Lect 2 Flashcards

Question

What is product/trademark franchising?

Answer 1

A franchisee acquires the identity of a franchisor by agreeing to sell the latters products and/or operate under the latters name.

Answer 2

There is more of an interactive relationship between the two parties as the franchisee receives assistance on site, location, quality control etc

Answer 3

They own a retail enterprise with relatively small capital investment They acquire well known names and goods/service lines Standard operating procedures and management skills may be taught to them

Answer 4

- Oversaturation if too many open in one geographic area - Over zealous selling by franchisors could mean potential gain to franchisees is overstated - May be disagreements with how the franchisee can run the firm

Answer 5

Quick development of a national or global presence with less investment Agreements mean rules are set for franchisees Money is obtained when goods are delivered rather than sold

Answer 6

Franchisees can harm the company reputation if they do not adhere to standards and rules Loyalty can be affected if there is a lack of uniformity between outlets Intrafranchise competition is not desirable

Answer 7

This is a department is a retail store- usually a department, discount, or speciality store e.g House of Fraser, Macs

Answer 8

Adv - The market is enlarged by providing one-stop customer shopping - Leased department operators pay for some expenses, and thus reduce store running costs Disad- Leased departments operating procedures may conflict with some store procedures Lessees may adversely affect store images Customers may blame problems on store rather than lessees

Answer 9

Adv - Stores are known, have steady customers, and generate immediate sales for leased departments Some costs are reduced through shared facilities, such as security equipment and display windows Their image is enhanced by their relationship with popular stores Disadv- There may be inflexibility as to the hours they must be open and the operating style The goods/service lines are usually restricted If they are successful, stores may raise rent or not renew leases when they expire In store locations may not generate the sales expected.

Answer 10

- A retail firm owned by its customer members | - A group of consumers invest, elects officers, manages operations, and shares the profits or savings that accrue.

Answer 11

- Consumer initiative and drive is rare

Answer 12

- Holland and Barrett | - Louis Vuitton

Answer 13

A category killer is a retailer that specializes in and carries a deep product assortment within a given category and through selection, pricing and market penetration obtains a massive competitive advantage over other retailers - e.g PC World, Ikea, Toys R us

Answer 14

The set of controllable variables the retailer can use to satisfy customers’ needs, influence their buying behaviour and compete effectively in the market. (Varley and Rafiq, 2004)

Answer 15

- Location - Price - Visual merchandising - Store Atmosphere - Advertising - Promotions

Answer 16

``` Product characteristics Price considerations Customer service Store location Facilities Customer communication Institutional profile/image Design In-store ambience ```

Answer 17

A market orientation is the firm’s organizational culture - Deshpandé and Webster (1989, p. 3), a market orientation is “a fundamental shared set of beliefs and values that put the customer in the centre of the firm’s thinking about strategy and operations”

Answer 18

- Market driven

Answer 19

- There success according to Kotler et al is due to their leap in value proposition as a result of them being technologically intensive which creates a product/service that overwhelms expectations, competitors therefore struggle e.g FedEx example - Benefit from free advertising in the BUZZ network - Advantage of establishing new industry price points for the quality or service levels they deliver e.g can charge price premium higher than typical e.g starbucks - Often bigger than the supplier, buyer power - Usually have unique and radical systems that are hard to imitate e.g IKEA

Answer 20

- Monitoring customer satisfaction allows firms to get an early indication about changing customer needs and preferences and the identification of future customer needs. Analyzing these needs helps the firms to prevent bad decisions or overlooking important parts of the customer value proposition as well as identifying its current or potential competitive advantage - well equipped to achieve high levels of performance (Day, 1994b) and are expected to be more adaptable and perform better than less market-driven competitors because they stay in touch with existing and potential customer needs and competitor moves - The focus on long-run return from marketing investments enables market-driven firms to understand which customers are profitable to pursue, and knowing how to encourage loyalty by reducing customer acquisition costs. (Day, 1998)

Answer 21

- Typically smaller than supplier - Investment in market research is expensive and alongside use of unsophisticated tech it may inhibit ability to gain intelligent - not sufficient way of sustaining innovation (Jaworski et al 2000) - Tend to be more beaucratic and risk avers than incumbent firms (Kumar et al 2000) so may miss out on big ops - Typically use traditional stores rather than meeting the experimental required today

Answer 22

Advan - Serves as a useful reminded that firms operate in a dynamic and highly competitive environment and so they must adapt to and anticipate change to avoid inevitable decline (McGoldrick, 1990) Disadvantages- No account can be taken of the strategic firms who may decide to have long term focus on discount operations - unrealistic to assumer a company can't 'turn back' the wheel as done by Asda with their roll back scheme

Answer 23

The traditional grocery store offering limited food assortments was once the main source of food in Taiwan in the 1960s and 70s - The introduction of the first full supermarket in 1981, which offered a wider selection of products, posed a potential challenge to the traditional grocery. -Starting from the early 1990’s, when the number of supermarkets increased rapidly, the traditional grocery started to decline. For example, the traditional grocery store, which once had been the main sales outlet for many types of drink, fell behind the supermarket in household market share, and even by 1991 had slipped to the third place behind the convenience store andhe supermarket in the individual consumption market.

Answer 24

Adv - It allows specialist retailers to thrive through their product offering disadvantages- Not appropriate for multiple formats such as hypermarkets who sell a wide range of product prices

Answer 25

This is a cycle which asserts institutions evolve through the stages if birth, growth, maturity and decline (Davidson 1970) - Berman and Evans 1995 state that the process is inevitable and decline can be postponed but not prevented

Answer 26

Allows for a visualised progress so firms can see where they are/what they can do to alter their path Dis - Dat emphasised that managers have have power and can cope with the changes to avoid decline

Answer 27

The institutional theory see's a firm as a natural part of the environment - retailers actions are influenced by cultural and moral norms - Decisions of a retail firm reflect PESTLE factors in which it exists

Answer 28

- Starssen 1995

Lect 2 Flashcards

(52 cards)