Modern Retail Management Process

and Retail Services

Subject Code: BBR601

Edition: Fall 2011

BKID B1940

Distributed by
Wiley India Pvt. Ltd.
4435-36/7, Ansari Road, Daryaganj
New Delhi - 110 002

Copyright 2013 Publisher

ISBN: 978-93-5119-226-8

This book may not be duplicated in any way without the express
written consent of the publisher, except in the form of brief excerpts or
quotations for the purposes of review. The information contained
herein is for the personal use of the reader and may not be
incorporated in any commercial programs, other books, databases, or
any kind of software without written consent of the publisher. Making
copies of this book or any portion, for any purpose other than your
own is a violation of copyright laws. The author and publisher have
used their best efforts in preparing this book and believe that the
content is reliable and correct to the best of their knowledge. The
publisher makes no representation or warranties with respect to the
accuracy or completeness of the contents of this book.

Sikkim Manipal University

Directorate of Distance Education

Department of Management Studies

Board of Studies
Chairman

Mr. Pankaj Khanna

HOD Management Studies

Director

SMU DDE

HR, Fidelity Mutual Fund

Additional Registrar

Mr. Shankar Jagannathan

SMU DDE

Former Group Treasurer

Wipro Technologies Limited

Dean
SMU DDE
Dr. T. V. Narasimha Rao

Mr. Abraham Mathew

Adjunct Faculty and Advisor

Chief Financial Officer

SMU DDE

Infosys BPO

Prof. K. V. Varambally

Ms. Sadhna Dash

Director

Senior HR Consultant

Manipal Institute of Management, Manipal

Bangalore

Edition: Fall 2011

Printed:
This book is a distance education module comprising a collection of learning
materials for our students. All rights reserved. No part of this work may be
reproduced in any form by any means without permission in writing from
Sikkim Manipal University, Gangtok, Sikkim. Printed and Published on
behalf of Sikkim Manipal University, Gangtok, Sikkim by Manipal Global
Education Services Manipal 576 104.
Printed at Manipal Technologies Limited, Manipal.

Authors Profile:
Mr. Deeleep Kumar Koul is a postgraduate in human resource management and a
post graduate diploma holder in computer programming and application. He has
more than 20 years of professional experience in the retail and service sectors. He
started his career in Elbee Services Ltd. and thereafter worked in Singer, a leading
manufacturer of Sewing Machines, for more than 10 years. Thereafter, he switched
to the retail sector and has been associated with this sector for the past 8 years.
He has rich experience in retail in a Pan India role for the past 7 years and is
currently working as Dy. General Manager in Devyani International Ltd., a
franchisee of KFC; Pizza Hut for North and East India; and the master franchisee of
Costa Coffee and Swensens Ice Cream.
In the span of 15 months since his joining, he had been honoured with the Best HR
Employee of the Year 2011 Award by Yum Brands!. He has also been awarded by
Costa Coffee Brand for his outstanding performance in 2011.

Reviewers Profile:
Parag Rastogi, an alumni of XLRI Jamshedpur and MDI Gurgaon, is currently
employed as VP - Merchandising at Bharti Wal-Mart. He has worked with many
reputed companies like Tata InfoTech, Marico Industries, Scion International and
Subhiksha Supermarkets. He has an in-depth understanding of the FMCG and
cross-vertical Retail businesses including telecom, pharmacy, grocery and fresh
produce. He has worked across the Indian sub-continent and exposed to Middle
East markets.
During his working tenure, he has been responsible for launch and establishing the
entire operations including backend and frontend. He has developed a multiple
channel business with a presence across all retail formats (from small stores to
large formats) through several channel partners across 7 nations. He has won
several team and individual appreciation awards consistently over 6 years.
Besides this, he has also authored Business World Cover Story on Food Retailing,
"KSA Food Outlook", in India Foods Journal, Co-authored Bioinformatics: Methods
and Applications Genomics, Proteomics and Drug Discovery for Prentice-Hall of
India Pvt.Ltd, Co-authored Bioinformatics Concepts, Skills and Applications for CBS
Publishers. He has also spoken in conferences like IPP8, KSA Retail Summit and
IARW Forums.

In House Content Review Team

Dr. Sudhakar G. P.

