seller and customer, all of which leads to commitment and greater
loyalty intention and loyalty behavior.
SOCIAL FORCES
In recent years, the concept of social responsibility has entered into
the marketing literature as an alternative to the marketing concept.
The implication of socially responsible marketing is that retail firms
should take the lead in eliminating socially harmful products such as
cigarettes and other harmful drugs etc.
There are innumerable pressure groups such as consumer activists,
social workers, mass media, professional groups and others who
impose restrictions on marketing process and its impact may be felt
by retailers in doing their business.
RELIEGION , BELIEFS, CUSTOMS AND VALUES OF
CONSUMERS: People live in different parts of the country may have
different cultural values which has to be analysed by retail business
people/firm.This will help them to reorient their strategy to fulfill the
demands of their consumers.
EDUCATION LEVEL: People with different education level have
different type of needs and demands.
ECONOMIC FORCES

9. Advertisement :
Any paid form of non- personal communication through the media about a
product that has an identified sponsor Advertising is normally associated with
mass communication, where abroad target market is to be contacted Models
of Advertising_ DAGMAR (Defining advertising Goals for Measured
advertising results) The sequence of stages in DAGMAR: Unawareness
Awareness Comprehension to offer Conviction Action or inaction.

Factors such as level of employment, rate of inflation, rate of interest,

demographic changes, and fiscal and monetary policies, which
determine the state of competitive environment in which a
firm operates.

10.Personal Selling:
Personal selling is an attempt to gain benefit through face-to-face or
telephonic contact between the seller and the prospective buyer. Whatever
situations occur in the buyer- seller relationship, trust is the important aspect
of any interaction Trust is the perceived credibility of the company and its
staff This is because trust affects the credibility in the communication

PURCHASING POWER: Consumer purchasing power measures the

value in money for which consumers may purchase goods or
services.If the purchasing power of consumer is strong they will go
for more and more purchasing of costly goods.

INCOME LEVEL:Different income level group has different type of

product need. So the retailer should adopt the retail mix according to
the income level of consumers, existing in that area.

MARKET CONDITIONS:Market condition means whether it is

boom or recession, inflation or deflation.

 FISCAL AND MONETARY POLICY: Factors such as interest rate,

taxation policy e.t.c.

Knowing what competitive forces exist helps an organization develop

strategic planning to attract customers

TECHNOLOGICAL FORCES
Technological factors such as packaging, billing system, storing
system, e.t.c affect the retail mix very much.
1. Innovative packing of the products

Private label
Private label products or services are typically those manufactured or
provided by one company for offer under another company's brand. Private

3. Modern stores where merchandise can be stored for a long time.

label goods and services are available in a wide range of industries from food

4. Billing.

to cosmetics to web hosting. They are often positioned as lower cost

Transportation.
Internal facilities. e.t.c.
COMPETITIVE FORCES
Forces in the marketing environment that are based on competition
among customers and competition with other firms

Who is buying goods and services and who is providing them to

those customers?

Are there many competitors or are there just a few? Maybe none.

alternatives to regional, national or international brands, although recently

some private label brands have been positioned as "premium" brands to
compete with existing "name" brands.
Types of Private Label
Store brands - The retailer's name is very evident on the packaging.
Store sub-brands - Products where the retailer's name is low-key on
the packaging.

Umbrella branding - A generic brand, independent from the name of

the retailer.

Advantages of Private Label

Conflict with other brands in the category.

Higher R&D expense

Lower Prices
Better Margins

Higher marketing expense

Offer consumer greater value

If product fails, will create negative image

Bargaining power to the retailer

Inventory risk

Disadvantages of Private Label

Private Label Manufacturers Association

The Private Label Manufacturer's Association (PLMA) categorizes PL
manufacturers into 4 main categories:
1. Large national brand manufacturers that utilize their expertise and
10 ps of private labels

excess plant capacity to supply store brands.

