Merchandise Presentation Techniques Merchandise displays are special presentations of products in a retail stores for the customers.

Merchandise displays are predicated on basic principles designed to increase product purchases. The nature of these displays, can however, vary from industry to industry,. Indeed, merchandise displays are an integral element of the overall merchandising concept, which seeks to promote product sales by coordinating marketing, advertising, and sales strategies. The presentation should be viewed from the customers perspective. Merchandise displays generally take one of several basic forms: Storefront Window Displays: These typically open on to a street or shopping mall walk or courtyard and are intended to attract people passing by, who otherwise, might not enter the store. Showcase Displays: items that are reckoned to be too valuable for display in storefront displays, or are niche items of high interest to the businesss primary clientele. These display centers are usually located in high traffic areas and typically feature multiple tiers for product display and a sliding door on the clerks side for access. "Found-Space" Displays: This term refers to product presentations that utilize small but nonetheless usable areas of the store, such as the tops of product carousels or available wall space. Storefront window displays and "found space" displays are particularly popular tools for publicizing and selling sale items. Following sub-sections discusses other techniques of presentation and tips for successful display. Cross merchandising Cross merchandising is simply grouping related products together. There are a few methods that can be used to accomplish this technique in an online setting. Lets take a look at the possibilities. Creating gift baskets or sets that include multiple related items, such as a skincare basket with a moisturizer, cleanser, toner, and an eye cream. Maybe you sell books. You can create a Music Lovers Dream set that includes a few bestsellers, posters of artistes, and other exclusive merchandise. Group similar items on the same web page. A customer who plans to purchase a DVD player would be a prime candidate for buying DVDs as well. This approach is similar to the gift basket idea, yet products are sold individually. Successful merchandise display The effectiveness of these bases of merchandising display strategy can be increased by applying the following tips: You must keep your target customers demographics in mind while allocating merchandise display space and expenditures. If a large part of your target customers are males between the ages of 20 and 40, the bulk of your displays should probably be shaped to catch their interest. You must be careful of pursuing merchandise display designs that sacrifice effectiveness for the sake of originality.

 You must make certain that the display area is clean and well maintained. You should try not to overcrowd a display. It is mostly seen that customers pass over busy-looking displays areas. Each and every primary article that has been put in a display must interact with every other so that they all come together as a group. If they dont it will look as if there is not one design, but several. (b) Give a note on ABC analysis. Measuring the performance of merchandise is necessary in order to gain an understanding of the products which have performed well and which have not performed well, as per the target. The performance can be as per plan, below the plan or above the plan. ABC analysis is one of the methods of analyzing merchandising performance ABC analysis ranks the merchandise on the basis of how important the item is. It uses some performance measures to determine which items should never be out of stock, which items should occasionally be allowed to be out of stock and which items should be deleted from the stock selection. An ABC analysis can be done at any level of merchandise classification, from an SKU to a department. ABC analysis makes use of the 80:20 principle, which says that 80% of the sales come from 20% of the products. The first step in the ABC analysis is to rank order SKUs using one or more criteria. Contribution margin is the most important performance measure used for this type of analysis. Contribution margin = Net sales Cost of good sold Other variable expenses Other variables expenses can include sales commissions. The next step is to determine how items with different levels of profit or volume should be treated differently. The buyer may define as: C items that account for 65% of the SKUs, but contribute only 10% of sales, B items represent 10% of items and 20% of sales and A items that account for 5% of items and represent 70% of sales. (D represents those items for which there were no sales in the past season.)

Ans:- Dimensions of Segmentation Markets are complex entities that can be segmented in a variety of ways. It is an important issue to find an appropriate segmentation scheme that will facilitate target-marketing, product positioning, and developing successful marketing strategies and action programmes. A segmentation variable is a characteristic of individuals, groups or organisations that marketers use to divide and create segments of the total market. One approach to segmentation is on a priority basis. In this case, the marketer may assume that differences must exist among heavy users and light or medium users of a product category. Segmentation descriptors fall under four major categories and include geographic variables, demographic variables, psychographic variables, and behaviouristic variables. Geographic variables focus on where the customers are located. Demographic variables identify who the target customers are. Psychographic variables refer to lifestyle and values. Behaviouristic variables identify benefits customers seek, and product usage rates.

