On the other hand, articles which, in the main, are more expensive, and which the purchaser will buy in advance of his immediate need such as a suit of clothing, or even a pair of shoes, are handled best by means of branch stores or special agents. When good-will for such articles is secured it can be retained, and the exclusive agent or dealer can afford to spend more for advertising, service to the consumer, and any other means whereby good-will may be secured and retained.
Chain stores. Branch stores, referred to in the section above, are each directly dependent upon a central, or common, source of supply and are designed primarily as a means of saving, to the manufacturer and to the Public, the extra selling cost which attaches to goods in the hands of intermediate dealers. Chain stores, as distinguished from branch stores, are relatively independent units under one management, designed to facilitate economy in merchandising through the savings which can be made by standardization of methods and in buying goods in large quantities, often from local sources of supply.
Chain stores dealing in groceries or other food products goods which are more or less bulky and in some cases perishable, and which are, moreover, to be selected with a view to satisfying a demand which is largely governed by local customs or prejudices, are most likely to be confined in their territorial scope to a single city or locality. For a chain store or any other store to attain the completest success it is necessary that it secure a large and fairly constant patronage. It cannot do this unless it is able to supply not only the principal needs, but also the minuter needs of its customers, with respect to the goods which such a store may be expected to have in stock. The customer prefers, so far as possible, to buy all his groceries, for example, at one place, and if he must go from the chain store, at which he buys staples, for instance, at a low price, to another store to supplement his purchases and satisfy his minuter needs, his goodwill is not secured. He may prefer to pay a slightly higher price elsewhere, in order to save himself the trouble of going to more than one place. An intensive study of the market, accordingly, is necessary, which means an intensive study of the buying habits of each community; and the chain of stores may be extended with safety only to those sections of the market of which Such an intensive study is practicable. These considerations, as we have observed, apply with particular force to stores which deal in perishable or bulky products, for if these are not disposed of they are either lost outright or transferred to another sales station at a considerable expense....
|