2. Small, quality manufacturers who specialize in particular product lines

1. Product: quality is equal to national brand.

and concentrate on producing store brands almost exclusively. Often

2. Partnership: work in extra mile in terms of support, marketing,

these companies are owned by corporations that also produce national

mechandising e.t.c.
3. Planogram: ensuring every product leads to sales and profit, delist the
slow movers.
4. Packaging: reflect quality and performance of overall brand & from
inside as first impression.,as 70% of purchase decision only at pop.
5. Pricing: provides the high perceived value to customer Without leaving
profit.
6. Position: position mark the one that you want to compete directly
against .
7.

push: let the branded player spend money to develop category

awareness, once customer in store, retailer have major impact

8. personnel:
9. promotion: by display and through features to gain customer attention.
10. pride: take pride in your brand, treat it and market it with the respect it
deserves.

brands.
3. Major retailers and wholesalers that own their own manufacturing
facilities and provide store brand products for themselves.
4. Regional brand manufacturers that produce private label products for
specific markets.

Private Label as a Marketing and Business Tool

Retailers have extended the concept of private label to identify a brand with a
store, a concept known as the store brand. This can be a far more profitable
business than selling nationally advertised brands.
Private Label may be behind the decision of some companies to enter the market
with products that are quite different, but somehow associable, to those that
have made them famous (apparel companies launching perfumes; car companies
launching watches and so on). Private Label may be an extremely profitable
business for companies or corporations commanding an important share of the
market with certain products that enjoy a high customer recognition.
As sophisticated technologies become widespread, and even subsidized, in
emerging countries (generally with export-driven economies), sourcing of a
wide range of products can be made at very low cost. These same products may
have prices that allow for net margins to account up to several times the cost of
the goods sold. Customers may be unaware of this business practice and be
paying higher prices for products that differ little from others with less famous
brands. On the other hand, some companies do provide additional guarantees to
these products offering better quality, customer support, additional services.

Private Label use by small companies

Another use of private labeled products that has seen good growth is by small
companies. Small companies usually do not have any input in the recipes
or packaging of the products they buy. These small companies buy from a
specialty food company that uses their recipes and simply label for the
individual retail store. The reasons small companies look at branding
products with their name is for the advertising benefits they receive.

Factors Affecting Buying Decision of the Customers at the Store

There are several factors which affect the buying decision of the customers.
1.Store Display and Presentation of Products
The store display plays an important role in influencing the buying decision of the customers . It is the display
of the store which attracts passing individuals into the store. The store must have an attractive display to entice the
customers. Shopping may be the last priority for an individual but a creative display encourages him to spend on
shopping.
A retailer must intelligently display the latest trends on mannequins to prompt the customers to buy the

same.
Make sure the products are kept on their respective racks. The merchandise should not fall off the
shelves.
Since most of us are right handed; we tend to go towards the right side of the store, the moment we step
inside. The retailer must thus display expensive and unique merchandise on the right side of the store.
Remove old stock from the shelves.
2. Ambience of the Store
The store ambience plays an important role in attracting new customers and retaining existing ones.
A customer would never purchase anything from a store which is not clean. Foul smell irritates individuals

and thus they leave in no time.

Play soulful music for a positive effect on the customers.
The store should be well lit and ventilated for the customers to enjoy their shopping.

3.Customer Treatment
Warm customer treatment is an effective way to pull the customers into the store. It is essential for the retailers to treat
the customers like kings to expect loyalty from them.
Understand your customers well. Try to find out what they expect from the store.
The sales representative must greet the customers with a warm smile. It makes a difference.
Assist them in their shopping.
Never oversell.
The retailer must never lie to the customers. If something is not looking good on them, be honest and give

them a correct feedback.

If a customer comes for an exchange, dont be rude; instead help him with an alternative.
4.Store Design and Layout
A customer would never prefer shopping from a store which gives a cluttered look.
There should be ample space in the store for the customers to move and shop freely.
Put stickers and labels (size, colour, FS (Full sleeves), HS (Half Sleeves) and so on) on the shelves and racks.
Dont stock unnecessary furniture and fixtures in the store.
Classify the complete range of merchandise into small groups (categories) comprising of similar and related

products. Categories help the customers to locate the products easily.

