Page 12 - DMGT550_RETAIL_MANAGEMENT

Unit 1: Introduction to Retailing

The Chinese and Indian supply chain systems are characterized by small stores operated by Notes
relatively small firms and a large independent wholesale industry. To make the daily deliveries
to these small retailers efficient, the merchandise often passes through several levels of distributors.
In addition, the infrastructure to support retailing, especially the transportation and
communication systems, are not as well developed as they are in Western countries. These
efficiency differences then mean that a much larger percentage of the Indian and Chinese labor
force is employed in supply chains and retailing than is the case in the United States.
The European supply chain system falls between the American and the Chinese and Indian
systems on this continuum of efficiency and scale, but the northern, southern, and central parts
of Europe should be distinguished. In northern European, retailing is similar to that in the
United States, with high concentration levels—in some national markets, 80 percent or more of
sales in a sector such as food or home improvements are accounted for by five or fewer firms.
Southern European retailing is more fragmented across all sectors. For example, traditional
farmers’ market retailing remains important in some sectors, operating alongside large “big-
box” formats. Some factors that have created these differences in supply chain systems in the
major markets include (1) social and political objectives, (2) geography, and (3) market size.

Self Assessment

Fill in the blanks:
7. .......................... refers to identifying the customer needs and satisfying those needs as
desired by the customer.
8. The marketing channel design is largely based on the level of .......................... desired by
the target consumer.

9. Manufacturers who offer products for immediate consumption are known as ..........................
manufacturers.

1.5 Opportunities in Retailing

The opportunities in retailing are discussed below:

1.5.1 Management Opportunities

To cope with a highly competitive and challenging environment, retailers hire and promote
people with a wide range of skills and interests. Students often view retailing as part of marketing,
because managing supply chains is part of a manufacturer’s marketing function. But retailers
operate businesses and, like manufacturers, undertake traditional business activities. Retailers
raise capital from financial institutions; purchase goods and services; develop accounting and
management information systems to control their operations; manage warehouses and
distribution systems; design and develop new products; and undertake marketing activities
such as advertising, promotions, sales force management, and market research.

Thus, retailers employ people with expertise and interests in finance, accounting, human resource
management, supply chain management, and computer systems, as well as marketing.
Retail managers are often given considerable responsibility early in their careers. Retail
management is also financially rewarding. After completing a management trainee program in
retailing, managers can double their starting salary in three to five years if they perform well.
The typical buyer in a department store earns $50,000–$60,000 per year. Senior buyers and others
in higher managerial positions and store managers make between $120,000 and $160,000.

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