Beruflich Dokumente
Kultur Dokumente
Ranjan Chaudhuri
Some Constructs
No single theory can be universally applicable or acceptable. The retail scenario keeps changing continuously. These changes are brought by ever changing customer requirement, economic progress of nations and new technologies
Demographic changes Attitudes and preferences to purchasing, brands and products Changes in Life Style Economic Influences
Changes in Technology Changes in Competition :The competitive strength of actual or alternative channels of distribution depending upon nature and type of Retail organization.
NATURAL SELECTION
An earlier theory, natural selection, has the stronger intuitive appeal for explaining change in retailing institutions. It follows Charles Darwins view that organisms evolve and change on the basis of survival of the fittest. In retailing, those institutions best able to adapt to changes in customers, technology, competition, and legal environments have the greatest chance of success. The Ability to adapt to change, successfully is at the core of this theory
Wheel of Retailing
..contd.
Due to low sales the retailer may plunge into decline and even be forced to withdraw from the market. Around the Wheel of Retailing a gap is left at the bottom end of the market.
The wheel keeps on turning as the department stores, supermarkets, and mass merchandisers pass through these cycles
Innovative retailer Low status and Minimum price Poor service Limited facilitiesproduct offering
Traditional retailer Elaborate Higher facilities More rent Higher locations Extended product prices offerings
TTrading up phase
Retail Wheel
Basic Hypotheses:
1.There are many price sensitive shoppers willing to trade customer services, wide selections and convenient location for LOWER PRICES 2. Price sensitive shoppers are often not store-loyal and are willing to switch to retailers offering lower prices. Other prestige-sensitive customers like to shop at stores with high-end strategies. 3. New institutions are frequently able to implement lower operating costs then existing institutions. 4. Retailers typically move up the wheel to increase sales, broaden the target market, and improve store image.
Low prices,
B) It was only intended to determine the pace with which retail innovations rise and fall
The Accordion Theory, the second cyclical theory, proposes that the retail institutions fluctuate from the strategy of offering many merchandise categories with a shallow assortment to the strategy of offering a deep assortment with a limited number of categories. This expansion and contraction calls to mind an accordion.
Retail institutions pass through A Life Cycle having following stages: INNOVATION ACCELERATED DEVELOPMENT MATURITY DECLINE
Maturity
Decline
Maturity
Many Direct Moderate Indirect
Decline
Moderate Direct Many Indirect
Maturity
Moderate to Slow Moderate Indefinite
Decline
Slow or Negative Very Low Indefinite
Maturity
Decline
Tightly Controlled Growth Marginal Capital in Untapped Markets Expenditures, & Only if
Maturity
Decline
Engaging in a Run-Out Strategy
Concept Refinement Establishing a Excess Capacity & Very Few Through Adjustment Preemptive Overstoring; Prolonging & Experimenting Market Position Maturity & Revising the Business Concept
Maturity
Extensive
Decline
Moderate
Maturity
Professional
Decline
Caretaker
Implications of Retail Life Cycle for the Retailers Stay Flexible Analyze risks and profits Attempt to extend maturity stage Emphasize RESEARCH