Ms. Somiya Mehrotra

HOD

Assistant Professor

Dept. of Management Studies

Dept. of Management Studies

SMU DDE.

SMU DDE.

Contents

Unit 1
Modern Retail Management

Unit 2
International Retailing

31

Unit 3
Multichannel Retailing and Ownership Structures in Retail

61

Unit 4
Retail Competition

81

Unit 5
Retail Customers

101

Unit 6
Retail Strategy

125

Unit 7
Retail Branding

149

Unit 8
Retail Franchising

179

Unit 9
FDI in the Indian Retail Sector

209

Unit 10
Retail Services

229

Unit 11
Customer Relationship Management

249

Unit 12
Information Technology in Retail

279

Unit 13
Internet Retailing

313

Unit 14
Retailing for Children

339

Unit 15
Ethical and Legal Aspects of Retailing

365

BBR601
Modern Retail Management Process and Retail Services
Course Description
Retail is one of the growing business sectors in the world. Modern
organised retailing has long been associated with developed countries like
the US and the UK. However, with the advent of globalisation and an
increase in personal income, modern retailing has also been growing at a
tremendous pace in developing countries, such as India. Therefore, many
leading international retailers have entered the Indian market. In addition, a
number of Indian retailers have also gained prominence in the Indian as well
as the international market. Naturally, the need for an organised discipline
to study the various services and processes in modern retail emerged.
Modern retail refers to contemporary practices in a retail environment. For
example, in India, people visit neighbourhood stores, also known as kirana
stores for their daily needs. These stores are unorganised in nature and do
not provide organised retail facilities, such as large assortment of products,
innovative product display and visual merchandising, card payment
facilities, etc. On the other hand, if you visit a big store say Big Bazaar, you
would see a large assortment of products in different sections to provide
more convenience to customers. In addition, in large stores, customers are
provided more assistance by store staff and there are more technological
applications, such as barcode scanning and card payment. Therefore,
modern retail involves more complexities as compared to traditional retail
operations.
In simple words, retail management refers to the initiation, execution and
control of various activities involved in a retail business. Some typical retail
processes include establishing retail organisations, dealing with ownership
structures, promoting a retail shop, developing and executing strategies to
capture higher market share, providing services, retaining customers and
managing technology. Therefore, retail management is a complex job that
needs access to information, careful planning, and execution. This book
elaborates on various aspects of retail processes.

A retail store does not only sell products to customers but also provide
innovative services to satisfy and retain them. For example, most
electronics retailers nowadays provide easy instalment options to customers
along with delivery, installation, and other aftersales services. Therefore,
services constitute an important part of modern retail operations.
Apart from this, technology is a great facilitator in modern retailing as it
helps in effectively executing various retail processes, such as inventory
management, merchandising, replenishment, connecting with customers,
and facilitating the payment system. This book elaborates on various
aspects of technological applications in a modern retail environment.
Therefore, as you can see, understanding the processes and services in a
modern retail environment is very crucial for successfully running a retail
organisation.

Course Objectives:
The course Modern Retail Management Process and Retail Services of
MBA 6th Semester helps students to understand and apply the concepts of
retail processes and services in a modern retail environment.
After studying this subject, you should be able to:

explain the fundamentals of modern retailing

elaborate the scenario of Indian retail

understand the concept of international retailing

list various market entry strategies in international retailing

explain the concept of multichannel retailing

classify retailers on the basis of ownership structure

plan and develop a retail strategy

classify retail customers

establish a link between retail and consumption

explain the concept and tools of retail branding

describe various aspects of retail franchising

analyse the current scenario of FDI in retail in India

explain the role of services in a modern retail environment

discuss the importance of customer relationship management in a

modern retail environment

enumerate the functions of information technology in modern retail

operations

understand internet retailing

discuss various aspects of retailing for children.

explain various legal and ethical aspects of retailing

understand green retailing

The Self Learning Material (SLM) for this subject is divided into 15 units. A
brief description of all the 15 units is given below:

Unit 1: Modern Retail Management

This unit deals with the fundamentals of modern retail and the present
status of organised retail in India. It also discusses various theories of retail
development. In addition, it elaborates on the role of retail in the Indian
economy. Some other topics covered in the unit include growth of retailing
in India and comparative scenario of Indian and global retailing.

