Critical Success Factor of the Nottingham Convenience Store - Coursework Example

Critical Success Factor Report of the Nottingham Convenience Store Introduction 1 Company Background The companyoriental mart was first formed as an online market company that specialized in offering oriental careering services. They focused on delicacies from the oriental countries that included China, Korea, Singapore, Thailand, Japan, Philippines, Malaysia and Singapore. The online retailer also diversified to offer other specialist products from the Asian continent. The business expanded due to its aggressive marketing and strategic planning to become a force in the online retail business. This growth in business prompted its expansion into traditional retailing by opening its first store in 2008 locating it in the busy city centre. The reason for this move was to provide a convenience store for people at the city and for people who are visiting it on a daily basis. 1.2 `Research Objectives The significance of carrying out this Critical Success Factor Report (CSF) was to establish the factors that contributed to the success of a business. This report is aimed at researching on the factors that made orient mart to be successful in the online retail business sector. This is to be achieved through collecting feedback from customers and asking the management questions relating to the strategies and practices that make the company a success. This is in order to determine what makes the business a success in its area of specialization. The rationale of this study was to gather information regarding the company’s success in the retail sector. 1.3 Methodology In carrying out the research process, the use of questionnaires was employed to get the required data from customers. This research process involved the printing a total of 200 questionnaires that were distributed to the public. Half of these questionnaires totalling 100 were given to regular customers who were willing to take part in this survey. The other half was distributed among the public consisting mostly of the people passing near the store. This was to ensure that the individuals participating in the study were aware of the store. This was necessary for the research to collect accurate data. The research was done for a period of one week, and the participants came from the different parts of the city. For this research, 165 of the 200 questionnaires were valid, and their feedback was relevant to the exercise. The remaining 35 were discarded since they were invalid. It was important that the customers took part in the exercise since the data will give a reflection of the customers’ thoughts and perceptions in the subject. Out of the 165 questionnaires that were valid, the customers filled only 62. The number was relatively lower compared to the 97 forms questionnaires that were filled by the public. In addition to the data collected, the manager of the store participated in an informal interview to give added information that was useful for the research. This was to get information from the management’s perspective. This provided a balance in the data collected in that it was all inclusive of both the consumers and the convenience store. 2. The Retail Audit The retail audit is carried out to determine the target market and the factors that affect this market in relation to the business. These factors influence how the market responds to the retail business. This is essential since markets are dynamic in that their needs and preferences change over time (Bullen, 1995, p14). . 2.1 The Market The market refers to the section of the population have a demand for the goods or services of a business. For any business to be flourishing, they require to have the capability to attract and maintain their market. If a business realizes this, it will have a profitable turnover leading to further growth and expansion of the business. Nottingham’s market consists of the city dweller and visitors that come to the city. Their market is broad since a convenience store offers products that are needed by the public in that its products are not as specialized as the Orient Mart (Bullen, 1995, p17). 2.1.1 Marketing Definition Marketing refers to a business, efforts to sell itself to the market. This is achieved through making it products or in some cases services attractive to their potential market or already existing clientele. Marketing aims to m maintain a company’s client base and increase the number of its clients in order to realize growth. 2.1.2 Market Trends Markets are dynamic in that the consumers change their consuming habits due to social and economic factors. These factors lead to the emergence of trends in the market. This makes it necessary for the retrial sector to be knowledgeable of the current market trends in order to fashion their products around these trends. The Nottingham stores have over the years prioritized on their grocery sections. This was due to the reason that the retailer felt that they can make a bigger impact on their market since they will collude with the consumers’ current trends. The significance of market trends is evident in that other major retailers have been seen to pay attention to these trends and adjust to them. Retail giants like Tesco and others apply this strategy to satisfy their clientele (Walsh and Kanter, 1988, p21). 