IMT-81: Retail Management

PART - A

Q1. Compare and analyze the retailing scenario in India and across the globe.

Q2. Suppose you are a retailer of garments and have set up a new store in Delhi. How would you develop your retail strategy? Describe your planning process step by step.

Q3. Assume that you are opening a new grocery store. What tasks would you perform to ensure smooth flow of the retail store's operations?

Q4. As a retail store manager, what duties and responsibilities, according to you, would your job entail?

Q5. Explain the concept of retailer relationships and outline the essential factors that must be considered before implementing relationship retailing.

PART - B

Q1. Analyze the performance of your neighborhood kirana store. Suggest some sales promotion strategies by which it can refurbish its image and increase sales.

Q2. 'It is a retailer's ability and efficiency that determines how effectively the finances of a retail store are managed.' In light of this statement, discuss the financial strategy that a retailer should adopt in order to reap profits.

Q3. Managing a retail store is a complex activity. Discuss.

Q4. Comment on the various career opportunities that are available in retailing. Which of these appeals to you and why?

Q5. Briefly analyze the future prospects of retail in India.

PART - C

Q1. Differentiate between hypermarkets and traditional kirana stores. What modus operandi would you suggest to the latter to compete with new forms of retailing like hyper/supermarkets?

Q2. Explain the broad segmentation of the Indian retail industry.

Q3. You wish to set up a provision store. State where you will locate it after considering the merits and demerits of setting it up in rural, urban and suburban areas.

Q4. 'Devising an efficient system of counting and maintaining a stock of inventory items has long been an arduous task for many retail managers.' Discuss some methods of inventory control in light of this statement.

Q5. You are the owner of a retail store. What recommendations would you make to your employees to ensure good customer service?

CASE STUDY -1

Marketing to Kids - The New Legislation1

The new regulations will make it illegal for fast food outlets to encourage consumption of their foods with giveaway toys. Promoting 'junk food' with the use of cartoon characters will also be discouraged. Marketing of sweets aimed at children will be curtailed and even some soft drinks will have to re-think their marketing strategies. The Health Department published its second draft of the proposed regulations in July 2007. The draft is aimed at ensuring honest and responsible labelling and marketing as part of an attempt to promote good health and prevent obesity.

The Advertising Standard Authority (ASA) believes there is a need for such regulations saying, 'What is important about these regulations is that there are huge international concerns about advertising junk food to children. There is definitely a growing concern about the problem of childhood obesity and advertisements for unhealthy products have been part of the blame.' According to Lillian Mlambo, Communications Manager, ASA, 'If South Africa does not keep up with international concerns and international norms, we could find ourselves in a difficult position.'

Nick Tselentis, legal and regulatory affairs manager of the Consumer Goods Council of South Africa, has prepared a code of practice to guide the industry when it comes to the issue of advertising to children, as well as a suitable amendment to the current code, for the ASA to adopt. However, ASA does not have answers to several questions which are currently being considered in a proposal to the Government and which have not yet been completed. These include the definition of what is foodstuff and which foods will be governed by this Act, as well as the Trademark Act itself.

In certain instances, the regulations will directly contradict the provisions of the Trademark Act which protects the likes of Simba, Niknaks, Ronald McDonald, The Baker's Man and Chappies. In these instances, for example, it is believed that only a protracted legal battle would decide the future of the brands. That is one reason why Yellowwood's Andy Rice says that the proposed regulations are nothing more than a 'dumbing down of society' as they deny any responsibility to adults or their children.

The industry should be sitting up and taking notice because self-regulation is always better than imposed regulation, which usually becomes quite draconian. Famous Brands, for example, took the view that they will simply stop actively promoting kids' meals and this has not affected their sales at all. Alda Heunis of Egg Marketing and Communications agrees: 'Children ultimately grow up to be adult consumers. Instead of just regulating, one should also be educating.'

She adds that obesity amongst children is as much the result of unethical marketing on the part of certain food and snack brands as it is the lack of proper marketing on the part of many health institutions, industries and brands: 'Where are the Teletubby-branded apples?' She agrees that the marketing of food products has to be done in an ethical manner, but stresses that different elements contribute to childhood obesity, all of which have to be addressed.

Network BBDO Simba Account Manager, Lucia Gorgoglione says her client has recognized that its advertising cannot appeal directly to kids anymore by using characters, toys, etc., and has basically changed its approach: 'Our new approach is to encourage moms to buy chips for the family and kids, but to do it responsibly. We encourage them to lead an active life and exercise, then snack in moderation.'

But the move is more radical than that. Gorgoglione says, Simba is taking steps to re-introduce 'Simba' as a character who looks after the well-being of the family and encourages a healthy lifestyle. 'The new legislation is an attempt to look after the consumer's health and well-being as opposed to marketers just pushing sales. It's very positive and marketers are also supporting this initiative completely.'

