De La Salle – College of Saint Benilde

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Lecture 04: Retail Institution Classifications

PRESENTED BY:

Ian Agoncillo Pacaña

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Agenda

• Classification Method for Retail Institutions• Ownership• Store-based Retail Strategy Mix• Nonstore-based Retail Strategy Mix

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Classification Method for Retail Institutions

Classification Method for Retail Institutions

By Ownership By Store-based retail strategy mix

By Nonstore-based retail strategy mix

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

A. Classification by Ownership

1. Independent Retailers2. Chain Retailers3. Franchisors4. Leased Departments

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

A. Classification by Ownership

1. Independent Retailers- Very targeted customer base- Capitalize on word-of-mouthEx: Sari-sari stores

2. Chain Retailers- Multiple outlets under common ownership Ex: Body Shop, Bench

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

A. Classification by Ownership

3. Franchising- Has a Franchisor (manufacturer, wholesaler,

service owner)-Franchisee relationship- Franchisee typically pays initial fee and monthly

percentage of gross sales in exchange for the rights to sell.

Ex: McDonald’s, Caltex

4. Leased Departments- Space is rented out to an outside party- Also called “concessions”Ex: Department Stores

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Activity: Given the chance, would you rather be….

• An Independent Retailer

• A Franchisor

• Leased Department

• Chain?

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

B. Classification by Store-based retail strategy mix

1. Convenience Store2. Conventional

Supermarket3. Combination Store4. Specialty Store5. Traditional

Department Store

6. Full-line Discount Store

7. Factory Outlet

8. Membership Club

9. Flea Market

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Retailer Strategy Mix

• A strategy mix is the firm’s particular combination of:store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

B. Classification by Store-based retail strategy mix

1. Convenience Store• Typically well located• Open for long hours• Carries moderate number of items

2. Conventional Supermarket• Self-service food store with departmentalized

grocery, meat and other related products

3. Combination Store• Unites supermarket and general merchandise in

one facility

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

B. Classification by Store-based retail strategy mix

4. Specialty Store• Sells one line of goods or service

5. Traditional Department Store• Large retail unit• Extensive assortment of goods and services

6. Full-line Discount Store• Type of department store with high volume but

low cost selling

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

B. Classification by Store-based retail strategy mix

7. Factory Outlet• Manufacturer owned store selling discounted

merchandise

8. Membership Club• Buyers should be members

9. Flea Market• Many retail vendors sell a range of products• Street selling where buyers can haggle for prices

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

1. Direct Marketing2. Direct Selling3. Vending Machine4. World-Wide Web5. Other Emerging Retail Formats

C. Classification by Nonstore-Based Retail Strategy Mix and Non-Traditional Retailing

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

1. Direct Marketing• Customers are exposed to non-personal medium• Examples are direct mail, TV, radio, magazines,

newspapers, or SMS

2. Direct Selling• Personal contact with customers in their homes and

other non-store locations

3. Vending Machine• Cash- or card-operated retailing format that

dispenses goods or services

C. Classification by Nonstore-Based Retail Strategy Mix and Non-Traditional Retailing

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

4. World-Wide Web• Online, interactive retailing• E-commerce, E-procurement, E-billing…..

5. Other Emerging Retail Formats• Video kiosks – freestanding, interactive computer

terminals that display products and related information on a video screen.

• Airport retailing – duty-free shopping centers.

C. Classification by Nonstore-Based Retail Strategy Mix and Non-Traditional Retailing

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Activity

• How can you non-traditionally sell the following:– Fastfood– Perfume– Photocopying services– School supplies– Baby products

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

Question and Answer

Q & A

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

For next meeting…

Prepare a 10-min presentation (use your groupings) that will analyze your assigned retailer using the following dimensions:– Brief Company Profile– Type of Ownership– Store-based Classification– Nonstore-Based classification (if any)– Strategy Mix

store location, operating procedures, goods/services offered, pricing tactics, store atmosphere, customer services, and promotional methods

VERTICAL SOLUTIONSVERTICAL SOLUTIONS

References

• Berman, Barry & Evans, Jpel, Retail Management 10th Ed. (Person)• Retail Forward, Inc., “Twenty Trends for 2010: Retailing in an Age of Uncertainty”