Assignment Code: BRL–001/TMA/2022-23

Course Code: BRL-001

Assignment Name: Overview of Retailing

Year: 2022-2023

Verification Status: Verified by Professor

Attempt all the questions.

(A) Short Type Questions: 10x7

Q1) How do you distinguish Cross-merchandising from merchandise? Which factors would you suggest for a retailing unit to consider for procuring merchandising and why?

Ans) The primary function of a retailer is buying from some sources and keeping it available to the customer at convenient sizes at a reasonable price. This process is termed as merchandising. Whenever you visit a retail store, you are on the search for products which fulfil your needs.

Majority of the buying done by customers in a store is impulse buying because many times customers do not have a pre-planned list of products to be brought. It is the merchandise which is displayed in the store arouses the attention of the customers. This in turn develops an urge amongst the customers to buy. Therefore, merchandising is the core of retailing and buying and selling of merchandise is the central retail function.

Merchandising comprises planning as to what to purchase for the outlet, how much to purchase and at what price to purchase. Thereon maintaining proper stocks and finally pricing them for selling purpose. In this process a retailer may deal with a single type of product or different type of products. If different types of products are dealt in, then it is called as 'cross merchandise'. Therefore, maintaining the stocks of complimentary goods along the main line is known as Cross merchandising. The objectives of Merchandising are as follows:

The core of merchandising activity is to make whatever is required to serve the target customer. While setting up merchandising objectives, a retailer must keep in mind the following factors:

1. Diversity in merchandise to meet the requirements of the customers,

2. Merchandise should be varied by meeting the changing fashions and market trends,

3. Suppliers' capacity to supply in time,

4. To meet the competitors merchandising strategy,

5. Warehouse capacity and cost incurred in holding the inventory in the warehouse.

Keeping in mind all the above objectives, retailers have to source the merchandise to serve the customers having different set of requirements. Thus, a chain store catering to the same type of target segment has a different set of assortment of products kept in its separate stores depending upon the geographic location and demographics of the place. So, it is important for a retailer to successfully plan for management of merchandise

Q2) Discuss the major elements of the Sales of goods act 1930.

Ans) Contracts of sale are those contracts that act as proof of the transfer of ownership of any object from one person to another in exchange for a price. The Sale of Goods Act India came up amidst the British Raj. The Sale of Goods Act 1930 was a law enacted in colonial, pre-Independence India for the benefit of merchants in India. The act relates to contracts for the sale of goods for all the states of India except for Jammu and Kashmir. Contracts of sale include the agreement on the part of the buyer as well as that of the seller.

While trying to understand the Sale of Goods Act, it is imperative to understand the key terms used in the Act. These include the two parties, the mercantile agent, goods, price, and the transfer of general property. Let’s discuss these various elements to understand better.

Two Parties

The two parties in the Sale of Goods Act 1930 are the buyers and the sellers.

A buyer is a person who is willing to or has agreed to buy a good.

A seller is a person who is willing to or has agreed to sell a good.

There has to be an agreement between these two parties for there to be a sale as per the Sale of Goods Act 1930.

Mercantile Agent

Rather than the buyer and supplier negotiating between themselves, a third-party agent can be used to coordinate the specifics of the contract on behalf of these parties. This third-party agent is called the mercantile agent, and they come in the form of brokers, auctioneers, and others.

Goods

The primary purpose of establishing a buyer and a seller is so that there is an agreement about the good which is supposed to be for sale. These goods need to be clearly defined in the sale contract as per the Sales of Good Act.

Price

The price must most certainly be included in the contract; otherwise, the contract is deemed redundant. A sale is defined by the exchange of ownership of a good between two parties at a specific price, and thus it is a critical element of the Sale of Goods Act India. A transfer of ownership of goods can only be done with the payment or promise of fulfilment of the price mentioned in the contract.

Transfer of General Property

The transfer of general property is differentiated from the transfer of specific property. General property refers to any property owned by a seller, whereas specific property refers to the property the seller is transferring the ownership of to someone else through a sales contract. The Sale of Goods Act 1930 looks only at the transfer of general property.

Q3) Describe various security aspects involved in retailing.

