Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Retail Management

BBA 3rd Year

UNIT NO. TOPICS

Fundamentals of Retail Management: Basic concept of Retailing, Types of

Retailer, Multi-Channel Retailer organize ratability organized Retailing in
India, Retail Market Strategy, Retail Format and target market, Growth
Strategies, Pricing Strategy Consumer behaviors, Determinants of consumer
UNIT - 1 Marketing strategy, consumer decision making Process, Organizational
consumers Behavior, Post purchase behavior Service Retailing-Importance of
service retailing and its Challenges. Consumer Behavior in Services zone of
Tolerance, Service Perception and Expectation, Service strategy, Service
triangle, marketing mix, Marketing segmentation.

Merchandise Management: Merchandising Philosophy, Merchandising plans,

Merchandise budget, financial inventory control, Pricing Strategy Basics of
UNIT - 2 Visual Merchandising, Retail Store site and design, Store layout, Image mix,
Store Exterior and Interior, Color Blocking, Signage and Understanding
Material Planograms

E-Retailing: Introduction: The concepts of E-Commerce, E Business and E-

Marketing Evolution of E-Commerce, E-Commerce Vs Traditional
Commerce, Network infrastructure for E-Commerce, Internet, Extranet. E-
UNIT – 3 Commerce applications: Consumer Applications, Organization Applications,
Procurement-Online Marketing and Advertisement, Online Interactive
Retailing, E-Commerce-Business Models: B2B, B2C, C2C, B2 Government,
Government to Government

E-Marketing: Information Based Marketing, E-Marketing Mix - Cost,

Connectivity, Convenience, Customer, interface, Speed of delivery-Web
UNIT-4 retailing, Process of website development. E-Retailing/ reverse Marketing.
Electronic Payment Systems: Introduction to payment systems, On-line
payments.

Electronic payment systems- Prepaid E-payment systems, Post-paid E-

UNIT-5 payment systems, E-Cash or Digital Cash, E-Cheque, Credit cards. Smart
cards, Debit cards
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

UNIT 1
Retailing:

Retail Industry, one of the fastest changing and vibrant industries in the world, has contributed
to the economic growth of many countries. The term 'retail' is derived from the French word
retailer which means 'to cut a piece off or to break bulk'. In simple terms, it implies a first-hand
transaction with the customer.

Retailing can be defined as the buying and selling of goods and services. It can also be defined
as the timely delivery of goods and services demanded by consumers at prices that are
competitive and affordable.

Retailing involves a direct interface with the customer and the coordination of business
activities from end to end- right from the concept or design stage of a product or offering, to
its delivery and post-delivery service to the customer. The industry has contributed to the
economic growth of many countries and is undoubtedly one of the fastest changing and
dynamic industries in the world today.

Evolution of Retailing
⚫ Traditionally retailing in India can be traced to
– The emergence of the neighborhood ‘Kirana’ stores catering to the convenience
of the consumers
– Era of government support for rural retail: Indigenous franchise model of store
chains run by Khadi & Village Industries Commission
⚫ 1980s experienced slow change as India began to open up economy.
⚫ Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and
Grasim first saw the emergence of retail chains
⚫ Later Titan successfully created an organized retailing concept and established a series
of showrooms for its premium watches
⚫ The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures
to Pure Retailers.
⚫ For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music
World in music; Crossword and Fountainhead in books.
⚫ Post 1995 onwards saw an emergence of shopping centers,
– mainly in urban areas, with facilities like car parking
– targeted to provide a complete destination experience for all segments of
society
⚫ Emergence of hyper and super markets trying to provide customer with 3 V’s - Value,
Variety and Volume
⚫ Expanding target consumer segment: The Sachet revolution - example of reaching to
the bottom of the pyramid.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Characteristics of Retailing

• Interaction with the end consumers

• It enhances the volume of sales but the monetary value is less
• Customer service plays a vital role
• There is a tendency for automatic sales promotion
• With more outlets retail marketing creates visibility
• Location and layout plays a vital role.
• Creates employment opportunities to all age groups, gender , irrespective of
qualification and religion.
• Generates job opportunities in flexi timings.
• Retail marketing creates a place, time and possession utility for a product.

Types of Retailing:

⚫ Malls: The largest form of organized retailing today. Located mainly in metro cities,
in proximity to urban outskirts. Ranges from 60,000 sqft to 7,00,000sqft and above. They
lend an ideal shopping experience with an amalgamation of product, service and
entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd,
Pantaloon.
⚫ Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books
retailer Crossword, RPG's Music World and the Times Group's music chain Planet M,
are focusing on specific market segments and have established themselves strongly in
their sectors.
⚫ Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts
on the MRP through selling in bulk reaching economies of scale or excess stock left over
at the season. The product category can range from a variety of perishable/ non perishable
goods
⚫ Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety
of consumer needs. Further classified into localized departments such as clothing, toys,
home, groceries, etc.
⚫ Department Stores: Departmental Stores are expected to take over the apparel business
from exclusive brand showrooms. Among these, the biggest success is K Raheja's
Shoppers Stop, which started in Mumbai and now has more than seven large stores (over
30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!.
⚫ Hyper marts/Supermarkets: Large self service outlets, catering to varied shopper needs
are termed as Supermarkets. These are located in or near residential high streets. These
stores today contribute to 30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000 sqft to 2,000 sqft and
large supermarkets ranging from of 3,500 sqft to 5,000 sq ft. having a strong focus on
food & grocery and personal sales.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

⚫ Convenience Stores: These are relatively small stores 400-2,000 sq. feet located near
residential areas. They stock a limited range of high-turnover convenience products and
are usually open for extended periods during the day, seven days a week. Prices are
slightly higher due to the convenience premium.
⚫ MBO’s: Multi Brand outlets, also known as Category Killers, offer several brands across
a single product category. These usually do well in busy market places and Metros.

Retail Type Product Focus Example

Store
Retailers

Specialty Store Single product line AutoZone

Department
Wide variety of product lines JCPenney, Kohl’s
store

Multiple product lines;

Supermarket focused mostly on grocery Publix, Kroger, Save A Lot
with limited services

Combination of supermarket
Superstore Target, Walmart
and department store

Convenience Limited range of everyday

7-Eleven, Speedway
Store items

Very large superstores with

Best Buy, Lowe’s, Home
Category killer wide product lines within a
Depot, Staples, Office Depot
category

Broad range of products with Dollar General, Dollar

Discount store
few or no services Tree, Family Dollar

Off-price Brand name overstock,

T.J.Maxx, Ross
retailer irregulars, and closeouts

Sawgrass Mills Factory

Overstock or over-
Outlet, Indiana Premium
Factory outlet manufactured brand-name
Outlets, Osage Outlets; Hanes
items, usually clothing;
Outlet, L.L.Bean Outlet
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Retail Type Product Focus Example

typically in a mall setting

with other factory outlets

Warehouse Bulk items at discount for

Sam’s Club, BJ’s, Costco
club paid membership

Vending machines, direct-mail

Non-store catalogs, television home
retailers shopping online, telemarketing,
direct selling

Unmanned with very limited

Automatic Snack and beverage machines in a
product line located in places
vending hospital waiting room
store retailers are not

Direct mail and Limited product lines Tiffany & Co.’s Blue
catalogs advertised through the mail Book, L.L.Bean, Fingerhut

Television Limited product lines

Home Shopping Network, QVC
home shopping advertised on television

Can be wide or limited

product lines of products
Online retailing Amazon
offered for sale via the
Internet

Very limited product line

Telemarketing
sold via the telephone

Very limited product line

sold by salespeople who are Kirby Vacuums (B2C)
very knowledgeable about
Direct selling the product and sell directly Publishing companies (B2B)
to a business or end user;
used in B2C, but more often Technology companies (B2B)
in B2B

What is multi-channel retailing?

Multi-channel retailing is a business strategy that offers your customers different sales channels
to purchase from you. It is often mistaken for omni-channel retailing. The most common types
of sales channels typically include physical stores, online stores or ecommerce platforms like
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Shopify, third-party marketplaces such as Amazon, social media platforms such as Facebook
Marketplace and Pinterest, and mobile applications for shopping on the go.
Multi-channel retailing is a business strategy that offers your prospects various sales channels
to buy from you.

The most well-known sales channels commonly include brick & mortar stores, online stores or
online platforms like Shopify, eCommerce marketplaces like Amazon, social media channels
like Facebook, and mobile applications for shopping on the go.

How businesses can benefit from multi-channel retailing

Since multi-channel retailing is an improvement over the most common strategies, let’s
compare it with single-channel retailing to get a better grasp of its benefits.

Better revenue
Even after you invest a lot of money on advertising and marketing and establish brand
awareness, if your customers have only one way of buying from you, it won’t necessarily
increase your revenue. But by spreading your business across multiple platforms, you could
pop up more often into a prospective customer’s view and therefore receive more attention.
This will give them the time needed to browse through your store, compare prices, and do their
research which is necessary for them to buy from you eventually. Improved revenue is by far,
the most prominent advantage that multi-channel retailing displays.

More ways to buy from you

Like any other skeptical person, most customers would hesitate to buy from a business that
they stumbled across once. And if that one viewing is all they ever get, then the chance of them
remembering your business and looking for you is impossibly low. With just a single sales
channel, all your customers would be forced to buy from you using just that channel. And this
is okay for customers that have purchased from you earlier and trust your brand, but it doesn’t
necessarily attract new customers who are considering buying from your business. So with
multi-channel retailing, you can offer your customers multiple ways to buy from you, from
which they can select one based on their comfort and convenience. This will give you a
competitive advantage over single channel businesses. Simply put, more ways to buy from you
could mean more customers.

Collect valuable data on customer purchases

Multi-channel retailing allows you to collect a lot more data on customer purchases compared
to a single channel. By doing this, you can tell which sales channels your customers seem to
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

prefer and which ones they don’t, so that you know what specific parts of your
business to work on and how to promote your business. Additionally, with a single sales
channel, you wouldn’t be able to compare your sales with any other channel since you’re stuck
with the one you have. Comparing several channels gives you more perspective. If you don’t
have anything to compare to and you’re selling X volume of goods per month on one channel,
you might think that’s pretty good. If you start using several channels and see that you’re selling
10x volume of goods on another channel, you haven’t only learned that the other channel is
better—you’ve also learned that you can shoot for much higher than your original X
volume. Also, you don’t have to only compare different channels’ overall performance; you
can also compare how different products perform on different channels. Knowing which
product to promote on which channel is part of the valuable data you’re collecting, right?

What are the challenges of multi-channel retailing?

Although multi-channel retailing is a helpful strategy, there are a few factors that businesses
need to consider before implementing it:

Difficulty coordinating inventory across sales channels

By far, the biggest challenge when it comes to multi-channel retailing is the difficulty of
managing inventory across all the different sales channels. This is because each channel is
independent of the others—so a change in one channel will not be reflected in the others unless
they are manually updated. Suppose a multi-channel retailer has 3 different channels: a
physical store, an ecommerce platform, and a third-party marketplace like Amazon. They run
out of stock for a specific product and immediately mark it as out-of-stock in their ecommerce
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

platform, but forget to mark it in their third-party marketplace. Now if a customer places an
order for that product in their third-party marketplace, the retailer will either have to turn the
customer away or keep them waiting, both of which are embarrassing and not good for the
business.

Costly investment
Multi-channel retailing is expensive. On its own, it might not seem to cost that much, but when
added to other pricey business expenses like marketing ventures and advertisements, it could
sum up to be a large amount of money. It is especially costly if you plan on setting up a lot of
channels. This is because each channel will require you to incur another round of expenses,
like setup costs, customization, and hiring employees to manage it. Test the waters first and
start out small with just one or two extra sales channels. Once you have a proper strategy in
place, you can start adding more.

Retail marketing strategies

A retail marketing strategy is any activity you use to attract customers to your store. Retailers
rely on many types of marketing strategies across different channels to meet their goals.

A retail marketing strategy refers to retailers' specific plans and tactics to promote their
products or services and attract customers to their stores or online platforms. A retail marketing
strategy involves analyzing the target market, identifying customer needs, developing a brand
identity, determining pricing and promotion strategies, and creating a customer experience that
encourages repeat business.

The retail marketing strategy may involve a combination of various marketing channels, such
as advertising, social media, email marketing, and in-store promotions, as well as partnerships
with other businesses or organizations. A retail marketing strategy aims to increase brand
awareness, drive traffic to the store or website, and ultimately increase sales and revenue.
Effective retail marketing strategies must be continually monitored and adjusted based on
consumer trends and feedback.

Impact of Retail Marketing Strategy on Business:

Retail marketing strategy can have a significant impact on a business in a variety of ways,
including:

1. Increased sales: By effectively targeting the right audience with the right message,
a retail marketing strategy can drive more sales and revenue for the business.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

2. Improved brand recognition: Retail marketing strategies can help establish and
promote brand identity, increasing brand recognition and recall among consumers.

3. Competitive advantage: A well-executed retail marketing strategy can

differentiate a business from its competitors, making it stand out in the
marketplace and attracting new customers.

4. Enhanced customer experience: By understanding their target market and tailoring

their marketing efforts accordingly, retailers can create a more positive and
personalized customer experience, leading to increased customer loyalty.

5. Cost-effectiveness: By focusing marketing efforts on the right audience and

channels, retailers can optimize their marketing spend and maximize the return on
investment.

A successful retail marketing strategy can help businesses grow their customer base, increase
sales, and build a strong brand identity in a competitive marketplace.

Retail marketing strategy

1 - Create impressive storefronts

The growth of e-commerce stores has forced brick-and-mortar stores to increase their
experiential appeal. Customers have multiple options when it comes to buying products, and
for a retailer to stand out, it must offer a great experience. And although many businesses are
fond of overlooking this important aspect of their retail marketing, the only way to attract
passersby to your online or physical stores is to optimize the design of your storefronts.

For brick-and-mortar stores, you have to design your storefront for better visibility with custom
designs and adopt a minimalist approach to the storefront design that subtly attracts customers
instead of screaming at them.

Even for e-commerce storefronts, including your social media platforms and websites,
considerations like website loading speed, website navigation, blog posts and other valuable
content, mobile optimized user interfaces and SEO visibility can serve as a pull or push
mechanism to bring in customers or chase them away.

2 - Motivate your employees with better wages and compensation packages

Your employees are your retail business' brand ambassadors, and you need to give them
incentives in order to get the best results. When you compensate your employees properly, you
can create an exceptional impression on your customers with memorable experiences.

If you're able to hire and maintain customer-oriented, long-term and committed employees,
you're likely to increase your customer retention rate, reduce employee turnover and increase
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

profitability. Also, if you motivate your sales team with compensation packages, they are
incentivized to work harder to increase sales.

You can also encourage sharing of new marketing and customer relations management
activations with your staff because they might just have a better contextual understanding of
your customers and potential customers because of their one-on-one dealings with them.

