Assignment Introduction to Retail

Chapter 1 - 5

Purposed by :

Made Pradnyana Putra

015 2012 00040

Business Administration Class 2 2012

President University

Jababeka Education Park

Ki Hajar Dewantara street, Jababeka City,

Cikarang Baru, Bekasi 17550.

Title     : Week 1 - Chapter 1 – Slide 1.

 

1.      My Favorite retailer is Fisik Sport station, why I choose it because I’m interesting in doing sports, especially futsall sport. Fisik Sport station is retail shop which is sell many kind of sports stuff such as futsall shoes, ball, bag, futsall shock, etc. The location of Fisik sports station in Mall Lippo Cikarang.

The Criteria that I choose to make decision to choose that retailer are:

a.       Promotion almost every day.

b.      Customer service is good.

c.       Products are branded.

d.      The products display make customers easy to find what they want.

e.       The location still in Cikarang area.

f.       They also use social media to make communication to customers.

Base on my opinion, the other competitor can do more than my criteria above, I mean that the other competitor offer more promotion like give more discount to customers, increasing quality of customers service, the location more near than that retailer and also keep communicate with their customers if they offer some promotion. 

2.      From pros side, that company will earn more profit, because they have their own type to sell their product, as we know Polo Ralph Lauren is global brand that sell their product almost in all country in the world, therefore they will earn more profit from that case.

From Cons side, if one company have their own retail facility market like Polo Ralph Lauren it will effect in new brand for the other company, they will hard to build their new brand, because they just sell in their small market.

3.     

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Yes, I believe that customer services in retailing will improving, because customers services is the one of decision variable in retailing. The purpose of the company sell their product is customers satisfaction, base on that reason  all company try to choose many kind of way to get customers satisfaction, and make a good dealing in customers services is the one way to get it. The effect when we offer good customers service to the customers we will get what we call it a testimonial by mouth to mouth, it will give very good promotion, off course our sales will be increasing.

4.      My favorite regional retail shop is Fisik Sport station and MM market for national is Alfa Mart and Indo Mart, for global market is Adidas Sport station. Base on my opinion, all retailer have a chance to join and compete in global market, but the first they must do is set their vision and mission. The vision and mission that company who want join and compete with global market must oriented to global market. After they set their vision and mission (goal) they must concern to manage what we call it decision variable in retailing, they must set their strategy and concern in this kind of variable :

1. Customer Service
2. Merchandise Assortment
3. Location
4. Communication Mix      
5. Pricing
6. Store Design and Display

If that kind of variable already manage and the end are good, I believe that the regional and the national retailer can join and compete with other company in global market.

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Title     : Week 2 - Chapter 2 and 3 – Slide 2.

1.      The characteristic of each of the ownership forms are :

a)      Independent

·         An independent retailer owns one retail unit.

·         There are 2.2 million independent U.S. retailers.

·         70% of independents operated by owners and their families.

·         Capitalize on a targeted customer base and please shoppers in a friendly, folksy way. WOM communication is very important.

b)      Chain

·         Operate multiple outlets under common ownership

·         Engage in some level of centralized or coordinated purchasing and decision making

·         In the U.S., there are roughly 110,000 retail chains operating about 900,000 establishments

·         Benefit from their widely known image and from economies of scales and mass promotion possibilities.

c)      Franchising

·         A contractual agreement between a franchisor and a retail franchisee that allows the franchisee to conduct business under an established name and according to a given pattern of business

·         Franchisee pays an initial fee and a monthly percentage of gross sales in exchange for the exclusive rights to sell goods and services in an area

·         Franchisors have strong geographic coverage-due to franchisee investments- and the motivation of franchisees as owner operators

d)     Leased Department

·         A leased department is a department in a retail store that is rented to an outside party.

ü 

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The proprietor is responsible for all aspects of its business and pays a percentage of sales as rent.

ü  The department store sets operating restrictions to ensure consistency and coordination.

e)      Vertical Marketing System

·         Consists of all the levels of independently owned business along a channel of distribution.

