Page 7 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes countries have developed only due to retailing and presently we see there is a vast change in the
retail industry. As far as India is concerned it contributes to 14% of our GDP and it is the second
largest sector next to agriculture which provides employment to more number of persons.
Now according to a survey, India is classified in to the fifth most attractive retail destination and
second among the countries in Asia. Worldwide it is ranked as fifth most attractive retail
destination.

1.1 What is Retailing

Retailing is the business activity of selling goods and services to the final consumer.
Retailing can be defined as the business products and services to consumers for their own use.
According to Kotler, “Retailing includes all the activities involved in selling goods or services to the final
consumers for personal, non business use”.
Retailing is the activity of selling goods and services to last level consumers for their use. It is
concerned with getting goods in their finished state into the hands of customers who are prepared
to pay for the pleasure of eating, wearing or experiencing particular product items. Retailing is
all about the distribution of goods and services because retailers play a key role in the route that
products take after originating from a manufacturer, grower or service-provider to reach the
person who consumes. Retailing is also one of the key elements of a marketing strategy facilitating
the targeting process, making sure that a product reaches particular groups of consumers. It is
important in a marketing strategy to match the arena in which a product is purchased to the
benefits and characteristics of the product itself and its price.
Retailers provide a collection of service benefits to their customers such as being located in
convenient places, editing product ranges according to shopping tasks, and selling goods in
quantities that match personal consumption levels. Ensuring that this process runs smoothly
presents a host of managerial challenges. Retailing is therefore a deceptively simple management
process - yet fascinatingly complex in its detail.

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Caution The term 'retailing' has a wider context and includes several transactions which
are several stages removed from sale to the ultimate consumer.
Companies who provide meals out, haircuts and aromatherapy sessions are all essentially
retailers, as they sell to the final consumer, and yet customers do not take goods away from
these retailers in a carrier bag. The consumption of the service product coincides with the
retailing activity itself.
From a traditional marketing viewpoint, the retailer is one of a number possible organization
through which goods produced by manufacture flow on their way to their consumer destiny.
These organizations perform various roles by being a member of a distribution channel.

Example: Chocolate producer like Cadbury’s will use a number of distribution channels
for its confectionery, which involve members such as agents, wholesalers, supermarkets,
convenience stores, petrol stations, vending machine operators and so on.
Channel members, or marketing intermediaries as they are sometimes referred to, take on
activities that a manufacturer does not have the resources to perform, such as displaying the
product alongside related or alternative items in a location that is convenient for consumer to
access for shopping.

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