RETAIL MANAGEMENT QUESTION BANK

UNIT I INTRODUCTION
An overview of Global Retailing – Challenges and opportunities – Retail trends in India –
Socio economic and technological Influences on retail management – Government of India
policy implications on retails.
PART-A
1. What Is Retailing.
According to Phillip Kotler: "Retailing includes all the activities involved in selling
goods or services to the final consumers for personal and non-business use."
2. What are the challenges of retailing
1. The threat of entry of new competitors (new entrants)
2. The threat of substitutes
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. The degree of rivalry between existing competitors
3. What are the opportunities of retailing
The retail industry is divided into two sectors namely, organised or formal and
unorganised or informal. In simple terms, it could be said that organised retailing is one in
which the trading or merchandising is carried out by licensed or authorized retailers who are
registered for sales tax and other taxes. The companies owned super markets, hyper markets;
retail chains and other privately owned retail stores or departmental stores come under this
organised retailing. The revenue, generated by these enterprises is accounted for by the
Government.
4. Discuss the trends in brief in retailing
 Branches
 Vending machines
 Packaging
 After sales service
 Trading groups
5. What are the government policies in retail sector?
1. The government has permitted FDI 100% in “single brand” segment or in joint venture for
the retail of its exclusive product. Therefore, so far foreign players in India are entering
through franchisee route only.
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 2. No incentives are required to attract FDI because indigenous market size and potential of
market is already large and ample inducers exist like increasing size of middle class,
increasing disposable income of Indian youth.
3. Following sectors are prohibited for FDI
(i) Atomic and nuclear energy
(ii) Lottery business
(iii) Gambling and betting
4. State governments are not supposed to provide any land and power subsidies.
6. What is global retailing?
Global Retail Markets is an organization that aims to win in each market by
combining global scale and capabilities with local knowledge, talent, innovation and agility.
7. Give the advantages of global retail marketing.
 Personal interaction
 Real – time control
 Serious customers
 Loyalty programs
8. List the socio economic factors in retail marketing.
 GDP
 Inflation rates
 Purchasing power
 Interest rates
9. Give any four applications of information Technology in retail sector.
 Payment
 ERP System
 CRM systems
 Wi-Fi
 RFID
10.What is retail branding?
Retail branding is a strategy based on the brand concept and which transfers it to a
retail company. A retailer's “products” are his stores that can be marketed in a similar way to

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 a branded good. A retail brand is then a group of the retailer's outlets which carry a unique name,
symbol, logo or combination thereof.
11.What is Universal Product Code (UPC)?
A UPC, short for universal product code, is a type of code printed on
retail product packaging to aid in identifying a particular item. It consists of two parts – the
machine-readable barcode, which is a series of unique black bars, and the unique 12-
digit number beneath it.
12.What is Public Distribution System (PDS)?
The Indian food security system was established by the Government of India under the
Ministry ... Food Corporation of India, a Government-owned corporation, procures and maintains
the PDS(public distribution system).
13.Explain specialty retail shops.
Specialty stores are retail businesses that focus on specific product categories, such as office
supplies, men's or women's clothing, or carpet. It isn't the product they sell that determines if a
company is a specialty store, but rather the breadth of their product offering.
14. How will you classify retail sector in India.
 Store format
 Non- store format
PART - B

1. Give an overview of Global Retailing.

 Retail is the new buzzword in India.
 The global Retail development Index has ranked India first, among the top 30 emerging
markets in the world.
 It is believed that India has the potential to deliver the fastest growth over the next 50 years.
 While barter would be considered to be oldest form of retail trade, since independence , retail
in India has evolved to support the unique needs of country, given its size and complexity
 Second largest sector after Agriculture. Contributes about 10 – 11 % of the GDP
 The estimated size of the organized retail industry in India is Rs. 16,000 crores. This is 2 % of
the total estimated retail trade.
 Indian Retail trade increased from Rs. 2200 billion in 2000 to Rs 3300 billion by the year 2005

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 India's first true shopping mall – complete with food courts, recreation facilities and large car
parking space – was inaugurated as lately as in 1999 in Mumbai. (this mall is called
"Crossroads").

