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KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 KAAV INTERNATIONAL JOURNAL OF ECONOMICS , COMMERCE & BUSINESS MANAGEMENT COMMUNICATION IN RETAILING- A STRATEGIC TOOL FOR EFFICIENCY & EFFECTIVENESS IN RETAIL INDUSTRY Mr. Kavish Sharma*1 1 Asstt. Professor, Deptt. of Management, Shree Ganpati Institute of Technology, (Affiliated to U.P.T.U., Lucknow) Uttar Pradesh India Abstract: Retail means selling the product or service to the end users or consumers for direct consumption. General store, super market, specialty store, mall, doctor’s clinic and beauty parlor etc these are examples of retail .In retail effective communication is required to attract customer and to increase defined as a transfer of ideas, emotions, and thoughts from one person to another person to get expected he sale. Communication response. Communication in retail business includes listening skill, team communication, oral communication, nonverbal communication, handling difficult customer interactions, feedback skill. Verbal communication means the communication where the words are used. Nonverbal communication means communication without words but using nonverbal cues. Retailer’s conscious use of these communication skills can foster positive relationship between retailer and customer. As retailing is a people oriented business and job of retailer requires that he has to be in constant contact with customer. Communication skills important in retail job in all selling and buying are listening, team communication, oral communication, nonverbal, handling difficult customer interactions and feedback skills. This paper examines how the communication depicts its role to improve the efficiency & effectiveness of the retail sector. Further, this portrays the importance & challenges in communication in retail sector. Key words: Retail communication, communication mix, communication skills etc. Copyright © 2014 Published by kaav publications. All rights reserved 84 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 Communication in Retailing- A Strategic Tool for Efficiency & Effectiveness in Retail Industry 1. Introduction In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations. The word retail is derived from the French word retailer, means to cut off a piece or to break bulk. Therefore, a retailer is a dealer or trader who sells goods in small quantities. Retailing is the final step in the distribution of products, for consumption by the end consumers. It consists of all activities involved in the marketing of goods and services directly to the consumers, for their personal, family or household use. This excludes direct interface between the manufacturer and institutional buyers such as government and other bulk customers. Retail is India’s largest industry. The sector has witnessed an immense growth in the last few years. The key factors responsible for the retail boom have been the change in consumer profile and demographics, increase in the number of international brands available in the Indian market, economic implications of the government, increasing urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers.The retail marketing concept is the acceptance by the retailer that it is the “customer” and not “demand” that lie at the core of the retail organization. The retail marketing concept is a philosophy, not a system of retailing or retail structure. It is founded on the belief that profitable retailing and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires. It is an attitude of mind that places the customer at the very centre of retailing activities. 2. Retail Communication Communication Mix Copyright © 2014 Published by kaav publications. All rights reserved 85 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 Communication Mix is the range of approaches and expressions of a marketing idea developed with the hope that it be effective in conveying the ideas to the diverse population of people who receive it. It is designed to achieve a variety of objectives for the retailer, such as building a brand image of the retailer in the customer's mind, increasing sales and store traffic, providing information about the retailer's location and offering, and announcing special activities. Retailers communicate with customers through various means. These elements in the communication mix must be coordinated so customers have a clear, distinct image of the retailer and not be confused by conflicting information. Many retailers use rules of thumb to determine the size of the promotion budget. Marginal analysis, the most appropriate method for determining how much must be spent to accomplish the retailer's objectives, should be used to determine whether the level of spending maximizes the profits that could be generated by the communication mix. 3. Retail Communication Mix A communication program can be designed to achieve a variety of objectives for the retailer, such as building a brand image of the retailer in the customer's mind, increasing sales and store traffic, providing information about the retailer's location and offering, and announcing special activities. Retailers communicate with customers through advertising, sales promotions, store atmosphere, Web sites, salespeople, e-mail, direct mail, m-commerce, community building, publicity, and word of mouth. These elements in the communication mix must be coordinated so customers have a clear, distinct image of the retailer and are not confused by conflicting information. Many retailers use rules of thumb to determine the size of the promotion budget. Marginal analysis, the most appropriate method for determining how much must be spent to accomplish the retailer's objectives, should be used to determine whether the level of spending maximizes the profits that could be generated by the communication mix. The largest portion of a retailer's communication budget is typically spent on advertising and sales promotions. A wide array of media can be used for advertising. Each medium has its pros and cons. For example, newspaper advertising is effective for announcing sales, whereas TV ads are useful for developing an image. Sales promotions and m-commerce are typically used to achieve short-term objectives, such as increasing store traffic over a weekend. Personal selling, community building, and word of mouth through social shopping activities help achieve more long-term goals and customer loyalty. Publicity and word of mouth are typically low-cost communications, but they are very difficult for retailers to control. Communication is an integral part of the retailer’s marketing strategy. Primarily, communication is used to inform the customers about the retailer, the merchandise and the services. It also serves as a tool for building the store