Principles of Retailing

Topics: Retailing, Sales, Online shopping Pages: 34 (8910 words) Published: January 30, 2013
Principles of Retailing:
The format of a retailer is the overall appearance and feel that it presents to customers, primarily its look and layout, the sort of range it stocks and the approach taken to pricing. New format : development of online business

Format is distinct from fascia which, strictly speaking, refers solely to external appearance. Retailers occasionally use it as as a synonym for format.

Retail internationalization
Companies like wal-mart, testco, internationalie due to the nature and hange in the competitive environment .. like Stagnation(ceasing) of sales at home Internationalize due to
various PULL factors such as – established location – potentially large growth markets, access routes , higher profits – factors that pull u to comet ot he country!!! By expanding operations to new heterogeneous markets companies can avoid facing STAGNAITON and fall out during maturity phase of the retail life cycle Concept behind retail internationalizatoin

Eclectic paradigm was initially developed in the 60s which seeked to explain RI in turns of manufacturing It worked on the assumption that RI was based on ASSET SPECIFIC advantage, location specifying and the degree of innovation in management This was later added by vida and sire who added to asset and location advantage * The degree of RI depens on FACILITATING COMPETITINCIES

As managers get more exposed to new markets they become more comfortable with change which drives the organization forward

- higher required rate of investment
Government regulation / high costs / market saturation / increased competition These are push factores that would push companies OUT OF THE COMFORT ZONE, to new and potentially greener pastures abroad PULL FACTORS

-Low barriers to entry (porter 5 forces)
- location advanatages ,
potential growth segment,
undifferentiated product segemetns, ,
low risk – low culture , low political barriers

Companies tend to chose diretions that are CULTURALLY and GEOGRAPHICALLY smilar 3Methods of Entry, ORGANIC and INORGANIC growth

* Use internal funds , retained profits or raises equity from the markets to grow and its relatively low risk

Advnatages: Low risk --- no control of conflict issues associated with inorganic grow, unity , management control Disadvantages: limited resourcs, needs to have resources financial, human , it will tie up the resources not easy to expand in shorterm… economic cycle if the company open a lot of outlets in different countries and if the economy effcts the industry, it will AFFECT THE WHOLE COMPANY, RECESSION NOW Organic growth can be concentric: open a main unit in a strategic location that can be serviced by the supply chain, and then open further unites around it in a CONTAGIOUS concentric fashion, like GAP BODY SHOP --- can also be used with franchising, opening a flagship store, then diffusing to other regions by franchises that benefit from marketing bran synergy and operation support of the parent Another organic growth form is by HIERARCHICAL DIFFUSION.. opening stores in key cities and then in major towns and then in minor town Both of these stratges are not mutually exclusive

When applied to a particular retail store, the designation of "flagship" is given to a retailer's primary location, a store in a prominent location, a chain's largest store, the store that holds or sells the highest volume of merchandise, a retailer's most well-known location, a chain's first retail outlet,

From a locational perspective, there are two major types of organic growth. Local and regional expansion from a single outlet, termed contagious diffusion, describes the early growth experience of long-established retailers which were geographically confined by transportation and distribution...
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