2.1.3 Market Forecasts The convenience store sector is growing steadily, and this is set to continue over time. However, certain factors may influence the future of this business. The economic difficulties experienced in early January, saw the VAT increase significantly affecting negatively the spending patterns of the consumers. This led to a sharp decrease in the spending habits of consumers, who became more cautious due to economic constraints. Consumers nowadays seem to be looking for ways to shop for value in that; they are looking for the cheapest way to shop and get their money worth. Christmas is a busy time for the retail sector in that it is a tradition for consumers to buy gifts for each other. Spending also increase on foodstuffs and luxury goods. According to market forecasts, it has been projected that consumers are approaching this Christmas; consumers are already contemplating to cut their spending. One out of ten customers has already implemented a plan to cut their Christmas spending. This will negatively affect the profits realized in the retail sector being that Christmas is one; of the most profitable holidays. Research also shows that .there is no plan for wage reviews for the consumers. It was also discovered through the recent national budget that banks are planning to increase their interest rates further discouraging consumer spending. The consumers will look to maximise on the advantages of saving their money rather than spending it. The rise in interest rates however, will have a negative effect since loans will become more costly, hence hampering the flow of cash (Mintel 2011). In the retail sector, the future of the market is going green. The consumers have become sensitive to environmental matters hence are looking for goods that are environmental friendly. Healthy living is also fast becoming a trend among the consumers this has led to the introduction of healthier versions of different products. The retailer has decided to concentrate on their grocery department due to this lifestyle choice that is growing fast in the market. 2.2 The Micro-Environment Another factor that is considered in measuring the CSF is by considering the micro-econo0mical factors. These factors include the market share and competition. Micro-economical factors are the incidents that influence the performance of a business in the in a smaller environment. This is in contrast to macroeconomics that employs tools that are more complex. 2.2.1 Market Shares Using the research method of questionnaires employed before in the primary research, 300 questionnaires were distributed among the consumers in the district of Nottingham, in the city centre. The data collected showed that only 148 of the research participants confirmed they shop at the retail store. Using a figure of 300 customers per week seems a little minimal however; it is evident that there is potential for the store to increase their market share by over 10,000 new customers if they only heard about the store. This shows that the retail store has the potential to increase their market share in future. 2.2.2 Competitors Competition is a crucial factor affecting the micro-environment of a business. The Nottingham stores face competition from large super markets. These supermarkets are cause for concern for the store since, they boast a large variety of product that a consumer needs, and this is attractive since customers prefer one stop shopping nowadays. This makes it difficult for the store to compete against the bigger better-established retailers (Rai, Borah, & Ramaprasad, 1996, p156). 2.2.2.1 Strengths and Weaknesses The strength of the retailers is their ability to react to the needs of the consumers in m appropriate time. The economic difficulties experienced have affected consumer spending. This has elicited mixed reactions in that the consumers are opting to eat home cooked meals since they are, more economical than eating out. This has led consumer to seek the cheaper food options this options are found in retailers. The customer needs have shifted to low cost foods that are easy to prepare leading to an increase in food purchases. This has created opportunities for the retail sector to satisfy this need. There is a downside to this in that, the weakness of the retail sector is that due to the economic constrains a majority of customers will shun expensive goods to cheaper alternatives. This will lead to the decrease in the number of customers buying pricy goods. This in turn, will bring about a sharp decrease in profits. 2.2.2.2 Customer Profile Customers that are currently common in the Nottingham stores include an age bracket of 18-24. This consumer bracket consists of mostly the youth. This is because this age bracket do not identify with brands. The status of the store among the other retailers is not important to them as seen in the older bracket; these consumers prefer this store to its competitors since, they are able to meet and socialize with their peers. The wide range of goods in the store also attracts them. The customers in this age group fall in the category of immediate spenders. 2.3 The Macro-environment Macro-environments refer to the complex factors that affect a business. These factors equally complex tool to measure their impacts. 2.3.1 Economic The recent economic hardships have been a significant factor in how the retail business is performing. The economic recession has affected how consumers spend negatively, due to the high cost of living. The consumers have been forced to scale down on their expenditure since; the economic times are putting a strain on their income. For a business to be successful, the economy should be stable in order to allow the market to have purchasing power. Sales have been decreasing in the retail sector due to the economic constraints caused by the recession. This clearly shows the relationship between the economy and business. 