Retail format

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Retail format
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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

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• 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 .

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Advantages

• 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

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Disadvantages

• In bargaining with suppliers, independent
  dont 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

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• Labor intensive everything is done manually
• less promotional strategy
• Overdependence on owners
• Little time for long run planning

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Chain Stores

• Multiple outlets, under a common ownership , so
  the decision making purchasing is usually
  centralized
• Advantages
• Have bargaining power due to the purchase volume
• Can take advantages of media
• Use technology

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• 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

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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

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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.

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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.

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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.

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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

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Advantages to Franchisee

1. Acquire well known name
2. Relatively small capital investment
3. Standard operating procedure
4. Cooperative marketing efforts
5. Exclusive selling rates.
6. Purchases may be less costly

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Disadvantages to Franchisee

1. Oversaturation if too many in one area
2. Locked into contracts requiring to purchase from
   one franchisor
3. Cancellation clause
4. Royalty

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Franchisor

1. National global presence developed more quickly
2. Franchisee have to abide by strict rules
3. As franchisee owner so they work hard

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Disadvantages

1. Harm the overall reputation if they do not adhere
   to co. standards
2. Lack of uniformity among outlets adversely
   affects customer loyalty
3. Intra franchise competition not desirable
4. The resale value of individual unit is injured if
   franchisee performs poor

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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.

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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.

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disadvantages

• Lessee may adversely affect the stores image.

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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

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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

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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)

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• 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

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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

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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, Spencers hyper

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Specialty Stores

• These include Lois Vuitton, the Body Shop, and
  Victorias 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.

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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).

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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.