Retailing and Marketing of the Sales of Goods or Commodities in Small Quantities - Research Paper Example

Applied Research Methods Student Name Student ID Course Name Date Table of contents Abstract 3 Acknowledgement 4 Introduction on Research Topic 5 Literature Review 8 Research Methodology 15 Analysis or Discussion 23 Conclusion 25 References 26 Abstract This paper aims to outline and justify how the research on the foreign market strategies and operations will be carried out. The paper highlights the research methods that will be used and how the research will be carried out. What things should be kept in mind and how will we go about researching on the area of investigation. Tesco plc is used to highlight the research questions and the research objectives. The limitations and the ethical considerations will also be considered in the course of investigation. Acknowledgement We would like to thank our course instructor and all those who have helped us in this course of investigation. Introduction on Research Topic Research can be conducted for two different purposes; basic and applied. When research is conducted to solve an existing problem in a work setting it is called “Applied research” however when it is conducted in order to improve our understanding or knowledge about certain thing or contribute to the general body of knowledge in a particular area of interest to a researcher it is called Basic or fundamental research. Background: According to Shari Waters, The sales of goods or commodities in small quantities directly to consumer, is called retailing and marketing of these sales and goods outside the organization’s home country is called international marketing or retailing. We can divide retailing into several categories: Domestic Regional exporter International International to global Global Basic motive of any company would be to enter foreign market and increase their global competitiveness. Why would they want to enter global market it might be because they will get diversified market? They will get customers abroad as well or may be in order to get into economic trends. Though globalization and internationalization enables company to groom and establish but it also brings new challenges and issues for company as well. These issues may include unstable governments, foreign exchange problems, trade barriers, corruption, bureaucracy or technology pirating etc. Research Aim: This paper aims to research on the international expansion strategies and operations of Tesco and study the success and failures of Tesco in entering, operating in foreign markets and what strategies Tesco should follow in exploring and entering newer markets. The major aim will be to present appropriate recommendations to Tesco on strategies to be adopted for entering newer markets in retail business like India, Pakistan and China. These are growing economies and Tesco plans to expand its retail business in these countries. Research Objectives: Following the aim of the research, the research objectives of the study will be: To highlight problems faced by Tesco in International Expansion Pinpoint the Components that Tesco applied in developing a global market strategy To highlight the global market entering strategies that Tesco has adopted To recommend strategies for expanding in newer markets Hypothesis/Problem Statement: What are the problems faced by international retailers especially Tesco? What are the components of developing a global market Strategy? What are the global market entering strategies and what strategies Tesco adopted? What strategies Tesco should follow in entering into newer markets? Literature Review Components of Developing Market Strategy: Jain (1999) says about developing strategies that, the person who will develop the strategy can do it in four simple steps. We are using a simple table in order to understand this concept more clearly: Usually companies start their business development process by entering themselves first into domestic market and always look after the strategies and actions of developed companies of developed countries. And this exactly is the way to success. In this way a new born company could learn from the mistakes of developed or under development companies and at least won’t make the basic mistakes. Selecting a strategy is a difficult question. In this regard Reibstein (1985) says that strategies could be divided into a number of types; ranging from Integrated Global Marketing Strategy, Global Product Category Strategy, Global Segment Strategy, Global Marketing Mix Element Strategies and Global Product Strategy to Global Branding Strategies, Global Advertising Strategy, Composite Global Marketing Strategy and Competitive Global Marketing Strategies. A company should have detailed information about all these strategies so that they can select the most appropriate one. It would be easy for them to apply these strategies if they had enough knowledge. Strategies for Entering Into Global Market: Strategies for entering into global markets include indirect exporting, direct exporting as an independent distributor, sales subsidiary, or by using foreign production as an entering strategy (Albaum, 2005). It is important for a company to work on entering global market strategy before making any move as it will be easy for them to survive in the competitive market otherwise they could not survive. Or if managed to enter somehow without enough knowledge of business, will have to face much problems so if you want to appear as a strong competitor, it’s better to get the required tactics. Problems Faced By International Retailers: As a company enters the international race, it had to face many challenges as the market gets large and there would be many diversifying business and successful strategies already running. According to Ghauri (2003), these problems can be classified into two types; internal and external problems. Internal problems are native to the company and can be because of insufficient resources available to company where as external problems could be from market. There could be many issues but there are some general issues as well which are common in market and most of new comers in business have to face these problems. General Issues in Retailing Business: While talking about general issues in retailing Albaum (2005) says that the most important component that should be considered while starting any business would be “Location”. Other then location a retailer should consider