Wheel of Retailing and Retail Life Cycle, Essay Example
Retailing is the most essential item in business. It marks the final stage in the channel of distribution, where the product transferred to the customer. Retailing is one of the activities that speak for the company and its products. Retailing speaks of the brand, image, quality of service, and the quality of the product itself. With time, there is increased competition in the marketing field such that a wide range of retailing procedures arises. This paper describes the two concepts: the wheel of retailing and the retail life cycle, which explain the continued changes that apply in the retailing field. It then discusses the comparisons and contrasts that apply in the two concepts.
Wheel of retailing
The wheel of retailing gives a description of the steps that a retail outlet follows upon entering into the market. Like any other business, a retail outlet enters the market in a low status and rises with time. At first, the retail store not known to the customers. It thus uses enticing approaches to attract customers such as provision of products and services at lower prices. At that time still, the retail outlet has a lower status and the margins are still low. With this strategy, customers become attracted and they start flowing in. the retail outlet then arises to the second level upon becoming famous in the market. They increase their services and fixtures, in terms of quality and number. With this, their status rises, and the retail outlet slightly increases its prices, leading to the rise of the overall margins. With good management, the retail outlet attains the third stage, where it grows even more and expands in the market. The prices could increase further, leading to the replenishment of the margins and status of the retail outlet. It then arrives at the fourth stage where its expansion could let to opening of new outlets. The original retail outlet then becomes the mother while the other new ones depend on the mother retail outlet.
Retail life cycle
The retail life cycle describes the process that a retail outlet follows, the way it grows, at reaches a point where it declines. The retail life cycle argues out that the retail curve follows a normal curve. At the first stage, the retail outlet experiences a negligible growth upon its emergence since the start up costs associated limits the profits. With time, the retail outlet joins the second stage where the profits are high, and there occurs accelerated development. This is the point where the retail outlet experiences maximum growth, with highest profits, and the retail outlet gains the greatest market share. With the evolvement of time, the third stage reached where the retail outlets begins feeling the competition from leading competitors. This is where the maturity stage reached, and the retail outlet only fights to maintain its market share. The expansion of the retail outlet limited while other retail outlets could even opt to drop out of business.
1) The two concepts describe that there exist a starting point of a retail outlet.
2) They both claim the existence of growth and expansion of a retail outlet in the initial stages.
1) The retail life cycle reaches a point of maturity where growth limited due to increased competition unlike the wheel of retail, which has no maturity point.
2) The wheel of retail focuses of growth without an end, unlike the retail life cycle, which gives allowance for closure of some outlets due to increased competition
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