MARKETING MANAGEMENT II

BM5302

ASSIGNMENT NO-4

SEC-E
BATCH-2022-2024

Smruti Ranjan Palai-22202278

Sambit Swain-22202265
Debasis Panda-22202243
Mayuresh Dash-22202253
Arya Punyashlok-22202355

Q1.Define Retailing? Who is a Retailer?

Ans. All the activities required for selling goods or services directly to final
consumers for personal, non-business use is retailing. Retailer is an entity that
sells goods directly to the consumers through different distribution channels
with the motive or goal of gaining profit.
Q2. What is Organized Retail? What is Modern Trade? Elaborate with
examples.
. Organized retail is a sector which consists of the companies which are
associated with production or sales of goods and services that operates as
private limited organizations which are governed by companies act.
Example: Walmart

It is an American retail corporation which

has multiple hypermarkets and
departmental stores which are
discounted along with grocery products.

Compared to other supermarkets was

marked as heavily discounted. It is headquartered in Arkansas and was
founded by Sam Walton in the year 1962.

Modern trade involves a more planned and organized approach to distribution and

logistics management. Modern trade includes the larger players such as
supermarket chains, mini-markets (Indonesia), hypermarkets, etc. This involves
aggregation of demand across a diverse product range.
Q3. Explain the following Retail Store formats with examples:
a. Convenience Store
b. Supermarket
c. Hypermarket
d. Specialty Store
e. Department Store
f. Off-price Retailer
g. Discount Store
h. Catalogue Showroom
a. Ans. Convenience store: It is a retail business that provides the public with a suitable
location so that consumers can quickly purchase a wide variety of goods and
services, mostly food and gasoline. Convenience stores are typically small stores
offering at least 500 stock-keeping units (SKUs), and the workers usually have
extended working hours.
Examples: Spencer’s, Reliance Fresh
b. Supermarket: It is a large, low-margin retail market that sells food and other
household goods. It is usually operated on a self-service basis.
Examples: Big Bazaar, DMart
c. Hypermarket: It is a huge retail store that combines a department store and a grocery
supermarket. It offers shoppers a one-stop shopping experience. The idea is to
provide consumers with all goods under one roof. Hypermarkets sell high volumes of
products which affords them greater buying power in comparison with retailers who
sell goods in smaller quantities.
Examples: Fred Meyer (the first hypermarket in the U.S.), Walmart
d. Specialty store: This type of retail store provides specific and specialized types of
items. They focus on selling a particular brand or a particular type of product.
Examples: ZARA, Khosla electronics
e. Department store: It is a large establishment that sells a wide range of products such
as toiletries, medicine, electronics, clothing, groceries, etc. organized into distinct
departments in order to satisfy nearly every customer’s requirements under one roof.
It is divided into several departments, each focusing on a specific type of product.
Examples: Macy’s, Kohl’s
f. Off-price retailer: In this type, the retailers provide leftover goods at cheap prices.
They usually sell second-hand goods, off-the-season items, etc.
Examples: T.J. Maxx, Ross Stores
g. Discount store: It offers a retail format in which products are sold at prices that are
lower than an actual or supposed “full retail price”. Discounters rely on bulky
purchasing and efficient distribution to keep down costs.
Examples: Pantaloon Retail (India) Ltd’s Brand Factory, Arvind Mills Ltd’s Megamart
h. Catalog Showroom: These are retailers whose showrooms are adjacent to the
warehouse. These retailers usually focus in hard goods such as houseware,
jewellery, and consumer electronics. Examples: AVON (cosmetics), IKEA (furniture),
Tanishq (jewellery).

Q4. What is a Franchisee Store? Explain with examples.

ANS:- A franchise store is a set-up where one entrepreneur pays for the right to use the
products, brand, confidential information, and competitive advantages of another company.
This enables the business visionary to launch a company without developing his or her own
brand or products. Example- MC Donald.

05. What is a Private Label or In-house Brand at a Retail Store? Explain with
examples.
ANS:- A private label, often known as an in-house brand, is a product developed and
marketed by a retailer under their own brand name rather than that of a manufacturer.
Though they are frequently produced by other firms, these goods are promoted and offered
for sale as though they were made by the shop. Example- A grocery store might, for
instance, develop its own range of cereal, snacks, or bottled drinks that are marketed under
the company's own brand name. Famous private label brands include Whole Foods' 365
Everyday Value, Target's Simply Balanced, and Walmart's Great Value.