2.3.2 Demographic In business, different categories of the population have different preferences. In the case of Nottingham stores, demographic comes into play in the store gets a bulk of its customers from the youth bracket. This is because the store has certain qualities that appeal to this specific demographic. When considering the demographics in a business, there are factors that one should consider. These factors include their spending ability, percentage against the general population. The youth in most populations make up the largest percentage of the total population hence; it makes economic sense to chase after this group. The downside of this is that, in most cases, this demographic does not have the spending power (Rockart, 1979, p 89). 2.3.3 Technology The world is making new technological advancements almost daily these advancements in technology affect the way we do business either negatively or positively. Technology has enabled various innovations in business. This can be seen through the example of the internet to set up a company online like the Orient Mart. 2.3.4 Political/Legal Governments also play a part in business through the red tape that exists in carrying out business. The government also affects businesses by the use of taxes and the issuance of licences and their economic strategies. 2.3.5 Socio-cultural Social and cultural perceptions of a community influence how they do business. A business should be sensitive to culture in order not to be accepted. 2.3.6 Natural Natural resources also have an effect of how a macro-environment influences business. Natural resources drive the economy since, with the availability of resources means the flow of cash hence, an advantage for businesses. 2.4 The Company The company is also part of the macro environment. Companies provide the goods that are sold by the retailers, hence lit is easy to say they are interrelated (Westwood, J, 2011, p1). 2.4.1 Strengths and Weaknesses Companies are an important component of macroeconomics. The recession caused the players in the retail industry to post loses. However, there was an increase in the purchase of cheaper goods. This posted higher returns to the companies that changed with the situation. The weakness includes the high price goods will suffer a decrease in sales hence cutting the profits of the company. 2.4.2 Marketing Assets Marketing assets involve the devices that will make a company sell itself better to the consumers. These assets may include the brand name and so on. 3 Conclusion and Recommendations 3.1 Segmentation The Nottingham store is preferred by mostly the youth that mainly come from the nearby campus. They students favour this store since it is convenient for them. The information obtained from the manager is that they prefer shopping there due to convenience rather than price. Since, it is more is more expensive in the retail audit carried out it is evident, that the store lacks a varied customer base and is currently concentrating on their current pool of customers instead of attracting new one. The store is also ranked among the top 100 stores but still it cannot provide some goods. The store has undergone segmentation in that it only focuses on the youths aged between 18 and 24. This population mostly makes students and worker. 3.2 Location The Nottingham store is located near a university. This location was strategic in that the targeted consumers were in abundance. They location also makes it possible to attract a new kind of client. Though they have segmented their client base hence, barring their chance of attracting a new kind of client since most of these people stay they have never heard about the situation was also important in that the store does not have a distinguishable brand image. Its location in the CBD also is an added advantage since business premises and accommodations, exposing it to customers around it (Pinto, and Prescott, 1988, p18). 3.3 Price The store prices tend to be much higher as compared to retailers in the locale. This is because the clients not to travel to other stores for different things. This makes the goods being spotted in the convenience store to be expensive. Despite this, the stores offered the advantage of promotions. The two types of pricing involved were the promotional pricing, which is a common practice of pricing used by retailers of convenient stores. The second one is psychological pricing. This is by influencing in the minds of consumers into thinking something is cheaper. For example charging $ 4.99 makes to product6 appear technical (Leidecker, and Bruno1984, p24). 3.4 Merchandise Consumers have become more sensitive to pricing and are keen in ensuring they observe a healthy lifestyle. This creates the need to offer the consumers goods that encourage a healthy. In the Nottingham stores, more healthy alternatives are being adopted to suit the need of the consumers. 3.5 Customer Service Customer service is important in that it e3nsures that a customers’ needs ate addressed to make them satisfied with your service. Customer service enables the retailer to create a suitable relationship with the clients and creates a bond of trust and goodwill between the two parties. Unfortunately, it is only in the big market chains that have this department. Smaller independent retailers do not have such an office that deals directly with the relationship between the customer and the retailer (Marquardt, Makens, and Roe, 1983, p36). 