Retail Marketing - Essay Example

of Retail Marketing Introduction Retailing is a very important concept in the current business world though it keeps on changing and taking new forms every now and then. The distribution of consumer goods and services starts with the producer and moves through various channels to reach the final consumer. The channels that the products go through between the producer and the ultimate consumer involve people called middlemen also known as retailers. Retailing is hence described as the convincing set of activities or events that ensures a product is sold to the consumer for their final use and to satisfy their needs. This is the process of matching the personal requirements of consumers and the product from the producers. Retailers break the bulk for the consumers. On the other hand, one stop shopping is a concept that allows a collection of products to consumers at one location. The ideology behind this kind of retail development is to ensure convenience for customers since their needs are usually varied. It's also beneficial to the business as it will be able to sell more. Concept of Retail Market with Reference to One Stop Shopping A retailer is an agency, a person, or an institution that is influential or very active in ensuring that merchandise or products are available to the final consumer (Kaufman 2006). Retailers often carry out critical tasks that ensure the products are attractive to the clients and that they fulfil the need that they are intended for. By this, the retailers are able to anticipate the needs of the clients, develop a variety of products, collect market information and obtain financial support (Thorne & Mackey 2007). There is a common assumption that retailing involves the selling of products in stores. This is partly true as the phenomenon also includes the selling of services like in a beauty parlour, car rental and restaurants. One very important function of retailing is providing a variety of products at one place for the clients. Due to this characteristic, there has emerged a trend that has been described as One-stop shopping. As identified earlier, this is a kind of business where an assortment of products is ticked under one building or a variety of goods are offered in one place. One-stop shopping has developed rapidly due to the changing societal needs to save time, find convenience and minimize movement (Kaufman 2006). The contemporary society now finds this trend conducive with the current lifestyle since shoppers are able to fulfil most of their need at once in one place. This therefore means that an appropriate assortment of products is a must and that the desirable mix of stores has to be collected together at one convenient spot (Samli 2003). One-stop shopping is associated directly with the number of hours people spend in stores shopping The use of a product's best characteristics within the promotions in the market is still very appropriate but it's evident that due to competition and the needs of clients, something more than just market campaign has to be done (Thorne & Mackey 2007). The service industry has been spearheading the changes and has become the primary criteria that clients use to determine where to shop. Better service will keep the clients coming back. The tendency has naturally developed and influenced the product stores to adopt offering a variety of goods and services under one umbrella (Kaufman 2006). This benefits the customers and sellers. The location of a business unit is critical. Producers usually consider different factors before they can decide on where to locate their premises for stores. Some of them include market availability, factors of production and security. Retailers base their location of demand, supply and store image factors. The number of operation units is usually very high in a one stop shopping centre. This is so that the centre can be able to meet the demand and cover a wide geographical area (Thorne & Mackey 2007) In a shopping centre, retailer assortment of merchandise is critical. It involves both depth and the wideness of goods and services that are offered. Retailers therefore should be able to select a combination of a variety of products from different categories. This is because the variety of products should be substitutable with several brands being available as well as different pricing. The difference should be that which is evident like flavour, colour and so on. The assortment is usually based on the experience of the retailer and some organizations use detailed analyses of the past trends and projections of the future (Samli 2003). There are several factors that should be considered when the retailer is developing an assortment plan for the store; profitability of particular products, compatibility with the current merchandise, layout and extent of compatibility. For instance, FoodWorld, which is a leading food supermarket located in a certain one-stop shopping centre deals with multiple product classes together with all the available brands, stock keeping units and physical attributes to be able to meet the requirements of their customers and keep up with the competition (Kaufman 2006). While a grocery in South India, Subhikha stores, has an extraordinary assortment of only the brands regarded as fast moving goods. They do not stock all the possible and available types found in the market. The assortment strategy is guided by size, location and business image of their chain stores. The one-stop shopping centre businesses are very beneficial in a number of ways. First is the revenue. Planners are able to obtain a lot of revenue from the same clients than their competitors. This is because of the idea that when a customer walks into an insurance firm for services for instance, regardless of how the client trusts the firms, they can only sell the insurance. However, if the client walked into a financial institution that offers refinancing services, prepared incomes tax, prepared financial plans and financial advices, then the customer would be able to discover more services that he/she needed and hence, order them immediately considering that they will be offered at the same location and probably consecutively (Samli 2003). Second, customer loyalty is easy to achieve. When a higher service level is delivered, consequently, a higher level of customer trust develops. Third, there is convenience; if a customer is able to access a variety of services or collect several products in one location, then this saves a lot of time that would have been lost by shifting from one store to the next in search of other alternative goods (Cathy et al 2006). Retailing in one-stop shopping has shown considerable success over