Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

13. Retailers, Wholesalers
    and Their Strategy
    Planning

Text © The McGraw−Hill

Companies, 2002

Retailers, Wholesalers, and Their Strategy Planning 375

New ideas spread

across countries

Consumer cooperatives

are popular in some

countries

Differences in Retailing in Different Nations

Some mass-merchandiser chains,

like Tesco in the U.K., are looking

for growth by opening small

stores—which will put even more

pressure on conventional retailers.

Some countries block

change

New retailing approaches that succeed in one part of the world are often quickly

adapted to other countries. Self-service approaches that started with supermarkets

in the United States are now found in retail operations worldwide. Similarly,

mass-merchandising approaches are popular in many countries. In 1969, for exam-

ple, Kmart entered into a joint venture with Australia’s largest department store

chain to pioneer mass-merchandising there. The supercenter concept, on the other

hand, initially developed in Europe.

The low prices, selections, and efficient operations offered by mass-merchandisers

and other large chains might be attractive to consumers everywhere. But consumers

in less-developed nations often don’t have the income to support mass distribution.

The small shops that survive in these economies sell in very small quantities, often

to a small number of consumers.

Retailing in the United States is more diverse than in most other countries. Even

so, some retailing formats, notably consumer cooperatives, are more prominent in

other countries. Switzerland’s Migros is the most successful example. Its stores—

ranging from supermarkets to appliance centers—account for 16 percent of Swiss

retail sales.^26

The political and legal environment severely limits the evolution of retailing in

some nations. Japan is a prime example. For years its Large Store Law—aimed at

protecting the country’s politically powerful small shopkeepers—has been a real bar-

rier to retail change. The law restricts development of large stores by requiring

special permits, which are routinely denied.

Japan is taking steps to change the Large Store Law. One such change allowed

Toys “R” Us to move into the Japanese market. Even so, most experts believe that

it will be years before Japan moves away from its system of small, limited-line shops.

To put this in perspective, a typical “mom and pop” grocery store in Japan is only

about 250 square feet. The inefficiency of that retail distribution system is an impor-

tant reason why Japanese consumers pay very high prices for consumer products.

Many countries in other parts of Asia and South America impose similar restric-

tions. On the other hand, the European Union is prompting member countries to

drop such rules and let competition determine what types of retailing will give cus-

tomers superior value.

Mass-merchandising

requires mass markets