3.6 Store Environment A shopping experience is made more memorable by the environment of the store. The days where shopping was unpleasant are being left behind. Though a convenience store is considerably smaller than as supermarket, the shopping environment cannot be compromised, but it will be unmerited to contrast the two. Stores usually have a basic theme. Products should be placed in there right manner, and the music played should not be too loud but only in the background. A radio station is preferable since it is all inclusive regardless of age (VanDeusen, 1996, p63). 3.7 Sustainability The retailers should always strive to ensure that the business is sustainable in that there can be continuity in the business, this is vital to ensure that the business grows in the future. This is also tom ensure that the gains made are sustainable in that they can be maintained. 3.8 Customer Communications It is important for businesses to get constant feedback from their customers. This is important in order to improve and maintain a high quality of service delivery. Communication with the client can take place through word of mouth or through other sources including emails and the rest of communication Medias (Cooper, and Kleinschmidt, 1996, 26). 3.9 Human Resources In the current situation, the store hires students to take part in the human resource. This enables the store have qualified adequately to help the company grow. This group and offer them fulltime jobs once they graduate. This ensures that the store has a constant supply of work force without inconveniences. List of References Bullen, C. V. (1995, Fall). Productivity CSFs for knowledge workers. Information Strategy: The Executive’s Journal, 12(1), 14–20. Cooper, R. G., & Kleinschmidt, E. J. (1996, July/August). Winning businessesin product development: The critical success factors. Research-Technology Management, 39(4), 18–29. Leidecker, J. K., & Bruno, A. V. (1984, February). Identifying and using critical success factors. Long Range Planning, 17, 23–32. Marquardt, R. A., Makens, J. C., & Roe, R. G. (1983). Retail management: satisfaction of consumer needs. Chicago, Dryden Press. Pinto, J. K., & Prescott, J. E. (1988). Variations in critical success factors over the stages in the project life cycle. Journal of Management, 14(1), 5–18. Rai, A., Borah, S., & Ramaprasad, A.(1996, Winter). Critical success factors for strategic 141–155. Rockart, J. F., (1979, March-April). Chief executives define their own data needs, Harvard Business Review, 57(2), 81–93. Seven critical success factors. (1996, September23). Oil & Gas Journal, 94(39), 62. VanDeusen, J. (1996, September). Honing an effective tool for community improvement. Journal for Quality & Participation, 19(5), 54–63. Walsh, J. J., & Kanter, J. (1988, January).Toward more successful project management. Journal Westwood, J. (2011). Marketing Your Business Make the Internet Work for You; Get into Exports; Learn about Products and Pricing. London, Kogan Page. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=688571. 5 Appendices Appendix 1 Company background Nottingham stores have over the years grown from being just a stationery store to venture into selling of foodstuffs that included groceries and snacks for the student population in the location. The store intended to offer quality services and to have a well-stocked store. The store has also provided the opportunity to those who are studying at the university, to work there part time. Context The retail business is shifting towards a more convenient store format. This is because they are facing stiff competition from the convenience store causing them to adjust in order to be competitive in future. In Nottingham, the number of convenience stores has increased dramatically over the years. This has led to added competition since, in every corner in Nottingham there is a convenience store. This has led to the reduction of the market base of the large retail stores. This has led to the big retailers to disenfranchise creating express stores. Independent retailers make up 42% of the market share, while the big retailers hold 31% of the market. This clearly shows that the independent convenience stores dominate the market. Appendix 2 Definition of market The market of the Nottingham stores is made up of students mostly. The goods that are commonly found in the stores include: Household / Non-food National lottery Milk Newspapers / Magazines Snacks Soft drinks Tobacco Alcohol Bakery Chilled food Confectionery Fast food / Food-to-go Frozen food Fruit / Vegetables Health & beauty Market forecast The market forecast has been bleak for the retail industry in that, the current economic recession has led to reduced spending by customers hence, a decrease in the annual turnover of the retailers. Appendix 3 Market Share 148 out of 300 responded they visit the store. The average visit per customer Is 2.03. 