About Globalization in Retailing

About Globalization in RetailingGlobalization has become increasingly prominent in the early 21st century as U.S.-based companies look to grow by expanding their marketplaces in other countries. For retailers that have saturated the domestic market, globalization gives them access to new customers and new capital useful in global marketing.

Considerations

Before a retailer decides to expand globally, it must consider the challenges as well as the opportunities. Dealing with language and culture differences, finding effective advertising and distribution methods and making relationships with local suppliers are important components of effective globalization. Gaining social acceptance of your brand and products is a key first step in getting into a new marketplace. People use products differently in some countries, and a successful business model in one country doesn't always translate everywhere.

Opportunities

Europe is a popular target market for American retailers given similar cultures in many European markets and similar economic and market opportunities. McDonald's has found it feasible to operate in roughly 100 countries as of 2012, including middle eastern nations like Saudi Arabia, where American sentiment isn't conventionally strong. Rapidly industrializing and highly populated countries like China, India and Brazil have become prime targets as well, as countries look for landing spots in populations with increased money to spend.

Multi-Channel

Growth in multi-channel retailing has coincided with the evolution of globalization. The Internet has equipped smaller, domestic businesses with the ability to promote and distribute products worldwide. This has caused chain retailers to expand globally just to keep up in the race for new customers and revenue streams. Additionally, store-based retailers continue to look for opportunities to create synergy with customers by offering products through stores, catalogs and Internet. Using each channel helps retailers more easily maintain relationships with customers in global markets.

Branding

One dilemma for global retailers is how to effectively brand themselves in each market. Companies with a universal offering commonly use global marketing, which means they deliver a universal brand message, such as top quality or elite service, throughout the world. Others realize they can't project the same image based on cultural variation, market factors, economic conditions or logistics issues. They tailor their brand to fit the unique conditions in each particular market. Doing so can be more expensive but may have better effects in each market.

Globalization of Retailing

Gielens and Dekimpe (2001) conclude that retailers are more likely to be successful at expanding internationally if they are first to enter the foreign market, with substantial scale, using no partners or acquired assets, and at the same time offering a store format that is at the same time new to the host market and familiar to the parent firm. These conclusions were based on an exhaustive study of 160 foreign entries by Europe's top seventy-fivefood retailers

in western Europe and a variety of transition economies in eastern Europe. The success of the entry decisions was measured by long-run sales performance of a retail firm's foreign perations. The findings in Gielens and Dekimpe (2001) seem to prescribe that retailers should enter markets where they are able to be the first to enter the foreign market and they should do it using no partners and acquired assets. They should also achieve substantial scale and introduce a format that is new to the foreign market and yet familiar to the global retailer to be successful. In this way, Gielens and Dekimpe's study provides answers to two questions: What is the criterion for selecting the market when expanding internationally? and What does it take to succeed in a foreign market? In this chapter, we focus on the top three global retailersCarrefour, Wal-Mart, and Ahold-and investigate if the conclusions that Gielens and Dekimpe (2001) reached can help us understand these companies' strategies for entering foreign markets. We have

Carrefour

Carrefour is the second largest retailer in the world after WalMart.! It operates hypermarkets, supermarkets, and hard discount stores in thirty countries across Europe, Latin America, and Asia. With a compounded annual growth rate of 24 percent since 1996, its sales were $69 billion in 2001 despite the fact that Carrefour has no stores in the United States, United Kingdom, and Germany. Carrefour opened its first store (with seven thousand square feet) in the basement of the Fournier department store in Annecy, France, in the summer of 1960. Iii 1963, it opened its first hypermarket outside Paris. The store was unique in its size (twenty-seven thousand square feet and parking for 450 cars); consumers could meet all their shopping needs under one roof. The store provided self-service groceries at discounted prices but also offered clothing, sporting equipment, auto accessories, and consumer electronics.

