M.B.A. DEGREE EXAMINATION, FEBRUARY 2018.
Fourth Semester
RETAIL MANAGEMENT
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Time 3 Hours Max. Marks 70
SECTION — A
Answer all FIVE questions. 2 10 Marks)
1. Concept of retail management.
2. Evaluation of alternation.
3. Retail marketing.
4. Retail logistics.
5. Brand loyalty.
SECTION — B
Answer ALL questions. (With internal choice) 10 50 Marks)
6. Explain the role of retail management in Indian economy.
Or
Explain evolution of retailing.
7. Explain various factors influencing consumer behaviour in retailing.
Or
Discuss the impact of buying decision process on retail management.
8. Explain various elements of retail marketing mix.
Or
Discuss various methods of retail pricing.
9. Explain various theories on retail store location.
Or
Write about retail property development.

10. Trace out future of retailing.
Or
Explain brand technology in retail stores.
SECTION — C
Case study (Compulsory) (10 Marks)
11. With worldwide sales of 3.7 billion. Swedish-based IKEA (Pronounced I key ah) is
the largest furniture company in the world. From its beginnings as a mail-order
retailer in Europe, IKEA has built a worldwide network of immense stores-there
are ninety-five in twenty-three countries- that attract millions of customers with
low prices, products with wide appeal, and a unique atmosphere and shopping
experience. IKEA"s lure is its inexpensive, ready-to-assemble furniture, house
wares, and accessories. The furnishings are generally of Scandinavian style, but
IKEA also offers a limited line of more traditional items. One factor that has
helped the retailer succeed is that it sells the same products in all of its stores. The
furniture and decorative items are designed to appeal to consumers regardless of
whether they live in Europe, Canada, the United States, Australia, Kuwait, or any
of the other countries where outlets are located. American shoppers welcomed
IKEA immediately. When IKEA opened its first US store in suburban
Philadelphia, it was a grand event. A six-month media blitz and the mailing of one
million catalogues helped draw roughly 130,000 people in the first four days. Sales
for the first three months reached 8 million, 2 million higher than initial
expectations. The two-story, six-acre store continues to pull in about 35,000
shoppers a week. Consumers responded similarly when the second IKEA opened in
Elizabeth, New Jersey. On opening day, the New Jersey turnpike was backed up
for nine miles. About 26,000 shoppers crowded into the store, and sales totaled over
1 million that day alone. Behind IKEA is a simple marketing idea: Keep prices
down and make shopping as pleasurable as possible. IKEA"s merchandise is priced
at 20 to 40 per cent below competitors" offerings. The company targets consumers
looking for value and willing to do some work themselves, such as serving
themselves, transporting purchases, and assembling their furniture at home. Each
store, staffed by red-shirted information clerks, features stylish display rooms and
a huge, self-service warehouse equipped with special shopping carts. At the front
door, customers are given catalogues, tape measures, pens, and notepaper. They
make their way along a well mapped out traffic pattern through the display rooms.
The layout enables customers to look, obtain product information, and make
purchase decisions without sales help. Signs remind customers that buying
furniture unassembled means they pay lower prices and can take the items home.
Shoppers pick up their purchases at a loading area and cart them home to
assemble. Other important store features are a restaurant, a playroom, a nursery
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complete with baby sitters, and diaper-changing areas with complimentary
diapers. These extras are designed to appeal to 25- to 44 year- old consumers, the
group that buys most of the furniture in the United States. One of IKEA"s primary
marketing tools is its annual catalogue, with photographs, product specifications,
price list, description of the company, and pictures of its playroom and restaurant.
IKEA guarantees prices for a year and holds only one sale a year, a strategy
intended to increase the store"s credibility. Bjorn Bayley, the president of IKEA
North America, explains, "If you are always running sales, how does your customer
know when he°s getting a good price?" Skillful site selection is another factor in the
firm"s worldwide success. IKEA scouts metropolitan areas for inexpensive land
near major highways, a tactic that allows the company to target customers living
up to ninety minutes away from a store. IKEA has stores in the Baltimore,
Washington, D.C,.Pittsburgh, New York City, and Los Angeles metropolitan areas.
The company has focused recently on both U.S. coasts, with plans to establish eight
of its huge stores in the New York and Los Angeles markets alone. Although IKEA
offers mail-order service in Europe, American shoppers will have to continue to
visit IKEA stores. Despite numerous requests from customers, the firm has no
current plans to begin a mail-order business in the United States. With its
innovative concept and effective strategies, IKEA has been called "the new wave of
retailing". The company opens about eight to ten new stores a year and plans to
open as many as sixty U.S. outlets in the next two decades. The United States
could become IKEA"s largest overseas Market by the year 2000. Sales from its
seven American stores are around 250 million a year, and annual sales growth is
expected to be about 30 per cent.
Questions:
What type of retail store is IKEA? and
Describe IKEA"s strategy for store location, its image, and its atmospheric.
How does each contribute to the company"s success?
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