148*2.03=300 customer per week. Ng1 total of 11,000 people 11,000*2.03=27,5003,330 22,330*52=1,161,160 (potential customers). Cash units for SU shop 300*?3 (average spend)=?300per week Cash units for Ng1 potential customers 11,000*?3= ?33,000 per week Strengths and weaknesses of competitors Strengths Driving growth: Retailers are reacting to the consumer wish to have access to better quality food and less time preparing it. With the effect of recession consumers have changed their purchasing behaviour and increased purchases of low cost foods and the variations of products. In addition, consumers have started eating out less and started considering having home cooked food. Therefore, consumer’s expectations are changing more rapidly than before. This is an opportunity for the convenient sector to continue to provide the customer what they want rather than what they can produce. Weaknesses Reducing growth With the effect of rising taxes, spending cuts and rise in interest rates consumers have reduced the amount of spending, hence consumers look for lower price goods with lower quality. However, low price value range products will still attract the consumer’s attention, resulting in a threat towards low cost retailers. Overall, customers are now more price sensitive and tend to shop around more to get the best value for money. Customers profile The current customers are within the age group 18-24 who consider convenience to be a priority with a variety of products available and the opportunity to socialise. Customers lack the brand identity of the store and store appearance is not important to them. Customers are immediate buyers. Current customer profile Gender Male or female Age 18-24 Customer Immediate buyers or convenient is a priority Employment status Studying or working (lecturers) Transport Tram/bus/car Travel to work Tram/bus New customer profile Gender Male/female Age 18 and above Customer Social, immediate price sensitive shoppers Employment status Studying or working Transport Tram/bus/car Travel to work Public transport Appendix 5 Macroeconomic PEST Analysis for convenience sector in UK Political Economic Competition guidance Competition laws Bands of products Advertising Taxes Increase in fees Social Technology Healthy eating Variety of products Augmented products After services Bar-coding CCTV Self service Cloud (customer info) Competition has become a major element within the convenient sector. Therefore, competition guidance has to be provided and make sure that the stores are not taking advantage and are affordable in anyway. This is where the competition laws are taking into account. Certain products have been band for several reasons, either for the good of the consumers and for the environment. The retailer needs to sell products under the code of conduct and not take advantage. Advertising needs to be up to standards that it does not mislead the consumers. Moreover, prices should be fair, affordable and must not rubbish competition. In terms of economic, the increase in VAT in January 2011 has had a severe impact towards the grocery sector. Consumers have reduced spending significantly and tend to shop around for products that they will save money and will gain value. The increase in university fees will have an effect towards the sector as well. The reason why is because the cost of living is going to increase significantly. Banks are increasing interest rates; therefore the cost of borrowing is going to increase. The convenient sector is in need to focus on the augmented product in terms of creating the value for the customer. Consumers now within the 21st century have become even more health conscious than before. With the effect of the economic issues, stress levels have increased as well. Therefore, this is an opportunity for the convenient sector to provide additional services such as products, which are less harmful to your health. Having a variation of products will enable the customer a greater shopping experiencing and also a competitive advantage. Technology has increase drastically within the 21st century. Nowadays within all different sectors technology has taken over what a human is capable of doing. This may be a cost effective approach, however retailers must not forget the necessity of keeping customer satisfaction levels high in other words customer retention. The student express shop tends to struggle during certain times of the day due to lack of tills. During the period of 12-1.30pm the store tends to have continuous long queues. Therefore, it has been suggested that customers would prefer more tills or an introduction of self-service machines to increase the speed of their shopping. Appendix 6 SWOT Analysis for the Student Express Shop Strengths Affordable Location University Payment method Top 100 list of convenient store Weaknesses Brand identity The name Target market Opportunities More variety Improve atmosphere Augmented products Target market Threats Boca (next door) Tesco (more variety) Competitors Strengths Recently the student express shop has been listed in the top 100 convenient stores in Nottingham. The rankings were allocated according to the location and transportation links within the area. In addition, the store offers a certain amount of products at affordable prices with the effect of major in store promotions. The current target market is within the area of Nottingham Trent University City Campus and those who pass through using the tram. The competitors around the area, which are Boca and Premier Inn, do not offer a variety of payment methods, therefore the student express shop tends to have an advantage by accepting card payments however, there is a ?0.30p charge below ?5. The closet cash point is with the Student union, but customers would not want to go looking around for cash points when they have the opportunity to pay by card. Weaknesses After examining our audit results, the customer profile was much clearer. Nottingham Trent Student Express Shop tends to follow a very generic theme, as the target market does not shop because of the appearance. Customers were asked to define the student express shop as a customer, and several customers struggled to identify the brand image. Therefore, there