Question

Explain the wheel of retailing. is this theory applicable today why or why not

Answer 1

this states that new type of retailers complete a full wheel.

Answer 2

Wheel of retailing also referred to as retail wheel is a marketing technique followed in retail development.

• When a person first steps into the retailing business, the products will be sold at discount rates to attract customers or we can say the retailer will initially open discount stores.
• Once the business gets established and has earned a good amount of customers, the retailers will slowly begin to increase the cost of their products.
• This is called the wheel of retailing.
• Now their biggest competitors would be the new entrants in the markets since they too will begin with the retail wheel technique.

The applicability of the wheel of retailing theory will depend on various factors.

• If the business is being set up in a region where they have competitors, then there will be no option to raise the price after some time as it will depend on and vary with the prices fixed by the competitors.
• The present market gives a lot of importance to product quality. If the quality is being compromised, then even the wheel of retailing cannot help.