Assignment
L.&D. Stores, Incorporated 1 MARKETING FUNCTIONS OF A CHAIN FOOD STORE
L.&D. Stores, Incorporated, a Massachusetts corporation, was organized in April, 1927. The company operates a chain of retail stores in 36 The nature of marketing 19 states, the District of Columbia, and the 4 Western Provinces of Canada. For many years the trend in the retail business has been toward large volume stores and more efficient ones. For example, the average number of stores operated by L.&D. 25 years ago was 3,124 with average sales of approximately $1,500 per week as compared with 2,131 stores 10 years ago with average sales of approximately $10,270 per week and 1,925 stores this last year with average sales of approximately $16,768 per week. L.&D. was one of the first food chains to adopt a "buy-build-selllease" real-estate program for securing large volume stores, warehouses, and other facilities at desirable locations and also for limiting the permanent investment in real estate. The program includes the purchase of carefully selected lots for building stores with adjoining parking space, the construction of buildings thereon, and sale of the property at or about cost with a long-term lease from the purchaser.
Ten years ago, L.&D.'s tentative plans involved the construction of approximately 500 retail locations within two years. L.&D. completed 35 retail locations in the first year, 100 in the second year, and 95 more in the third year. During this same period, the company closed over 500 of its former stores. The original plans of L.&D. were modified so that the program now involves the construction of not more than 100 stores annually. The new stores feature air-conditioning, self-service meat sections, refrigerated produce, and enlarged frozen food, dairy products, and bakery goods departments. Most of the stores have adjoining parking space for 100 or more cars. The retail stores in the L.&D. Company deal in groceries, meats, fresh produce, beverages, bakery and dairy products, frozen foods, and other goods usually sold in the general retail food business. Sales include nationally known and distributed merchandise as well as products sold under trade marks and brands owned or controlled by the company. Most of the stores stock frozen food products, and self-service prepackage meat sections are installed in substantially all new stores and in many of those that have been modernized. All stores are of the self-service type and operate on a cash-and-carry basis. In connection with its business, L.&D. operates 23 principal grocery warehouses, 15 produce warehouses, 10 bakeries,
6 meat distributing warehouses, 5 fluid milk plants, 4 coffee-roasting plants, an L.&D. Stores, Incorporated- 37 evaporated milk plant, 5 creameries, 6 dressing plants, 2 fruit-canning plants, a vegetable-canning plant, a cracker bakery, 8 cake plants, 4 jam and jelly manufacturing plants, 6 soft-drink bottling plants, a poultry-dressing plant, a fish-processing plant, an oleomargarine and shortening plant, a cereal-processing plant, a sausage and meat processing plant, a cheese manufacturing and aging plant, 4 butter-churning plants, and a number of branch warehouses. Fifteen years ago, L.&D. completed arrangements with 7 commercial banks for financing reserve and processing stocks of merchandise. All but approximately 15 per cent of the cost of the merchandise is financed through self-liquidating bank loans.
The plan provides for the purchase of merchandise of Youngton Commodities, a wholly-owned subsidiary, with funds obtained from bank loans for the processing and storage of this merchandise and for its subsequent sale to L.&D. Seven years ago, the banks renewed their commitments to make approximately 90-day loans to Youngton providing for an aggregate credit at any one time of $10,000,000. It is the policy of L.&D. to operate its stores and other properties in premises held under lease rather than in company-owned properties. The business is competitive with other chain store companies and numerous independent stores and markets. On the basis of sales volume, L.&D. ranks among the first five food chains in the United States.
1. Enumerate the marketing functions that L.&D. must perform in its operations. Explain.
2. Are there any marketing functions that the individual stores in the L.&D. chain fail to perform? \
3. What functions are involved in the "buy-build-sell-lease" policy of L.&D.?
4. Would all large chain stores perform the same marketing functions as L.&D. does? Why or why not?
5. How would the functions of the independent food store compare with those of an L.&D. store? Would it be necessary for an independent store to perform fewer or more functions?
6. Would the functions in the four coffee-roasting piants of L.&D. be considered as production or marketing functions? Is the packaging of the coffee into one- and two-pound containers a marketing or production function?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.