06. What is a Shop-in-shop? Explain with examples.

ANS- A shop-in-shop is a retail concept where a brand or company opens a smaller store within
another larger store, sharing the latter's customer base and benefiting from its existing
infrastructure, while still maintaining their own distinct
brand identity and product offerings.

For example- Apple has shop-in-shops within Best Buy

stores where customers can try and buy Apple products,
and Nike has a shop-in-shop within department stores
such as Macy's that sells only Nike branded items.
Another example is Samsung opening a shop-in-shop
within a mobile phone retailer to showcase and sell its
latest products.

Q7.Explain the following Store Layouts with examples.

Free - Flow Layout -

The goal of a free flow layout is not to guide the user using recognisable design
elements like displays or signage. This retail store design does not adhere to
any predefined design guidelines, giving customers more freedom to interact
with the items and find their way around independently.

Grid Layout -

Grid store design. In a grid plan, goods are put on display in long aisles where
customers can browse as they move up and down the aisles. The grid, which is
used in almost all convenience stores, pharmacies, and grocery stores,
maximises product presentation and reduces white space.

Loop Layout -

Before reaching the checkout, consumers travel a single path through the
whole inventory of the loop store. While this method simplifies consumer
traffic and maximises the exposure of all products, it can also reduce browsing
options in heavy traffic situations.

Spine Layout -

A single aisle with storage on either side runs from the front to the back of the
shop in a straight store layout, also known as a spine layout. This design
promotes customer movement, particularly in department stores where access
between floors is important.

Q8. What is Visual Merchandising? Explain with examples

Ans. Visual Merchandising – attracting patrons with visual cues
▫ Consistency with shelf methodology
▫ Colour blocking, Block categories and Block Brand families
 ▫ Categories based on price flow and stock situation
▫ Space allocation based on volume movement
▫ No loss of shelf space
Example a window display it provides a glimpse of the appearance of the
products and thus help to catch the attention of the window shoppers.
.09. Explain the following terms with images and examples:
a. Shelving
b. Hanging
c. Pegging
d. Folding
e. Stacking
f. Dumping
g. Colour Blocking
h. End-caps
i. Promotional Aisle
ANS:-
a. Shelving - Shelving refers to the storage of items on horizontal shelves,
usually made of metal, wood, or plastic. It is commonly used in retail stores,
warehouses, libraries, and homes to store and display various items such as
books, products, and decorative objects.
b. Hanging - Hanging refers to the display of items by suspending them from
hooks, hangers, or other hanging mechanisms. It is commonly used in retail
stores to display clothing, accessories, and other hangable items.
c. Pegging - Pegging refers to the display of items by inserting them into pegs
or hooks. It is commonly used in retail stores to display small items such as
jewelry, toys, or packaged products.
d. Folding - Folding refers to the process of folding a piece of cloth or fabric in
half or into a compact shape for storage or display. It is commonly used in
retail stores to display clothing or linens.
e. Stacking - Stacking refers to the arrangement of items in a neat pile, one on
top of the other. It is commonly used in retail stores to display products such
as boxed items or containers.
f. Dumping - Dumping refers to the display of products in an unorganized
manner, often in large quantities, to create a sense of abundance or to clear
inventory.
g. Color Blocking - Color blocking refers to the use of blocks of contrasting
colors to create visual interest. It is commonly used in fashion, interior design,
and product packaging.
h. End-caps - End-caps refer to the display space located at the end of a retail
store aisle. It is often used for promotional purposes or to showcase seasonal
items or special promotions.
i. Promotional Aisle - A promotional aisle is a dedicated area within a retail
store used for promotions and special sales. This space is used to showcase
limited time offers, clearance items, or other products that are being
highlighted.
10. Explain the following retail fixtures with images and examples:
a. Gondola
b. Straight Rack
c. Rounder
d. Four-way hangers
e. Category signage
f. Wall fixtures
g. Floor stickers
h. Stopper
i. Digital signage
j. Point of Sale Material (POSM)

ANS:-
a. Gondola - It is a freestanding shelving unit
used in retail stores to display products. It often
consists of multiple levels of shelving and can be
several feet in height. Example: A grocery store
using gondolas to display food and household
items.
b. Straight Rack - It is a simple retail fixture consisting
of a horizontal bar or rod supported by legs, used to
hang clothing or other merchandise. Example: A
clothing store using straight racks to display shirts
and pants.