Before collecting any data on the market, the basis for segmentation is analysed. The marketer can also assume that dual-income households are growing in urban areas and then develop a programme for this segment. Selecting the right segmentation variable is critical. For example, small car producers might segment the market on the basis of income but they probably would not segment it on the basis of political beliefs or religion because political leanings or religious beliefs do not normally influence consumers automobile needs. Segmentation variable must also be measurable to segment the market accurately. For example, segmenting the market on the basis of intelligence would be difficult because this characteristic cannot be measured accurately. Marketers can use one or more variables to segment the market. Different variables are used to segment consumer markets. Broadly speaking, segmentation variables fall under two categories: consumer characteristics or consumer responses. The most popular bases for market segmentation include geographic factors, demographic factors, psychological characteristics, social/cultural variables; use related factors, use situation variables, benefits sought and combination of several segmentation bases called hybrid formats, such as demographic/psychographic profiles, geo-demographic variables, values and lifestyles. Table 8.1 lists the variables that can be used to segment the market. Table 8.1: Segmentation Variables

The subsequent sub-sections discuss various bases for market segmentation. Geographic segmentation Geographic segmentation focuses on dividing markets into different geographic units, such as regions, nations, states, urban, rural, etc. Customers located in different geographic areas vary in terms of climates, terrain, natural resources, population density, culture, service needs, sales potential, growth rates, competitive structure of the market, frequency of purchases for a variety of goods and services. For example, Jeeps are more popular in rural areas in India than in urban areas. Shopping malls are located only in larger cities in India, and raincoats are sold more in rainy areas. Geographic segmentation is used both in consumer and organisational markets, particularly where customers are not willing to travel far to acquire goods and services. Geo-demographic segmentation Many segmentation approaches involve both geographic and demographic descriptors. This approach is based on the premise that people who live close to one another are likely to have similar economic status, tastes, preferences, lifestyles and consumption behaviour. Geo-demographic segmentation is particularly useful when a marketer is capable of isolating its prospects with similar personalities, goals, interests, and in terms of where they live. For products, and services used by a wide cross-section of society,

this approach may not be suitable. For example, some retailers who propose to open new stores are interested in knowing something about the people who live within a defined area whom they aim to attract. Demographic segmentation Demographic characteristics are commonly used to segment the market. Factors such as age, sex, education, income, marital status, household life cycle, family size, social class, etc., are used singly, or in a combination, to segment a market. Shaving products for women are based on the demographic variable of gender. Toy manufacturers such as Funskool and Mattel Toys segment the market on the basis of age of children. Auto manufacturers segment the market by considering income as an important variable. Producers of refrigerators, washing machines, microwave ovens etc., take income and family size as important variables in segmenting the market. Ready-to-wear garment producers often segment the market on the basis of social class. Examples are Chirag Din, Arrow, Van Heusen, Louis Philippe, Levis and others. In general, the social class can represent lower, middle and upper class depending on education, income, status, etc. For example, an engineer and a clerk are considered as members of different social classes. Figure 8.1 depicts the classification of the Indian population in a pyramid form

Figure 8.1 Socio-economic Pyramid of Indian Population Psychographics segmentation When segmentation is based on personality or lifestyle characteristics, it is called psychographic segmentation. Consumers have a certain self-image and this describes their personality. There are people who are ambitious, confident, aggressive, impulsive, conservative, modern, gregarious, loners, extrovert, introvert, etc. Some motorcycle manufacturers segment the market on the basis of personality variables such as macho image, independent and impulsive. Some producers of liquor, cigarettes, apparel, etc., segment the market on the basis of personality and self-image. Marketers, are often not concerned about measuring how many people have the characteristic as they assume that a substantial number of consumers in the market either have the characteristic or want to have it. Lifestyle: It is an indicator of how people live and spend their time and money. What people do in their spare time is often a good indicator of their lifestyle. For example, John L. Lastovicka, John P. Murray, Erich A.

Joachimsthaler, Gaurav Bhalla and Jim Sheurich in their study, were identified two lifestyle segments that were most likely to drink and drive: good timers and problem kids. Good timers are partygoers, macho and high on sensation seeking. Problem Kids frequently display troublesome behaviours. According to Morris B. Holbrook, people who have an affinity for nostalgia, or the desire for old things, also represent a lifestyle segment and can be a key market for old movies, antiques and books. Surfing on the Internet has also created a new type of lifestyle. Another study by Rebecca Piirto of fashion consumers found six major groups: yesteryears (older consumers), power purchasers (married households with college degree), fashion foregoers, social strivers, dutifuls (highly practical) and progressive patrons (high-income/quality buyers). Consumers in different countries and cultures may have characteristic lifestyles. For example, Indian women are home focused, less likely to visit restaurants, more price-sensitive, spend time preparing meals at home and fond of movies. AIO inventories are useful additions to demographic data but marketers have found the original AIO inventories as being too narrow. Now, psychographics or lifestyle studies generally include the following: Attitudes include evaluative statements about people, products, ideas, places, etc. Values refer to widely held beliefs about what is right/acceptable/desirable, etc. Activities and interests cover behaviours with respect to activities other than occupation to which consumers devote time and effort, such as hobbies, interests, social service, etc. Demographics cover gender, age, education, occupation, income, family size, geographic location, etc. Media preferences describe which specific media the consumers prefer to use. Usage rate focuses on measurements of consumption level within a particular product category and is generally recorded as heavy, medium, light, or non-user. Table 8.2 lists various lifestyle dimensions that are of interest to the marketers.

