Page 23 - DMGT552_VISUAL_MERCHANDISING

Visual Merchandising

Notes Generally, manufacturers adopt the first alternative. In this alternative they can earn good
profits on spare parts. This alternative also keeps the manufacturer in touch with the
customers and their problems. In the second alternative, dealers can offer faster services
because they are closer to the customers. Manufacturer can still make profit on spare parts
but give the servicing profit to the middlemen. Over a period of time independent service
firms emerge. They generally provide cheaper and faster service than the manufacturer or
the authorised dealer. Ultimately, some big customers may take over the responsibility of
repairing and maintaining themselves. For instance, a company having one hundred
computers in its different departments/branches may find it cheaper to have its service
staff. It may get its staff trained in self-serving.
5. Trading stamps: During severe competition, retailers offer sales incentives to attract
customers. Discount sales, gift coupons, trading stamps, etc., are examples of such incentives.
A retailer offers free trading stamps to customers who buy goods from him on regular
basis. These stamps are issued generally at the rate of 2.5 per cent of the amount of goods
purchased. Customers go on accumulating the stamps. They can exchange their stamps
with any article of equivalent value from the retailer. Trading stamps induce consumers
to buy their requirements from the retail shop offering such stamps. In other words, the
purpose of trading stamps is to increase loyalty of customers.

Example: Raymon Bonus stamps have been popular in India.

Self Assessment

Fill in the blanks:
17. Today, the ……………… have attacked every retail category.
18. The Indian retail scene has witnessed too many players in too short a time, crowding
several categories without looking at their ………………, or having a well thought out
branding strategy.

19. Retailing in India is gradually inching its way toward becoming the next ………………
industry.
20. The Indian population is witnessing a significant change in its ………………



Case Study Chinese Retailers Give Global Giants Run for Money

ven as the issue of 100 per cent foreign direct investment in retail has set off a major
controversy in India, the Chinese experience offers a refreshingly positive tale to
Etell.
Almost two decades after China opened up retail fully, starting with allowing 26 per cent
FDI in 1992, the sector has seen rapid growth, against the backdrop of increased market
consolidation, higher production efficiency enabled by rising investments in rural
infrastructure, and booming exports made possible by the setting up of new supply chains.

Many of these changes, according to Chinese analysts, were made possible by the entry of
foreign retail giants such as Walmart and Carrefour, who changed the way Chinese
companies managed their businesses, from farm procurement to logistics. Yet, 20 years
Contd...

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