3 - Provide adequate employee training

Substantive employee training can make the difference between you and your competitors. The
experts from EssayOnTime recommend arranging regular training sessions and conferences to
retain employees and keep up with industry trends. If you neglect to train your employees, your
company will be left behind in your niche.

A retail business that neglects the training of employees will eventually struggle to stay in
business. A good practice that will ensure you have great employees with good customer
relationship management, retail selling and upselling skills is to train them as soon as they're
hired and conduct recurring training annually or every six months to reorient them based on
new consumer trends.

4 - Understand the market

To increase sales, you need to do market research to get in-depth retail market data relating to
sales performance, store portfolios, and competitor analysis, as well as keeping track of rapidly
changing retail and consumer trends.

5 - Engage your customers

Give your customers a reason to love you. This does not involve ineffective, non-subtle
marketing techniques like situating a greeter at the storefront to greet incoming customers with
scripted lines like, "Hi, how are you doing?" The best way to make customers loyal is to be
helpful to them. Answer their questions as truthfully as possible. Relate from their perspective
and answer product questions from your own user experience or from real customer user
experiences.

When your customers are leaving, thank them for their purchase and invite them to return,
leaving a memorable experience with your customers. You should also solicit feedback from
customers, post questions and answers online, engage your customers in your market research,
and respond to customers' positive and negative reviews. Additionally, you can offer discounts
and coupons for returning customers among many other engagement techniques.

6 - Leverage social media capabilities

Almost all businesses, retail or not, have some form of social media presence. However, very
few of them have fully leveraged social media capabilities. You can invest in social media
advertising which makes it easy for you to get in front of people likely to buy your products
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

and convert them or send them into your sales funnel. With the importance of social media to
many people's lives, you can start targeting customers who are specifically interested in the
products and services you offer in your retail business, online or offline.

7 - Smart remarketing

You can increase your customer retention rates through remarketing. Shoppers are usually
distracted and can easily forget their positive shopper experience, whether at your online stores
or at your brick and mortar stores. You need to remind them of their positive experience by
engaging previous shoppers either with promotions and/or discounts based on past purchases
or current consumer trends.

8 - Tweak your pricing strategy

There are always changes in product demand due to seasonal or market changes, as well as
consumer trends and competitor actions. Thus, you need to stay on top of your pricing game to
keep your inventory moving. To do this, you must frequently change retail prices strategically
in a way that attracts customers while covering costs and bringing in reasonable profit.

Retail format

Suggests the type of retail mix (nature of merchandise and service offered, pricing policy,
advertising and promotion program, approach to store design and visual merchandising, typical
location.

Sustainable competitive advantage is an advantage over the competition that is not easily
copied and thus can be maintained over a long period of time.

TARGET MARKET AND RETAIL FORMAT

Retailing concept is a management orientation that focuses a retailer on determining the needs
of its target market and satisfying those needs more effectively and efficiently than its
competitors do.

Retail market is a group of consumers with similar needs (a market segment) that is serviced
by a group of retailers using a similar retail format to satisfy them.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Growth Strategies:

1. Market Penetration:
- Description: Increasing market share in existing markets with current products.
- Approach: Attracting new customers or encouraging existing ones to buy more frequently.

2. Market Development:
- Description: Introducing existing products to new markets.
- Approach: Entering new geographic areas or demographic segments.

3. Product Development:
- Description: Creating and introducing new products to existing markets.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Approach: Innovating and expanding the product line to meet changing customer needs.

4. Diversification:
- Description: Entering new markets with new products.
- Approach: Taking on new risks by exploring unfamiliar territories.

5. Horizontal Integration:
- Description: Acquiring or merging with competitors to strengthen market presence.
- Approach: Consolidating market power by combining forces with similar businesses.

6. Vertical Integration:
- Description: Controlling various stages of the supply chain.
- Approach: Integrating suppliers or distributors to improve efficiency and reduce costs.

7. Franchising:
- Description: Expanding by allowing others to operate under the established brand.
- Approach: Offering business opportunities to franchisees.

8. Strategic Alliances:
- Description: Collaborating with other businesses for mutual benefit.
- Approach: Forming partnerships to leverage strengths and resources.

9. E-commerce Expansion:
- Description: Growing through online channels.
- Approach: Investing in online platforms and improving the digital customer experience.

10. Global Expansion:

- Description: Extending operations to international markets.
- Approach: Adapting products and strategies for global audiences.

Pricing Strategy:

1. Cost-Plus Pricing:
- Description: Setting prices based on production costs and adding a markup.
- Objective: Ensuring costs are covered and generating profit.

2. Value-Based Pricing:
- Description: Pricing based on the perceived value to customers.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Objective: Aligning prices with the perceived benefits of the product or service.

3. Skimming Pricing:
- Description: Setting high initial prices and gradually lowering them.
- Objective: Maximizing profits from early adopters before attracting price-sensitive
customers.

4. Penetration Pricing:
- Description: Setting low initial prices to gain market share quickly.
- Objective: Attracting a large customer base and discouraging competitors.

5. Dynamic Pricing:
- Description: Adjusting prices in real-time based on market demand and conditions.
- Objective: Optimizing revenue by responding to fluctuations in the market.

6. Psychological Pricing:
- Description: Setting prices to influence customers' perception of value.
- Objective: Leveraging psychological factors like odd pricing (e.g., $9.99) to impact consumer
behavior.

7. Bundle Pricing:
- Description: Selling multiple products or services as a package at a lower price.
- Objective: Encouraging customers to purchase more by offering a perceived value.

8. Promotional Pricing:
- Description: Temporarily reducing prices for promotions or sales events.
- Objective: Stimulating short-term sales and attracting price-sensitive customers.

9. Competitive Pricing:
- Description: Setting prices based on competitors' prices.
- Objective: Maintaining price competitiveness within the industry.

10. Loss Leader Pricing:

- Description: Offering one product at a loss to encourage the sale of complementary
products.
- Objective: Attracting customers with a low-priced item and encouraging additional
purchases.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Effective growth and pricing strategies depend on a thorough understanding of the market,
competition, and customer preferences. Companies often employ a combination of these
strategies to achieve their business objectives and remain competitive in dynamic markets.

Consumer Behavior

• It comprises of two word "consumer" and behavior. Consumer refers to an individual,

group or organization who is engaged in various purchase activities and behavior
means the way an individual, ggroup or organization make purchase.

• It is the study of how individual consumers, groups or organization select, buy, use &
dispose ideas, goods and services to ssatisfy their needs and wants.

• It is the detailed analysis of the behaviour of consumers about the product, the reason
of purchasing the product, the place preferred for purchasing it etc.

• Consumer Behaviorr is the process whereby individuals decide what, when, how and
from where to purchase goods and services -Walters & Paul

Factors Affecting Consumer Behavior

Individual Determinants External Factors

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Consumer Decision Making Process

It’s important to note that the consumer decision making process has many different names,
including but not limited to the buyer journey, buying cycle, buyer funnel, and consumer
purchase decision process. But all the names essentially refer to the same thing: The journey
a customer goes through when making a purchase.

So, here’s a breakdown of what happens in each step:

1. Need recognition (awareness): The first and most important stage of the buying
process, because every sale begins when a customer becomes aware that they have a
need for a product or service.
2. Search for information (research): During this stage, customers want to find out their
options.
3. Evaluation of alternatives (consideration): This is the stage when a customer is
comparing options to make the best choice.
4. Purchasing decision (conversion): During this stage, buying behavior turns into action
– it’s time for the consumer to buy!
5. Post-purchase evaluation (re-purchase): After making a purchase, consumers consider
whether it was worth it, whether they will recommend the product/service/brand to
others, whether they would buy again, and what feedback they would give.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Now, to show you how these stages of the buying decision process play out in real life, here
are consumer buying process examples that outline each of the steps and ways for your
eCommerce brand to maximize results during each stage.

Organizational Buying Behavior:

Organizational buying behavior refers to how businesses purchase goods and services. It is
influenced by several factors, including the type of organization, size, the nature of the product
or service being purchased, and the organizational buyer's role. Organizational buying behavior
can be divided into three main types: routine buying, modified rebuying, and new buying.
Routine buying occurs when an organization purchases goods or services similar to those
previously purchased.

The basic features of organizational buying are listed as follows:

• The organizational market has few buyers who buy their required products in a
large quantity.
• Organizations maintain very close relationships with their suppliers and
customers.
• Organizations often adapt their products, services, and other elements of
the marketing mix to meet the requirement of buyers.
• Organizations buy goods and services by complying with the government and
organization’s laws, rules, and regulations.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• The organizational buying is mostly technical and based mostly on some logical
reasons.
• Organizational buying involves infrequent purchases i.e. organizations do not
tend to buy goods frequently as an individual buyer usually does.

Organizational consumers Behavior

Organizational buying behavior refers to how businesses purchase goods and services. It is
influenced by several factors, including the type of organization, size, the nature of the product
or service being purchased, and the organizational buyer's role.

It refers to the behavior of consumers when it comes to purchasing products or services from
organizations. But why does this matter? Organizations buy from other companies too, and
those transactions greatly affect the business world.

Organizational buying behavior can be divided into three main types: routine buying, modified
rebuying, and new buying. Routine buying occurs when an organization purchases goods or
services similar to those previously purchased.

How does Organization’s Buying Behavior work?

Organization buying behaviour involves how organizations buy goods or services from
suppliers. It is a complex process that requires careful consideration of cost, quality, and
convenience. Here are some key points to consider when understanding how organizational
buying behaviour works:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

1) Needs/Wants: Organizations must first identify their needs and wants to determine what
type of product or service they need to purchase. This includes evaluating the organization’s
budget, desired features, size of the purchase, time frame for purchasing decisions etc.

2) Research Suppliers: Once organizations have identified their needs and want, they can begin
researching potential suppliers capable of providing these products/services at an acceptable
price point. They may also consider any affiliations with certain brands or other companies and
supplier ratings on various platforms.

3) Select/Evaluate The Supplier: After conducting research, organizations should select one or
two potential suppliers best suited for their particular needs and requirements before formally
negotiating terms with them (e.g., pricing structure). Additionally, organizations can evaluate
each supplier based on factors such as delivery timescales, customer service capabilities, etc.,
to ensure it fits within the framework set by the organization’s specific objectives before
making a final choice about which supplier will be used for this project/purchase decision.

4) Negotiate Terms & Conditions: Once both parties agree upon terms and conditions related
to pricing structures and timeline expectations, then both parties can enter into a contract
formalizing agreement between them regarding said topics so that all involved understand
what is expected out of this transaction moving forward before ordering/delivering goods or
services being discussed hereinbefore mentioned above.

5) Final Decision: After considering these factors and reaching an agreement, the organization
can make their final purchase decision. They should ensure that they are obtaining value for
their money and that the supplier they have chosen is reliable and trustworthy. They should
also consider any potential risks associated with this supplier before committing.

Organization buying behaviour is a complex process, but understanding each step can help
organizations make informed decisions about which suppliers to use for their needs and wants.

Factors Affecting Organizational Buying Behavior

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Economic Factor

Economic factors play an essential role in the buying behaviour of organizations. When
purchasing decisions, organizations consider economic conditions such as inflation, taxes,
interest rates and consumer income levels. The economy’s stability profoundly affects how
much money businesses are willing to spend on goods or services. If a company operates in an
uncertain economic climate, it will likely be more conservative with its spending and opt for
cheaper products.

Economic factors have a major influence on organizational buying behaviour due to their direct
impact on profitability and cost savings opportunities. On the other hand, if a business is
flourishing in a healthy economy with low unemployment and rising wages, it may be inclined
to invest more money into higher-quality products to help it stay ahead of its competition.
Additionally, companies must factor in their budget before making any purchase decision
which limits what they’re able to purchase within their desired price range.

Technological Factor

Technology is playing an increasingly important role in influencing organizational buying

behaviour. Technological advances can create new opportunities for firms to reduce costs and
increase efficiency, leading to changes in purchasing decisions. For example, automated
solutions such as robotic process automation (RPA) or AI-driven decision-making are becoming
more popular among organizations because they allow them to free up their time and
resources while also optimizing their operations.

Technology can also influence the types of vendors that organizations choose and the products
and services they purchase.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Organizations may look for suppliers who have invested heavily in innovative technologies or
those with a proven track record of successful technology deployments. Additionally,
technological trends such as cloud computing or big data analysis are driving organizations
towards vendors that provide these capabilities so they can stay competitive in their industries.

Political and Legal Factors

Political and legal factors have a major influence on organizational buying behaviour.
Government policies, regulations and laws determine the terms of purchase for many
organizations, such as labour laws and environmental regulations. These factors can limit what
an organization can buy or receive in terms of goods/services as well as how much they can
spend on certain items. Additionally, taxes, subsidies, tariffs and other government incentives
affect the cost of acquiring products from suppliers, which impacts organizational buying
decisions.

Political unrest or changes in government leadership also have a huge effect when it comes to
decision-making regarding purchasing patterns, as do ethical considerations about sourcing
products from different countries or regions (e.g., boycotts). Ultimately, political and legal
forces shape an organization’s ability to purchase certain items within their budget constraints
and their moral obligation to make ethical choices while doing so.

Social Responsibility Factor

Organizational buying behaviour is heavily impacted by the social responsibility factor.

Companies are now more conscious of their impact on society, leading them to consider how
their decisions affect the bottom line, the people and environments in the local community,
and beyond. Corporate social responsibility initiatives such as donating a certain percentage of
profits to charities, reducing environmental footprints, or offering employees additional
benefits and support can influence purchasing decisions.

Consumers today expect companies they purchase from to be transparent in their actions,
making it important for organizations to act responsibly while still maintaining competitive
prices. Organizations that actively demonstrate socially responsible behaviours may gain an
edge over competitors who do not prioritize these values, ultimately resulting in increased
sales.

Organizational Factor

Organizational factors play an important role in influencing organizational buying behaviour.

These factors include organizational structure, size and resources such as budget, staff
availability and technology. The larger the organization is, the more complex its decision-
making process becomes due to the different stakeholders involved in making decisions.
Additionally, the higher the budget available for purchases determines how much a company
can spend on products or services being bought.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Furthermore, staff availability also directly impacts whether they have enough people to
undertake research and make informed decisions when it comes to spending money. Lastly,
technology makes it easier for companies to do research online, affecting their buying choices
and getting access to industry trends and new products quickly. These organisational factors
directly affect an organization’s buying behaviour, making them fundamental elements of
consideration by buyers before committing any expenditures.

Risk Attitude Factors

Risk Attitude Factors are an important determinant of organizational buying behaviour. They
refer to the degree of risk aversion or comfort with taking risks when making purchasing
decisions. This can influence how much research and consideration is given when choosing
suppliers and what type of alternative solutions may be sought. Purchasing managers may be
more likely to choose a well-known vendor if they have a low tolerance for taking risks, but
those with a greater risk appetite may consider less familiar vendors that offer better pricing
structures or other advantages.

Additionally, different departments within an organization may have varying levels of risk
attitudes, which could affect the overall decision-making process and outcome. Understanding
these factors can help organizations make informed decisions about their supplier selection
processes and ensure the best possible options are being considered for each situation.

