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Classification of retail units

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Classification of retail units

Classification of retail units

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  • 1. The term retail organisation refers to the basic format orstructure of a retail business designed to cater to the needs ofthe end customerA Retail unit could be owned by Manufacturer Wholesaler Independent Retailer Consumer Cooperative Society Government Franchiser & Franchisee
  • 2. a) Nature of Ownership:Sole ProprietorshipPartnershipJoint VentureLimited Liability Company (Private &Public L.L.C).b) Operational Structure:Independent trader(one retail outlet operation)Multiple or Chain storeFranchisingConsumer co-operative.
  • 3. c) Length & Depth of Merchandise: Offer a wide range of goods Dealing in specific product categoryd) Nature of Service:For eg: Self-service, and providing following services sucha delivery, credit, gift wrapping, repairs, etc.e) Pricing Policy:Some retail businesses choose, Low price emphasis, while some offer Attractive attribute such as convenient location, premiummerchandise mix or distinctive image.
  • 4. f) Retail Location:Classified according to their store’s geographic location.Out-of-town locations, whilst othersLocate in ‘cluster’ locations in downtown centersg) Customer Interaction:Retail stores facilitating face-to-face contacts.Non-store retailing operations(mail order catalogues,telephone selling, vending machines, door-to-door selling ormobile vendors.)
  • 5. 1. Sole Proprietorship:The characteristics of this retail format are:It’s easy to form, less expensive to organize and theproprietors have full controlThe income generated reaches the proprietor and he canmake the ultimate decision to keep it or reinvest in businessThe business is easy to dissolve, if desiredTheir business and personal assets are at risk; due tounlimited liability, they are also legally responsible for allthe debts.Often limited to using funds from personal savings orconsumer loans, andMay have a hard time attracting high-caliber employees
  • 6. The characteristics of this retail format arePartnerships are relatively easy to establish and withmore than one owner, the ability to raise funds may beincreased.Prospective employees may be attracted to thebusiness if given the incentive to become a partner andthe business usually will benefit from partners whohave complementary skills.Partners are jointly and individually liable for theactions of the other partners.Since decisions and profits are shared, disagreementscan occur.
  • 7. A joint venture is not well defined in the law.Unless incorporated or established as a firm as evidenced bya deed, joint ventures may be taxed like association of persons,sometimes at maximum marginal rates.It acts like a general partnership, but is clearly for a limitedperiod of time or a single project.
  • 8. LLC’s must not have more than two of the four characteristicsthat define corporations i.e.Limited liability to the extent of assets; continuity oflife; centralization of management; and freetransferability of ownership interests.It is designed to provide the limited liability features of acorporation, tax efficiencies and operational flexibility of apartnership. Yet formation is more complex and formal thanthat of a general partnership.
  • 9. 1. Independent Trader: Generally operates one outlet and offers personalizedservice, a convenient location and close customer contact. Roughly 98% of all the retail businesses in India, aremanaged and run by independents, including barber shops,dry cleaners, furniture stores,bookshops,LPG Gas Agenciesand neighborhood stores. This is due to the fact that into retailing is easy and itrequires low investment and little technical knowledge.This obviously results in a high degree of competition.. Most independent retailers fail because of the ease ofentry, poor management skills and inadequate resources.
  • 10. It involves common ownership of multiple units. In suchunits, the purchasing and decision making are centralized. Itincludes specialization, standardization and elaborate control-systems. Chain stores have been successful, mainly because they havethe opportunity to take advantage of “economies of scale” inbuying and selling goods. Examples : Shoppers stop; West side and IOC, conveniencestores at select petrol filling stations.2. Multiple Or Chain Store
  • 11. Is a contractual arrangement between a “franchiser”and a “franchisee”. It is a certain form of business under an establishedname and according to a specific set of rules. In exchange for fees, royalties and a share of theprofits, the franchiser offers assistance and very oftensupplies as well. Examples; McDonalds, Pizza Hut and Nirulas.
  • 12. A retail cooperative is a group of independentretailers, that have combined their financial resourcesand their expertise in order to effectively control theirwholesaling needs. They share purchases, storage, shopping facilities,advertising planning and other functions. . Example : Amul
