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    BUILDING & SUSTAINING

    RELATIONSHIP IN RETAILING

    Presented By

    TEAM 5

    V.S.Aayisha Parveen

    C.R. Shrilekha

    N.Shri Aishwarya

    K.Vijayalakshmi

    M.S. Sindhu

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    RELATIONSHIP RETAILING

    It seeks to establish and maintain a long term

    bonds with customers.

    This means concentrating on the total retail

    experience, monitoring satisfaction with customer

    service, and staying in touch with customers.

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    To be effective in relationship retailing, a firm

    should keep two points in mind

    1. A Win-Win Approach:

    Retailer must win- attract shoppers, make sales,

    earn profits.

    The customer must also win-receive good value, be

    treated with respect, feel welcome by the firm.

    2. Develop a customer database :

    To provide information on people attributes andpast shopping behaviour.

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    FOUR FACTORS OF

    RELATIONSHIP RETAILING

    The Customer Base

    Customer Service

    Customer Satisfaction Loyalty Program

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    1. CUSTOMER BASE

    The customer base is the group of customers

    that a business serves.

    In many cases, the customer base is

    considered the business's target market,

    where customer behaviors are well

    understood through market research or past

    experience.

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    Example:

    Bharti Airtel is the first service provider to cross 100 million

    subscribe base as announced by the chairaman on 19th august 2011.

    After having started its service in 1995 as Bharti Tele-Ventures, the

    company crossed the 7.5-crore customer mark in August 2008 and 5-

    crore mark in October 2007, making it one of the fastest growing

    telecom company in the world.

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    WHAT SHOULD THE RETAILER DO?

    Retailers must regularly analyse the customer

    base in terms of

    population and lifestyle trends attitudes toward and reason for shopping

    the level of loyalty,

    the mix of new versus loyal customer.

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    2. CUSTOMER SERVICE

    Customer service refers to the identifiable, but

    sometimes intangible, activities undertaken by a retailer inconjunction with the goods and services it sells. It impacts on thetotal retail experience.

    Two elements of customer service:

    Expected customer service:is the service level that customers

    want to receive from any retailer, such as basic employee

    courtesy.

    Augmented customer service: includes the activities that

    enhance the shopping experience and give retailers a

    competitive advantage.

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    DEVELOPING A CUSTOMER SERVICE

    STRATEGY

    What customer services are expected and what customer services

    are augmented for a particular retailer ?

    What level of customer service is proper to complement a firm's

    image?

    Upscale retailer Discount retailer

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    Should there be a choice of customer services?

    Warranties may have optional extensions or fixed

    lengths. A firm may offer one, three, and six month payment

    plans or insists on immediate payment.

    Should customer services be free ?

    In settling on a free or fee-based strategy, a firm must

    determine which customer services are expected (these are

    often free) and which are augmented (these may be offered

    for a fee).

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    How can a retailer measure the benefits of providing customer

    services against their costs?

    A retailer should plan augmented customer services based on

    its experience, competitors' actions, and customer comments; and

    when the costs of providing these customer services increase, higher

    prices should be passed on to the consumer.

    How can customer services be terminated ?

    Once a customer service strategy is set, shoppers are likely toreact negatively to any customer service reduction. Therefore, some

    costly augmented customer services may have to be dropped.

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    PLANNING INDIVIDUAL CUSTOMER

    SERVICES

    CREDIT PURCHASES

    DELIVERY

    ALTERATIONS AND INSTALLATIONS

    CENTRALIZED OR DECENTRALIZED

    PACKAGING COUNTERS AND COMPLAINTS

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    CNTD

    GIFT CERTIFICATES& TRAIL PURCHASE

    OTHER USEFUL CUSTOMER SERVICES- interior

    designers, personal shoppers, ticket outlets,

    plentiful parking, water fountains, pay phones,

    restrooms, a restaurant, baby-sitting, fitting rooms,

    a beauty salon, shopping bags, help desks and

    information counters

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    CUSTOMER SATISFACTION

    Customer satisfaction

    occurs when the value

    , quality and customer

    service provided

    through a retailing

    experience meets

    customer expectation.

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    Retail satisfactionconsists of three

    categories: shopping

    system satisfaction ,buying systems

    satisfaction and

    customer

    satisfaction.

