MKT 3831 Retail Buying and Merchandising

MKT 3831 Retail Buying and Merchandising A. Ratikarn Semester 1/2007

OVERVIEW OF RETAIL BUSINESS IN THAILAND

Overview of Retail Business : How many types of retailer in Thailand? • Where do you buy food or snack? • Where do you buy Coca-Cola? • Where do you shop shirts/dresses? • Where do you buying shampoo? • Where do you buy food for your pets? • Where do you buy books? • Where do you buy medicine?

Types of Retail Business for FMCG in Thailand • Department Stores • Central • Robinson • The Mall • Siam Paragon • Emporium • Isetan • Tokyo • Tang Hua Seng • Jusco • Specialty Stores • B2S • Supersports • Powerbuy • Powermall • Homeworks • Homepro • Index • ToysRus • Hypermarket • Tesco-Lotus • Big C • Carrefour • Personal Care • or HBC Stores • Watson’s • Boots • Guardian • Supermarket • Tops • Home Fresh Mart • Foodland • Villa • Tang Hua Seng • Warehouseclub • Makro • CVS + G-stores • 7-Eleven • Family Mart • Jiffy (Jet) • Select (Shell) • Tiger Mart (Esso) • Open Trade • Pop & Mom Shop • Minimart

Retail Definition by AC Nielsen • Nationwide • Greater Bangkok, Central, • North, Northeast and South • Defined Retail Outlets • Super/Hypermarkets / Personal Care Stores • Convenience / G-Stores • Open Trade (Pop&Mom Shop) • Licensed Pharmacy North Northeast Central Greater Bangkok Bangkok, Samut Prakarn, Nonthaburi Pathumthani South

Department Stores • A department store is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line. Department stores usually sell products including apparel, furniture, appliances, electronics, and additionally select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewellery, toys, and sporting goods. Department stores are usually part of a retail chain of many stores situated around a country or several countries. Department Stores: Carry a wide variety of product lines—typically clothing, home furnishings, and household goods. Each line is operated as a separate department managed by specialist buyers or merchandisers.

Hypermarket • In commerce, a hypermarket is a superstore which combines a supermarket and a department store. The result is a gigantic retail facility which carries an enormous range of products under one roof, including full lines of groceries and general merchandise. When they are planned, constructed, and executed correctly, a consumer can ideally satisfy all of his or her routine weekly shopping needs in one trip to the hypermarket. • Hypermarkets, like other big-box stores, typically have business models focusing on high-volume, low-margin sales. Due to their large footprints -- a typical Wal-Mart Supercenter covers 150,000 square feet, a typical Carrefour 210,000 square feet -- and the need for many shoppers to carry large quantities of goods, many hypermarkets choose suburban or out-of-town locations that are easily accessible by automobile. Hypermarket: Carry a wide variety of product lines under one roof (one stop shopping), focusing on high-volume, low margin sales.

Supermarket • A supermarket is a departmentalized self-service store offering a wide variety of food and household merchandise. It is larger in size and has a wider selection than a traditional grocery store. • The supermarket typically comprises meat, produce, dairy, and baked goods departments along with shelf space reserved for canned and packaged goods as well as for various nonfood items such as household cleaners, pharmacy products, and pet supplies. Most supermarkets also sell a variety of other household products that are consumed regularly, such as alcohol (where permitted), household cleaning products, medicine, clothes, and some sell a much wider range of non-food products. Supermarket: Self-service store that carries a wide variety of food, laundry, and household products.

Specialty Stores • Specialty stores are small stores which specialise in a specific range of merchandise and related items. Most stores have an extensive width and depth of stock in the item that they specify in and provide high levels of service and expertise. The pricing policy is generally in the medium to high range, depending on factors like the type and exclusivity of merchandise and ownership, that is, whether they are owner operated or a chain operation which has the advantage of bulk purchasing and centralised warehousing system. They differ from department stores and supermarkets which carry a wide range of merchandise. Specialty Stores: Carry narrow product lines with deep Assortments within those lines.

Warehouse Club • A warehouse club is a retail store, usually selling a limited variety of merchandise, in which customers pay annual membership fees in order to shop. The clubs are able to keep prices low due to the no-frills format of the stores. The concept is similar to the many consumers' cooperative supermarkets found in Europe, though using bigger stores and not co-operatively owned. The use of members prices without co-operative ownership is also sometimes used in bars and casinos. Warehouse Club: Off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay annual membership fees.

