1. CHAPTER 14 INTERNATIONAL RETAIL PRODUCT MANAGMENT

2. LEARNING OBJECTIVES Understand why a retail organisation should become involved in international RPM activities Understand the two opposing approaches to international RPM: standardisation and adaptation Consider the implication of international RPM on the retail buying organisation Consider the opportunities and challenges associated with international sourcing

3. PRODUCT RANGE: STANDARDISE OR ADAPT? A global strategy  reproduction of a successful retail formula across the globe  concentrates on similarity of customer needs  same product range in all outlets A multinational strategy  opening retail outlets that are adapted for different international markets  takes different customer needs into consideration  different product ranges for different outlets

4. THE TRANSNATIONAL STRATEGY Retail operations are managed on a global basis, with standardised procedures, but product ranges are adapted to different regional markets The basis of many successful international retail strategies Some product categories have more localised preferences (e.g. food) Luxury and high fashion branded products have international appeal

5. STANDARDISED RANGE ADVANTAGES  economies of scale  buying power increases  internationally recognised brand image DISADVANTAGES  novelty appeal of retail formula may decline  unable to take buying and selling opportunities  lack of transfer of knowledge / experience

6. ADAPTED RANGE ADVANTAGES  able to adapt to emerging market opportunities  become readily accepted within new culture  may be able to benefit from existing management expertise and supply base DISADVANTAGES  higher costs (buying, marketing, training etc.)  does not build global recognition for retail brand

7. UNAVIODABLE ADAPTATIONS Multilingual product information Logistical necessities (packaging, labelling, documentation) Product’s technical compatibility International health and safety standards Pricing (distribution costs)

8. ORGANISATION FOR INTERNATIONAL PRODUCT MANGEMENT A purely standardised approach will not require separate product managers  scale benefits of centralised buying will be realised  international outlets may not receive the attention they need An adapted retail strategy needs decentralised buying decision making  faster response to market opportunities  local expertise and suppliers can be retained or built

9. LOCAL VS GLOBAL SOURCING LOCAL  suppliers will be familiar with local tastes and preferences  supporting local industries can help a retailer to integrate into new market economy GLOBAL  can help to develop an international outlook  necessary to remain price competitive  enabling technology has made global sourcing more viable for many  consumers are becoming more ‘international’ in their product usage  can be difficult to determine exactly where/how product is made

10. ALTERNATIVE GLOBAL SOURCING STRATEGIES Limit level of imported goods, use domestic suppliers for specific product or services (e.g. quick response) Spread risk by sourcing from a number of different countries and suppliers Limit buying to certain geographic regions to limit costs Use intermediaries (such as buying offices, agents, distributors, e-commerce trading networks)

11. ETHICAL SOURCING Buyers may be unaware that supplies are being made where working conditions are unsatisfactory (long/complex supply chains) Retailers are morally and increasingly legally responsible for trade conduct (corporate social responsibility) Consumer expectations are getting higher Fair Trade and the Ethical Trading Initiative (ETI) are examples of retailer responses Ethical issues need to become part of supplier assessment and product selection