Interpersonal Factors

Interpersonal factors are an important factor in organizational buying behaviour. Interpersonal

relationships and interactions between buyers, their peers and outside organizations can
significantly impact how purchases are made. In particular, the influence of key decision
makers such as senior management or influential people within the organization can play a
major role in influencing buying decisions.

Additionally, informal networks within an organization often help shape purchase decisions by
providing information and support that is unavailable through formal channels.

Interpersonal dynamics such as power differentials between parties involved in buying

processes also affect organizational purchasing behaviour; for example, suppliers may exert
more influence over buyers if they possess superior bargaining power due to market
dominance or industry expertise. Understanding interpersonal factors are, therefore, essential
for understanding organizational buyer behaviour.

Psychological Factors

Psychological factors heavily influence organizational buying behaviour. These factors can refer
to the emotional state of individuals in a company, which affects their decision-making abilities
and preferences when purchasing. Furthermore, individual attitudes towards various products
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

or services can also influence organizational buying decisions. For example, if employees have
strong positive feelings about a particular brand, they may be more likely to recommend it over
competitors’ offerings.

Conversely, negative emotions towards certain brands may lead people to not purchase from
them at all. Additionally, perceptions of quality and price are key psychological considerations
that need to be considered when evaluating potential purchases for a business venture.
Understanding these elements can help organizations make better-informed buying decisions
to satisfy their customers’ needs while optimizing costs for the company itself.

Post purchase behavior Service Retailing-Importance of service retailing and its Challenges.
Post-purchase behavior in service retailing refers to the activities and experiences that occur
after a customer has made a purchase. In the context of service retailing, which involves the
sale of intangible services rather than tangible products, post-purchase behavior is particularly
significant. Here are some key aspects:
1. Customer Satisfaction: The primary goal of post-purchase behavior is to ensure customer
satisfaction. This involves assessing whether the service met or exceeded customer
expectations. Satisfied customers are more likely to become repeat customers and may even
become advocates for the service.
2. Service Quality Evaluation: Customers often evaluate the quality of a service based on their
post-purchase experiences. Factors such as responsiveness, reliability, assurance, empathy,
and tangibles (physical appearance of facilities, equipment, personnel) contribute to the
perceived service quality.
3. Feedback and Reviews: Customers may provide feedback or write reviews about their
service experience. Positive reviews can enhance the reputation of the service provider, while
negative reviews can have a detrimental impact. Monitoring and responding to customer
feedback are crucial aspects of post-purchase management.
4. Relationship Building: Building long-term relationships with customers is a key objective in
service retailing. Post-purchase interactions, such as follow-up communications, loyalty
programs, and personalized services, contribute to fostering a positive and enduring
relationship.
5. Problem Resolution: In service industries, issues or complaints may arise after the purchase.
Effective problem resolution is vital for maintaining customer satisfaction. Quick and
satisfactory resolution of problems can turn a potentially negative experience into a positive
one.

Importance of Service Retailing:

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

1. Intangibility: Services are intangible, meaning they cannot be touched or seen before
purchase. This makes the service encounter itself a crucial part of the overall customer
experience.
2.Customer Experience: Service retailing places a strong emphasis on the overall customer
experience. The way services are delivered, the interactions with service personnel, and the
environment in which the service is provided all contribute to the customer's perception of the
service.
3. Customer Loyalty: Providing excellent service can lead to increased customer loyalty.
Satisfied customers are more likely to return for additional services and are more inclined to
recommend the service to others
4. Competitive Advantage: In many industries, especially those where differentiation is
challenging based on the physical product alone, service quality can be a significant source of
competitive advantage.

Challenges in Service Retailing

1. Intangibility and Inseparability: The intangible nature of services makes it challenging for
customers to evaluate them before purchase. Additionally, services are often produced and
consumed simultaneously, leading to inseparability, which can complicate the delivery process.
2. Quality Control: Ensuring consistent service quality can be challenging, especially when
service delivery depends on the actions of frontline employees. Training and monitoring are
essential to maintain high standards.
3. Customer Expectations: Managing customer expectations is crucial in service retailing.
Exceeding or failing to meet customer expectations can significantly impact satisfaction levels.
4. Employee Training and Engagement: Since service encounters often involve direct
interactions between employees and customers, the training and engagement of frontline staff
are critical. A motivated and well-trained workforce contributes to positive customer
experiences.
5. Service Recovery: When issues arise, effective service recovery is essential. Handling
complaints and resolving problems promptly and effectively is crucial to maintaining customer
satisfaction.
6. Technology Integration: Embracing and effectively integrating technology into service
delivery can be challenging for some businesses. However, technology can enhance efficiency,
personalization, and overall customer experience.

Understanding and addressing these challenges are essential for service retailers to thrive in a
competitive market and build lasting relationships with customers. Continuous improvement
and a customer-centric approach are key strategies in overcoming these challenges.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Consumer Behavior in Services zone of Tolerance

The "zone of tolerance" in the context of consumer behavior in services refers to the range of
acceptable service levels that customers are willing to tolerate. It reflects the acceptable
variability in service quality that customers consider reasonable. This concept is particularly
relevant in the service industry, where the quality of the service experience can be subjective
and influenced by various factors.

Here are key aspects related to the zone of tolerance in consumer behavior in services:
1. Perceived Service Quality:
- Customers form expectations about the service they anticipate receiving. These
expectations are based on past experiences, word-of-mouth, marketing communications, and
other factors.
- The zone of tolerance is the range between the minimum and maximum service levels that
customers find acceptable. It's the area where service quality meets or exceeds customer
expectations.

2. Components of the Zone of Tolerance:

- Zone of Adequacy: The lower end of the tolerance range represents the minimum service
level that customers find acceptable. Below this threshold, customers may perceive the service
as inadequate or unacceptable.
- Zone of Delight: The upper end of the tolerance range represents the maximum service
level that customers find acceptable. Beyond this point, customers may experience diminishing
returns, and the additional service quality may not significantly enhance satisfaction.

3. Factors Influencing the Zone of Tolerance:

- Type of Service: Different types of services may have varying levels of tolerance. For
example, customers may have higher expectations for personalized services compared to
standardized services.
- Industry Norms: Customers' perceptions of service quality are often influenced by industry
standards and norms. Deviations from these norms can impact the zone of tolerance.
- Individual Differences: Customers have unique preferences, experiences, and
expectations. The zone of tolerance can vary from one individual to another.

4. Service Failures and Recovery:

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- When service falls below the lower limit of the zone of tolerance, it is considered a service
failure. Effective service recovery measures are crucial to bringing the service back within the
acceptable range and preventing customer dissatisfaction.
- Service recovery efforts that exceed customer expectations can positively influence the
upper limit of the zone of tolerance.

5. Continuous Monitoring and Adjustment:

- The zone of tolerance is not fixed; it can change based on factors such as evolving customer
expectations, changes in competition, and industry trends.
- Service providers need to continuously monitor customer feedback, adapt to changing
expectations, and make adjustments to stay within the acceptable range.

Understanding the zone of tolerance helps service providers manage customer expectations,
deliver consistent service quality, and respond effectively to service failures. By staying within
the acceptable range, service providers can enhance customer satisfaction, loyalty, and
positive word-of-mouth.

SERVICE PERCEPTION AND EXPECTATION

An organization that understands customer expectations and is able to fulfill them to the best
of its ability is the one that succeeds in the competitive world of marketing. Fulfilling customer
expectations leads to satisfaction and exceeding expectations in terms of service delivery
results in delight. However, when a customer expects superior service and his experience is
otherwise, he feels dissatisfied. Dissatisfaction of customers may result in several adverse
effects such as spread of negative word of mouth. Hence, it is important for a firm to promise
only what they can deliver in order to abstain from having dissatisfied customers.

Expectations of service
People form expectations of the services they are about to avail based on their own prior
experience, familiarity past experiences of near and dear ones. Perceptions are affected by
expectations. Examples of expectations and perceptions:
• A student who has taken admission in a reputed University and has heard of the high-quality
education being offered by it shall probably perceive the institute in the same manner once he
there starts studying
• A girl who has been told how horrifying a horror movie is will probably perceive it the same
way when she watches it.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

•A boy who goes to a salon for a haircut shall probably like the services offered if the salon has
previously been praised by his friends.

Perceptions of Service
Perception, in general, is defined as a process through which people select organized stimuli
and interpret it such that it frames a meaningful picture. Perceptions vary from one person to
the other. For marketers, perception of customers is more important than reality since
customers make purchases on the basis of their perceptions.

For example, people perceive Dominos to deliver their pizzas in 30 minutes. This is because
they have positioned their product and services in that manner. Adhering to promises and
fulfilling them helps in building brand image.

Perceived Quality of Services

A service may deliver high quality in reality, however it is not necessary that the quality of
service offered is perceived as superior by the consumer. Perceived quality of the service shall
be dependent on various cues that may be classified as extrinsic or intrinsic cues. It is difficult
to gauge the quality of service being availed since it is intangible and perishable.

At times, there exists a gap between what the customer expects and what he receives. This is
best explained by the framework called Gaps Model. The larger the gap between expectations
and perceptions, more is the dissatisfaction. Hence, it is in a marketer's best interest that he
narrows the gap to the maximum extent possible to be able to fulfill the customer's
expectations.

The SERVQUAL scale is used for measuring the "gaps" that exist between the expectations of
the consumer and his perceptions of service availed. The measurement of these distances
between expectations and perceptions, called gaps, is done based on two major factors:
1. Outcomes
These depend on the reliability of services being delivered to the consumer. For example,
whether or not a flight you took helped you reach the desired destination.
2. Processes
These predominantly focus on how desired core services were delivered. This includes aspects
like assurance and empathy. For example, the behavior of flight attendants while dealing with
you in the flight.
Processes aid companies and service houses in not only meeting, but exceeding customer
expectations.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

For example, the core service of Amazon is to sell varied products and brands. However, what
helps it succeed in a competitive market is the superior "processes" that it follows, like timely
and reliable delivery of products. One can also track the ordered product while in transit. All of
this contributes immensely in increasing the brand loyalty of existing customers and also in
customer acquisition.

Service Strategy
A service strategy is a comprehensive plan that outlines how an organization intends to deliver,
manage, and improve its services to meet the needs and expectations of customers.
Developing a robust service strategy is crucial for organizations, particularly in service-oriented
industries, to create a competitive advantage, enhance customer satisfaction, and achieve
business objectives.
A service strategy is a key aspect of service management that focuses on developing and
implementing strategies to deliver effective and efficient services that align with an
organization’s overall business objectives. It involves identifying the services that an
organization should offer, determining the target market for these services, and developing a
plan to deliver them.

Importance of service strategy

It is very important in a highly competitive business environment that there is a service strategy
present in order to address customer needs and wants. Following are a few of the reasons
which elaborate on the importance of service strategy:

1. The cost of getting a new customer is much more than entering the retention of
the existing customers. The customer strategy for service strategy should be in
sync with the marketing strategy of the company.
2. It is a well-known fact that to get a new customer the cost would be 5 to 10 times
more than that of the cost of retaining a current customer. More often than not
customers are lost because of poor services and bad treatment which gives them
unsatisfactory. It is also estimated that an unhappy customer will talk about his
dissatisfaction to at least 8 to 16 other potential customers. Adding social media
and that the satisfied customer’s voice will reach 1600 more people which is
why customer retention is of crucial importance to the organization.
3. Looking on the other side of service strategy a customer who is satisfied or who
is loyal will cost not even a single penny but will add value to the business by
being word-of-mouth ambassador. This will save millions of bucks of the
company since it is free publicity from the customer to a potential customer. This
is the reason why every customer should be satisfied with the service strategy.
4. It is also stated that customer loyalty can have any impact on the business.
Making the customer is important creates all customers and those all customers
will continue to do business in spite of increasing competition. Higher customer
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

loyalty translates into higher customer retention and better competitive

advantage.
5. Companies should ensure that the service strategy is in sync with
the vision and mission of the organization. They should complement the strategy
of the organization. Companies to take time in order to develop and implement
an efficient service strategy which will be responsible for the retention of the
existing customers.

7 Steps to create an efficient service strategy

In most of the cases, the Service strategy depends on the nature of the business but here are
the following steps which can generally be used and implemented by most of the service
organizations.

1) Crafting a service vision, The primary step is to communicate the vision of the service to the
employees associated with the business. The employees associated with the organization
should understand and comprehend the organizational goals and the vision of the organization
and should be able to write their responsibility to help the company achieve that vision.

2) Contemplating the customer needs More often than not the companies fail and waste their
valuable resources in creating services of product that the company thought customers would
want only to know that the offering was not what the customers wanted at all.
The important part is to know what the customer needs and to put it in sync with the
organization’s vision and mission. Taking the feedback of customers is the first step in order to
know and determine what their expectations are so that the company can form a strategy
around the feedback obtained in order to deliver and meet the expectations of customers.
The market needs for customer needs can be assessed using a method such as satisfaction
surveys for focus groups and the customer feedback forms. Development of such feedback
forms and questionnaires is very important and should focus on the questions that need to be
answered by the customers.
It is also very important to keep in mind that the needs of customers keep on changing with
time and are like a moving target. Since it constantly keeps changing it is very important for
the companies to form a process which will continuously keep on updating them about the
changing needs of the customer so that the companies can prepare and modify themselves
and their offerings accordingly.

3) Right hiring When it comes to facing the customers, it is not the company who is going to
face them rather it is the employees who are going to face the customers. Employees are the
face of the organization and organization has to ensure that the face is represented correctly.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

The employees should have the right skill set which meets the goals of the organization and
helps to form a strong network and backbone to provide service to the customers. Having a
right attitude and personality is something which companies cannot develop in the employees
which is why they should take care of these things with hearing.
Most of the things can be incepted and developed in the employees but most of the other
things have to be built in. Interacting with customers and providing services is an art more than
science and not everyone can achieve it.

4) Goal setting for the service team Wednesday identification of customer needs and the
parameters for customer satisfaction is done then the organizations have to create goals for
the service team in order to achieve customer satisfaction. These goals should be measurable
and quantifiable so that the organization can grow the employees as well as along with the
growth of the business.
The employees should be able to understand the vision and mission and the target of the
organization so that they can align themselves to reach chief and exceed those objectives. An
example of customer satisfaction can be given as follows:
The service team of a refrigerator company provides after sales service. Once the customer
causes about the breakdown of the machine the time taken by the service team to reach the
place of the customer and correct the machine is measured.
The lesser the time to attend the customer breakdown calls the higher would be the customer
satisfaction. This can be a measurable parameter in order to appraise the employees.