the following things: What is the budget? Which the best location is of desired the target market? What would be the kinds of products being sold? Whether public transportation would be available to general public from your vicinity? What are the characteristics of customer? Where are your competitors standing at this time? Situation of relative ease of traffic flow, incl. pedestrian Very minor things like parking issues and major thorough fares can also make difference Complementary stores Another important question for a retailer is from where to start the business or in other words we can say that which place is best as a beginner as people often make a mistake by direct entering into macro market and as a result they can’t move long way and surrender in front of hardships that come their way because of a single mistake they made by entering the macro market without any experience (Partington, 2002).In this regard author says that in order to succeed it would be better to target a micro market. The reason is that competition in macro market is very tough and without a proper strategy it is very important to observe the developed business which can’t be done by entering into the race but by being a good observer. Other then these issues the retailer might have to face problems in the supply change management and stock control, sourcing overseas and CSR, accounting, Reporting and regulations, consumer and domestic trends, HR and tax issues. Internationalization Problems and Internationalization Strategies: Once you have selected the business strategy and are ready to get into international market you should prepare yourself to face the problems that are waiting for you in this macro market. In this regard Bell (1997) posits that the nature of different problems depend on the strategic decisions adopted throughout the process. As mentioned above, that problems can be classified into two types that is internal and external problems. In addition to this Kohli (1990) says that internal problems can be further classified into three more categories that is operational, internal and information problem. However external problems are related to industry. So according to author if a retailer is facing problem in expanding his export market it means that he lacks enough knowledge of export business and if he unable to decide which market to choose then he might lack the required information about market. Moreover author believes that if the retailer is confused about which strategy to use in order to enter the market it shows that he is facing the barriers in entering the market. Last but not the least writer says that the market strategy is also an art and those who don’t know it have to face financial, logistical or operational problems (Seddighi, 2000). Other then selecting appropriate strategy what are other things that should be considered. In this regard Silverman, (2004) says that there are some key points in retailing business that needs to be remembered which include: Defining the core business then internationalizing them and finally globalizing them for the competitive strategies. In this it would be easy for a company to make its place in market as it would already had a trademark in market as a struggling company and will not be a new name that needs to prove its authenticity. Secondly a core business contributes to corporate profits, and has important global potential which will make it easy for an organization to move ahead. Internationalizing core strategies involves recognizing comprehensive similarities in customers and markets. A retailer should make be very clear about the fact that in order to globalize his strategies he had to internationalize brands and global brand portfolios as well. A company should make its standard in every aspect including total product standardization, distribution, pricing and promotional strategies. While defining the global brands author classified them into: corporate brands, range brands, and individual brands. Offensive competitive strategies can be product-based or geographically-based so a company should consider all the factors that could affect the organization’s prestige or could play an important role in increasing its credibility and consumer market. Author says that different markets respond in a different way to its competitors i.e. US companies respond to global rivals by asking for trade protection, working with competitors, forming domestic collaborations, or restructuring themselves however European companies go for offensive or defensive international strategies, national defensive strategies, or exiting the industry. In the same way emerging market firms can go for defender, dodger, contender, or extender strategies. It depends on the location where company is standing or in simple words according to the worth of company. If a company is not able to stand alone in market and fight then the other way out is to collaborate with rivals by global alliances. Responding to Global Competitors: There is a difference in making market entering strategies, globalization strategies and making a strategy in order to respond to global strategies. And success of each of the strategy depends on your wise decision. It’s up to the retailer how he managed to get into market and make his place. Once he gets into market he defiantly had to face strong competition and has to respond the moves of global competitors. And it’s not that east as it sounds like. Your competitor will always busy to get hold of your weakness and will high light them as much as they can. Don’t forget that your weakness is a strong point for them. They will try to get as benefit as much they can from your minor weaknesses. So in order to respond to their moves an organization should have the deep knowledge of strategies used to respond the global competitors. In this regard Kohli (1990) says that in order to respond to global competitors a company or organization should behave really efficiently. He further says that there are certain strategies that could be followed which include: Defender Strategies: In this type of strategies the industry globalization influences are very low and home market customized assets are competent. Dodger Strategies: it really means by firms with home-market oriented assets but under high competitive pressures; localize or JV Contender Strategies: deals with larger larger, well resourced developing firms in order to upgrade existing technologies and/or transfer