Retail is the sale of goods and services from persons or concerns to the terminal user. Retailers are portion of an incorporate system called the supply concatenation. A retail merchant purchases goods or merchandises in big measures from makers or straight through a jobber. and so sells smaller measures to the consumer for a net income. Retailing involves a direct interface with the client and the coordination of concern activities from terminal to end-right from the construct or design phase of a merchandise or offering. to its bringing and post-delivery service to the client. The industry has contributed to the economic growing of many states and is undoubtedly one of the fastest changing and dynamic industries in the universe today The growing of retail industry

U. S. retail industry gross revenues growing will shrivel to 3. 4 per centum this twelvemonth. hampered by the lingering lodging slack. a trade group prognosis. The economic system is non turning at the gait we would trust. Before. Consumers are happening a manner to acquire out at that place and pass. But the consumers are different today. They are much more focussed on value. A retail merchant can pass old ages turn overing out a trade name in the largest U. S. markets and more old ages perforating smaller markets before looking overseas. Today’s globalisation makes traveling internationally earlier to go a much more attractive chance. Retailers call planetary enlargement a cardinal beginning of gross and a necessity. non an option. for them. They besides see the growing of in-between category consumers around the Earth as a cardinal driver of these international chances. The importance of retail industry

Today. retail is one of the biggest employers in the universe and a big part of the universe economic system. The function of retail industry is to execute retailing maps expeditiously than jobbers. It provides the long term relationship with the consumers. They besides provide information about competitor’s activities associating to merchandise. monetary value and publicity. It besides offers assortments of services such as bringing. installing. fix.
care. and supply of trim parts. The Retail industry has high per centum in USA selling. Of the World’s 10 largest retail companies in the universe. five of them are from the US and five are from Europe. Retail gross revenues are an of import index because consumer disbursement thrusts much of our economic system. The basic motivation of these retail industries is to fulfill the consumers and carry through their demands and demands. increasing the overall net incomes of the company.


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The purpose of this thesis is to understand the growing of retail industry in US. The challenge for retail industry and ways to get the better of it
1. Economic environment
2. Information engineering
3. Population and truism
4. Employment
5. Cost

International enlargement troubles
International trades are overwhelmingly brushing all of the states. With the slow recovery of U. S. economic system and the negative impacts of European debt crisis. the underdeveloped universe offers great markets and chances for making luck. Many companies. such as Pepsi. Apple. General Electric. followed this tendency. They expanded their concern into developing states and succeeded in assorted ways. However. in contrast to other industries. food market retail is still dominated by local participants in most states. International participants performed ill even in the largest retail markets. Every food market retail merchant that has explored overseas has failed every bit frequently as it has succeeded. Most of them have really prudent attitude to venture other states. For illustration. Walmart has succeeded in Canada and Mexico. but it had to draw out of Germany and South Korea. JC Penney. Carrefour. and Home Depot have besides tried to come in the Chilean retail market but have failed due to stiff local competition and the inability to steal their highly loyal clients. Why does retail industry faces more troubles than any other industries.

The undermentioned grounds would be good explains. One of the challenges to planetary retail enlargement is retail merchants face many barriers to entry in foreign markets. In many parts. acquisition schemes are used by big retail merchants to come in local markets. In a long clip. Elephantine retail merchants purchase small- and middle-size local retail companies. while they are infant. to spread out their concern in the local countries. However. in mature markets. few retail merchants want to sell. It’s tough for retail merchants to come in abroad or foreign markets by geting local participants. Even worse. new local rivals. who likely know more information about the local markets. would come in if there are any possible net incomes. In emerging markets. few ironss have developed big webs of shops. The retailing is normally extremely disconnected and mostly scattered. which besides make difficult acquisition work. In add-on. consumers in developing states perceive foreign retail merchants to be premium participants. In eyes of the occupants. they may be more expensive than local food markets. On the other manus. in developed states. foreign entrants are expected to convey some new. different. and valuable merchandises and services.

