Retailing & Franchising

Made By:-Warda Azhar B.Des. FDPM 14/07FDDI,Fursatganj

Retailing

What is retailing ?Retailing is the business where an organisation

directly sells it’s products and services to an end consumer.

Whenever an organisation be it a manufacturing or a whole seller sells

directly to the end consumer it is actually operating in the retail space.

Industry DriverIt is an industry which is

heavily dependent on consumer spending. In this ecosystem consumers play the most important role.Retail sales is generally

driven by people’s ability (disposable income) and willingness (consumer

confidence) to buy goods and services.

Types of Retailers

Speciality Stores

These stores are characterized by narrow

product lines but with deep assortments such as Apparel

Stores, Sporting goods stores, Furniture store, Florist and Book store. Under this also

there could be specializations like limited line store (e.g. Men’s clothing store) and Super specially sore (e.g. Men’s custom shirt store).

Department StoresSeveral Product Lines-

typically clothing, home furnishing and household

goods with each line operated as a separate

department managed by specialist buyers and

merchandisers.

Supermarket / Hypermarket

Relatively large, low cost, low margin high volume, self

service operation which is designed to cater total needs for food, laundry, household

maintenance product.

Convenience StoresThese are the stores which are relatively small in size and they

are located near residential area, normally remains open

seven days a week and carrying a limited line of high turnover

convenience products at slightly high prices.

Mom & Pop StoresLocal neighbourhood stores

managed by an independent, which provides limited range

of daily use articles.Many such outlets are still thriving by knowing their

customers better and providing them with more

personalized service.

Off Price RetailersMerchandise bought at less than regular wholesale prices and sold at less than retail prices. Often

left over goods, irregulars obtained at reduced prices from

manufacturers and other retailers.

Factory outlets are owned and operated by manufacturers and

they normally carry manufacturer’s surplus,

discontinued and irregular goods.

Current Characteristics of Retail Industry

• Decline in mom & pop stores.

• Internet and E commerce

• Repositioning of departmental stores.• Rise in discount

stores.• Direct / non store

retailing.• Category Killers.

Franchising

IntroductionFranchising is the practice

of the right to use a firm's business model and

brand for a prescribed period of time. The word "franchise" is of Anglo-

French derivation—from franc, meaning free.

• A Franchise is a license granted by a

business to another business to make and sell goods/services.

• A Franchisor is the owner of the business who grants the license.

• A Franchisee is the person who purchases the business name.

Types Of Franchise

Business Format Franchise Business Format Franchise is

the most popular type of franchise.

Agreements under this franchisor offer are -:• use trade mark• advertising

Product or Trade name Franchise

Product franchise or trade name franchise only involves

product.Agreements under this franchisor offer are-:

• Allows using trademark.• The manufacture grants a franchise the authority to

distribute goods.

Dealership or Distributorship

Franchise• Dealership and Distributorship Format Franchise is also one of

the most popular franchise.• Allow to sell franchiser product

under their own trademark.• Agencies Formant Franchise

own the rights to sell products on behalf of a supplier.

Master FranchiseA master franchisee is granted the

rights to substantial territory, usually a whole country.

This is a structure adopted by many franchisee.Franchisor

Master Franchisee

Manufacturing & Unit Franchise

Manufacturing Franchise provide an organisation with

the right to manufacture.Examples include Coca Cola.Unit Franchise is granted the

right to operate one unit.

Regional FranchiseeIn geographically large area

Master Franchisee may decide to appoint Regional Franchisee.Franchisor

Regional Franchisee Regional Franchisee

Advantages Of Franchise• Increase number of outlet

with minimum capital.• Name recognition.

• Running small business under franchise name is very

beneficial.• Big business help in corporate

marketing.• Proper and effective

marketing tactic.• Training and management

facilities.

Disadvantage Of Franchise• It has to control and

coordinate a network of semi independent businessman.• Indulgence of big business

into small business.• Safe guarding the interest of both the parties are complex.• Much time is required while

selecting a Franchise.• Complex procedure.

The End...