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different clusters. For example if a manager has to decide about the stocking of 100,000 items in 1,500 stores for 1 year, for each stock she would have to make 54.8 billion decision which are too much and can be meaningless thats why if she makes decision on the basis of timing, place then she would have to make 2.6 million decision which a computer can handle. Best Buy identified five types of customers from its 700 stores. First type is of JILL who is busy mother and wants quick personalized help in technology. The company designed store and kept household appliances, lightening systems and toys.Buzz customers need latest technology.Barry is busy and rich who want personalized services.Ray is those who need technology in proper budgets.Geek Squads are small business customers who need office equipment. By keeping them in mind, Best Buy designed products and services staff according to their needs. For cluster making, information gathering is most important and different types of companies required different number of clusters. Sorting the product in right cluster is also very important. If senior citizen product is piled with college communities this will drop sells. By learning localization with Lowes Lin and Target companies are gaining advantages. Cadbury added kiwi-filled chocolate Cadbury kiwi Royale in New Zealand, Kraft developed Fiesta fruity pebbles for Hispanias, Coca-cola make four coffees flavor for Japan, Procter and Gamble introduced different flavors in Pringles according to countries needs. VF did extensive market search to know about its customers demands, color and style patterns. Immigrant and non immigrant Americans, even different stores in same metropolitan areas showed diverse results. According to VF due to localization, sales can increase 40% but at the same time it can reduce inventory and price to 50%. Centralization and Decentralization in localization shit is another issue. Decentralization is not good for two reasons: First local manager has lack of data and skills for buying deicisions.Second, it can bring cost complexity and inconsistency in business and business owners are less willing to accept too much decentralization.J.S Penney found that due to decision leeway, managers tired to minimize risk by ordering variety of products rather than hot products. Due to which sales slowed down and popular products moved back. In 2000, the new CEO developed fixture modules and centralized the systems which increase store sell to 5%. But in centralization, coordination was needed to shorten the view of demand patterns. For this, data from internet sales, store scanners, loyalty cards, and data from third-part such as ACNielsen were used. Product suppliers and retailers relationship is also needed with Central Coordination. Manufacturers and retailers have deep knowledge of where the products sell and can get demand of locals and clusters. Local manager has now more powerful role still in centralization by focusing on store guests and find innovative solution of local challenges .Wal-Marts store managers focus on pricings and hot items.BestBuy employee displayed a shirt in front of store about IPods stock which increased store ranking from 240 to 60.7-eleven has created a system called centrally decentralized. Amat-UL Mateen Noor UMT
Localization requires high investment and data collection and analysis and for clustering some economies of scale will need to remove. Investment return in localization is slow but bring more opportunities in longrun.Quick move of companies to localized markdown strategies creates ease in pricing, promotion and marketing of localization. The thinking of homogeneity due to globalization is proving wrong. Instead of it, as the communities are becoming diverse the same will be companies diverse strategies.