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Bases for Classification of retail Units

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Nature of ownership. Operational structure. Length and depth of merchandise. Nature of service. Type of pricing policy. Type of retail location. Method of customer interaction.

Nature of ownership- The three basic legal forms of ownership are sole proprietorship, partnership, and limited liability company(private and public).

Operational structure- The retail operational structures can be classified into the following three types: the independent trader(usually operating only one retail outlet); the multiple or chain store; franchising and the consumer co-operative.

Length and depth of merchandiseRetail units differentiate themselves on the basis of the range and variety of merchandise they maintain in their stores. Some retail businesses offer a wide range of goods. On other hand, some deal only in a specific product category with a minimum range of merchandise within that product category.

Nature of service- Lately, with the growing emphasis of retailers on service mix in their entire retail mix, retailers are classified on the basis of level and kind of services extended by them to their customers. Recently, in India many retail outlets have been converted to or built as self-service units, and are providing services such as delivery, credit, gift-wrapping, repairs, etc. Hence, many former self-service retailers are now looking at ways of gaining competitive advantage by adding new customer services.

Type of pricing policy- Some retailers choose to emphasize the low price rather than the service element of their retailing mix. Others choose to price their offerings above the competition, knowing that they will generate business on the basis of some other attribute such as convenient location, premium merchandise mix, or distintive image.

Type of retail location- Under this, retailers are classified according to their stores geographical location. With the increasing cost of central business district centre sites, limited parking facility, and traffic congestion, many retailers have out-of-town locations, whilst others have preferred to locate in cluster locations in downtown centres.

Method of customer interactionTraditionally, most of the retail interactions or transactions have been conducted by face-to-face contact in retail stores. However, a significant number of retailers are generating retail sales by non-store retailing operations such as mail order catalogues, telephone selling, vending machines, door-to-door selling, or mobile vendors.