A store must have a trial (change) room.
Individuals avoid places where there is a parking hassle. The store should have an adequate parking space.

5. Other Factors
1. Discounts and rebates influence the customers to shop more. A customer might not need a product, but a
discount will encourage him to purchase the same as he would now get it at a lower price.
2. Promotional schemes like free gifts also affect the buying decision of the customers. A Free T Shirt with a pair
of jeans would definitely prompt the customers to shop more.
3. Customers also indulge in shopping to redeem their coupons and avail discounts.
Retail Pricing - Different Types of Pricing Models

The sale of goods from fixed points (malls, department stores, supermarkets and so on) to the consumer in small quantities for
his own consumption is called as retail. According to the concept of retailing, a retailer doesnt sell products in bulk; instead sells
the merchandise in small units to the end-users.
1.Cost Plus Pricing Mechanism:
Cost plus pricing works on the following principle:
Cost Price of the product + Profit (Decided by the retailer) = Final price of the merchandise.

According to cost plus pricing strategy the retailer adds some extra amount to the actual cost price of the product to earn his share
of profits. The final price of the merchandise includes the profit as decided by the retailer.
Cost plus pricing strategy takes into account the profit of the retailer.
Cost plus pricing is an easy way to calculate the price of the merchandise.
The increase in the retailer price of the merchandise is directly proportional to the increase in the cost price.
The customers however do not have a say in cost plus pricing.

2.Manufacturer Suggested Retail Price (Also called List Price or Recommended retail price)
According to manufacturer suggested retail pricing strategy the retailer sets the final price of the merchandise as suggested by the
manufacturer.
The retailer sells the product at the same price as suggested by the manufacturer.
The retailer sells the merchandise at a price less than what was suggested by the manufacturer - Such a condition

arises when the retailer offers Sale on his merchandise.

Retailers initially quote an unreasonably high price and then reduce the price on the customers request to make him
realize that a favour has been done to him. A condition of Bargain - where the customer negotiates with the retailer to
reduce the price of the merchandise.
3.Competitive Pricing
The cut throat competition in the current retail scenario has prompted the retailers to guarantee excellent customer service to the
buyers for them to prefer them over their competitors.
The price of the merchandise is more or less similar to the competitors but the retailers add on certain attractive

benefits for the customers. (Longer payment term, gifts etc.)

The retailers ensure that the customers leave their store with a smile to have an edge over the competitors.
He tries his level best to offer better services to the customers for a better business in future.

4.Pricing Below Competition

According to pricing below competition policy
The price of the merchandise is kept lesser than what is being offered by the competitors.

5.Prestige Pricing (Pricing above competition)

According to prestige pricing mechanism, the price of the merchandise is set slightly above the competitors.
The retailer can charge higher price than the competitors only under the following circumstances:
Exclusive Brands at the store.
Brand image of the store
Prime location of the retail store
Excellent customer service
Merchandise not available at any other store
Latest Trends
6.Psychological Pricing
Certain price of a product at which the consumer willingly purchases it is called psychological price.
The consumer perceives such prices to be correct.
A retailer sets a psychological price which he feels would meet the expectations of the buyers and they would easily

buy the merchandise.

7.Multiple Pricing
According to multiple pricing, the retailer sells multiple products (more than one) for a single price.
The retailers combine few products to be sold for a single fixed price.
3 Shirts for $100/- or 3 Perfumes for $20/- and so on.

8.Discount Pricing
According to discount pricing, the retailer sells his merchandise at a discounted price during off seasons or to clear out his stock.
Traffic flow
Traffic flow is the movement of customers through the store. It is a critical aspect of store layout due to the impact that it can
have on the customer both practically and psychologically.
Types of traffic flow
There are two basic traffic-flow alternatives available to the retailer:the grid pattern which is characterised by its structured
layout design; and the free flow pattern which is less formal in its appearance.
GRID PATTERN
A highly structured format that maximises the available display space. The grid pattern uses the length and width of the traffic
area to create clear aisles and facilitate self-serve shopping.
FREE FLOW PATTERN
An informal format that uses a variety of fixtures to create a relaxed, unbalanced floor layout. While the free flow layout often
sacrifices selling space to create atmosphere, it does encourage browsing and unplanned purchases.
COMBINATION PATTERN
The combination pattern incorporates both grid and free flow formats to create atmosphere suited to the style of products and
shopping behaviour involved.
Improving customer traffic flow
Study customer traffic flow
Studying your customers' traffic flow will help you know where to place certain items to ensure your customers move through
your whole store. Draw a map of your store and mark the way customers walk around it:

Is there a common pattern to the way they walk through your shop?