Ans) Retailing, like other industries, places a premium on security. Security has become a key problem for shops as they sell more small, high-value items. Retailers' proliferation of new stores has increased data collection, which must be secured by a solid IT back-end architecture. Retailers are concerned about shrinking, especially for high-priced/small SKUs. Three categories of retail security are:

External Security

Security has grown to be a significant concern with the emergence of malls, large shopping centres featuring multiplexes, food courts, retail stores, and other services. Security measures become even more crucial as a result. The administration, workers, open areas, and parking lots should all be monitored by security systems. Vehicle owner identification should be accomplished via electronic security tags or ID. Closed-circuit televisions should be required everywhere, even outside the shopping area's border, to monitor any potentially dangerous activity.

Internal Security

The term "internal security" refers to security measures taken inside stores primarily to stop shoplifting, which causes financial losses for the retailer. Internal security measures have the dual benefit of preventing thefts committed by both customers and store employees. Store design is important in enforcing good security measures.

Store Design: When designing a store to prevent stealing, use these rules:

1. Small, easily stolen objects shouldn't be near exits.

2. Only 2 or 3 things should be allowed in trial rooms, whose entrances should be accessible to as many staff as feasible.

3. The store layout should allow personnel to see an aisle or section from a single point.

4. End-of-day security checks all employees at the exit.

5. All staff must be checked at an entrance enclosure.

6. The security room or monitoring room must be near the door for fast action.

7. The cashiers can operate as a second line of security for the long aisles in front of the check-out counters.

Employee Screening and Training: Pre-employment testing is required and must be mandatory. A potential employee's references should be checked as part of this.

The following are some examples of technological applications used to preserve internal security:

1. Bar Coding: A specific numerical code number is automatically translated to black and white bar codes whose width and size uniquely identify each item code using the bar-coding technology. These bar codes are scanned using bar-coding, which enables the computer to read the item codes instantly.

2. Electronic Article Surveillance: With the aid of this technology, shops may promote valuable but small-sized items like jewellery, shoes, and watches.

3. Electronic Shelf Labels: Labeling of display shelves with electronic indicators connected to a computer network for indicating price changes across products is a young technology.

4. Closed Circuit Television: The world's most popular retail security measure is this one. It consists of a network of cameras mounted in strategic areas of the stores and linked to a main TV. These cameras can be rotated or are fixed in place.

Data Security

Data security refers to the retail operations' IT security needs. This covers both head office- and store-level security issues. The general prerequisites are listed below:

1. Access Lever by User: Access levels must be established in accordance with the internal user level of authentication and authorisation.

2. Recovery Management: In order to prevent duplication of effort and data loss at any time, the day's transactions backup and other information pertaining to inventory and merchandise should be downloaded by the head office and made a part of the IT policy with technical and process documentation.

3. Payment Gateways: Online payments for suppliers, online shoppers, etc. will be handled through the use of payment gateways with digital signatures and encryption standards approved by an authorised agency.

4. Security Audit of IT Systems: Any of the knowledgeable and accredited IT suppliers should do a half-yearly or annual audit of the software, hardware, networking, and communications systems.

Q4) (a) The internet is revolutionizing the world of retail both in terms of the way we shop and the prices we are paying. Comment. (5)

Ans) The way we shop and the prices we pay are both being revolutionised by the internet in the world of retail. Online shopping has greatly increased over the past few years, and for many firms, it has shown to be a reliable and effective sales and distribution platform. E-tailers are essentially retailers who sell their products/services to customers online rather than in physical storefronts. There are two categories of e-tailers, one in which the business only engages in online sales.

When it comes to online buying, price is the most crucial aspect and the one that most buyers are interested in. Online retailers are able to create and sell their goods at a far lower cost to themselves since they do not have to pay overhead expenses like store rental, electric, water, and gas bills, shop fittings, etc. Shopping online is not only more convenient, but it also costs much less because they can pass the savings on to the client. Prices are likely to decrease even further because firms will still have to compete with other market competitors for new clients and to hold onto existing ones.

E-tailing, often known as e-commerce, is a type of retailing in which the buyer and the seller may not be in the same physical area at the time of the transaction but instead conduct it through an electronic medium. The broad array of goods and services offered by retailers, including anything from books and clothing to vehicles, music, and vacations, is unmatched in the retail industry and is available on the World Wide Web. Due to this, a lot of merchants have decided to develop websites that either support or serve as the foundation of their businesses.

