Directorate of Distance Education
Swami Vivekanand Subharti University
II Year
Course Code: MBA -302
Course Title: Retail Management
Assignment No.: MBA -302/ 2023
Q1. What is Retail Strategy?
Retail Strategy refers to a comprehensive plan developed by a retailer to gain a competitive
advantage and achieve its goals in the retail market. It involves identifying the target market,
selecting appropriate product offerings, determining the best locations, pricing strategies,
promotional methods, and customer service approaches. Retail strategy outlines how a retailer will
compete in the marketplace, attract customers, and differentiate itself from competitors. It also
includes decisions on the store layout, inventory management, branding, and digital presence. A
successful retail strategy aligns all aspects of the business to enhance customer experience and
profitability.
Q2. Write the Importance of Location in Retail Business
The location of a retail business plays a critical role in its success for the following reasons:
1. Customer Accessibility: A prime location increases the likelihood of attracting more foot
traffic and customers. Being close to a high-traffic area, such as shopping malls, busy streets,
or popular districts, enhances visibility and accessibility.
2. Brand Image and Positioning: The location of a store helps reinforce the retailer’s brand
image. For example, luxury brands often choose upscale, prestigious areas, while discount
retailers target more price-conscious locations.
3. Competitive Advantage: A good location allows retailers to be closer to their competitors or
to strategically place themselves where they can draw in customers who may have
otherwise shopped elsewhere.
4. Operational Costs: Rent, utilities, and other location-based expenses can vary significantly
depending on the area. Retailers must balance costs with potential customer traffic to
ensure profitability.
5. Convenience: The convenience of location is crucial for customer retention. If a store is in an
easy-to-access location, with adequate parking and public transportation options, it
improves the likelihood of repeat business.
6. Market Demographics: Retailers select locations based on the demographics of the area.
Understanding the population’s income levels, buying habits, and lifestyle choices is
essential for targeting the right market segment.
Directorate of Distance Education
Swami Vivekanand Subharti University
II Year
Q3. What is Merchandising?
Merchandising refers to the activities involved in promoting the sale of goods, including the
selection, display, and pricing of products in a retail setting. It focuses on ensuring that the right
products are available at the right time, in the right quantities, and at the right price. Merchandising
encompasses everything from product procurement and inventory management to store layout,
visual displays, and promotional strategies. The goal is to maximize sales, enhance customer
satisfaction, and improve profitability by effectively presenting products to the consumer.
Q4. Discuss the Factors Influencing Merchandising
Several factors influence merchandising strategies, including:
1. Consumer Preferences and Trends: Understanding what customers want, their tastes, and
trends in the market is crucial in making informed product decisions. Merchandisers need to
stay up-to-date with consumer behaviour, fashion trends, and seasonal demands.
2. Market Competition: The pricing, quality, and range of products offered by competitors can
influence merchandising decisions. Retailers must differentiate their offerings to stay
competitive.
3. Supplier Relationships: The availability and pricing of products depend on relationships with
suppliers. Efficient supply chain management and negotiation skills are essential for
maintaining competitive pricing and timely stock availability.
4. Seasonality: Certain products may be in demand only during specific seasons or holidays
(e.g., winter apparel or Christmas decorations). Merchandisers must plan ahead to meet
seasonal demand and adjust inventory accordingly.
5. Store Layout and Design: The way products are displayed in-store influences customer
perception and buying behaviour. Merchandisers must plan the store layout and product
placement to encourage purchases.
6. Pricing Strategy: The pricing of merchandise, based on cost, competitor pricing, and
consumer willingness to pay, plays a crucial role in driving sales. Discounts, promotions, and
pricing tactics must align with business objectives.
7. Inventory Management: Effective inventory control ensures that popular items are stocked
and available when needed, while avoiding overstocking or understocking. This balance is
crucial for sales optimization.
8. Economic Conditions: Economic factors such as inflation, disposable income, and overall
consumer confidence can influence purchasing behaviour and affect the types of products
merchandisers choose to focus on.
Directorate of Distance Education
Swami Vivekanand Subharti University
II Year
Q5. Explain the Functions of a Merchandising Manager
A Merchandising Manager is responsible for overseeing all aspects of the merchandising process,
ensuring that the right products are available to meet consumer demand. Key functions include:
1. Product Selection: Choosing the right products for the store based on market trends,
consumer preferences, and company goals. This involves analysing sales data, reviewing
supplier offerings, and anticipating customer needs.
2. Pricing Strategy: Setting competitive and profitable prices for products. This involves
researching competitor prices, calculating margins, and adjusting prices based on demand,
seasonality, and promotions.
3. Inventory Management: Ensuring optimal stock levels are maintained. A merchandising
manager oversees ordering, stocking, and reordering products to avoid both overstocking
and stockouts. This function is critical for maximizing sales and profitability.
4. Store Layout and Visual Merchandising: Planning the store layout and creating appealing
product displays to attract customers and encourage purchases. The merchandising
manager ensures that displays align with brand identity and customer expectations.
5. Sales Forecasting: Analysing sales data and market trends to forecast future demand. This
helps with inventory planning, product selection, and budgeting.
6. Vendor Relations: Building and maintaining relationships with suppliers and negotiating
terms of contracts, prices, and delivery schedules. The merchandising manager ensures that
suppliers meet the store’s product and quality requirements.
7. Promotion and Marketing: Collaborating with the marketing team to plan and execute sales
promotions, special offers, and product launches. This function also includes tracking the
effectiveness of promotional campaigns.
8. Trend Analysis and Market Research: Continuously monitoring industry trends, consumer
behaviour, and competitor strategies to adjust the merchandise mix accordingly. This helps
ensure that the business remains competitive and responsive to market shifts.
9. Budget Management: Managing the merchandising budget to ensure that costs are kept
within limits while achieving desired sales outcomes. The merchandising manager is
responsible for balancing cost efficiency with product quality and variety.
10. Team Coordination and Leadership: Leading and coordinating the merchandising team,
which may include buyers, stock managers, and display coordinators. The manager ensures
that the team is aligned with the organization’s merchandising objectives and overall
strategy.