2. What are the Challenges and opportunities retailing.

Challenges to Retail Development in India

An industry is a group of firms that market products, which are close substitutes for
each other (e.g. the car industry, the travel industry). Understanding the sources of competition
can help a firm gauge its strengths and weaknesses, and analyze the trends in the industry so
that it can position itself optimally for the best returns. Some industries are more profitable
than others. Because the dynamics of competitive structure in an industry. The most influential
analytical model for assessing the nature of competition in an industry is Michael Porter’s Five
Forces Model, which is described below:
Porter explains that there are five forces that determine industry attractiveness and long-run
industry profitability. These five “competitive forces” are:
1. The threat of entry of new competitors (new entrants)
2. The threat of substitutes
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. The degree of rivalry between existing competitors

Opportunities for Retail Sector in India

There are many factors which act as opportunities for the organized retail players and
have a positive impact. As Indian economy is the fourth largest economy in the world and
third largest in terms of purchasing power parity. This booming economy is one of the major
factors of opportunity for the organized players.
The higher bargaining power of the retailers with the suppliers is another opportunity
for organized retailing. Big retailers purchase in bulk and enjoy low prices. Large retailers
operate on low margins and reap the benefit of economies of scale. In house brands or private
labels are introduced by the retailers to increase the sales and thereby increasing the market
share. Private labels are used by the retailers to differentiate themselves from the competitors.
Another big opportunity for the Indian retailers is the changing age profile of spenders. India is
a very young nation when compared to other countries. This would result in high level of

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 spending on leisure activities and also the consumption level would go up on a higher side. It
would also result in higher investment in economy and generate trade opportunities.

3. Give in detail about Retail trends in India

 Recent Trends Retailing in India is witnessing a huge revamping exercise as can be seen in the
graph India is rated the fifth most attractive emerging retail market: a potential goldmine.
 Estimated to be US $200 billion, of which organized retailing (i.e. modern trade) makes up 3
percent or US$ 6.4 billion.
 The annual growth of department stores is estimated at 24%.
 Ranked second in a Global Retail Development Index of 30 developing countries.

4.What are Socio economic and technological Influences on retail management.

Socio economic infleuence

 The implication of socially responsible marketing is that retail firms should take the lead in
eliminating socially harmful products such as cigarettes and other harmful drugs etc.
 There are innumerable pressure groups such as consumer activist, social workers, mass media,
professional groups and others who impose restrictions on marketing process and its impact
may be felt by retailers in doing their business.
 The society that people grow up in shapes their basic beliefs, values and norms.
 Retailers provide value to their communities society, as well as to their customers.
 Retailers are also responsible for developing many innovative products and services.
Technological influence
 Retail marketing firms are vulnerable to economic conditions, both directly and through the
medium of market place.
 For example, the cost of all inputs positively respond to upward swing of economic condition
– which will affect the output price and consequently affect the sales.

 The effect on consumers also influences the marketing through changes in consumer habits.
This is an indirect influence.

5. Explain the Government of India policy implications on retails.

Government not to relax FDI policy in retail

 The government is unlikely to take a more liberal stance on foreign direct investment
(FDI) in the retail sector, something being favoured by most in the industry.

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 The state minister for trade and industry Jyotiraditya Scindia said in Parliament that
government was not looking to change the FDI norms in retail for now.
 Presently India allows 51% FDI in single brand stores.
 It also allows 100% in wholesale cash and carry model, but has kept out FDI in multi-brand
retail owing to political opposition as also that from mom and pop store operators.
 There is no consensus on the issue and a recent parliamentary standing committee report
strongly opposed FDI in retail citing its ill effects on domestic businesses.
 Retail industry however has been demanding allowing FDI into the multi-brand segment for
sometime now.
 The government, however, maintains that big multinationals if allowed into the multi-brand
segment, may pose substantial threat to domestic retailers, something that the government is
not willing to concede.

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 UNIT-2 RETAIL FORMATS
Organized and unorganized formats – Different organized retail formats – Characteristics of each
format – Emerging trends in retail formats – MNC's role in organized retail formats.