Customers would prefer local retail merchants if foreign entrants merely operate every bit same as locals’ did. This unjust judgement on local and foreign retail merchants makes high entry barriers to foreign entrants. Finally. Torahs in comparatively closed markets protect local concern from foreign competition. Second. Grocery retailing is a high fixed cost. low border concern with long clip payback periods. Large retail merchants should put tonss of money in real-estate. stock lists. supply ironss and engineerings systems constitution. This procedure is slow. It spends a long period clip to construct efficient webs of shops and providers. and derive a profitable graduated table which plenty to cover the high fixed cost. Furthermore. local retail merchants normally have more close relationship with providers in those countries. Even though foreign retail companies are in the advantage of economic graduated tables and plentifulness of capitals. local retail merchants had long clip and solid confederation with providers. They can still acquire comparative low monetary values from providers. As a consequence. food market retailing concerns. particularly for foreign entrants. need huge investing and plentifulness of clip for growing. Few retailing companies can make break-even point in short clip.

For case. Walmart broke even in China in 2010. after 15 long old ages of investing. Low net income border is besides one of troubles to retailing industry. Unlike other industries. food market retailing concern must vie for every goods that served. Some of merchandises may non hold any net incomes. Retailing operators must be sensitive to the monetary value alterations in markets and happen their profitable merchandises. Third. Foreign entrants frequently have to run variously to accommodate peculiar civilizations and spirits in a state. which addition operating costs. With eventual growing in a peculiar country. those local retail merchants must hold better apprehension of the civilization and gustatory sensations of local occupants. Outsiders. on the other manus. have to look into and react to big fluctuations in the residents’ shopping wonts. alone demands. and how much per centum of their incomes spent in food markets. Global retail merchants face legion diversenesss of civilizations and gustatory sensations and troubles of fulfilling assorted client demands. which menace their determination to come in anther state.


With the development of our society. engineering plays an progressively important function in the retail industry. Many consumers and some concerns use the cyberspace to seek concern information and store online. However. one coin has two sides. As the engineerings bring in a batch of chances in retail industries. it besides brings in so many challenges. Information system. engineering. the outgrowth of the World Wide Web. and instant connectivity although has helped but made it more tough and onerous for retail merchants to run in their concern niche. Today’s clients are extremely enlightening and monetary value medium. If a concern is unable to run into the demands of market so. they will really likely to be eliminated from the concern they pattern. In order to do themselves outstanding among so many rivals. retail shops have to use new engineerings and inventions into every facet of their industry concatenation. Large retail shops understand the positives of the investing on engineering and invention. Not merely does it supply a alone experience to clients who have busy lives. but it can increase more merchandising and selling method as good.

Technology is the key to win

In old decennaries. traditional concerns led the patterned advance of invention and engineering within a concern sector. As industries conduct with increasing consumer demand for assorted and advanced merchandises. in order to confront these challenges and alleviate concern concerns. endeavors invested a big figure of money in Research and Development which brought about invention and engineering. which is a direct consequence of increased demand of concern maps. This provided an chance for concern enlargement and competency that finally led to a successful concern theoretical account. However. that is non the instance today within the tremendous technologically advanced society as functions are reversed and information engineering drives concern success. Today’s retail concern is greatly dependent on information and if it is without barriers. a blooming concern will be doomed every bit shortly as possible. In order to accommodate to the of all time changed retail industry. Information engineering. online shopping and efficient supply concatenation have been applied into it.

Better the Information engineering

Now information is considered an highly valued plus to an organisation and if concerns do non cover with these information barriers every bit shortly as possible. they will be involved in the compound in accelerated growing in information which will take to organisations out of their concern. In the extremely competitory retail industry. any information about your client disbursement pattern/habits/preferences is treated as an plus and makes you go more competitory to your rivals. On the contrary. if the company does non put geting relevant information that is as competitory advantage of the company and necessary for a concern to last in the strongly competitory market. so the company will lose concern with hapless client relationships.

Apply Web 2. 0 engineering

Web 2. 0 includes such new engineerings as societal networking. web logs. wikis. RSS. mash-ups. folksonomies. forums and other on-line communicating tools. The engineerings of Web 2. 0 affected the World Wide Web and focused more on promoting the users to interact with each other. This extremist alteration could non go forth concern unaffected. In order to change the method to public and get indispensable information. the retail industry needs to take the Web 0. 2 engineerings into great consideration. At the first topographic point we are in a extremely competitory market. Once the rivals apply these engineerings showing to clients a typical experience. so the other retail merchants must take action if they want to go on to last in the concern topographic point. In add-on. as an increasing sum of information becomes available to clients. the retail merchants should set merchandise distribution so as to fulfill the high outlooks of their clients.

