Factors Affecting Market Share of Retailers

Topics: Marketing, Pricing, Sales Pages: 52 (15020 words) Published: May 1, 2013
This chapter entails the background, the statement of the problem, objective of the study research questions, the significance of the study, the limitation of the study and the scope of the study.

1.1 Background of the Study
(Levy and Weitz 2009) defines that “retailer” is a business that sells products and/or services to consumers for their personal or family use. Retailers are the final business in a supply chain that links manufacture to consumers. According to Kotler and Armstrong (2006) a retailer is a business whose sales come primarily from retailing. Although most retailing is done in retail stores, in recent year’s non stores retailing has been growing much faster than has store retailing. Non store retailing include catalogs, telephone interest, TV home shopping shows, home and office parties, door-to-door contact, vending machines and other direct selling approaches. Retailers offer assortment of a product, but they specialize in the assortments they offer. Most customers are well aware of the product assortments retailers’ offer. Supermarkets are the most frequently shopped type of retail store, offering this broad assortment enables customers to buy a wide selection of brands, designs, sizes, colors and prices in one location. Researchers worldwide have appreciated the role played by small scale retailers to the society and the development of the society as a whole. According to Berkowitz (1997), Market share is the ratio of the firm’s sales revenues or unit sales to those of the industry (competitors plus the firm itself). Companies often pursue a market share objectives when industry sales are flat or declining and they want to get a larger share. Anheuser Busch has adopted these objectives in the brewing industry. According to August A. Busch III, the company’s chief executive officer “we want 50 percent of the (beer) market in the mid-1990s” Although increased market share is a primary goals of some firms, other see it as a means to other ends; increasing sales and profit. Kotler (1993 – 1974), coined the term atmospherics to describe visual (color, brightness size, shape), aural (volume, pitch) Olfactory (freshness) and tactile (softness, smoothness, temperature) dimensions of store that can influence the purchase probabilities of consumers. McCarthy (2003), Retailers interact directly with final consumers so strategic planning is critical to their survival. If a retailer loses a customer to a competitor, the retailer is the one who suffers. Producers and wholesalers still make their sale regardless of which retailer sells the product. Retailers worldwide established mutual beneficial relations with their consumers and business partners. In their dealing they expect their consumers to adhere to business principles consistent with their own. Channel members are crucial for every organization as it is the path which the products reach to the ultimate customers and consumers. As this type of businessmen has very wide range of business operations and large number of products. It is effective and efficient for them to sell directly to the final consumers. For this reasons retailers play a vital role in adding value to the products and selling the products to the final consumers and also retailers play a vital role and have left an everlasting impact to their consumers. Small scale retailers are those retailers whose scale of operation is restricted to small segment of the market and to a narrow range of products. They generally hold small stocks of the products of regular use such retailers are very large in number but account for a small portion of the total retail business. But, small scale retailing is a very common, simple and flexible way of distributing the products to the final consumers. It incurs low operating costs and is usually owned and operated by a proprietor. The most important feature is that the small-scale retailers have a direct and personal...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Factors Affecting Share Price Essay
  • Factors Affecting UK Housing Market Essay
  • Essay on Factors Affecting Housing Market
  • Factors Affecting Retailers Selection of Suppliers Essay
  • Factors Affecting Ready Meals Market Essay
  • Essay on Factors Affecting Share Prices
  • Essay about Factors Affecting the Automobile Market
  • Essay on factors affecting Demand and Supply

Become a StudyMode Member

Sign Up - It's Free