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INTRODUCTION TO BUSINESS
Name: Mysha Noor
ID: 20210102087
Batch: BBA -1.1(Section B)
Topic: Retailing and types of retail stores (last 5 points)
Retailing is a distribution process, in which all the activities involved in selling the merchandise
directly to the final consumer (i.e., the one who intends to use the product) are included. It
encompasses sale of goods and services from a point of purchase to the end user, who is going to
use that product.
Based on consumer behaviour and manufacturers abilities, there are various types of retail stores
which exist in the market. Each of these retail outlets are different based on the products they
offer and the way they offer it. What are these retail stores and what are they called? Let us have
a look.
Superstores or hypermarkets
Superstores are retail stores which are huge in size and have many different categories under
their belt. Think of a Superstore having everything under its roof – all the products that you can
buy as a “residential consumer”. These retail stores are not found in malls. Rather they are malls
by themselves.
Tesco, Asda, Sainsbury, Walmart, Costco all are players which have the presence in the
hypermarket segment. A superstore is also a type of discount store because without discount the
customers will not be attracted.
But generally, a superstore or a hypermarket does a good job of balancing the cheap the good,
the quality as well as the premium. Basically, you will find low level, mid-level and even high-
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level quality of products in a hypermarket. Hence it is known as a “complete market”. This
category is being affected most heavily since the advent of E-commerce because there is huge
cost associated with running a superstore or a hypermarket.
Advantages:

Saving in labour cost due to self-service system.

Supermarket has large turnover.

Reasonable or low prices of goods.

Low cost of operation.

Freedom of selection.

Shopping is very easy and quick.
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Due to adequate parking space, shopping becomes easy and pleasing activity
than boredom.

High degree of efficiency due to elimination of service.

High margin of profit to organisers.

Advantages of large-scale operations.
rather
Disadvantages:

Supermarket requires huge financial resources.

It is normally situated at a long distance from the residential localities.
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There is lack of personal attention.

Supermarket does not provide various services such as free home delivery, personal
guidance, credit facility and after sale service.
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It faces the problem of co-ordinating activities of various sections of the market.

It requires large and extensive premises.

Goods which require explanation by salesmen cannot be sold in such markets.
Convenience stores
A store in your locality which provides the most basic material to you in a timely manner and
which is available to you for all basic needs is a convenience store. These are small stores which
do not have too many categories or too much depth in their product line. They will have 2-3
types of each product and the volume too will be lesser. Nonetheless, they are almost anywhere
and in any country that you go too.
Typically, most convenience stores provide low-level items which are not even mid-range. The
advantage of a convenience store is, well, its convenience. It is nearby. So, if you have forgotten
to bring milk, you need not enter the mall again, check in your bags, go to the milk section,
checkout and drive back home. All you have to do is visit the store, buy milk and come back.
The shop is a small shop giving super-fast service with a focused approach.
Advantages:

They are a natural destination retail location. ...

It provides an economic boost to the community. ...

It doesn't cost much to start a convenience store. ...

Convenience stores are not bound by local pricing needs. ...

Franchises are often available
Disadvantages:
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
Long operational hours are often required. ...

They are often targeted by the local criminal element. ...
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Cleaning and maintenance are frequent requirements. ...

Convenience stores experience inventory losses. ...
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These stores sell what people want more than what they need.
Warehouse showrooms
A warehouse showroom is a retail store of a company that has a display of the products of the
company and a sizable inventory of the products in a large building. It provides limited services
to the customers
Advantages:
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Warehouse showrooms provide a range of useful products under one roof.

They provide goods in bulk, which could be beneficial to some customers.
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They provide goods at prices lower than the prices at traditional stores.
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Buying goods in bulk means more savings for customers.
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These stores provide a good percentage of discounts on products of popular brands.
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Some warehouse stores provide return facility on goods purchased.
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Warehouse showrooms/warehouse stores provide limited but excellent customer service.
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The working mechanism of these stores’ benefits both the store owner and the customers
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
The store owners benefit from a large number of customers lining up for low priced
products. •
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The customers benefit from low priced products in the store. • There is a vast variety of
similar products in the store, which gives customers a choice to pick one out of many
according to his requirement.
Disadvantages:
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Buying products in bulk often creates a problem of storage for the buyer.
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Buying perishable products in bulk, that is, products that get spoilt soon and have a short
life span often results in wastage of such products.
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Customers may end up buying more than what they need and pay a considerable sum of
money for those products.

Customers have to bag products themselves. Buying goods in bulk might make this task
extremely difficult.

The products sold might not be of good quality.

