retailing final project

7/28/2019 Retailing Final Project

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Types of Retail Store

The retail Store which we planned to open is a discount store. The store will be located AbdulHaq Road near to doctor hospital johar Town that will offers a broad variety in merchandise andquality service. Firstly we will introduce national brands as they are known and afterwards when

our discount store will be promoted and brand awareness will be created we will also introduceour private brand in the future.

WHY a Discount Store

The reason of our opening a discount store is that in Pakistan there are no proper discount stores.There are stores like CSD. But the environment and treatment with the customers are not verygood. Even the merchandise offered is not of good quality and condition. So we have planned to

open a discount store with a good and refreshing environment along with quality customer

service and merchandise. When the ambiance of the store will appeal the customers, then people

of all classes will visit the store. We are opening the store in this area because there is a very biguntapped market which will be the people of johar town, Wapda town, Valencia, PIA & PCSIR

society. Most of the people from these societies use this road. So everyone passing by the road

will be our target market. So a discount store with quality service, product and discounted price

will be effective in such an area.

Customer Buying Behavior

The discount store will fulfill the utilitarian needs of our customers. For such needs people

require adequate information and an effortless shopping experience. Thus, our store is providing

efficient and quality customer service at discounted prices. People will get the information about

the store from both internal and external sources. People passing from the road will see the name

and image of the discount store and will make a mind to inquire about it. People will alsobecome aware from external sources which include SMS marketing, Brochures, Social Media,

Sponsorships, Word of mouth and Direct mail services. People from societies like johar town,

Wapda town, Valencia, PIA & PCSIR society educated and have a modern lifestyle. They will

think that we can buy grocery from this discount store because they will be getting all things

mainly grocery items under one roof. They will tend to compare our discount store with other

stores. Thus due to convenience they will visit the store. As the store is near doctors hospital,

the people who are going to hospital will also buy things like cokes, juices etc for the patient and

their family. The main reason of planning to open the store in this particular area was to fill the

gap in the market and provide then good quality household products for their daily usage.


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Retail Marketing Strategy

A retail strategy is a statement identifying

1. The retailers target market2. Format used to satisfy target market needs3. The bases upon which the retailer plans to build a sustainable competitive advantage.

Target MarketOur target market is the people of johar town, Valencia, wapda town and PCSIR society. There

is no other discount store near this area so we have a first mover advantage in this place we can

serve those people who have low income or middle income for their household. We are

providing quality customer service along with discounted price which is our core competence.

Retail FormatRetail Mix: Daily use household Items, kitchen ware, cosmetics, stationary and after we have

created brand awareness in people we will be introducing private label brand also.

Nature of Merchandise: We are providing products of daily household use like groceries,

kitchen ware, and cosmetics, stationary.We will be also providing services to our customers likehome delivery of products in the future who will become our regular shoppers and whose

customer data base will be available to us.

Pricing Policy: We buy our products from wholesale store so we give them on the actual price

of the products with a little margin after promoting the store.

Advertising and Promotion: We are advertising through distributing brouchers inside

newspaper and also through social media and making website of our royalty discount store.

Store design

We will be having a grid store layout with different shelf space for different products. The grid

store layout is well suited for customers who are primarily interested in the utilarian benefits

offered by the store. Cash registers are located at the entrance of the store. They want to easily

locate the product so that the customers can easily buy, make their purchase as quickly as

possible. The grid layout is also cost efficient because less space is wasted. The use of high

shelves for merchandise enables more merchandise to be on the sales floor compared with otherlayouts.

Sustainable Competitive AdvantageWe can achieve sustainable competitive advantage by the following points for our discount store

and they are as follows:


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Location

The location which we have chosen is that where there is no as such discount store. And Peoplehave to visit the markets which are not very far from their houses. So Our Location near doctor

hospital near johar town can be a cause of sustainable competitive advantage. The discount store

is rare in Pakistan with such suitable conditions which we are providing to the customers. Thelocation is such a competitive advantage which cannot be copied by anyone which is the biggest

benefit of it.

Human Resource Management

Human resource management is an integral part of any business in the world. Mostly the retail

outlets do not focus to train their employees and hire contract employees and this is the reason

why most small retail shops or big retail shops fail. As we are all professional business

graduates, we will train our employed to deal with the customers efficiently and effectively.

Distribution and information system

We will try to cut down our cost associated related to running of the business and we will be

assuring that the right product category is available to our customers at the right place as well.Royalty discount store will be maintaining information system that will increase the efficiency of

the store and by keeping the record of past purchases of our customer information we will be

able to provide them the delivery of home product as well. We definitely will serve our

customers in respectful manner and that can be a cause of competitive advantage.

