Flashcard Set Preview
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35% of sales are made by...
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INDEPENDENT RETAILER!
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65% of sales are made by..
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RETAIL CHAINS
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disadvantages to being an independent retailer:
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-low bargaining power w/ suppliers
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Retail Promotions
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-source/company-product/service (mission)-target market: primary/secondary-retail promotions...
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Ownership Forms
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-independent-chain-franchise-leased department-vertical marketing system-consumer cooperatives
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Independent Retailer
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-very target customer base-try not to serve too many customers-try not to enter into price...
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Advantages of Independents
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-flexibility in format, locations & strategy-control over investment costs, personal functions...
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Disadvantages of Independents
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-lack of bargaining power-lack of economics of scale-labor intensive operations-over-dependence...
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Chain Retailers
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-benefit from widely known image & from economics of scale & mass production possibilities-maintain...
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Advantages of Chains
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-bargaining power-cost efficiency-efficiency maintenanced by computerization, warehouse sharing...
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Disadvantages of Chains
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-limited flexibility-higher investment costs-complex managerial control-limited independence...
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Franchising
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-strong geographic coverage-careful of policy disputes-careful not to charge excessive royalty...
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Franchise: Product/ Trademark
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-franchisee aquires the identity of a franchisor by agreeing to sell products and/or operate...
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Franchise: Business Format
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-franchisee recieves assistance: location, quality control, accounting systems, startup practices,...
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Wholesaler‐Retailer Structural Franchising Arrangements
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voluntary: a wholesaler sets up a franchise system & grants franchises to individual retailerscooperative:...
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Advantages of Franchising
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-low capital required-acquisition of well-known names-operating/management skills taught-cooperative...
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Divadvantages of Franchising
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-over-saturation could occur-franchisers may overstate potential-contractual confinement-agreements...
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Franchisers Benefits
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-national or global presence possible-qualifications for franchisee/operations are set &...
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Franchisers Potenital Problems
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-potenital for harm to reputation-lack of uniformity may affect customer loyalty-ineffective...
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Leased Departments
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*A leased department is a department in a retail store that is rented to an outside party-join...
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Leased Departments Benefits
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-provides one-stop shopping-lessee handle management-reduces store costs-provide a stream of...
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Leased Departments Potential Pitfalls
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-lessee may negate store image-procedures may conflict with department store-problems may be...
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Vertical Marketing Systems
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*consist of all the levels of independently owned businesses along a channel distribution (manufacturing-wholesaling-retailing)-great...
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Partically integrated channel system
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two channel members own all facilities & perform all functions
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Fully integrated channel system
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all production & distribution functions are performed by one channel member
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retail institution
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the basic format or structure of a business
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Manufacturere- Retailer Structural Franchising Arrangements
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-right to sell goods & related services through a lisenscing agreement (ex: GM)
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Sevice Sponser- Retailer Structural Franchising Arrangements
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-a service firm licenses individual retailers so they can offere specific service packages...
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constrained decision making
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whereby franchisors limit franchisee involvement in the strategic planning process
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dual marketing
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a form of multi-channel retailing & engaing in more that one type of distribution agreement
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channel control
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one member of a distribution channel dominates the decisions made in that channel due to the...
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consumer cooperative
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a retail firm owned by its customer members -consumers invest, elect officers, manage...
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