PART-A
1. What are organized sectors?
Organized Retail refers to the set-up of any retail chain supported by a well defined
Supply Chain which usually has a small number of middlemen when compared to the
unorganized sector. Due to a number of factors like cutting down of middlemen, removing of
bottlenecks along the supply chain, efficiency in the processes, etc., the end user is rewarded
with a better product at a cheaper price as against the unorganized retail sector. As the
consumer base is growing each minute, the organized retail sector is believed to have a huge
growth potential.
2. What are unorganized sectors?
“Unorganized retailing” is defined as an outlet which is run locally by the owner or the
caretaker of a shop who lacks the technical and the accounting standardization. The supply
chain and the sourcing are also usually done locally to meet the local needs.
Unorganized merchandising, refers to the normal formats of cheap retail, the native
kirana retailers, the owner manned general stores, paan / beedi retailers, the convenience
stores, hardware stores at the corner of one’s street, small medical shops etc
3. Define retail format.
The format of a retailer is the overall appearance and feels that it presents to
customers, primarily its look and layout, the sort of range it stocks and the approach taken to
pricing. Format is distinct from fascia which, strictly speaking, refers solely to external
appearance.
4. What are the types of retail format?
 Organized retail format
 Unorganized retail format
 Different retail format

5. What are the characteristics of retail format?

 Direct interaction with customers
 Low average amount of sale Transaction
 Point of purchase and display
 Promotion

6. Give the importance of retail formats.

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  They provide information to consumers through advertising, displays and signs and sales
personnel. Marketing research support is given to other channels, members.
 They store merchandise, mark prices on it, place items on the selling floor and otherwise
handle products; usually they pay suppliers for items before selling ,,them to final customers.
They complete transactions by using appropriate locations, and timings, credit policies, and
other services e.g. delivery.
 Retailing in a way, is the final stage in marketing channels for consumer products. Retailers
provide the vital link between producers and ultimate consumers.
7. What are the ethical issues in marketing decision?
Ethical marketing decisions and efforts should meet and suit the needs of customers,
suppliers, and business partners. Unethical behavior such as price wars, selective advertising,
and deceptive marketing can negatively impact a company's relationships. Recent trends show
that consumers prefer ethical companies.
8. Explain the impact of the internet on markets?
When analyzing the Internet's effect on the global market and small business, it is
important to remember that the Internet carries information as well as commerce. The effects
of instant information can be as powerful as the ability to reach a worldwide audience. But
small business still needs to carefully examine the effects of the Internet on international
markets to understand whether or not an online presence is the right move.
9. Explain customer driven organization?
A customer driven organization is one that has realized that the hierarchical structure,
where the executive and management were the most important people in the organization,
must be modified to put the attention on the customer; who is currently the principal thrust of
the organization.
10. Discuss the advantages and limitations of online marketing.
Advantages
 Extremely low risk

 Reduction in costs through automation and use of electronic media

 Faster response to both marketers and the end user
 Increased ability to measure and collect data
 Opens the possibility to a market of one through personalisation
 Increased interactivity
Limitations
 Security, privacy issues
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  Maintenance costs due to a constantly evolving environment
 Higher transparency of pricing and increased price competition
 Worldwide competition through globalization
 Dependability on technology
11. Define MNC’s.
A multinational corporation (MNC) has facilities and other assets in at least one
country other than its home country. Such companies have offices and/or factories in different
countries and usually have a centralized head office where they coordinate global
management. Very large multinationals have budgets that exceed those of many small
countries. Multinational corporations are sometimes referred to as transnational, international
or stateless corporations.
PART- B
1. What are the Organized and unorganized formats available in retail sector?
Organised retail formats
Organized retailing refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, etc. These include the corporate-backed
hypermarkets and retail chains, and also the privately owned large retail businesses.
Organized retailing comprises mainly of modern retailing with busy
 shopping malls
 multi storied malls
 huge complexes
 Hypermarket
 Super market
 Retail chains
 Departmental stores
 Cash and carry
 Convenience stores
Unorganised retail formats
Unorganised retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops,
convenience stores, hand cart and pavement vendors, etc.
The Indian retail sector is highly fragmented with 97 per cent of its business being run
by the unorganized retailers. The organized retail however is at a very nascent stage. The
sector is the largest source of employment after agriculture, and has deep penetration into rural
India generating more than 10 per cent of India’s GDP.
Unorganised retail formats mainly comprises of

