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RETAIL INSTITUTION BY OWNERSHIP
*Retail institutions can be classified by ownership: independent, chain, franchising, leased department, vertical marketing system, and consumer cooperative. *An independent owns only one retail unit. Since only one store location is involved, a detailed list of specifications can be derived for the best location and a thorough search can be undertaken. The one store location also lowers investment costs for leases, fixtures, employees, and merchandise. An independent often has the image of a friendly, personalized retailer. *Chains are multiple retail units under common ownership, which utilize centralized purchasing and decision making. Competitive advantages for chain stores include bargaining power, wholesale function efficiencies, multiple-store efficiencies, computerization, access to media, well-defined management, and long-run planning. Chains have a number of disadvantages: inflexibility, high investments, reduced control, and limited independence. *Franchising is defined as a contractual arrangement between a franchisor and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. A franchisor benefits because control is acquired and growth is increased. A franchisee benefits because a well-known name and shared costs are achieved at a reasonable price. *A leased department is a department in a retail store that is rented to an outside party. The proprietor of a leased department is usually responsible for all aspects of its operations (including fixtures) and normally pays the store a percent of sales as rent. The store imposes various requirements on the leased department to ensure overall consistency and coordination. *Vertical marketing systems occur when successive stages of production and distribution are owned by a manufacturer, wholesaler, or retailer or two of these categories. A
RETAIL INSTITUTION BY OWNERSHIP
*Retail institutions can be classified by ownership: independent, chain, franchising, leased department, vertical marketing system, and consumer cooperative. *An independent owns only one retail unit. Since only one store location is involved, a detailed list of specifications can be derived for the best location and a thorough search can be undertaken. The one store location also lowers investment costs for leases, fixtures, employees, and merchandise. An independent often has the image of a friendly, personalized retailer. *Chains are multiple retail units under common ownership, which utilize centralized purchasing and decision making. Competitive advantages for chain stores include bargaining power, wholesale function efficiencies, multiple-store efficiencies, computerization, access to media, well-defined management, and long-run planning. Chains have a number of disadvantages: inflexibility, high investments, reduced control, and limited independence. *Franchising is defined as a contractual arrangement between a franchisor and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. A franchisor benefits because control is acquired and growth is increased. A franchisee benefits because a well-known name and shared costs are achieved at a reasonable price. *A leased department is a department in a retail store that is rented to an outside party. The proprietor of a leased department is usually responsible for all aspects of its operations (including fixtures) and normally pays the store a percent of sales as rent. The store imposes various requirements on the leased department to ensure overall consistency and coordination. *Vertical marketing systems occur when successive stages of production and distribution are owned by a manufacturer, wholesaler, or retailer or two of these categories. A