5) Constant training and development Once the hiring is done in a proper and correct way the
employees will have some inborn cause it is which the organization will be able to utilize them
in order to serve the customers correctly. The other part of having a good service team is
providing them with constant training in order to upgrade their technical skills.
The training should focus not only on technical skills but also on interacting with customers.
Right service strategy requires suitable training to the service team so that not only the
customer but also your organization benefit from it.
The employees need to know about the goals of the organization so that they can modify
themselves to fit accordingly. The need to be trained not only on the technical skills but also
on other soft skills like answering the customer phone calls and customer complaints and
providing services.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

6) Accountability Organizations should ensure that the employees have a suitable

understanding of the importance of good customer service and how their actions affect the
organization’s performance overall. The organizations should also ensure that the employees
are held accountable in order to achieve the service goals.
This also forms the part of the performance management system and should be embedded in
the culture of the company.
For example, rewarding the employee with the highest customer satisfaction and working on
the employee with over customer satisfaction.
7) Awards and recognitions Positive reinforcement always works in every organization which
is why it is very important to recognize the performing employees who are responsible for
excellent customer service. This will help the other employees to perform well and live up to
the set goals or exceed them.
This also reinforces the vision and mission of the organization and the service strategy which
is chalked out for everyone. A successful organization is categorized by strong customer
service.

Service triangle
The "Service Triangle" is a concept in service marketing that represents the three key
participants involved in the delivery and consumption of services. This model emphasizes the
interdependence of the service provider, the customer, and the organization's system or
policies. The Service Triangle is also known as the "Service Profit Chain" or the "S-1-C-3" model,
representing the three Cs: Company, Customers, and Employees.
Here's an overview of each element in the Service Triangle:
1. Service Provider (Company):
- The company or service provider is at the top of the triangle. This includes the organization
delivering the service.
- The service provider is responsible for designing and implementing service processes,
establishing policies, training employees, and creating an overall service strategy.
2. Customer:
- The customer is on one corner of the triangle, representing the end-user or recipient of the
service.
- Customer satisfaction and loyalty are critical components of the Service Triangle. The
customer's expectations, perceptions, and feedback play a central role in the success of the
service.
3. Service Employees (or Systems):
- The other corner of the triangle represents the employees or systems within the
organization that deliver the service.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Service employees are the frontline personnel who directly interact with customers. They
are crucial in influencing the customer's perception of the service quality.

Key Relationships and Dynamics:

1. Company to Customer (C1):
- This relationship emphasizes how the company interacts with customers. It involves aspects
such as marketing communications, pricing strategies, and the design of service offerings.
2. Company to Employees (C2):
- This relationship focuses on how the company manages and supports its employees.
Employee training, empowerment, and motivation are critical in ensuring that frontline staff
can deliver high-quality service.
3. Employees to Customer (C3):
- This relationship highlights the interactions between service employees and customers. The
behavior, competence, and attitude of frontline staff directly impact the customer experience.
4. Customer to Company (C4):
- This relationship represents customer feedback, expectations, and loyalty. Understanding
customer needs and preferences is essential for the company to adapt its services accordingly.

Key Insights from the Service Triangle:

1. Interdependence:
- The Service Triangle emphasizes the interdependence of the three elements. Success in
service delivery requires a coordinated effort among the company, its employees, and the
customers.
2. Service Quality:
- Service quality is a result of the interactions and relationships within the triangle. It's
influenced by how well the company manages its employees, how employees interact with
customers, and how customers perceive and respond to the service.
3. Continuous Improvement:
- The model suggests that continuous improvement in service quality requires attention to
each relationship (C1, C2, C3, C4) and ongoing efforts to align the interests of the company,
employees, and customers.

Understanding and managing the dynamics within the Service Triangle can help organizations
enhance their service delivery, build strong customer relationships, and create a competitive
advantage in the marketplace.

MARKETING MIX
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• The process of marketing or distribution of goods requires particular attention of management

because production has no relevance unless products are sold. Marketing mix is the process of
designing and integrating various elements of marketing in such a way to ensure the achieve-
ment of enterprise objectives.

• The elements of marketing mix have been classified under four heads—product, price, place
and promotion. That is why marketing mix is said to be a combination of four p’s

• According to Philip Kotler, ‘marketing mix is the mixture of controllable marketing variable that
the firm uses to pursue the sought level of sales in the target market’

Elements of Marketing Mix

Product

The product is either a tangible good or an intangible service that is seem to meet a specific customer
need or demand. All products follow a logical product life cycle and it is vital for marketers to
understand and plan for the various stages and their unique challenges. It is key to understand those
problems that the product is attempting to solve. The benefits offered by the product and all its features
need to be understood and the unique selling proposition of the product need to be studied. In
addition, the potential buyers of the product need to be identified and understood.

Price

Price covers the actual amount the end user is expected to pay for a product. How a product is priced
will directly affect how it sells. This is linked to what the perceived value of the product is to the
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

customer rather than an objective costing of the product on offer. If a product is priced higher or lower
than its perceived value, then it will not sell. This is why it is imperative to understand how a customer
sees what you are selling. If there is a positive customer value, than a product may be successfully
priced higher than its objective monetary value. Conversely, if a product has little value in the eyes of
the consumer, then it may need to be underpriced to sell. Price may also be affected by distribution
plans, value chain costs and markups and how competitors price a rival product.

Promotion

The marketing communication strategies and techniques all fall under the promotion heading. These
may include advertising, sales promotions, special offers and public relations. Whatever the channel
used, it is necessary for it to be suitable for the product, the price and the end user it is being marketed
to. It is important to differentiate between marketing and promotion. Promotion is just the
communication aspect of the entire marketing function.

Place

Place or placement has to do with how the product will be provided to the customer. Distribution is a
key element of placement. The placement strategy will help assess what channel is the most suited to
a product. How a product is accessed by the end user also needs to compliment the rest of the product
strategy.

CHALLENGES
Over the years, marketing managers have felt that the traditional marketing mix has its limitations in
how it is structured. Several important elements have been grouped within four larger categories
thereby belittling their true importance amid several factors. Two main criticisms and their solutions:

Lack of Focus on Services

The conventional marketing mix tends to be applicable to tangible goods i.e. the traditional definition
of products. Services or intangible goods are also a vital customer offering and can be planned for in
much the same way as physical products. To cater to the unique challenges of services, the 4P model
has been supplemented with 3 additional categories which are:
 Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• Physical Evidence is proof and a reassurance that a service was performed

• People are the employees who deliver the service

• Processes are the methods through which a service is executed and delivered to the customer

MARKET SEGMENTATION

According to Stanton, "Market segmentation consists of taking the total, heterogeneous

market for a production dividing it. into several sub-markets or segments, each of which tends to be
homogeneous in all significant aspects."

According to Kotler, 'tile purpose of segmentation is to determine difference among buyers which may
be consequential in choosing among them or marketing to them.

Market segmentation is the process of dividing a target market into smaller, more defined
categories. It segments customers and audiences into groups that share similar characteristics such
as demographics, interests, needs, or location.

Market segmentation enables a business to conduct strong market research into customers. It also
enables in-depth market-based research. It reveals consumer experience insights, product
development innovation approaches, suggestions for boosting customer loyalty, and more.

FEATURES OR CHARACTERISTICS OF MARKET SEGMENTATION –

1. It consists of a group of customers who share a similar set of wants.

2. The marketer does not create the se gments, but identify the segments and decide which one to
target.
3. Market segmentation is the result of -modern marketing concept' and micro marketing.
4. Varied and complex buyer behavior is the root cause of market s egmentation.
5. It is a method for achieving maximum market response from limited marketing
resources by recognizing differe nces in the response characteristics of various parts of
the market.
6. It is being used as strategy of 'divide and conquer'.
7. It enables the marketers to give better alternatives to the selection of customers and offer
an appropriate marketing-mix.
8. To divide customers in homogeneous groups on the basis of their attributes and nature so
that suitable marketing programs may be prepared for each segment (group).
9. To find out customers' preferences, their interests and buying habits so that it may be decided
whether homogeneous marketing efforts would be suitable for all customers or not.

10. To find out areas where new customers may be made while making proper marketing efforts.
11. To find out purchase potential of different customer groups.
12. To make organization customer-oriented so that profit may be earned through customer
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

satisfaction.
13. Market segmentation provides a basis for improved performance through correct application
of selected marketing concepts and techniques.

FAVOURABLE CONDITIONS FOR EFFECTIVE MARKET SEGMENTATION

The use of the concept of market segmentation will be more useful in the following conditions:

1. The number of potential customers of the target market must be measurable.

2. The various required information and data about the target market must be accessible.
3. There must be consumers in sufficient number to provide profitable sales volume to the
company.
4. The prospective target segment must be accessible itself through the existing channels
of distribution of the company, the advertising media and sales-force to minimize
cost and unnecessary wastage of efforts

BASES FOR MARKET SEGMENTATION

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

SELECTION OF TARGET SEGMENT

In evaluating different market segments, the firm must look at two factors: the segment's overall
attractiveness, and the company's objectives and resources. In brief, the following points should
be kept in mind while evaluating and selecting a target market:

1. Size of the Segment.

2. Growth Potential.
3. Attractiveness.
4. Must be Measurable:
5. Accessible.
6. Resources.

Stanton has suggested the following four guidelines about how to determine which segment
should be the target markets:'

(1) The target market should be compatible with the organization’s goals and image.
(2) It should match with the market opportunity represented in the target market, with the company's
resources.
(3) An organization should seek markets that will generate sufficient sale, volume at a low enough
cost to result in a profit.
(4) A company ordinarily should seek a market where there are the least and smallest competitors.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

UNIT 2
Merchandise Management
Merchandise management is the process that every retailer uses to plan and control their retail
store's inventory. It is the process through which a retailer decides which items they should
keep in their store, how much of the item they should have available to meet customer
demand, where the products should be put on display in the store to boost sales, and how to
price these items to achieve maximum sales and profits.

Merchandising is the sequence of various activities performed by the retailer such as planning,
buying, and selling of products to the customers for their use. It is an integral part of handling
store operations and e-commerce of retailing.

Merchandising presents the products in retail environment to influence the customer’s buying
decision.

Merchandising is the process of promoting specific products to increase sales. A business can
experience an increase in consumer demand and sales if they stock preferred goods in a store
and arrange them according to their categories.

Here are key components and activities related to merchandise management:

1. Merchandise Planning:
- Assortment Planning: Determining the variety and range of products to offer, considering
factors such as customer preferences, trends, and seasonality.
- Forecasting: Estimating future demand for products based on historical data, market trends,
and other relevant factors.
2. Procurement:
- Sourcing: Identifying and establishing relationships with suppliers or manufacturers to
obtain the products needed for the store.
- Negotiation: Negotiating terms, including price, quantity, and delivery, with suppliers to
ensure favorable conditions for the retailer.
3. Inventory Management:
- Stock Levels: Monitoring and maintaining optimal inventory levels to prevent stockouts or
overstocks.
- Reordering: Implementing systems for automatic reordering of products to replenish
inventory based on predetermined levels.
4. Allocation and Distribution:
- Allocation: Distributing inventory to different stores or locations based on demand patterns
and sales data.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Distribution Center Management: Efficiently managing distribution centers to ensure timely

and accurate delivery of products to stores.
5. Visual Merchandising:
- Store Layout: Designing the layout of the retail space to enhance the customer shopping
experience and promote sales.
- Display: Creating visually appealing product displays to attract customer attention and
encourage purchases.
6. Pricing Strategy:
- Pricing Optimization: Determining the optimal prices for products based on factors such as
cost, competition, and perceived value.
- Promotions: Planning and executing promotions or discounts to drive sales and move
inventory.
7. Performance Analysis:
- Sales Analysis: Analyzing sales data to evaluate the performance of products, identify
trends, and make informed decisions.
- Inventory Turnover: Calculating the rate at which inventory is sold and replaced to assess
the efficiency of inventory management.
8. Technology Integration:
- Inventory Management Systems: Implementing software solutions to automate and
streamline inventory-related processes.
- Data Analytics: Leveraging data analytics tools to gain insights into customer behavior,
market trends, and inventory performance.
Effective merchandise management requires a balance between customer preferences,
market trends, and operational efficiency to ensure a profitable and satisfying shopping
experience. Retailers often use advanced technologies and data analytics to enhance their
merchandise management processes and stay competitive in the dynamic retail landscape.

Merchandising Philosophy
Merchandising philosophy refers to the overarching principles and beliefs that guide a retailer's
approach to selecting, displaying, and selling products. It reflects the retailer's values,
priorities, and strategies in the realm of merchandise management. Different retailers may
adopt various merchandising philosophies based on their target market, business goals, and
competitive landscape. Here are some common merchandising philosophies:
1. Customer-Centric Merchandising:
- Focus: Prioritizes understanding and meeting the needs and preferences of the target
customers.
- Key Practices: In-depth market research, customer feedback analysis, and tailoring product
assortments to cater to specific customer segments.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

2. Profit Maximization:
- Focus: Emphasizes maximizing profitability through effective pricing, cost control, and
inventory management.
- Key Practices: Implementing dynamic pricing strategies, negotiating favorable terms with
suppliers, and optimizing inventory turnover.

3. Trend-Driven Merchandising:
- Focus: Places a strong emphasis on staying current with fashion trends, industry
developments, and consumer preferences.
- Key Practices: Regularly updating product assortments, collaborating with trendy designers
or brands, and monitoring fashion cycles.
4. Value-Based Merchandising:
- Focus: Emphasizes offering customers good value for their money, often by providing
quality products at reasonable prices.
- Key Practices: Efficient sourcing to control costs, promoting value-oriented messaging, and
implementing transparent pricing strategies.
5. Brand-Centric Merchandising:
- Focus: Centers around building and promoting the retailer's brand identity through the
products it offers.
- Key Practices: Curating a distinctive product selection that aligns with the brand image,
implementing consistent branding across marketing materials and store displays.
6. Data-Driven Merchandising:
- Focus: Relies on data and analytics to make informed decisions regarding product selection,
pricing, and inventory management.
- Key Practices: Utilizing sophisticated analytics tools, employing predictive modeling for
demand forecasting, and leveraging customer data for personalization.
7. Sustainable Merchandising:
- Focus: Prioritizes environmental and social sustainability in product sourcing,
manufacturing, and distribution.
- Key Practices: Offering eco-friendly products, promoting fair trade practices, and adopting
sustainable packaging and supply chain practices.
8. Experiential Merchandising:
- Focus: Aims to create a unique and memorable shopping experience for customers, going
beyond the transactional aspect of buying products.
- Key Practices: Innovative store layouts, interactive displays, in-store events, and technology
integration to enhance the overall shopping experience.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Retailers may integrate elements from multiple philosophies based on their specific
circumstances and business objectives. The chosen merchandising philosophy plays a critical
role in shaping a retailer's brand identity and influencing its competitiveness in the market.

What is merchandise planning?

Merchandise planning is a systematic approach to planning, buying, and selling merchandise
based upon consumer demand. It means that if a customer wants to buy product X with color
Y and size Z from your shop, you have that available when they come knocking.
Merchandise planning process refers to selecting, managing, and displaying products in a
manner that they bring maximum turnover on a brand name. This is all done by meeting
consumer needs and desires.

The activity seeks to meet consumer demand by making the right merchandise available to
customers at the right time, place, price and quantity.