Q4) (b) What do you mean by Business Ethics? Explain the ethical dimensions of retailing. (5)

Ans) Corporate ethics is a type of applied or professional ethics that looks at moral or ethical issues that could come up in a business setting. It is important to the actions of both individuals and entire companies and is applicable to all facets of business behaviour. The essential principles that guide our daily actions are included in ethics. Moral values are those that serve as a guidance for how we should conduct ourselves.

Ethical Dimensions of Retailing

Every retail establishment puts the consumer first, yet the long-term interests of society can frequently conflict with the requirements and wants of the customer. Every firm must adhere to moral standards in order to endure and grow over time. False information should not be given to the customer, and temporary shortages should not be exploited. The worker must receive fair treatment.

Ethical Standards: Every shopkeeper has a basic obligation to instil moral principles into his business. These ought to serve as a reference point for his managers and staff when deciding between right and wrong, fair and unfair, loyal and unloyal, trustworthy and untrustworthy, and a variety of other ethical dilemmas and value contrasts.

Ethical Codes: Studies on ethical codes come to following conclusions:

1. Ethics codes must be more than just legal or PR gimmicks.

2. These codes are helpful, clear, and applicable.

3. There is no one method of conducting business that is best suited for a specific corporation.

4. The company's top management needs to stand up for its desire for the greatest ethical behaviour.

5. Important partnerships start to disintegrate when businesses resort to poor practises.

Ethical Practices in Retailing Functions: Retailers should make sure that the following duties are performed in an ethical manner:

Product Development

1. Make sure the customer is informed of all important dangers related to using the product/service.

2. Any component substitutions that could significantly alter the product should be noted.

3. Identifying optional supplementary features that cost more.

Promotions

1. Retailers should steer clear of deceptive advertising.

2. Reject manipulative or deceptive sales techniques that include strong pressure.

3. Steer clear of sales campaigns that manipulate or lie.

Distribution

1. Retailers shouldn't manipulate a product's availability to take advantage of customers.

2. The use of coercion or force by retailers during negotiations with channel partners is not appropriate.

3. The decision of resellers to handle the product should not be subject to undue influence from retailers.

Pricing

1. Merchants shouldn't engage in price fixing, which entails making unofficial agreements with nearby retailers to set inflated pricing.

2. It shouldn't use predatory pricing, which is when prices are set extremely low in order to drive out competitors.

3. The whole cost of each purchase should be disclosed by the retailer.

Market Research

1. A retailer shouldn't engage in fundraising or selling under the pretence of conducting market research.

2. Retailer should refrain from exaggerating and leaving out relevant research data.

3. Be fair to external clients and suppliers.

Q5) Describe the stages in consumer decision making process in purchasing with examples.

Ans) When planning to purchase a car or a colour television, considerations include necessity, finances, product details, product image, cost of maintenance and replacement components, after-sale support, etc. Unknowingly or intentionally, you go through various stages when making a decision to purchase a good or service, which is referred to as the decision-making process.

Need Recognition

The need for a product typically begins when you realise that you need that specific item. It occurs when you are conscious of the need for a good or service, like in the case of Mr. Rohith, who finds it quite awkward to bring his paperwork, files, and lunch box to work in a plastic bag. He feels that he needs a briefcase to transport the items. There are two types of needs psychological and functional; psychological demands linked to self-gratification when you might be paying for the product and functional is directly connected to how the product works. The consumer may become aware of the need in a variety of circumstances, such as when the product they are using falls short of their expectations, a new model with additional features enters the market, the product is about to run out completely, or they are motivated by an advertisement and feel the need to purchase it.

Information Search

The following step after realising a need for a certain good or service is to gather information on its many features, including models, prices, brands, sizes, performance, after-sale services, and so forth. The consumer can gather this knowledge by thinking back on their post-purchase experiences with the goods. The consumer moves on to the next stage for evaluation of the information among the alternatives based on the information gathered. In the case of Mr. Rohith, he has amassed sufficient knowledge regarding the many types of briefcases offered by retail stores.

