LECTURE 1

Question 1

DISCUSS TYPES OF CHANNELS

Answer 1

PRODUCER —> CONSUMER

PRODUCER—>RETAILER—>CONSUMER

PRODUCER—>WHOLESALER—RETAILER—>CONSUMER

Question 2

WHAT IS THE ROLE OF INTERMEDIARIES

Answer 2

Create time, place and possession utilities (right product, right place, right time)

• sorting and reassortment
• Routinise transactions (automated re-ordering etc)
• Facilitate the search process

Question 3

who are the biggest retailers?

Answer 3

Globally
Wal-Mart is ahead of the competition in terms of size of operation
United Arab Emirates - Lulu (Emke Group) and Landmark (operates Splash, Centrepoint , Max, E-Max, Home Centres, Shoe Mart, Lifesyle)
Nationally

Tesco is ahead of the competition in the UK in terms of operation
Most main retailers are US based but…. That doesn’t mean they are international in scope

Fact: European retailers have greater global reach - Carrefour

Question 4

retail classifications
(I doubt this will come up.)

Answer 4

Legal Form 
Type of Organisation 
Merchandise Range 
Location 
Outlet Size 
DTI/agency

Question 5

Discuss some aspects of the ‘changing consumer’

Answer 5

• Older
• More affluent
• Insecure
• Discerning
• More demanding
• Better educated
• Time pressured

Question 6

Retail 2020 3 key themes and micro-trends

Answer 6

The pace of technological change – the key areas marketers need to be aware of from use of geo-targeting to best use of data.
Consumers in charge – societal changes have placed consumers in charge of their relationship with brands, the report considers how marketers can turn what may seem a challenge into an opportunity.
Brands fighting back – In a market driven by consumer expectation some brands are working collaboratively to create rich experiences, the report identifies the emerging trends in the world of the brand.

Question 7

Discuss time pressured consumers

Answer 7

-Less likely to shop in planned conventional method
- Increase in remote shopping and other special modes of fixed store retailing
-

Question 8

Discuss demographic trends

Answer 8

• Ageing population
  Low numbers entering job market
• Changing household
• More Living Alone – expected that 20% in 2026 in the UK i.e. 26 million households
• Rise in female participation in workforce
• Rise in self employment
• Rise in multiple employment

More Independence - children leaving earlier

• Married Couples in Decline
• Divorce Rates Record Level

Question 9

Discuss why service industries are growing at expense of traditional manufacturing industries?

Answer 9

• Offshoring
• Look at China rise of the middle class.
• Bloomberg 2016 - restuarants hotels etc have saved from slump in economy but have taken migrant workers out of more ‘productive jobs’

Question 10

Discuss the UK consumer

Answer 10

Spending More on Services But…Less Disposable Income on Traditional Retail Goods
Trading Up – Keeping up with the Jones’s
Owning Own Home
Holidays/Weekend Breaks
Employment Mobility (Read the Flight of the Creative Class)
Mobility for Shopping, Entertainment & Leisure
1 or 2 cars (High Proportion with 2 cars in England and Wales)

UK consumer: 
Seeks Better Living Environment 
Suburbanisation 
Move to Smaller Sized Communities 
Demands Better Quality of Life 
BUT - Impact on Environment	
Urban and Suburban Sprawl and Higher Car Ownership 
European and US Planners Curbing Excess Sprawl

Question 11

ECONOMIC TRENDS

Answer 11

ECONOMIC CYCLE
Demand/supply price equilibrium cycle. Usually lasting 8/10 years.

Inflation
UK inflation rate drops to 2.6%
https://www.theguardian.com/business/live/2017/jul/18/uk-inflation-cost-of-living-squeeze-pound-ftse-business-live
Low Unemployment
UK unemployment falls to new 42-year low bringing the jobless rate down to 4.4% - its lowest since 1975.
http://www.bbc.co.uk/news/business-40947087
Comparative Low Interest Rates
UK interest rates have been kept on hold at 0.25%, but in a surprise move three of the Bank of England’s rate-setting committee backed a rate rise.
http://www.bbc.co.uk/news/business-40288125

Question 12

Discuss the more demanding consumer

Answer 12

More Demanding, Fickle, Disloyal, Footloose and Independent
Better Informed and More Sophisticated
Prepared to Complain
Have Greater Uncertainty Re: Future Prospects
Growing Concern for Environment
Lost Faith in Traditional Institutions
Police, Church, State

Question 13

HOW DID RETAILERS RESPOND?

Answer 13

Increased flexibility
(opening hours, new product ranges, new services etc)
Proximity to customers
(Either congregate where they are, high street, airports, or category killers/hyperstores)
Multi-channeling
(create multiple ways consumers can shop)
Concentration and fragmentation
New retail formats
Polarising outlet size
Investing in digital tech
Data driven marketing

Question 14

Growth of power players

Answer 14

• Large Retailers Power and Control Over Others in Distribution Channel
  Economies of Scale
• Use the Power to Grow the Brand
  Compete on Price
• Leads to Further Concentration
  Survival of the Fittest – Financially that is….
  E.g. Tesco in the UK, Wal-Mart in the US
• Where Competition in an Area Dies Out
  Large Retailers Increase Prices & Profitability

(TESCO TAX ISSUES)