Programme:- BBA

Semester:- 2
Name:- JAIN HARDIK MAYUR
Roll Number:- 2114501175
Course Name and Code:- Retail Management
(DBB1205)
University Mail ID:- jain.2114501175@mujonline.edu.in
 Set 1

Q. 1 Define retail strategy. Discuss the various strategies adopted by the retailers to grow their
business.
Answer→ Retail strategy is a detailed marketing plan related to the of the business, its goals, and
the ways and methods to achieve them in relation to retail. A retail store must develop a strategy
to promote its goods and services and reach the right customers. The primary goal of retail
strategies is to increase sales as well as customer satisfaction.
There are various strategies adopted by the retailers to grow their business, some of them are as
follows:
1. Market Penetration Strategy:-

In a market penetration strategy, a company believes that there are numerous opportunities
to be had by utilising its current products and markets. Market penetration entails
expanding through existing products in existing markets. A company can accomplish this
by:
➢ Increasing its efforts to attract the consumers of its competitors.
➢ Promoting its existing customers to purchase its product more frequently and in
larger quantities.
➢ Targeting new customers in existing markets.
2. Market Development Strategy:- In market development strategy, a company attempts to
expand by introducing existing products into new markets. This strategy includes
expanding into new market segments or geographical areas. The creation of new markets
for the product could be beneficial if the firm's core competencies are more closely related
to the specific product. As the company expands its product line into a new market, market
development is usually more risky than market penetration strategy. This is due to the fact
that the firms do not typically have extensive knowledge of new markets, which may result
in incorrect market forecasting incorrect marketing decisions and assessment. In a market
development strategy, a company seeks to increase its sales by expanding into new markets
with its products. The two alternatives are-
➢ The company can expand its existing products into new geographical areas through
the expansion of its sales force, the appointment of new channel partners, sales
 agents, or manufacturing representatives, and the establishment of new
manufacturing representatives.
➢ The company can increase sales by attracting new market segments. This is the case
done by making minor changes to an existing product that will appeal to new
markets.
3. Product Development Strategy:-

This strategy includes development of new or improved products in the current market. It
is the best strategy for low brand loyalty and products with short life. This strategy will
also be very impactful if the company has loyal and regular customers, so that a new
product can target to the existing customers. After adopting this strategy the firm can
increase its sales through developing new products, the firm can make a different or
improved version of existing product and also make some changes in its existing products
according to customers needs, likes and dislikes.
4. Combination Strategy:- It is the combination of all the above strategies which are market
penetration, market development and product development. The firm continues with its
existing products in market penetration and market development but a new or improved
product which satisfies customer needs involves in the product development strategy.
Q. 2 The classification of retail stores can be summarized in store and non-store formats. List and
explain sub-categories of both store and non-store formats.
Answer→ Retail store is categorized as – (a) Store format, (b) non-store format.
a) Store retail format: The place where a customer comes physically, choose a product,
purchase it and pays the bill at the bill counter is a format of store retail format. Its subtypes
are as follows –
1. Convenience Store:- The convenience stores are generally of perishable
commodities like food, bread, milk, etc. which are located near residential areas.
Here, the prices of the products are little higher. Generally, the size of this store is
2000-3000 sq.ft. with a fast checkout facility. There are not many convenience store
in India, some of them are ‘HP speed mart’, ‘in and out’, etc.
2. Supermarkets:- Supermarkets generally have a large varieties of food and everyday
commodities like bakery, household items, biscuits & other food items, etc. The
size of this stores is 8000-20000 sq.ft. Some examples are Reliance fresh, food
bazaar, etc.
3. Departmental Stores:- These stores have various product lines related to clothing,
household items, home furnishing, etc. The size of this stores in India is generally
20000-40000 sq.ft. For ex- westside, max fashion, zudio, etc.

