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High l/atue Added

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image. Their profit mar gin is high, and if they are fortunate enough to have high volume, they will lie very profitable.

2. Tiffany?-St ores that feature a narrow product assortment and high value added. Such stores cultivate an exclusive image and tend to operate on a high margin and low volume.

3. Sunglass Hut-Stores thai feature a narrow tine and low value added. Such stores keep their costs and prices Iqw by centralizing buying, merchandising, advertising, and distribution,

4. Wat-Mart - Stores that feature a hroad line and low value added. They focus on keeping prices low so that they have an image of being ft place for good buys. They make tip for low margin by high volume.

Although the overwhelming bulk 07 percent) of goods and services is sold through stores, npnstorc retailing has been growing much faster than store retailing, Mo n store retailing falls into four major categories: direct selling, direct marketing (which includes telemarketing and Internet selling),, automatic vending, and buying services:

I. Birect selling (aKn called muliiletvi selling, network Marketing} is a billion Industry, with over GOO companies selling do or-to-door or at ho rnc sales parties. Well* known in one-to-one selling are Avon, Llcctrohix, and Southwestern Company of Nashville {Bibles). Tupperwar^ and Mary Kay Cosmetics are sold one-to-many: A salesperson goes to the home of a host who has invited friends; the salesperson demonstrates the products ami lakes orders, Pioneered by Armvay, lite multilevel (nenvorkj marketing sales system consists of recruiting independent husinesspeople who act as distributors. The distrtbu tor's compensation includes a percentage of sales of tho^e the distributor recruits us well as earnings on direct sales to customers. These direct-selling firms, now finding fewer consumers at home, are developing multidLs-tnbtititm strategies.

Z. Direct marketing has roots in direct-mail and catalog marketing (Lands' find, LL [lean}; it includes telemarketing(l-SOO-FLOWEDiSjl; television direct-response marketing (Nome shopping Network, QVC), and ele^pttmic shopping {Amazoh.com, AuiohyteL.c(j[u), Of these, electronic shopping experienced a major nikc-ofl in the late IWUs jjs consumers flocked todoi-com sites to buy books, music, toys, elect runics, and other products.

3. Automatic ending i^. used for a variety of merchandise, including impulse goods like cigarettes, soft drinks, coffee, candy, newspapers, magazines* and other products like hosiery, cosmciies, hot food, condoms, and paperbacks. Vending machines are found in factories, offices, large retail stores, gasoline stations, hotels, restaurants, and many other ¡daces. They offer -hour selling, self-service, and merchandise that is always fresh, Japan has the most vending machines per person—Coca-Cols has over 1 million there, and annual vending sales ofS50 billion- twice thai of the United States. These reliable, high-tech tnacliinc$ allow consumers m buy products ranging front blue ¡cans to expensive lunches- Sorlie U.S. retailers are now trying to emulate la pans success with a new generation of vending machines In high-traffic areas. All over South Florida, machines are popping up that dispense Banana Boat sun screen to travelers and outdoor enthusiasts where they need it most.'1

4. Buying service is stateless retailer serving a specific clientele—usually employees of large organisations—who are entitled to buy from a lisl of retailers That have agreed to give discounts in return for membership.

Although many retail stores are independently owned, an increasing nflltlber are part of some furm of Corporate retailing. Corporate retail organizations achieve economies of scale, greater purchasing power, wider brand recognition, and better-trained employees. The major types of corporate retailing corporate chain stores,"Voluntary chains, retailer cooperatives, franchises, and merchandising conglomerates—are described in Table lfj-2. franchising is described in detail in "Marketing Insight: franchise Fever."

New Models for Success

In the past, retailers held customers by offering convenient location, special or unique assortments of goods, greater or better services i lion competitors, and store credit cards. Alt of this luts changed. Today, national hratuls such as Ralph Lauren Polo, Calvin Klein, and Levi's are found in department stores, in (heir awn shops, in merchandise Outlets, and in

Corporate chain store: Two or moreoullels owned' and jjjmtrollM, employ tig cenlral buying and merchandising, and selling similar lines ol merchandise. GAP. Pottery fen, Hold Everything. Voluntary chain: A wholesaler-spo'isorcd group ol i.'idependent retailers engaged in bulk buying and common merchandising. Indepsndenl Grocers Alliance flGA).

Retailer cooperative: Independent retailers using a central buying organization and joint promotion ellorts. Associated Grocers, ACE Hardware.

Consumer cooperative: A retail firm uwillI by lis customers. Members oonlr bule loons'; to open their own store, vole on Ms policies, elect a group to manage it, and receive dividends.

franchise organization: Contractual association between a franchiser and irancliisees. popular im a number oi product and service ¿teas. McDonald S, Sbbvfly, Pi^a Hut, Jiify lube, 7-Eleven.

Merchandising conglomerate: A corporation (hat combnes several dieted retaiUng lines and forms under central ownership, with seme integration of dlstributinn end managemeni Allied Domed PLC v. lit DuiikirV Donut$ and Baskin -flBbLiins, p'us a number of British retailers antt a v/ine and spirits gioup.

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