The sample size is often 500 or more individuals who provide this information and are placed in groups whose members have similar response patterns. According to F. W. Gilbert and W. E. Warren, most studies use the first two or three dimensions mentioned above to group individuals. The use of other dimensions provides more complete profiling of each group. Generally, the AIO measurements are product or activity specific. For example, W. A. Kamakura and M. Wedel have reported a study related to fashion clothing which included 40 statements and respondents reported their degree of agreement or disagreement. Five of the statements are mentioned here:

 I like parties with music and chatting. I like clothes with a touch of sensuality. I choose clothes that match my age. No matter where I go, I dress the way I want to. I think I spend more time than I should on fashion. In this study, statements relevant to activities and demographics were also included. General lifestyle studies can be used to spot new product opportunities, while product specific lifestyle analysis may help repositioning decisions regarding existing brands. The VALS (Values and Lifestyles) Stanford Research Institute (SRI) developed a popular approach to psychographics segmentation called VALS (Values and Lifestyles). This segmented consumers according to their values and lifestyles in USA. Researchers faced some problems with this method and SRI developed the VALS2 programme in 1978 and significantly revised it in 1989. VALS2 puts less emphasis on activities and interests and more on a psychological base to tap relatively enduring attitudes and values. To measure it, respondents are given 42 statements with which they are required to state a degree of agreement or disagreement. Some examples of the statements are: I am often interested in theories. I often crave excitement. I liked most of the subjects I studied in school. I like working with carpentry and mechanical tools. I must admit that I like to show off. I have little desire to see the world. I like being in charge of a group. I hate getting grease and oil on my hands. VALS2 has two dimensions. The first dimension, self-orientation, determines the type of goals and behaviours that individuals will pursue, and refers to pattern of attitudes and activities which help individuals reinforce, sustain, or modify their social self-image. This is a fundamental human need. The second dimension resources reflects the ability of individuals to pursue their dominant self-orientation that includes the full range of physical, psychological, demographic and material means such as self-confidence, interpersonal skills, inventiveness, intelligence, eagerness to buy, money, position, education, etc. The questions above are designed to classify respondents based on their self-orientation. Stanford Research Institute (SRI) has identified three basic self-orientations: Principle-oriented individuals are guided in their choices by their beliefs and principles and not by feelings, desires and events.

 Status-oriented individuals are heavily influenced by actions, approval and opinions of others. Action-oriented individuals desire physical and social activity, variety and risk taking. Based on the concepts of self-orientation and resources, Values and Lifestyle typology breaks consumers into eight groups. VALS2 suggests that a consumer purchases certain products and services because the individual is a specific type of person. The purchase is believed to reflect a consumers lifestyle, which is a function of self-orientation and resources. People with most resources are at the top and the ones with least resources are at the bottom of this typology. Each of the eight groups exhibits a distinctive behaviour, decision-making approach and product or media usage attributes. VALS2 represents an interconnected network of segments, which means that adjoining segments have many similar characteristics and can be combined to suit particular marketing objectives. Behaviouristic segmentation Dividing the market on the basis of such variables as use occasion, benefits sought, user status, usage rate, loyalty status, buyer readiness stage and attitude is termed as behaviouristic segmentation. Buyers can be identified according to the use occasion when they develop a need and purchase or use a product. For example, Archies greeting cards are used on many different occasions. User status, such as non-users, potential users, or first time users can be used to segment the market. Markets can also be segmented into light, medium, or heavy users of a product. Brand loyalty of varying degree can be presented among different groups of consumers and may become the basis to segment the market. There are consumers, who are very loyal to cigarette brands, beer and even toothpaste. Markets may also be divided on an imaginary Likert-type scale by considering level of product awareness such as unaware of the product, aware, interested, desirous, or contemplating to purchase the product. Based on attitude, consumers may be enthusiastic, indifferent, or hostile towards the product, and these differences can be used to segment the market. Benefit Segmentation: By purchasing and using products, consumers are trying to satisfy specific needs and wants. In essence, they look for products that provide specific benefits to them. Identifying consumer groups looking for specific benefits from the use of a product or service is known as benefit segmentation and is widely used by marketers. For example, there are distinct groups of auto buyers. One group might be more interested in economy, the other in safety and still other in status. Segmentation bases, such as demographics are descriptive. These variables are useful but do not consider why consumers buy a product. Benefit segmentation has the potential to divide markets according to why consumers buy a product. Benefits sought by consumers are more likely to determine purchase behaviour than are descriptive characteristics. Marketers should also appreciate that many benefits sought by consumers are subject to change with changing technologies, changing social values and competitive offers. This requires that marketers must constantly reassess benefit segments. The present scenario in the computer market is an example. With the introduction of faster and better products, the benefits consumers seek, are constantly changing. Benefit segmentation can be seen in the toothpaste market; fresh breath, decay prevention and whiter teeth are some examples and the leading brands involved are Colgate Total, Close-Up and Promise. Table 8.3 presents the benefit segmentation of the toothpaste market.