is need to build a brand image for the customer to value and also to build the stores name. Secondly, the name of the store tends to focus on demographic segmentation. This is one on the major weaknesses the store faces, as they are clear that they want to target a certain customer, which is “students”. In addition the target market is very limited, therefore using the demographic segmentation limits the opportunity to a wide audience. Opportunities In recent times. The level of stress has increased and consumers recommend that convenient store stock more healthy selections of products. Currently the student express shop does not really consider such events. There are encouragements towards the sweets and chocolates and minority towards the other products. As mentioned above the image of the store needs to be transformed so that the customers has some knowledge towards the store and are able to picture what sort of brand it is. In addition, a new store will be opened using behavioural and psychographic segmentation to target a wider audience in a location where there is continuous movement from all backgrounds. Threats The retai9l business faces certain threats. However, the main concern is the competitors within the area. Competitors who have a high market share tend to win over customers preferences and expectations by offering a wide range of products and services. Especially within the grocery/ convenient sector, if customers are not satisfied with the quality of the product and service available they tend to move to other retailer who will provide that. Furthermore, it is vital that the store focuses on the augmented product and retains their customers rather pushing them away to competitors. Marketing assets The student express shop is owned by Nottingham Trent University; therefore, the store has an advantage in terms of sponsorship by the university. However, many years back the store used to offer brochures to the targeted market on the special promotions in store. The current strategy of the in store promotions is effective; however there is need to transform the marketing mix by using other means of promotions to reach a wide audience in the effect of a new store. Appendix 7 Conclusions and Recommendations Segmentation The Nottingham stores are a convenient store that sells products to customers who prefer shopping under convenience even though the price is higher than other retailers. According to our retail audit and information received from the manager of the store, the current customer is: Gender Males/female Age 18-24 Employment status Working/studying Spending on average ?3 Buying habits Immediate shopper/ convenience Where else the shop Larger supermarket (Tesco) From the information provided through our retail audit, it can be identified that the current store is lacking a wider audience. It is just focusing on the current market that work and live around the area. As is evident in the table above, the store has segmented focusing on an age of 18-24 and through an occupation such as working and studying within the area. Therefore, the store has segmented through demographic segmentation. Appendix 8 Positioning Positioning is not what you do to a product. It is what you can do to the mind of the prospect. Customers know where to shop. They know where they will get the best deals and value for money. Therefore, it is vital that “The Express Shop” needs to be in the mind of the consumers. As presented within the main document, the positioning maps are describing each store in the mind of the consumer identifying quality and price. Through the results and observing the position map, The Student Express Shop tends to provide expensive products that are lacking in quality. Observing the local market and the results received from the retail audit, the Express Shop will be transformed offering further improvements in quality at a fair price as well. Therefore, the positioning map below provides a greater understanding of how the store will be transformed using the methods of segmentations and providing the customer what they require rather than what the store can produce. Appendix 9 Location The Nottingham Trent Student Express Shop is located within the area of the university. However, as mentioned above due to the fact of demographic segmentation limits the opportunity to a wide audience, there is need to shift and open a new store within the same postcode. The new location is based with the prominent location of Nottingham City Centre. The reason why the location was chosen on the corner of Kings Walk and Forman Street is because there is continuous movement on the street and there is an opportunity to target our new customer profile. In addition, the current store is lacking the brand image as several individuals responded that they have not heard of the store. Appendix 10 Price and Products According to IGD (2010) report, for a retail business to be classified as a convenience store they should stock up at least seven of the items listed below. Household / Non-food National lottery Milk Newspapers / Magazines Snacks Soft drinks Tobacco Alcohol Bakery Chilled food Confectionery Fast food / Food-to-go Frozen food Fruit / Vegetables Health & beauty Therefore, majority of the stores within Nottingham tend to have almost all of the products mentioned above. However, at present customers have become more health conscious, hence the need to provide customers products which are less sweet and not a burden towards their health. Currently the Student Express Shop has basic products and tends to