Adapt to the online store

Harmonizing to U. S. Bureau of Labor Statistics. 15 % of Americans use the cyberspace to research merchandises. Harmonizing to store. org. 2009 vacation season. the bulk of working Americans with internet entree on the occupation. 55 % or approximately 73 million people did their vacation shopping research and some buying online. The web has helped consumers to happen discount houses on instant entree and they are taking advantage of it In the retail industry. no 1 can do net incomes through a individual dealing. Retailers need to set up a resonance and a long term understanding with clients and so to construct repute and client relationships to profile client purchasing forms. Technology has unmeasurable and first deductions in practical shopping. where a client can shop anything he wants by merely a few chinks of a button. The biggest benefit of holding an online store is that clients can shop it online all the clip. Most celebrated retail shops have an integrated online shopping option which enables clients sitting from their offices. There are two illustrations for successful online store of retail merchants “Amazon had a $ 19 billion one-year gross and continues to turn. truly without any troubles even during the recent recession where every other major retail merchant struggled to bring forth positive Numberss. Wal-Mart besides reported an amazing $ 404 billion gross in 2009 recession as good but with profitable $ 13. 4 billion net gross. ”

The demographic displacements

Economic growing depends on human resources and human wants. The demographic age construction shapes both of these factors. It is a common rule that the sum of retail gross revenues are likely to lift if the figure of clients additions. One of grounds that affect the figure of client is the demographic age construction. because the demographic age construction mostly determines how many consumers have the ability to devour in the retail industry. Harmonizing to old surveies of OECD. the age of 50–64 group has a positive consequence. and the group above 65 contributes negatively. while younger age groups have indefinite influence to the growing of retail industry.

Presently. in the US society. babe boomers that accounted as the huge bulk of the population are non in a place to pass. since they are making the age of retirement. In add-on. the figure of dependent people–those under the age of 14 and over the age of 65–ranks rather high. The people in the in-between old ages. who are taking attention of the dependants. have less disposable income doing a negative impact on retail gross revenues.

Attract more foreign consumers

Since the US retail industry lacks a big figure of powerful local consumers to efficaciously increase the sum of retail gross revenues. another utile scheme is to pull more foreign consumers. Foreign consumers can make chances for retail gross revenues encouragements. Concerts. festivals or big featuring events serve as tourer attractive forces. This brings excess money into the country and increases buying in the retail sector.

As the same clip. U. S universities are opening for world-wide pupils. which attract a big group of foreign pupils come to U. S. They non merely analyze in the United States but devour in here every bit good. Harmonizing to the U. S. Department of Commerce statistics. 2010-2011. foreign pupils paid $ 14. 3 billion to the American University merely for their tuition fees. Plus a assortment of life costs. pupils contribute about $ 20. 2 billion to the U. S. economic system.

With a big amount of capitals that has been brought to U. S economic system. retail merchants need to catch this chance to greatly increase their sum of gross revenues. For illustrations. supermarkets can supply trade goods aim for abroad pupils or foreign tourers. Some mercantile establishments can besides provide goods that are suited for foreign tourers and abroad pupils devouring wonts.


Age construction effects and growing in the OECD. 1950-1990. Thomas Lindh. Bo Malmberg

hypertext transfer protocol: //www. usa. gov/Agencies/Federal/Executive/Commerce. shtml

The rate of unemployment has a extremely impact on retail concern There is no uncertainty that commercial retail concern is one of the biggest industry of the U. S. . which has the largest figure of endeavors and most of the working population. The gross revenues of retail industry is closely related to the unemployment rate and ingestion. Since the fiscal crisis from 2008. the U. S. economic system is fundamentally in a procedure of a slow recovery. but economic growing in the first half twelvemonth of 2012 is still subdued. Table 1. Quarter-to-Quarter Growth in Real GDP

