(a) Identify the type of fixed shop retailer in which retailer has networks of various retail shops with centralized management and all the shops deal in similar into standardized and branded consumer goods.
(b) Also explain two advantages and two limitations of such type of retailer.
(a) Identify the type of fixed shop retailer in which retailer has networks of various retail shops with centralized management and all the shops deal in similar into standardized and branded consumer goods.
(b) Also explain two advantages and two limitations of such type of retailer.
(a) Chain stores/multiple shops. Limitations of chain stores / multiple shops.
1. Limited variety: These are specialised in one line of products. They do not offer a wide variety of different product line under one roof like departmental stores.
2. No facilities: Chain stores offer no extra facilities to attract the customers like- credit, home delivery etc.
3. Lack of personal touch: These stores are managed by the branch managers who are paid employees and not owners. They do not take personal interest in each and every customer.
(b) The advantages of multiple shops are as follows :
1. Low cost : These shops have low operational cost because of centralised purchasing and promotion of sales.
2. Diffusion of risk : The total risk of an organisation is reduced as the losses incurred by one shop are covered by the profit made in the other shop.
3. Flexibility : A loss making shop can easily be shifted to some other place or can be closed without affecting the profitability of the organisation.
(a) Chain stores/multiple shops. Limitations of chain stores / multiple shops.
1. Limited variety: These are specialised in one line of products. They do not offer a wide variety of different product line under one roof like departmental stores.
2. No facilities: Chain stores offer no extra facilities to attract the customers like- credit, home delivery etc.
3. Lack of personal touch: These stores are managed by the branch managers who are paid employees and not owners. They do not take personal interest in each and every customer.
(b) The advantages of multiple shops are as follows :
1. Low cost : These shops have low operational cost because of centralised purchasing and promotion of sales.
2. Diffusion of risk : The total risk of an organisation is reduced as the losses incurred by one shop are covered by the profit made in the other shop.
3. Flexibility : A loss making shop can easily be shifted to some other place or can be closed without affecting the profitability of the organisation.
