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International

  1. 1. International Retailing Dana-Nicoleta Lascu Chapter 12
  2. 2. Chapter Objectives <ul><li>Provide an overview and description of the general merchandise retailing category and offer examples and illustrations </li></ul><ul><li>Provide an overview and description of the food retailing category and offer examples and illustrations </li></ul><ul><li>Provide an overview and description of the nonstore retailing category and offer examples and illustrations </li></ul><ul><li>Address issues related to legislation, taxation, and retailing practices around the world </li></ul>
  3. 3. International Expansion of Retailers <ul><li>Wal-Mart </li></ul><ul><li>Metro AG </li></ul><ul><li>Sears Roebuck </li></ul><ul><li>Rewe Gruppe </li></ul><ul><li>Edeka Gruppe </li></ul><ul><li>Aldi Gruppe </li></ul><ul><li>Dayton Hudson </li></ul><ul><li>Tenzelmann Gruppe </li></ul>
  4. 4. International Retailing Defined <ul><li>All the activities involved in selling products and services to final international consumers for their personal consumption. </li></ul>
  5. 5. Retail Formats: Variations in Different Markets <ul><li>Specialty Stores </li></ul><ul><ul><li>Retailers offering a narrow product line and wide assortment </li></ul></ul><ul><ul><ul><ul><li>Virgin Records (music products) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Mango (youth fashion) </li></ul></ul></ul></ul><ul><li>Specialized Markets </li></ul><ul><ul><li>Markets that house stores specializing in a particular product category </li></ul></ul><ul><ul><ul><ul><li>Jade market (Hong Kong) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Spice market (Istanbul) </li></ul></ul></ul></ul>
  6. 6. Retail Formats: Variations in Different Markets <ul><li>Department Stores </li></ul><ul><ul><li>Offer a broad variety of goods and wide assortments </li></ul></ul><ul><ul><li>U.S. and Canada: recent substantial losses </li></ul></ul><ul><ul><li>Europe: expansion of national chains throughout the European Union </li></ul></ul><ul><ul><li>Asia: on the decline </li></ul></ul>
  7. 7. Retail Formats: Variations in Different Markets <ul><li>General Merchandise Discount Stores </li></ul><ul><ul><li>Sell high volumes of merchandise </li></ul></ul><ul><ul><li>Offer limited service </li></ul></ul><ul><ul><li>Charge lower prices </li></ul></ul><ul><ul><li>Types: </li></ul></ul><ul><ul><ul><li>All-purpose: offer wide variety of merchandise and limited depth </li></ul></ul></ul><ul><ul><ul><li>Category specialists (category killers): carry a narrow variety of merchandise and offer a wide assortment </li></ul></ul></ul>
  8. 8. Retail Formats: Variations in Different Markets <ul><li>Off-Price Retailers </li></ul><ul><ul><li>Sell brand name and designer merchandise at below regular retail prices </li></ul></ul><ul><ul><li>Overruns, irregular products, previous seasons’ products </li></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><ul><li>Factory outlet stores </li></ul></ul></ul><ul><ul><ul><li>Close-out retailers (broad, inconsistent assortments) </li></ul></ul></ul><ul><ul><ul><li>Single-price retailers (all products for the same price) </li></ul></ul></ul>
  9. 9. Retail Formats: Variations in Different Markets <ul><li>Catalog Showrooms </li></ul><ul><ul><li>Offer high-turnover, brand name goods at discount prices </li></ul></ul><ul><ul><li>Internationally, however, goods sold through this venue tend not to be brand name, but, rather, goods that have not sold the last season through the catalog </li></ul></ul>
  10. 10. International Food Retailers <ul><li>Conventional Supermarkets </li></ul><ul><ul><li>Self-service retailers with annual sales higher than $2 million and less than 20,000 square feet of store space </li></ul></ul>
