The environment of retailing and decision making issues
THE ENVIRONMENT OFRETAILING AND DECISION- MAKING ISSUES CHAPTER 3
INTRODUCTION• To understand the complex external environment in which retailers function.• To explore several different dimensions of the environment.• To examine some historical attitudes.• Issues of personal decision making.• To discusses the legal, competitive, and technological environment.• To discuss global market influences and opportunities.
Changing role of business in meeting government, economic, and social needs. Business with Business with Government, Business Government Religious Institutions, Regulation School. Family Meets Meets Meets Economic, Economic Economic Social, Political, needs needs Personal Needs1700s and 1800s Late 1800s to Early 1900s Late 1900s
THE SOCIAL RESPONSIBILITYENVIRONMENT• Providing goods and services to the ultimate consumer - Caveat emptor – “let the buyer beware”• A change in Attitudes.• Nonbusiness Influences on Decision Making – Economic Utilitarianism.• Criticism of Business.• Retailing and Social Needs.
INFLUENCES ON INDIVIDUALDECISION MAKING Professional Codes of Ethical Behavior Influences on Individual A Personal Legal Ethic Decision Environment Making in Retailing Economic Utilitarianism
Consumerism• Basic consumer rights.• What retailers can do ? • Better goods and services. • Aid in urban affairs. • Employment opportunities and needs.
Personal Ethical Decision Making• A Legalistic Ethic• Professional Codes of Ethical Behavior• A Personal Ethical Framework• Self Ethic• Situation ethic• Societal ethic• Others ethic
A framework of increasing commitment to ethical decision making Others Ethic Social ethic is modified by concerns Social Ethic for what is right and Situation ethic best for others as modified by well as self. Situation Ethic concern for what society Self ethic modified thinks is right. Self Ethic by the situation. What are the Most primitive consequences ? level of ethicalthinking, Involvesonly self-interest
The Legal Environment• Laws and Regulation and Their Effect of Retailing – Laissez faire.• Regulation of competition • Consumer Protection Act.
The economic Environment• Growth and Inflation.• Effect or real growth on retailing.• Inflationary effects on retailing.• Recession and depression.
The Competitive Environment• Effects of a Competitive Environment.• Changes in Retailing in Response to Competition • Wheel of retailing. • Retail accordion theory. • Natural selection. • Dialectic process.
THE WHEEL OF RETAILING • Low price• Higher Prices Entry • Limited• Excellent Maturity Phase service facilities • Modest• Excellent profit Phase facilities• Conservation • Limited management product line, variety and assortment • Innovative Trading Up management • Moderate prices, good facilities • Higher service levels, highest profit • Increasing product variety and assortments
The Technologicalenvironment• Most dynamic changes in retailing have come as a result of changing technology.• Technology can be used to add entertainment and excitement.
The Global Environment• GATT – “general agreement on trade and tariff”• Global Expansion of Retailing