One of the biggest expenses retailers face is buying merchandise. All the costs of shipping,
transporting, delivering, and storing add to a significant amount. Make the wrong purchasing
decision, and you may end up doubling your merchandise purchasing costs for a month.
Therefore, merchandising planning is important to ensure that expenses do not mount up, and
a retailer is able to meet a customer’s needs the right way.

Understanding Merchandise Planning in the Retail Industry

The merchandise planning process is a critical one in the retail industry that involves effectively
managing the assortment, inventory, pricing, and allocation of products to maximise
profitability and meet customer demand. Retailers use the retail planning process, data-driven
analysis and forecasting to determine which products to stock, how much to order, and when
to offer discounts or promotions.

An effective merchandising planning process requires collaboration between different

departments, such as merchandising, finance, and supply chain management, to ensure that
the right products are available at the right time and in the right quantities. By optimising this
process, retailers can improve sales, reduce costs, and enhance the customer shopping
experience.

How to Develop a Merchandise Plan

The steps in merchandise planning typically involves:

1. Define Your Target Customer – Identify your target customers based on factors such as
age, gender, lifestyle, interests, and spending habits.
2. Seasonal Performance Review – Analyze the previous season’s sales data, customer
feedback, and inventory levels to identify successful and unsuccessful products. This
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

information is used to create a strategy for the upcoming season, which includes
deciding which products to keep and which to remove to determine its pricing,
promotions, and marketing strategies to maximize sales.

Ongoing Performance Optimization – Monitor your merchandise performance regularly and

make adjustments as necessary to ensure continued success.

Merchandise Control – The Open To Buy

Merchandise control is a critical aspect of retail management, and the Open to Buy (OTB)
system is an effective tool for managing inventory and purchasing. This allows retailers to set
budgets, track sales, and adjust purchasing plans based on real-time data. With OTB in retail
merchandise planning, retailers can ensure that they have the right products at the right time
to meet customer demand and maximize profits.

Merchandise Budget
A merchandise budget is a financial plan that outlines the expected costs and revenues
associated with a retailer's merchandise activities over a specific period. It serves as a critical
tool for managing resources, optimizing inventory investments, and ensuring that the overall
merchandising strategy aligns with the financial goals of the business.

A merchandise budget plan, as the very name implies, is a forecast of particular merchandise
related activities designed for a particular period of time, say, one year or six months. Under
this plan, rather than physical control of items, stress is given towards their financial planning.

Merchandise Budget Plans usually are made for one season and then broken down into shorter
periods like monthly & weekly plans.

In an effective merchandise Budget Plan, a retailer forecasts and plans about five fundamental
variables, namely, sales level, stock levels, purchases, reductions (markdowns) and gross
margin.

The primary objective of having a merchandise budget plan is that a retailer would like to have
a proper balance between:
(a) What will be paid to suppliers for purchase of merchandise and making it available to
customers; and
(b) The cash inflow that will come in the business from sales to customers.
Though in practice, there are several accounting practices that allow some flexibility (for
example extended credit terms or easy payment options), this balance is vital to maintain the
firm’s liquidity. For the effective accomplishment, the firm’s internal records, past years
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

experience must be carefully considered instead of relying on historical data alone that will
lead to repeating previous mistakes, including previous missed opportunities.

Components of Merchandise Budget Plan:

The various components of a merchandise budget plans are as follows:
(1) Planned Sales and Stock levels:
Planning sales and stock levels is the first step in preparation of a sales forecast for a particular
period (say one season) and for each month in that particular season for which a retailer wish
to prepare a budget plan. After this, retailer should determine the beginning of month (B.O.M.)
inventory in order to specify the desired rate of stock turn for each month of the season under
study.

For example, a retailer’s stock sales ratio for the month of February is six and predicted sales
during February is Rs.80,000 then the planned BOM stock would be Rs.4,80,000.

Note: For the purpose of making budgeting effective, it is always suggested to calculate End-
of-Month (E.O.M. stock), which is same as B.O.M. stock for the following month. Thus in this
case, retailer’s EOM stock for January will be same (Rs.4,80,000) to February’s BOM stock.

(2) Planning for Reductions:

Planning for reductions is the third step in a merchandising budget plan which involves deciding
about markdowns, employee discounts and shortages. Reducing prices is critical because the
degree of reduction will have exactly the same effect on the value of stock as an equal amount
of sales for that period. Markdown is used to push retail sales that offer particular merchandise
at a price less than the merchandise marked price (normal price).

Shortages result from pilferage (in retailing it is known as shop lifting), accounting frauds,
vendor theft and employee theft. Employee discount is also provided by some retail firms in
order to build public image and employees’ welfare by extra rebate and inviting them to buy
merchandise before offering to general public by the way of sales.

(3) Planning For Purchases:

After planning sales and stock levels, opening stock (BOM), closing stock (EOM) and reductions,
next step under merchandise budget plan is to plan for purchases in Rupees.

It is calculated as under:
urchase Planning = Planned Sales + Planned Reductions + EOM – BOM
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Suppose for example, the planned E.O.M. stock for February was Rs 5, 60,000 and that
reductions for February were estimated to be Rs 10,000.

Therefore, planned purchase will be calculated as under:

The planned purchases figure usually is based on retail prices rather than at cost. In order to
determine the financial resources required to procure merchandise, it becomes imperative on
the part of retailer that he should determine planned purchases at cost.

The underlying gap between planned purchases at cost and at retail denotes the initial mark
up goal for the merchandise under consideration. This objective is achieved by calculating by
the amount of operating expenses required to attain the estimated sales volume, the profit
expectations, and adding it with the reduction figure. Therefore,

Sometimes, term Open-to-Buy is used synonymously with planned purchases where forecasts
concur with actual results.

(4) Planning For Gross Margin and Operating Profit:

The gross margin usually is the initial mark up attuned for price variations, reductions,
shrinkage and other stock shortages. The gap between gross margin and expenses needed to
create sales will either contribute to profit or a net profit (i.e. profit before taxes), depending
on retailer’s accounting practice and the thinness of merchandise budgeting.

3. Evaluation of Merchandise Budget Plan:

Merchandise budget plan is used by retailers to determine how much money to allocate in
each month on a particular merchandise category, considering the firm’s sales forecast,
inventory turnover and profit margins.

After developing a merchandise budget plan, retailer purchases the inventory for the
upcoming season in advance and when season comes, retailer sells the merchandise. After the
selling season, the retailer should determine how actually the category has performed against
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

the plan forecasted. If the actual turnover and GMROI are greater than the forecasted, then
the performance is better than retail’s expectations and vice versa.

Evaluating the merchandise budget plan aims to balance the money outflows (for supplies) and
inflows (received from customers by selling merchandise) for the next financial year or
upcoming season. Is there any need to pre-order for some stock or the
budget provided was sufficient to meet customers’ demand, may be determined through
evaluation only.

What Is Inventory Control?

Inventory control, also called stock control, is the process of ensuring the right amount of
supply is available in an organization. With the appropriate internal and production controls,
the practice ensures the company can meet customer demand and delivers financial elasticity.

Inventory control, also called stock control, is the process of managing a company’s inventory
levels, whether that be in their own warehouse or spread over other locations. It comprises
management of items from the time you have them in stock to their final destination (ideally
to customers) or disposal (not ideal). An inventory control system also monitors their
movement, usage, and storage.
Inventory control means managing your inventory levels to ensure that you are keeping the
optimal amount of each product. Proper inventory control can keep track of your purchase
orders and keep a functional supply chain. Systems can be put in place to help with forecasting
and allow you to set reorder points, too.
Inventory control can include:

Inventory control, also called stock control, is the process of managing a company’s inventory
levels, whether that be in their own warehouse or spread over other locations. It comprises
management of items from the time you have them in stock to their final destination (ideally
to customers) or disposal (not ideal). An inventory control system also monitors their
movement, usage, and storage.
Inventory control means managing your inventory levels to ensure that you are keeping the
optimal amount of each product. Proper inventory control can keep track of your purchase
orders and keep a functional supply chain. Systems can be put in place to help with forecasting
and allow you to set reorder points, too.
Inventory control can include:
• Barcode scanner integration
• Complete inventory counts
• Keeping track of physical inventory with sales and purchase orders
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• Product details, locations, and histories

• Reports and adjustments

Inventory Control Types

The inventory control system is broadly classified as – periodic and perpetual. The periodic
inventory system involves regular manual counting of the stocks in the warehouse. There is no
software product or inventory scanning procedure to be followed here. The businesses do not
record the volume daily or frequently but have accounting periods decided beforehand to
track the same. The tracking can be done based on either First In, First Out (FIFO) or Last In,
First Out (LIFO) stocks.
The perpetual inventory system is the automated control system to keep track of the stocks.
Organizations require equipment and software to implement this system of controlling
inventory. They record the number of stocks coming in and going out efficiently through this
system with minimal or no chances of error as no process is manual. The recording or tracking
is facilitated using several technologies to ensure no mistake is committed while reflecting the
quantity and prices of the stocks being moved in and out.
Firms have a barcode system, which is applicable for periodic and perpetual inventory control
systems. A barcode is a picture with text or numbers unique for every item in the inventory.
Scanning the barcode helps the systems and devices read the details and transfer the same to
the centralized database. In short, the barcode feature updates the item information
automatically in the system.
Similarly, firms use Radio Frequency Identification (RFID) tags to track inventory smartly. Any
movement of the stocks transfers the information stored in the electronic form to the
database. This equipment can store more information than barcodes. The RFID tags are active
in batteries and other devices that the manufacturing business units may use.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Pricing Strategy Basics of Visual Merchandising

A retailer must price merchandise in a way that besides satisfying the customers, achieves

profitability for the firm. Pricing is a crucial exercise due to its direct relationship with a firm’s

goals and its interaction with other retailing matters. A pricing policy, if not appropriate, send

a store out of competition.

A pricing strategy must be consistent over a period of time and consider retailer’s overall

positioning, profits, sales and appropriate rate of return on investment. Lowest price does not

necessarily be the best price, but the lowest responsible price is the best right price. The

difference between price and cost is profit which can be very high when the sales person wants

to exploit an urgent situation.

The Consumer and Retail Pricing:

Retailers should understand the importance of pricing because it has direct relation with

consumer purchases and perceptions. During pricing decisions, retailers should also under the

price elasticity of customers to price changes in terms of the quantities bought.

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

If relatively small percentage change in price results in substantial percentage changes in the
number of articles purchased, price elasticity will be high. This is the situation where the
urgency to purchase is low or substitutes are well available. If large percentage changes in price
have small percentage changes in the number of articles purchased, demand is considered to
be inelastic.

This is the situation where purchase urgency is high and substitutes are not easily available.
The formula to compute price elasticity is given below. The price elasticity is calculated by
dividing the percentage change in the quality demanded by the percentage change in the price
charged. Because in retail market sales usually decline as prices go up, elasticity tends to be on
negative side.

Factors Affecting Retail Price Strategy:

Following factors have direct or indirect influence on retail pricing. Three are usually basic
pricing options before a retailer. Each has its own merits and demerits.

These are as follows:

Pricing Options:
(i) Predatory Pricing:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

It involves large retailers that normally seek to produce competition by selling merchandise at
very low prices and create the situation where it becomes difficult for small retailers to stay.

(ii) Prestige pricing:

It assumes that customers will not buy merchandise displayed if price fixed are too low. It is
based on the price-quality association.

(iii) Price lining:

A pricing practice where by retailers sell merchandise at a limited rate/limited range of price
points, where each point represents a different level of quality.

Pricing Objectives:
Pricing objectives are generally considered as part of the general business strategy and give
direction to the retail pricing process. While deciding on pricing objectives, a retailer must
understand that pricing strategy must reflect the retailer’s overall goals that can be stated in
terms of profit and sales.

Usually, while setting the price, the firm may aim at one or more of the following objectives:
(i) Achieving pre-determined return on investment (ROI)

(ii) Building company’s image, goodwill and brand’s name

(iii) Building sustainable competitive advantage

(iv) Creating curiosity and interest about goods and services

(v) Creating store traffic

(vi) Early recovery of cash

(vii) Having price leadership

(viii) Increasing company’ growth

(ix) Increasing market share

(x) Increasing rupee sales

(xi) Justifying social responsibility of business

(xii) Making the newcomers’ entry in the industry difficult

(xiii) Matching with competitors’ prices

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

(xiv) Maximizing long-term profit volume

(xv) Maximizing short-term profit volume

(xvi) Partial Cost Recovery

(xvii) Providing ample customer service

(xviii) Quality Leadership

(xix) Stabilization of prices and margin

(xx)Survival

(xxi) Avoiding government intervention of any kind

Types of Pricing:
(i) Horizontal pricing:
This practice involves agreements among manufacturers, wholesalers, retailers to set certain
prices. These agreements usually are illegal under Indian sales act.

(ii) Vertical Price Fixing:

A practice where manufacturers or wholesalers seek to control the retail prices of their
merchandise through some sort of agreements.

(iii) Price Discrimination:

A pricing practice where different prices are charged from different retailers for the same
merchandise and same quality.

(iv) Minimum Price Laws:

These laws prevent retailers from selling certain items for less than their cost plus a fixed
percentage to cover overhead.

(v) Unit Pricing:

The objective of such legislation is to let the customers compare the prices of product available
in many sizes. For instance, Food and Grocery stores must express both the total price of an
item and its price per unit of measure.

(vi) Item Price Removal:

A pricing practice whereby prices are marked only on shelves or signs and not on individual
item.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Retail Store site and design

Retail store layout, also referred to as store design or layout design, is a term used for the way
retailers set up product displays, fixtures, and merchandise in-store.
There’s no right or wrong way to lay out your store, but it’s important to focus on your target
market, your space, and the types of products you sell to come up with a retail store layout
that works for your business.
Store design is the architectural character or decorative style of a retail store that conveys to
the customer “what the store is all about.” Retail stores vary so much in kind, size, and
geographical location that it is difficult to generalize about design. The architecture of the
store’s exterior creates an initial impression. For example, if a retailer chooses to remodel an
older Victorian home, the customer will get a different impression from that of a store in the
mall.

General Requirements in Retail Store Design

1. Customer Focus
The focus of a retail store design should always be the customer. If the store design and layout
are appealing the customer will from an image that is also appealing. It is easy to get into the
technical aspects of store design and forget that the retailer’s reason for existence is the
customer. The design should be focused on forming and maintaining an image, while at the
same time making the layout as accessible as possible for shoppers. Research should
determine the needs, habits, and buying potential of the shoppers in the area and the need
for store service and overall general customer comfort. Management must then determine the
overall image that would best differentiate the store and attract the target market.