  11. 11. International Food Retailers <ul><li>Superstores </li></ul><ul><ul><li>Combination stores (food and drug) </li></ul></ul><ul><ul><li>Hypermarkets – combine supermarket, discount, and warehouse retailing </li></ul></ul>
  12. 12. Food Retailers <ul><li>Warehouse Clubs (Wholesale Clubs) </li></ul><ul><ul><li>Require members to pay an annual fee </li></ul></ul><ul><ul><li>Operate in low-overhead, warehouse-type facilities </li></ul></ul><ul><ul><li>Offer limited lines of brand-name and dealer-brand merchandise at a substantial discount </li></ul></ul>
  13. 13. Food Retailers <ul><li>Convenience Store </li></ul><ul><ul><li>Small residential retailers or retail chains consisting of small neighborhood stores </li></ul></ul><ul><ul><li>Open long hours </li></ul></ul><ul><ul><li>Carry limited lines of higher-turnover necessities </li></ul></ul><ul><ul><li>One-stop shopping </li></ul></ul>
  14. 14. Nonstore Retailing <ul><li>Internet Retailing </li></ul><ul><ul><li>Also known as interactive home shopping or electronic retailing </li></ul></ul><ul><ul><li>Includes both new dot-com companies and traditional retailers attempting additional market penetration </li></ul></ul><ul><ul><li>Increase company diversification </li></ul></ul><ul><li>Vending Machines </li></ul><ul><ul><li>Increasingly popular </li></ul></ul><ul><ul><li>Extent of use varies from country to country </li></ul></ul>
  15. 15. Nonstore Retailing <ul><li>Television Home Shopping </li></ul><ul><ul><li>A venue for selling merchandise to consumers in their homes using cable channels </li></ul></ul><ul><ul><li>Examples: infomercials and direct response advertising </li></ul></ul><ul><ul><li>Popular in North America and Europe, and becoming increasingly popular in Asian markets </li></ul></ul>
  16. 16. Nonstore Retailing <ul><li>Catalog Retailing and Direct Mail Retailing </li></ul><ul><ul><li>Venues for selling merchandise to consumers using catalogs and other types of direct mail </li></ul></ul><ul><ul><li>It allows for the international expansion of retailers </li></ul></ul><ul><ul><li>Must be adapted to local market needs and practices </li></ul></ul><ul><ul><li>Obstacles in developing countries: </li></ul></ul><ul><ul><ul><li>deficient telephone service </li></ul></ul></ul><ul><ul><ul><li>unreliable mail service </li></ul></ul></ul><ul><ul><ul><li>low income </li></ul></ul></ul><ul><ul><ul><li>unavailability of credit cards </li></ul></ul></ul>
  17. 17. Nonstore Retailing <ul><li>Direct Selling </li></ul><ul><ul><li>A retailing venue whereby a salesperson, typically an independent distributor, contacts a consumer, demonstrates product use and benefits, takes orders and delivers the merchandise </li></ul></ul><ul><ul><li>Direct selling firms are most active in the growth markets (in emerging markets, in particular) </li></ul></ul>
  18. 18. Network Marketing <ul><li>Variation on direct selling </li></ul><ul><li>Involves signing up sales representatives to go into business for themselves with minimal start-up capital and sell more &quot;distributorships&quot; and merchandise </li></ul><ul><li>Network marketing is growing rapidly, especially in emerging markets </li></ul>
  19. 19. Issues in International Retailing <ul><li>Legislation and Regulation </li></ul><ul><li>Taxation and Cross Border Shopping </li></ul><ul><li>Variations in Retailing Practice and Customs </li></ul>
  20. 20. Chapter Summary <ul><li>Described general merchandise retailing </li></ul><ul><li>Addressed the food retailing category </li></ul><ul><li>Discussed the non-store retailing category </li></ul><ul><li>Addressed issues related to legislation and taxation </li></ul><ul><li>Discussed retailing practices around the world </li></ul>

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