Marketing Franchising

Marketing Franchising can be characterized as follows: the franchisor provides the franchisee with the exclusive rights to sale the produced products. Selling of these goods should be carried out in a certain area and under the franchisor’s brand. Manufacturers use marketing franchising when they need to build an extensive distribution network which will work under their control. The points of sales (warehouse, shop, database, etc.) in this type of relations are independent business of franchisee, so that he is a partner of manufacturer he cooperates with.

This type of relations is quite attractive for retail outlets owners as it has some advantages. The commercial network which sells supplied products is established and coordinated by the manufacturer. In this form of cooperation retailers (franchisees) deal directly with the manufacturer (franchisor) passing by all kinds of intermediaries and that is favorably effects on the financial side of business. They use extra privileges in addition – staff training directly in the manufacture, access to all the necessary materials, advertising support of the product etc.

Using this franchise scheme, the manufacturer distributes its products through a narrow distribution channel as a rule, it means through authorized retailers or dealers only. That is why besides previously mentioned advantages the franchisee also uses a certain product exclusivity, which leads to increased demand in its turn (consumer can purchase product from a certain vendor only).

We can find Marketing Franchising examples in almost any area of trade; with the help of this system the essential goods the same as automobiles and other luxury items can be distributed.