c. Rounder - It is a circular retail display unit used to

showcase products in a store. It is often used for small
items such as cosmetics, toys, or candies. Example: A
convenience store using a rounder to display bags of
chips and candy.
d. Four-way hangers - It is a retail fixture used to display
hanging clothing or merchandise. It consists of a single
upright support with multiple arms extending out in four
directions to hold hangers. Example: A department store
using four-way hangers to display shirts, dresses, and pants.
e. Category signage - It is a type
of retail signage used to indicate the location of
specific product categories within a store. Example:
A hardware store using category signage to indicate
where customers can find tools, hardware, and
electrical supplies.
f. Wall fixtures - It is a type of retail fixture used to
display products on a wall. It can range from simple
shelves to more complex displays such as slatwall
panels or pegboards. Example: A sporting goods
store using wall fixtures to display and organize
items such as bikes, skis, and snowboards.
g. Floor stickers - It is a type of retail display that uses
adhesive decals placed on the floor to highlight
products or promote sales. Example: A shoe store using
floor stickers to direct customers to the clearance
section.
h. Stopper - It is a type of retail fixture used to block off or restrict access to an
area within a store. Example: A department store using a stopper to prevent
customers from entering a section under construction.
i. Digital signage - It is an electronic display that
shows digital content, such as advertisements,
information, or promotions. Example: A mall using
digital signage to display advertisements and
information about upcoming events.
j. Point of Sale Material (POSM) - It is any type of
promotional material used at the point of sale in a retail
store to increase sales and brand awareness. Example: A
beverage company using POSM, such as posters and
flyers, to promote a new product launch at retail stores.

11. What is sensory marketing in retail? Explain with examples.

ANS:- Sensory marketing is a marketing technique that appeals to a customer's
five senses (sight, sound, touch, taste, and smell) to create a memorable and
emotional connection with a product or brand. It's used in retail to enhance
the shopping experience and build brand loyalty.
For example:
• A perfume brand might use a distinctive scent in their stores to create an
emotional connection with customers and increase brand recognition.
• A fashion retailer might play background music that complements their
target audience and creates a mood that makes customers feel good about
shopping.
• A food retailer might offer free samples to allow customers to taste their
products, making it more likely that they will purchase them.
• A luxury goods store might use high-quality materials and finishes in
their stores to give customers a sense of premium quality and exclusivity.
• A coffee retailer might use the sound of brewing coffee to create an
inviting and warm atmosphere in their stores.
12. Explain the following Retailer Profitability terms with examples:
a. Total Sales, Gross Sales, Net Sales
b. Sales Growth, Same-store Sales Growth
c. Gross Margin
d. Sales per Square Foot
e. Footfall
f. Conversion Rate
g. Average Transaction Value
h. Inventory Turns
i. Days of Inventory
j. Product Return Ration
k. Sales by Department, Sales by Category
l. Accessory Sales Percentage
m. Sales per Employee, Employee Productivity
n. Gross Margin Return on Floor Space (GMROF)
o. Gross Margin Return on Inventory Investment (GMROII)
ANS:-
a. Total Sales - Total amount of money received from selling products and
services to customers over a given period of time.
Gross Sales - The total amount of sales before deducting returns, allowances,
and discounts.
Net Sales - The amount of money a retailer has left after deducting all the costs
associated with producing and selling a product.
b. Sales Growth - The increase or decrease in the total sales of a retailer over a
certain period of time.
Same-store Sales Growth - The increase or decrease in sales of a retailer's
stores that have been open for more than a year, excluding the impact of
newly opened or closed stores.
c. Gross Margin - The amount of money a retailer makes after subtracting the
cost of goods sold (COGS) from its gross sales.
d. Sales per Square Foot - The amount of sales generated per unit of floor
space, used as a measure of retail store productivity.
e. Footfall - The number of people who visit a retail store.
f. Conversion Rate - The percentage of customers who make a purchase after
visiting a store.
g. Average Transaction Value - The average amount of money spent per
transaction.
h. Inventory Turns - The number of times a retailer's inventory is sold and
replaced over a given period.
i. Days of Inventory - The number of days it takes for a retailer to sell its entire
inventory.
j. Product Return Ratio - The percentage of products sold that are returned by
customers.
k. Sales by Department - The amount of sales generated by each department
within a retailer.
Sales by Category - The amount of sales generated by different product
categories within a retailer.
l. Accessory Sales Percentage - The percentage of total sales generated by
accessory products within a retailer.
m. Sales per Employee - The amount of sales generated by each employee of a
retailer.
Employee Productivity - The efficiency of a retailer's employees, often
measured by sales per employee.
n. Gross Margin Return on Floor Space (GMROF) - The ratio of a retailer's
gross margin to its floor space, used as a measure of the efficiency of space
utilization.
o. Gross Margin Return on Inventory Investment (GMROII) - The ratio of a
retailer's gross margin to its inventory investment, used as a measure of the
efficiency of inventory utilization.