·         Goods and services are normally distributed through one of these systems: independently, partially integrated, and fully integrated.

·         A vertical integrated channel gives a firm greater control over sources of supply.

f)       Consumer Cooperative

·         It is a retail firm owned by its customer members.

·         A group of consumers invests, elects officers, manages operations, and shares the profits or savings that accrue.

·         The most popular in food retailing.

2.      Ease on entry has less impact on the chain of retailers then that of independent retailers. This is because of following reasons, the reasons are :

a)      The chain of retailers have more contacts that they make any market an easy entrant.

b)      They have no problems regarding the investment so they will invest a lot wherever they enter so the locals will also be benefited.

c)      They have a recognizable brand name which will make the customers to repeatedly buy in their retail stores. So they will receive a huge market as soon they enter.

d)     The independent retailers will hesitate to invest a lot regarding the risks involved.

e)      The chain of retailers may not receive profit in all areas they operate but overall they will get profit

f)      

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But the independent investors have to get profit in the certain store which they open.

So if the entry is easy, the independent investors will be more benefit than chain of retailers.

3.      The basics are the same. Both of this ownerships form have store or shop more than one. But the different are :

·         Chain store is usually corporate owned. The highest ranking person on site is the branch manager, but he or she has very little decision making authority.

·         Franchise is where an independent owner buys the corporate structure, and obtains a license to do business as a store of the same name and design. He has many options to make his store his own, as long as his variation does not conflict with corporate policies. 

The franchise owner is subject to following rules and restrictions of the corporate office, and usually has to pay annual license fees and ongoing royalties on sales. In return, the corporate office provides extensive training, operating support and usually a generous advertising support.

4.      The department store want to lease space to an outside operator rather than run a business because they can get benefit from that side, such as :

·         provides one-stop shopping to customers.

·         lessees handle management.

·         reduces store costs.

·         provides a stream of revenue.

5.     

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Small independent restaurant can increase its channel power when they management of this restaurant have a good form management such as production department, marketing department, human resource department no matter the quantity of the people they can work in team, together to give the best for the company and also the owner of this restaurant have willingness to expand their business. From this willingness the independent restaurant can give several marketing mix to give promotion and make a relationship between the other independent companies. Both of companies can promote each other and can get benefit from this type of relationship. It’s can increase the channel power of small independent company.

6.      Consumer cooperatives not expanded much because we can see in the ownership point, consumer cooperatives is a retail firm owned by its customer members  by customers, so when they company have a consumer cooperative they can operate stores as well as or better than traditional retailers. They think existing retailers inadequately fulfill customer needs for healthful, environmentally safe products. They assume existing retailers make excessive profits and that they can sell merchandise for lower price. From that last statement, we can now what the reason when we have a consumers cooperative, they will more interrupt in our business, such as sell product in lower price that will effect in our profit balance, and we can’t expand more in our business.

  

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Title     : Week 3 - Chapter 4 – Slide 3.

 

1.      No, the buying process doesn't end after the customer buys the merchandise. There are several stall customer will go through after they get what they want. The store tries to put the sale item on their way back to check out and try to make the customer spend every bit of the dollar they can. Also they put the necessary items such as newspapers, magazines, gums, mints etc in a easy access place beside the checkout lanes so that they can spend more money. The customers want buy a new product everyday when they are not satisfy enough with the product that they bought before. Process customers buy merchandise are started when they have a needs, search, evaluation, purchase, and out purchase.

2.      For hotel retailing as we knows this is kind of retailing that sell or offer a services, different with retailing manufacture that sell product to customers, the promotion that over by this type of retailing is directly in travel agency that always have traveler. It type of retailing make one communities that help each other. For example one hotel in Bali they are joining with travel agency to get their daily customers. To differentiate both of them we can differentiate between their way how to sell their product, for instant the hotel sell their product trough partnership (promotion) and for retailing manufacture sell their product directly to customers and make own promotion.

