International Retailing

International Retailing
Copyright Atomic Dog Publishing, 2002
International Expansion of Retailers

Wal-Mart Metro AG Sears Roebuck Rewe Gruppe
Edeka Gruppe
International Retailing Defined
All the activities involved in selling products and services to final international consumers for their personal consumption.
Retail Formats: Variations in Different Markets

Specialty Stores Retailers offering a narrow product line and wide assortment - Virgin Records (music products) - Mango (youth fashion)
Specialized Markets Markets that house stores specializing in a particular product category - Jade market (Hong Kong)
Global Retailing Department stores Specialty retailers Supermarkets Convenience stores Discount stores and
Hypermarkets Supercenters Category killers Outlet stores
Global Retailing
Environmental Factors Saturation in the home country market Recession or other economic factors Strict regulation on store development High operating costs Critical Question What advantages do we have relative to the local competition?
Global Retailing Strategies Organic Company uses its own resources to open a store on a green field site or acquire one or more existing retail facilities Franchise Appropriate strategy when barriers to entry are low yet the market is culturally distant in terms of consumer
Global Retailing Strategies Chain Acquisition A market entry strategy that entails purchasing a company with multiple existing outlets in a foreign country Joint Venture This strategy is advisable when culturally distant, difficult-to-enter markets are targeted
Global Retailing Strategies
Innovation in Global Retailing

Innovation takes place only in the most highly developed systems The ability of a system to successfully adapt innovations is directly related to its level of economic development Even when the economic environment is conducive to change, the process of adaptation may be either hindered or helped by local demographic factors, geographic factors, social mores, government action, and competitive pressures The process of adaptation can be greatly accelerated by the actions of aggressive individual firms
Supply Chain Definitions

Supply Chain
Includes all the firms that perform support activities by generating raw materials, converting them into components or finished products and making them available to customers
Logistics
The management process that integrates the activities of all companies to ensure efficient flow of goods through the supply chain
Physical Distribution, Supply Chains, and Logistics Management

Order Processing
includes order entry in which the order is actually entered into a companys information system; order handling, which involves locating, assembling, and moving products into distribution; and order delivery
Warehousing
Warehouses are used to store goods until they are sold Distribution centers are designed to efficiently receive goods from suppliers and then fill orders for individual stores or customers
Physical Distribution, Supply Chains, and Logistics Management

Inventory Management
Ensures that a company neither runs out of manufacturing components or finished goods nor incurs the expense and risk of carrying excessive stocks of these items.
Transportation
the method or mode a company should utilize when moving products through domestic and global channels; the most common modes of transportation are rail, truck, air, and water
Transportation
Channel Strategy analyzing each shipping mode to determine which mode, or combination of modes, will be both effective and efficient in a given situation

Department Stores

Offer a broad variety of goods and wide assortments U.S. and Canada: recent substantial losses Europe: expansion of national chains throughout the European Union Asia: on the decline

General Merchandise Discount Stores

Sell high volumes of merchandise Offer limited service Charge lower prices Types:
-
All-purpose: offer wide variety of merchandise and limited depth Category specialists (category killers): carry a narrow variety of merchandise and offer a wide assortment

Off-Price Retailers
Sell brand name and designer merchandise at below regular retail prices Overruns, irregular products, previous seasons products Examples:
-
Factory outlet stores Close-out retailers (broad, inconsistent assortments) Single-price retailers (all products for the same price)

Catalog Showrooms

Offer high-turnover, brand name goods at discount prices 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
International Food Retailers

Conventional Supermarkets
Self-service retailers with annual sales higher than $2 million and less than 20,000 square feet of store space
International Food Retailers

Superstores

Combination stores (food and drug) Hypermarkets combine supermarket, discount, and warehouse retailing
Food Retailers
Warehouse Clubs (Wholesale Clubs)

Require members to pay an annual fee Operate in low-overhead, warehouse-type facilities Offer limited lines of brand-name and dealer-brand merchandise at a substantial discount
Food Retailers
Convenience Store
Small residential retailers or retail chains consisting of small neighborhood stores Open long hours Carry limited lines of higher-turnover necessities One-stop shopping
Nonstore Retailing
Internet Retailing
Also known as interactive home shopping or electronic retailing Includes both new dot-com companies and traditional retailers attempting additional market penetration Increase company diversification
Vending Machines

Increasingly popular Extent of use varies from country to country
Nonstore Retailing
Television Home Shopping
A venue for selling merchandise to consumers in their homes using cable channels Examples: infomercials and direct response advertising Popular in North America and Europe, and becoming increasingly popular in Asian markets
Nonstore Retailing
Catalog Retailing and Direct Mail Retailing
Venues for selling merchandise to consumers using catalogs and other types of direct mail It allows for the international expansion of retailers Must be adapted to local market needs and practices Obstacles in developing countries:
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deficient telephone service unreliable mail service low income unavailability of credit cards
Nonstore Retailing
Direct Selling
A retailing venue whereby a salesperson, typically an independent distributor, contacts a consumer, demonstrates product use and benefits, takes orders and delivers the merchandise Direct selling firms are most active in the growth markets (in emerging markets, in particular)
Network Marketing
Variation on direct selling Involves signing up sales representatives to go into business for themselves with minimal start-up capital and sell more "distributorships" and merchandise Network marketing is growing rapidly, especially in emerging markets
Issues in International Retailing

Legislation and Regulation Taxation and Cross Border Shopping
Variations in Retailing Practice and Customs
Chapter Summary
Described general merchandise retailing Addressed the food retailing category
Discussed the non-store retailing category

Addressed issues related to legislation and taxation Discussed retailing practices around the world

International Retailing

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International Retailing

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International Retailing

Copyright Atomic Dog Publishing, 2002

International Expansion of Retailers

Copyright Atomic Dog Publishing, 2002