Retail Format PPT 2
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Transcript Retail Format PPT 2
Independent
Also known as Kirana Store & Mom & Pop
Store
Retailers owns one retail unit
Are run by owners & their families
India has the highest no. of independent
stores- kirana stores
There are 9 million independent stores in India
accounting to 70% of retail outlet
Average size in India is app 25-30 sq. meter
brands are limited
Allow customer to buy on credit
home delivery in neighborhood
Employ members of extended family
Takes order by Telephone
Ease of entry into the market so many
independent outlet .
Advantages
1.
2.
3.
4.
5.
6.
7.
Flexibility in choosing retail formats and locations
Because only one location is involved , detailed
specification can be chocked out
Small segment of customers are catered to
Investment cost for lease , fixture & workers can be
held down
prices, hours & other factors are set according
to the segment
Personal relation is created
Free from unions & seniority rules
Disadvantages
In bargaining with suppliers, independent
don’t have much power as they often buy in
small quantities.
Reordering maybe difficult if minimum order
requirement is not full filled. Therefore
Independents often form groups
Loose on Economies of Scale
High cost of transportation ,ordering & handling
cost
Labor intensive –everything is done manually
less promotional strategy
Overdependence on owners
Little time for long run planning
Chain Stores
Multiple outlets, under a common ownership , so
the decision making & purchasing is usually
centralized
Advantages
a. Have bargaining power due to the purchase
volume
b. Can take advantages of media
c. Use technology
d. They usually give time to long run planning &
may assign the job to someone for day to day
management.
e. Warehousing maybe centralized
f. Less dependent on the owner & usually has
trained management
Disadvantages
Difficult to find new locations
Difficult to maintain consistency in terms of
prices ,products, assortments firstly due to
difference in management & secondly due to
difference in local market
Investment is higher.
Managerial control is difficult
Franchising
A contractual agreement between a franchisor (a
manufacturer, whole seller, service provider) & a
retail franchise, which allows the franchise to
conduct business under a established name &
according to a given pattern of business
The franchisee pays a initial fee & a monthly
percentage of gross sales in exchange of exclusive
rates to sell goods & service in that area.
Trademark Franchising
Acquires the identity of a franchisor by agreeing to
sell the latters products & operate under the latters
name.
The franchise operates rather autonomously. There
are certain operating rules but the franchisee set
the store hours ,chooses a location & determines
facilities and displays.
Business Format Franchising
Receive assistance on site location ,quality,
control ,accounting system, startup practices,
management training & responding to problems
besides the right to sell goods & services.
Prototype stores ,standardized product lines,
cooperative advertising ,foster a level of
coordination previously found only a chain
stores.
Types of Franchise
Unit Franchising – Can operate only one unit
Master- Grants large territories & sub franchising
is allowed - Raymond's ,Titan, Wills lifestyle
Development Agreement- Has right to operate
multiple units in a territory but no sub franchising
If they operate one outlet ,they are independent
& 2 or more they are chains
Advantages to Franchisee
a. Acquire well known name
b. Relatively small capital investment
c. Standard operating procedure
d. Cooperative marketing efforts
e. Exclusive selling rates.
f.
Purchases may be less costly
Disadvantages to
Franchisee
a. Oversaturation if too many in one area
b. Locked into contracts requiring to purchase
from one franchisor
c. Cancellation clause
d. Royalty
Franchisor
a. National global presence developed more
quickly
b. Franchisee have to abide by strict rules
c. As franchisee owner so they work hard
Disadvantages
a. Harm the overall reputation if they do not adhere to
co. standards
b. Lack of uniformity among outlets adversely affects
customer loyalty
c. Intra franchise competition not desirable
d. The resale value of individual unit is injured if
franchisee performs poor
Leased departments
Is a department store inside a retail store.
The leased department proprietor is
responsible all aspects of its business.
The retail store puts some operating
restrictions to ensure overall consistency
and coordination.
Advantages for retailer
Market is enlarged
Personnel management, merchandize display
and reordering all are undertaken by lessee.
Regular store personnel do not have to be
involved.
Some expenses are paid by the LD so total cost
of store is reduced.
A % of revenue is received regularly.
disadvantages
Lessee may adversely affect the stores
image.
Advantage to the leased
department
Stores are known and have a steady walk in of
customers.
Costs are reduced
Their image is enhanced by their relationship with
popular store.
Problems- the restrictions by the retailer in terms
of hours and days of working and total products
that can be stored are less
Department store
Large retail units with an extensive assortment of
goods and services that are organized into
separate departments for the purpose of selling.
Wide range of products like apparel, furniture,
appliances, home furnishing, toys, footwear,
handbags , wallets, watches, jewelry and so on.
with no one merchandize line predominating
No grocery
Convenience store
Typically a well located food oriented retailer and carries a
moderate number of items.(serving the catchment)
Ranging from 1,500 to 5,000 sq. ft. in size
All necessary everyday household items including milk, eggs,
bread
Limited number of brands
Store area is small with an average atmosphere. with very
less walking space.(aisle)
Customer shop multiple types and the average transaction
size.(average ticket size)
Due to limited shelf space stores receive
frequent deliveries.
Simple and frequently used fruits and
vegetable only.
No elaborate layout.
have the same entry exit door
Easy day, twenty four seven, reliance
fresh,6ten, Spencer's daily, food mart
supermarket
Big grocery store
Large area- 10,000-30,00 square feet
Large isles
Non vegetarian section
Variety of products with a large number of brands
All household items including crockery, plastic
goods, utensils
Food bazaar ( by big bazaar),Spencer's super
hypermarket
Combination of department store and
supermarket.
Average size 60,000- 1,20,000 square feet
Have on an average of 70,000 items
Big bazaar, Spencer’S hyper
Specialty Stores
These include Lois Vuitton, the Body Shop, and
Victoria’s Secret. These stores concentrate on one type
of merchandise and offer it in a manner that makes it
special. Some are very high-end (Louis Vuitton) while
others cater to the price-conscious masses (Old Navy).
The retail chains, which deal in specific categories and
provide deep assortment within the category in them
are specialty stores.
Category Killer
As the name suggests, category killer is a large retail
chain store that dominates its product category so
completely that it eliminates a large chunk of
competition. Also known as big box store, a category
killer is a discount speciality store that offers an
extensive selection of merchandise at prices so low
that smaller stores cannot compete (read survive).
Discount Stores
These are the stores or factory outlets that provide
discount on the MRP items. They focus on mass selling
and reaching economies of scale or selling the stock
left after the season is over.