Demographic-psychographics segmentation (Hybrid pproach) Demographic and psychographic profiles work best when combined together because combined characteristics reveal very important information about target markets. Demographic-psychographics information is particularly useful in creating consumer profiles and audience profiles. Combined demographic-psychographic profiles reveal important information for segmenting mass markets, provide meaningful direction as to which type of promotional appeals are best suited and selecting the right kind of advertising media that is most likely to reach the target market.

Q.3 What new customized retail formats could be seen in retail environment today? Give examples. [10 marks] Ans:- New Customized Formats Various customized retail format discuss below: 1. 2. 3. 4. 5. 6. Customized stores Portable stores Merchandise depots Retail theater Customer-made stores Interactive kiosk shopping arcades

Customized stores These are those type of stores where customers can find all the items to fulfill their daily needs such as FMCG products, daily wear apparels, etc. customized stores are small version of hypermarket. Portable stores

These are mainly to solve the reach problem. Concept behind them is to make the products available at distant places where retail outlets are not easily available. Some FMCG companies also apply this format to advertise and make their products reach direct to customer for awareness. Merchandise depots As clear by their name the main function of these types of depots are to merchandise all the products with available categories to customer. Retail theater Successful retail spaces create a full sensory experience. Consumers want to see, feel, touch, taste and interact with your products before they buy. Here are some strategies that will help you stage a little retail theater of your own. Present a lifestyle: Display and market your products in a way that helps customers visualize the full experience and realize their lifestyle aspirations. As per USA Today, Whole Foods grocery stores enjoyed a 15% jump in total sales last year while the average supermarket grew just 1%. Why? Whole Foods has taken the mundane task of grocery shopping to an inspiring and interactive new level. Dip a fresh strawberry in a flowing, chocolate fountain. Watch while any one of 150 fresh seafood items are prepared before your eyes. Sip a glass of pinot in the produce section. Affirming your customers desire to feel exclusive, indulgent or even organic and chemical-free can have major bottom-line impact. Construct vignettes and suites: Create vignettes that can be merchandized and accessorized, even if your inventory is not usually displayed that way. Displays are powerful because they show you how to use the products how they would fit into your life and make it more efficient, more comfortable and even more fun. A leather armchair that I would otherwise have ignored suddenly beckons me with a cozy cashmere blanket and a steaming Americano in a sleek new mug, of course. Satisfy the senses: Multi-sensory experience and inviting design can lend a powerful competitive advantage even in unexpected industries. Imagine a doctors office which has a cold, square, ill-painted waiting room with hard chairs lining the perimeter, the walls decorated with bad artwork, old torn magazines lying on the plastic tables, and a dirty water dispenser with dirty glasses to drink water in. I am sure that even if the doctor is great, you wouldnt like to wait there much or if possible avoid going there altogether. On the other hand, theres another doctors office which has softly lit reception area with warm laminate floors, nice aroma, current issues of her favorite magazines, patient friendly examination rooms with flat screen computers, electronic medical charts and supplies organized in stylish stainless-steel containers. I am sure you would not mind going there. Medical professionals like doctors, dentists and many other medical practitioners have firmly entered the service industry. With growing options in areas such as hair treatment, skin treatments and cosmetic surgeries, many doctors and dentists are competing for patients and market share.

So now its upto you to decide that which doctor will or should get more patients. Encourage customers to sample, touch and feel: Give your customers unrestricted freedom, access and creativity with your products and youll stand out in a crowded marketplace. Freed from staff paid on commission or overly eager to close a sale, shoppers often spend an hour or more trying different colors and brands until they find exactly what they like. Watch the details: Whether youre dealing in consumer durables, apparels, home decor, footwear or books, the right surroundings have an enormous impact on your customers, especially your female customers. A retail space that satisfies womens needs for engagement and plays to her heightened awareness of environment and aesthetics has a major advantage over the dingy, uninspired retail space, even if the products are fantastic. Put on a good show and watch your profits soar. And, finally, dont forget that seemingly inconsequential details can actually make or break a sale: Consider your lighting. Who wants to purchase a bathing suit after seeing your butt in a harsh, fluorescent glow? Bathrooms and office spaces reflect your stores atmosphere. Make sure theyre clean, well stocked, properly lit and ventilated. Create amenities such as a family room or play place where dads, kids or grandparents can gather while other family members are shopping. One major interiors retailer projects a hopscotch pattern on the floor with laser lights. And voila kids arent tugging on your sleeve while you hunt for furniture. According to Americas Research Group, nearly half of a consumers perception of a retail brand is formed in the parking lot. Like it or not, consumers judge your styles and your selection before they even walk through the front door, and they may just drive away if they dont like what they see. Customer made stores These stores are made to fulfill the daily necessities of local customers within a region. They are generally small in size and capacity. They are smaller version of customized stores. Customer-made: nowadays, the corporations create goods, services and experiences in close cooperation with consumers, tapping into their intellectual capital, and in exchange giving them a direct say in what actually gets produced, manufactured, developed, designed, serviced, or processed. Opportunities of customer-made stores Custom made stores are not a new concept. But in recent times, with the gap between traditional business practices and truly empowered consumers now reaching significant proportions, the customer-made trend will further accelerate, moving from fringe trend to mega trend. In fact, customer-made may turn out to be one of the most exciting and long term engines behind change and innovation that the world of business has seen in years: a way of thinking that has the power to redefine the relationship between customer and brand, between consumer and producer, something that taps into the most awesome reservoir of intellectual capital ever assembled. Interactive kiosk shopping arcades