French consumers were excited about the Carrefour proposition, and the company grew rapidly. Carrefour invented the hypermarket concept in 1963. Between 1965 and 1971, sales growth exceeded 50 percent per year, with nonfood items accounting for more than 40 percent of sales. Its stores average 108,000 square feet, are usually located outside towns in commercial areas where land is cheap, and are easily accessible by highways. The company

also prefers simple facility construction that allows it to achieve a total investment per square meter of selling space of about onethird that of traditional supermarkets.

International Expansion

With limits to growth in France, Catrefour expanded into Belgium in 1969, barely six years after opening its first store. In the next few years, it expanded into Spain and brought the hypermarket concept to Latin America in 1975. In expanding to Latin America, Carrefour

adopted the concept of self-funding and provided starting capital for only one store and a half. It opened its second store only after it was able to generate enough funds from the operations of the first store. This discipline forced Carrefour to experiment with 1975 and 1985, Carrefour opened only ten stores, using capital available from operating stores. Growth accelerated in 1985, and by 2001 Carrefour had seventy-seven hypermarkets in Brazil,

twenty-two in Argentina, five in Colombia, and five in Chile. During the late 1980s, the Brazilian economy experienced severe inflationary pressures, and the local Carrefour management responded to this challenge, producing great financial results for the

company. The decentralized structure paid off handsomely. The key to their strategy was to negotiate longer terms of payments to the vendors and to increase throughput. Discounts available from suppliers were plowed back to lower prices and increase sales volumes.

Today, with the acquisition of Norte and merger with Promodes, Carrefour has multiple formats in the region (hypermarkets, supermarkets and discount stores) and a total of 222 hypermarkets and supermarkets in Brazil and 150 in Argentina.

Carrefour's Experiences

Currently, with the merger with Promodes, Carrefour faces the significant challenge of integrating two management structures: a completely decentralized and autonomous structure in the hypermarket division and the more centralized structure practiced by Promodes in the supermarket division. This merger also provided Carrefour the opportunity to benefit from economies of scale without having to open more hypermarkets than can be sustained in the local market. Today, Carrefour is among the most successful operators in Latin America. It has a market share of 13 percent in Brazil and 32 percent in Argentina. Latin America accounts for as much as 12 percent of its sales and 2 percent of profits.

Wal-Mart

Today Wal-Mart is the world's largest retailer, with sales of $218 billion and a cash flow of$10 billion in 2002. Wal-Mart operates several formats, induding the traditional discount store, supercenters, and Sam's Clubs. The traditional discount store was a 100,000

square foot store in a" small town or suburb built over twenty acres ofland with lots of parking space. The store was organized into thirty-six departments and carried eighty thousand stock-keeping units (SKUs), induding housewares, hardware, electronics, home

furnishings, small appliances, automotive accessories, garden accessories, sporting goods, toys, pet foods, cameras and camera supplies, health and beauty aids, pharmaceuticals, jewelry, fabrics, stationery, books, and shoes. In 1992, Wal-Mart opened its first supercenter by adding a sixty thousand square foot grocery store to its traditional discount store.

Wal-Mart's International Expansion

In 1991, thirty years after opening its first store in Rogers, Arkansas, Wal-Mart made its first entry into markets outside the United States. Wal-Mart entered Mexico when there were no other formidable international competitors; It started its international operations in Mexico by forming a partnership with CIFRA, the most successful Mexican retailer, which had sales of more than $5 billion in 1997. This expansion was viewed favorably by several analysts because of the promise of the North American Free Trade Agreement and the familiarity and demand for U.S. products, as many middle-class consumers had friends and relatives living in the United States. Although sales were down in 1993, Wal-Mart continued its international expansion by buying 122 Wooleo stores in Canada, which it quickly converted into the Wal-Mart format. Despite initial doubts, the entry into Canada has been a smashing success by all accounts. Local competitors doubted Wal-Mart's ability to buy locally, run a hub-and-spoke distribution system in a country that is three thousand miles long and one hundred miles deep from the U.S. border, operate the Wal-Mart format in Wooleo stores that were on two levels, and motivate service personnel to accept the Wal-Mart cheer.Distribution System