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    Most customers do notcomplain whendissatisfied. They justshop elsewhere. Most

    people feelcomplaining produceslittle or no positiveresults.

    The retailers mustobtain regularfeedbacks.

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    LOYALTY PROGRAMS

    Retail loyaltyprograms evolvedwhen progressiveretailers recognizedthat without a"customeridentification tool,"

    they were unable torecognize individualcustomers.

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    The basic benefits of using a loyalty program toobtain customers are:

    Shift - Acquire new customers

    Lift - Increase the spending of existingcustomers

    Retention - Improve the natural churn rate of

    customers Profit mix - Shift spending to higher margin

    products.

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    A retailestablishment or a

    retail group may

    issue a loyalty cardto a customer who

    can then use it as a

    form of identification

    when dealing withthat retailer.

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    EXAMPLES:

    Shopper's Stop has been offering a loyalty

    programme called First Citizen .

    Lifestyle -The inner Circle loyalty Programme.

    Reliance Retail - "Reliance One"

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    GOODS AND SERVICE RETAILING

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    DIFFERENCES BETWEENGOODS AND

    SERVICE RETAILING

    GOODS RETAILING SERVICE RETAILING

    Goods retailing focuses on

    the sale of (physical)

    products

    Some retailers engage in

    either goods retailing (suchas hardware stores)

    No sales- goods can be

    stored

    Service retailing involves

    transactions in which

    consumers do not purchase or

    acquire ownership of tangible

    products.

    service retailing (such as travel

    agencies) others offers a

    combination of two ( such as

    video stores that rent , as well

    as sell, movies).

    No possibility of delayed sales

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    CONTINUED

    Service retailing encompasses diverse businesses

    as personal services

    hotels and motels

    auto repair and rental recreational services.

    In addition, although several services have not been commonly

    considered a part of retailing (such as medical , dental , legal

    ,and educational services), they should be when they entailsfinal consumer sales.

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    KINDS OF SERVICE RETAILING.

    There are 3 kinds of service retailing.

    Rented goods services

    Owned goods services Non goods services

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    FOUR UNIQUE ASPECTS OF SERVICE

    RETAILING

    Intangibility

    Inseparability

    Perishablity Variability

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    INTANGIBILITY

    No possibility of the customer to see, touch or feel

    the service proposition before or during its

    purchase

    No impulse purchase

    Very difficult to evaluate or measure quality in

    services

    The customer cannot stake any claim of ownershipor possession of the service proposition ;they can

    only experience the offer

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    PERISHABILITY

    Unlike goods services cannot be stored but

    have to be transacted during the given time.

    If transactions does not take place then service

    offer loses its value

    Service revenue can never be recovered with

    the hope of future sales.

    There is the element of opportunity lost.

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    VARIABILITY

    Not consistent with quality and delivery

    Same service can never be delivered in the

    same way to the same customer across two

    different time periods

    The service transaction as having a different

    quality when delivered from two different

    places.

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    INSEPARABILITY

    The production and consumption takes place at

    the same time

    The presence of the service retailer and the

    customer is important.

    Even if one of them is absent the service

    transaction cannot take place

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    ABILITIES REQUIRED TO BE A

    SUCCESSFUL SERVICE RETAILER Specific skills are often required for the

    retailer.

    The retailer must select staffs who arecourteous towards customers.

    Retailers must accept responsibility for

    complaints and rectify problems quickly. It is important to listen to customers opinion

    on the outlets customer service.

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    TECHNOLOGY AND RELATIONSHIPS IN

    RETAILING

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    TECHNOLOGY AND RELATIONSHIPS IN

    RETAILING

    Facilitates a better communication flow

    between retailers and their customersbetween retailers and their suppliers

    Faster transactions.

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    IMPACT OF TECHNOLOGY IN

    RETAILING

    In each firm, the roles of technology andhumans must be clear and consistent withthe goals and style of that business.

    Although technology can facilitate customer

    service, it may become overloaded and breakdown.

    It is also viewed as impersonal by some

    consumers. New technology must be set up efficiently

    with minimal disruptions to suppliers,employees, and customers.

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    CONTD

    Shoppers expect certain operations to be inplace, so they can rapidly complete credittransactions, get feedback on product

    availability, and so on. By enacting the advances, they can be

    distinctive.