Customer might get fooled when buying goods in bulk but later finds out that the majority
of the goods are either damaged or not of good quality.

Customers have to find goods themselves among racks full of goods. Many times, this task
can be overwhelming, and the customer might be discouraged.
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Sometimes good quality products get sold pretty quickly, and the customers are left with
low-quality goods.
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Most of the time, these stores are crowded, which might discourage customers from coming
to the store. • Because there are enormous quantities of products stored, it takes a lot of
time for customers to find products, bag them, and finish their shopping.
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If the store depends on manual work more than the usage of modern technology, then
customers might be irritated and leave the store due to the inconvenience caused to them.
Catalogue showroom
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These are retailers whose showrooms are adjacent to the warehouse. These showrooms have low
prices, as they minimize the cost of displaying merchandise, focus on a narrow range of goods
and are located in low-cost areas.
Advantages:
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Easy to reach hundreds and thousands of potential customers just by sending one mail.
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You don’t wait for your people to come to your store to make a purchase. You can send
them details about your products and offers using catalogue marketing.
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Low risk of failure of the business. A catalogue business grows slowly. In this way, as a
retailer, you can start your business by making little investment in the beginning.
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Better cash flow as buyers is required to pay in advance if they want to buy something.
Hence, you don’t need to worry about your money getting stuck.
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Better control over advertising expenses as you are spending your money to advertise to
only targeted customers rather than advertising to the mass population.
 With catalogue marketing, you can keep checking on the Return on Investment (ROI).
Disadvantages:
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Catalogue businesses grow slowly because sellers are required to win the trust of their
customers to convert them into loyal customers.
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The high initial investment of catalogue marketing because the seller is not only needed to
produce catalogues but also required to buy the list of prospective customers.
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Low response rate. People are less responsive to catalogue marketing because of the
availability of different shopping platforms.
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You require excellent writing skills to write details about the products. A poorly written
catalogue will create a negative image of your products.
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Catalogue marketing business is always at a disadvantage when it comes to comparing with
brick-and-mortar businesses. Because in a store, a buyer can try and physically see the
products before buying it, which is not possible when you sell products using catalogues.
Warehouse club:
Warehouse club is an off-price retailer that sells a limited selection of brand name grocery items,
appliances, clothing, and a hodgepodge of other goods at deep discounts to members who pay
annual membership fees.
Warehouse clubs (or wholesale clubs or membership warehouses), such as Costco, Sam’s Club,
and BJ’s, operate in huge, draftee, warehouse like facilities and offer few frills. However, they
offer ultralow prices and surprise deals on selected branded merchandise. Warehouse clubs have
grown rapidly in recent years. These retailers appeal not only to low-income consumers seeking
bargains on bare-bones products but also all kinds of customers shopping for a wide range of
goods, from necessities to extravagances.
Advantages and Disadvantages of Shopping at Warehouse Clubs:
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Warehouse clubs offer great values on many items; however, they can also end up costing
you more if you do not use your membership wisely. Warehouse clubs can be tricky, but
as long as you are able to prepare properly for your shopping trip and stick to a budget,
there are many advantages to joining a warehouse club.
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Fees
Most warehouse clubs like Sam’s Club and Costco require an annual fee for membership.
This means that you should be able to save at least the amount that you are paying for the
membership each year. Currently a basic Sam’s Club membership is $40 per year, and
Costco costs $55 to join. Both clubs offer business account memberships, as well as
memberships with additional services and discounts. Sam’s Club Advantage Plus
membership is $100 per year, and Costco’s Executive Membership is $110. Sam’s Club
also offers discounted memberships for college students and military personnel.
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Coupons
Once you have chosen a warehouse club that is right for you, be on the lookout for
exclusive coupons because these stores do not accept regular manufacturer’s coupons.
These coupons will be your best bet at maximizing your savings.
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Buy only what you need
One of the problems with warehouse shopping is that many people buy more than they use
before their products expire. This can be the case with perishable food, as well as
medications. Unless you have a very large family, it can help to shop with another family
and split the cost of items that you both will use. Buying from a warehouse store can be
confusing because many people don’t know exactly how much of a certain product that
they will consume in an extended amount of time.
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Tickets
One of the many advantages of warehouse clubs is that they offer huge discounts on tickets
to movie theatres and amusement parks. If you are planning a trip, be sure to check out the
prices at your local warehouse club before buying tickets online or directly.
Thus, retailing has become large-scale, concentrated, centralised and sophisticated. Retailers are
well down the track of seizing value-chain power. The next major challenge and opportunity for
retailers is the development of strong retail brands, that generate long-run consumer preference
and loyalty and create sustainable differentiation between direct retail competitors.