History Module

Question 1

Name the (3) Profit Maximising strategies a firm can pursue

Answer 1

1) Sell low, sell bitchin’ boatloads.
2) Sell distinctive goods with high margin, sell less of them.
3) Niche strategy, high interaction, high service, high loyalty (ITSCOMPLICATEDMILANO)

Question 2

What are the 4Ps?

Answer 2

Product, Place, Price, Promotion.

Question 3

What are the 7Ps?

Answer 3

[Product, Place, Price, Promotion], Public Relations, People, Politics.

Question 4

What is Relationship Marketing?

Answer 4

Interdependence & cooperation between firms and outside actors.

Question 5

What (5) shifts does Economic Development Produce?

Answer 5

(1) Shift in output & demand (new demands, more food in cities for example)
(2) Urbanisation (More concentration & new attitudes like make less at home, buy more)
3) Population Growth (More demand)
4) Technological Improvements (More variety, lower prices!)
5) Transport improves

Question 6

What (2) effects can Economic Growth have on demand?

Answer 6

1) Extensive Growth
GDP rises, so more demand

2) Intensive Growth
GDP Per Capita rises, economic development ensues

Question 7

What are the (3) phases model of relationships between INDUSTRIAL STRUCTURE and MARKETING STRATEGIES

Answer 7

1) Fragmentation Phase
- Pre railroad, isolated markets spring up. Served by companies with high prices and high margins.

2) Unification Phase
National markets emerge, oligopolistic competition increases volume and depresses margin.

3) Segmentation Phase
Characterised by more complex demand patterns. This divergence drives firms to adopt specific Value-Prices, together with high volume.

Question 8

Explain the role of Cultural Forces in Marketing Strategies

Answer 8

Direct influence on: Expectations, Utility, Patterns of Consumption.

NB: Firms can have a role in shaping cultures (Coke & Christmas)

Question 9

What was Pre-industrial distribution like?

Answer 9

DONKEY!

Community markets, and traders that traveled from swamp to swamp.

Shopkeepers bought in bulk and repackaged for final customers. Also, provided credit.

Question 10

What (2) impacts did the creation of national markets have, and why?

Answer 10

1) Lowered cost of goods (Railroads that created an American market reduced logistics costs compared to caravans, and stimulated account rather than commission sales, which allowed wholesalers to form)
2) Introduced new products (Feasible range of producers increased due to transport)

Question 11

What were the (3) shifts in Britain post-1950?

Answer 11

1) Fixed shops replaced temporary ones
2) Producers began to brand, package and advertise (challenging existing channel relationship)
3) Mass retail (chain stores) appeared (lower prices, cash payment)

Question 12

What is the role of a Regional Retailer?

Answer 12

Buy large quantities for cash payments, which they break up and sell to retailers on credit terms.

Question 13

How did Mass Retailers create economies of scale?

Answer 13

They CUT OUT WHOLESALERS,

They INCREASED STOCK TURNS

Question 14

Define: Stock Turn

Answer 14

Number of times entire stock was sold (KPI)

Question 15

What are the (3) main characteristics of a department store?

Answer 15

1) Variety of merchandise
2) Methods of selling
3) Style of management

NB: these existed before, but Department Stores consolidated these traits

Question 16

What are the (2) main (Socio-Economic) drivers of department store adoption in mid-19th century Europe?

Answer 16

1) The spread of the industrial revolution (mass product availability),
2) Changes in consumer behavior (Urbanisation, less self-made goods, etc)

Question 17

What were the (5) revolutions in Supermarket Retail?

Answer 17

1) Birth of the Chain Store,
2) Introduction of the Supermarket formula,
3) Internationalisation of the Supermarket,
4) Diffusion of computerisation (barcodes, inv.mgmt),
5) The rise of Walmart: formation of truly national US chains.

Question 18

What (2) factors did Atlantic & Pacific (A&P) introduce into food distribution?

Answer 18

1) Standardisation

2) Scale

Question 19

What were the (6) novel elements of A&P’s business model that differed from the grocer or general store that dominated before it?

Answer 19

1) Bypassing middlemen
2) Producing Private Lables
3) Signing agreements with manufacturers to better capture benefits of scale
4) Footraffic studies
5) Experiment with store layouts
6) Invest in quality - & inventory management

Question 20

What advantages did Chain Stores (like A&P) have over competing formats?

Answer 20

• Network externalities, mostly from increased data
• Could therefore forecast demand & correspondingly plan inventory
• Centralised key processes like finance, marketing, and accounting

Question 21

What did Cullen’s Super Store set out to do (Mission)?

Answer 21

Operate on low margin, and low expenses, making up through volume.

Question 22

What did the term Americanization describe?

Answer 22

It was a countermeasure to soviet influence. The process of acculturation by immigrants to American customs values and products (hotdogs)…

Its foreign influences were a massive transfer of technology & management practices to Western Europe which staved off “Red” influence

Question 23

Which tech innovations to retail occurred in the 1980s?

Answer 23

UPC or Universal Product Code. Allowed stores to keep more SKUs.

NB: this shifted competitive advantage back to national chains (Walmart)

Question 24

What (3) advantages did Walmart leverage when entering the grocery retailing market?

Answer 24

1) Experience sharing between stores (data)
2) Network effects of multiple stores
3) State of the Art(i) distribution system

Question 25

What was the impact of Walmart on the wider grocery retail market?

Answer 25

Drop in the aggregate price level. Massive loss of volume to other incumbents, and a new concentration process.

Question 26

Define “General Merchandise Store”

Answer 26

Establishments primarily engaged in retailing a general line of merchandise that may or may not include a general line of grocery items.

This is a shit definition. General is general… duh.

Question 27

How do Mass Market Merchandisers make money?

Answer 27

Profit = (High volume) x (Low margin)

Wages are kept low, and stock flips something quick.

Question 28

What are the advantages of larger retail firms?

Answer 28

Advantages of Scale and Scope! (+ Scale/Scope interaction effect)

Acquisition and distribution costs fall, and customers like the scope economies from one-stop shopping. Towards suppliers they can now order large quantities, allowing them to gain economies of scale, so pushing prices down.

NB: The interaction between scale and scope (adding two stores to the average chain means 100 additional items in each of the chain’s stores)

Question 29

Name the Direct & Indirect effects of Discount Stores

Answer 29

Direct: Lower price over competitors

Indirect: Traditional retailers actually usually cut prices as a retaliatory response to low-cost competitors. Competitors also tend to diversify and improve quality as a response.

Question 30

What are the Effects of Retail on Foreign Direct Investment position in the Supply Chain?

Answer 30

Multinational retailers sell direct to consumers, no downstream industries can benefit.

Multinational retailers directly affect the cost of living of residents.

They have strong bargaining power so can push producers to upgrade, which causes innovation!