Comprehensive Report on Advantages and Disadvantages of Retail Outlets

This report analyzes the advantages and disadvantages of retail outlets. The advantages include increased reach, access to a customer base, and the retailer handling the selling process, which can be supported by marketing strategies. However, disadvantages include the potential for price wars, the commoditization of products, and the need to compete on product variety and quality. The report references Central Place Theory, which explains how businesses cluster together to attract customers, and highlights the importance of understanding consumer behavior. The report emphasizes the importance of product training, sales incentives, and promotional support to encourage retailers to sell products effectively. The report also includes references to external sources for further information on retail outlets and their benefits. This report is a valuable resource for business students looking to understand the complexities of retail operations and the factors that contribute to success.

Advantages and disadvantages are there
for retail outlets

Table of Contents
Advantages:.................................................................................................................................................3
Reach.......................................................................................................................................................3
Customers...............................................................................................................................................3
Selling......................................................................................................................................................4
Marketing................................................................................................................................................4
Disadvantages:............................................................................................................................................4
References:..................................................................................................................................................4

Think for a moment about the kinds of retail stores that tent to cluster together like cell phone stores,
car dealerships and big box stores are a few. One of the major ideas about Central Place Theory is that
there is a hierarchy of goods - an order, where higher ordered goods are those that are purchased
infrequently like cars and lower ordered goods are those purchased more regularly like milk and eggs.
People are keen to go farther from their homes to purchase a car than to purchase their breakfast, so it
makes sense for competitor car dealerships to locate next to each other to take advantage of potential
customers who come from great distances to shop.
Advantages:
Being close together makes it more likely you will be drawn into a price war, as potential customers can
walk round the block to compare offers and options.
On the flip side, you'll probably get more footfalls because potential customers who want what you offer
are more likely to make a trip to you if they have not one but two potential retailers available to resolve
their purchasing requirement.
There is nothing wrong with competing on price in a non-competitive market, but everyone does it, you
will lose.
Humans understand things not in isolation but in reference of an existing context. This means the
advantage is that customers will have an easier time comparing the product to another one they
arguably know and understand.
Reach
Selling goods through a retail channel extends the geographical reach of your business. Setting up your
own outlets or hiring a sales team to cover the territories where an existing retail chain operates would
involve significant investment but more customers will be attracted towards shops where there are
more shops.
Customers
Dealing with retailers gives you access to an additional customer base without investing in a sales and
marketing program to capture new business. You have immediate access to a group of customers and
prospects who visit retail outlets to buy the type of product you offer. In some cases, you may be able to

negotiate an arrangement with a retailer to stock only your type of product and not those of your
competitors.
Selling
Selling your products through a retail channel puts responsibility for selling the product on the retailer.
To encourage retailers to sell your product, you must provide product training for the retail sales team,
together with a program of sales incentives and promotional support material.
Marketing
Marketing may be easy in a way because more customers will be inspired by the marketing strategies
taken up by outlets situated very close.
Disadvantages:
There primary disadvantage is that the product becomes a commodity. A plain white shirt could come
from any brand and it would be the same.
But then of course people spend a lot of money on plain white shirts as long as they come from an
expensive brand.
You will need to compete with your competitors with a good variety and quality of products. In case you
are not able to give varieties of products with good quality, your competitors may attract more people
towards their outlets.
References:
 Advantages of retail outlets: Available at:
http://smallbusiness.chron.com/advantages-retail-outlets-36821.html[Accessed November 24,
2016]
 Advantages and Disadvantages. Available at:

http://www.planetizen.com/node/65765[Accessed November 24, 2016]