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  Street markets
 Counter stores
 Liosks
 Vendors
 Hand vendors cart
 Local kirana stores
 Small –road side vendors
 Mom and pop stores

2. What are the different types of organized retail format?

 shopping malls
 multi storied malls
 huge complexes
 Hypermarket
 Super market
 Retail chains
 Departmental stores
 Cash and carry
 Convenience stores

3. Enumerate the Characteristics of each format.

Characteristics of organized retail formats
 Direct interaction with customers
 Employment generation
 Boost to exports
 Improvement of government revenues
 Provide ideal shopping
 Expose shoppers
Characteristics of Unorganized retail formats
 Lack of inventory control and supply chain management
 Labor intensity
 Family run stores
 Lack of standardization
 Crowded format
 Low productivity

4. Explain the emerging trends in retail formats

 Trial and error
 Emergence of wholesale clubs
 Increasing acceptance of rural markets
 Government is also promoting the development of modern retail formats
 Efficient buying
 Hyper markets – the biggest crowd puller
 Emergence of private label brands
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  Ease of shopping and customized services
 Magnetic effect
 Category killer
 Dollar stores
 E- retailing

5. Explain the MNC's role in organized retail formats.

The main role of MNC’S in organized retail formats are
 Capital
 Technoilogy
 Skill
 Exports
 FDI through MNCs is far easier

6. Write in detail about online marketing. State the advantages of online marketing.
Online marketing is the practice of leveraging web-based channels to spread a message
about a company’s brand, products, or services to its potential customers. The methods and
techniques used for online marketing include email, social media, display advertising, search
engine optimization, Google AdWords and more. The objective of marketing is to reach
potential customers through the channels where they spend their time reading, searching,
shopping, and socializing online.
Online marketing differs from traditional marketing, which has historically included mediums
like print, billboard, television and radio advertisements.
Benefits of Online Marketing
A key benefit of using online channels for marketing a business or product is the ability
to measure the impact of any given channel, as well as how visitors acquired through different
channels interact with a website or landing page experience. Of the visitors that convert into
paying customers, further analysis can be done to determine which channels are most effective
at acquiring valuable customers.

Analytics for web or mobile app experiences can help determine the following:

 Which online marketing channels are the most cost-effective at acquiring customers, based
on the conversion rate of visitors to customers, and the cost of those visitors.

 Which channels are effective at acquiring and driving higher lifetime value for customers
— such as email marketing, which drives repeat purchases to prior customers.
 Which cohorts of customers exhibit strong engagement behavior and high potential for up
sells — such as software or mobile apps, which expect to sell more products to customers
with high engagement.
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 UNIT-3 RETAILING DECISIONS
Choice of retail locations - internal and external atmospherics – Positioning of retail shops – Building
retail store Image - Retail service quality management – Retail Supply Chain Management – Retail
Pricing Decisions. Mercandising and category management – buying.

PART-A
1. Define retail location.
A space you lease for the selling of goods to consumers. When it comes to
business, retailers have one overall goal: to sell merchandise. That's why they focus on sales
floor space, adequate parking for customers, and an overall image that draws in customers.
Retail space comes in a variety of shapes and sizes and may be located in free-standing
buildings, enclosed malls, strip shopping centers, downtown shopping districts, or mixed-use
facilities. You will also find retail space in airports and other transportation facilities, hotel
lobbies, sports stadiums, and temporary or special-event venues.
2. What are internal atmospheric?
Internal atmospherics refers to all aspects of physical environment found inside the
store. Point-of -purchase interaction and retail unit decoration influences the customer and in
turn sales of the retail ifnit.
3. Define positioning.
Positioning defines where your product (item or service) stands in relation to others
offering similar products and services in the marketplace as well as the mind of the consumer.
4. What are the factors to be considered for positioning the retail shop?
 Best location
 Taget market
 Ompetitive factors
 Financial capital
 Legal and regulatory environment
5. Define service quality.
An assessment of how well a delivered service conforms to the client's expectations.
Service business operators often assess the service quality provided to their customers in order
to improve their service, to quickly identify problems, and to better assess client satisfaction.

