What advantages and disadvantages are there for retail outlets selling similar products to be located close together?
Generally, when we need to buy something, we will straight forward to the city centre or the shopping malls because we all know that it is a place, which gathers many shop together in one area. So, it is easy to customer to shop whatever they want. It is undeniable that consumers will receive the most benefits when alike retailer cluster together. In the opposite sides, retailers, it increases more customers or not. Thus, this essay will analyse both advantage and disadvantage factors that effect retailer who sell alike merchandises cluster together in the same place.
Firstly, similar stores cluster together will increaseing more customers. According to customer buying behaviour, the main intention of buying is to obtain satisfaction. Most customers satisfied if there are many choices of product to choose, rather than less choices of product. Therefore, if there are many choices of retailer offering consumer to look around, it will lead consumer go to shop at that area rather than go to one store in one specific place. As Gary Simpton stated in his example of ice cream vendor on a beach, the saler A will shift their ice cream cart to another place that they think their sale figure will increase in the same way the saler B also like to increase their sale figure too. They try to shift their vendor until both carts share an equal market. It can answer the reason why similar retail stores keep their competitor close as possible.
Because of coins have two sides, in contrast, there are many disadvantages that retailer have to pay attention. Beginning with the high competition because they sell the similar goods so they need to be different in order to catch the consumers’s attention to shop in their store. Being cluster together is more likely that every stores stand in the price war as consumer can walk around to compare the price and...
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