Customer service

We will be giving superior customer service to our customers and this type of service which they

will avail from our store will give them a reason to come again and again in the store. Thetrained staff will greet the customer with the smile to know them that they are here for their help

or guidance. All staff will be trained according to the customer need. We will give free home

delivery services for the regular shoppers in the future. We will be providing service to

customers more then their expectations.

Strategic Retail Planning Process

Strategic retail planning process is the set of steps a retailer goes through to develop a strategy

and plan. The strategic planning process of our discount store is as follows:

Business Mission

Our business mission is to provide groceries, cosmetics, kitchen ware and stationary items to our

customers with an effortless shopping experience at discounted rates in our store. We will

provide good ambiance and the merchandise in a logical sequence as per their need and

requirement at convenient location. Our target market is the people who are living in johar town,

Valencia, Wapda town and PCSIR society near doctor hospital. We will be marketing our


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discount store through Websites, Brochures, Banner Along Road Side, SMS Marketing, Sponsorship Of

Events, Sales Promotion, Print Media (Flyers, Flexes, Billboard), Sales Personnel Uniform ( T-Shirt),

Shopping Bags and Store Atmosphere

Conduct a Situation Audit

After developing the mission statement the next step is to develop a situation audit. It is an

analysis of the opportunities and threats in the retail environment and the strengths and weakness

of retail business relative to its competitors. It includes the factors like market factors,

competitive factors, environmental factors and analysis of strength and weaknesses.

Market FactorsThe market in which we are operating is of large size. Approximately 10,000 customers will get

aware of the store and 10% will visit our store. There is a retail store at almost every corner of

the street. The market is in growth phase. There is a lot of scope of retailing in Pakistan big

stores like Hyper Star, Metro and Makro also the most rushy retail stores. Seasonality can alsoaffect our business as ramzan is coming so the coke, breads and egg stock will be in the boom for

this reason we should have a lot of resources in the seasonality.

Competitive FactorsThe competitive factors which will affect our discount store is the bargaining power of vendors

and it will be high because as we are new in the market so the vendors will take time to trust on

our discount store. So their bargaining power will be high. When the bargaining power of vendor

is high they have the opportunity to dictate prices and other terms as well as it will reduce the

retailer profit. The competitive rivalry will be low because there is no other discount store in thatarea.

Environmental FactorsEnvironmental factors that can affect market attractiveness include technological, economic,

regulatory and social changes. Environmental factors such as economy will affect our discount

store because if there is inflation exists in the country the prices will get high and it will be

difficult for us to maintain the prices which are prevailing in our discount store. In technological

factor, we need to develop our discount store as it is working on excel. We need to develop

software of our own at cash counters and for maintaining supply chain. In social changes the

trends in demographics, lifestyles, attitudes, and personal values affect retailer market

attractiveness.

Analysis of Strength and WeaknessStrengths


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We all three partners are Business Students and can handle the business effectively. As we are opening the discount store and that store is of our uncle so it will save our money

and the rent will also be low due to family terms and conditions.

Our Location is according to the need of the customers because there is no such discountstore prevailing in that area so it will be beneficial for us and our customers also.

We provide quality and reliable goods. We will try to establish strong relations with the public by creating brand awareness and

brand loyalty.

We as business graduates are Energetic to run the store effectively and have the skills andabilities so that we can manage the store effectively and efficiently.

The people who pass johar town as well as other societies like Valencia, Wapda town andPCSIR will also be captured as our target market as well as the people who are going to visit

the patients to doctor hospital.

The ambiance would be up to the mark and the atmosphere of the store will provide thecustomers with a good shopping experience which mostly retail outlets neglect this thing.

Weaknesses

We are new in the market so it will be difficult for us to get the attractiveness of customers We are fresh graduates so we have a limited experience in buying and purchasing things as

well as how to build a strong relationship with customers.

We have limited investment for our discount store. Our Target Market is limited. The trust of vendors will be low at the start of the business.Identify Strategic Opportunities

After completing the situation audit, the next step is to identify opportunities for increasingretail sales.

We can increase our product line with the passage of time by increasing the assortment. We can go for private branding in the future for different products like Flour and pulses. In the future we can go for market penetration by increasing communication with our

potential target customer

We can also go for Market development by opening one more store in any other society. We can also go for joint ventures with different other store chains of our size to grow. We can also go for Online Retail store in the future as the trend is swiftly changing in

Pakistan and people are attracted towards it.

We will provide home delivery in futureEvaluate Strategic Opportunities

The fourth step in strategic planning process is to evaluate opportunities that have been identifiedin the situation audit. The evaluation will determine our potential to establish a sustainablecompetitive advantage and reap long term profits from the opportunities being evaluated. For this


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purpose we would be analyzing it more carefully and focusing on our strengths and our

competitive advantage also.

