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Khamis Ali
Lecturer ZIFA
Lecture 2
khamiskhamis80@gmail.com
12/15/15
AGENDA:
Definition of Home Trade
Retail trade
Functions of a Retailer
Types of Retailers
wholesale trade
Functions of a
wholesaler
Types of wholesalers
chain of distribution
Zanzibar Institute and Financial Administration ZIFA
12/15/15
Definition of Home
refers to the buying and selling of goods for
Trade
delivery
within the boundaries of a particular
country.
Home trade may be further classified as given
below:
Retail trade
Functions of a Retailer
Retailer performs functions for two groups
of people;
the first group are the manufactures or
wholesalers who
provide him with
goods.
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Cont
5. Provide credit facilities: He grants credit to
Types of Retailers
conti..
ZIFA
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conti..
Mobile traders: are those traders who
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Cont.
Advantages;
Disadvantages;
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conti..
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Cont.
Disadvantages;
1. In
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conti..
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Cont
1.
2.
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Disadvantages;
These outlets sell the products of
one manufacturer only so the
consumers have no choice.
Insufficient supply of the goods
from the manufacturers can result
in the closure of such outlets.
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17
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conti..
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advantages
of
multiple
1. Efficient service; multiple shop system serves the
customers easily and efficiently by opening a large
shops
number of branches near the customers residence.
2. Economies of large scale buying and selling;
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4.
conti..
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Disadvantage
of
multiple
1. Lack of personal contact; there is little personal
contact between the customer and seller. It need
shops
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Department
stores
This is a number of single shops each restricted to
selling only one class of goods under one roof (i.e
same building) and one management. Each shop has
a department manager who decide on the size and
type of stock to be held. It offer a wide variety of
goods so that customers need not go to different
shops for purchasing different articles.
Department store often maintain their own
restaurants, reading rooms, cinema houses, hair
dressing and beauty saloons, information bureau etc.
Department store are always situated in the central
shopping areas of big towns. The premises are
generally very extensive to accommodate various
departments.
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Advantages of department
1. Lower prices for goods; department
stores
store
purchase goods direct from manufacturer, this has
effect of saving on the middlemans commission.
These enable the department store to sell goods
at comparatively low prices.
2. Saving on overhead expenses; owing to the
large volume of sales of a department store the
overhead expenses of the store will be distributed
over a large turnover. Thus the average rate of
overhead expenses will be comparatively low.
3. Right personnel for the right job; the large size
of a department store enables it to employ the right
person for the right job.
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conti..
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disadvantages of department
1. Lack of personal contact with customers; It is not
stores.
able to give personal attention to the customers. The
customers of such a store are far too many and they are
drawn from different places with different tastes.
2. Not easily accessible to many; they are situated in
central shopping areas of large towns and cities unlike
to ordinary retail stores so they are not able to cater the
needs of the rural population.
3. Chance of mismanagement; since the organizational
set up of a department is very large, inefficiency in
management is a possibility.
4. Chances of pilfering; some customer may exploit the
situation by pilfering the goods displayed due to it may
not be possible to exercise a close watch on all the
customers.
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conti..
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super-markets
These are large stores that stock
many of
household items and operate on self service
system. They offer food stuffs, utensils, drinks,
electrical
appliances,
cleaning
materials,
stationary, mattresses, hardware etc.
Self service means that a customer pick up any
item he needs by himself. Items carry price tags
which is its cost and customers move through
the shop from shelf to shelf, picking whatever
they need.
Example of supermarket are nakumatt, kwality
supermarket etc.
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super-markets
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THA
NK
YOU
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HOME TRADE
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Cont.
Advantages
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36
37
conti..
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conti..
Advantage to the trader;
The trader can increase his sales by creating
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wholesale trade
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conti..
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conti..
Functions
of
wholesalers
to
consumers;
1.The wholesaler helps to maintain
prices steady. When the price is
falling on account of over production
and consequent over supply, the
wholesaler purchase goods in large
quantities and stocks them, thus
absorbing the excess supply and
vice-versa.
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advantages
and
disadvantages
the
The wholesale
trader
perform someof
functions
in
the interest
of the manufacturer, retailers and
wholesale
trade
consumers.
These
function
indicate
the
advantage of the wholesale trade.
The disadvantages of the wholesale trade are:1.The wholesalers are link btw the manufacturer
and the retailers so they are in a position to
exploit them if they do not buy goods from the
manufacturers in time.
2.Sometimes , they provide incorrect information
to the manufacturers regarding the market
situation.
3.They can create shortage of some goods in view
of some selfish motives.
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Various types
of wholesalers are classified as under;
Types
of wholesalers
1.General wholesalers: they deal in a variety of goods
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chain of distribution
A chain of distribution is a path in which
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Chain of distribution
This diagram is concerned with home trade only.
diagram
Manufacturers
Wholesale
rs
Small
Retail shops
Retailers
of
Consumer
manufacture
s
rs
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Large
Retailer
s
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