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EXTERNAL ENVIRONMENTAL FORCES IN CONFRONTING RETAIL FIRMS

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by

Izwa Fairuz

on 23 January 2015

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Transcript of EXTERNAL ENVIRONMENTAL FORCES IN CONFRONTING RETAIL FIRMS

CHAPTER 2:
THE CHANGING NATURE OF RETAILING

Behavior of competition
Channel behaviour
focus on behavior of various members of distribution channel
Interorganizational management retailer need to understand include
dependency
power
(reward, expertise, referent, coercive, legitimate, informational)
conflict
(perceptual incongruity, goal incompatability, domain disagreement)
managing cooperative relations
(mutual trust, 2 way communication, solidarity)
Technological Advances
Socioeconomics Environment
EXTERNAL ENVIRONMENTAL FORCES IN CONFRONTING RETAIL FIRMS
The Effects of changing of social trends in customers
education
The impact toward the retail outlet
Changing age mix
Ethical and Legal Behaviour
Ethical & Legal constraints influencing Retailers
Behavior of Consumers
Population trends
(population growth,trends,age & geographic)
Social trends
(increase edu.level, marriage & divorce, makeup household & change nature of work)
Economic trends
(income growth, decline rate of personall saving, increase no of working woman, credit card use)
Changes in Retail Management
Pure competition
market has homogenous product
easy entry
Pure monopoly
only 1 seller
Monopolistic competition
substitutable product compete each other.
Oligopoly competition
few small firms follow lead larger firms selling homogenous products
What are the external environmental forces confronting retail firms?

Pricing
Promotional
Product
Horizontal Price Fixing
Vertical Price Fixing
Price Discrimination
Deceptive Pricing
Predatory Pricing
Deceitful Diversion of Patronage
Deceptive Advertising
Deceptive Sales Practices
Product Safety
Product Liability
Product Warranties
Territorial Restrictions
Dual Dsitributions
Exclusive Dealing
Tying Agreements
Retailers are using advanced IT & software systems in producing better forecasts, control inventory cost, sending e-mail,electronically order from supplier.
Ex : checkout scanning systems, online transaction processing, electronic data interchange, in-store television & improve merchandise handling system
touch screen kiosk, electronic shelf labels & signs, smart cards, self-scanning system & virtual reality displays.

measures social class concern
Ex : high income buy exclusive & luxury products while middle & lower income buy off-price & discount sale
Population Demographic Details
Political
Economics
Social
Technology
(genders, age, birth rate, household size, marital status, income, employment status, occupation, education level, ethnic/racial background)
- laws & regulations, social pressure affecting retailers.
- to protect competition among companies
- business cycle, consumer income & spending patterns
- eco. changes will appect the wealth of an area include income distribution, inflation, recession & spending patterns.
- population ageing, rising proportion of one & two-person households & increase women workforce
- new consumerism movement in retailing
- nature of retail institution
* Retailers should be keep changing due to customer changes
- ex : fashion items & technologies
household makeup
marriage & divorce
Level of income
Changing female population
IT in Retailing
E-tailing ---> electronic retailing ; refers to the practice of selling goods and services over an electronic medium like the Internet.
The contribution if IT for Retailing
Efficient stocking of merchandise
Collection of Data
Efficiency in operations
Helps communication
The rise of E-tailing and the price competition in retail industry
- prices are lower - no overhead of sales clerks & store
- shift in power between retailers & consumers.
Full transcript