1. THE ENVIRONMENT OF
RETAILING AND DECISION-
MAKING ISSUES
CHAPTER 3

2. INTRODUCTION
• To understand the complex external environment in which
retailers function.
• To explore several different dimensions of the environment.
• To examine some historical attitudes.
• Issues of personal decision making.
• To discusses the legal, competitive, and technological
environment.
• To discuss global market influences and opportunities.

3. Changing role of business in meeting
government, economic, and social needs.
Business with
Business with
Government,
Business Government
Religious Institutions,
Regulation
School. Family
Meets Meets Meets
Economic,
Economic Economic
Social, Political,
needs needs
Personal Needs
1700s and 1800s Late 1800s to Early 1900s Late 1900s

4. THE SOCIAL RESPONSIBILITY
ENVIRONMENT
• Providing goods and services to the ultimate consumer -
Caveat emptor – “let the buyer beware”
• A change in Attitudes.
• Nonbusiness Influences on Decision Making – Economic
Utilitarianism.
• Criticism of Business.
• Retailing and Social Needs.

5. INFLUENCES ON INDIVIDUAL
DECISION MAKING
Professional
Codes of Ethical
Behavior
Influences on
Individual
A Personal Legal
Ethic Decision Environment
Making in
Retailing
Economic
Utilitarianism

6. Consumerism
• Basic consumer rights.
• What retailers can do ?
• Better goods and services.
• Aid in urban affairs.
• Employment opportunities and needs.

7. Personal Ethical Decision Making
• A Legalistic Ethic
• Professional Codes of Ethical Behavior
• A Personal Ethical Framework
• Self Ethic
• Situation ethic
• Societal ethic
• Others ethic

8. A framework of increasing commitment to ethical
decision making
Others Ethic
Social ethic is
modified by concerns
Social Ethic for what is right and
Situation ethic best for others as
modified by well as self.
Situation Ethic
concern for
what society
Self ethic modified thinks is right.
Self Ethic by the situation.
What are the
Most primitive consequences ?
level of ethical
thinking, Involves
only self-interest

9. The Legal Environment
• Laws and Regulation and Their Effect of Retailing – Laissez
faire.
• Regulation of competition
• Consumer Protection Act.

10. The economic Environment
• Growth and Inflation.
• Effect or real growth on retailing.
• Inflationary effects on retailing.
• Recession and depression.

11. The Competitive Environment
• Effects of a Competitive Environment.
• Changes in Retailing in Response to Competition
• Wheel of retailing.
• Retail accordion theory.
• Natural selection.
• Dialectic process.

12. THE WHEEL OF RETAILING
• Low price
• Higher Prices
Entry • Limited
• Excellent Maturity Phase service
facilities • Modest
• Excellent profit
Phase facilities
• Conservation • Limited
management product line,
variety and
assortment
• Innovative
Trading Up management
• Moderate prices, good facilities
• Higher service levels, highest profit
• Increasing product variety and
assortments

13. The Technological
environment
• Most dynamic changes in retailing have come as a result of
changing technology.
• Technology can be used to add entertainment and excitement.

14. The Global Environment
• GATT – “general agreement on trade and tariff”
• Global Expansion of Retailing

15. Thank You