3.      Base on customers buying decision and base on myself also family decisions hoe we choose university, when I choose President University because I follow my passion in business I choose business administration study program as my right place. Base on buying decision this is our need. I search the information about President University trough internet and also my senior in senior high school. I compare President University with Management business UGM and also SBM ITB. I choose President University because I don’t pass my SNMPTN. Today, I don’t realize to study in President University especially in Business Administration Study Program. I purchase my time to choose President University is about 3 month because I prepare also for SNMPTN. The objective to choose PresUniv is in this university we can get experience to study in international environment. The subjective of this university this is public university.

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4.      This company must doing personal approach with campus management that near university. The potential target markets are university student and also university management staff. The marketing mix that we offer for this company is doing some promotion to potential customers such as make a member of this shop. So, the customers can get several discount if the make member card and the promotion that should this company do is supporting the event in university, they can print out and put their company logo then it will make the company more popular.

5.      My recent purchase is futsal shoes, the effect that I buy this product come from group, family and also culture. For instant in group side, in President University I join Futsal club, so in that group push me to buy that product. Family side, my family is like doing sports, and me especially are football player, because of that reason I buy that product. For culture in Bali all my friends playing football since I was child until know we are play together if have a free time. because of that I buy that product. Social Media also effecting me to buy futsal shoes because in social media like facebook, twitter and also the new popular one instagram I follow the account that related about football and also futsal. Therefore, every day I will see the picture about futsal and football.

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Title     : Week 5 - Chapter 5 – Slide 4.

1.      The concept of atmosphere related into psychological feeling a customer gets when visiting a retailer. And the concept of atmosphere are :

·         Store retailer: Atmosphere refers to store’s physical characteristics that project an image and draw customers

·         Nonstore retailer: Atmosphere refers to the physical characteristics of catalogs, vending machines, Web sites, etc.

The basic of concept of atmosphere and visual merchandising are same, but differ is in the type both of them. Atmosphere operated in store and the visual merchandise applied in merchandise.

2.      The exterior that controllable by retailer are :

·         Storefront

·         Marquee

·         Store entrances

·         Display windows

·         Exterior building height

·         Surrounding stores and area

·         Parking facilities

The exterior that uncontrollable by retailer are :

·         The other building that own by the other beside the retailer.

·         The place that issue by people near or beside the retailer.

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3.      Planogram for near clothing store :

4.      For online books store we suggest that use the eye catching web graphic design. The display of the books must clear put the color full cover books.  There will easier to see the books base on their cover. For the owner, they must re update the web frequently for make the customers always feel fresh when she the product (books update).

5.      I don’t agree with that statement because as we know that when upscale retailer provide in store, there will be unbalance in retailing market. From that case, the customers will buy the product retailer just in upscale position. The product in low position will be kick out from market, So don’t make the regulation like that for make the market balance.

6.      For make relation between communities and local bakery the must make a relationship form each other. For example in local Piscok bakery placed in Pasimal market, Cikarang they always join with President University student who want to doing Fund Raising to support their budgeting income event. They sell their product to President University students in a big quantity and the President University student will sell it again in higher price in President University. Therefore, in this case there are symbiosis mutualism between Piscok bakery and President University students.

Title     : Week 3 – Short Cases I

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A.    Piggly Wiggly : A Supermarket Franchising giant.

1.   Yes. My reason is the Piggly Wiggly supermarket franchising giant is good supermarket franchising, that offer a good operational management to their franchiser. The brand name of Piggly Wiggly also well known, there are 6000 supermarket unit and the sales are 4 billion. Therefore, the company has been successful developed in franchise market.

2.   Advantage : it save cost to build branch in many places, and the franchisor can get the money easily, they also no need to make the advertisement, because the advertisement made by the franchisee. The brand name already known by customers.

Disadvantage : the franchisor will have bad reputation if the franchisee doesn’t work properly and new customers must doing some evaluation and searching before purchasing in Piggly Wiggly.

3.   For Piggly Wiggly new franchisor we suggest that have big capital, have good marketing strategies, have good management, offer more promotion to attract consumers, obey the terms and condition to become piggly wiggly franchisee.

