Term
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Definition
| Is a basic format or structure of a business. Institutions can be classified by ownership, store-based retail strategy mix, and nonstore-based, electronic, and nontraditional retailing. |
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Term
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Definition
Independent
Chain
Franchise
Leased department
Vertical marketing system
Consumer cooperative |
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Term
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Definition
There are 2.2 million independent retailers in the U.S.A.
They account for one-third of total store sales ($1.5 trillion in 2011.)
70% of independents operated by owners and their families
Why so many? Ease of entry |
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Term
| Why are competitive state of independents so easy |
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Definition
Flexibility in formats, locations, and strategy
Control over investment costs, personnel functions, and strategies
Strong entrepreneurial leadership |
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Term
| competitive state of independents difficult |
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Definition
Lack of bargaining power
Labor intensive operations
Over-dependence on owner
Limited long-run planning |
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Term
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Definition
Operate multiple outlets under common ownership
Engage in some level of centralized or coordinated purchasing and decision making
In the U.S., there are roughly 110,000 retail chains operating about 900,000 establishments
AMERICAN EAGLE |
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Term
| Competitive State of Chains |
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Definition
Advantages
Bargaining power
Cost efficiencies
Efficiency maintained by computerization, warehouse sharing, and other functions
Defined management philosophy
Considerable efforts in long-run planning |
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Term
| Competitive State of Chains |
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Definition
Disadvantages
Limited flexibility
Higher investment costs
Complex managerial control
Limited independence among personnel |
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Term
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Definition
A contractual agreement between a franchisor and a retail franchisee that allows the franchisee to conduct business under an established name and according to a given pattern of business
Franchisee pays an initial fee and a monthly percentage of gross sales in exchange for the exclusive rights to sell goods and services in an area |
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Term
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Definition
| Sylvan Learning, Dunkin, Burger King, AAMCO, Macco, Panera, Jiffy Lube, Papa Johns, Liberty Tax, Jimmy John's, Sports Clips, Great Clips, Merry Maids, Papa Murphy's Kumon North America, & 7-11, Domino's Pizza |
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Term
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Definition
is a department in a retail store that is rented to an outside party
The proprietor is responsible for all aspects of its business and pays a percentage of sales as rent
The department store sets operating restrictions to ensure consistency and coordination
Brings experts into that line, the company pays them a % of what they sell & pay for the space |
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Term
| Competitive State of Leased Departments Advantages |
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Definition
provides one-stop shopping to customers
lessees handle management
reduces store costs
provides a stream of revenue |
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Term
| Competitive State of Leased Departments Disadvantages |
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Definition
lessees may negate store image
procedures may conflict with department store
problems may be blamed on department store rather than lessee |
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Term
| Vertical Marketing Systems |
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Definition
Functions:
Manufacturing
Wholesaling
Retailing |
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Term
| Vertical Marketing Systems |
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Definition
Ownership:
Independent Manufacturer -->
Independent Wholesaler -->
Independent Retailer |
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Term
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Definition
Manufacture & Wholesale
Retailer |
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Term
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Definition
Independent Manufacturer
Independent Wholesaler
Independent Retailer
-- do all 3 |
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Term
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Definition
is the firm’s particular combination of:
store location
operating procedures
goods/services offered
pricing tactics
store atmosphere
customer services
promotional methods |
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Term
| Earning Destination Retailer Status |
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Definition
Must be price-oriented and cost efficient
Must be upscale
Must be convenient
Should offer a dominant assortment
Should offer superior customer service
Must be innovative or exclusive |
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Term
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Definition
| As a low-end retailer upgrades its strategy to increase sales and profit margins, a new form of discounter takes its place. |
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Term
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Definition
This concept states that retail institutions pass through identifiable life stages
introduction
growth
maturity
decline |
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Term
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Definition
| Combinations of separately owned firms |
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Term
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Definition
| retailers become active in businesses outside their normal operations (e.g., Yum! Brands) |
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Term
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Definition
| unprofitable stores are closed or divisions are sold off |
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Term
| Methods for Cost Containment |
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Definition
Standardizing procedures, store layouts, store size, and product offerings
Using secondary locations
Placing stores in smaller communities
Using inexpensive construction materials
Using plainer fixtures and displays
Buying refurbished equipment
Joining cooperative buying and advertising
Creatively financing inventories |
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Term
| Convenience Store Strategy Mix |
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Definition
Location: Neighborhood
Merchandise:
Sandwiches, candy,
tobacco, lottery, beer
& other beverages
Prices:
Average to
Above average
Atmosphere and
Services: Average
Promotion: Local |
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