Assignment On

Retailing
Name: Md. Mokarram Hossen
Roll: 22
Batch: 29th
Assignment Submitted To: Rumana Mallik

Introduction
The word 'Retail' is derived from a French word with the prefix re and the verb tailer meaning
"to cut again". Evidently, retail trade is one that cuts off smaller portions from large lumps of
goods. It is a process through which goods are transported to final consumers.
In other words, retailing consists of the activities involved in selling directly to the ultimate
consumer for personal, non-business use. It embraces the direct-to-customer sales activities of
the producer, whether through his own stores by house-to-house canvassing or by mail-order
business.

Manufacturers engage in retailing when they make direct-to-consumer sales of their products
through their own stores by door-to-door canvass, or mail order or even on telephone. Even a
wholesaler engages in retailing when sells directly to an ultimate consumer, although his main
business may still be wholesaling.

A retailer is a merchant or occasionally an agent or a business enterprise, whose main business

is selling directly to ultimate consumers for non-business use. He performs many marketing
activities such as buying, selling, grading, risk-trading, and developing information about
customer’s wants.

A retailer may sell infrequently to industrial users, but these are wholesale transactions, not
retail sales. If over one half of the amount of volume of business comes from sales to ultimate
consumers, i.e. sales at retail, he is classified as a retailer. Retailing occurs in all marketing
channels for consumer products.
Importance of Retailing
The retailer is an intermediary in the marketing channel because he is both marketer and
customer, who sells to the last man to consume. He is a specialist who maintains contact with
the consumer and the producer; and is an important connecting link in a complex mechanism
of marketing. Though producers may sell directly to consumers, such method of distributing
goods to ultimate users is inconvenient, expensive and time consuming as compared to the job
performed by a specialist in the line. Therefore, frequently the manufacturers depend on the
retailers to sell their products to the ultimate consumers. The retailer, who is able to provide
appropriate amenities without an excessive advance in prices of goods is rewarded by larger or
more loyal patronage.

Economic Justification for retailing

All middlemen basically serve as purchasing agents for their customers and as sales specialists
for their suppliers. To carry out those roles, retailers perform many activities, including
anticipating customer's wants, developing assortments of products, acquiring market
information and financing.

It is relatively easy to become a retailer. No large investment in production equipment is

required, merchandise can often be purchased on credit and store space can be leased with no
'down payment' or a simple website can be set up at relatively little cost.
Considering these factors, perhaps it's not surprising that there are just over a 6 million retail
outlets operating across the Indian cities from north to south and from east to west. This large
number of outlets, many of which are trying to serve and satisfy the same market segments,
results in fierce competition and better values for shoppers.

To enter retailing is easy; to fail is even easier! To survive in retailing, a firm must do a
satisfactory job in its primary role - catering to consumers. Rama Subramanian the former head
- retail segment Spensors described a successful retailer as a "merchant who sells goods that
won't come back to customers who will". Of course, a retail firm also must fulfill its other role -
serving producers and wholesalers. This dual role is both the justification for retailing and the
key to success in retailing.
GENERAL SERVICES
The general services which a retailer provides are:
1. The retailer anticipates the wants of the consumers and then supplies them the right kind of
goods at reasonable price. His job is to make the consumers buying as easy and convenient as
possible i.e. he acts as a consumers' agent.

2. He performs the service of bulk-breaking i.e. dividing large quantities into small units, such as
individual cans, bottles, boxes, wrappers, packages, appropriate for consumer use.

3. He offers a large assortment of merchandise, of suitable size, colour, design, style and
seasonal items-ranging from domestic utensils, household requisites to specialty goods.

4. He creates time and place utility by storing the products in off season and by transporting
these goods to the places where they can be readily available as and when needed by the
consumer.

5. He also assumes risks by guaranteeing the goods he sells to the consumer.

6. He also offers free delivery of goods, credit on open accounts, free alteration, liberal
exchange facilities, and instructions in the use of goods, revolving credit plans, and long term
instalment programs.