An Interactive kiosk is a computer terminal that provides information access via electronic methods. Most kiosks provide unattended access to web applications such as HR, Benefits, Informational and Loyalty. Traditional Interactive kiosks sometimes looked like telephone booths, but can also be used while sitting on a bench or chair. Interactive kiosks are typically placed in high foot traffic settings such as hotel lobbies or airports. With the integration of technology, kiosks can now perform a wide range of activities, evolving into self-service kiosks. For example, kiosks may collect cash in exchange for merchandise. Customised components like the coin hoppers, bill acceptors, card readers and thermal printers enable kiosks to meet the owners specialised needs. Types of kiosks 1. Telekiosk: The telekiosk can be taken as the technical successor to the telephone booth, a publicly accessible set of devices that are used for communication. These can include email, fax, SMS, as well as standard telephone service. They are mostly situated in shopping centres and transport terminals, with the intention of providing detailed local information. Others are in public places, including motorway service areas and airports. The International Telecommunications Union has been promoting the use of the telekiosk in Africa and parts of Asia where local people do not have adequate access to communications technology. This initiative addresses the "digital divide" between rich and poor nations, in part. There are, however, great practical benefits. The scheme in Bhutan aims to provide an E-Post system, whereby messages are relayed by telephone, then delivered by hand to rural areas, easing the problems of transporting letters across the countryside. Health, agricultural and educational information is also available. 2. Financial services kiosk: The financial services kiosk can provide the ability for customers to perform transactions that may normally require a bank teller and may be more complex and longer to perform than desired at an ATM. These kiosks are generally referred to multi-function financial service kiosks and the first iteration was back in late 90s with the VCOM product deployed in Southland (7-Eleven) convenience stores. New multi-function machines have been deployed in "c-store" markets supported by Speedway and others. 3. Photo kiosk: they are interactive kiosks that allow the users to print pictures from their digital images. Two major classes of photo kiosks exist: (a) Instant Print Stations: This type of photo kiosk makes use of internal printers to instantly create photographic prints for a self serve paying customer. They are mostly located in public locations (hotels, schools, airports), Instant Print Stations handle payments. Often such systems will only print 46 inch prints although popular dye sublimation photo printers as of 2008 allow for 46, 57, 810, 812. Its more a matter of re-supply labour economics and chassis size. (b) Digital Order Stations: This type of photo kiosk are typically found within retail locations and allows users to place orders for prints and photographic products. Products generally get produced in-store by a digital minilab, or at another location that is to be delivered directly to the consumer, or back to the store to be picked up at a later time. Digital Order Stations may or may not support instant printing, and typically do not handle payments.

4. Internet kiosk: it provides public Internet access. They also sometimes resemble telephone booths, and are typically placed in settings such as hotel lobbies, long-term care facilities, medical waiting rooms, apartment complex offices, or airports for fast access to e-mail or web pages. They in some case also have a bill acceptor or a credit card swipe, and nearly always have a computer keyboard, a mouse (or a fixed trackball which is more robust), and a monitor. In some cases, internet kiosks are based on a payment model similar to vending machines or Internet cafs, while others are free. A common arrangement with pay-for-use kiosks has the owner of the Internet kiosk enter into a partnership with the owner of its location, paying either a flat rate for rental of the floor space or a percentage of the monthly revenue generated by the machine. Internet Kiosks have been the subject of hacker activity. Hackers will download spyware and catch user activity via keystroke logging. Other hackers have installed hardware keystroke logging devices that capture user activity. Businesses that provide Internet Kiosks are encouraged to utilize special Internet Kiosk software and management procedures to reduce exposure to liability. 5. Movie ticket kiosk: Many movie theater chains have specialized ticket machines that allow their customers to purchase tickets and/or pick up tickets that were purchased online. 6. Vending kiosk: An example of a vending kiosk is that of the DVD rental kiosks manufactured by several manufacturers, where a user can rent a DVD, secured by credit card for $1 per day. Beginning in 2002 new vending kiosks have started to be deployed which dispense a variety of items including electronic device and cosmetics. 7. Visitor management and security kiosk: this type of kiosk can help the visitor check in process at businesses, schools, and other controlled access environments. These systems can check against blacklists, run criminal background checks, and print access badges for visitors. School security concerns in the United States have led to an increase in these types of kiosks to screen and track visitors.

Q.4 Explain the scope of Ans:- Future of Electronic Retailing

electronic

retailing

in

near

future.