the recent past with many retailers now going even international and some operating online. Though larger firms are able to offer more corporate support and organization for their deals, retailers on the other hand are in general more able to synchronize their services in accordance with a customer's requirements and position (Thorne & Mackey 2007). The larger corporations also face the problem of higher bureaucracy and stringent policies of the firm making them to find it hard to adjust and match small retailers in offering personalized services to the customers. Part Two Bridal Shop Offering a one stop shop for bridal accessories is a very viable business idea in a busy one stop shopping centre. It's known that women like to go shopping; therefore, having a shop for mothers, maids and ladies accessories is vital in any shopping centre. The shop will embrace the idea of variety; that is, the shop will stock everything else apart from wedding gowns. The products will range from wedding accessories like jewellery (rings, necklaces, hair bands etc), shoes, socks, veils, flowers, gloves, wedding suits and huts among others (Samli 2003). The shop will in general take care of bride's needs, the groom, flower girls, bride's maids and brides' mother. Brides Place will be the name of the business and the name will be registered as an incorporated company co-owned Fred Jones and Sharon Struts. The objective of the company will be to offer basic one-stop shopping purchases for the ladies of a bridal party when the bride gets her gown. The business also intents to vigorously engage in business for the next twelve months so that by the end of the third year of operation, the sales would have increased to more than double the first year (Cathy et al 2006). Company Summary Brides place is a new retailer in apparel and boutique products that will offer an assortment of the product offered in other shops. Since most of the bridal shops focus on providing the bride with the wedding gowns, the uniqueness of Brides Place will be that it will besides offering wedding gowns, offer everything else that accompanies the event including dresses for flower girls, veils, and head pieces, mother of the groom attire, footwear and jewellery (Cathy et al 2006). To meet the goal of assortment, the company will aim at providing a wide selection of styles, designs and price ranges that will be of very high quality and obtained from reputable suppliers (manufacturers and designer). Bearing in mind that many shoppers are attracted by visual perception, the business will have a very nice show room and the front will have an eye-catching display of the apparel. Research has indicated that most customers do not always carry a fixed shopping list unless they are doing it for a very important occasion like a wedding (Samli 2003). For this reason, the business will build a situational appeal in its displays so that the displayed products will always be in the mind of buyers in that at any time a wedding is mentioned, they will think of the Brides Place. The store layout and the catalogue system will be very important tools for marketing. This is because visual objects attract people quickly and draw their attention (Cathy et al 2006). Marketing strategy The dresses offered for sale will be made according to order strategy. However, the store will also have ready made dresses which the clients can come and choose from (Cathy et al 2006). Each and every style will have sample dress in the store for fitting and once a decision has been reached by the customer, then the seller will order the dress according to size and colour plus other specifications that would be made by the customer. Remember that the floor sample will still be up for sale in case a customer likes the dress the way it is. When a dress is ordered on the basis of made to order, the client will be required to make a deposit of fifty percent of the price which will be a non-refundable fee. Once the dress has been made, then the balance can be cleared and full payment is due as the customer picks the dress from the shop. Other products that require special or varied designs are veils and head pieces and they too will be sold in a similar manner. Other products like shoes and jewellery do not usually have much complications or specification and therefore, they will be sold on the floor according to fit and likeness (Cathy et al 2006). As a retailer, the business will be very close to the clients due to the direct interaction that comes by direct selling. In this regard, the business will be in a very good position to efficiently communicate the response from clients and also the change in taste and preferences of the customers to the suppliers and designers. The business will be offering value for money and therefore, the customer's requirements will be first. There will be no compromise on the quality of products sold or obtained from suppliers. The major communication channels will be catalogues, magazines and the internet. The apparel industry is very vibrant and it has gone online with a thud. It's estimated that last year alone, the United States online sales of dresses was about $18.5 Billion. Nonetheless, when it comes to sensitive dresses like wedding gowns, many shoppers preferred to take a stroll in the stores where they can touch the fabric and fit the dress. This is the basic reason why Brides Place will focus on advertising through magazines and the internet but will still operate physical stores and show rooms where there are clothes on display (Berman 2006). Many shoppers are also familiar with the internet and it has become a trend that people will window shop on the internet first before seeking out the physical store. In fact, it's been discovered that a dress is the most cross-channel purchasing type. In order to overcome the resistance by clients to make actual purchases on-line, the business will pioneer the use of visual tools, personalize the services and adopt a liberal delivery and return policy. The business will also offer a small token to online shoppers to fill out information regarding their likes, preferences and tastes in a customer database. The business will exploit the fact that everyone likes being appreciated and as a result, the clients who frequently visit the website will be sent emails of appreciation, magazines and newsletters (Berman 2006). Internet marketing has been very important over the recent past since it is the fastest growing media in the world. Businesses are turning on-line because of the ability of this media to reach a wider audience or clients. On the other hand, being a direct method of selling, there are a lot of sales that can be seen this way. Then considering