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Lecture 12

Lecture 12.docx

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Stephen Swales

Lecture 12 Retail Supply 1.The major Factors  Independents  Retail chains/ franchisees  Shopping centre developers ( books, insurance, computer)  Government agencies  Planners Retail Concentration  A few cities command most market and sales  A few cites have most retail chain H.Q.s  A few locations in cites command most sales  There are many retailers but relatively few of them command most of the sales  Most retailers are independent but most sales are in retail chains  Retail chains are numerous but a relatively small number of large chains command most sales. Ex. walmart  The nature od retail chains advantages and disadvantage  Why do retail chains run as efficiently? ADVANTAGES OF RETIAL CHAINS (A Independent vs. Independent Approach) 1. General advantage of scale economies a. Most activities are cheaper at a larger scale b. Cost per unit/outlet is low i. More specifically below 2. Avoid Restrictions of Single/ Few Markets a. Countries, regions, cities, trade areas – what regions in the country are we going to operate 3. Aspects of Overhead can be shared a. E.g. administration, accounting, locational analysis, training, technology 4. Leverage ad purchasing power is high a. Negotiate with suppliers and producers shelf space own brands 5. Experience: Success and Failure a. What works? Test product lines in sub-set of stores 6. Maximum advertising/marketing exposure a. High profile different media, generative, universal application 7. Wait-Out Strategy a. System wide decision making – retail chains will get out there and establish in a area were houses are being built because they know that the market is coming 8. Very Familiar and Prediatable a. Associated with shopping centres b. Theisson polygon will only work with retail chains because it’s the exact same store c. You go anywhere in the world you know what your getting, its beneficial d. DISADVANTAGE : Independents have the oppurtuinity when the person knows exactly what they are going to get but they don’t want it , so the person will not go into the store e. Independent store will remember their customers, you go to walmart theres so many people walking by , you go to the small independent person they know you – very specialized scenerios , for upscale store ( fashion , fine dining
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