The wheel of retailing helps explain the evolution of firms that enter a market on a shoestring budget and gain customers by offering lower prices. It suggests that once a customer base is established, the retailer begins offering higherend products, more upscale facilities, and better service.

Question

The wheel of retailing helps explain the evolution of firms that enter a market on a shoestring budget and gain customers by offering lower prices. It suggests that once a customer base is established, the retailer begins offering higher­end products, more upscale facilities, and better service.

Quizplus · Accepted Answer

The wheel of retailing theory suggests that low-cost retailers initially enter the market with basic facilities and low prices to attract customers. As they establish a customer base, they start offering higher-quality products, more upscale facilities, and better service, leading to an increase in prices. Therefore, the statement is true.

The Wheel of Retailing Helps Explain the Evolution of Firms