  • 13. It refers to department in a retail store that are rentedto an outside party.Usually this is done in case of department andspeciality stores and also at times, in discount stores.The proprietor of a leased department is usuallyresponsible for all aspects of its business and normallypays the store a percentage of sales as rent.Example : store beauty salon,banks,watch repair
  • 14. Differentiate themselves on the basis of the range and varietyof Merchandise they maintain in their store.Wide range of goodsProduct category with a minimum range of Merchandisewithin that product category
  • 15. Variety of merchandise mix can be classified as follows:Departmental storesDiscount StoresSpecialty StoresSupermarket and Hypermarkets
  • 16. Departmental stores:A large retail store organized into number of departmentsoffering a broad variety and depth of merchandise;commonly part of a retail chain Ebony, Globus, Lifestyle,Pantaloon, Shoppers Stop andWestsideDiscount Stores:Retailers offering a broad variety of merchandise mix,limited or no service, and low prices. Subhiksha, MarginFree market and outside India, Wal-Mart is a classicexample of the most successful retailer operating as adiscount centre.
  • 17. Specialty Stores:Complementary product categories and extend a high levelof service to their customers.For e.g.: Vivek’s retailing consumer durables in Chennai,shopper’s store housing planet m.Supermarket and Hypermarkets:Hypermarkets are characterized by large store size, lowoperating costs and margins, low prices and comprehensiverange of merchandise.For e.g. : Big Bazaar ,RPG owned Giant Hypermarket.Successful international hypermarket chains includeCarrefour of France and Continent of South Africa.
  • 18. Retailers are classified on the basis of level and kind ofservices extended by them to their customerThese retail outlets have been converted to or built as self-services units, and are providing services such as delivery,credit, gift-wrapping, repairs, etc
  • 19. Low price rather than the service element of their retailingmixThey will generate business on the basis of some otherattribute such as convenient location, premium merchandisemix or distinctive image
  • 20. 1. Retailers at Freestanding location:Retailers located at site, which is not connectedto other retailers and therefore they depends onits own drawing power and promotion to attractcustomers, classified as neighborhood orhighway stores.For e.g. : McDonalds outlet in Delhi- Ludhiana highway.
  • 21. Retailers in Business Associated location: who located theirstore where a group of retail outlets offering a variety ofmerchandise, work together to attract customers to their retailarea, but also compete against each other for the samecustomers, classified as unplanned business districts andplanned shopping centres.For e.g. :Trichur Round Market Place in Kerala covering garments,grocery, jewelry, shoes, home products, confectioneries etc candescribe a planned business district .
  • 22. Traditional independent retailers or chain stores particularlyprefer specialized markets .For e.g.:The Chowk area in Lucknow famous for its food and cottonembroidery cloth materials.
  • 23. Retailers at airports are mostly comprising of duty-free shops,newsstands and book stores but now also seen opening foodretail chains like cafe coffee day etc.
  • 24. Retail units can be classified into two groups on the basis ofthe nature of interaction between retailer and customersnamely store retailers and nonstore retailers.
  • 25. They operate from fixed point-of-sale location to attract ahigh volume of walk-in customersMass media ads to attract consumersIt serve business and institutional clientsIt provide after sales services, such as repair , alterationsand installation
  • 26. Electronic Retailing- It is also called e-tailing and internetretailing is a retail format in which the retailers communicatewith customers and offer products and services for sale on theinternet.Catalog Retailing-It is a non-store retail format in which theretail offering is communicated to a customer through a catalogDirect-Mail Retailing-It is a non store retail in which theoffering is communicated through letters and brochures.
  • 27. Direct selling : It is a retail format in which a salesperson,frequently an independent businessperson, contacts acustomer directly in a convenient location either at thecustomers house or at work and demonstrates merchandisebenefits, takes an order and delivers the merchandise to thecustomer.TV Shopping: It is a retail format in which customers watcha TV program demonstrating merchandise and then placeorders for the merchandise by telephoneVending machine retailing: It is a non-store format in whichmerchandise or services are stored in a machine anddispensed to customers when they deposit cash or use acredit card.