[10

marks]

The investment and improvements in the communication infrastructure will lead to the mass offering of electronic services in the home from several appliances. Established appliances, including the television and telephone will be equipped to provide simple access to electronic products and services. Furthermore, the increased power and portability of computers will facilitate easy, carefree, and daily use of electronic shopping options. Consumers As e-shopping becomes the most sensible alternative of procuring goods and services, consumers are likely to abandon their traditional views of shopping. No longer will a routine trip to a supermarket or mass retailer, suchas Wal-Mart, satisfy the econsumers expectations.

The effort of the trip will require an experience that appeals to ones social needs, entertainment needs, creativity, and curiosity. Brick and mortar retail This new shopping experience segues into the changes required by suppliers. As stated above, retailers and manufactures will have to rethink their physical selling strategies. Shoppers will use the Internet to quickly gather product information, including price, to save time in comparison shopping and unsuccessful outings due to lack of stock. Once a product and location decision has been made, the consumer will load up the kids into the SUV and venture in the brick-and-mortar world of shopping. E-marketing In time, however, the dominance of electronic purchasing is inevitable. Suppliers should bet their lives on it, especially if the product is not particularly differentiated or unique. Marketers must rethink their strategies and target audience. Mass marketing will not have the same appeal to the individual consumer. Marketers must utilize the massive databases that will be built through consumer clicks on the Internet, to personalize company advertising efforts. Suppliers Manufactures and retailers must also evaluate their relationships. Manufactures have spent the past twenty years dominated by their retail customers. The chain of products to consumers has been drastically altered already. Manufactures are no longer separate from their consumers. They have new opportunity to establish a direct link with the end-consumer companies, such as Dell Computers, have proven that direct selling to the consumer is more efficient and satisfying to the customer. The only advantage of a retail electronic shopping site is the collection and convenience of many products in one location or site. Vision The future of electronic retail is indeed the future of retail. However, electronic shopping will transcend the mere transaction and become a pillar of daily virtual activities. On-line purchasing activities will be only a part of a new e-lifestyle. Issues in e-tailing Some of major issues in e-tailing have been discussed below. Customer Service, Distribution and Logistics related issues: it is evident that e-tailing facilitates business transactions but care should be taken to ensure that the products are delivered on time. Most of the e-tailers adopt fancy techniques to attract customers but fail to acknowledge one of the most important aspects of customer satisfaction, which is achieved through a flawless delivery. It is important to follow through and ensure a smooth delivery to the customer. E-tailers should provide prompt and smooth delivery to enhance customer experience. Mode of Payment related issues: credit cards are fast becoming the preferred mode of payment for all online purchases. There is always a possibility of misuse of the card details as the e-tailers cannot capture any signatures of the cardholder. Some alternative modes of payment include:

 Smart Cards: they are a more accepted form of payment across Europe, but have had a limited global impact. They are used for small purchases and do not require the consumers to disclose their personal information. American Express is working on a smart card that would come with a chip inside, to allow the storage of transaction history and other important data related to transactions. To use Smart Cards, consumers need to install a "reader" on their machines (whether a PC or a mobile device). VeriSign: it provides a secure online payment option that helps customers overcome the fear of misuse of information. It has purchased Cybercash that offered multiple payment solutions to its customers. PayPal: this tool is owned by E-bay. This tool allows the e-tailing sites who do not accept credit cards to process online payments in an effective and efficient manner. It facilitates person-to-person transactions. It has acquired all the VeriSigns payment services including Cybercash. Personalization vs. Privacy related Issues: In e-tailing, there is a disagreement between the e-tailers need to be able to personalize the offerings in order to provide a better experience to the consumers and consumers need for privacy, of their identity and financial information. There is an urgent need to address both the issues and strike a balance. This will surely affect the growth of online retailing in a positive way. There is an urgency to acknowledge the rules governing the use of personal information.

Q.5 How does consumerism and ethics influence retailing? [10 marks] Ans:- Consumerism and Ethics in Retailing Ethical decisions ensure that a sense of order and justice prevails in the society. But trying to determine what falls into that sense of order and justice can be difficult. One department that is frequently maligned for unethical acts in business is marketing. Marketing activities of a firm are most visible, that is why there is a lot negativity against this department. For example, fictitious pricing, deceptive advertising and false sales pitches from sales personnel often become cannon fodder for aggrieved customers and the media. Studies have confirmed that unethical marketing decisions can engender considerable personal, organisational and social costs. There are moral constraints built into the very dynamics through which marketing works. For example, contemporary marketing practitioners often argue that dishonest marketing will be unsuccessful marketing that the market will weed out those who violate the common morality. After all, ethics functions as a form of social control, something that is especially critical to customers, salespeople and the organisation. One concept that is often linked with the concept of corporate ethics is that of Corporate Social Responsibility (CSR). CSR appear to be the ethical expression of the business. Consequently retailers ethics may be focused on the notion of ethical responsibility to contribute to sustainable economic development; working with employees, their families, the local community and society at large to improve their quality of life. Sales is another area where ethical misconduct can easily occur. Sales personnel often compromise on ethics to meet their sales targets. Marketing personnel are the unfortunate victims of the ethics gap. Institutional support for encouraging ethical behaviour is more useful than a punitive or reformatory approach. If ethicality is measured, sales and marketing personnel may be as ethical as other groups in the organisation. This however needs to be reinforced organizationally. Failure to structure supportive ethical work environment is a case of managerial malfeasance.