Unit 2: International Retailing

This unit elaborates on the concept of global retailing and its importance in
detail. In addition, it discusses opportunities in international retailing. Next, it
elaborates on different strategies of entry into the market. Apart from this,
you will also study about the challenges a retailer can face while executing
international strategies. Towards the end, the unit elaborates on some of the
leading international retailers.

Unit 3: Multichannel Retailing and Ownership Structures in

Retail
This unit elaborates on the concept of multichannel retailing and various
retail formats under multichannel retailing, such as online retailing,
catalogue/direct mailing, vending machine and kiosks. In addition, the unit
describes the classification of retailers based on their ownership structure
and brand availability. Finally, it explains the key features of new technology
retail formats.

Unit 4: Retail Competition

This unit elaborates on retail competition based on product quality, product
variety, and location. Subsequently, it explains how retailers can gain a
competitive advantage by managing their internal resources effectively.
Further, it elaborates on strategic choice and strategic direction. Towards
the end, the unit explains the selection of organisation-specific strategy.

Unit 5: Retail Customers

This unit elaborates on different types of retail customers. In addition, it
explains a relationship between retailing and consumption along with
changes in customers requirements. Towards the end, it elaborates on
retail outlet choice and retail segmentation.

Unit 6: Retail Strategy

This unit explains about strategy from the retail perspective. In addition, it
elaborates on various steps involved in the process of developing a retail
strategy. Finally, it discusses retail expansion strategies.

Unit 7: Retail Branding

This unit explains the concept of retail branding and its significance. In
addition, it explains different dimensions of promotion mix including the
significance of advertising and its types. Towards the end, it describes how
to measure a retailers brand equity.

Unit 8: Retail Franchising

This unit explains the concept of retail franchising and its scenario in India.
In addition, it elaborates on the vertical marketing system as well as the
pros and cons of franchising. Further, the unit describes different modes of
franchising including how to get prepared for franchising. Finally, it
elaborates on the legal aspects of franchising and how to manage long-term
relationships in franchising.

Unit 9: FDI in the Indian Retail Sector

This unit elaborates on the impact of FDI in the Indian retailing business. In
addition, it explains the growth and opportunities of organised retailing.
Finally, the unit elaborates on the expansion of retailers.

Unit 10: Retail Services

This unit elaborates on retail services related to products, convenience, and
price. In addition, it describes specialty products and associated services in
retailing. Finally, it elaborates on retail services and durable product
categories.

Unit 11: Customer Relationship Management

The unit elaborates on the concept of CRM. Next, it explains the role of
competition and IT in CRM. Further, the unit elaborates on different CRM
software and their functions followed by the benefits and pitfalls of CRM
programs. Towards the end, it explains two important concepts of CRM,
namely Return on Investment (ROI) and Lifetime Value of a Customer
(LVC).

Unit 12: Information Technology in Retail

This unit elaborates on the concept of IT and its importance in retail.
Further, it explains some important IT concepts, such as flow of information,
data warehousing, Electronic Data Interchange (EDI), data security,
database marketing, and Radio Frequency Identification (RFID). Next, it
describes the significance of Enterprise Resource Planning (ERP) in retail.

Towards the end, it elaborates on the concept of mobile retail and digital
wallets.

Unit 13: Internet Retailing

This unit elaborates on the concept and importance of Internet retailing. In
addition, it explains the role of websites in online retailing. Further, the unit
elaborates on shopping and social connectivity, highlighting the various
shopping styles and attitudes of teens and boomers. Towards the end,
provides a number of suggestions for retailers to maintain better
connectivity with consumers.

Unit 14: Retailing for Children

This unit elaborates on various aspects of retailing for children. It describes
various major players in different categories of childrens products. Further,
the unit elaborates on the various driving forces for children in retailing.
Towards the end, it explains the scope of retailing for children.

Unit 15: Ethical and Legal Aspects of Retailing

This unit explains the concept of business ethics and the importance of
ethical behaviour in an organisation. In addition, it elaborates on the ethical
aspects of a retailer from the point of view of different stakeholders, such as
customers, the general public, shareholders, and other stakeholders. Some
other concepts covered in the unit include green retailing, CSR, and legal
aspects in retailing.