image. Retail communication has moved on from the time when the retailer alone communicated with the consumers. Today, consumers can communicate or reach the organizations. Examples of this include toll free numbers, which retailers provide for customer complaints and queries. Another example is the section called Contact Us on the websites of Copyright © 2014 Published by kaav publications. All rights reserved 86 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 many companies it is believed that every brand contact delivers an impression that can strengthen or weaken the customer view of the company. The main elements that make up the promotions/communications mix in Retail Communication are: PAID IMPERSONAL COMMUNICATION (a) Advertising It is an Effective medium for creating awareness and interest. Low control over response: Copyright © 2014 Published by kaav publications. All rights reserved 87 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 Television Cinema Radio Directories Packaging Hoardings/Posters Magazines Catalogues Brochures Internet Advertising can be defined as any paid form of non-personal presentation and communication through mass media. It is popularly believed that one of the main aims of advertising is to sell to a wide mix of consumers and also to induce repeat purchases. However, a retailer may use advertising to achieve any of the following objectives: Creating awareness about a product or store Communicate information in order to create a specific image in the customer’s mind in terms of the store merchandise price quality benefits etc. Create a desire to want a product. To communicate the store’s policy on various issues. Help to identify the store with nationally advertised brands. Help in repositioning the store in the mind of the consumer. To increase sales of specific categories or to generate short term cash flow – by way of a sale, bargain days, midnight madness etc. Help reinforce the retailer’s corporate identity. (b) Determining the Advertising / Promotional budget While there is no definite formula for determining the advertising or the overall promotion budget the following are the main methods that may be employed to determine the advertising budget. ‘ (c) The percentage of Sales method: This is perhaps the most commonly used method for determining the budget. Here, the budget is a fixed percentage of sales. The biggest advantage of this method is that it is simple to apply and Copyright © 2014 Published by kaav publications. All rights reserved 88 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 it allows he retailer to set an affordable limit on promotional activity. This method however, takes little consideration of the market conditions of any special advertising needs. (d) The Competitive Parity Method Here the budget is based on the estimated amount spent by the competition. There is risk that it could be based on wrong information and again there is little consideration for market conditions or growth opportunities. (e)The research approach or the Task and objective Method The budget is determines on the basis of a study of the best forms of advertising media and the costs of each. The retailer formulates advertising goals and then defines the tasks necessary to accomplish these goals. Next, the management determines the cost for each task and adds up the total to arrive at the required budget. Here, he advertising expenses are linked to the retailer’s objectives and the effectiveness of some forms of advertising can be measured and compared to costs. (f)The Incremental Method The budget is simply based on the previous expenditure. The budget allocated for advertising or for promotion is based on the basis of the money that can be allocated by the retailer for this purpose. While determining which method s to be adopted, a retailer needs to take into consideration the market that the firm is operating in , its current market position and how important advertising is in that market. (g) Sales Promotion Effective medium for creating awareness, interest and credibility. Money-off coupons free gift Samples are the examples of sales promotion. (h) Store Atmosphere The combination of the store’s physical characteristics (architecture, layout, signs and displays, colors, lighting, temperature, sounds, smells) together create an image in the customers’ mind (i)Retailers’ Community Building Websites Copyright © 2014 Published by kaav publications. All rights reserved 89 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 It offer opportunities for customers with similar interests to learn about products and services that support their hobbies and share information with others 4. PAID PERSONAL COMMUNICATION (a)Personal selling In this salespeople satisfy needs through face to face exchange of information. Effective medium for influencing all stages of the decision making process, especially the decision to buy. High level of control. Good for small businesses with local markets complex products and services. (b) Direct Mail Mail E-mail CD-ROMS 5. UNPAID IMPERSONAL COMMUNICATION (a) Publicity It is communication through significant unpaid presentations about the retailer, usually a news story, in impersonal media. Effective medium for creating awareness, interest and credibility. Little control. Publicity can be highly credible if it is well thought - out and it is extremely cheap. A feature in a paper, magazine sometimes seem more credible to readers than ads BUT it is restricted by editorial decisions by the media source used 6. UNPAID PERSONAL COMMUNICATION (a) Word of Mouth Effective medium for creating interest and desire for your product or service and it is extremely cheap & produce followings results: Copyright © 2014 Published by kaav publications. All rights reserved 90 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 Give excellent service and produce good quality Pay attention to packaging Give customers something to pass onto friends such as business cards Give customers incentive to bring new customers e.g. special discounts Become part of local community activities Team up with other local businesses and pass customers between you 7. Steps to develop a Communications Program. Identify target audience. Determine Promotion Objectives. Set Promotion Budget. Decide on Suitable Time-Span. Design the Message. Decide on Promotion Mix and Allocate Budget. Carry out Promotion Plan. Measure and Analyze Results. 