competitive assets into foreign markets (Mexico’s Cemex) Extender Strategies: are used by local market expertise and products to move into similar markets abroad. Jollibee. Research Methodology Before doing in-depth study of research methodologies, it is important to understand the research procedure. We will explain the process of research in steps to make it more easy and understandable (Bryman, 2003). Research Procedure: We will go through the outline of research procedure in 10 simple steps (Smith, 2003). Step 1: Objective: The very first step of research procedure is to make your objective very clear to your audience and it should be clear and precise. Step 2: Hypothesis: While considering your objective make a hypothesis statement. This statements would is also called problem statement. You the heading of hypothesis you have to write those certain questions which you are going to answer through your research. Step3: Literature Review: In third step you have to see what others have done in context to your research or what is already known about your subject. Literature review may contain any article or journal etc. Step4: Data Collection: After reviewing the literature you have to collect data for your research and to prove your hypothesis. Step5: Design and corresponding analysis: In this step you have to decide which design and corresponding analysis is appropriate according to type of your data and hypothesis. Step 6: Data selection: When you are done with data collection and analysis, you have to select the appropriate data. Step7: Data Analysis: After data collection get ready to do data analysis. Analyze the collected data to answer the hypothesis. You have to be very conscious about the methodology of analyzing data according to the type of data. Step8: Results: Discuss the outcome of your data analysis and clearly mention the results with the help of graphs and charts in order to make it more authentic. Step9: Conclusion: Give the conclusion of your research. Step10: Report your research: Compare your results and ratings from others who have done research on same topic. As we have mentioned above that we will do In-depth study of applied research methods so first let us have look at types of applied research methodologies. Types of Applied Research Methods: Following are the types of applied research (Coghlan, 2005): Field Experiments: In this type of research the experimenter goes to the subject’s turf. It is also called laboratory research; physical controls available in the laboratory are greater than those found in the field. Field Observation: Field observation is useful to collect data as well as for generating hypothesis and theories. There are two extremes of field observation; Total observation in which subject may or may not be aware that they are being observed and Total participation, when the observer become the full-fledged participant in the situation Focus Groups: Focus group allows the collection of primarily information by discussing with a sampled group of people the topic under investigation. . Case Studies: Case studies are performed when a researcher desires to understand or explain a phenomenon. Interviews: Interviewing the related personnel which are directly linked to the subject of investigation. Questionnaires: Questionnaires help in getting firsthand knowledge from consumers, company managers etc about the topic under investigation. Adopted Research Methodology: For the purpose of conducting this specific research, the methodologies used will be: Secondary Research: This will consist of reviewing the literature already present on the research area in the books, journals, periodicals and websites. A vast of amount of literature will be reviewed and analysis and conclusions will be drawn from the data already present on the research topic. Primary Research: For the purpose of conducting the primary research, interviews will be conducted from the company managers to determine the current strategies Tesco has followed and what strategies it plans to follow in entering the newer markets. Also the interviews with company managers will be accompanied by questionnaires from the consumers to determine the effectiveness of Tesco’s foreign strategies and operations. Rationale for Selected Methods: The above discussed research methodology is selected with respect to the nature of study. Since the end result of the research will be to recommend foreign market strategies for Tesco to expand into newer markets, it is important to review the literature available on the successes and failures of the company. The interviews methodology is selected because interviews with managers will help to get the firsthand knowledge of the company’s foreign operating and entering strategies and also about the markets the company is planning to enter in future, what strategies they plan to adopt and what ways it will handle the problems that arise in the course of action. Questionnaires from the customers will help to incorporate some quantitative data into the research and get a firsthand knowledge of the satisfaction level of the customers with respect to the operations of Tesco and its specific strategies in various countries. The questionnaire will consist of rating and ranking questions which will gauge the satisfaction level of consumers. Also some qualitative questions will be included in order to keep a blend of both qualitative and quantitative research. The other methods are rejected as they are not viable for the particular research. Field Experiments and Field Observation are irrelevant to the research as studying the foreign market strategies involves no specific observation or experimenting. The case study method is not being used as the research is not intended to understand any phenomenon, whereas the focus groups of experts in the field can be conducted but these are not being conducted due to the issue of busy schedules of the people and also due to the unavailability of the experts at the same time for conducting focus groups. Sample Size: The interviews will be conducted from 2-3 executives of Tesco due to their busy schedules. While the consumer responses that will be collected for the purpose of collecting quantitative data will be 500 responses from randomly selected customers at various retail outlets of Tesco. Pilot Study: Before using the questionnaires and the interview guide, it will be first tested on a random sample of 10 people in order to gauge if the respondents are