2. Store Image

A comprehensive plan would include a process for community obtaining customer feedback
regarding improvements and for continuously updating the design to reflect changing
customer needs wants. A store design serves two, often opposing, functions. First, and
foremost, the design serves the functional purposes of protecting, enclosing, and displaying
merchandise, while at the same time serving as a central location where customers can find
the merchandise that they seek during convenient times. The second purpose relates to the
symbolic needs of the customer. This includes the social aspects of shopping or owning a
particular good from a particular store. The symbolic aspects of the store are anything that
contributes to the overall store image. This may include environmental aspects, such as store
atmosphere, or physical aspects, such as brand name products. When customers enter a
store, they want the displays and departments to tell them what the store is all about. The
image the store is attempting to project should be immediately obvious to potential customers.
If the store wants price as the predominant image, departments emphasizing this aspect
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

should be placed near the entrance. Managers should give the best space to the departments
that say to the customer, “This is what I am”.

3. Holistic Approach
A retail store design should match the store’s character. This means that consideration should
be given to the type of store image the merchant hopes to project. It includes exterior design
and interior arrangements for selling and non-selling activities. In addition, the design should
match with that of other stores around it; it should also enhance the scalability of the
merchandise within the store and be in good taste. The store design should have a single theme
or image throughout. Attempts to create several images often greater competition. This is
because the retailer is no longer competing against stores within a single image category, but
instead with stores in several categories.

4. Technology and Planning

Store designs are becoming more complex as new formats evolve. For this and efficiency
reasons, it is becoming more common to rely on technology to assist in developing a store
layout design. Computer Aided Design (CAD) helps to plan stores that more space-efficient.
Planning can be done quickly and changes are easy to make. In the store itself, new
combinations of interactive and multimedia technologies will change the way retailers design
for direct customer contact and information assistance. For example, a self-service concept
store may be developed where kiosks replace sales associates, providing product information
and updates on availability of merchandise. Retailers will likewise be exploring creative
linkages between participation in electronic home shopping channels and in-store selling.
Through the use of interactive technologies, consumers will be able to view merchandise
choices at home, make product selections, and conclude the purchase transaction. They will
be able to choose whether to wait and receive their purchases through transportation carriers
or to proceed directly to the retailer’s store or depot where the merchandise will be ready for
pickup.

Why is retail store design so important?

Retail store design is important because it’s the first and most fundamental way you
interact with in-store customers. Here are some of the ways your retail store
design choices can impact your desired KPIs:

• Revenue: We’ve all been there: You headed into a store with just one item on
your list, and ended up leaving with a cart full of goods you didn’t know you
needed. Customers make about 4 out of 5 shopping decisions while they’re in
the store, so the choice of which goods you show shoppers, when, and how,
can make a huge difference on how much they spend.
• Customer retention: Put simply, good retail store design is one of the best
ways to make it easy and satisfying to shop in your store — and bad retail
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

store design is one of the best ways to turn off potential customers. How
satisfied customers feel with your store after shopping there plays a big role
in how likely they are to come back.
• Brand identity: Social media engagement, email outreach, and loyalty
programs can each make a strong impression on current and potential
customers, but there’s no stronger way to show off what makes your business
tick than by immersing customers in a carefully crafted retail experience.

5 tips for making good retail store design

Now that we’ve established what retail store design is and why it’s such an essential
component of retail planning, it’s time to lay out a solid foundation for your own. These
five tips will help you get started.

Find the best store layout for your business

While the individual implementation of retail store designs will vary based on the amount
of space and type of location you have, it’s a good idea to apply a consistent, overarching
philosophy to your spaces. But which should you pick? Racetrack? Grid? Free form? Each
has its own benefits and drawbacks, and our guide to store layout will help you find the
best approach to meet your goals.

Use the right tools

Once you have an overall plan for your retail store design in mind, it’s time to get into
the specifics — how will you use an existing space, or if you’re constructing an all-new
location, how will you make the most of the possibilities ahead? Fortunately, you don’t
have to do it all by hand. Store layout maker tools help automate many of the fiddly
details of laying out your vision, and many come with handy templates that will give you
a HeadStart toward creating the retail map.

Use color psychology

While it’s natural to start with the concrete form of a place, don’t let your choice of color
only come as an afterthought. Instead, think about how the effects that colors are known
to have on the psyche can be used to your business’ benefit; for example, red elements
command attention but shouldn’t be overused at the risk of causing strain, while yellow
is associated with feelings of self-esteem and creativity.

Don’t overlook window displays

Stores have been enticing customers by displaying products in their front windows for
centuries, but that doesn’t mean the practice is out of date. For businesses in areas with
strong foot traffic, a tempting window display can be an excellent means of attracting
passers-by. Even if your store is further from foot traffic and more of a destination of its
own, using window space and the initial decompression zone to inform customers of
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

current promotions and hot items gives you one last chance to shape their retail journey
before it begins.

Change up key elements frequently

Novelty is a powerful means of directing attention, but overhauling your entire store
interior every few months probably isn’t a practical solution. Instead, prioritize choices
early in the design process that will make it easy to implement high-impact visual changes
with a minimum of employee effort. Ensuring that customers still know how to get around
the store even as novel changes to the space help retain their interest is a worthwhile
balancing act.

Image Mix
In the context of retailing, "image mix" could refer to the combination or assortment of images
used for various purposes within the retail environment. These images are strategically chosen
to convey a specific brand identity, engage customers, and enhance the overall shopping
experience.

Image Mix
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Let’s now take a look at the components of the retail mix that are ultimately the pieces of the
retailer’s strategy.

1. Price
What is my pricing strategy? What is my markup strategy and how does that affect my overall
retail price? You must make sure you calculate your retail price based on the markup you
receive and not the costs involved. You also want to think about profitability and relate this
back to the goals of your area as well as your organization.
2. Promotion
What promotional tools will you use to influence the consumer’s purchase decision and,
overall, their intention to purchase? This is where you also want to make sure you include a
budget that shows where resources are allocated as well as a time table for the promotional
activities. Remember to include specific examples of your proposed promotional
activities. Some examples include online promotions, print advertising, and any television
advertising.
3. Place
What are the hours of operation for your store? How many employees do you need and when
do you need them? This is where you can also include a general description of the
responsibilities of each associate along with some type of detailed info on the organization’s
structure. This could also be dependent upon the area in which you are located as well as the
needs of the customer.
4. Product
What type of product do you intend to carry? What is the depth (how much you will carry of
an item) as well as the breadth (number of SKUs) you will carry in your assortment? What is
your anticipated turn as well as inventory levels? Later we will discuss in more detail the
importance of inventory turnover and how it contributes to profitability. This is where you
want to make sure you have adequate inventory levels to meet customer demand. Too much
product could lead to excessive markdowns which deteriorates profitability while too little
desired merchandise might lead to missed sales opportunities. Does your product meet your
customer’s needs?
5. Presentation
Will you have a free-standing location? Will you be located in the mall? How is the location
you have chosen a good fit for your target market? It is during this time you will also want to
provide a thorough trade analysis that shows the population in the area and how they are a
good fit for your business.
6. Personnel
How are you selling to your customers? What kind of internal marketing supports your sales
team? What are the graphics that set your store apart? What does the signage look like inside
and outside of your store? These are all key elements you want to consider.
For the final segment of this section let’s take a look at how we the retailer can take the one
element of the mix (product) and transform it into a customer experience as well as why this
is important.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Store Exterior and Interior

The design of a store's exterior and interior plays a crucial role in attracting customers, creating
a positive shopping experience, and reinforcing the brand image. Here are key considerations
for both the store exterior and interior:
Store Exterior:
1. Storefront Design:
- Branding: Clearly display the store name, logo, and any key branding elements on the
storefront to enhance brand visibility.
- Window Displays: Create visually appealing window displays to showcase featured products
and entice passersby.
2. Entrance Design:
- Inviting Entrance: Ensure that the entrance is welcoming and well-lit, with clear signage
indicating store hours and any ongoing promotions.
- Accessibility: Make the entrance accessible to all customers, including those with
disabilities.

3. Exterior Lighting:
- Illumination: Use appropriate lighting to highlight architectural features, signage, and
window displays, creating an inviting atmosphere during both day and night.

4. Landscaping:
- Greenery: Incorporate landscaping elements such as plants or flowers to add a touch of
greenery and enhance curb appeal.
- Cleanliness: Maintain the exterior cleanliness, including sidewalks and entry areas.

5. Signage:
- Clear Signage: Install clear and visible signage that is consistent with the brand identity.
Ensure that the store name and logo are easily readable from a distance.

6. Store Architecture:
- Design Aesthetics: Align the architectural design with the brand image, considering factors
such as modernity, tradition, or a unique theme that represents the store's identity.

7. Parking and Accessibility:

- Convenient Parking: If applicable, provide convenient parking spaces for customers,
ensuring easy access to the store.
- ADA Compliance: Ensure that the exterior design is in compliance with accessibility
standards.

Store Interior:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

1. Store Layout:
- Logical Flow: Create a logical and intuitive store layout that guides customers through
merchandise zones and encourages exploration.
- High-Traffic Areas: Position high-margin or promotional items in high-traffic areas to
maximize visibility.

2. Visual Merchandising:
- Planogram: Use a planogram to strategically arrange merchandise on shelves and displays
for visual appeal and easy navigation.
- Highlight Products: Showcase key products or promotions with well-designed displays.

3. Lighting:
- Ambiance: Utilize lighting to create a pleasant and well-lit atmosphere, with a focus on
highlighting key areas and products.
- Color Temperature: Consider the color temperature of lighting to influence the mood within
different sections of the store.

4. Fixtures and Displays:

- Modular Fixtures: Use modular fixtures that allow for flexibility in changing the store layout
based on seasonal changes or promotions.
- Display Height: Vary the height of displays to create visual interest and make the store more
engaging.

5. Checkout and Service Areas:

- Efficiency: Design efficient checkout and service areas with sufficient space for customer
transactions and employee interactions.
- Impulse Items: Include strategically placed displays for small, high-margin items near
checkout counters.

6. Technology Integration:
- Digital Signage: Incorporate digital signage for dynamic content, including promotions,
product information, and branding messages.
- Point-of-Sale Systems: Implement modern and efficient POS systems for smooth
transactions.

7. Branding Elements:
- Consistent Branding: Maintain a consistent brand identity through the use of colors, logos,
and other branding elements within the store.
- Incorporate Brand Story: Use interior design elements to tell the brand's story and connect
with customers on an emotional level.

8. Aesthetics and Ambiance:

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Interior Design Elements: Pay attention to interior design elements such as flooring, wall
treatments, and decor to create a cohesive and appealing aesthetic.
- Music and Scent: Consider incorporating background music and subtle scents to enhance
the overall ambiance.

9. Customer Comfort:
- Seating Areas: Include comfortable seating areas for customers to rest or try out products.
- Temperature Control: Ensure that the store maintains a comfortable temperature.

10. Safety and Security:

- Surveillance: Implement adequate security measures, including surveillance cameras, to
protect both merchandise and customers.
- Emergency Exits: Clearly mark emergency exits and ensure they are easily accessible.

11. Interactive Elements:

- Interactive Displays: Incorporate interactive displays or digital kiosks that engage customers
and provide additional product information.

By carefully planning and implementing a cohesive design for both the store exterior and
interior, retailers can create a memorable and enjoyable shopping experience that resonates
with customers and supports the overall success of the business.

Color blocking
Color blocking in retail involves the strategic use of solid blocks of contrasting or
complementary colors to create visually appealing and attention-grabbing displays, store
layouts, and overall merchandising strategies. This technique is often used to enhance the
visual impact of products, draw attention to specific areas of the store, and create a cohesive
and aesthetically pleasing environment.

Colour blocking is the use of colour to support merchandising of products. It is an effective

weapon that visual merchandisers can use to improve the way products are displayed.

Color Blocking is the merchandising methodology that uses color coordination to improve the
visual aesthetics of the product displays and encourage store walk-ins and sales. Though the
perceptions of color are subjective, some color effects have universal meaning. For example,
colors in red spectrum are known to evoke feelings of warmth, spicy and comfort whereas
colors on the blue spectrum are known as smoothening or calm colors.

Planograms help to design your color blocking strategies and get the right visual schematic
before implementation.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Left to Right Rule

Another important factor to consider is the eye-scanning pattern. As people prefer dark colors
during winter, placing products with darker shades on the left and lighter shades towards right
side has found to yield better results. As the natural eye-scanning pattern is from left to right,
the darker shades on the left act as the anchor to entice customers. During summer, the
reverse order has found to yield better sales
Top to bottom rule
Color blocking rule for top to bottom rule is placing light color products on the top and darker
shades towards the bottom. Unlike the left to right rule, top to bottom rule is usually followed
round the year.
Color Emotions
We live and shop in a customer experience economy where the very idea of physical store has
changed. Customers won’t necessarily buy from you just because you have a great product
and a big store. Customer are looking for emotion connections and personalized experience.
Colors have the power to set the tone for customer experience, grab customer’s attention and
inspire different emotions.
Apart from the universal meaning, certain colors can evoke different meanings based on your
store’s location, traditional values of that region and other factors. Choosing the right color
for your merchandising can enable your store to stand out from the crowd than blending into
it.
Use colors strategically and let your customers see what you want them to see and help them
to perceive your store and products the way you aim to be perceived.

What is a Signage?
Any visual representation which gives information to the customers about a store, any office,
building, street, park and so on is called a signage.
Signage helps the customers to easily reach their desired destination or locate a building by
simply following the instructions displayed on it.

Importance of Signage:
1. Communication:
- Information: Signage communicates essential information to customers, such as product
details, prices, promotions, and directions within the store.
- Branding: It reinforces brand identity and helps customers recognize and connect with the
store.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

2. Navigation:
- Wayfinding: Signage assists customers in navigating the store, directing them to different
sections, aisles, and key areas.
- Aisle Markers: Clearly visible aisle markers with appropriate signage help customers locate
products efficiently.
3. Promotion:
- Sales and Promotions: Signage promotes sales, discounts, and special offers, encouraging
customers to take advantage of deals.
- Product Highlights: Feature signage draws attention to specific products or collections.
4. Safety and Compliance:
- Safety Information: Signage communicates safety instructions and information, such as
emergency exits, no-entry zones, and COVID-19 safety measures.
- Compliance: It ensures that the store complies with regulations and standards, including
ADA (Americans with Disabilities Act) requirements.
5. Enhancing Customer Experience:
- Interactive Displays: Digital signage or interactive displays engage customers, providing an
immersive and informative shopping experience.
- Inspirational Content: Inspirational or lifestyle signage enhances the overall atmosphere
and experience in the store.

Types of Signage Material:

1. Paper:
- Printed Posters: Traditional printed posters are cost-effective and versatile for various
promotional messages.
- Banners: Durable paper banners can be used for temporary or seasonal promotions.
2. Vinyl:
- Vinyl Banners: Durable and weather-resistant, vinyl banners are suitable for both indoor
and outdoor use.
- Vinyl Decals: Adhesive vinyl decals can be applied to windows, walls, or floor surfaces for
branding and promotions.