mainly focus on products, which customers purchase for the sake of it such as sweets and chocolates. Below in the store environment section you shall have the opportunity to observe the store layout as a diagram representing what products the store stocks. According to the manager of the store, customers within the area are allocated to the 90% of the current sales. Customers currently purchase products for day to day purposes, however there is need to transform the range of the products and offer the customer a variety so that the store shall become within the position of the mind of the consumer and shall follow the position map where we are aiming to be at. As a convenient store, the prices of products tend to be much higher than any other supermarket within the area. The reason why is because defined as convenient, consumers are not likely to travel further to purchase the same or similar product which will cost them 0.50p more. This is an advantage the store has. The store focuses on in store promotions however; customers have mentioned that the store is much more expensive than Tesco for example. For that reason, strategies have been examined and have concluded to proceed and use the following pricing strategies: Promotional pricing: this is a common application used by the retailers in the convenient sector, however it is important to continue to deliver value for the customers. Nowadays customers have become price sensitive therefore, they tend to shop around more to get the best deal in town. Psychological pricing: this is an approach used by the retailer to contribute towards the customers minds for example charging pricing by not rounding it off such as ?1.99. This approach is used in conjunction with promotions to attract the customers and create the image the customer should have towards the store. Appendix 11 Customer service “Customer service is the sum total of what an organization does to meet customer expectations and produce customer satisfaction. Having an effective customer service department enables relationships with the customers. Any complaints and disputes can be resolved accordingly if there is a department to handle such information. Within the non-affiliated independents who are contributing towards the market share tend to be all family owned. Whereas big chains such as Tesco have franchised out therefore, customers would expect to have an effective customer service. Moreover, you would not expect to have a customer service department in a non-affiliated independent store; nevertheless, you would expect to have employees who take responsibility. Appendix 12 Store Environment Customer want an environment where they are able enjoy their shopping with the chance of have a wide range of healthy products. A convenient store runs at a much smaller scale than the bigger supermarkets, hence the range of products is not going to be comparable. The store currently has a generic theme towards the image and the layout of the store. The way products are placed is incorrect and according to customers, they mention that the store mainly stocks sweets and chocolates and hardly focuses on other basic products. The music that should be played is not something, which should be loud and tear someone ears apart. Music should be played in a moderate manner and should be liked by all age groups. Preferably the radio should be on rather than specific CD’s. Several customers mentioned that they always have to stand in a queue and that it is very time consuming. Therefore, taking into account the health conscious of the consumers, we have transformed the store layout. Before in the chocolates section, consumers always purchased unnecessary sweets while they are waiting for the tills. provide and adapt to our customer’s lifestyle. Below is an example of how the new stores layout will be. As this is a corner shop, we are able to attract customers from both ends. Appendix 14 Sustainability Property Design Running costs locations Supply Chain Transport Packaging Sourcing After Use Products Selection Design Innovation After life Customer Service Carrier bags Recycling Awareness Response to social pressure It is very important for retailers within the 21st century to start going green in everything they do. Every sector not just the convenient sector is considering such an event hence; it is vital for the environment. Recently, majority of the supermarkets have started charging a certain amount for carrier bags. This effect is being used to reduce pollution and the move away from products that cannot be recycled. Efficient lighting is always important within a retailer. Therefore, energy saver bulbs will be used throughout the both stores and this will have an effect towards the end of month bill on electricity. Fridges and freezers are also supposed to be turned off when not in use as well as the heating. Several suppliers have started replacing packing of their products for example the salad boxes are being transformed from plastic to cardboard. In addition, bins shall be located outside the store to keep the area clean. Overall, the express shop will be conducting practices under an ethical green environment by using electricity efficiently and taking into consideration the impact it has on the environment. Appendix 14 Marketing Communication Marketing communication is one of the major elements in bringing in customers to the store. Through our audit results, customers lacked the knowledge of the store; as a result only 116 out of 250 mentioned they have shopped at the store. Therefore, the objective is to