cost, the internet is cheaper compared to other media that promoting sales. Since apparel and accessories are currently advertised through the paper, electronic media and the internet, then selling on the internet is appropriate (Berman 2006) Costing Models: the business intends to have a net income of about ten percent of the sales. The start up capital will be obtained from the owners and a long - term business loan. The cash at hand will be 23 percent, inventory 30 percent and expensed facility and leasehold development is 19 percent. The total start up expense would be $ 36, 250; the total start up assets would be $ 58, 950. Capital will be $ 20,000 from each of the co-owners (Fred and Sharon) and a liability loan of $ 55,000. There is an outstanding bill of $ 1,000, making the total funding to be $ 96,000. Pricing models: the business will adopt valour for the money model. This is very critical in the wedding context because many wedding planners would want the event to be a perfect one; one that would spark memories and cause emotions. The values of the clothes to be worn on that event are valued. In this regard, the business will offer special fabrics with the best quality (Berman 2006). The jewellery will be original and not imitated or fake. Meaning that if it's gold, then it will be gold; if it's silver then it will be silver and so on. This model is deemed workable by the business since it offers the clients the freedom to pay. In most cases, customers would want their freedom and products like jewellery and wedding dresses are critical; value has to be assured. The business will assure value by allowing customers the freedom to purchase and expect value from the business. Customer expectations will be created since clients will have paid about fifty percent of the dress before it's designed and brought out (Berman 2006). The business will also have no otherwise but to deliver the promised quality or value for money. Through this means, the business is expected to win customer confidence when the value is delivered just as promised. Sales forecasts: The following statistics show the expected sales for Brides Place. The prospective sales are a reflection of the sales to some extent; more than 1% of the total customer base is in King County. The forecasts are based on the assumptions that there would be approximately 12,000 wedding purchases per year; each of the weddings will have at least two moms; there would be at least four bridesmaids in every wedding and a flower in about 65% of the weddings. Taking a 1% estimate is very sensible considering that this would be the first year of operation. There are about thirty shops in King County that are engaged in offering some or even all the products that Brides Place will be selling (Samli 2003). Based on the assumption that the customer base would be evenly divided across the shops, Brides Place would then secure close to 3.3% market share. However, since this will be the first year in business in this region, this fair share is improbable. It's anticipated that that fair share will be achieved by the second year and that by the third year; the market share will be far much higher than the three percent (Berman 2006). This is likely to happen as the Brides Place gains more popularity in offering bridal accessories, maid's attire, flower girls attire and mother attire as well all under one umbrella. To breakdown the sales forecast, the first year's goal is to sell about 160 apparels to wedding parties or about two events in one week. When dresses are ordered, a deposit of fifty percent is paid. When the client collects the dresses, the remaining percentage is cleared. For the purposes of projection, there is an assumption that the dresses will be received in two months (Berman 2006). For instance if a client orders a dress in February for $ 200, he/she pays $100 which is recorded in February's sales and when the dress is picked in April, the other $ 100 is recorded in April's sales. The forecasts are hence grossly reflecting the sales of that day (Samli 2003) For the cost of sales, the clothes are assumed to average at a wholesale price of about 47.5% of the retailing price and the bridal accessories will have an estimated average cost of about 32% of the retailing price (Berman 2006). Clothes definitely have the two months lag phase in the cost of sales since their inventory lasts at least two months Break Even Analysis In order to carry out a break even analysis, the following assumptions were made; 1. That there would be a monthly cost of operation which would be obtained by dividing the expenses by twelve 2. That for every item that would be purchased from Brides Place, there would be a variable of about 42 percent in the retailing price of the item. Break even Revenue per Month = $ 22, 435 Assumptions Variable Cost average = 42% Estimated Fixed Cost per Month = $ 13, 139 Losses are expected during the first year of operation because; it has to take some time before the business attains the right momentum and develops shoppers' traffic. However, once the sales improve, the outcomes will be positive since many other expenses will still be unchanged. In fact, there is much anticipation that the sample inventory cost will drop in the near future. Some suppliers and designers will also offer discounts on some inventory or even offer free sample once the business has established good credit terms and corporate relationships. As a consequence, the annual expenditure for sample inventory will drop (Berman 2006). Conclusion Provision of one-stop shopping services can be very beneficial and challenging for businesses and especially for retailers. Smaller businesses should remember that they will still be faced with the same legitimate consequences concerning information sharing just like other larger corporations. The larger firms on the other hand should realize that the amount of energy needed for coordinating an individual customer's need is vast. It is true though that businesses can benefit from the idea of one stop shopping. References Berman K (2006). Retail Marketing and Management. A Tactical Approach. Pearson Education Cathy H, Doherty, N & Ellis-Chadwick F (2006). Retailer Adoption of the Internet - Implications for Retail Marketing. European Journal of Marketing. Vol. 34 Issue 7 pp 894 -934 Kaufman C.F (2006). A New Look At One-Stop Shopping. Model advance to harmonizing shopping Hours and customer plans. Journal of Consumer Marketing. Vol 13 Issue 3 pp 5 - 23 Samli C. (2003). Strategic Marketing for Success In Retailing. Greenwood Publishing Group Thorne K & Mackey D. (2007). Everything You Ever Needed To Know. A One-Stop Shop for Everyone. Kogan Page Publishers Read More