SECTION A
A1)
a) Retailing
Retailing is a set of business activities that adds value to the product & service sold to the consumer for their personal or family use.
Includes all the activities involved in selling products or service directly to final consumer for their personal, non-business use.
Retailers- business whose sales come primary from retailing.
Retailing can thus be defined as consisting of all such activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use.
Retailing involves a direct interface with the customer and the coordination of business activities from end to end, right from the concept or design stage of a product or offering,
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In vertical integration new products or services are added which are complementary to the present product line or service. The purpose of vertical diversification is to improve economic and marketing ability of the firm
b) Horizontal Diversification: Horizontal diversification involves addition of parallel products to the existing product line. For example: A company, manufacturing refrigerator may enter into manufacturing air conditioners. The purpose of horizontal diversification is to expand market area and to cut down competition.
c) Concentric diversification When a firm diversifies into business, which is related with its present business it is called concentric diversification. It is an extreme form of horizontal diversification. For example: Car dealer may start a finance company to finance hire purchase of cars.
d) Conglomerate diversification When a firm diversifies into business, which is not related to its existing business both in terms of marketing and technology it is called conglomerate diversification.
It involves totally a new area of business. There is no relation between the new product and the existing
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Ex. Kmart, Wal-Mart
Supermarkets: Large, self-service stores that carry a complete line of food products, along with some nonfood products. Ex. Big Bazaar
Superstores: Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products. Ex. Wal-Mart Supercenters
Hypermarkets: Stores that combine supermarket and discount shopping in one location. Ex. Carrefour
Non Store Retailing
Catalog Marketing: A type of marketing in which an organization provides a catalog from which customers can make selections and place orders by mail, telephone, or the Internet
Direct-Response Marketing: A type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone orders
Telemarketing: The performance of marketing-related activities by telephone
Television Home Shopping: A form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card
Online Retailing: Retailing that makes products available to buyers through computer
Moreover, despite the presence of some large chains, specialty retail markets are highly fragmented. Barnes & Noble, for example, with over 900 stores, is the largest US bookseller but has a market share of only 15 percent. With increasing transportation costs and tighter margins, there is a possibility that some large specialty retail players will consolidate assets, knowledge and outsourcing capabilities in order to generate economies of scale and scope. Key Opportunities High-end and niche merchandise: With rising disposable incomes, the demand for high-end goods is increasing, which can best be catered by specialty retail stores.
Vertical integration is when an organisation own companies on two or more levels of the buying chain. Examples of this can be found within “The Big 4,” all of them own an airline, travel agent and a tour operator. The companies have until recently used different names for their travel agency, airlines and tour operators, but now they are power branding their companies so that customers can see whom they are booking with. An example of this is TUI UK, which has rebranded its companies using the Thomson name.
In the horizontal integration, the company product range is from a wide clientele. That is they sell product either clothing or luxurious foods from different manufacturers. These give them the edge since the products they offer a variety for the customers to choose from, and hence they can shop less than one roof (Cole, 1997). In the vertical integration strategy, the firm will deal substantial with products from a single supplier and M&S gets the exclusive rights to deal with the product and its supply to the market. This is necessary when the company aim is to serve an identified target market which is exclusive and has the potential to sustain and grow the company substantively. These employ a tar...
...ative aspects of diversification, for example through better corporate planning, human recourse management and reaching further synergies between its various business lines.
The retailing business has always existed, however it has been changing through external factors external factors. The retail industry is a huge business; an example of a highly profitable retail company would be Tesco. Last year they had total revenue of £38,259 million in Great Britain alone and there Net income was £1,576 million (Wikipedia, 2006). However, when it is bombarded with new laws, technology and other changes it needs to change as well, otherwise they may have huge consequences.
Over the previous couple of decades, modern business has been evolving rapidly and the retail industry has been no exception. Whereas previously the customers received retail ads and offers from disconnected sources, today retailers are operating a combination of all available retail marketing methods to reach the customer.
Horizontal integration is a firm in one industry, for example, television, broadens to another industry, for example, telecommunications. Masked the boundaries between telecommunications computer and media industries, which led to a monster of information production, communication, and distribution. Vertical integration is firms that focused on one point in the production chain, for example, film production, of a district broadened into another part, for example, film distribution. Both forms of expansion drove industry convergence within the districts. The fourth and last form of convergence is culture, which is a result of reduced production and distribution costs conjoined with an expanded range of delivery and distribution channels and
Challenges in Today's U.S. Supermarket Industry. 2014. Challenges in Today's U.S. Supermarket Industry. [ONLINE] Available at:http://msdn.microsoft.com/en-us/library/aa479076.aspx. [Accessed 31 March 2014].
An outlet store is a retail channel which allows the manufacturers to sell stocks directly to consumers (Wikipedia,2013). Although people may hold the misperception that products in outlet stores do not have the same quality as good as those sold in the department store, a research conducted by Fowler and Clodfelter (2001) indicates that besides the prices, there are hardly any differences between products sold in the two channels.
Diversification is where a company grows into new business areas either similar to existing business or different from existing business allowing a firm to create value by creatively using excess resources. Seprod operates in a number of different and distinctive product markets and several businesses using corporate-level strategy. Seprod operates in the fats and oil business, milk and juice and the sugar industry
We are doing the marketing setting in retail business, in the sense of doing business with retail seller.
Retailers focuses on providing variety of fashion items and brands that attracted customers, some of them also offered items that are about to be distributed and introduced into the market.
This video provides an overview of product diversification. It explains that there are two types of diversification, which are related diversification and unrelated diversification. In addition, the video informs that diversification often involves merger and acquisition activities. Furthermore, it stresses the importance of keeping diversifications balanced, as in some instances, companies that do not take advantage of diversification, can miss out on some benefits, and/or could experience negative effects. However, on the other hand, the opposite could also occur, because some companies that over-diversify, extend themselves too far and can experience detrimental and disadvantageous effects as well. The key is staying
There are three premises of corporate strategy, which any successful corporate strategy is built on a number of premises. The first premise is competition occurs on the business unit level, which diversified companies do not compete, only their business units do. The second premise is diversification inevitably adds costs
‘Horizontal Merger’ is when two companies with similar products join together. ‘Vertical Merger’ is two companies at different stages in the production process. ‘Conglomerate Merger’ is when two different types of companies join together. ‘Market extension merger’ is between two companies who produce the same product but sell in different markets. ‘Product Extension merger’ is between companies with related production but they do not compe...