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6. Give Importance of Retail store image.
Retail store image has been shown to play an important role in store patronage, and it is
widely accepted that psychological factors have a significant role in store image formation.
Past research has often involved the measurement of tangible attributes, or links between store
images and consumers' self‐images.
7.Define supply chain management.
Supply chain management (SCM) is the broad range of activities required to plan,
control and execute a product's flow, from acquiring raw materials and production through
distribution to the final customer, in the most streamlined and cost-effective way possible.

8. Define Service.
Services are the non-physical, intangible parts of our economy, as opposed to goods, which
we can touch or handle. Services, such as banking, education, medical treatment, and
transportation make up the majority of the economies of the rich nations. They also represent
most of the emerging nations’ economies.

9. What is a quality of service?

Quality of service (QoS) refers to a network’s ability to achieve maximum bandwidth
and deal work performance elements like latency, error rate and uptime. Quality of service also
involves controlling and managing network resources by setting priorities for specific types of
data (video, audio, files) on the network. QoS is exclusively applied to network traffic
generated for video on demand, IPTV, VoIP, streaming media, videoconferencing and online
gaming.
10. Define Pricing.

Pricing is the method of determining the value a producer will get in the exchange of
goods and services. Simply, pricing method is used to set the price of producer’s offerings
relevant to both the producer and the customer.

11. Give the decision making process.

Step 1: Identify Your Goal.
Step 2: Gather Information for Weighing Your Options
Step 3: Consider the Consequences
Step 4: Make Your Decision.
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 Step 5: Evaluate Your Decision.
12.What is impulse buying?
Impulse buying by definition is purchasing items that you may or may not need or that
your budget cannot afford. It can be candy at the convenience store, a cute shirt that seems to
be on sale, or even sometimes things like gadgets which you didn’t have a budget for but you
bought it on impulse because you liked it so much.

PART- B
1. How do you choose the Choice of retail locations?
Define Store:
“A store is place , where the shoppers comes to buy the goods & services. The sales
transaction occurs at this junction.”
 The location of retail store has for a long time been considered the most important ‘P’ in
retailing.
 Locating the retail store in the right place was considered to be adequate for success.
 Location becomes a critical decision for a retailer for several reasons. As like;
 Location is generally one of the most important factors customers consider while choosing a
store.
 A bad location may cause a retailer to fail even if its strategic mix is excellent.. On the other
hand , a good location may help a retailer succeed even if its strategic mix is normal.
 Store location is least flexible element of retailer’s strategic mix due to its fixed nature, the
amount of investment, and the length of lease agreements
 It must be in accordance with the expectations of target customers.
 It requires greater financial outlay interms of investment and a long term commitment.
 The retail location decision must be consistent with other aspects of retail mix strategy.
 The location decision is of strategic significance since it can be a source of sustainable
competitive advantage.

2. Explain the internal and external atmospherics in retail sector.

Exterior atmospherics
 Storefront
 Marquee
 Entrances
 Display Windows

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  Height of Building
 Size of Building
 Visibility
 Uniqueness
 Surrounding Stores
 Surrounding Area
 Parking
Internal atmospherics
 Flooring
 Colors
 Lighting
 Scents
 Sounds
 Fixtures
 Temperature
 Dressing Facilities
 Self-Service
 Merchandise
Prices (Levels and Displays)
 Cash Register Placement Technology
 Modernization
 Cleanliness

3. How will you Building retail store Image?

Building a Retail Image
 Image: how the retailer is perceived by customers and others
 Positioning: the firm’s strategy that projects the image in relation to its competitors –
 The personality of the store…
 Types of merchandise or services
 Product Quality
 Sales associations
 Bags and Packaging
 Colors of the decorations
 Fixtures and Equipment
 Music, Lighting, Scent
Value of Brand Image
 Brands provide value to both customers and retailers.
 Brands convey information to consumers about the nature of the shopping experience