Evaluation of Alternatives

Mr. Rao will use specific evaluation criteria before making his ultimate choice. The most typical standards are:

1. Product attribute,

2. The relative, importance of each attribute to the consumer,

3. Brand image,

4. Attitudes towards the different brands or alternatives under consideration.

For instance, the unbreakable, lightweight, capacious, dependable locking system, colour, and cost of the moulded plastic briefcases are product qualities. In comparison to other product qualities, Mr. Rao places the greatest emphasis on the product's light weight and spaciousness. In the course of gathering information, he established some sort of attitude toward the various brands that will influence his choice.

Purchase Decision

Mr. Rao has ranked the different brands according to his first, second, and third preferences during the evaluation stage. In other words, he knows which brand he wants to purchase. However, Mr. Rao might ultimately decide to purchase a brand that is not his top choice.

Post Purchase Behaviour

If Mr. Rao discovers that the briefcase's functionality or performance meets his expectations after buying it, he will be happy with his purchase. The satisfaction will support his perception of the brand as favourable, which is likely to extend to the complete line of items manufactured by the Company. He may also strongly suggest the brand to his friends when they ask for his opinion. If Mr. Rao believes that client contentment or unhappiness has a significant impact on new customers, he can take the opposite action.

Q6) What is merchandise mix? Describe various factors affecting merchandise mix decisions.

Ans) The combination of goods and services that a retailer sells is known as the merchandise mix. The combination of goods and services that a retailer sells is known as the merchandise mix. The product selection that a retail business offers is essentially what is meant by the term "merchandise mix."

Factors Affecting Merchandise Mix

Depending on the following elements, the merchandise mix may be increased, decreased, or modified:

1. Profitability: To increase its profitability, the company likes to add new product lines or product items to already existing product lines. The product mix is continually modified to maximise revenues.

2. Objectives and Policy of Company: To accomplish its goal, the company frames the mix of its products. In light of the objectives, the product mix is developed, amended, or altered.

3. Production Capacity: Decisions on the marketing mix are more influenced by the company's manufacturing capacity or plant.

4. Demand: Demand is taken into consideration when determining the product mix. Marketers should research consumer behaviour to determine which products are popular. The product mix of a corporation must adapt to changes in consumer desire, fashion, interest, habits, etc.

5. Production Costs: Depending on production costs, the product mix is either widened or narrowed. Products that can be produced within the allocated budget will be preferred by the company.

6. Government Rules and Restriction: Such goods are produced by all businesses and are neither restricted nor outlawed by the authorities. Even when a product or variety is deemed illegal, a corporation may need to discontinue selling it. Similar to how they do, social and religious protests are crucial in this context.

7. Demand Fluctuation: Demand fluctuates for various factors in addition to consumer behaviour. Particularly, demand is impacted by seasonal effects, the lack of replacements, population growth, war, draught, floods, and other factors.

8. Competition: It is one of the key elements that strongly influence product mix. A business designs its product mix so that it can effectively counteract competition.

9. Impact of Other Elements of Marketing Mix: Other marketing mix components like price, promotion, and distribution are also crucial when building the product mix.

10. Overall Business Condition or Condition of Economy: Economic conditions on a national and international level are also crucial factors. Due to globalisation and liberalisation, no company would dare undervalue the global economy's overall picture.

Q7) Would you suggest e-tailing or retailing in India? Explain why?

Ans) E-tailing, often known as e-commerce, is a type of retailing in which the buyer and the seller may not be in the same physical area at the time of the transaction but instead conduct it through an electronic medium. The broad array of goods and services offered by retailers, including anything from books and clothing to vehicles, music, and vacations, is unmatched in the retail industry and is available on the World Wide Web.

On the internet, a customer can easily get product information. Instead of wasting his valuable time travelling to the store, searching the store for a specific item, asking the salesperson for assistance, etc., he may obtain information about the many goods or services provided by a specific company with just a few mouse clicks during a free hour. When opposed to a traditional retail store setup, the employment of salespeople, store operating personnel, and maintaining the store layouts is cut off in e-tailing.

Because the products are displayed online, the customer cannot physically see, touch, or feel them. The item viewed might not be the same as the one shown on the website. Due to the fact that urban areas and metropolises account for the majority of Internet users, a substantial market share cannot be attained. Consumers primarily rely on physical stores to buy food and grocery items since they can physically compare the products' quality and make purchases to take the items home. They don't even need to order online and then wait for delivery; they may get the things delivered quickly just by giving a phone call.

(B) Essay Type Questions: 15x2

Q8) (a) What do you understand by the term retailing? Explain the emerging trends in Indian retailing.