3. Acrylic:
- Acrylic Signs: Clear or colored acrylic signs provide a sleek and modern look, often used for
directional or informational purposes.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Backlit Signs: Illuminated acrylic signs enhance visibility, especially in low-light conditions.
4. Metal:
- Aluminum Signs: Lightweight and durable, aluminum signs are suitable for both indoor and
outdoor use.
- Brushed Metal Signs: Create a premium look with brushed metal signs for high-end
branding.
5. Wood:
- Wooden Signs: Wooden signage adds a rustic or natural element, suitable for certain
branding styles.
- Chalkboards: Use chalkboard signs for customizable and trendy messaging.
6. Fabric:
- Fabric Banners: Lightweight and versatile, fabric banners can be used for decorative
purposes or temporary promotions.
- Fabric Flags: Ideal for outdoor events and promotions, fabric flags are eye-catching and
easily customizable.
7. Digital:
- LED Screens: Digital signage with LED screens allows for dynamic content and real-time
updates.
- Interactive Displays: Touchscreen displays provide an interactive experience, enabling
customers to engage with content.

Considerations for Effective Signage:

1. Visibility:
- Ensure that signage is easily visible from various angles and distances within the store.
- Use appropriate font sizes and contrasting colors for readability.
2. Consistency:
- Maintain a consistent design and color scheme across all signage for a cohesive look.
- Align signage with the overall brand identity.
3. Placement:
- Position signage strategically to guide customers through the store flow and draw attention
to key areas.
- Consider eye-level placement for critical information.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

4. Durability:
- Choose signage materials that are durable and suitable for the intended use, especially for
outdoor or high-traffic areas.
- Regularly check and replace worn or damaged signage.
5. Compliance:
- Ensure that signage complies with local regulations and accessibility standards.
- Provide clear and accurate information to avoid confusion.
6. Innovation:
- Explore innovative signage options, such as digital displays or interactive elements, to
enhance the customer experience.
- Stay updated with emerging trends in retail signage.

Understanding Material Planograms:

A material planogram is a visual representation or diagram that outlines the placement and
arrangement of different materials and fixtures within a retail space. It provides a detailed plan
for organizing products and promotional materials on shelves, displays, and other fixtures.
Here are key elements of understanding material planograms:
1. Layout and Placement:
- A material planogram details the layout of the retail space, specifying where different
materials, products, and displays should be placed.
- It includes information on shelf heights, spacing, and the arrangement of fixtures.
2. Product Placement:
- Specifies the placement of products on shelves or displays, ensuring an organized and
visually appealing presentation.
- Takes into account factors such as product categories, sizes, and promotional priorities.
3. Visual Merchandising:
- Incorporates principles of visual merchandising to create an attractive and enticing display
for customers.
- Considers color coordination, product grouping, and the overall aesthetic of the display.
4. Seasonal and Promotional Changes:
- Allows for flexibility to accommodate seasonal changes, promotions, and new product
launches.
- Provides a framework for updating displays to reflect current marketing initiatives.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

5. Inventory Management:
- Supports efficient inventory management by optimizing product placement and ensuring
proper stock levels.
- Facilitates easy restocking and reduces the risk of overstocking or understocking.
6. Customer Flow:
- Considers the flow of customer traffic within the store, guiding customers through a visually
engaging journey.
- Encourages exploration and discovery of different product categories.
7. Planogram Software:
- Utilizes planogram software for creating and visualizing the planogram.
- Allows for easy adjustments, updates, and collaboration among merchandising teams.
8. Communication Tool:
- Serves as a communication tool for the merchandising team, ensuring that everyone follows
a consistent layout and presentation strategy.
- Provides clear instructions for store staff responsible for implementing the planogram.
9. Performance Tracking:
- Supports performance tracking by providing a baseline for measuring the effectiveness of
different product placements and visual merchandising strategies.
- Allows for data-driven adjustments based on customer response and sales data.
10. Compliance and Standards:
- Ensures compliance with brand standards and guidelines in terms of product presentation
and store aesthetics.
- Incorporates merchandising best practices to enhance the overall customer experience.
In summary, both effective signage and material planograms are essential elements in retail
merchandising. Signage communicates information, enhances the shopping experience, and
reinforces brand identity, while material planograms guide the organization and presentation
of products within the retail space. Together, they contribute to a well-organized.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

UNIT 3
E-Retailing: Introduction
E-retailing, short for electronic retailing, refers to the practice of selling goods and services to
consumers over the internet. Also known as online retailing or e-commerce, e-retailing
leverages digital platforms and technology to facilitate transactions between businesses and
consumers. This form of retailing has gained tremendous popularity with the widespread
adoption of the internet and the increasing preference for online shopping. Here's an
introduction to key aspects of e-retailing:

Key Components of E-Retailing:

1. Online Platforms:
- E-retailing primarily takes place on dedicated online platforms, such as websites and mobile
applications. These platforms serve as virtual storefronts where customers can browse
products, make purchases, and interact with the brand.

2. Digital Payment Systems:

- E-retailing relies on digital payment systems to facilitate secure online transactions.
Common payment methods include credit cards, debit cards, digital wallets, and other
electronic payment options.

3. Electronic Catalogs:
- Product information is presented through electronic catalogs on e-retail platforms.
Customers can view detailed product descriptions, images, specifications, and pricing
information before making a purchase.

4. E-Commerce Websites:
- Retailers often establish dedicated e-commerce websites that showcase their product
offerings and provide a seamless shopping experience. These websites are designed for user-
friendly navigation and efficient online transactions.

5. Mobile Apps:
- Many e-retailers offer mobile applications that allow users to shop conveniently from their
smartphones or tablets. Mobile apps enhance accessibility and provide a personalized
shopping experience.

6. Digital Marketing:
- E-retailers use digital marketing strategies to drive online traffic, increase brand visibility,
and attract potential customers. This includes tactics such as search engine optimization (SEO),
social media marketing, email campaigns, and online advertising.

7. Order Fulfillment:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Efficient order fulfillment processes are crucial in e-retailing. This involves inventory
management, order processing, packaging, and shipping to ensure timely delivery of products
to customers.

8. Customer Relationship Management (CRM):

- CRM systems are employed to manage and nurture customer relationships. E-retailers use
customer data to personalize interactions, offer targeted promotions, and enhance overall
customer satisfaction.

9. Security Measures:
- E-retailers implement robust security measures to protect customer information and
ensure secure online transactions. This includes encryption technologies, secure payment
gateways, and adherence to data protection regulations.

10. Reviews and Ratings:

- Customer reviews and ratings play a significant role in e-retailing. They provide valuable
feedback for both retailers and potential customers, influencing purchasing decisions and
building trust in the online shopping experience.

Advantages of E-Retailing:

1. Global Reach:
- E-retailing allows businesses to reach a global audience without the constraints of physical
locations, expanding market reach and potential customer base.

2. Convenience:
- Customers can shop anytime, anywhere, providing unparalleled convenience. E-retailing
eliminates the need for physical travel and allows for 24/7 accessibility.

3. Personalization:
- E-retail platforms can leverage customer data to personalize the shopping experience,
offering tailored product recommendations, promotions, and content.

4. Cost Savings:
- For businesses, e-retailing can reduce overhead costs associated with maintaining physical
stores. For consumers, it may result in cost savings due to online discounts and promotions.

5. Efficiency and Accessibility:

- Online platforms provide efficient and accessible ways for customers to find, compare, and
purchase products. Search functions, filters, and intuitive navigation enhance the overall
shopping experience.

6. Data Analytics:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- E-retailers can leverage data analytics to gain insights into customer behavior, preferences,
and trends, enabling informed decision-making and targeted marketing strategies.

7. Flexibility:
- E-retailing offers flexibility for both businesses and consumers. Businesses can adapt quickly
to changing market conditions, and consumers have the flexibility to browse and shop at their
own pace.

8. Diverse Product Offerings:

- E-retailing provides access to a diverse range of products from various sellers, often beyond
what is available in local physical stores.

Challenges and Considerations:

1. Cybersecurity Risks:
- E-retailing faces cybersecurity challenges, including the risk of data breaches, phishing
attacks, and online fraud. Robust security measures are essential to protect customer
information.

2. Logistics and Shipping:

- Efficient logistics and shipping operations are critical to ensuring timely delivery and
customer satisfaction. Challenges include managing inventory, coordinating shipments, and
addressing returns.

3. Competition:
- The online retail landscape is highly competitive, requiring e-retailers to differentiate
themselves through innovative strategies, customer service, and unique offerings.

4. Customer Trust:
- Building and maintaining customer trust is crucial in e-retailing. This involves transparent
business practices, reliable product information, and responsive customer support.

5. Technological Advancements:
- E-retailers need to stay abreast of technological advancements to remain competitive. This
includes adopting new technologies, optimizing websites for mobile devices, and embracing
innovations like augmented reality for virtual try-ons.

6. Regulatory Compliance:
- E-retailers must comply with relevant regulations and standards, including consumer
protection laws, data privacy regulations, and e-commerce taxation policies.

7. User Experience:
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Providing a seamless and positive user experience is essential in e-retailing. This includes
easy navigation, quick load times, and responsive customer support.

8. Returns and Refunds:

- Managing returns and refunds poses logistical and operational challenges. E-retailers need
effective processes for handling returns and ensuring customer satisfaction.

What is e-commerce?
E-commerce (electronic commerce) is the buying and selling of goods and services, or the
transmitting of funds or data, over an electronic network, primarily the internet. These
business transactions occur either as business-to-business (B2B), business-to-consumer (B2C),
consumer-to-consumer or consumer-to-business.

The terms e-commerce and e-business are often used interchangeably. The term e-tail is also
sometimes used in reference to the transactional processes that make up online retail
shopping.

Ecommerce is one way people buy and sell things in retail. Some companies sell products
online only, while other sellers use ecommerce as a part of a broader strategy that includes
physical stores and other distribution channels. Either way, ecommerce allows startups, small
businesses, and large companies to sell products at scale and reach customers across the
world.

Advantages of E-Commerce
• E-commerce provides the sellers with a global reach. They remove the barrier of
place (geography). Now sellers and buyers can meet in the virtual world, without
the hindrance of location.

• Electronic commerce will substantially lower the transaction cost. It eliminates

many fixed costs of maintaining brick and mortar shops. This allows the companies
to enjoy a much higher margin of profit.

• It provides quick delivery of goods with very little effort on part of the
customer. Customer complaints are also addressed quickly. It also saves time,
energy and effort for both the consumers and the company.

• One other great advantage is the convenience it offers. A customer can shop 24×7.
The website is functional at all times, it does not have working hours like a shop.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• Electronic commerce also allows the customer and the business to be in touch
directly, without any intermediaries. This allows for quick communication and
transactions. It also gives a valuable personal touch.

Disadvantages of E-Commerce
• The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, the constant
maintenance and upkeep are all quite expensive.

• Although it may seem like a sure thing, the e-commerce industry has a high risk of
failure. Many companies riding the dot-com wave of the 2000s have failed
miserably. The high risk of failure remains even today.

• At times, e-commerce can feel impersonal. So it lacks the warmth of an

interpersonal relationship which is important for many brands and products. This
lack of a personal touch can be a disadvantage for many types of services and
products like interior designing or the jewelry business.

• Security is another area of concern. Only recently, we have witnessed many security
breaches where the information of the customers was stolen. Credit card theft,
identity theft etc. remain big concerns with the customers.

• Then there are also fulfillment problems. Even after the order is placed there can
be problems with shipping, delivery, mix-ups etc. This leaves the customers
unhappy and dissatisfied.
E-Business:
Definition:
- E-business, or electronic business, encompasses a broader range of online activities beyond
buying and selling. It involves the use of electronic technologies to conduct business processes,
including communication, collaboration, and transactions.

Components of E-Business:
- E-Commerce: The buying and selling of goods and services online.
- E-Banking: Online banking services, including transactions, account management, and
digital payments.
- E-Procurement: Online purchasing of goods and services for business needs.
- E-Collaboration: Digital tools and platforms for collaboration and communication within and
between businesses.
- E-CRM (Customer Relationship Management): Managing customer relationships through
electronic means, often involving data analytics and personalized communication.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Benefits of E-Business:
- Global Reach: E-business enables organizations to reach a global audience without
geographical constraints.
- Cost Efficiency: Streamlined processes and reduced operational costs through automation
and digital tools.
- Improved Customer Interaction: Enhanced customer interactions through online platforms,
social media, and personalized communication.
- Efficient Supply Chain Management: Better coordination and efficiency in supply chain
processes.

Challenges of E-Business:
- Security Concerns: E-business faces cybersecurity threats, including data breaches and
online fraud.
- Technology Dependence: Reliance on technology exposes businesses to challenges related
to system failures and technical issues.
- Resistance to Change: Internal resistance to adopting digital processes and cultural shifts
within organizations.
- Regulatory Compliance: Adherence to evolving regulations and compliance standards.

E-Marketing (Electronic Marketing):

Definition:
- E-marketing, or electronic marketing, refers to the use of digital channels and technologies
to promote products or services. It includes various online marketing strategies aimed at
reaching and engaging target audiences.

Components of E-Marketing:
- Social Media Marketing: Promotion of products or services on social media platforms.
- Content Marketing: Creation and distribution of valuable content to attract and retain
customers.
- Email Marketing: Sending targeted messages and promotions to a specific audience via
email.
- Search Engine Optimization (SEO): Optimizing online content to improve visibility in search
engine results.
- Pay-Per-Click (PPC) Advertising: Online advertising where advertisers pay a fee each time
their ad is clicked.
- Affiliate Marketing: Collaborating with affiliates to promote products or services and
earning a commission for each sale.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Evolution of E-Marketing:
- Early Internet Marketing (1990s): Basic online advertising through banner ads and email
marketing.
- Search Engine Optimization (2000s): The rise of search engines led to a focus on optimizing
content for better search visibility.
- Social Media Marketing (2010s): The emergence of social media platforms transformed
marketing strategies, allowing businesses to engage with audiences directly.
- Mobile Marketing and Apps (2010s): The increasing use of smartphones led to a shift
towards mobile-friendly content and app-based marketing.
- Personalization and Data Analytics (Present): Advanced data analytics and AI-driven
personalization enable targeted and personalized marketing efforts.

Benefits of E-Marketing:
- Global Reach: E-marketing enables businesses to reach a wide and diverse audience
globally.
- Cost-Effectiveness: Digital marketing often proves more cost-effective than traditional
advertising methods.
- Real-Time Analytics: Marketers can access real-time data and analytics to measure the
effectiveness of campaigns.
- Targeted Advertising: Precise targeting allows businesses to reach specific demographics
and customer segments.

Challenges of E-Marketing:
- Information Overload: The abundance of online content can lead to information overload,
making it challenging for businesses to stand out.
- Privacy Concerns: Increased scrutiny over data privacy raises concerns about how
businesses collect and use customer data.
- Rapid Technological Changes: Keeping up with rapidly evolving technologies and platforms
requires constant adaptation.
- Competition: Intense competition in the online space necessitates innovative strategies to
differentiate brands.