4.   Fleming could require freshbrands to use piggly wiggly name and all of their promotions as long as fresh brands doesn’t make the reputation of piggly wiggly become bad and also don’t take the customers of Piggly Wiggly it’s self.

B.     Can Traditional Store Revive Themselves

1.     

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The department store concept in retailing is they give the chance to retailer to sell their product in one place or what we call it one stop shopping area. This kind of business, just provide a place for the other retailer to sell their product and for the costumers they are provide a place that they can get all they need in one place.

2.      The department store life cycle almost 5-10 years, they must offer several promotion regularly to keep their business a life. The department store will get more loyal consumers when the keep doing promotion in big day in one years.

3.      As an executive I differentiated that between types of product that they offer. For instant, the department store offer many kind of product and give the chance to consumers to get experience one stop shopping in one place. But for specific store they just offer one type of product, for example clothing store.

4.      As an executive I differentiated between how they display and sell their product. For instant, in department store they sell their product directly trough customers (face to face), but in Online discount store, they sell their product using catalog online, picture of the product in web site.

C.    Jill Moves Into Multi-Channel Retailing

1.      Pros :

·         They offer the new experience to buying product online.

·         They have a successful website retailer.

·         They can get their own target market online

Cons :

·         They are not focus in growing their online website store in the starting time.

2.      Jill can grow up their website, online store, and I suggest that they have an update online catalog at least once a month, that will use full for customers when they want to see new product in online catalog.

3.     

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After I see the online store of Jill, this is good enough. They have simple website that can easily serve the customers to buy or one to find the information about their product. I suggest that they may give colorful color in their website and choose the color that can increase customers buying want.

4.      Jill can use different marketing promotion than the others online store or retailing store such as have planning to corporate with social media such as facebook, twitter and also you tube. They can add the advertisement in that type of social media. Therefore it can improve their sales and brand information.

D.    Can Ebay Keep Booming ?

1.      Seller perspective : its hard to sell product in ebay, because the seler can’t find the way to sell the product easily. Ebay must fill page that inform how the seller sell their product in ebay instantly.

Buyers perspective: ebay provide simple layout so the buyer can easily found the product that they want. They can easily get information by choosing sub product type.

2.      The seller of the product can promote their product to buy in ebay, and ebay provide a safe transaction system between seller and buyer and off course the product can be promoted around the world.

3.      Pos :

·         Ebay help dell to sell discontinued equipment besides throuh dell’s own website

·         Ebay provide a web retailing store for Dell and also doing corporative between two company that will promote each other.

·         Ebay no need to harm their reputation by selling discontinued equipment through their own website

Cons

·         Dell should share their profit with ebay

·         Dell can looked as a low class product, it sold in ebay which is a web that sell anything.

·         The visitor of Dell website will be slash into two, Dell own website and Ebay website.

4.      The local camera store should know the consumer wants and needs by doing observation/research, than after know it, the store can sell/provide the camera that needed and wanted by the customer. Ebay make a business base on customers want.

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Title     : Week 5 – Short Cases II

Paco Underhill, Consulting Guru, on Retail Atmospharics.

1.      Converting non buyers to buyers is largely dependent on store design and display. From this articles we can read that Poco Underhill provide the facilities and service. Therefore, the customers will more buy the product and the customers will more satisfy.

2.      For music retailer to increasing a consumer time in store we suggest that in the store they can try the instrument that they want to buy and some time (once a month) the store held live music performance in front of store. Therefore, it will be increase consumers time in store.

3.      No, because different market have a different customers. We can see that the consumers of Underhill are increasing, they are going to middle retailer. Therefore we can’t set the level of Underhill in low-end again.

4.      To relating the golden rules of Underhill to web retailer we can see that the web retailer can duplicate the way or the rules of Underhill because we can see that in all the rule the goal of that rules are customers satisfaction, so when that rules are applied in web retailer, they will get more trust from customers.

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