Ethics in marketing practices is an important issue and needs developing understanding and awareness to bring improvement in its application. Ethical issue refers to some situation, problem, or opportunity that can be recognised and requires a person or organisation to select from among different actions that must be evaluated as right or wrong, or ethical or unethical. For instance when marketing managers or consumers feel manipulated or cheated, it becomes an ethical issue, irrespective of the fact that the action happens to be legally right. Whatever the reasons for unethical instances, what is necessary after the issue is identified is that marketing managers must decide how to resolve it. This requires knowing most of the ethical issues related to marketing that often arise. In general, most issues relating to unethical behaviour occur in case of products and promotions. Product-related ethical issues may include little or no information about safety, function, value, or use instructions. One example can be used of inferior materials, or components to cut costs without any information to customers. It is ethically wrong not to inform customers about the changes in product quality, as this failure is apparently a form of dishonesty. Issuing false medical certificates is unethical for medical practitioners as it raises questions about their honesty in general. Promotion of products and services, etc., often furnishes a number of instances of a variety of situations that involve ethical issues, such as false and misleading advertising, and manipulative or deceptive sales promotions. There have been instances of misleading ads about obesity control and weight reduction programmes that mislead customers and some went to the courts. Many ads are criticised for using excessive nudity to attract an audience. Use of bribery or false promises in personal selling situations is an ethical issue. Occasionally, media reports highlight cases of unethical practices by organisations involved in offering bribes to procure large orders. Such practices damage trust and fairness and ultimately harm the concerned organisation and tarnish its image. Encouraging ethical behaviour American Marketing Association has its codes of ethics, and member organisations agree to abide by them. Individual organisations in India develop their own code of ethics. Some universities and management institutions in India offer courses in ethics or make it compulsory part of management courses. In the absence of formal written down codes of marketing ethics, there have been suggestions that Indian businesses should adopt AMA codes of ethics. Occasionally, there are seminars on topics such as corporate governance to promote ethical conduct in business. Codes of ethics refer to organisational rules and policies that serve an organisations members in the shape of formal guidelines for professional conduct. This way, the employers help company members to better understand what is expected of them. Rewards and punishments associated with ethical or unethical conduct enforce code of ethics and limit the opportunities or tendency to engage in unethical behaviour. Fairness in the enforcement should help greater acceptance of ethical standards. A very short selfassessment test can assist an individual in determining whether a certain decision would be ethically right: Is this decision right legally? In case the answer is No, then one must stop there, as it can cause serious trouble. Is this decision fair to all concerned? If it is not fair to anyone concerned, then very likely it is not ethically right. How will this decision make me feel about myself? Unethical decisions generally give rise to feelings of uneasiness and guilt and when they become known to the public, they cause shame, and humiliation. If top management of a business develops programmes to encourage ethical conduct, then such programmes become a force. Marketing people understand the policies that govern ethical conduct and can easily resolve any conflicting ethical issues. Tom Rusk and D. Patrick Miller suggest that an aggressive ethical approach to

marketing should consider at least four fundamental values of interpersonal communication: (1) respect, (2) understanding, (3) caring, and (4) fairness. The application of these fundamental values entails five steps: Keep listening, dont argue, criticise, or defend yourself until you understand the problem confronting you. Identify the ethical issues involved in a decision that may affect colleagues, and customers. Understand the viewpoint of those who are involved. Ignore your anger and desire of power or prestige and develop as many alternatives as possible before analysing. Identify the best alternative from your point of view considering respect, understanding, caring, fairness, honesty, etc. Explain your decision to a neutral and trusted colleague, take time to reconsider, and consult before the final decision. Irrespective of what businesses finally decide about framing a formal guideline to cover ethics in marketing practices, one aspect is of critical importance: the individuals character. Most cases of employees engaging knowingly in unethical conduct are traceable to the individuals character. People are expected to know at least what is clearly right or wrong and should have the courage to act accordingly. One often learns that it is not the compulsive need for some kind of gratification but greed that often motivates gainfully employed individuals to engage in unethical practices. One can understand some possibility of wrong judgements being made about grey areas, but there cant be excuses about knowingly engaging in unethical practices, and everybody does it cannot be the justification. Ultimately, each individual is responsible for her/his controllable behaviour.

