International Marketing © Thomson/South-Western ChapterChapter International Marketing Channels 8.03 International Retailing 8

International Business © Thomson/South-Western Chapter 8 Slide 2 Lesson 8.3 International Retailing Goals Identify the various types of international retailers. Describe the factors international retailers need to consider when developing a global strategy.

International Business © Thomson/South-Western Chapter 8 Slide 3 Terms consumers retailer specialty store convenience stores e-commerce malls franchise

International Business © Thomson/South-Western Chapter 8 Slide 4 FROM MARKETS TO MALLS consumers individual buyers end-users of a product retailer a member of the channel of distribution that sells to the end user Offer convenience by providing an assortment of products Consumer product vendors Food vendors

International Business © Thomson/South-Western Retailing History Earliest types of retail conducted between individuals who produced a surplus to sell or trade Often gathered in market places Markets have been around more than 5000 years Many markets remain unchanged Temporary shelters Prices negotiated at point of sale Chapter 8 Slide 5

International Business © Thomson/South-Western Chapter 8 Slide 6 Types of International Retailers Categorized by: Function Size product width a variety of product categories product depth many variations within a category

International Business © Thomson/South-Western Chapter 8 Slide 7 Types of International Retailers (continued) specialty store a smaller store that specializes in a product category (e.g., jewelry store) Higher levels of service Narrow product width/large product depth

International Business © Thomson/South-Western Types of International Retailers (continued) general merchandise stores Have large product width and large product depth department stores Numerous departments that specialize in certain products superstores Combine groceries and other department store-type products hypermarkets European version of a superstore Chapter 8 Slide 8

International Business © Thomson/South-Western Chapter 8 Slide 9 Types of International Retailers (continued) convenience stores limited inventory offering width but little depth vending products can be purchased from a vending machine

International Business © Thomson/South-Western Chapter 8 Slide 10 E-Commerce E-commerce involves using the Internet to aid in the sales process. works well in developed countries

International Business © Thomson/South-Western Chapter 8 Slide 11 The Malling of the World malls (shopping centers) 1 st mall was Trajan’s Forum in ancient Rome buildings that host a variety of stores May be totally enclosed or open-air

International Business © Thomson/South-Western IBH – 8.03 Activity Students team with someone other than their IBP partner and… Research the largest malls in the world Are these open air or closed How many stores are included What other amenities are included Who owns the malls What stores are missing that should be included in the mall Chapter 8 Slide 12

International Business © Thomson/South-Western Chapter 8 Slide 13 >> C H E C K P O I N T List five type of retailers. Largest malls in the world Best shopping cities in the world

International Business © Thomson/South-Western Chapter 8 Slide 14 INTERNATIONAL RETIALING STRATEGY International retailers must: understand the needs of the local market. Have a product that meets those needs Create a brand image that attracts customers International retailers cannot expand beyond their distribution system’s ability to support them. To open in China, Wal-Mart needed to develop purchasing, warehousing, inventory, and shipping Also had to train workers for their stores

International Business © Thomson/South-Western Chapter 8 Slide 15 Localized Versus Global Strategy Choice depends on products and market served Localized strategy: Adopt the language Localize selling strategies to match local laws and customs Global strategy Single brand image for shoppers around the world Sell to high-income customers who share common characteristics

International Business © Thomson/South-Western Franchising International retailers often will act as a franchisor, franchising their stores to franchisees. franchise a contractual right to licenses, trademarks, and methods of doing business in exchange for royalties and fees Allows international retailer to move quickly into new markets Chapter 8 Slide 16

International Business © Thomson/South-Western Franchising (cont.) Franchisee provides: Funding to develop the business Knowledge of local market to ensure local market conditions are met Franchisor provides: Standardized process to ensure quality product delivery at all locations worldwide Chapter 8 Slide 17

International Business © Thomson/South-Western Chapter 8 Slide 18 >> C H E C K P O I N T Name three factors to consider when developing an international retail strategy.