13. Go the market and find out what are the typical retailer margins in the
following categories?
a. FMCG Goods
b. Clothing and Apparel
c. Mobile Phones
d. Cars
e. Furniture
f. Jewellery
g. Electrical Equipment and Lights
ANS:- Retail margins for the following categories are:-
1. FMCG Goods: 5-10%
2. Clothing and Apparel: 20-40%
3. Mobile Phones: 5-15%
4. Cars: 2-5%
5. Furniture: 15-40%
6. Jewellery: 20-60%
7. Electrical Equipment and Lights: 5-15%
These margins can vary depending on factors such as brand, location, and
market conditions.
Q14. Solve the following numerical questions:
a. In a retail store, the profit on a product is calculated as a percent of the
retail price to the customer. This is called margin. If the store pays $8.00 for a
music CD and wants to make a 20% margin, what would the retail sales price
need to be?
Ans- 20% margin = 0.2

1-0.2 = 0.8

Therefore:

8/0.8 = 10$ should be charged on 20% margin

b. If the store pays $8.00 for a music CD and wishes a 20% mark-up, what
would the sale price be?
Ans- Price paid = 8$, Markup required = 20%= 0.2

Total Price charged = 8 + 8*0.2 = 9.6$ should be the sale price.

c. A shop sold $1 million worth of whoopee cushions, rubber chickens, and

other prank items in its 1,800 sq. ft shop, that company’s sales per square foot
would be?
Ans- Sales = 1million $, Area = 1800/sq. ft

Sale/sq. ft = 10^6/1800 = 555.55 $/sq. ft

d. Your store got 100 visits and 45 of those shoppers completed a purchase.
This means your store’s conversion rate is ___________
(a) No of people visited = 100
No of people did shopping = 45
Turnover = 45/100*100 = 45

e. Let’s say a gift shop’s total monthly sales amount to $35,000 and it
processed a total of 418 transactions. Its average dollar per transaction is _
= 35000/418 = 83.7$

f. Let’s say an apparel store’s average inventory is $25,000 and the cost of
goods it sold in a 12-month period is $100,000. Its inventory turnover is _
Inventory turnover = COGS/avg. inventory = 100,000/25000= 4

g. If you sold 120 widgets and 5 of them were later returned, the product
return rate is__________
Ans- Product Return Rate = 5/120*100 = 4.16
h. Let’s say a bookstore received 500 copies of a thriller novel from the
publisher, and sold 95 books after a month. The book’s sell through percentage
is _______
Ans- No of units sold = 95

No of units received = 500

Sell through % = 95/500*100 = 19%

i. A retail store has gross margin of $55,000 and an average inventory cost of
$30,000. Its GMROI is ______ and that means the store earns _______ for
every dollar in inventory.
Ans- GMROI = 55000/30000= 1.83$ / inventors

j. Gross dollar margin of $129,500 and an average inventory cost of $83,000.

Your GMROI is
Ans- GMROI = 129500/83000 = 1.56

k. Hudson Shoes reports it had $250K in sales last year and the store is around
8,000 squarefeet then you can roughly estimate the sales per square feet to be
about _____.
Ans- Sales/sq. ft = 250*1000/8000 = 31.25$
l. Joe's Shoe Store sells boots for $100, which he purchases for $75. His
gross margin is $25, and the inventory's median value throughout the
year is $20. His GMROI then is____________________
Ans- GMROI = 25$/20$ = 1.25

m. Sales= 3112869; Area = 5000 sq ft; Then the sales per sq. ft. =?
Ans- Sales/sq. ft = 3112869/5000 = 622.5$

n. Sales = 3112869; Gross margin % = 45%; Area= 5000 sq ft. Then returns/sq
ft/month =?
Ans- Gross margin = 3112869*45/100 = 1400791

Returns/sq. ft/month = 1400791/5000 = 280.15

o. If there are 200 employees in a store, out of which 100 do a eight hour shift
and 50 do a four hour shift in a day and the rest 50 work for 3 days in a week
for eight hours per day and suppose the employees work for six days in a
week, then calculate the number of Full Time Equivalent Employees.
Ans- Total no of hours/week by the employees = 100*8*6 + 50*4*6 + 50*3*8 = 720
Total working days = 6/week = 144 Hrs

Full Time Equivalent Employees/week = 7200/144 = 50

*** THANK YOU ***