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Basics of Marketing - Kotler Philip

Affiliation store

SHOP EQUIPMENT . Retail trade establishments can be classified on the basis of their belonging. About 80% of shops are independent, and they account for two-thirds of the total retail turnover. There is also a number of other forms of property: corporate networks, voluntary networks and retailers' cooperatives, consumer cooperatives, privilege holders organizations and retail conglomerates.

Corporate network. Network stores - one of the most important and significant phenomena of retail trade in the XX century. A chain of stores are two or more trading establishments under common ownership and control that sell products of a similar assortment that have a common procurement and sales service, and possibly similar architectural design.

The commonality of ownership and control is the main distinguishing feature of the corporate network. The stores of the chain sell goods of a similar assortment. Headquarters plays a decisive role in determining the product range of stores, when issuing large orders in order to obtain discounts for quantity, when distributing goods to individual stores, when developing price policy, incentives and other mandatory shopping malls. And finally, to give each of their stores a distinctive and recognizable appearance, the networks often formulate them in a single architectural style.

The success of corporate networks is based on their ability to achieve price advantages over independent traders due to increased sales and reduced margins. Networks provide their profitability in several ways. First, their size allows them to purchase large quantities of goods, receiving maximum discounts for quantity, and at the same time saving on transport costs. Secondly, they are able to create effective organizational structures, employing good managers and developing special techniques in the areas of sales forecasting, inventory management, pricing and incentives. Thirdly, networks are able to combine the functions of wholesale and retail trade, while independent retailers have to cooperate with a variety of wholesalers. Fourth, the networks save on the costs of sales promotion, buying advertising that is advantageous for their stores, and attributing the costs for it to large quantities of goods. And fifthly, the networks give their stores a certain freedom, so that they can take into account local consumer preferences and successfully compete in local markets.

Along with corporate, there are also voluntary networks, which are a set of independent retailers under the aegis of a wholesaler, and cooperatives of retail traders, i. A group of independent retailers who combined their efforts.

Consumer cooperatives. This is any retail company that is in the possession of its own consumers. Consumer cooperatives arise when residents of a community come to the conclusion that either they are not receiving proper services from local retailers, or the merchants are asking for too high prices or offering poor quality goods. In this case, residents collect money to open their own store, jointly determine the principles of its activities and select members of the board. The store can either set low prices, or trade at regular prices, paying dividends to members of the cooperative, depending on the volume of purchases they make. Many successful cooperatives are formed on ideological grounds, there are cooperatives in student communities. In the United States, there are several thousand consumer cooperatives, but they have not become any significant force in the distribution system. But in Europe - and especially in the Scandinavian countries and Switzerland - the situation is exactly the opposite.

The most striking example is the Swiss consumer cooperative "Migros", which accounts for 11% of the total retail turnover in the country. "Migros" was founded in 1925 by Gottlieb Duttweiler as a corporate grocery and gastronomy chain, designed to withstand deeply entrenched competitors who charged high margins. Duttweiler's child was so successful that in 1946 he turned the Migros network into a consumer cooperative, selling one share to each of the 85,000 registered customers. Today, Mitros is a gigantic combination of 440 branch stores, 74 specialized stores and a host of other businesses, mostly owned by consumers.

Organization of holders of privileges. Such an organization is a contractual association between the owner of a privilege (it may be a producer, wholesaler or service organization) and holders of privileges (these are independent entrepreneurs who purchase the right of ownership of one or more points of the system operating on the basis of this privilege). The contract provides for the order of financial relations, as well as the duties of the owner of the privilege and its holders. The main difference between organizations of privilege holders from other contractual associations (voluntary networks and retailers' cooperatives) is that at the heart of such organizations usually there is some unique product, unique service, business method, trade name, reputation or patent of the owner of privileges.

In 1982, there were about 466,000 privileged enterprises in the United States with a total turnover of $ 437 billion. The largest number of such enterprises are located in petrol stations (32.4%), dealers selling cars and lorries (6.4% ), And fast-food restaurants and snack bars (7.3%). Among the enterprises of the fast food service, leaders in the occupied market share in 1979 were McDonald's (18.1%), Berger King (5.7), Kentucky Freid Chicken (5.5), Wendy (4.1) and International Dairy Queen (3.8%). Today, McDonald's and other organizations of privilege holders in the fast food industry are facing great difficulties due to rising labor costs and buying food, which forces them to raise prices for consumers. Continuing to appear and new competitors, offering new types of dishes, such as "tacos" (Mexican variety of pizza) and "jairos" (Greek dish of lamb in the test). Some owners of privileges start to open small establishments in small towns and villages, where competition is not so strong. Others are arranged in large factories, in administrative buildings, colleges and even hospitals. Still others experiment with new dishes, which, in their opinion, can appeal to the public and will bring profit to the firm.

Retail conglomerates. A retail conglomerate is a free-form corporation that unites several enterprises of diverse directions and forms of retail trade under a single ownership with a partial integration of distribution and management functions. The most typical examples of such organizations are the firms "Federated Department Stores", "Allied Stores", "Dayton Hudson" and "J. K. Penny. " The most profitable diversified retail conglomerates are the firms of Melville Corporation with the networks of shoe shops Tom Macan, Miles and Vangard; "Chess King" - with a network of 326 fashion stores for young men; "Foxmoor" - with clothing stores for teenage girls and girls; "Kloots Ben" - with a network of discount stores selling women's clothing; "C-VE" - with a network of stores of sanitary and cosmetic products and "Marshall, Inc." - with a regional network of stores selling a wide variety of clothing with brand names.