Establish Specific Objectives and Allocate Resources

After evaluating the strategic opportunities, the next step in the strategic planning process is to

establish objectives for each opportunity. The specific objectives of our business is defined in the

mission statement and to achieved these objectives we need to have a performance review to bemeasured in our discount store, a time frame within which we will achieve that goal and the last

thing we have to determine that how much the level of investment should be to achieve these

specific goals. For example we are planning to give home deliveries and are allocating budget for

Suzuki cars.

Develop a Retail Mix to Implement the Strategy

The sixth step in the strategic planning process is to develop a retail mix for each opportunity in

which an investment will be made of the discount store and control and performance evaluation

will be done at this stage in the store.

Evaluate Performance and Make Adjustments

The final step in the planning process is to evaluate the results of strategy and implementationprogram. If the royalty discount store is meeting its expected objectives then we do not need to

change our strategic planning process but if we fail to meet our objectives of the store then for

this purpose reanalysis is required for our discount store.

Retail Store Site Selection and Location


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Our Location is a Abdul Haque Road near Doctors Hospital.

Attractiveness of Region of Trade Area

As there is no other discount store in johar town at this moment and which is rare in Pakistan andpeople hesitate to buy their products from discount store because their environment is not good

and there is no customer service offered and they have to go far away to buy grocery products, so

its an attractive trade area which can create huge demand for the business by creating awarenessamong people that will give you the quality service at affordable price near your home with good

ambiance as well as working conditions.

Residents of this area are educated and middle class families. So they belong to modernlife styles at johar town, wapda town, and Valencia and pcsir society.

As there is no other discount store in this block at the moment so there is no competitionas such which we will going to face.

Royalty discount store will be providing them with effortless experience of shopping inthis type of discount store.

Attractiveness of Site

Accessibility

For our target market we have chosen the area of Abdul Haque Road near doctor hospital nearjohar town. The people passing by the road and going towards Valencia, wapda town, Ahbab

Housing society and PCSIR society will create the traffic flow of customers. When the traffic is

greater, more consumers are likely to stop at the store. Traffic counts are particularly important

for retailers offering merchandise and services bought on to the store. We will create traffic flow

in our location but it will be in positive sense that will draw customers to our store.

Location Characteristics

Parking Facility

Our location characteristics are that we will be providing the customers with small parking

facility. but at first it will be not too big but after creating awareness to our customers it will be

increased with the passage of time or we will make underground parking facility.

Visibility

Visibility refers to customers ability to see the store from the street. As our store location is at

the main road so it has a good visibility for the customers and it will be easy for us to create

awareness among our customers through flex, sponsorship and social media.


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Retail Mix

Retail Mix includes the entire element used by the retailers to satisfy its customer needs. The

elements which we are using includes

Type of Merchandise

We are a general merchandise store so initially we will be offering groceries, kitchen ware,

cosmetics and stationary. We will have products of all national brands and few international

brands. There is also an opportunity for introduce private label brands once we attain the positive

brand image.

Variety

We will have a broad variety of merchandise in general grocery. Items like sugar, flour, rice, salt,

oil, ghee, beans, pulses, bread, eggs, russ, cheese, tea, coffee, butter, mayo, corn flakes and

various brands of masalas, noodles, pickles, jam, jellies, ice creams, snacks, biscuits, chocolates,jellies, chips, squashes, instant juices, vinegar and other beverages will be available. Brands of

tooth paste, shampoos, soaps, washing powders will be available. In kitchenware, we will have

keep glasses and products of plastics like bowl and plates will be available. In cosmetics we will

keep limited variety of basic products like beauty creams, scrubs, liner mascara etc. In stationary

we will keep basic things like pen, pencils, rubbers, sharpeners, copies etc.

We will assure the quality of these products and will also take order of those cosmetics which

customer demands but are not available at the store and

Service Offered

The services which our store will offer include displaying merchandise accurately so that

customers can easily touch the product. We will open the store at convenient timings like 6 A.M

till 1 A.M. With time we will plan to make it 24 hours opened. We will be providing easy

packing of the groceries purchased. It will be in eco friendly bags. We will not ask the customer

to buy the bags first. We will arrange a jelly box and chocolate selection area for children where

they will select the jellies of their choices. We will be providing quality customer service by

training our CSRs. We will be communicating easy by telling our customers that this is our

contact number please inform us if u have any complain regarding the grocery by saying that we

will solve it by coming at your door steps. We will provide home delivery for the cosmeticsordered by the customers and will planning to do it for groceries as well.