4. Speciality store:- Speciality store have a narrow product line and deals in a single
line of product. Generally, jewellery, beauty and health care, coffee or pizza store,
etc. are some of the speciality stores. The size of the store is nearly 8000 sq.ft. Some
examples are Starbucks, Tanishq, etc.
5. Hyper Markets:- This is a combination of supermarket and departmental store with
huge discounts and offers. The ambience of the hyper markets attracts every
member of the family. This stores operates in an area of 80000 to 200000 sq.ft. For
ex – D-mart, big bazaar, etc.

6. Mom-and-pop stores or kirana stores:- These are generally family businesses which
are individually owned. This stores are very common in India.
 7. Category Killers:- The stores which are special in their own field is known as
Category killers. This stores have various categories. Sporting goods, electronics
are some category killers which generally have an area of 20000-120000 sq.ft. For
ex- Toys R Us, Decathlon, etc.

8. Malls:- This is the largest retail format which have various types of products, food,
entertainment, games, etc. in a single roof. Malls includes departmental stores like
westside and speciality stores like pizza hut. For ex- Kumar Pacific mall pune, VR
mall surat, etc.

9. Discount Store:- These are generally the factory outlets which provides high
discounts on MRP and deals in large volume sales. The products of discounted
stores are sold in low price and high volumes.
10. Off-price Retailer:- This store generally buy products at low price then wholesale
market and sells it in low price than retail market. It also includes the out dated
stock, overruns and irregulars.
11. Superstore:- It meets all the requirements of consumer under a single roof having
the area range of about 35000 sq.ft. Laundry, dry cleaning, etc. are some services
includes in superstore.
b) Non-store retail format: Those retail format not have a physical store. Some types of non-
store retail format are as follows-
1. E-tailers:- It means retailers, who sell the products and services online. This type
of selling is the most popular and most used in today’s era which have large variety
of products. For ex- Amazon, Flipkart, etc.
2. Vending:- In this store, products can be bought through the vending machines such
as cold drinks, snacks, etc. This vending machines are generally not seen in India.
3. Catalogue retailing:- This format is now becoming more popular. Generally
catalogue of the products and related information is shown on the website or send
through mails before placing an order.
4. Direct Selling:- It means selling the products directly to the customers by going to
their home or office. Cosmetics, herbal products, etc. are the products in the direct
selling format. Some examples are Amway, modicare, lever ayush, etc.
Q. 3 Do you think that the selection of retail store site can be systematic based on certain
parameters and steps to be followed? Justify the context with description.
Answer→ Yes. It’s true that for choosing a retail store site, it is necessary to be based on certain
parameters and steps. Many things are to be kept in mind while choosing a retail store site. The
following steps should be done for the selection of retail store site –
1. Market Identification:- The first and foremost step in selecting a retail site is to identify the
market attractive to the retailer. It is a very important step especially in India, where there
are different cultures, specifics, peculiarities, etc. in different regions.
2. Determining the market potential:- For determining the market potential, the retailer needs
to consider various elements which are as follows :
A. Population-: In order to determine the market potential, first of all it is necessary to
understand the population of the particular country or region or the retail site. It is
also important to identify the rural and urban population, the literacy rate, etc.
B. Characteristics of households in the area-: It is important to determine the average
income level of the household and its distribution in the area because it largely
defines the kind of facilities requires. Also it is necessary to determine the average
age group of people in the region which helps in making decisions. For ex- If the
area consist more young people then we can see gym, fast foods store, etc. And if
it have more adults then we can see yoga centers, healthy food store,etc.
C. Competition and Compatibility-: While determining the potential of the market, it
is also essential to check the compatibility of the retail store with the nearby stores
or area. For ex- A medical store near a hospital is always a good location for the
potential customers. So it is necessary to check the compatibility of the store with
neighbouring areas. Also it is important to analyse the competition near the store
location, and considering its strengths and weaknesses.
D. Trade area analysis-: A geographical area that generates the maximum numbers of
customers in the store is called as Trade area. It is important to know the boundaries,
demographics and lifestyle of trade area which helps in identifying the potential
customers and their needs. Different types of businesses have different trading
areas. A trade area is of three parts, viz. primary, secondary and tertiary. 50-80%
of the store’s customers are comes under primary trading area, 10-15% comes under
the secondary and the remaining customers come under tertiary trading area. This
trade areas can be identified by studying the frequency of purchases and the average
amount of purchase.
3. Identify alternative location and choose the best:- After determining the market potential
the third step is to select the location. The firm also look out for some other locations as
alternative and choose the best out of it by taking in mind the following things:
A. Traffic at the location.
B. Accessibility to market.
C. Amenities available.
D. Buy or lease the location.
E. Total range of products.
F. Competition near the location.
 Set 2

