Retail marketing mix

• Retail marketing-introduction product decision related

to selection of goods(merchandise management,
revisited) decision related to delivery of service, retail
marketing mix- pricing- influencing factors approaches
to pricing, price sensitivity, value pricing- mark down
pricing, RMM, place- supply channel SCM principles –
retail logistics computerized replenishment system-
corporate replenishment policies, retail marketing mix-
promotion mix, human resources management in
retailing man power planning, recruitment and training
compensation performance appraisal
 introduction
• Retail market can be said to be a pace where a group of
consumers with similar needs and a group of retailers
meet using a similar retail format to satisfy those
consumer needs.
• Retail marketing can be said to be the process by which
a retailer ties to identify the target market, work out
the mix in terms of nature of merchandise and services
offered, pricing policy, promotion, location, store
design and visual merchandising in order to satisfy the
target markets needs and build up a sustainable
competitive advantage.
• Marketing mix represents the total marketing programme of a
firm. It involves decisions with regard to product, price, place
and promotion. These elements differ from firm to firm. It
serve and as a link between a business firm and its customers.
Finding the correct marketing mix is a vital part of positioning
retail outlet. A retailer must engage in planning research and
analysis before implementing a marketing strategy the retail
marketing mix consists of four P’s:
• Product
• Place
• Price
• promotion
 product
• In retail marketing mix, products decision are related
to the selection of goods or merchandise. It will be
based on the type of retail outlet and target
audience. Product decisions involve choices regarding
brand and names, packaging and services that should
accompany the product offering. The important
aspect of this element of the mix is new product
development. As technology and taste changes
product became outdated. The companies must
update products with features that the customer
need.
Important components of product mix are:

1. Brand
2. Style
3. Color
4. Design
5. Product line
6. Package
7. Warranty.
 Decision related to selection of goods
• Choosing a product for a retail store to sell is the most
difficult decision retailers need to make when starting a
retail business. The choices are limitless. They should find
a product or product line that needs to target market.
• The retailers need to consider the following factors while
deciding what products to sell:
1. Product delivery
2. Trends
3. Marketing
4. Enhanced quality
Decisions related to delivery of service
• Customer service can be referred to those set
of activities and programmes undertaken by
retailers, which will increase the value that
the customers receive from the merchandise
and services and also make their shopping
experience more interesting and rewarding
for their customers.
Importance for delivering services in retail

