Retail firms may be independently owned, chain-owned, franchisee-operated,
leased departments, owned by manufacturers or wholesalers, or consumerowned.
Each ownership format serves a marketplace niche, if the strategy is executed
well:
● Independent retailers capitalize on a very targeted customer base and please
shoppers in a friendly, folksy way. Word-of-mouth communication is important.
These retailers should not try to serve too many customers or enter into
price wars.
● Chain retailers benefit from their widely known image and from economies
of scales and mass promotion possibilities. They should maintain their image
chainwide and not be inflexible in adapting to changes in the marketplace.
● Franchisors have strong geographic coverage—due to franchisee investments—
and the motivation of franchisees as owner-operators. They should not get
bogged down in policy disputes with franchisees or charge excessive royalty
fees.
● Leased departments enable store operators and outside parties to join forces
and enhance the shopping experience, while sharing expertise and expenses.
They should not hurt the image of the store or place too much pressure on the
lessee to bring in store traffic.
● A vertically integrated channel gives a firm greater control over sources of
supply, but it should not provide consumers with too little choice of products
or too few outlets.
● Cooperatives provide members with price savings. They should not expect
too much involvement by members or add facilities that raise costs too much.