As the information from Table 1. . the U. S. economic recovery since the 3rd one-fourth of 2009. and before that the U. S. had been experienced four quarters negative growing. which had reached the extremum at -9 % . From the 3rd one-fourth of 2009 to now. this three-year mean rate of GDP growing is 2. 2 % . In the first two quarters of this twelvemonth. the U. S. economic growing has been uninterrupted below this norm. and the dropping tendency is progressively apparent. Therefore. the U. S. economic recovery is sustained. nevertheless. the growing is coming along with large challenge of low consumer willingness that make the development of the U. S. economic system under the back uping force. Table 2. Percentage Change From Predating Period in Real GDP

Harmonizing to the information from the U. S. Department of Commerce. it said the latest ingestion informations in June 26 shows that economic growing in the first one-fourth was merely 1. 9 % . the slow growing and high unemployment rate are the two affairs of concern. Before that. the Fed released its latest policy statement in June 19 in order to back up the investing and ingestion of houses and persons by keeping low involvement rate. Consumption histories for approximately 70 % of the U. S. economic activities. nevertheless. the growing in the first one-fourth was merely 2. 5 % . unilke the old anticipation of 2. 7 % . Even though the entire economic of the U. S. rises modestly. but people still cautious about passing money. and coupled with the slow gait of occupation growing. the failing addition of retail industry will be sustained. Table 3. 1. Employment Number from Jan 2008 to Jan 2012

With the U. S. fiscal crisis bit by bit to the proliferation of the existent economic system from 2008. the U. S. employment state of affairs is declining. Harmonizing to the latest statistics of the U. S. Department of Labor. since the beginning of 2009. entire U. S. occupations to cut down 120 million. of which more than half of the last three months were laid away. The United States a sum of 1101 million people are unemployed. A twelvemonth ago. the U. S. unemployment rate has been stable at around 4. 8 % . 5 % in the beginning of 2008. and it rose to 6. 1 % at August. 6. 5 % in October. taging the highest degree since March 1994. Table 3. 3. Employment Number from 2008 to 2012

U. S. labour market has kept worsen during 2008 to 2011. High unemployment rate of invention in the United States issued a recession signal. bespeaking the U. S. economic system will hold a deepness of impact. And this impact can be shown in two facets: foremost. high unemployment rate exacerbate residents’ income dropped to the economic and societal development. shriveling consumer disbursement. The addition of U. S. unemployment will take to cut down corporate and personal income. consumer disbursement to shrivel farther decelerate the gait of economic recovery. and decreased willingness from foreign imports. Second. the downward force per unit area on involvement rate cuts and the dollar are increasing. and cut downing U. S. buying power. U. S. unemployment state of affairs compounded by declining economic downswing. the authorities cut involvement rates further increased force per unit area.

Since the fiscal crisis. the U. S. has 12 times in a row to cut down the federal financess rate. the current federal financess rate from 5. 25 % down to 1 % . if U. S. authorities adjust involvement rates into nothing. it will do the bureau sold a batch of dollars. exacerbated by the farther depreciation of the dollar to weaken the buying power of the United States. Furthermore. the bad economic environment besides cut down the power of U. S. foreign investing. The U. S. unemployment rate will be given to increase the production and operation more hard. ensuing in foreign investing will worsen and retreat from the foreign investing behaviour. Intensified trade clash with foreign states. When retail merchants realized the low ingestion of all domestic clients. and consumer’s assurance is dropping. Under the lag planetary economic environment. the people who still working and visitants are non willing to pass money as earlier. In order to increase the gross revenues of retail concern. retail merchants can seek to advance and dismiss to a great extent Lashkar-e-Taiba clients purchase. In table 1. we can see the addition of ingestion in the 4th one-fourth of 2010 and 2011. which was effected by non merely the ground of vacation but besides the gross revenues publicity.

Control COSTS
Before retail merchants can command costs expeditiously and increase net income. they need to understand what their cost constructions are.
Beginning: Food Marketing Institute ( FMI – 2008 )

The image above shows us a complete image about supermarket and food market sector. For every dollar of gross revenues. supermarkets use 96 % of that to pay for all types of costs. Gross net income is merely 4. 5 % . Net net income is even smaller as the FMI said that from 1998 to 2008. net net income was less than 2 % of a dollar of gross revenues. This per centum proves that supermarket is really competitory. Besides with a thin net income border like 2 % . shops can non allow any costs grow bigger and decrease the net income. Therefore. control cost is important for the success of any participants in the industry. Cost constructions are similar for all sectors in retail industry. Farm value in supermarket sector will be in another type cost of goods for other retail sectors. Therefore. sectors in retail industry all have thin net income border. Cisco System. Inc. ( 2005 ) stated that net net income border for food market was 1. 34 % . for consumer electronics was 2. 00 % . and for dress was 7. 28 % . There are so many ways to cut down cost and addition more net income. but the focal points in this research are energy/electricity cost and shrinking. Each country entirely can significantly better retailers’ net income. Energy/Electricity Cost