    F

    or instance, consider the paint store withcomputerized paint-matching equipment forcustomers who want to touch up old jobs.

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    TECHNOLOGYS EFFECTS IN TERMS OF

    ELECTRONIC BANKING

    Automatic teller machines(ATM) and

    The instant processing of retail purchases.

    allows centralized recordkeeping and letscustomers at bank and nonbank locations-including home or office.

    Besides its use in typical financial transactions

    (such as check cashing, withdrawals, andtransfers), electronic banking is now used inretailing.

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    CONTD.

    Many retailers have accepted some form of

    electronic debit payment plan, whereby the

    purchase price is immediately deducted from a

    consumers bank a/c by computer and

    transferred to the retailers a/c.

    Worldwide, there are more than 1.1 billion

    ATMs and people make billions of ATMtransactions yearly

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    SMART CARD SYSTEM

    New version of electronic payment is called the smart

    card

    The smart card contains an electronic strip that storesand modifies customer information as transactions take

    place.

    It is similar to pre-paid phone cards.

    As they shop, card readers deduct the purchase amountfrom the cards. After they are used up, the cards arethrown away or are recorded.

    In the future, Smarter smart Cards are expected to be

    for more permanent and store more information.

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    IMPACT OF TECHNOLOGY IN

    CUSTOMER AND SUPPLIER

    INTERACTIONS:

    Retailers widely use point-of-salescanning equipment.

    By electronically scanning products,retailers can quickly completetransactions, amass sales data, give

    feedback to suppliers, place and receiveorders faster, reduce costs, and adjustinventory.

    The disadvantage here is the error rate.

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    SELF-SCANNING SYSTEM

    A super market customer scans the groceries and

    sacks them. The sacking area is built atop a scale

    linked to the scanner that alerts the customer if an

    item was scanned twice or not at all.

    After all items are scanned, the customer scans in

    any coupons and selects a payment method.

    The machine accepts cash, credit, and debit cards,and electronic benefits transfers.

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    CONTD.

    Customers can use checks and food stamps

    but may need assistance from a cashier.

    Additionally, a cashier monitoring the check

    out stations will be required to enter the birth

    date of customers purchasing alcohol or

    cigarettes.

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    ETHICAL PERFORMANCE AND

    RELATIONSHIPS IN RETAILING

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    ETHICAL CHALLENGES FALLS INTO 3

    INTERCONNECTED CATEGORIES

    Ethics relates to the retailers moral

    principles and values

    Social Responsibility Involves acts benefiting

    society

    Consumerism entails protecting consumer

    rights.

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    ETHICS

    Retailers have a moral obligation to act

    ethically

    a failure to be ethical may lead to adverse

    publicity, law suits, and the loss of customers

    and lack of self-respect among employees.

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    UNETHICAL PRACTICES AGAINST THE

    SOCIETY

    Raising prices on scarce products after a

    natural disaster

    Not having adequate stock when a sale is

    advertised

    Selling alcohol and tobacco products to

    children

    Deflaming competitors

    Selling refurbished merchandise as new

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    HOW TO AVOID UNETHICAL ADS

    The best way to avoid unethical ads for firms is:

    to have written ethics codes,

    to distribute them to employees and channelpartners,

    to monitor behavior, and

    to punish poor behavior- and for top managers

    to be highly ethical in their own conduct.

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    SOCIAL RESPONSIBILITY

    Initiatives taken by retailers are:

    having employees participate in community

    events

    donations to charitable groups

    giving away goods and services to a school

    wheel-chairs for persons with disabilities

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    CONSUMERISM

    Consumerism involves the activities of the

    government, business, and other organizations

    to protect people from practices infringing upon

    their rights as consumers

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    WHY RETAILERS PREFER PRACTICING

    CONSUMERISM

    Some retail practices are covered by legislation

    People patronize firms perceived as customer oriented and not toone seen as greedy

    Consumers are more knowledgeable, price-conscious and selectivethan in the past

    They may not provide enough personal attention for shoppers or mayhave inadequate control over employees

    The use of self service is increasing and it can cause frustration forsome shoppers

    Innovative technology is unsettling to many consumers, who must

    learn new shopping behavior Retailers are in direct customer contact, so they are often blamed for

    and asked to resolve problems caused by manufacturers.