Indian Railways

(reporting mark IR / . ) is an Indian state-owned enterprise, owned and operated by the Government of India through the Ministry of Railways. It is one of the world's largest railway networks comprising 115,000km (71,000mi) of track over a route of 65,436km (40,660mi) and 7,172 stations.[4] In 201314, IR carried 8.425 billion passengers annually or more than 23 million passengers daily (roughly half of which were suburban passengers) and 1050.18 million tons of freight in the year.[5] In 20132014 Indian Railways had revenues of

1441.67 billion (US$23billion) which consists of

940.0 billion (US$15billion) from freight and

375.0 billion (US$5.9billion) from passengers tickets.[6]Railways were first introduced to India in the year 1853 from Bombay to Thane. In 1951 the systems were nationalised as one unit, the Indian Railways, becoming one of the largest networks in the world. IR operates both long distance and suburban rail systems on a multi-gauge network of broad, metre and narrow gauges. It also owns locomotive and coach production facilities at several places in India and are assigned codes identifying their gauge, kind of power and type of operation. Its operations cover twenty nine states and seven union territories and also provides limited international services to Nepal, Bangladesh and PakistanIndian Railways is divided into several zones, which are further sub-divided into divisions. The number of zones in Indian Railways increased from six to eight in 1951, nine in 1952 and sixteen in 2003.[16]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_Railways" \l "cite_note-17" [17] Each zonal railway is made up of a certain number of divisions, each having a divisional headquarters. There are a total of sixty-eight divisions.[18]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_Railways" \l "cite_note-19" [19]Each of the seventeen zones is headed by a general manager who reports directly to the Railway Board. The zones are further divided into divisions under the control of divisional railway managers (DRM). The divisional officers of engineering, mechanical, electrical, signal and telecommunication, accounts, personnel, operating, commercial, security and safety branches report to the respective Divisional Manager and are in charge of operation and maintenance of assets. Further down the hierarchy tree are the station masters who control individual stations and the train movement through the track territory under their stations' administration.

Electric railways use electric locomotives to haul passengers or freight in separate cars or electric multiple units, passenger cars with their own motors. Electricity is typically generated in large and relatively efficient generating stations, transmitted to the railway network and distributed to the trains. Some electric railways have their own dedicated generating stations and transmission lines but most purchase power from an electric utility. The railway usually provides its own distribution lines, switches and transformers.

Power is supplied to moving trains with a (nearly) continuous conductor running along the track that usually takes one of two forms. The first is an overhead line or catenary wire suspended from poles or towers along the track or from structure or tunnel ceilings. Locomotives or multiple units pick up power from the contact wire with pantographs on their roofs that press a conductive strip against it with a spring or air pressure. Examples are described later in this article.

The other is a third rail mounted at track level and contacted by a sliding "pickup shoe". Both overhead wire and third-rail systems usually use the running rails as the return conductor but some systems use a separate fourth rail for this purpose.

In comparison to the principal alternative, the diesel engine, electric railways offer substantially better energy efficiency, lower emissions and lower operating costs. Electric locomotives are usually quieter, more powerful, and more responsive and reliable than diesels. They have no local emissions, an important advantage in tunnels and urban areas. Some electric traction systems provide regenerative braking that turns the train's kinetic energy back into electricity and returns it to the supply system to be used by other trains or the general utility grid. While diesel locomotives burn petroleum, electricity is generated from diverse sources including many that do not produce carbon dioxide such as nuclear power and renewable forms including hydroelectric, geothermal, wind and solar.

