A Brief Analysis Of Which Is Better Or Better?

Direct operation and franchise

Direct camp, as the name suggests, is directly operated by factories. Some powerful brands often prefer to use direct camp mode to invest directly in large stores or special stores in gold areas. Some international top brands usually adopt direct battalion for the needs of brand maintenance. In addition, many manufacturers will consider the promotion of image and set up self flagship stores in some important market areas, so as to establish a brand image standard and provide a reference shop for dealers. Flagship stores are generally decorated, with complete goods and service specifications, which can reflect the strength and overall image of the company. The advertising effect of the flagship store is even higher than the economic effect. In terms of management, manufacturers usually use branch offices and office mode operations to directly manage direct storefront stores. In order to ensure smooth logistics distribution, warehouses are usually set up in various branches and offices to supply goods directly. In this way, manpower, material resources and financial resources are relatively large, so only the strength type enterprises usually dare to do so.

Franchised stores are a way of jointly managing the market with related partners. There are mainly two ways to recruit franchisees in general enterprises. One is that manufacturers directly look for franchisees. The other is to develop junior franchisees through agents and middlemen. The former way belongs to the flat mode, which effectively reduces the intermediate links, but the radiation surface is wider, and the management, logistics and distribution links are more difficult. Small and medium-sized brands often choose to rely on intermediaries to develop franchisees' cooperation in order to enter the market quickly because of the reasons of early capital strength. Usually franchisees have to pay a certain fee or margin. The company will also provide some props, design, decoration support and concept guidance. In order to ensure the unity of chain store image and operation.

Which way is the two way?

Direct chain stores at least have the following advantages:

1 as an image display, especially the flagship store's image display is very convincing and reference, it can effectively show the strength of the company and provide image standardization.

2, putting aside the intermediate links, enterprises directly face consumers, and can directly earn higher business profits.

3, facing the market directly helps enterprises to get the most effective market information and understand the characteristics of consumers' needs.

4, because of direct control, convenient operation and management, it can perfectly reflect and implement the company's marketing concept.

5 self run stores can effectively handle the inventory and special products of enterprises.

The advantages of using franchising chains are:

1, we can accelerate the market entry time, speed up the withdrawal of funds, and expand the effective network expansion with the existing channels of intermediaries.

2 save capital investment and reduce investment risk. Enterprises can focus on product production and brand promotion.

3, we can effectively develop blind spots in the market, especially for the effective penetration of the two or three tier market.

4, transfer inventory to middlemen and reduce market risk.

But these two ways also have their obvious disadvantages. The direct investment in the store is large, the structure is huge, the staffs are numerous, the organizational management is more difficult, the investment risk and the inventory risk are relatively large, and the franchisee is difficult to carry out the promotion activities and image construction because of the relationship of the ownership of interests. The market is easy to fluctuate, and the market price system is also easily confused, which is not conducive to the overall development of the brand. clothing The industry is the most lacking loyalty industry. Today, when new brands emerge in an endless stream, franchisees can easily turn to other brands.

Contradiction between direct operation and franchise

The vast majority of garment enterprises are joining and directly running mode coexist, especially in the same area, this kind of coexistence of contradictions will be exposed.

A brand is a well-known clothing brand in China. It has been located in the major shopping malls of the country. In 2001, in order to find new growth points, A brand has been developing vigorously. The number of outlets has been developing rapidly in the past six months, and the number of franchisees has reached more than 60. But then the problem came out. Franchisees complained more and more about discount sales promotion. Eventually, many franchisees joined in the price dive. In turn, the manager of the mall began to make trouble, saying that the franchisees sold the brand name products in the exclusive store, disrupted the brand image, and disrupted the price at any discount, demanding that the manufacturers withdraw from the cabinet. A brand manufacturers began to be besieged everywhere. Finally, they had to lose their car to protect the company and terminate the contract with all the franchisees.

Usually, Direct stores enjoy comparative advantages, and they have absolute advantages in terms of price and so on. In order to maintain their image, manufacturers will have greater input in decoration, image building, advertising promotion and so on, while dealers are lacking in strength due to their strength and are inevitably at a disadvantage in image. Moreover, Direct stores can display more styles and types of products. In today's diversified demand for clothing, franchisees are usually unable to run so many products at the same time, and are also at a disadvantage in product display.