Are there any areas that customers rarely go to?

Are there spaces that customers leave quickly?

Which areas do most customers go to?

Where are customers gazing and how much are they looking around?
Direct traffic to your products
Your customers will pay more attention to your products if you place them in a way that helps browsers discover what they want.
Here are the best ways to showcase your products:

Place high-profit items in high traffic areas and demand items in low-traffic areas.

Don't place feature products or important promotional material right inside the entrance to your store. Customers need a
'decompression zone' to adjust to the environment of your store and are less likely to notice detailed information in this area.

Know your 'strike zone'. It's the space you use to make first product impressions on your customers. Place widely
appealing, affordable products here so customers don't get turned off by high prices.

Place impulse items - that is, the low-cost, repeat-purchase items - around the counter and in high-traffic areas.

Place your high-demand products at the back to draw customers through the store.
Direct traffic throughout your store
Retail designers use clever store design principles to help draw customers and increase traffic through the store. Here are some of
the main store design principles:

Place your sales counter so it is not the first thing customers see. The cash register reminds them they're spending money,
and forces your customers to engage with your sales staff before they've decided they're comfortable in your store.

Use lighting and layouts that ensure your customers can always easily see the way through and way out of your store.
Customers who feel trapped or lost in your store will leave quickly.

Create aisle space that is narrow enough to slow customers down to look, but wide enough to be comfortable, clear and
safe. Excessively wide aisles encourage customers to rush without browsing.

Consider access for customers with disabilities and special needs. For example, aisles should be uncluttered and wide
enough to allow wheelchairs and prams.

Multi level marketing

Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally
generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the
participant's "downline", and can provide multiple levels of compensation. Other terms for MLM include pyramid selling,
network marketing, and referral marketing.
Pros
Start-up outlay is lowthis is indeed one of the best things about MLM business. You dont have to have huge amount of
money to be able to get the initial package with products and the training to start MLM. All you have to do is sign-up, give the
registration fee and pay the products inclusive of your initial product supply. You are now ready to start selling!
High Quality Productsresearch on a number of MLM manufacturers show that products that they actually manufacture are of
high quality and standards. That is why many individuals actually would want to buy the products. But we all know that MLM is
not just retailing the products but convincing other people to invest in the business as well.
You are your own manager certainly one of the best aspects of this business is that you dont have to answer to anybody but
yourself. Just like running your own conventional type of business MLM lets you set your own phasing. It is up to you whether
you want to take your time or go on a faster mode.

Work From Homeyou dont have to go or go back and forth to work each day. You can do cold calls and lead generation at
home. You can invite people including your friends and links to listen to your business opportunity meeting at home. You can
already take care of your business while taking care of your family. You can even do other businesses if you manage your
time well.
Cons:
Frustrationthis can eat you up because of so many things about MLM. You might begin very fast, very productive but will get
plenty of rejections. You could also read and hear many negative opinion about MLM causing you to think twice or doubt as to
why you entered this business in the first place.
Wrong Reasonsbecause business opportunity meetings and seminars are designed to get people who are listening into an
excited mood or get them hyped and ready to sign-up anytime; they tend to think that this is a business of easy money. It is not.
The truth is MLM requires a lot of work, a lot of influential power and determination. You will invite people to listen. Sometimes
you might get 20-30 audience but zero converts.
Rejectionsthis is the hardest thing to handle with. After the first, second and third rejection you will probably say to yourself
that you dont want to continue anymore. And when that happens that will be the end of your MLM career.
Doubtsyou might come across many people with different doubts about MLM and some of it might rub onto you. You might
also start doubting if you can actually make it in this business or not. You might even doubt your business if they are actually
going to deliver their end of the bargain.
FRANCHISE
Definition
A form of business organization in which a firm which already has a successful product or service (the franchisor) enters into a
continuing contractual relationship with other businesses (franchisees) operating under the franchisor's trade name and usually
with the franchisor'sguidance, in exchange for a fee. Some of the most popular franchises in the United States include Subway,
McDonalds, and 7-Eleven.
There are advantages and disadvantages in buying a franchise rather than buying or starting an independent business, including:
Advantages:

Association with a well established brand, reputation and product or service;

Assistance with site selection, lease negotiation, site development, builders and shop fitters;

Assistance with outlet design and equipment purchasing;

Initial management training and continuing management assistance;

Access to group/national market research, along with advertising and merchandising assistance;

Access to established standard procedures, operating manuals and stock control systems;

Assistance in securing finance and sometimes financial assistance in establishing the business;

Access to financing packages which may be more attractive and easier to access than for non franchised businesses; and

Access to established financial systems and checks which can provide early warning signals to highlight trouble spots.
Disadvantages:

Less autonomy in some business decisions. Franchisees generally have to operate the business according to the
franchisor's operations manual;
Restricted territory in which you may operate and/or promote your business;
Ongoing payment of fees to the franchisor;

Less control if you decide to sell your franchise business as there will be a set of procedures for you to follow, including
getting the franchisor's approval of the buyer;
If you sell the business you will usually have to pay a fee to the franchisor as outlined in the franchise agreement;
Restraint of trade provisions on the sale or termination of the franchise that may be more onerous than required if a non
franchised business is sold;
At the end of the franchise term, the franchisor is not obliged to renew the franchise, in which case the business and its
goodwill revert to the franchisor.
6 Factors to Consider Before Buying a Franchise
The franchising model works like this you (the franchisee) buys the rights to market and distribute the goods and services of
another company (the franchisor) and to use its business name for a fixed period of time.So before you decide if its right for you,
here are 6 factors you should consider before buying a franchise.
1. Demand
As is the case before starting any new business, find out if there is a demand for the product or service you intend to offer. If you
are buying an overseas franchising licence, be wary that what sells well in other countries may not be equally well-received here.
So dont jump on the opportunity without doing your research. The potential for expansion should also be considered if you
intend to branch out to multiple outlets in the future.
2. Track Record
Just because a company offers franchising opportunities doesnt mean its worth taking up. You should only look at companies
that have proven themselves successful at franchising their business.
If possible, speak to current franchisees about their experience so you get a clear idea of whether the franchise is worth investing
in.
3. Investment
One of the biggest barriers to buying a franchise is that unlike starting your own business, where all the capital is invested in your
operations, a sizeable portion of your initial capital goes to the franchisor as fees for training, equipment and licensing rights.
This figure can range from a few thousand dollars to a few million.
Look at what the franchise company will be providing in exchange for the franchise fees, and evaluate the time it will take to
earn your upfront costs back to determine if a franchise is a sound investment.
4. Competition
If the franchise is a well-known brand, there may already be lots of franchisees operating in the vicinity, and not to mention other
rival companies. Consider first if the franchise and industry youre choosing is a strategic business to enter as itll be hard to
establish yourself if there are many competitors in that market.
If the product being sold is unique then competition will not be an issue. But for most businesses, this will not be the case.
5. Training
A major advantage of franchising is the training and support offered to franchisees. If you dont have any entrepreneurial
experience, then it is advisable to choose a franchise that offers substantial training. Some even provide on-going support even
after your franchise is up and running.
With proper guidance and training, the chances of your franchise being successful right from the start will increase greatly.
6. Restrictions
It is very common for franchisors to impose certain restrictions on how their franchises are to be run. They usually require
franchisees to follow guidelines and standards which may encompass things such as product offerings, prices, operational hours,
and store design among others.
So you may be the boss, but the franchisor generally has the control. If youre not comfortable with this kind of arrangement,
then running a franchise may not be what youre looking for.