Retail Case Study Ignou

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MANAGEMENT PROGRAMME
Term-End Examination

June, 2005

MS-612 : RETAIL MANAGEMENT

Time: 3 hours
Maximum Marks: 100
(Weightage 70%)

Note : (i) Attempt any three questions from Section A.
(ii) Section B is compulsory.
(iii) All questions carry equal marks.
SECTION A

1. Define retailing. Discuss the scope and prospects of retail sector in the Indian context, describing the drivers of growth of retailing in the country.

2. (a) What are the stages of consumer decision making and their impact on retail strategies ? Explain with suitable examples.

(b) What makes locational decisions in retailing strategic in nature ? Discuss with suitable examples the factors necessary to consider before selecting a final site for any store.

3. (a) How important is the role of pricing in retail marketing mix ? Briefly discuss the various retail pricing approaches available to the retailer.

(b) What are loyalty programmes ? What purpose do they serve in the overall retail business? Explain.

4. Briefly discuss the various types of non-store retailing currently in vogue. What are their limitations ?

5. Write notes on any three of the following :

(a) Functions of Retailers
(b) Wheel of Retailing
(c) Responsibilities of Merchandising Manager
(d) CRM
(e) Ethical Responsibilities of Retailer

SECTION B

6. Read the case given below and answer the questions given at the end of the case.

Margin Free Market Private Ltd.

Subhiksha in Chennai, Margin free in Kerala, Bombay Bazaar in Mumbai, RPG'S Giant in Hyderabad, and Big Bazaar in Kolkata, Hyderabad, and Bangalore have one thing in common - they all price their products below MRP. Discount stores are slowly arriving in India and industry insiders feel they will spearhead a revolution in organized retailing. On the list of top retailers in the world, quite a few are discounters. Around 60% of the business abroad comes from this format. Incidentally, the largest retailer in the world, Wal-Mart, is a discount store.

Margin Free was registered as a co-operative society in 1993 in Kerala and entered the supermarket business in 1994. It is run by the Consumer Protection and Guidance Society, a charitable organization based in Thiruvananthapuram. Today, it has emerged as India's number one supermarket chain with 150 stores and a turnover of Rs. 450 crores. Margin Free purchases directly from manufacturers at ex-factory price and sells at lower prices than the MRP, as it eliminates the margin accrued in the traditional manufacturer-stockist-wholesaler-retailer network.

Margin Free takes extreme care while pricing the products through its entire stores. It has employed software which evaluates the price by minimizing profits. Every store is computerized and utilises the software to determine the pricing. This helps in ensuring that the products are rationally priced.

Margin Free has found exceptional success in its scalable franchised model. It is now looking to upgrade to a central warehouse concept. which will help it manage growth further. The success of Subhiksha and Margin Free indicate that the discount war will hot up in the coming months but it will be the customer who will emerge as the final winner.

Margin Free also gets an average credit of 20-22 days from suppliers, which it sells, on an average in 10 days, thereby even earning a notional interest on its sales also. Its strategy has made it flush with funds, which can finance further expansion. Margin Free uses its customer base as a bargaining power to strike discount deals. Any dealer who wants to set up a Margin Free store has to buy at least rupees one lakh worth of share of the main Margin Free holding company. Margin Free has a consumer base of 6 lakhs and it sells them consumer cards at Rs. 40 per year Customers who buy using this card get discounts on bulk purchases and also on government subsidized producis like Rs. 2 per kg rice.

The stores are now opting for a major...
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