increase to brand image to the customers of Nottingham especial in NG1 area. However, the store currently focuses on in store promotions only and has not re-introduced other promotions to the store. A brochure, which was dated many years back was examined the only time consumer managed to get some sort of discount in regards to shopping at the store. Examining the current marketing assets, led to transform and reinforce additional methods to target our customers. Below is an example of a flyer that we will be handed out to the local market. This will be done to increase the awareness of the new store opening and to mention that there will be special offers for the opening. The current fascia of the store needs to be redesigned, therefore below is an example of how the 2 stores will have exactly the same fascia and on the windows advertising the promotions of the store. This is an advantage small businesses have reason being they have control over their window displays whereas the big chain supermarkets windows are all standardised. In addition, an example to add is an Indian restaurant, which opened 2 years ago within the same post code and are located in the prominent location Nottingham City, however they have managed to increase the customer awareness of the store by offering several promotions that are affordable. Moreover, the restaurant has managed to attract a wider audience by having offers printed on the back of receipts on cinema tickets. This is a perfect example, which we will also try to adapt for the express shops. Although as the university owns the store, it will be possible to provide vouchers behind receipts when books are lent out and also when payment is made. Certain promotions would be for example buy one get one free. Having conducted this sort of communication with the customer, we will increase our possibilities of reaching a wider audience and a profitable business. Throughout the year there will be promotions of the products being stocked within the store. This is to keep the customer happy and continue providing the value the customer deserves. The Nottingham city council was contacted in regards to prices to advertising on certain areas within the NG1 area. The main roads to have the store advertised are on the Milton Street where Waitrose is located and on lower parliament street where Spar is located. The table below provides an indicator of how much it will cost periods. Advertising Rates City dressing: Banners and CIPS Location 2 weeks 4 weeks Maid Marian Way ?4825 ?6075 Guildhall ?1544 ?1944 Neighbourhood ?9264 ?11664 Boundary ?5211 ?6561 Milton Street ?1930 ?2430 Lower parliament street ?1158 ?1458 London road ?3860 ?4860 Website Advertising on Nottingham City council Website gives the opportunity to have a front-page banner with link to the store for ?400 per fortnight. Advertising through the Internet will also be an opportunity to target an audience. Although there will be no home delivery but just to emphasis the store is located on the list of the other store. If customers types in convenient stores in Nottingham “ The Express Shop” should be listed. Additionally, well will advertise through social media website such as Facebook and Twitter within the NTU groups. This will have no cost but it will reach out to our audience of the new store opening and the promotions which are on offer. Appendix 15 Human Resources Currently the store hires individuals who are part of the university to participate part time and full time. However, this approach will still be undertaken within the current store to continue to build the relationships and skills on their CV’s. In addition, individuals from all backgrounds will be considered, however employees within the store will need to have an efficient background on how to handle customers. The employees will have to have certain skills and experience working in retail so that they are able to take the responsibility on running the store. In addition, applicants wanting a position will be offered training to become an effective sales representative. Appendix 17 Sale forecast Sales Forecast based on the current 250 applicants and our new targeted market. 2011(current) 2012 (with changes) 2013(with changes) 2014(with changes) Turnover 45,240 312,000 468,000 624,000 Currently the store is using demographic segmentation therefore, based on the 250 questionnaires the figure for 2011 stands at ?45,240 at a minimum of ?3 average spend. In 2012, the turn over is expected to increase to ?312,000 with the effect of targeting ng1 area as our new customer profile expresses having 2000 customers a week. In 2013 we aim to increase to 3000 customers as the image and awareness of the store is in the mind of the consumers. Therefore, every year we are expecting to increase the number of customers entering the store weekly. Communications expenditure Billboards and banners Milton street (2 weeks) Lower parliament street (2 weeks) ?1930 ?1158 Advertising on Nottingham City Council Website (Fortnight) Advertising on Facebook and Twitter ?400 ?0 Flyers for new store (5000 quantity) ?167 Total ?3655 The student express shop currently does not advertise any products externally and tends to only focus on in store promotions. Therefore, as shown above there will be advertising on lower parliament street and on Milton Street due to the fact that the store is located within the location and it is the most used street by our targeted market. Flyers will be handed out as well, increasing the awareness of the store to the consumers on the offers available. Read More