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Definition of Retailing
Definition of Retailing The term µretailing¶ is
derived from the old French word µretailler¶,
meaning µa piece of¶ or µto cut up¶.

Retail is: ³any business that directs its

marketing efforts towards satisfying the
final consumer based upon the organisation
of selling goods and services as a means of
distribution´
arowing Importance of Retail
Sector :
' arowing Importance of Retail Sector
' Large and increasing contribution to aDP
' Economic importance more visible
' Major employer
' Retailers as gatekeepers
' Retailers diversifying their activities
' Organizations growing on an international
scale.
Structural trends in retailing :
' Increasing dominance of retailers over
suppliers
' Increasing market share held by multiples and
associated loss by independents and co-
operatives.
' Increasing rates of market concentration
' Marketing and Operational superiority of the
big players providing cost-effectiveness!
›arketing in Retail Organization :
Definition of Marketing The Chartered Institute
of Marketing (CIM) defines marketing as: ³the
management process responsible for
identifying, anticipating and satisfying
customer requirements profitably´.
Marketing philosophy is the acceptance of
customer as Queen/king.
Definition continues«. :
Marketing is therefore:
' ? management function
' It organizes and directs
' It has a function of assessing
' It has a function of conversion
' It deals with consumer purchasing power
' It deals with consumers or users
' It deals with moving the goods to the final
consumer
' It achieves the profit target or other
objectives/aim
›arketing Practices in Retailing :
Activities at strategy level:
' Environmental (PESTLE) search
' Strategy development (STP marketing, Brand
management etc.)
' Building strong organization
' Implement retail strategy
' Counter competitive threats
' Forecast future market trends (SWOT analysis,
PESTLE analysis, aap analysis etc.)
[ont..
Activities at operational level:
' Collect information
' Make operational decisions
' Implement operational strategy
' Manage store operations
' Manage human resource
' Manage store-level resources
Retail marketing mix :
' Store location
' Merchandising
' Store ambience
' Customer service
' Retail pricing
' Retail integrated communications
' Personal selling
' Store image
' Sales incentives
 Role of competition in retailing :
' Retailing is more competitive than most other sectors
' Retail competition is multidimensional i.e., 5 levels
X ost level ± product, services, communication, and
physical distribution.
X2nd level ± related to retail organization and its
horizontal competitors.
X3rd level ± other retail organization and the vertical
competition.
X4th level ± deals with geographical dimensions including
location and shopping environment.
X 5th level ± nature of the marketplace¶s (local, national
international) economy, including economic boom, bust,
recession, inflation prone, hyper inflation etc
Dimensions of [hange in retail
competition :
' Retail competition has been changing along
spatial, institutional and functional dimensions.
' Spatial dimension ± retailing follows
population trends.
' Institutional dimension ± both large and small
firms are engaged in retail competition.
' Functional dimension ± takes two dimensions
e.g. price competition; and non-price
competition
Retail concentration :
' ùigh concentration of retail competition could be
attributed to ease of entry.
' ùigh profit in retailing invites competition and
resulting in high concentration.
' Large firms taking over smaller firms leads to
polarization and concentration.
' aovernment policies and regulations favoring large
firms and less favorable to smaller firms lead to
concentration.
' Consumers willingness to accept process foods and
innovative products help build retail concentration
[ompetitive advantage
(differentiation) :
' Retailers need to differentiate themselves from their
competitors
' Competitive advantage is achieved through differential
congruence.
' Differential congruence is the positive balance between
store¶s image and the customer¶s self-image.
' Successful retailers must achieve differential
congruence as a means of coping with growing
competition.
' Retail management must create a congruence between
the store¶s perceived image and the customer¶s self-
image to achieve differential advantage.
›onopolistic competition:
' Monopolistic competition is where each retailer
has certain unique features, e.g. in terms of
merchandise mix, its location etc.
' The unique features give retailers competitive
advantage over their competitors.
' The ability to use the opportunity to create
competitive advantage is indicative of good retail
marketing management.
' Retailers need to establish a degree of monopoly
power in order achieve competitive edge or to
survive in a fast changing retail market.
[onditions for monopolistic
competition :
' The conditions that monopolistic competition
imposes on retail organization include:
' Relative ease of entry
' Relative ease of exit
' ? less than perfectly elastic demand function
' Less than perfect information for individual firm
' Consumer behavior is less than being entirely
rational
' The possibility of acquiring additional
information.