RoadwayIndia has a road network of over 4,689,842 kilometres (2,914,133mi) in 2013,[1]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-roadsindia-2" [2] the second largest road network in the world. At 0.66km of roads per square kilometre of land, the quantitative density of India's road network is similar to that of the United States (0.65) and far higher than that of China (0.16) or Brazil (0.20). However, qualitatively India's roads are a mix of modern highways and narrow, unpaved roads, and are being improved. As of 2011, 54 percent about 2.53 million kilometres of Indian roads were paved.[2]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-wbtransport-3" [3]Adjusted for its large population, India has less than 3.8 kilometres of roads per 1000 people, including all its paved and unpaved roads. In terms of quality, all season, 4 or more lane highways, India has less than 0.07 kilometres of highways per 1000 people, as of 2010. These are some of the lowest road and highway densities in the world. For context, United States has 21 kilometres of roads per 1000 people, while France about 15 kilometres per 1000 people predominantly paved and high quality in both cases. In terms of all season, 4 or more lane highways, developed countries such as United States and France have a highway density per 1000 people that is over 15 times as India.

According to 2009 estimates by Goldman Sachs, India will need to invest US$1.7 trillion on infrastructure projects before 2020 to meet its economic needs, a part of which would be in upgrading India's road network.[10] The Government of India is attempting to promote foreign investment in road projects.[10]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-forbes_india-11" [11]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-rediff_roads-12" [12] Foreign participation in Indian road network construction has attracted 45 international contractors and 40 design/engineering consultants, with Malaysia, South Korea, United Kingdom and United States being the largest players

Road transport is vital to India's economy. It enables the country's transportation sector to contribute 4.7 percent towards Indias gross domestic product, in comparison to railways that contributed 1 percent, in 20092010. Road transport has not gained in importance over the years despite significant barriers and inefficiencies in inter-state freight and passenger movement compared to railways and air. The government of India considers road network as critical to the country's development, social integration and security needs of the country.[19]India's road network carries over 65 percent of its freight and about 85 percent of passenger traffic.[20]Indian road network is administered by various government authorities, given India's federal form of government. The table below describes the regulating bodies.

Road classificationAuthority responsibleTotal kilometres (as of 2011)

National HighwaysMinistry of Road Transport & Highways (Central government)92,851[21]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-22" [22]

State HighwaysState governments (state's public works department)1,63,898[23]

Major and other district roadsLocal governments, panchayats and municipalities17,05,706[24]

Rural roadsLocal governments, panchayats and municipalities27,49,805[24]

The National Highways are the backbone of the road infrastructure and the major roads in India. They carry most of India's freight and passenger traffic. State highways and major district roads constitute the secondary and interconnecting roads in India. The sortable table below lists national highway density in India per state or union territory.[25]

HYPERLINK "http://en.wikipedia.org/wiki/Indian_road_network" \l "cite_note-26" [26] Included for context and comparison are major road density of several developed economiesModeling of the electric system "architecture" aims to achieve performances of safety, maintenance, operation and reliability. The paper discusses about the criteria in designing special cases, as roadway tunnels, that need a structured architecture complying with electrical loads extensively distributed and with installation requirements proper to external stresses hazard as fire hazard. Recommendations of mechanical and electrical criteria have to be graduated according to duty categories (as building occupancy in hospitals, strategic buildings or environment parameters for the road tunnels). Their consideration is essential for the settlement of the design criteria, which have to concern variable configurations to simplify installation problems, to allow a flexible operation and to optimize the cost-benefits efficiency. A special power distribution, "brush-distribution", is suitable for the strategic buildings with higher risk for seismic event and for the road tunnels against the fire, and restoration. The electrical power system of a roadway tunnel could raise high values with a relevant contribution by the mechanical ventilation and the support lighting. The authors suggest an adaptive criterion in designing the support lighting system in order to mitigate the cost and energetic impact.

A port is a location on a coast or shore containing one or more harbors where ships can dock and transfer people or cargo to or from land. Port locations are selected to optimize access to land and navigable water, for commercial demand, and for shelter from wind and waves. Ports with deeper water are rarer, but can handle larger, more economical ships. Since ports throughout history handled every kind of traffic, support and storage facilities vary widely, may extend for miles, and dominate the local economy. Some ports have an important military role.DistributionPorts often have cargo-handling equipment, such as cranes (operated by longshoremen) and forklifts for use in loading ships, which may be provided by private interests or public bodies. Often, canneries or other processing facilities will be located nearby. Some ports feature canals, which allow ships further movement inland. Access to intermodal transportation, such as railroads and highways, are critical to a port, so that passengers and cargo can also move further inland beyond the port area. Ports with international traffic have customs facilities. Harbor pilots and tugboats may maneuver large ships in tight quarters when near docks.

