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Retail Management: A Strategic ApproachThirteenth EditionChapter 4Retail Institutions By OwnershipCopyright @ 2018, 2014, 2012 by Pearson Education, Inc. All Rights Reserved
Learning Objectives4.1 To show the ways in which retail institutions can be classified4.2 To study retailers on the basis of ownership type and to examine the characteristics of each4.3 To explore the methods used by manufacturers, wholesalers, and retailers to exert influence in the distribution channel4.4 To examine the differences in relationship building between goods and services retailers4.5 To discuss the impact of technology on relationships in retailing4.6 To consider the interplay between retailers’ ethical performance and relationships in retailing
Figure 4.1 A Classification Method for Retail InstitutionsOwnershipStore-Based Retail Strategy MixNonstore-Based Retail Strategy Mix
Ownership FormsIndependentChainFranchiseLeased departmentVertical marketing systemConsumer cooperative
Independent Retailers2.3 million independent U.S. retailersAccount for one-third of total store sales70% of independents operated by owners and their familiesWhy so many? Ease of entry
Competitive State of IndependentsAdvantagesFlexibility in formats, locations, and strategyControl over investment costs, personnel functions, and strategiesPersonal imageConsistency and independenceStrong entrepreneurial leadershipDisadvantagesLack of bargaining powerLack of economies of scaleLabor intensive operationsOver-dependence on ownerLimited long-run planning
Figure 4.2 Useful Online Information for Retailers
Chain RetailersOperate multiple outlets under common ownershipEngage in some level of centralized or coordinated purchasing and decision makingIn the U.S., there are roughly 110,000 retail chains operating about 1 M establishments
Competitive State of ChainsAdvantagesBargaining powerCost efficienciesEfficiency maintained by computerization, warehouse sharing, and other functionsDefined manag
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