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 Brands also affect the customers’ confidence in their decisions to buy merchandise from a
retailer.
 Finally, brands can enhance the customers’ satisfaction with the merchandise and services they
buy.
 The value that a brand image offers retailers is referred to as brand equity.
Building Brand Equity
The activities that a retailer needs to undertake to build the brand equity for its firm or its
private-label merchandise are
o Create a high level of brand awareness
o Develop favorable associations with the brand name and
o Consistently reinforce the image of the brand
Some common associations that retailers develop with their brand name are as follows:
 Merchandise Category: the most common association is to link the retailer to a category of
merchandise.
 Price/Quality: some retailers, such as Neiman Marcus, want to be associated with offering
high price and unique, high-fashion merchandise. Other retailers, such as Wal-Mart, want
associations with low prices and good value.
 Specific attribute or benefit: a retailer can link its stores to attributes such as convenience or
service.
 Lifestyle or activity: some retailers associate their name with a specific lifestyle or activity.
 E.g. the Nature Company, a retailer offering books and equipment to study nature, is
linked to a lifestyle of interacting with the environment.

4. Explain the Retail Supply Chain Management.

Supply Chain Management deals with the management of materials, information, and
financial flows in a network consisting of suppliers, manufacturers, distributors and customers.
 Pull processes: execution is initiated in response to a customer order
 Push processes: execution is initiated in anticipation of customer orders
Characteristics of SCM
 Short Life Cycle: Many products in these sectors have a short life cycle. The time period in
which it is saleable is likely to be short and seasonal.

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 High Volatility: Demand for these products is rarely stable. It may be influenced by the
weather, movies and advertising.
 Low Predictability: Due to the volatility of demand, it is extremely difficult to forecast with
any accuracy.
 High impulse purchase: Many buying decisions for these products are based on impulse and
taken at the point of purchase.
 Time-to-Market: In the shorter life cycle markets, being able to spot trends quickly and to
translate them into products in the shop has become a pre-requisite for success.
 Time-to-serve: Traditionally, in retail orders from retailers had to be placed on suppliers many
months in advance. This gives rise to the risk of obsolescence and high stock-outs, as well as
increased costs of inventory.
 Time-to-react: Ideally, in any market, a company would want to meet a customer’s
requirements at the time and place that the customer needs them.
 The lead time gap: The fundamental problem that many companies face is that the time that it
takes to source materials, convert them into products and move them into the market place is
invariably longer than the time that the customer is prepared to wait.
Causes of SCM
 Delays in transmitting orders and receiving merchandise: even when retailers can forecast
sales accurately, there are delays in getting orders to the vendor and receiving those orders
from the vendor.
 Overreacting to shortages: when retailers find it difficult to get the merchandise they want,
they begin to play the shortage game.
 They order more than they need to prevent stock outs, hoping they will receive a larger
partial shipment.
 These over orders again lead the vendor to think demand is higher than it really is.
 Ordering in batches: rather than generating a number of small orders, retailers wait
and place larger orders to reduce order processing and transportation costs and take
advantage of quantity discounts.
 This ordering pattern leads the vendor to think that sales are more irregular than they
really use.
5. Explain in detail about Retail service quality management and its process.

 Providing high-quality service is difficult for retailers.

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 Good service keeps customers returning to a retailer and generates positive word-of-mouth
communication, which attracts new customers.

 In addition, most service provided by retailers are intangible - customers can’t see or feel
them.
 The challenges of providing consistent high-quality service provides an opportunity for a
retailer to develop a sustainable competitive advantage.
Customer Evaluation of Service Quality

 Reliability: Accuracy of billing, meeting promised delivery dates.

 Assurance (Trust): Guarantees and warranties, return policy
 Tangibility: Appearance of stores, salespeople
 Empathy: Personalized service, recognition by name.
 Responsiveness: Returning calls and e-mails, giving prompt service.

The Gaps Model for Improving Retail Service Quality

 Service Gap: It means the difference between the customers’ expectations and perceptions of
customer service).
 The gaps model indicates what retailers need to do to provide high-quality customer service.
 Thus, retailers need to reduce the service gap to improve customers’ satisfaction with their
service.
Four factors of Service Gap
 Knowledge Gap: The difference between customer expectations and the retailer’s perception
of customer expectations.
 Standards Gap: The difference between the retailer’s perceptions of customers’ expectations
and the customer service standards it sets.
 Delivery Gap: The difference between the retailer’s service standards and the actual service
provided to customers.
 Communication Gap: The difference between the actual service provided to customers and the
service promised in the retailer’s promotion program.

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