Chapter 4

• To Show Retail Classifications• To Study Retail Ownership Type• To Explore Influences in the Channel of

Distribution

II.Store-Based

Retail StrategyMix

III.Service vs.

Goods RetailStrategy Mix

IV.Nonstore-Based

Retail Strategy Mixand Nontraditional

Retailing

I.Ownership

I.Ownership

• Independent• Chain• Franchise• Lease Department• Vertical Marketing System• Consumer Cooperative

• Flexibility• Investment Costs Down• Specialists• Strong Control• Image• Consistency• Independence• Entrepreneurial Drive

• Lack of Power• No Economies of Scale• Labor Intensive• Limited Access to Advertising• Over-dependence on Owner• Limited Resources for Long-run

Planning

• Bargaining Power• Cost Efficiencies• Operating Efficiencies• Technical Abilities• Advertising Availability• Defined Management Philosophies

• Time and Resources Spent on Long-run Planning

• Limited Flexibility• Investments High• Managerial Control Difficult• Limited Independence for Personnel

• Product/Trademark• Business Format

Manufacturer-Retailer

Service Sponsor-Retailer

Wholesaler-RetailerCooperative

Voluntary

• Small Capital Investment• Brand Awareness• Operation Procedures and

Management Skills• Cooperative Marketing• Exclusive Selling Rights• Purchasing Costs

• Oversaturation• Franchisor Overselling• Contract Provisions• Cancellation Clauses• Short Duration• Gross Sales Based Royalties

• National or Global Presence• Ownership Qualifications Set• Money Obtained on

Delivery• Stringent Rules for Franchisees• Franchisee Work Incentive• Royalties Continue

• Damaged Reputation• Loss of Customer Loyalty• Intra-franchise Competition• Reduced Resale Value• Injured Profitability• Franchisee Desire for

Independence

• Fills Merchandise and Expertise Gaps• Enlarged Market• Reduces Store Costs• Lessee Assumes Administration Rol• Percent of Revenues

• Conflicts in Operating Procedures• Damaged Image• Customer Blame

• Well Know Store• Reduced Costs• Economies of Scale

• Inflexibility in Hours• Product Line Restrictions• Raised Rent• Sales Expectations Not Met

FOOD-ORIENTED RETAILERS

• Convenience Store• Conventional Supermarket• Food-Based Superstore• Combined Store• Box (limited-line) Store• Warehouse Store

II.Store-Based

Retail StrategyMix

GENERAL MERCHANDISE RETAILERS

• Specialty Store• Variety Store• Traditional Department Store• Full-Line Discount Store• Off-Price Chain• Factory Outlet• Membership Club• Flea Market

II.Store-Based

Retail StrategyMix

III.Service vs.

Goods RetailStrategy Mix

•Rented Goods•Owned Goods•Nongoods

• Direct Marketing• Direct Selling• Vending Machine• World Wide Web• Other Emerging Retail Formats

IV.Nonstore-Based

Retail Strategy Mixand Nontraditional

Retailing

Manufacturer Independent ManufacturerOwnership

WholesalerIndependent Wholesaler

Ownership

RetailerIndependent Retailer

Ownership

Manufacturer

Wholesaler

Retailer

Two Channel MembersOwn All Facilities andPerform All Functions

Manufacturer

Wholesaler

Retailer

All Production and DistributionFunctions are Performed By

One Channel Member

• Owned by Consumers• Most Popular in Grocery

Retailing

• Ways Retail Institutes Can Be Classified

• Retail Ownership Types and Characteristics of Each

• Exertion of Influence in the Channel of Distribution– By Manufacturers– By Wholesalers– By Retailers

Questions?

Questions?

Questions?