independents often find that the entrepreneur owners spend long work weeks and realize only modest profits. The retail outlets of some dealers and distributors and most franchise operations are locally owned. As noted earlier, dealers and distributors can be independent busi nesses that contract with national product or service companies and represent the national businesses in the local area.
For example, a company might have a large number of authorized dealers who stock parts and perform services and repairs. This company will also offer training and advises its dealers of product changes, new parts, and service techniques and requirements. Not all dealers and distributors are locally owned, and many are owned by a national manufacturer, a retail chain, or a group of retailers. Franchise operations are also locally owned and operate under a specific con tract—or franchise agreement. Franchise agreements require franchisees to use certain elements of the marketing mix and pay fees to the franchisor to support national advertising and new product development. Some franchise agreements are more restrictive than contracts offered by other franchisors. Wholly owned retail operations seek control of the retailing function by a national manufacturer, distributor, or retail chain. Wholly owned operations have replaced traditional independents in many product sectors, including clothing, groceries, and home furnishings. Large men’s apparel retailers have replaced many small independent men’s clothing stores. Large grocery chains are the dominant food retailers. In the services sec tor, banks and other financial institutions have consolidated in recent years, and a few brands dominate the U.S. retail landscape. By their nature, wholly owned retailers have standardized products and services and enjoy economies of scale that help keep costs low and permit lower prices for consumers. Retailer Service Levels We can classify retailers by the level of service offered to customers. Service level is often a trade- off of high levels of personalized service against the costs of staffing and training. Fortunately, the American public has a mix of consumers who tolerate a wide range of service experiences. Service levels can be assessed as follows: Self-service : Self-service retailers have merchandise displayed so that custom ers can access products and services, gather the needed selection, and proceed to checkouts, where customer service representatives (CSRs) scan, box or bag, and process payment for the merchandise. In
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