Ans) The most dynamic and appealing industry over the past ten years has been retail. Although the retailing industry has existed in our country for much of its history, it has only recently undergone such rapid growth. It's the newest train that has seen throngs of players board it. While many tourists have developed a fascination with multinational retail shop chains, the Indian business sector, at least until lately, was lacking in action.

Emerging Trends In Indian Retailing

This demonstrates how highly fractured it is. The retail stores in India, particularly in the organised sector, is being driven by evolving lifestyles, an increase in working couples, and a resultant rise in disposable income. Due to the daily influx of new products into the market, shelf space and shelf life for these items are now practically limited, which has allowed departmental stores and its small Kirana shops to significantly outnumber the organised sector.

Many newbies are currently searching for the best way to enter the Indian retail industry. The ascent is difficult for those aiming for the upper end of the market, even though the majority are growing quickly and catering to the middle class. The unorganised sector is giving the organised sector some difficult times. Being creative by nature, they are adjusting to operate like international retailers, leading the way for department stores, self-service stores, and specialty stores. The market is seeing turbulence as it attempts to change. This has caused mall developers to carefully consider location, entertainment options, dining options, and retail options.

Q8) (b) Discuss the factors influencing retail consumer behaviour.

Ans) Motives, personality qualities, socioeconomic level, cultural background, and influences from friends, family, co-workers, and society all affect consumer behaviour. Combinations of these variables affect us differently, which is evident in our consumer behaviour. Personal and environmental variables influence consumer behaviour. Consumers buy things to display the self-image they want others to accept and to achieve their ideal self-image.

Psychological Factors

Psychological variables are interior qualities. Retailer segmentation is based on individual behaviour or psychology. Motives, perceptions of involvement, and attitudes affect how consumers respond to retail marketing.

1. Healthy people are motivated to develop and realise their full potentials and capacities. Any action, including buying, requires motivation.

2. Perception is how a person interprets five-sensed stimuli. Seen, heard, touched, tasted, and smelled.

3. Attitudes are a person's permanent positive or negative evaluations, emotional sentiments, pro or against behaviour, or dispositions toward an object or idea.

4. Workaholic, Impulsive, Self-Confident, Friendliness, Adaptability, Ambitious, Introversion, Extroversion. These attributes indicate buyer behaviour.

5. Learning is gaining knowledge through experience.

Personal Factors

Age, sex, stage in family life cycle, education, occupation, income, lifestyle, personality, and self-concept affect a retail consumer's buying decisions.

1. First, a buyer's age influences his retail decision. Age impacts product and service needs.

2. Education broadens vistas, refines tastes, and cosmopolitanizes viewpoint.

3. Income greatly affects a person's consumption.

4. Personality includes psychological traits, characteristics, motives, habits, attitudes, beliefs, and outlook. Personality defines individuality.

Social Factors

Consumer behaviour is also influenced by social factors such as reference groups family, social roles, social status and opinion leaders.

1. As a consumer, your decision to buy and utilise specific items and services is influenced by the people you connect with and the social groupings you belong to.

2. As a unit, the family consumes various things for everyone's use. It influences members' buying habits. Most of our values, attitudes, beliefs, and buying behaviours come from our parents.

3. A person can play multiple roles. His position in each group is defined by the duties he must do. You're presumably a manager at work.

4. Each role a person plays has status, or social prominence. Status is frequently evaluated by how much someone influences others' behaviour and attitude. People buy status-enhancing things.

5. A consumer's friends, neighbours, relatives, and colleagues impact what items and services he buys. This informal practise of influencing others' behaviours or views is called opinion leadership.

Cultural Factors

Retail consumer behaviour is also being strongly influenced by the cultural factors. Marketers normally study three cultural factors:

1. Culture covers a society's religion, knowledge, language, laws, conventions, traditions, music, art, technology, labour patterns, goods, etc. These characteristics create each society's own individuality.

2. Subculture: Societies have many subcultures. Sub-culture is a unique cultural group that follows the prevailing cultural values of society but has its own beliefs, values, and rituals.

3. Inequality in social rank in every society divides people into social classes. Social classes are permanent and homogenous divisions in a society where people with similar values, lives, interests, and behaviours can be placed.