Q. 4 Define retail pricing. What are the factors influencing retail prices? Elaborate various
pricing strategies available with the retailers.
Answer→ The amount paid by a customer for a product or services at a retail store is called as
Retail pricing. Retail pricing is the sum of manufacturing cost and all the cost that the retailer incur
while charging the customer.
There are two factors influence the retail prices which are as follows :
1. Internal Factors:- The internal factors which influence the retail prices are as follows –
A. Cost of Production-: The retail firm considers the both, fixed and variable costs of
production. The fixed cost depends on the production volume and the variable cost
depends on raw materials.
B. Predetermined objectives-: The objectives of the firm also influence the retail prices.
Objectives of the firm changes with time and market situations. If the objective is profit
motive then the price will be charged higher to earn maximum profit.
C. Image of the company-: The retail price also influences through the image of the firm.
If the image of the company is good in market then it can charge higher prices. For ex-
US Polo, Nike, etc.
D. Promotional activity-: If the firm is spending huge money on advertisement and
promotion, then the price of the product will be charged higher.
2. External Factors:- The external factors which influences the retail prices are as follows –
A. Competition-: If there is a high competition in the market then the price charged to be
low and if there is less competition then the price is kept higher.
B. Purchasing power of consumers-: The buying power of the customer is a huge
influencing factor to set the retail price.
C. Market conditions-: If the market is under recession, the buying pattern of the
consumers may changes. So taking this point in consideration low prices are set.
D. Channels involved-: The more the number of channels involves from the manufacturers
to the consumers, the higher the price will be.
There are two important Pricing Strategies, which are given as follows :
1. Competitor’s price:- Pricing the product keeping in mind the price of the competitor’s
product is called as Competitor’s price or competitive pricing. In the competitor’s price
strategy, the firm keep an eye on the competitor and look at their cost of the product, market
price, discounts and offers given by them for their customers, etc. and compete with them
by doing the similar things. If the company sells a prestigious product then it generally
keeps the price higher than the competitor. Also sometimes the company sets their price
similar to the competitor and any rise or fall in the competitor’s price leads to change in
price of product. And sometimes the company sets their price lower than the competitor by
increasing production, using of more manpower and machine power, etc.
 2. Ceiling Price:- This is also an important pricing strategy in which the retailer not fixes the
price above ite ceiling price because the ceiling price is the highest price of the product in
the market. If the price of the product is kept above the ceiling price then consumers will
not going to buy those products.
So this are some of the factors influencing the retail pricing and strategies for retail pricing.
Q. 5 What are the two most common methods used to analyze the merchandise performance?
Explain in detail.
Answer→ The two most common methods in analyzing the merchandise performance are as
follows:
1. ABC analysis:-

ABC stands for Always Better Control. It is an inventory management technique that
identifies the value of inventory items based on their importance to the business. ABC
analysis ranks the products according to its demand, cost and risk data. This helps the firm
to determine that which products or services are most important for the financial success
of the organization.
It divides the inventories in three classes, Class A contains the items that are most important
for the organization which is based on sales volume and profitability. Class B contains
items which are generally less important and Class C contains the items which have the
least importance given by the organization. According to the Pareto’s principle, 80% of
value comes from only 20% of goods. So many businesses have less items in Class A, a
little more in Class B and the most items in Class C. Let us understand this with a table
given below –

