Q1: What are the functions of a retailer?

The diferent functions performed by retailers are as follows:

i. Assembling goods: A retailer needs to purchase products and services from
supplier and store them. This is essential to make the products and services
available to the customers when required.
ii. Arranging storage: A retailer needs to have a proper storage system to
store the products and services to make them available to the end customers
on time.
iii. Grading and packaging: Sometimes, retailers need to perform the grading
function. rading is an activity in which the retailer needs to categorise the
products based on their characteristics, such as si!e, shape, colour, and
quality. After grading the products, the retailer needs to pack the classi"ed
products to make them easily available to the end customers.
iv. Physical distribution: A retailer performs the physical distribution of goods
from the supplier to the end customer.
v. isk bearing: A retailer needs to bear the risk of loss that may result from
the spoilage of material while procuring and storing the products and
services.
vi. !inancing: A retailer needs to perform "nancing functions by providing
credit facilities to its customers.
vii. "ales promotion: #etailers promote the products and services by displaying
them attractively in windows or shelf.
viii. $ersonal selling: #etailers advise and guide the customers in the selection of
products and services, thereby promoting the products.
i#. Gathering market information: #etailers provide customer information like
their tastes, preferences, buying behaviour, and competing brands, to the
manufacturers and wholesalers to design and market the product accordingly.
Q$. %i&erentiate bet'een etail "upply (hains vs. )anufacturing "upply
(hain.
The diferences between the retail supply chain and manufacturing supply chain on
the basis of their core competencies are shown in Table below
"l *o
(ore
(ompetency
etail "upply (hain
)anufacturing "upply
(hain
% &nvestment'Assets &n retail supply chain,
investment is done primarily
to manage the (ow of
merchandise throughout its
network as the main cost for
the organisation is the cost of
sourcing, stocking, and
&n manufacturing supply
chain, investment is
required in managing the
(ow of goods in the
network, equipment, and
resources essential for
production purposes.
distributing merchandise.
Thus, the retail supply chains
are distribution focused.
Thus, the manufacturing
supply chains are asset
focused.
) Si!e of *etwork
#etail supply chain networks
include multiple warehouses
and large number of retail
outlets. Thus, it requires
optimal transportation of
products and warehouse
planning becomes essential.
+anufacturing supply
chain networks are
smaller with a limited
number of manufacturing
plants and warehouses.
, Types of *etwork
&t consists of storage
locations -warehouses. and
selling locations -retail
outlets., and emphasise on
managing inventory and
service levels.
&t includes storage
locations -warehouses.
and manufacturing
locations -factories., and
focus on managing
inventory, resource
planning, usage, and
service levels.
/
0apacity
0onstraints
These are largely
unconstrained with modelled
inventory levels and
inventory multiples to sustain
desired service levels.
These are constrained by
the manufacturing
capacity -including
available resources,
skills, and material. along
with the modelled
inventory levels and
inventory multiples for
maintaining desired
service levels.
Q+. ,#plain the di&erent stages of retailer-supplier relationship
development.
The relationship between the retailers and the suppliers develops gradually. Thus,
the retailers and the suppliers need to move through various stages to develop a
strong relationship. These stages are shown in 1igure below
i. A'areness: &t is the "rst stage of the retailer2supplier relationship
development. &n the awareness stage, either retailer or supplier identi"es the
other party as the potential e3change partner and they get aware about each
other.
ii. ,#ploration: &n this stage, both parties begin to e3plore the possible
opportunities. &t includes testing assignments on how well the two parties can
work together. &n the e3ploration stage, the initial trust and mutual
satisfaction is developed between the retailer and the supplier.
iii. ,#pansion: After gaining information about each other, both retailer and
supplier think about e3panding their relationship further. &n the e3pansion
stage, the retailer and the supplier become more dependent on each other,
due to increasing bene"ts derived from the e3change increase. &n this stage,
the risk taking within the retailer2supplier relationship increases. They look for
win2win situations where both parties bene"t.
iv. (ommitment: &n this stage, the retailer and the supplier invest in the
relationship and adopt a long2term perspective.
Q.. /(onsumer ,lectronics retailing is one of the rapidly gro'ing
markets in 0ndia1. ,#plain the supply chain in consumer electronics
retailing in this conte#t.
0onsumer electronics retailing is one of the rapidly growing markets in &ndia.