Q9) (a) How can one build a career in retailing trade? Discuss some of the popular forms of retail employment.

Ans) Working in retail is labor-intensive. The retail sector, which is only now beginning to grow in our country, requires a sizable labour force to meet demand. The industry is critically understaffed with skilled professionals, especially at the middle management level. Technology is becoming increasingly important in the domains of commerce, supply chain management, corporate development, expansion, marketing, product creation, and research.

The retail sector offers the following potential career paths:

1. Customer Service and Retail Sales: The foundation and front end of selling is customer service. It entails duties like addressing and interacting with clients. identifying their needs, assisting them in selecting the appropriate goods and services, and building relationships with customers.

2. Store Operations: Store operations include managing retail locations and hitting sales goals. The emphasis is on effective service and operations. A store tries to draw customers in, ensure high conversion rates, prevent stock outs, offer effective service, and facilitate a rapid checkout.

3. Sourcing: Effective sourcing and purchasing are becoming increasingly vital due to rising competition and customer bargaining power. Industry's buying and sourcing team is in charge of finding suitable vendors, working with them to create and obtain a product line that satisfies client needs while also being profitable. Leading retail businesses get their goods from around the globe.

4. Merchandising: Merchandisers collaborate closely with purchasing groups at the corporate headquarters. They make sure the correct product is available in the right amounts, at the right time and place, and in the right assortment based on consumer needs. This position calls for extensive planning and forecasting.

5. Supply Chain Management: Retailing's supply chain is its foundation. To enable effective planning, ordering, stocking/warehousing, and receiving of goods, supply chain management collaborates with merchandising and purchasing functions.

6. Visual Communication: Retailers want to give their customers a fantastic shopping experience by creating appealing storefronts, visual merchandising, and display. This calls for a thorough grasp of the clientele, their needs, and the motivations behind their visits.

7. Information Technology in Retailing: Modem retailing has undergone a transformation thanks to information technology and its applications. IT is used to collect sales data at the point of sale and make it available across the supply chain to facilitate just-in-time manufacturing and efficient purchasing.

8. Design: In a retail setting, a designer's primary responsibility is to advise clients in advance of the newest market trends. Designers share their concepts with the buying and merchandising teams so they can purchase the product lines in fashion that appeal to consumers.

9. Technical and Production: It is the duty of technologists to make sure that vendors adhere to the specified technical and quality requirements. They also make sure that laws are followed. A technical degree in the area is required.

10. Market: The responsibilities of a marketer span widely, from determining the needs of consumers to marketing items and guaranteeing client pleasure. Consumer market research is carried out to identify and comprehend client wants.

11. Human Resources: Manpower planning, hiring, vetting, training, career development, and pay are among the HR duties performed in the retail industry. The aim of the HR manager is to maintain employee motivation to ensure successful and efficient work.

Q9) (b) What are the benefits of managing ethics in the workplace?

Ans) It's crucial to comprehend the ethical aspects of retailing after having a general awareness of business ethics.

1. Attention to Business Ethics Improves Society: When there is significant change, such as the kind that retailers are currently experiencing, it is crucial to pay attention to corporate ethics.

2. Ethics Programmes in Organizations Develops Strong Teamwork and Productivity: Openness, integrity, and teamwork all essential components of good teams in the workplace are developed via ongoing consideration and discussion of values in the workplace.

3. Ethics Programmes Support Employee Growth and Meaning: Employees that pay attention to ethics at work are better able to face reality, both good and negative, within the company and within themselves.

4. Ethics in Organisations Ensure That Policies are Legal: Legal issues are frequently at the centre of ethical standards. The cost of legal problems is reduced, and highly ethical workplace policies and practises are ensured.

5. Ethics Programmes Improve Quality Management and Strategic Planning: Organizations that practise ethics often record their beliefs, create policies and processes to align behaviour with those values, and then train all staff members on those policies and procedures.

6. Total Quality Management: It places a strong focus on some operating values, including as performance, dependability, measurement, and stakeholder confidence. Techniques for controlling ethics are very helpful when managing strategic values.

7. Ethics Programmes Help to Develop Strong Public Image: Strong public relations also pay attention to ethics. An organisation can project a strong good image to the public if it routinely pays attention to its ethics. This suggests that managers in these firms put people before money and make every effort to conduct themselves with the utmost honour and honesty.