Kellogg's recently agreed to raise the nutrition value of the cereals and snacks it markets to children.

The company avoided a lawsuit threatened by parents and nutrition advocacy groups in America who were worried about increasing child obesity. The Kellogg's Global Nutrient Criteria (KGNC) apply to all products currently marketed to children around the world, including the South African favourites Coco Pops, Froot Loops and Frosties, so that

Kellogg's, South Africa, will not need to reformulate cereals or change its advertising strategies. Marketers are embracing the change, but it is still a long road for many brands as they seek the new opportunities hidden within this revolution.

Questions:

Q1. Why will the marketing of sweets aimed at children be curtailed? Why will soft drinks companies have to rethink their marketing strategies?

Q2. What are the pros and cons of consuming junk food? As a retailer, would you want junk food in your store? Why and why not?

Q3. Describe the three advantages of the new legislation that will have an impact on customers' health and well-being.

Q4. 'It appears that marketers have adopted a pro-active approach and are already exploring and implementing changes to keep in line with proposed new regulations that will alter the way that certain foods are marketed to young children.' Explain.

CASE STUDY - 2

Automobile and Niche Marketing

Wth the world's leading manufacturer, Toyota, recognizing the power of niche within the automotive sector, the power of this form of marketing is entrenched. For the launch of the new Auris, Toyota's money-spinning, C-segment hatch, instead of adopting the regular paths of mainstream magazines, prime time television and snappy shopping mall cafes, Toyota hit their target market directly with the use of bloggers. Toyota's changed tactics come from the Director of Communications, Brian Eades, and aims to change the staid image of the Japanese brand. A competition was held to entice regular bloggers to submit entries as to why they should attend the media launch of the stylish hatch, with three winners being selected. In turn, their reviews of the launch produced underground, automotive blogging coverage of the launch and car, targeting the computer-savvy, DINK (double income no kids) as well as a youthful and informed crowd.

Custom publications benefit from the term 'niche' and further add to any company's brand strategy. The Retail Motor Industry Organization (RMI) is responsible for assisting its members with all matters surrounding the motor industry while ensuring that members comply with a high level of business practice. With just 8,000 members, correspondence can be logistically challenging. For this reason, RMI decided to start their custom publication, Automobil. A monthly magazine that has been in existence for more than three decades, Automobil has grown exponentially from near newsletter status to 100 saddle stitched pages providing in-depth coverage on a spread across the automotive industry. Not only does this provide RMI with the ideal tool to communicate with its members, but it also offers a revenue generating device through its unique niche status. A recent survey completed by Automobil members saw an overwhelming response through fax, e-mail and post. Wth 98 per cent of members concurring that Automobil provides relevant and informative content and could be referenced for business purposes, the notion of niche is evident.

Considering that 8,500 copies are printed each month, Automobil is the ideal mechanism to reach the automotive trade industry. Figures confirmed this with 60 per cent of respondents reporting that they based their business decisions on editorial content in the magazine, while a massive 78 per cent reported that they were influenced by regular advertisers in the magazine. Furthermore, these respondents were not your anticipated grease monkeys. On the contrary, they fell between the LSM groups 8-10 and were in a position of management, ownership or directorship.

All these factors provide an extremely appealing sales pitch to get advertisements for Automobil, and its continued growth is testimony to this. However, beyond the income, the brand awareness and communication levels achieved by RMI for its members through Automobil is priceless. A set percentage of the magazine is decided upon and dedicated to RMI-specific news. This provides a template from which topical industry information, special focus features and RMI data can be scribed.

The value added in providing members with a custom publication is insurmountable and can also be seen in industries such as law and accountancy where De Rebus, the law journal has become synonymous with industry-breaking news and foresight. Similarly, the South African Financial Markets journal provides all aspects relevant to those operating businesses the financial arena. On joining RMI, the arrival of Automobil in the company's post box is affirmation of membership and provides industry-leading trends, new products, ideas and international operations structures -the start in the anticipated growth by joining the organization.

A custom publication transcends the humble newsletter and evolves the base communication device into a profitable brand-awareness marketing tool. Generating income through advertising, and maintaining contact with members, RMI has benefited tremendously from Automobil. Furthermore, the members have gained useful information from the magazine, pertaining to their relevant fields, which in turn, creates a happier member base and stronger client relations for RMI. Custom publications are a powerful tool available for use in most fields, and the benefits are tremendous.

Explain the following:

Q1. What is niche marketing?

Q2. As an automobile retailer, what would you propose to increase sales volumes through niche marketing?

Q3. Explain the role of RMI.