Classification of retailing


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Classification of retailing

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Classification of retailing

  2. 2. 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.
  3. 3. Retail formats A retail institution refers to basic format orstructure of a businessClassification of Retail Institutionsa) Store – based retailingb) Non store –based retailing
  4. 4. STORE–BASED RETAILINGOwnershipOperationalstructureVariety ofmerchandise mixSole proprietorshipPartnershipJoint ventureDepartment storeDiscount storeSpeciality storeHyper marketIndependent retailChainFranchiseLeased departmentsCo- operatives
  5. 5. 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
  6. 6. 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.
  7. 7. 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.
  8. 8. Independent Retail An independent retailer owns only one retailunit. The management has direct contact with thecustomers and can quickly respond to theirneeds
  9. 9. Chain Retail Store A chain retailer operates multiple outlets undercommon ownership. It usually engages in some level of centralizedpurchasing and decision making
  10. 10. 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.
  11. 11. 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.
  12. 12. 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
  13. 13. 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.
  14. 14. 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
  15. 15. 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.
  16. 16. 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.
  17. 17. Non Store Retailing Direct selling Television shopping Vending machine retailing
  18. 18. 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.
  19. 19. 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
  20. 20. 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.