Clas Importance Total Annual Contro Records

s Inventory Consumption ls
Percentage Value
A High Value Items 10%-20% 70%-80% Tight High
accuracy
B Medium Value 30% 15%-20% Mediu Good
Items m
C Low Value Items 50% 5% Basic Minimal
 The Pareto’s principle is not accurate always but shows that the valuable things do tend to
bend towards an 80/20 distribution. ABC analysis determines the “sweet spot” where the
maximum amount of revenue of a particular firm comes from with relatively less efforts.
2. Sell-through analysis:- A sell through analysis compares actual and planned sales to
determine whether early markdowns are necessary or whether more merchandise is
required to meet demand. There is no rule that determines when a markdown is required.
It depends on previous experience with the merchandise, whether the merchandise is
scheduled to be featured in advertising, or whether the vendor can reduce the buyer's risk
by providing a markdown, money, or other incentives. If the actual sales is more than the
planned sales then the reorder should be made. The table related to the sell through analysis
is given below –

Sell Through Analysis for Mens Shirts

Particulars Week Week

1 2
Stock no. Size Particular Plan Plan Actual Variation Plan Actual Variation
(%) (%)
IMS-4301 S White Plain Shirt 40 50 25 25 29 16
IMS-4302 M Black Plain Shirt 30 25 -16.67 10 25 150
IMS-4303 L Checks Shirt 40 25 -37.5 20 15 -25
IMS-4304 S Lining Shirt 20 30 50 35 38 8.57
IMS-4305 XL Printed Shirt 20 15 -25 50 30 -40
IMS-4306 L Casual Shirt 30 40 33.33 35 28 -20
IMS-4307 M Plain Formal Shirt 50 30 -40 30 25 -16.67

So the above table shows the analysis of men’s shirts for two weeks. The shirts is from
fashion category and its difficult to predict the plan of it. But after doing this analysis of
two weeks the retailer will come to know about which product is running good in market
and which is not so it will help him to order the goods in future.
Q. 6 Discuss the various types of store layout with examples.
Answer→ Store layout refers that how the goods and services have been displayed in a way to
attract the potential consumers in every direction. Layout also deals with the environment of the
store.
There are different types of layouts for different types of stores which are as follows:
1. Grid Layout:- A variety of merchandise and products which are displayed on long aisles in
a predictable fashion is called as a Grid Layout. In grid layout, the racks are displayed in a
parallel manner. Generally the supermarkets, grocery store, etc. use this type of layout.
There are lots of products in a supermarket or a grocery store so they can be displayed well
in the grid layout. Its easy for the customers to pick the products they want through the
racks. The key advantage is there is ample space to display, it is familiar to customers and
have the ability to control the traffic. For ex- Dmart, Bigbazaar, etc.

2. Diagonal Layout:- As the name says, the diagonal store layout have the aisles that placed
at a certain angle so that when the consumer will walk through the store, it will watch all
the products offered by the retailer. This layout is helpful for managing the space, so many
retail stores having limited space chooses the diagonal layout. For ex- Clothing stores,
small grocery stores, etc.
3. Loop Layout / Race Track Layout:- Loop layout is also called as Race track layout or
forced path store layout which displays the products in the Centre and on the outer edges.
It is a better way to predicting and manipulating the customer’s traffic. By, creating this
type of layout, the customer can watch every product you offers by walking in the store. It
increases the chance of impulsive buying. Generally stores in malls use this layout which
have limited products. For ex- Purse store, clothing store having limited varieties, etc. This
layout is very catchy to the eyes.

4. Freeform or Mixed Layout:- As the name suggests, this layout doesn’t follow any certain
pattern for layout. It gives the license to the retailer to design the store according to its
choice and creativity. It is the most simple type of layout because there is no pattern to
follow but at the same time it is challenging to display all the merchandise in a creative
manner so that a customer can see all of them and may be buy the products. A well designed
freeform layout is perfect for impulsive buying and browsing. Some creative brands
follows this layout to give an amazing experience to their customers like IKEA. IKEA is
also a type of freeform or mixed layout because it displays its product in a creative manner
and not follows any certain pattern like grid layout or diagonal layout. The picture below
is a picture from IKEA which is similar to a living room, they did not followed any grid or
diagonal layout but used their creative to show their all products to customer.

____________________________THANK YOU______________________________