Evolution of E-Commerce:
1. Early Development (1970s-1980s):
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- The groundwork for e-commerce was laid with the development of electronic data
interchange (EDI) systems for B2B transactions.
2. Emergence of Online Retail (1990s):
- The 1990s saw the rise of online retail giants like Amazon and eBay, paving the way for B2C
e-commerce.
3. Dot-Com Boom (Late 1990s):
- The dot-com boom witnessed a surge in the number of e-commerce startups, with high
expectations for online marketplaces.
4. Dot-Com Bust (Early 2000s):
- The dot-com bust led to the decline of many e-commerce startups, but established players
like Amazon survived and continued to grow.
5. Mobile Commerce (2010s):
- The proliferation of smartphones led to the growth of mobile commerce, allowing
consumers to shop on mobile devices.
6. Omnichannel Retailing (Present):
- E-commerce has evolved into omnichannel retailing, where businesses integrate online and
offline channels for a seamless customer experience.
7. Technological Advancements (Present):
- The integration of technologies like artificial intelligence, augmented reality and virtual
reality is reshaping the e-commerce landscape.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

What is an Infrastructure?
Infrastructures are systems needed by a business to operate smoothly. It is a key component
of any business, as it ensures growth and sustainability.
This could be software such as operating systems, applications, and security tools, as well as
hardware, such as servers, routers, etc.
It also includes the people, procedures, and guidelines that support the infrastructure.

What are Ecommerce Infrastructures?

Ecommerce infrastructures are hardware and software components required to operate and
maintain an online store.
They are the foundation upon which ecommerce businesses are built, empowering businesses
to sell their products and services over the internet.
They include the hardware, software, and services needed to manage online transactions and
process orders.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Components of an Ecommerce Infrastructure

Below are some infrastructures all ecommerce businesses should have:

Web Servers
A web server is a hardware or software that stores data and communicates it to users through
HTTP (Hyper Text Transfer Protocol) request. It is in charge of hosting websites, handling visitor
requests, and supplying web page content.

Web servers use scripting languages like PHP, ASP, and JavaScript to generate dynamic web
pages.

A web server in ecommerce is a computer that stores and serves web pages to users over the
internet. They allow customers to access product information, view prices, and purchase
goods.

Database Servers
A database server is a computer system that stores, manages, and retrieves data from a
database. It is the backbone of an ecommerce system, as it hosts the databases used for online
transactions and stores customer information.

It is also in charge of effectively managing the data's organization and security. Database
servers also provide expansion, ensuring websites can handle large amounts of data.

Payment Processing System

A payment processing system is a system used to process financial transactions in an
ecommerce system. It lets merchants receive payments from customers, securely process the
payments, and transfer the funds to the merchant’s bank account.

This system is also part of the ecommerce functionality responsible for confirming clients’
identities and providing a secure platform for consumers to make their purchases.

This handles payments from different sources, such as debit and credit cards, PayPal, Apple
Pay, and Google Pay.

Content Delivery Network (CDN)

A content delivery network (CDN) is a network of servers spread out across different locations.
It provides online content to users based on their geographic location.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

CDNs are used to improve website performance and deliver a better user experience. In
ecommerce, CDNs are used to provide online content such as product photos, videos, and
other information to customers faster.

Security and Fraud Prevention

Protecting ecommerce websites from cyber-attacks and fraudulent activities is important. To
protect customers, use fraud protection technologies like SEON, Signifyd, Kount, Cybersource,
and more.

For the safety and security of customers and their data, ecommerce security and fraud
prevention are crucial.

Load Balancing
This is a process for distributing incoming traffic and requests across a group of servers. It helps
to improve the performance of an ecommerce system. This gives no room for failure in the
system and ensures the system can handle the increased demand from online shoppers.

It also helps to prevent any server from becoming overloaded with requests and also helps to
improve customers' shopping experience.

Backup System
This is a system that stores data, such as customer information, routinely. It helps restore the
system to the last saved state in the event of a system failure.

This ensures that the business can quickly and easily recover from any potential data loss.
Backup systems can also be used to transfer data from one system to another, allowing for
greater flexibility.

Customer Service
Customer service in ecommerce is providing support to customers before, during, and after a
purchase. This helps customers find what they need, provides shipping and delivery info, and
also resolves order issues. This is critical for any ecommerce business.

Inventory Management
This is the practice of tracking and controlling the inventory of a business’ product. It includes
maintaining stock levels, ordering new products, and tracking sales. It is important to keep
accurate records of inventory to ensure customer satisfaction and product availability.

Inventory management helps protects against loss due to theft or damage and can help identify
areas of opportunity to improve efficiency.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Shopping Cart
This is more of an ecommerce feature than a component of an infrastructure. It allows
customers to add products to their carts, views their orders, and check out. It is an essential
part of any online shopping experience, as it enables customers to quickly and easily purchase
products.

Item selection, item quantity adjustments, payment selection, and order submission are
common features of cart functionality. This can easily be integrated with the help of
ecommerce solutions like Medusa.

Shipping and Fulfillment

In ecommerce, shipping and fulfillment refer to the process of receiving, processing, and
shipping orders to customers. It also includes shipping tracking and order fulfillment.

Shipping and fulfillment are vital for any online business to be successful. This makes sure
customers get their orders quickly and are happy with them.

Some examples of providers that offer this service, ShipBob, ShipStation, Fulfillment by
Amazon (FBA), Deliverr, etc.

1. Internet:
An Internet is a public network and it is not owned by anyone. Since, it is a public network
therefore anyone can access it without a valid username and password. Internet is the largest
network in the case of number of connected devices. In this, there are numerous users and
it provides lots of information to users. It acts as a tool for sharing information all over the
world.
2. Extranet:
Extranet is a private network and it is owned by a single or multiple organization. Since, it is
a private network therefore no one can access it without a valid username and password. It
acts as a medium to share the information between the internal and external members. It is
more secure network and managed by numerous organizations.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Most common applications of Ecommerce:

• Retail and Wholesale
Ecommerce has numerous applications in this sector. E -retailing is basically
a B2C, and in some cases, a B2B sale of goods and services through online
stores designed using virtual shopping carts and electronic catalogs. A
subset of retail ecommerce is m-commerce, or mobile commerce, wherein
a consumer purchases goods and services using their mobile device through
the mobile optimized site of the retailer. These retailers use the E -payment
method: they accept payment through credit or debit cards, online wallets
or internet banking, without printing paper invoices or receipts.
• Online Marketing
This refers to the gathering of data a bout consumer behaviors, preferences,
needs, buying patterns and so on. It helps marketing activities like fixing
price, negotiating, enhancing product features, and building strong
customer relationships as this data can be leveraged to provide customers
a tailored and enhanced purchase experience.
• Finance
Banks and other financial institutions are using e -commerce to a significant
extent. Customers can check account balances, transfer money to other
accounts held by them or others, pay bills through inter net banking, pay
insurance premiums, and so on. Individuals can also carry out trading in
stocks online, and get information about stocks to trade in from websites
that display news, charts, performance reports and analyst ratings of
companies.
• Manufacturing
Supply chain operations also use ecommerce; usually, a few companies form
a group and create an electronic exchange and facilitate purchase and sale
of goods, exchange of market information, back office information like
inventory control, and so on. This enables the smooth flow of raw materials
and finished products among the member companies and also with other
businesses.
• Online Booking
This is something almost every one of us has done at some time – book
hotels, holidays, airline tickets, travel insur ance, etc. These bookings and
reservations are made possible through an internet booking engine or IBE.
It is used the maximum by aviation, tour operations and hotel industry.
• Online Publishing
This refers to the digital publication of books, magazines, ca talogues, and
developing digital libraries.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• Digital Advertising
Online advertising uses the internet to deliver promotional material to
consumers; it involves a publisher, and an advertiser. The advertiser
provides the ads, and the publisher integrates ads into online content.
Often there are creative agencies which create the ad and even help in the
placement. Different types of ads include banner ads, social media ads,
search engine marketing, retargeting, pop -up ads, and so on.
• Auctions
Online auctions bring together numerous people from various geographical
locations and enable trading of items at negotiated prices, implemented
with e-commerce technologies. It enables more people to participate in
auctions. Another example of auction is bidding for seats on an airline
website – window seats, and those at the front with more leg room
generally get sold at a premium, depending on how much a flyer is willing
to pay.
E-Commerce is all around us today, and as an entrepreneur, you should also
get into this realm if you want to expand your markets, get more customers
and increase your profitability.
Procurement-Online Marketing and Advertisement

Procurement in the context of online marketing and advertising involves the acquisition of
goods and services necessary for implementing marketing campaigns, advertising initiatives,
and promotional activities in the digital space. Here are key aspects and considerations related
to procurement in online marketing and advertising:

1. Vendor Selection:
- Identify and evaluate potential vendors or service providers for digital marketing and
advertising solutions.
- Consider factors such as expertise, reputation, pricing, and previous performance.

2. Digital Advertising Platforms:

- Procure access to digital advertising platforms such as Google Ads, Facebook Ads, and other
relevant platforms based on campaign objectives.
- Negotiate terms and pricing for ad space and placements.

3. Ad Creative Services:
- Procure services for ad creative development, including graphic design, copywriting, and
multimedia content creation.
- Consider agencies or freelancers with a proven track record in digital advertising creative.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

4. Search Engine Optimization (SEO) Services:

- Procure SEO services to optimize online content for search engines.
- Evaluate vendors based on their understanding of SEO best practices and their ability to
improve organic search visibility.

5. Social Media Management Tools:

- Procure tools and platforms for social media management.
- Consider features such as content scheduling, analytics, and community engagement.

6. Content Marketing Services:

- Procure content marketing services for the creation and distribution of valuable and
relevant content.
- Ensure alignment with overall marketing strategy and target audience.

7. Email Marketing Solutions:

- Procure email marketing platforms for campaign creation, automation, and analytics.
- Consider features such as list management, A/B testing, and integration capabilities.

8. Data Analytics and Reporting Tools:

- Procure analytics tools to measure the effectiveness of marketing campaigns.
- Look for platforms that provide insights into key performance indicators (KPIs) and user
behavior.

9. Programmatic Advertising Services:

- Procure programmatic advertising services for automated ad buying and real-time bidding.
- Evaluate providers based on their targeting capabilities and reach.

10. Affiliate Marketing Programs:

- Procure affiliate marketing solutions to establish partnerships with affiliates for
promotional purposes.
- Define commission structures and performance metrics.

11. Market Research and Audience Insights:

- Procure services for market research and audience insights.
- Utilize data to inform marketing strategies and target the right audience segments.

12. Ad Verification and Fraud Prevention:

Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

- Procure solutions for ad verification and fraud prevention to ensure the quality and
authenticity of digital advertising.
- Protect against ad fraud and ensure brand safety.

13. Legal and Compliance Services:

- Procure legal services to ensure compliance with advertising regulations and data
protection laws.
- Review contracts and agreements to safeguard the interests of the business.

14. Training and Skill Development:

- Invest in training programs to enhance the skills of the marketing team.
- Ensure that team members are well-versed in the latest digital marketing trends and tools.

15. Budget Management:

- Implement a procurement strategy that aligns with the overall marketing budget.
- Monitor and optimize spending to achieve maximum ROI.

Effective procurement practices in online marketing and advertising contribute to the success
of digital campaigns, enhance brand visibility, and drive customer engagement. Regular
evaluation of vendors and technologies ensures that the organization stays current with
industry trends and remains competitive in the digital landscape.

E-Commerce-Business Models: B2B, B2C, C2C, B2 Government, Government to Government

Below picture shows the different types of e-commerce parties that can be involved in e-
commerce. You notice the classic B2C, B2B one, but also C2C, C2B (web markets). And also
variations where the government is one of the parties
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Let's walk the different combinations:

Consumer-to-Consumer (C2C).
Auction websites such as www.eBay.be, www.2dehands.be, www.Kapaza.be., etc. where
consumers can sell and buy products from each other. But also product recommendations
(e.g.: https://www.theSIMPLEmoms.com) from consumer to consumer. Blogs, social networks
and communities can also be considered C2C.

Business-to-Consumer (B2C)
In many cases the classic web shop selling to consumers (transactional). But that’s not
necessarily the case, e.g. the Kraft case with its relationship/brand building.

Government-to-Consumer (G2C).
Automated request processes enabling consumers to request a service from the local, the
central government. E.g.: TaxonWeb, an application to enter your taxes from the Belgian
government. Many communities have an “e-teller”, removing the need for a physical visit to
your town hall for many types of requests and documents.

Consumer-to-Business (C2B)
C2B is about an online exchange where consumers do themselves approach providers on the
web.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

• Prospective buyers name their own price and leave it to the provider to accept or reject
the offer. Can be a group of buyers (co-buy sites) e.g. to get the best heating fuel offer.
• Consumer feedback can provide serious added value for an e-commerce site. A review
is a powerful means to convince potential buyers. (customer review sites).
• Campaigns where consumers organize themselves to influence a business (behavior)
(e.g. e-petition confronting BP, TEPCO (Fukushima nuclear plant operator)

Business-to-Business (B2B)
Setting up e-commerce towards your business customers can be a great trick to stimulate a
lasting business relationship. Think of application domains such as wholesale, cloud service
providers addressing the professional market, e.g. with SaaS ERP, CRM, mass e-mailing,
business e-mail & collaboration, Online printers, Online accounting service provider, etc.. And
of course all those “webshops” addressing the professional customers. Businesses such as BP
or Dell have products that address both consumer and businesses. Different partitions of their
website will be equipped to address those different target groups. Product offering will also
typically differ. (e.g. more design styled consumer products compared to more robust business
products).

Real life examples:

• MagCloud: B2B & B2C mix - an on demand magazine printing service. Magcloud is a
B2B+B2C marketplace for on demand magazine printing: The B2B function is to offer a
direct printing magazine functions. The magazine is printed on a digital printer on
demand by individual order placed by consumers. So for the business wanting to
publish a magazine, the issue of minimum printing run using classic printing is removed,
as well as all risk of unsold stock
• MarketDojo: B2B reverse auction system. This is e-business sweets for your
procurement department: the software and process to help you squeeze your suppliers
to go for the lowest price possible.
• Dell:The Dell website offers B2B, B2G, B2C functionality in it’s shop. It sells products
and services, and also provides e-business functions without financial transaction, such
as technical support. Have a close look to its supports pages. You will find functionality
such as
- Self help with “Free Hardware diagnostics, “Free Performance Diagnostics”
- Top Solutions
- Access to service desk functions
- Assisted search, using a wizard
- Order tracking

Government-to-Business (G2B)
Request automation from business to government (replacing a paper procedure or having to
visit a government office) Tax entry. Fulfilling regulatory compliance processes.
Class:- BBA- III Year Subject: - RETAIL MANAGEMENT

Consumer-to-Government (C2G)
Pressure groups, political/social action to influence government. E-petitions

Business-to-Government (B2G)
Feedback to government businesses and non-governmental organizations.

Government-to-Government (G2G)
Local government making requests to central government (e.g. project funding), exchanging
information, inter government services