1. It helps the customers in buying decision

process.
2. It ensures value for money.
3. It enhances living standards.
4. It creates a positive image for the good
products.
5. It helps the customers to find the best
product and services.
 pricing
• Price is the monetary value assigned by the
seller for any product or service. Pricing is a
very critical decision that needs to be taken
in marketing mix. The main objectives of the
firm to earn profit very much depends upon
the correct price decisions.
 Needs for pricing
• 1. sales increase: a low price can achieve the objective of
increase in sales volume but it is not always necessary. A right
price can stimulate the desired sales increase.
• 2. increasing the market share:
Price is typically one of those factors that carries the responsibility
for improving or maintaining market share.
3. Profit level:
Pricing helps in having proper return on investment and helps in
maintaining the profit level.
4. Perfect competition:
Pricing also helps in maintaining the stability and proper profit
level helps in facing the competition.
 Factors influencing pricing
• Retail prices are affected by internal and external
factors:
1. Internal factors: it includes
a) Manufacturing cost: the retail company consider
both fixed and variable costs of manufacturing
the product. The fixed costs do not vary
depending upon the production volume. The
variable costs include varying costs of raw
materials and costs depending upon the volume
of production.
• B)the predetermined objectives:
The objectives of the retail companies vary with time and
market situations. If the objectives is to increase return or
investment then the company may change a higher price.
If the objective is to increase market share, then it may
change a lower price.
c) Image of the firm:
The retail company may consider its own image in the
market.
Ex: companies with goodwill such as procter &gamble’s can
demand a higher price for their product.
• D. product stage:
• the stage at which the product is in its
product life cycle, determines its price. At the
time of introducing the product in the
market. The company may charge a lower
price for it to attract new customers. When
the product is accepted and established in
the market, the company increases the price.
• E. promotional activity:
If the company is spending high cost on advertising and sales promotion then it keeps
products price high in order to recover the cost and investments.
2. External factors: it includes
a. competition: in case of high competition, the prices may be set low to face the
competition effectively and if there is less competition the prices may be kept high.
b. Buying power of consumers:
The sensitivity of the customer towards price variation and purchasing power of the
customers contribute to the decisio5ns of selling price.
c. Market conditions:
If the market is under recession the consumers buying pattern changes to modify their
buying behaviour the products prices are set less so,
6. Penetration pricing:
It includes setting the lower price to the goods for attracting customers and gaining
market share. The price will be raised once the market share is gained.
7.Predatory pricing:
It is also known as aggressive pricing or
undercutting it is intended to drive cut the
competitors from a market drive.
8. Premium pricing:
It is the practice of keeping the price of a
product or service artificially high in order to
exchange favorable perceptions among buyers
• 9. price discrimination:
It is the practice of setting a different price for the same product in
different segments to the market.
10. Psychological pricing:
Pricing designed to have a positive set of product. There are
certain prices points.
11. Value pricing:
Value pricing is also called value optimized pricing. It is a pricing
strategy which sets price primarily but not exclusively on the
value perceived or estimated to the customer rather than on
the cost of the product or historical prices. It is based on the
amount of money it takes to produce the product.
• 12. marketing pricing:
Markdown pricing is the temporary reduction in the selling price
of an item to stimulate its demand or to drive a competitor
out of the market. Permanent markdowns are created to
remove a slow-selling item from the inventory.
Importance of markdown pricing:
1. It attracts new customers
2. It creates the opportunity to generate loyal customer base.
3. It helps to clear the stock out of the store.
4. It ensures the shelf-space with fresh stock
5. It is used to get cash in hand.
• D. levels of channels involved:
The retailers has to consider the number of
channels involved from manufacturing to
retail. The deeper level of channels, the higher
would be the product prices.
 Approaches to pricing
• A business can use a variety of pricing
strategies. The price can be set to maximise
profitability for each unit sold or from the
market. Overall businesses may benefit from
lowering or raising prices depending on the
needs and behaviour of the customers in the
particular market. The retailers need to find
the right pricing strategy in running a
successful business.
 The approaches to pricing are as follows:

• 1.high low pricing:

It is the method of pricing for an organisation where the
goods or services offered by the organisation are
regularly priced higher than competitors. The products
have promotions, advertisements, coupons….
2.Absorption pricing:
It is the pricing method in which all costs are recovered.
The price of the product includes the variable cost and
proportionate amount of the fixed costs.
• 3.skimming price:
In this method goods are sold at higher prices
initially then, lower the price over time by the
retailers.
4.Loss leader pricing:
It is the method in which the products are sold at
a low price to stimulate the profitable sales.
This would help the companies to expand its
market share as a whole.
• 5.odd pricing:
• In this type of pricing, the seller tend to fix a
price whose last digits are odd number. This is
done so as to give the buyers or consumers no
gap for bargaining as the price seems to be
less but in an actual sense there are high, here
they take the advantage of human psychology.
 Price sensitivity
• Price sensitivity is the amount by which changes
in a products cost tend to affect consumer
demand for that product. It is often used by
business when determining the optimal pricing
and marketing strategy for the product. It is the
degree to which the prices of a product affects
consumers purchasing behaviour. The degree of
price sensitivity varies from product to product
and from consumer to consumer.
 place
• Place consideration involves decision concerning the
distribution channels to be used and their management,
the locations of outlets, methods of transportation.
• Place mix:
It is concerned with making available of the goods and
services at right time, place and quantity.
1. Distribution channel: it is concerned with making
available of the goods and services at right time, place
and quantity.
2. Physical distribution: it includes transport, warehousing
and inventory.
 Supply channel
• The retail supply chain consists of the following:
1. manufacturers: the one who produces the goods with the help of
machines, labour and raw materials.
2. Wholesaler: the one who purchases the goods from the
manufacturers and sell to the retailers in large quantity but at a lower
prices.
3. Retailer:
A retailer comes at the end of the supply chain who sells the products in
small quantities to the end users as per their requirements and
needs.
4.customers:
The one who purchases the products from the retailers to fulfill their
needs.
 Retail logistics
• Retail logistics involves planning, implementing and
controlling the physical flow of materials and final goods
from the point of origin to the point of use.
• Retail logistics is the organised process of managing the
flow of merchandise from the source of supply to the
consumer from the producer/
manufacturer/wholesaler/intermediary through to the
warehouse, transport to the retail units until the
merchandise is sold and delivered to the consumer.
• The retail logistics systems will include the following
functions
1. Physical movements of goods
2. Holding of the goods at stock keeping unit
3. Holding the sufficient quantities to meet the demand from the end
customer.
4. Management and administration of the distribution system.
Supply chain management can be defined as the design and operation
of the physical management, informational and financial systems
needed to transfer goods and services from vendor to customers in
an effective and efficient manner.
Supply chain management is concerned with the management is
concerned with the management of the flow of goods, cash and
information internally and externally of a company. Functions of
SCM are logistics, distribution and warehousing
Objectives of supply chain management
• Enhancing customer services
• Expanding sales revenue
• Expanding the distribution
• Reducing the transportation costs
• Improving on time delivery.
SCM principles:
Seven principles of supply chain management are as follows:
1. Customer segmentation baised on the distinct groups services needs adopt
supply chain to serve these customer.
2. Customer logistics networks as per the service requirements and ensure
profitability of customer segments.
3. Listen to the market signals and align demand planning accordingly across
the supply chain ensure consistent forecast and optimal resource
allocation.
• 4.differentiate product closer to the customer
and speed conversion across the supply chain
• 5. manage source of supply strategically by
outsourcing. It reduces the total cost of owing
materials and services.
• 6. develop a supply chain wide technology
strategy.
• 7.adopt channel- spanning performance
measures.
 Computerized replenishment system
• Replenishment is a process which defines
review period for recording and ordering
quantity. It takes inventory into consideration
to determine whether an order for recording
should be placed at the time of review or not.
 Automatic store replenishment
• It is also known as computer ordering it is a
powerful strategic weapon for retailers. It is
the preparation of orders by a computer
integrating information about product
movement (as recorded by point of sale
equipment). Outside factors that affect
demand (such as seasonal changes). Actual
inventory level and acceptable safety stock
levels.
 importance
• 1. lower level of stocks
• 2.Enhanced sales volume
• 3.Lower inventory costs
• 4.Reduction of price mark-downs
• 5. it avoids manual ordering mistakes.
• 6.It generates correct sales data.
 promotion
• Promotion is the most recognizable part of the
marketing mix. It involves all of the marketing
activities that the retailers do to let their
customers know about the products they offer.
It involves a mix of communication activities
carried out by the retailers in order to make a
positive influence on the customer’s perception,
attitude and behaviour which can lead to an
increase in store loyalty, visits and product
purchaser.
• Promotion refers to the act of communicating benefits and the
value of the products to the customers, using methods such as
advertising, direct marketing, personal selling and sales
promotion.
• Promotion mis leads with informing about company’s products
or services to the potential consumer’s and stimulating them to
the purchase
1. Sales promotion
2. Advertising
3. Public relation
4. Direct selling
5. Personal selling
• 1. sales promotion:
It refers to the activities which supplement and co-ordinate personal
selling ad advertising to attract customers to buy a product. This
method includes displays, demonstrations exhibitions etc… sales
promotion techniques are indirect and non-personal.
2.advertising:
It is a powerful communication tool directed towards specific target
customers in order to carry the message regarding a particular
product or services with a view to achieve certain specific
objectives such as to establish brand loyalty, expansion of existing
markets, increased sales volume etc… advertising is any paid form
of non-personal communication of ideas, goods and services.
• 3. public relation:
It is also an unpaid impersonal communication which
can be used to change opinion or achieve coverage
in a man medium. Advantage of public relation is
that it can be used as tool to promote and enhance
an organization image. Retailers can use public
relation in a planned manner and attempt to gain
control by sending suitable press and photographs
to media and thereby create a positive image of a
company in the minds of its target market.
• 4.direct selling: it is the process whereby the producer
sells to the user, ultimate consumers without the
middlemen like the wholesaler, retailer or broker.
• 5. personal selling:
It is a broader concept and involves oral presentation in
conversation with one or more prospective buyer for
the purpose of making sales. The purpose or the
objective of the personal selling is to bring the right
products in contact with the right customers. It is a
direct method of selling the product.
 Setting the objectives
• Communication programmes can be used to realise the
short term objective of increasing sales during a
particular period or to achieve the long term objectives
of earning profits for which they need to create or
modify a retailers brand image. All retailers strive to
achieve the most effective response from the target
market i.e, develop a continuous increase in demand
for their products or services .
• It is for this purpose that all their promotional efforts
are inclined to build up a brand and product
awareness.
 Communication effects
• Communication is the process of passing
information and understanding from one person to
another. It is the basic requirement for passing any
form of information. Various communication
techniques are used by the retailers to build
awareness and convey information about the
products or services and their prices so
communication is having the effect on the retailers
business and thus the retailers should opt for
proper kind of technique to promote their business.
Human resources management in retailing