&nnovation is the key for the success of consumer electronics retailing. This industry
includes the following product categories:
White goods: &nclude washing machine, A0, and microwave
,ntertainment goods: &ncludeT4, 545'405'+$, player, home theatre, music
systems, and i$ods
0maging products: &nclude digital camera and handycam
(omputer and peripheral products: &nclude desktops, laptops, printer, and
peripherals
(ommunication products: &nclude mobile phones, telephones, and phone
accessories
2ome appliances: &nclude mi3er2grinder and cooker
2ome medical electronics items: &nclude blood pressure and blood sugar
measuring instruments
"oft'ares: &nclude gaming software and music 05s'405s'545s
The supply chain of consumer electronics starts from product designing, which is
performed by the research and development department of the manufacturer,
based on customer6s feedback obtained by the retailers or its own website. After
that, product sample is prepared and market testing is performed.
1urther, the quantity of the product to be produced is decided and the process of
production is started. After production, the manufacturers use diferent distribution
channels to reach out to the end customers. Some of the consumer electronics
manufacturers open their own retail stores to sell their products, like 4ideocon.
&n addition, all large retail groups including 1uture group, Tata group, and #eliance
group are also entering in consumer electronics sales. 1or e3ample, 1uture group
promotes 7 8one, Tata group promotes 0roma, and #eliance group promotes
#eliance 5igital. +oreover, manufacturers are using the &nternet stores to sell their
consumer electronic products. 9owever, multiple sales channels also result in
channel con(ict, such as the con(ict between the organised retail and traditional
distribution channels.
&n customer electronic retailing, warranty and service plays a vital role. 7arlier,
these services were provided by the manufacturers. 9owever, with the passage of
time, these services are now provided by the retailers. 1or e3ample, the #elianace
5igital has introduced #elianceres: that provides the pre sales and post sales
support services to the cutomers.
(hallenges: Supply chain cost related to storage of bigger items is a big challenge
for this industry, as the margins for the retailers are very low.
Q3. %iscuss the ma4or areas of )erchandise )anagement.
+erchandise management is the process by which a retailer attempts to ofer the
right quantity, of the right product, at the right place, and at the right time, while
meeting the retailer6s "nancial goals. +a;or areas of merchandise management are
shown in 1igure below
The diferent areas of materials management are discussed as follows:
i. Analysis: &t is performed after determining the target segment and their
needs to buy the required merchandise.
ii. Planning: &t is the process of establishing performance guidelines. &t consists
of establishing ob;ectives and devising plans for obtaining the merchandise
well in advance of the selling season.
iii. Procurement: &t is the process of procurement of the merchandise, either
from the manufacturers or the distributors. &t is also known as a buying
system. #etailers use two types of buying systems, namely staple
merchandise buying system and fashion merchandise buying system. Since,
historical data is available for staple Stock2<eeping =nits -S<=s., statistical
techniques are used to forecast sales. 1or fashion merchandise, the buyers
forecast sales at the category level. >oth the merchandise and the buyer6s
performance are evaluated at the end of the sales period.
)erchandise
)anagement
Analysis 9andling 0ontrol $rocurement $lanning
iv. 2andling: &t is essential for a retailer to identify the requirement of the
merchandise at diferent stores and ensure it reaches the store at the right
time and in the right condition.
v. (ontrol: &t is the process of checking the guidelines established in the
merchandise planning. +erchandise control involves designing the policies
and procedures to determine if the stated ob;ective has been achieved.
Q5. ,#plain the follo'ing:
i. (olour Wheel
ii. 6b4ectives of 7isual )erchandising
i. (olour Wheel
A colour wheel is a convenience tool that helps to determine the colour scheme
of a store. &t is a usual wheel "lled with %) diferent colours as shown in "gure
below
As shown in this "gure, the %) colour in the colour wheel are a combination of
warm and cool colours. 7ach colour in the colour wheel creates a diferent
response.
ii. 6b4ectives of 7isual )erchandising
As a tool to promote sales of a retail store, visual merchandising aims to ful"ll
the following ob;ectives:
To inform the customers with all the features of a product and services in a
creative and attractive way
To ofer attractive and appealing display of the products and services
To provide self2e3planatory displays of the products and services to
in(uence the buying decision of the customers
To implement reasonable display ideas to introduce new products in the
store
To discover and implement creative ideas of describing the product
features to a customer
To realise the target of higher sales for a retail store
To enforce a long2lasting impact and recall value of all the features of a
product in the customer6s mind
To inform the customers about the launch of a new product'new season
merchandise arrival.
#ecover the products in the night and display appropriately before the
store opens ne3t day.
Thus, 4+ involves displaying the product for sale in a creative and attractive way
that e3plores its features and usefulness before the viewers.