Retailing: Activities and Methods

• Entrepreneurial activities consider the capital requirement and the merchandise to be handled
• They also account for organizational expenses, procurement terms, operating expenses, and asset requirements
• Also include the quality and quantity of goods and services needed for prospective customers.

Retailing

• Retailing sells goods and services directly to ultimate consumers
• It involves the offering and selling of goods and services to satisfy consumer needs

Activities Involved in Retailing

• Storekeeping
• Pricing
• Advertising
• Record keeping
• Maintaining Inventory

Retail Methods of Operation

• In-store Retailing
• Non-store Retailing
• Non-Personal, Non-Retailing

In-Store Retailing

• This method makes products and services available at specific outlets for consumer convenience
• Choosing store locations and proximity to potential customers are important
• Goods and services are available at specific locations because of the store's physical structure

Types of In-Store Retailing

• Warehouse Retailing sells well-known furniture or appliances without customer service; customers inspect merchandise in a showroom, then items are pulled from an adjacent warehouse
• Discount Retailing provides lower-than-manufacturer's suggested prices on branded product lines, encourages on-the-spot purchases through mark-up reductions for higher sales volumes of specific brands
• Department Store Retailing consists of highly organized large retail institutions with wide assortments of goods
• They use customer feedback to understand sales performance and expenses
• Segmented item displays require customers to navigate different departments
• High operating costs occur due to large inventory stocks
• Out of fashion stocks accumulate as fashion trends change
• Supermarket Retailing offers a wide variety of product lines, including convenience and necessity items
• Large capital investments are needed
• Fifty percent of sales come from commodities like oil, sugar, milk, canned goods, soap, and school supplies
• Chain Store Retailing differs from department stores; chains consist of two or more branches with large-scale operations
• Chain stores receive privileges due to total sales volume
• They operate centrally
• Major decisions is merchandising, pricing, and procurement are made at the central office
• Specialty Retailing is specialized in certain merchandise(furniture, shoes, jewelry, etc)
• A disadvantage of specialty retailing, is that the retailer depends solely upon one line of merchandise
• Franchising is where the mother company provides franchise with the technology
• The franchisee provides capital and pays royalties
• Royalties are based on the gross sales of the retail outlet
• Examples are fast food chains

Non-Store Retailing

• Non-store retailing sells directly to consumers without physical stores
• It is becoming increasingly popular and relies on the value of time

Categories of Non-Store Retailing

• Personal Retailing involves face-to-face contact between buyer and seller with verbal communication for transactions outside a store
• Non-Personal Retailing includes telephone retailing that is performed by establishments, mail orders, machines, and street vending

Manufacturing

• Manufacturing is the process of converting raw materials into finished goods, a basic activity in any productive operation

Manufacturing Processes

• Productive Design and Development System are activities which geared toward creation of design and construction of a model for a new product
• Manufacturing Operation consists of activities in manufacturing and delivering goods
• Material Flow Operation includes storage and handling of new materials

Importance of Product Planning

• Product research is gathering and classifying data
• Product development is the construction of a sample model of the product
• Final product design is the final and detailed specification of the product

Financial Considerations of Business Enterprise

• Capital for entrepreneurs is not just monetary, its also about innovative ideas
• Fixed capital is the money for acquiring machinery, building and equipment
• Working capital is what funds the day-to-day operation of the business
• Growth capital covers requirements for expansion

Characteristics of a Good Workplace and Location

• Signage should be distinct and eye-catching, with a logo
• Entrances should have security with revolving or automatic doors depending on the location size
• Display windows can be beneficial if retailers can afford to change them
• Poor displays can deter customers
• Environment should have the correct smell, sound and sight
• Success depends on favorable store design