Page 163 - DECO101_MICRO_ECONOMICS_ENGLISH

Micro Economics

Notes making the bicycle buying process easy and fun, and the whole visit to the store
extraordinary. Making it all about them and providing an extraordinary shopping
experience is the path to increased transaction values and increased close rates.
6. Make your store the brand. Work with, stock and sell products that will provide the
features and value your customers want and need, and the margins and inventory
turns you need to grow your business. Present a uniform brand image in everything
you do and that your staff does and says - one outward brand face. And develop and
promote formal word-of-mouth customer referral programs to leverage your store
brand in the market.
7. Create individual client solutions. You and your staff - your whole store, your brand
and the shopping experience you provide are for one purpose. To create individual
solutions for your customers wants and needs. In doing so you will create clients for
life.
8. Become an efficient database manager. Educate your staff to the importance to

your business of utilizing all the features built into to your computerized point of
sale system and any other retail shopping systems you incorporate into your retail
process and shopping experience. The uniform entry of shopper, customer and
client information is as important to your business as a uniform and consistent new
bicycle assembly process and check list.

9. Become an efficient direct-response marketer. Staying connected to prospects,
shoppers, customers and clients utilizing a regular direct-response marketing plan,
is essential to growing the number of transactions generated by the business, and it
is reliant upon a clean and current database.
10. Follow the Phillips Rule of never ever selling anything in your retail store below
your cost of doing business. This will lead to consistently earning excess profi ts.
All ten of these suggestions together create the foundation for a new level of specialty
bicycle retailing that changes the paradigm and has the potential to take the retailers that
follow it out from under the state of perfect competition that the rest of the channel of trade
is trapped in.
Question
Comment on the suggestions made by the writer.

Source: http://www.jaytownley.com/the-bicycle-industry-competition?page=4

10.6 Summary

In theory, perfect competition implies no rivalry among fi rms.
In a perfectly competitive market structure there is a large number of buyers and sellers of
the product and the product is homogeneous.
There is free mobility of factors of production and the buyers and sellers have perfect
knowledge of the market.

In the short run the best level of output of the firm is the one at which the fi rm maximises

profits or minimises losses. This is possible at P = MR = MC. The point at which the fi rm
covers its variable costs is called “the closing down point”.
In long run the best level of output is one at which price P=LMC. At equilibrium the short
run marginal cost is equal to the long run marginal cost and the short run average cost is
equal to the long run average cost. Thus, given the above equilibrium condition, we have
SMC = LMC = LAC = SAC P = MR

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