8. Identify Target Audience Market research and market segmentation will help to identify the audience for your product or service. Information on how large the audience is, where they are located and hopefully some idea of their needs, attitudes and preferences and the benefits they require from your product or service. (a) Determine Promotion Objectives The objectives of the promotion mix must be: Realistic, Attainable, Attributable. Measurable: Specific goals related to the retail communication mix’s effect on the customer’s decisionmaking process Long-term: creating or altering a retailer’s brand image Short-term: increasing store traffic (b) Determine Promotion Budget Copyright © 2014 Published by kaav publications. All rights reserved 91 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 Allocate your budget wisely; money spent on a bad promotion is worse than spending no money on promotion. You must also be able to justify this cost in your business plan. (c) Decide on Suitable Time Span A decision must be reached on the time scale of the Promotion campaign. This will depend on the objectives of the campaign, the medium used and the allocated budget. The timing of the campaign is also important e.g. advertising fireworks in January! (d) Decide on Message The message and the medium used to convey that message will be affected by the type of product/service, the cost, legislation, what the competition is doing etc. Most importantly, it will be affected by the desired response from the consumer and the stage in the buying process that needs to be influenced. The “AIDAS” model can illustrate this buying process: Attention Interest Desire Action Satisfaction Ideally the message should get the attention of the consumer and take them through the stages until a purchase is made and satisfaction reached. In practice few messages take a consumer through the whole process, but are pitched at a certain level that meets the promotion objective. The message content should include a unique selling proposition (USP), i.e. a benefit, motivation, identification etc. that appeals to the audience. This appeal could be: - Rational - appeals to audience's self interest. Show that product produces claimed benefits such as quality, economy, value, e.g. car ads. Emotional - stir up a positive/negative emotion that will motivate purchase, e.g. Andrex puppies. Moral - directed to the audience's sense of what is right, e.g. support for social causes. Copyright © 2014 Published by kaav publications. All rights reserved 92 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 The message format should be strong in order to catch the attention of the audience. The message format depends on the promotional medium used. For printed ads, careful decision for headline illustration, color etc. For personal selling, decision as to choice of words, portfolio, dress, body language. 9. Promotion Mix Each promotional element has a different communication capacity, is effective at different stages in the buying process and we have a different level of control over each one. Therefore the decision for choice of promotion mix will depend upon: Target audience Objectives Timing stage of product life cycle complexity of product competition legal restraints Monetary restraints etc. (a) Carry out a promotion Plan A pre planned promotion should be done so that it is able to attract consumers and is successful. Various methods for promotion can be adopted. Such As- advertising, sales promotion, personal selling, e-mail, direct mail etc (b)Measure and Analyze Results It is important to measure in some way the effectiveness of your promotion campaign. Measuring and analyzing the outcome of the promotion campaign will help in the development of future campaigns. It may be that you need to change the medium used or the time - span etc, of the next promotion campaign. 10. Retail Communication Forms: Most retail stores have established many forms of Communication to assist customers even prior to trekking to the store. These systems include a web site, email, fax, online shopping, automated Copyright © 2014 Published by kaav publications. All rights reserved 93 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 attendant, custom call routing (CCR) and enhance the customer experience. After all, the ultimate goal is too quickly and efficiently services the needs of the customer while maximizing a return. 11. Challenges in Retail Communication:Due to modernization and globalization Communication in retail is facing following challenges: Analyze and priorities product information and relate it to customer. Knowledge of high-tech communication capabilities. Ability to understand and appreciate customer sensitiveness. Skills to analyze and handle difficult sale situation. Ability to handle difficult customer reaction. Inter cultural communication competence. 12. Importance of communication for retail professional:In addition to the product knowledge and sales efficiency, effective communication with customer result in Increased sales. Better customer relationship. Steadier work flow to improve gain ability. To add value in numerous ways. Foster work teams. Get feedback. Positive attitude. Motivation. Cooperation in organization. Business customer and maintenance of good professional relation. 13. Communication and promotion through the new media: New/unmeasured media such as the web, email, blog, video, other social media, and mobile continue grow in usage and popularity, but not much is known about their effectiveness, making allocation to such media an important but challenging task. The media mix for its major brands now includes greater allocation to in-store (shopper marketing), the Internet, and other unmeasured media. 14. Conclusion: Copyright © 2014 Published by kaav publications. All rights reserved 94 www.kaavpublications.org KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7 ISSN:2348-4969 To conclude, Communication skills in retail should be learnt by the retailer to make it effective communication so that customer can trust retailer. Communication is two way process. Communication cycle results maximum buying customers that means maximum profit. In the age of modernization and globalization retailer needs to be aware of communication skills viz. listening skill, oral skill, feedback skill, assertiveness skill, nonverbal communication. By knowing various retail communication forms, importance and challenges in retail communication, retailer can manage his business easily. References: 1. Balaraman, B., 2004, Development of Generic Skills, Nagpur, Central Techno Publication. 2. B, John, v.Thill, 1975, Excellence in Business Communication, London, Oxford Publication. 3. Cundiff, M., 1972, Kinesics, New York, Parker Publishing. 4. M. Ashraf Rizvi, 1998, Communication for Retail Professionals, Delhi, Tata McGraw Hill Publication House. 5. Levy Weitz. “Retailing Management “,Tata Mc Graw Hills Company Ltd New Delhi p.p472502. 6.Swapna Pradhan, “Retailing Management Text& Cases”, Tata Mc Graw Hills Company p.p127-141,342-350. Copyright © 2014 Published by kaav publications. All rights reserved 95 www.kaavpublications.org