Page 7 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes 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 Definition and Scope

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.
!
Caution The term retailing applies not only to the selling of tangible products like loaves
of bread or pairs of shoes, but also to the selling of service products.
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 doesn’t 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.

Retailing consists of the sale of goods or merchandise from a fixed location, such as a department
store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a retailer buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user. Retail establishments are often called shops or stores.

2 LOVELY PROFESSIONAL UNIVERSITY