Personal Care Stores/Health & Beauty Stores • A personal care store is a retail that sells perfumeries & cosmetics to grocery, and some store is also selling drugs & medicine. This store format is compact and situated in office buildling or shopping center. This store carries a wide variety of health & beauty products. Product Consultant service and Pharmacist are provided at this stores. Personal Care Stores: Focusing on health & beauty products or product for daily usage.

Convenience Stores (C-Store or G-Store) • A convenience store is a small store or shop. They are often located alongside busy roads, or at gas/petrol stations. This can take the form of gas stations supplementing their income with retail outlets, or convenience stores adding gas to the list of goods that they offer. Railway stations also often have convenience stores. They are also frequently located in densely-populated urban neighborhoods. Convenience Stores: Small stores located near residential areas that are open long hours 7 days a week and carry a limited line of high-turnover convenience goods.

Convenience Stores Differences from supermarkets • Although larger newer convenience stores have quite a broad range of items, the selection is still limited compared to supermarkets, and in many stores only 1-2 choices are available. • Prices in a convenience store are typically higher than at a supermarket, mass merchandise store, or auto supply store (with the exception of the goods such as milk, soda and fuel in which convenience stores traditionally do high volume and sometimes use as loss leaders). • The stores will sometimes be the only stores and services near an interstate highway exit where drivers can buy any kind of food or drink for miles. Most of the profit margin from these stores comes from beer, liquor, and cigarettes. Although those three categories themselves usually yield lower margins per item, the amount of sales in the categories generally makes up for it. Profits per item are much higher on deli items (bags of ice, chicken, etc), but sales are generally lower. • At least in some countries most convenience stores have longer shopping hours, some being open 24 hours.

Organizational Classification Chain Stores: Two or more outlets that are owned and controlled, have central buying and merchandising, and sell similar lines of merchandise. Voluntary Chain: A wholesaler-sponsored group of independent retailers that engages in bulk buying and common merchandising. Retailer Cooperative: A group of independent retailers that bands together to set up a jointly owned, Central wholesale operation and conducts joint merchandising and promotion efforts. Franchise: A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.

Retailer : a middlemen between Producer & Consumers Manufacturer Consumers Wholesaler/Retailer Push Strategy

Business Objective -> To have a Healthy Business We can create a Healthy Business by...-> have a good quality in sell-in-> have a good quality in sell-out Sell-Out 61,000,000 Consumers Sell-In Manufacturer 294,000 Retail Outlets

Channel of Distribution: A Retailer is an important aspect of successful marketing Wholesalers: a multi-level service • The advantages of using a wholesaler actually make it a much more cost-efficient route for most MFG than direct delivery. • Their sales force can reach many small stores far more economically than the MFG could. • They cut the MFG’s inventory costs and risks by holding goods in warehouses. • They help finance MFG by ordering early and paying promptly. • They even absorb risks, by carry the cost of theft, damage and spoilage. • Their transportation network is fastest & cheapest way of getting more products into more stores. Retailers: Point of sales – Where buying begins

Organization of RetailBusinessExample : Supermarket

Buyer’s Roles & Responsibilities: • Buying & Merchandising • Merchandising Presentation • Advertising • Shortage Control • Staff Development & Training

Buyer’s Roles & Responsibilities:Buying & Merchandising • Follow the company policy and quality/image positioning, develop a merchandising strategy for the departments. • Develop an achieved planned goals in sales, mark-up, profits • Analyze sales/stock/vender performance reports and take action • Forecasting sales for Promotion items • Negotiate with vendors for favorable terms, discounts, and transportation allowances. • Participate in product development for private labeling, importing goods. • Stay current on new trend and exploring new merchandising trends. • Shop & analyze competitive stores with price, assortments and display in mind.

Buyer’s Roles & Responsibilities:Merchandising Presentation • Define a point of view toward merchandise presentation (displays) • Work with a Vendor to maximize the excitement of displays

Buyer’s Roles & Responsibilities:Advertising • Prepare advertising and promotion plans, budgets, and schedules • Inform branch stores of advertised promotion well in advance, so they can plan ahead for them. Schedule deliveries to make sufficient stock available for all advertised goods. • Track & analyze the results of any advertising, for use in future planning • Conform to the requirements of country laws & regulations

Buyer’s Roles & Responsibilities:Shortage Control • Ensure that all purchase orders, requests for price revisions, transfers of goods, and vendor returns and processed promptly and according to company procedures • Review purchase journals regularly and take appropriate action • Maintain good working relationships with operating divisions to promptly resolve problems in those areas as they arise. • Participate fully in all shortage control audits and loss prevention programs Out Of Stock Vs Out Of Shelf

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MKT 3831 Retail Buying and Merchandising