• HRM is a function in organization designed to maximize

employee performance. It involves the strategic
planning and management of employees to create a
productive and motivated work force.
• HRM can be defined as the planning, organising,
directing and controlling functions for the purpose of
employing, developing and compensating human
resources leading to the creation of development of
human relations within the organisation with the
intention to contribute proportionately to the
individual, organisational and social goals.
 Functions involved in Human resource
management functions need to be carried out:
• 1.recruitment and selection:
Recruitment process is carried out to invite the application
forms from the candidates for specified retail jobs. It
involves calling for the job application from prospective
candidates through newspapers, advertisements.
Consultancy firms, online recruitment etc.. Once job
applications are received from various sources, a
screening is done to make a short list of job applicants
suitable to the retail organizations requirement. Then the
short listed candidates are called for interviews and test
and then final decision or selection of employee is made.
• 2.traning and development:
The training process states with an induction
programme when all those who have joined
the retail organization recently are introduced
to the company’s policies. Procedure and
methods of doing the business. Training is
given to the employees to develop the
merchandise management market awareness
etc….
• 3.compensation:
It is the monetary benefits given by the
employers on the basis performance. The
good compensation package is a great
motivating factor for the retail employees. It is
the reward earned by the employees in return
for their labour. There can also be non-
monetary benefits which help to motivate the
employee.
• 4. performance appraisal :
It is the systematic evaluation of an individual with respect to the
performance on the job and individuals potential for
development. Generally, the performance of an employee is
evaluated against the goals that have been set by the retailer.
For example, the performance evaluation of the sales staff at the
store may be evaluated by looking into the number of
customers who visited the outlet, actual sales, loyal customer
or inflow of repeated customers etc… after evaluating the
performance of all the retail employees the appraisal will
determine whether the employee has under-performed, meet
the desired performance or over performed.
 Man power planning/ human resource
planning
• Man power planning/ HRP may be defined as
a process by which the management ensures
that right number and the right kind of
people are at the right place and right time
and are doing the right things for the
achievement of the organization's objectives.