able to derive the same meanings out of the questions as the questions are intended to. This pilot study will be conducted in order to maximize the accuracy of the results that are collected from the questionnaires and to get the purpose of the research achieved in an efficient manner. Design of the Questionnaires: The questionnaire for the respondents will consist of rating and ranking questions. The order will be random so that the respondents don’t follow a sequence in answering questions. Double barreled questions, leading and loading questions will be avoided. And for ensuring that the questionnaires produce the maximum accuracy of the information collected, pilot study will be conducted to test and then review and correct the questionnaire. Design of the Interview Guide: The interview guide will consist of open ended questions and although we will prepare a guide; it will be just there to keep the flow of questions going. The structure will be open ended and unstructured questions because while interviewing we can ask back questions for more information and we will not have to follow a hard and fast structure of questions. If a structure is followed, there is a possibility that miss out on some integral and important information that we can ask and cross question in an unstructured interview. Methods of Data Analysis: The method that will be used for this research will be “content analysis” because content analysis is objective, quantitative and systematic. Kerlinger’s (1973) definition is fairly typical: content analysis is a method of studying and analyzing a communication in systematic, objective and quantitative manner for the purpose of measuring variables”. The literature from various sources reviewed and the results from the primary research will be combined, compared and contrasted in order to analyze the ground realities and be able to present appropriate recommendations to Tesco on strategies to be adopted for entering newer markets in retail business. Limitations: The following limitations are present to the conducting of this research and they will be addressed by the ways that are given in column 2. For the Literature Review Availability: Information is not available in the market. Reviewing literature is time consuming as large amount of literature is available Various books, journals and periodicals will be used as the main resource, Direct phone call to company managers and interviews with frontline managers, Time Schedule for literature Review For Interview Schedules and Questionnaires Time consuming, Lack of questionnaire design skills Formulate a time schedule, Review academic books on how to design good interviews and questionnaires For Survey Administration Response rate, Response Biases etc Choose appropriate sample for the questionnaire survey administration that eliminates any biases For interviewing the company Managers Time and Availability of managers Patience and Communication skills For data Analysis Lack of analysis skills Review academic books on how to analyze data For Report Development Compilation Problems Keep a track of every milestone and record each and every task in an orderly manner Ethical Issues: The ethical issues that can arise as part of the research include that the respondents will not be willing to disclose their identity while answering the questions so it will be made sure for this purpose that their anonymity is maintained. The ethical codes of the company we visit for the purpose of conducting the interviews will be followed. Research ethics will be followed in the research. Analysis or Discussion Like all other markets retailing market is facing a decline as well because of the economic condition of different countries. Experts should sit together globally and should find a way out to the major problems faced by retailing market. The major reason behind failure of any business or retailing shop is the wrong decisions made by retailers or business man. If they are unable to make decisions by themselves they can contact expert in this regards i.e. strategist who already have the information about market so it’s better to concern expert before investing at any place. Economic situation of a county plays a very important role in running or drowning any business for example Real State Business is facing a real decline in Pakistan the only reason is the unstable economic situation of the country. So another way out to get rid of these problems is a PEST analysis. It will help the businessman to analyze where his business stands and which factor is affecting his business most. Declines do come in every business but there is a way out as well and the way out to this global decline of retailing industry is to do proper planning and to make an effective strategy. To make a strategy is not an art but to select the right strategy is an art similarly to run a business is not an art but to run it successfully is an art. Same is the case with the retailing business, the basic thing is to run it successfully and groom it as much as you can. Once you get hold of the barrier between you and your success you will  get out of it very soon and this can be conquered by doing an in depth study of market before entering into it and then by making a strong affective strategy. Second important thing is the selection of market. It is not a wise thing to enter the global market without any experience. When a businessman once enters in the market he have to make strategy for everything to expand his business, to respond to global market and competitor’s moves so it’s better to be prepare.  Conclusion Retailing industry is flourishing day by day. Businessmen are ready to invest in this industry but some of them lack enough knowledge of export due to which they have to suffer in form of loss. Selection of entering strategy and market selection is very important in order to make retailing business successful. Retailer should prepare himself before entering the global market. Don’t forget that affective marketing strategy is very important for any retailer to survive in this fast growing era. A company should be strong internally in order to face the external barriers and hurdles. So appropriate strategy and correct targeted audience is very important to run the business and compete with the market successfully. 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Potter, Mark, 2009, “UPDATE 1-Tesco foreign mkts bottom out, no recovery”, Guardian.co.uk, viewed 08 May, 2009, Read More