Prices and Cost of Offering Merchandise and Services

As we are a discount store we will be offering products on a price lower than other stores. The

discount will be on groceries. Our profit margins will be less but we are pursuing for high sales.


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HR in Retailing

Objectives of HR in Retailing

Main objective of HR is to align the activities and performance of employees with the shortterm and long term goals of the organization. The goal of our discount store is to give qualitycustomer service so the goal of HR is to align our HR resource with our goal.

Other objective of the HR is to develop Sustained competitive advantage. The activities andbehavior of our store will differentiate with other stores.

HR will also ensure the satisfaction level of the employees and will pursue to keep themeffective performers. It will be the duty of HR to ensure to take continuous feedback fromthem to keep them loyal to the store. Keeping employees happy is far more important than

keeping customer happy because these are the people who will directly deal with the

customers.

Developing proper training programs for the employees.Designing Organizational Structure

The retail structure of our store will be as follows

There will be decentralization in our retail store. Monthly meetings will be held with allthe employees so collect feedback from everyone. Everyone will be given a chance to

participate in the decisions about the store. The environment of the store will be

participative.

Owner-Manager

Store Manager

*Store Management

*HRM

Salespeople

Merchandise Manager

*Merchadise Management

*Advertising & Prmotion

Finance Manager

*Accounts

*Financial Control


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There will be proper merchandising and store managing procedures. The CSRs will notethe need of merchandise and will report it to the merchandise manager. We will be

analyzing the customers demands and maintain a data. The data will discuss point like

o How many SKUs of a product category were purchased?o How many are sold?o How many are available on shelf and in store

Special HR Issues in Retailing

We will not hire part time workers at our stores. As handling part timers is difficult. Themost difficult thing is to train according to the culture of the store.

We will be facing problems in training our HR initially. As we are the universitygraduates, we will design proper training programs on biannual basis.

We will also train them to deal with various demographics.CRM Implementation in Retailing

The CRM process involves following steps

Collecting Customer Data Analyzing Customer Data CRM Programs

We will be collecting the

customer data by at the cash

counter. The cashier will be

asking for the name and contact

number of the customer. He will

maintain a data base of names,

contact numbers and their

transactions. We can also collect

the data by offering lucky draws

for children. With the help of

transactions of customers we will

develop a customer pyramid addivide the customers into platinum, gold, iron and lead. By identifying our platinum customers

we will offer things like Rs 1000/- shopping free or

so. We can also give them surprise gifts to keep them

loyal to the store.


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1. Buying Merchandise, Brand Decisions, Negotiation Strategies with VendorsAfter analyzing the buying behavior and purchasing pattern regarding different brands of target

market residents, we opted to have all famous local and multinational brands along with few

private label brands for generic goods. Our retail store will offer Nestle, Engro foods, Pepsi-cola,

National, Shan, Mitchles, P&G and Uniliver brands. These all brands holds high brand equity

and positive positioning. As a new retail store, we would need to develop store loyalty and image

along with traffic. Pull strategy will be used to attract vendors after we have established a

customer loyalty in few months time. In the beginning we would be focusing on simple gross

margin along with long- term payment plans to increase the available cash.

2. Retail CommunicationAdvertising Strategies with VendorsAdvertising

Brochures and TV cable ads: - we will advertise our store through brochures and banners

placement in the target area. Newspaper distributors will be used for brochures distribution in the

target area household. TVC are most effective in terms of reach and information flow to the

target market, national channels will be too costly and less productive in nature. In order toincrease the efficiency of TVC, cable operators private movie channels will be used to advertise

our store.

Sales promotion

Rebates and premiums: - Sales promotion act as a complimentary to other sources of promotion,

rebates on bulk buying will be offered to customers as per planned buying levels. Non-monetary

premiums will be offered after few week time to customers that will have a profound impact on

sales increase.

Social media

Social media campaigns have revolutionized the branding and promotion concept for marketers.

Facebook page, twitter and instagram will be used to develop a close relationship with our target

market and provide them with new information like new arrivals, sales promotion, rebates and

other additions. Social media allows our customers to personalize with store.


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3. Store ManagementSelection:-

Employee selection will be done on reference and background check

Motivation and incentive (Profit sharing):-

Store manager job will be to motivate employees for greater efficiency and productivity.

Employees can be both intrinsically and extrinsically motivated through appreciation,

mentorship and profit sharing.

Inventory loss and energy cost management:-

Inventory shrinkage and loss are major concerns to be given high priority as a store manager.

4. Lay out Design and Visual MerchandiseGrid layout

Merchandise placement

Impulse purchase items

5. Customer ServiceEmpathy

Responsiveness

retailing final project

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