7. He adds to the convenience and ease of consumer purchasing by offering convenient

shopping locations, market information’s and other services such as free parking privileges,
lessons on product use and a multitude of other facilities may be offered and found sufficiently
desired to result in increased patronage.
8. He helps the producers in distributing their products by using advertisement display and
personal selling.
9. The level of retail sales is one of the most useful barometers of the nation’s economic health.
For example when sales of cycles pick-up, sales of steel and components also increase, as does
employment and thus increasing purchasing power. But when sales go down, manufacturers
cut back production, unemployment increases and retail sales also goes down.
Facilitating Services:
In order to carry out functions involving transfer of ownership and physical supply effectively
retailers perform a number of facilitating functions i.e. functions relating to standardization and
grading, financing, risk-taking and market information.
A retailer of fresh fruits and vegetables has to standardize and grade these to make these
acceptable to customers. They establish standards, inspect goods they receive, and sort them in
various classifications.

Quite often they purchase in large quantities and then divide them and repack them before
selling. When the retailer sells goods on credit he performs finance function. From the moment
he sells and collects the last rupee from the customer, when goods are sold on credit, he is said
to be performing a financing function.

Another function performed by retailers is that of risk-taking. During the entire time a retailer
holds title to particular goods, he must inevitably bear a wide variety of risks. Not only the
goods may be destroyed through fire or flood, but also, there is often the danger of theft,
deterioration or spoilage.

Furthermore, such merchants are also faced with the threat that consumers will not accept
their product or will purchase them only at unprofitable prices. He also undertakes risk in
handling of fashion goods and other items for which consumer demand varies greatly from time
to time.

Since the retailer knows about the wishes of his customers the price, quality and the kind of
merchandise available in the market as well as the existing and anticipated style trends, he
keeps in stock the goods usually required by customers.

Overview of Retail Sector

All over the world, retailing is undergoing a process of evolution and is poised to undergo
dramatic transformation. With special reference to India, the retail sector employs over 10
percent of the national work force but is characterized by a high degree of fragmentation with
over 5 million outlets, 96 percent of whom are very small with an area of less than 50 m2. The
retail universe doubled between 1986 and 2006 and the number of outlets per 1000 people at
an All India Level increased from 4.9 in 1988 to 14.8 in 2006. Because of their small size, the
Indian Retailers have very little bargaining power with manufacturers and perform only a few of
the flows in marketing channels unlike in the case of retailers in developed countries. The
corner grocer or the 'Kirana' Store is a key element in the retail in India due to the housewife’s
unwillingness to go long distances for purchasing daily needs. Although convenience and
merchandise were the two most important reasons for choosing a store, the choice interia
varied across product categories. Convenience was indicated by consumers as the most
important reason in the choice of groceries and fruit outlets, chemists and life style items while
merchandise was indicated as the most important in durables, books and apparel.
In recent years, there has been a slow spread of retail chains in some formats like super
markets, department stores, malls and discount stores. Factors facilitating the spread of chains
are the availability of quality products at lower prices, improved shopping standards,
convenient shopping and display and blending of shopping with entertainment and the entry to
industrial houses like Goenkas and Tata’s into retailing.

Thailand is one of the countries whose economy has developed rapidly in recent years. There
has been a tradition of independently owned outlets called shop houses. These outlets are run
by families, with the shop located on the ground floor and the family's living quarters on upper
floors. Thailand's first departmental store opened in 1956 and the first shopping Centre in
(1967). Discounts and super stores were introduced in 1989. However, the presence of super
market format has been low due to ingrained habit of buying fresh produce. Specialty stores
were just emerging in Thailand in mid 1990s.

Another country where the development of the retail sector has also followed an interesting
path is Brazil. The concept of self service in shopping was introduced to Brazil in 1953 but until
1972, there was no foreign influence in the Brazilian retail sector. Food retailing especially,
contained to be Brazilian owned and managed although international innovations were
adopted. The number of intermediaries in marketing channels is decreasing as the operation of
wholesalers is under threat from the direct contact between retailers and suppliers, although
few specialized distributors have emerged who provide value added services such as
distribution of frozen and chilled food.

Summary
Retailing is the sale of goods and services to ultimate consumers for personal, non-business
use. Any institution may engage in retailing, but a firm engage primarily in retailing is called a
retailer. Retailers serve as purchasing agents for consumer and as sales specialists for producers
and wholesaling middleman. They perform many specific activities such as anticipating
consumers' wants, developing product assortments and financing.