Cargo ports, on the other hand, are quite different from cruise ports, because each handles very different cargo, which has to be loaded and unloaded by very different mechanical means. The port may handle one particular type of cargo or it may handle numerous cargoes, such as grains, liquid fuels, liquid chemicals, wood, automobiles, etc. Such ports are known as the "bulk" or "break bulk ports". Those ports that handle containerized cargo are known as container ports. Most cargo ports handle all sorts of cargo, but some ports are very specific as to what cargo they handle. Additionally, the individual cargo ports are divided into different operating terminals which handle the different cargoes, and are operated by different companies, also known as terminal operators or stevedores.Ports sometimes fall out of use. Rye, East Sussex, was an important English port in the Middle Ages, but the coastline changed and it is now 2 miles (3.2km) from the sea, while the ports of Ravenspurn and Dunwich have been lost to coastal erosion. Also in the United Kingdom, London, on the River Thames, was once an important international port, but changes in shipping methods, such as the use of containers and larger ships, put it at a disadvantage.Shipping Land or "ground" shipping can be by train or by truck (International English: lorry). In air and sea shipments, ground transport is required to take the cargo from its place of origin to the airport or seaport and then to its destination because it is not always possible to establish a production facility near ports due to limited coastlines of countries. Ground transport is typically more affordable than air, but more expensive than sea especially in developing countries like India, where inland infrastructure is not efficient.

Shipment of cargo by trucks, directly from the shipper's place to the destination, is known as a door to door shipment and more formally as multimodal transport. Trucks and trains make deliveries to sea and air ports where cargo is moved in bulk.

Much shipping is done aboard by actual ships. An individual nation's fleet and the people that crew it are referred to as its merchant navy or merchant marine. Merchant shipping is the lifeblood of the world economy, carrying 90% of international trade with 102,194 commercial ships worldwide. On rivers and canals, barges are often used to carry bulk cargo.Distribution Free on board (FOB)the exporter delivers the goods at the specified location (and on board the vessel). Costs paid by the exporter include load, lash, secure and stow the cargo, including securing cargo not to move in the ships hold, protecting the cargo from contact with the double bottom to prevent slipping, and protection against damage from condensation. For example, "FOB JNPT" means that the exporter delivers the goods to the Jawahar lal Nehru Port, India, and pays for the cargo to be loaded and secured on the ship. This term also declares that where the responsibility of shipper ends and that of buyer starts. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer.

Carriage and freight (now known in the US as "cost and freight")(C&F, CFR, CNF): Insurance is payable by the importer, and the exporter pays all expenses incurred in transporting the cargo from its place of origin to the port/airport and ocean freight/air freight to the port/airport of destination. For example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles). most of the governments ask their exporters to trade on these terms to promote their exports worldwide such as India and China. Many of the shipping carriers (such as UPS, DHL, FedEx) offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds"; if the parcels are not delivered on time, the customer is entitled to a refund.

Carriage, insurance and freight (now known in the US as "cost, insurance and freight")(CIF): Insurance and freight are all paid by the exporter to the specified location. For example, at CIF Los Angeles, the exporter pays the ocean shipping/air SALES MANAGEMENT & PERSONAL SELLING An earlier explanation/ definition of sales management was, directing the sales force personnel.

Later as the responsibilities taken up by the sales team grew and as the sales function evolved into a more holistic function a new definition has emerged :

Sales Management is management of all marketing activities including advertising, sales promotion, marketing research, physical distribution, pricing and product merchandising.