Whenever a individual walks into retail shop. it is easy to see that the shop is devouring a immense sum of energy or electricity. from iceboxs. to visible radiations. air conditioner. and other types of machines. Even though energy histories for a little part of the industry’s costs. cut downing energy cost can add much extra net income. Harmonizing to the U. S Environmental Protection Agency ( 2008 ) . if a typical shop can cut down its energy cost by 10 % . it is able to hike net net income by up to 16 % and additions extra $ 44 of gross revenues per square pess. That per centum is excessively attractive to do cut downing energy cost becomes one of primary ends for supermarket industry. Extra net income is non the lone motive for shops to cut down energy ingestion. Monetary values for energy and electricity are lifting continuously over old ages. and this tendency is non likely to halt shortly ( see appendix for more inside informations ) . Even if retail merchants remain the same sum of energy ingestion over old ages. their energy cost still increase and cut down their net income. They have to utilize energy more expeditiously to maintain the energy costs within an acceptable degree. E Source Companies LLC. whose expertness is energy salvaging consultative. offers several solutions to cut down energy cost. Immediate actions that can cut down energy costs:

– Turn off things that are non in usage such as visible radiations and electric shows.

– HVAC. which stands for heating. airing. and air conditioner. has to be cleaned and maintained on a regular footing. HVAC. without a proper care. will non be able to run decently and increase the sum of energy used.

Besides there are many solutions for long tally:
– Use merchandises have Energy Star mark which indicates that they consume less energy than standard 1s about 20 to 30 per centum.

– Reduce sum of heat that edifice will absorb. There are two ways: pigment edifice roof with white or bright colourss that can reflect sunshine ; and utilize Windowss that can forestall outside heat.

– Improve the efficient usage of HVAC. The HVAC system will automatically set their end product based on the figure of people inside edifices.

Other solutions:
– Better usage of twenty-four hours lighting: Wal-Mart and Stater Bros. have developed a system that utilizes visible radiation from the Sun in replace for their unreal visible radiations. With this invention. Wal-Mart’s energy cost is 25 to 35 per centum less than rivals ( Wal-Mart. 2005 ) . and Stater Bros. cut its illuming disbursal by half ( U. S. Department of Energy. 2008 ) .

– Refrigerators ever consume a big part of energy cost. particularly for supermarkets and food market shops. Target has implemented iceboxs with LED visible radiations and gesture detectors to cut this cost as all LED visible radiations will turn off when cipher is around ( Target. 2012 ) .

– Join the Energy Star plan. which is supported by the U. S. Environmental Protection Agency and the U. S. Department of Energy. The plan supports concern with information and tools to cut down energy costs. besides there are many spouses and instance surveies that can be cooperated with and learned from.


Beside those seeable costs. many costs are concealed and can non straight be included in cost construction. Shrinking is one of those. The National Retail Federation ( NRF. 2009 ) defined shrinking as “retail merchandise vanishing from the shop without being sold. ” There are several grounds for shrinking such as shrinkage. employee larceny. and mistakes. In a research conducted in 2011 by FMI and The Retail Control Group. the shrinking in retail industry can be listed into two classs: operational mistakes and larceny. Larceny can be caused by shoplifting ( 36 % ) . teller ( 31 % ) . seller ( 8 % ) . and general employee larceny ( 25 % ) . Major causes of operational mistakes include: deficient ordination ( 22 % ) . deficient production planning ( 17 % ) . cashier mistakes ( 14 % ) . and other causes. Besides. harmonizing to the NRF ( 2011 ) . the retail industry lost $ 34. 5 billion as the consequence of shrinking. That was tantamount to 1. 41 per centum of entire gross revenues.