Q.6 Give a note on psychological pricing, mark-up pricing and mark-down pricing. [10 marks] Ans:- Psychological Pricing In, psychological pricing prices are set at a certain level where the consumer perceives the price to be fair. The most common method is odd-pricing using figures that end in 5, 7 or 9. It is believed that consumers tend to round down a price of Rs. 5.95 to 5, rather than 6. Ultimately, you must take into consideration the consumers perception of your price, figuring things like: Positioning: If you want to be the "low-cost leader", you must be priced lower than your competition. If you want to signal high quality, you should probably be priced higher than most of your competition. Popular price points: there are certain prices at which the customers become more willing to buy a specific product, referred to as "price points". For example, "under Rs. 100" is a popular price point. While a drop in your price to a popular price point might mean a lower margin, but this is offset by more than enough increase in sales. Fair pricing: there are times when the value delivered by the products doesnt matter, even if you dont have any direct competition. There is simply a limit to what consumers perceive as "fair". If the customers perceive that a shirt should cost Rs. 500, then they would not even care what value the shirt is offering. A sufficient amount of market testing can help the retailers estimate the fair price. Is psychological pricing an effective strategy?

It is true that price has a psychological value. Customers tend to buy a highly priced product just because they believe that the high price is a good indicator of value. Here, their perception is not reality based, it is psychologically based. It is seen that, as buyers do more investigation into the products attributes or the business promotes the products characteristics more effectively, that product knowledge enables buyers to make a more rational, versus psychological, buying decision and for buyers, price moves down the value scale. One use of psychological pricing is in price-ending numbers. Buyers believe that prices ending in uneven, rather than even numbers. But the problem with this strategy can be that products ending in an odd number are also often perceived as being lower in value. You must ensure that you choose the right price and the right strategy for your specific product or service. Another use of psychological pricing is reference price. Reference pricing is when buyers have a psychological response to the price that depicts the way they relate price and a product. A product can be positioned amongst high value or luxury items to imply that it belongs in the same category, hence capitalising on reference pricing. But the firms should be careful with this kind of a positioning strategy, as it can backfire if buyers feel that your product doesnt really belong in that category. A psychological pricing can be effective, only if the product to has certain features that would appeal to an egosensitive buyer. For example, luxury goods are attractive to ego-sensitive buyers. Premium recreational goods, such as yachts, are attractive to ego-sensitive buyers. Your strategic planning model must ensure that the pricing strategy selected for your product or service is a best-fit price. Mark-up and Mark-down Pricing After deciding the price of merchandise, the retailers next step is to consider whether there is any need to change some price due to reasons, such as changing demand patterns, pilferage, competition and seasonal shift during normal course of business. Price adjustments include either mark-down or additional mark-ups. Mark-down Mark-down is a most common technique to push retail sales that offers particular merchandise at a price lesser than the merchandise marked price (normal price). The reasons for mark-down include: Overstocking/overbuying Season change Clear-out shopworn/slow-moving merchandise Clear-out old-fashioned/old-trend merchandise Generate customer traffic Mark-down does not always mean that the store is not performing wall, this is a part of doing business and running a retail store efficiently. Sometimes, initially some retailers mark-up their merchandise high enough so that after reductions and mark-down the planned maintained mark-up is achieved.

Thus, a retailers intentions should not be to reduce mark-downs. If mark-downs are too less, it may mean that the retailer is probably charging too low for the merchandise, not purchasing in bulk or not having interest in purchasing a particular merchandise. Types of mark-downs The various types of mark-down of price are: Temporary mark-down: This is a policy of reducing the prices of merchandise for a particular time period due to a particular reason, e.g. mark-down because of clearing-out shopworn/substandard merchandise. Once such merchandise is sold, the product will be sold at the normal selling price. Permanent mark-downs: In such mark-downs price reduction is made for comparatively longer periods, maybe a few weeks, few months or more. Unlike temporary mark-down, where price reduction takes place for a particular cause and price is eventually raised to the original one, permanent mark-down is used to replace the old-quality merchandise with the new one. The reasons for permanent mark-down are: Merchandise if of perishable nature and will be of no use after some time. Old technology goods are to be replaced with latest versions.

Seasonal mark-downs: Under such mark-downs, prices are reduced to clear out seasonal retail merchandise. Ludhiana woolen sales, for example, in the previous winter season are very common in North Indian states like Haryana, Punjab, Delhi and Western UP. etc. Mark-up Unlike mark-down where prices are reduced, additional mark-up is intended to increase the retail price above the original mark-up due to certain reasons like: When the demand for merchandise offered is exceptionally high. There is a monopoly-like situation. When competitors are not able to meet the consumers demand. In case private labels are performing well in retail market and have good demand and the retailer likes to have quick returns. In todays world of retailing where brands are easily available and competition is becoming tougher, markdowns are increasingly applied by Indian as well as global retailers rather than mark-ups. Besides mark-downs and additional mark-ups, a third price adjustment, employee discount is becoming popular in the retail world. Some retail firms, in order to build public image and employees welfare provide additional benefits to their employees besides normal salary and perks by offering them discounts on merchandise buying or inviting them to buy merchandise before offering it to general public by the way of sales.