are retail stores which are not part of a corporate chain or contractual
Single retail stores which are not part of a corporate chain or a contractual VMS, which includes voluntary chains and
are a type of Vertical Marketing System in which a parent company grants dealers the right to use the
supplier's trademarks--usually in return for a percentage of the total sales. Involve a franchisor, which is the supplier, granting a
franchisee, or the dealer, the right to sell products in exchange for something--often a percentage
of sales. Franchisees benefit from
this system because they get to take advantage of well-known products and brand names.
Examples of franchises are McDonalds
and Jiffy Lube
Direct channel of distribution
gives the manufacturer the greatest degree of control over the marketing of the product. However,
it is best suited for an organization whose customers are geographically
concentrated; otherwise, it can be very inefficient.
often provides franchisees with assistance in site selection, personnel training, inventory
management, and promotion strategy.
, which is the parent company which owns the trademarks, grants the franchisee the right to use these trademarks.
usually pay a franchise
fee; in return, the franchisor provides certain services and support.
Retail stores can be divided into 3 main categories:
typically have a wide and deep selection, with moderate prices, and an emphasis on customer
Mass merchandisers -
Consists of discount stores, superstores and hypermarkets, supermarkets, and catalog showrooms.
Typically emphasize low prices and a low
level of customer service, and a wide product mix.
Specialty retailers -
Include stores such as Foot Locker, jewelry stores, Radio Shack, etc.
. Some specialty retailers offer
unusual depth in one main product category, and are called single
Retail stores which carry a narrow
product mix with deep
- categorized based on the width and depth of their product mix
, their pricing strategy, and the level of customer service
- selling of goods or services outside the confines of traditional store settings, and include telemarketing,
, mail-order retailing, in-home retailing, etc.
Accounts for approximately 20
percent of retail sales.
direct selling of goods by telephone, in-home retailing is where a salesman sells products to consumers in their
(examples are Amway and Mary Kay cosmetics)
When choosing a
retail store location
, a firm takes into account location of competitors, the location of the target
market, site costs, etc. Store location is important because location dictates the geographic trading area from which a
store will draw its customers
. The location needs to be profitable, which means factors such as site cost, accessibility
to potential customers, location of competitors, etc. must be taken into account.