The American Marketing Association has given a current day definition of sales Management as:

The planning, direction and control of personnel selling, including recruiting, selecting, equipping, assigning, routing, supervising, paying and motivating as these tasks apply to the personnel sales force

From the Organizations Viewpoint there are three general objectives of sales management

a. Achieving the desired sales volume

b. Contribution to profits in the organization

c. Continuing growth

Relationship selling Buyers and salespersons have some type of a business or working relationship

Every relationship is an exchange

Relationship Marketing aims at creation of customer loyalty

The spectrum of relationships include

a. Transactional relationship (Selling)

b. Value added relationship (Counseling)

c. Collaborative relationship (Partnering)

Sales Management, Personal Selling and Salesmanship are all related. Sales management directs the personal selling effort which is turn is implemented largely through salesmanship

Salesmanship is one aspect of personal selling and never all of it.

It is one of the skills used in personal selling

Salesmanship is the art of successfully persuading prospects or customers to buy products or services from which they can derive suitable benefits, thereby increasing their total satisfaction.

It is also defined as a seller initiated effort that provides prospective buyers with information and other benefits, motivating or persuading them to decide in favour of the sellers products or services

People Skills Ability to motivate, lead, communicate and coordinate effectively

Managing Skills- Administrative skills like planning, organizing, controlling & decision making

Technical Skills Training, Selling skills, negotiating skills, use of IT, problem solving abilities, Product knowledge

Personal selling is when a company uses salespersons to build a relationship and engage customers to determine their needs and attain a sales order that may not otherwise have been placed. The personal selling process is a seven step approach: prospecting, pre-approach, approach, presentation, meeting objections, closing the sale, and follow-up.

Personal Sales Meeting

Meeting the customer face-to-face to makes the sales process more personalized.

The sales cycle, more generally speaking, turns leads into prospects, suspects into prospects and prospects into customers.

Prospecting is the step where salespeople determine leads or prospects. The pre-approach is used for preparing for the presentation through customer research and goal planning for the presentation. The approach is when the salesperson initially meets with the customer and determines a customer's wants and needs. Once the salesperson knows the needs, he or she is ready for the presentation that will entice the customer to commit. After the presentation, a salesperson must meet objections or address customer concerns. Gaining commitment comes next. Finally, the salesperson must remember to follow up after the sale is made.

The Relationship of Sales & Marketing

Marketing and sales differ greatly, but have the same goal. Marketing improves the selling environment and plays a very important role in sales. If the marketing department generates a list of potential customers, sales will benefit. The goal of a marketing department is to increase the number of interactions between potential customers and the organization. Achieving this goal may involve the sales team using promotional techniques such as advertising, sales promotion, publicity, creating new sales channels, or creating new products.

Sales Management Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management.

Sales manager is the typical title of someone whose role is sales management. The role typically involves talent development and leadership.

Sales planning involves strategy, setting profit-based sales targets, quotas, sales forecasting, demand management and the writing and execution of a sales plan.

A sales plan is a strategic document that outlines the business targets, resources and sales activities. It typically follows the lead of the marketing plan, strategic planning[1]

HYPERLINK "http://en.wikipedia.org/wiki/Sales_management" \l "cite_note-2" [2] and the business plan with more specific detail on how the objectives can be achieved through the actual sale of products and services.

Sales reportingThe sales reporting includes the key performance indicators of the sales force.

The Key Performance Indicators indicate whether or not the sales process is being operated effectively and achieves the results as set forth in sales planning. It should enable the sales managers to take timely corrective action deviate from projected values. It also allows senior management to evaluate the sales manager.

More "results related" than "process related" are information regarding the sales funnel and the hit rate.

Sales reporting can provide metrics for sales management compensation. Rewarding the best managers without accurate and reliable sales reports is not objective.

Also, sales reports are made for internal use for top management. If other divisions compensation plan depends on final results, it is needed to present results of sales departments work to other departments.

Finally, sales reports are required for investors, partners and government, so the sales management system should have advanced reporting capabilities to satisfy the needs of different stakeholders

PAGE 9