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IMT-81: Retail Management-MT2

IMT-81: Retail Management-MT2




Q1. Discuss in some detail the importance and impact of retailing industry in overall economy of India.


Q2. Explain the retailing concept. Apply it to an automobile dealer of your choice.


Q3. Cite the major advantages and disadvantages of using secondary data in retail store management.


Q4. Highlight she special characteristics of, and importance of strategy, in retailing.


Q5. Explain, why in inventory management, FIFO method seems more logical than LIFO method?




Q1. Differentiate between goods and services retailing, enlist the essential success factors in service retailing.


Q2. Are variety and assortment the same? If not, differentiate. Highlight their importance in success of retail business.


Q3. What approaches can a kirana store retailer use to develop competitive advantage over other similar stores?


Q4. Generally there are four approaches to start a retail business, enumerate, and discuss each in some detail


Q5. Enlist the steps required in strategic planning process of retailing.



Q1. Why is human resource management more important in retailing than in manufacturing industries?


Q2. Discuss in some detail, steps required for designing the organization structure for a retail firm.


Q3. What strategic advantages can be gained through supply chain management in retailing?


Q4. What is outsourcing? Discuss its advantages and disadvantages in retailing operations.


Q5. How do retailers use Twenty eighty to identify their most profitable customers?





HLL Joins the Direct Marketing Bandwagon


The innovative distribution channel created by HLL to access the Indian market has spelled success for the company for over five decades. HLL's formula has been successfully replicated by many competing brands and small players in the FMCG segment.


The wide range of products offered by HLL to tap every conceivable price point, tapped the unexplored Indian market optimally, and HLL became the jewel in Unilever's crown, contributing to revenue growth even when the parent company was struggling.


But in the late 1990s and early 2000s, an influx of foreign players and myriad low-price local rivals started eroding HLL's dominant's position.


The company zeroed in on the idea of meeting the growing needs of the time-starved Indian middle class population through direct marketing via HLN (Hindustan lever Network).


The direct marketing industry was estimated to be worth more than Rs.15 billion as of early 2003, and was growing at the rate of approximately 25% year on year.


Through value added services like expert advice and home delivery, and a range of world class products which mirrored the aspirations of its target consumer, HLN aimed to be the most preferred network marketing company in the country.


It envisioned partnering with its consultants (salespersons) and providing them with a business and selfdevelopment opportunity that was truly rewarding. In the words of Executive Director - New Ventures and Marketing Services, HLL, "We need to be present in all channels. And we see network marketing as a bigger opportunity than a threat.



1. Enlist the environmental factors and their impact on Indian retail by the channel strategy adopted by HLL prior to 1990.

2. Highlight the advantages and disadvantages of HLN format as adopted by HLL, and its impact on the purchase behavior of Indian consumer.





The Retailer - a case in study



·         successful

·         privately held

·         medium size juniors ready to wear retailer headquartered in New Jersey

·         competes in B and B+ malls in the northeast

·         merchandise is very trendy

·         heavy price competition


For some time the company did their merchandise planning on a sophisticated series of linked spreadsheets that the director of planning and distribution had worked very diligently to devise. After some time a decision was made to install one of the leading planning applications.

The installation, implementation and rollout of this planning application were a success. However it was a success not because the application was superior or technologically advanced, but because the organization understood the need to manage its inventory.


The retailer had a strong inventory process which lead to a culture wherein inventory management became paramount. This formalized process was engrained with regular meetings. This took the form of weekly bestseller meetings (Monday evenings) and monthly plan review sessions.


On Monday Night, Everything Is Beautiful Like most retailers on Mondays, this company spent the day analyzing the prior week's business. The entire merchandising organization, senior management from the store organization, marketing/visual display and the controller met to review to the best sellers. The primary topic of conversation was the best selling styles, or classes and what action could be taken to capitalize on the current trends. The outcome of the Monday meetings were the marching orders for the week on how to get more business.


On the Thursday following the end of the fiscal month, an all day meeting was held to review the business at a relatively detailed level (sometimes this ran into Friday where necessary). The following was discussed:


·         The GMM would review with the DMM, Buyer, Assistant Buyer, and Planner the details of the business, starting at the top and working down to the style level if necessary.

·         Each major division would review the major business components -- sales, inventory, markup, markdowns, gross profit and gross margin. Although each element had a place in the discussion, inventory levels were paramount.

·         Merchandise areas that were well run and under control could finish in an hour or so. For those areas that showed serious deviations from the plan, the review process could take hours and be quite painful.

·         For styles whose rate of sale had slowed to the point where the retailer could not be meet the target "out date," the price was slashed significantly.

·         The goal of the price reduction to move the goods out as soon as possible. The impact on gross margin was considered less important. If a significant amount of markdowns beyond the plan needed to taken, it was done aggressively.

·         If, by the subsequent month's plan review, the goods had not been significantly reduced, the GMM insisted that additional markdowns be taken. These were taken with impunity regardless of the impact on the margin.



1. Culturally what was the net effect of the complete planning process on overall operations?

2. Do you agree with the management style as discussed in the case , if so? Give reasons for your answer.

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