What is retailing Retail involves the sale of goods from a singlepoint directly to the consumer in smallquantities for his end use. Retailing is transaction of goods between theseller and the end user as a single unit (piece)or in small quantities to satisfy the needs ofthe individual and for his direct consumption.
Retail formats A retail institution refers to basic format orstructure of a businessClassification of Retail Institutionsa) Store – based retailingb) Non store –based retailing
Sole proprietorship Owned and managed by single person Has day to day responsibility of runningbusiness Owns all assets of the business and profitgenerated by it
Partnership Two or more people share the ownership of asingle business Law does not distinguish between the businessand its owners in partnership There should be a legal agreement that setsforth how decision will be made, profit will beshared, how dispute will be resolved & howpartners will be admitted etc.
JOINT VENTURE Joint ventures are typically not a passive investment.Generally the parties need to contribute skills as well asmoney. Joint ventures are typically for a single business,development or project rather than a long termrelationship between the co-ventures. Joint ventures usually are not the major activity of theparties concerned. If theyre individuals theyll have dayjobs. In the business world theyll have a core business towhich the joint venture is an adjunct typically. The jointventure is a collaborative extension of their commercialactivities.
Independent Retail An independent retailer owns only one retailunit. The management has direct contact with thecustomers and can quickly respond to theirneeds
Chain Retail Store A chain retailer operates multiple outlets undercommon ownership. It usually engages in some level of centralizedpurchasing and decision making
Franchise It involves a contractual arrangement between a franchisorand a retail franchisee, which allows the franchisee toconduct a given business under established name andaccording to a given pattern of business. The franchisee pays an initial fee and a monthly share ofgross sales in exchange for the exclusive rights to sell goodsand services in a specified area. Franchising is a retail organizational form in which smallbusinesses can benefit being a part of a large retailinstitution.
Lease Department Retail store rented to an outside party Proprietor of a leased department isresponsible for all aspects of the business. Existing store based retailers use this tobroaden their merchandise. E.g.:-beauty salons, watch repairs, cosmetics.
Co–operative Stores Owned and managed by co-operative societies It is a voluntary association of adult personsregistered under the Co-operative SocietiesAct. The capital is divided into shares of small value andthese shares are subscribed by its members. The liability of the member is limited to the extent offace value of the shares subscribed by its members. It is controlled in a democratic set up. The accounts of the society are subject to audit bythe registrar of co-operative societies. One member has one vote irrespective of his holding
Department Store A departmental store is a large scale retail organization. It provides a large variety of merchandise from pin to planeat one place. Divided into several departments, each specializing in one lineof goods. Housed in an impressive building which is fully furnished andwell decorated. All departments function independently. But they are under acentralized management and control. A departmental store offers restaurant, post, office, bank andother facilities to customers to make shopping comfortable In order to attract customers in large numbers, a departmentalstore makes extensive use of advertising. A departmental store requires huge investment of money.
Discount Store Type of department store, which sells products atlower prices. Most discount department stores offer a wideassortment of goods; others specialize in suchmerchandise as jewelry, electronic equipment, orelectrical appliances. Are not variety stores, which sell goods at a singleprice-point or multiples thereof (£1, $2, etc.). Discount stores differ from variety stores in thatthey sell many name-brand products, and becauseof the wide price range of the items offered
Specialty Store Specialty stores are small stores which specializein a specific range of merchandise and relateditems. Most stores have an extensive depth of stock inthe item that they specialize in and provide highlevels of service and expertise. The pricing policy is generally in the medium tohigh range, depending on factors like the type andexclusivity of merchandise and ownership.
Hyper Market Hypermarket is a super store combining asupermarket and a department store. The result is an expansive retail facilitycarrying a wide range of products under oneroof, including full groceries lines and generalmerchandise. Allow customers to satisfy all their routineshopping needs in one trip.
Non Store Retailing Direct selling Television shopping Vending machine retailing
Direct Marketing It is a form of retailing in which a customer isfirst exposed to a good or service through anon-personnel medium Direct mail, broadcast or cable TV, radio,magazine, newspaper are the mediums. Orders by mail, phone (usually a toll freenumber), fax or by computer.
Television Shopping It is a retail format in which existing andprospective customers watch a TV programdemonstrating products and then placing orderfor the same by telephone ,e-mail and internet
Vending Machine Retailing It is a retailing format involving the coin or cardoperated dispensing of hot and cold beverages andfood or snacks items. It eliminates the use of sales personnel. It allows round the clock sales. Location of the machines can be done accordingcustomer’s convenience.
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