Reducing shrinking can add a important addition in net income. particularly for supermarket and food market shops where net income border is less than 2 per centum of gross revenues. Furthermore. shrinking causes problem for non lone retail merchants. but besides consumers and community. Because of loss of gross revenues. retail merchants need to cover the loss by bear downing consumers higher monetary values on other merchandises. Retailers with more loss will necessitate more money from consumers and lose competiveness. Besides loss of gross revenues means loss of revenue enhancements which will profit community. Therefore. retail merchants need to implement and better their loss bar plans. – Door look intoing reception: this method is applied by many large retail merchants such as Costco. Wal Mart. Frys. or Best Buy. This action will forestall boosters acquire off with stolen points.

– Publicly Tell which points are stolen most often. Terry Hipp ( 2010 ) said that “one well-known survey showed that when specific ware was conspicuously marked with big ruddy stars as being often taken by boosters. shrinkage was virtually eliminated. ”

– Video surveillance: retail merchants should set cameras to supervise high value points and low traffic country where shrinkage frequently occurs. Tellers besides need to be monitored as tellers can corporate with boosters to steal points at the point of gross revenues. Video surveillances besides provide necessary cogent evidence when there is a shoplifting incident.

– Excellent client service can be used as an effectual manner to forestall shrinkage. As possible boosters need plenty privateness to steal points. sale representatives can friendly set visitants under monitoring by doing seeable contact and direct communicating. Besides first-class client service improves retailers’ competiveness.

– Electronic article surveillance: this is a shoplifting bar system with two points: electronic ticket on point. and tag sensor at the entryway. If an point is shoplifted. its ticket will non be removed. When it is carried through the ticket detector’s zone. the sensor will dismay and state retail merchants that there is something stolen ( AIM. 2012 ) .

Beginning: Food Marketing Institute and The Retail Group Control ( 2012 )

Retailing includes all concern activities that involve the sale of goods and services to Consumers for personal. household. or family usage. It is the concluding measure in the distribution of these goods and services. The retail sector has played a phenomenal function throughout the universe in increasing productiveness of consumer goods and services. There are many ways to do the retail industry recession. high unemployment and uncertainness over the chances for occupation growing has a extremely impact on retail industry. The retail industry is besides the 2nd largest industry in US in footings of Numberss of employees and constitutions. It offers a batch of working chances to USA employee. Under the lag planetary economic environment. personal income is cut downing which besides affects the customer’s buying ability ; retail industries are come ining a competitory phase and must alter to run into our demands.

Today the retail industry is greatly affected by technological progresss. Technology alterations people’s life and besides changes the consumer’ shopping behaviour. Right now. consumers like to research the item’s information before buying. Besides. consumer likes to compare the monetary value in different web site to do them pass the lowest cost one. Retail industry is besides a population occupation in the U. S. Right now. more and more people try to get down their retail industry from the cyberspace. This is the ground why online retail selling supports turning in each twelvemonth. Each company ever has the cost job. Right now. it is a large job how to command cost. Retailers can command costs expeditiously and increase net income. There are several ways to make it. for illustration. salvage the energy cost for visible radiation. Shrinking is besides an of import job to cut down cost. To cut down this cost. it will assist employee to salvage more money and addition more net income. so the employ will utilize those money on other retail points. Retail marker will go the top concern in following old ages.


U. S. Department of Energy. Energy Economy – Prices and Trends. Energy Prices. 2000-2008. U. S. Energy Information Administration. Electricity Date Browser. Average Retail Price of Electricity Food Marketing Institute. & A ; The Retail Control Group ( 2012 ) . National Supermarket Shrink Survey U. S. Environmental Protection Agency ( 2008 ) . Buildings and Plants. Chapter 11: Facility Type: Supermarkets and Grocery Stores. Target Corporation. ENERGY STAR Certified.

Association for Automatic Identification and Mobility. Electronic Article Surveillance ( EAS ) – An Overview of the Major Technologies. E Source Companies LLC ( 2006 ) . Pull offing Energy Costss in Retail Buildings Hipp. T. ( 2010 ) . Shoplifting and Loss Prevention: Do We Necessitate a Fresh Expression?

National Retail Federation ( 2011 ) . Retail Fraud. Shoplifting Rates Decrease.

Cisco ( 2005 ) . Reduce Shrink to Improve Retailer Profitability. Food Marketing Institute ( 2008 ) . Selling Costss.


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