ASSIGNMENT OF BRL-011
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(A) Short Type Questions1. Who are the major beneficiaries of category management and why?
2. Explain the concept of a Balanced Scorecard witb the help of a suitable diagram.
3. Explain the concept of perception in influencing consumer behavior.
4. Distinguish between the following:
a) Merchandise on hand and Merchandise on order
b) Horizontal price fixing and Vertical price fixing
c) Deceptive Advertising and Bait and Switch Advertising
d) Financial goals and Profitability Goals
5. Write short notes on the following:
a) Dimensions of customer loyalty
b) Inventory management
c) Achievements of Pantaloon Retail
d) Vertical Price Fixing
6. Briefly comment on the following:
a) "Probably with the success of an isolated store, many others want to open stores selling similar product lines to cash in on the shoppers' flow into the area."
b) "Earlier retailers used to outsource certain functions to an outside agency because they were not experienced in the said function or were finding it uneconomical".
c) "All retailers who are involved in sale of merchandise makes an implied warranty of merchantability".
d) "The human resource compensation plays important role in the motivation of personnel".
7. Explain the organization structure normally used by a national retail chain.
(B) Essay Type Questions
8. Explain the concept of store planning and its elements.
9. What are the major purposcs of public relations exercises? Explain the advantages and disadvantages of the same.
(A) Short Type Questions
1. Who are the major beneficiaries of ca tegory management and why?
ANS: 1 - The Customer Wins
Firstly, the customer. Without whom no business exists. Category Management has been long rumoured to be dead, yet the first principle of Category Management is meeting the customer's needs. If meeting a customer's needs is dead then Category Management is too. Yet, of course, giving the customer what they want is paramount to bus iness success and Category Management is no different in wanting to achieve this.
Wider range, better quality, improved availability ... whatever the customer needs, Category Management should provide. Through shopper understanding, leading to insights, a Category Manager aims to identify catego1y opportunities and deliver them, better & quicker than their competition. For example, from the innovative - customers struggled to read maps, the sat nav was born, to the evolutionary, Mum wants to buy bigger packs of fish fingers - larger packs were produced, to the revolutionaiy plant-based explosion.
Meeting customer needs is the first benefit of Category Management and by doing it better and quicker than your competition, your business thrives. First, the challenge is to have a desire to seek the infonnation from the customer through focus groups, mining data or comparing yourselves to your competition, ai1d so on. Then, understai1ding the info1mation, and then delivering a solution that meets the customers' wishes.
From my own experience as a pizza buyer for a supermai·ket, microwave pizzas were a wish from the shoppers, because of the convenience. However, the launch failed because what we gained in speed we lost in product quality by not having a crispy base. Lesson learned.
#2 - Great Category Insights
Category Management is largely a data-driven concept. Using information to identify performance and therefore opportunities. In our Categ01y Management training course, we teach the Leainers that there a re 3 b road aims of Category Management; 1. Identify category opportunities, 2. Sell the category opportunities, and 3. Land the category opportunities in-store. Great Category Managers do these 3 aims regularly, with success, and achieve huge improvements in their catego1y performance.
The challenge with Category Management is the abyss of data. There is no shortage of data about your categories in the information age. Getting lost in the data is an occupational hazard for any Categ01y Manager and using the 73% funnel can help. Plus, approaching data with a healthy amount of disregard for data that leads to no insights, only providing observations, remembering that 'information without application is just entertainment'.
#3 - Understanding the Shoppers
Win over the shopper with an easier-to-shop range, better catego1y communication, easier to open packs, and more. The list is endless. If you make these changes and make them successfully you achieve great market share, sales, and the all-imp011ant profit. Catego1y Management drives us to know our shoppers better than the competition. Pattly through a thirst to dig deeper an d deeper into the data to know why, and also tlu-ough a relentless desire to know what the shoppers want next. Innovate before the competition. Be first.
#4 - 'Know Thy Spend'
Since Category Management arrived in the late 1990 's retailers and suppliers have been plagued by an irritation that their promotional plan is a carbon copy of yesteryear. Yet transforming it into something different has been always on the hard-to-do pile. Catego1y Management encourages us to understand where we spend our investment and what we get back in return. The millions spent on posters hanging from the ceiling, & floor stickers, and yet the shopper looks from above two feet above the floor to eye height and nothing higher or lower. Good investment? Probably not. Creating a p romotional plan that achieves a positive return on investment struts with throwing out what we did before and then identifying an objective. What do we want the shopper to do differently? Do we want them to buy more? Yes, but if we promote x product, do they just move their spend to y, and does that benefit us? We need to understand cannibalisation. If we want the shopper to t:J.y om new product, do we want to att:J.·act new shoppers to the category, rather than sell to our existing shoppers? Yes, then how do we market to new shoppers. Those that aren't already buying from the category. Where do those new shoppers shop? The tough questions need to be asked and answered if we are to achieve a positive return on our promotion spend. Creating a promotional plan that is objective-dliven, measmed, and includes shopper metlics is the holy grail and that gauntlet should no longer be ignored by any Category Manager.
#5 - Hungry For More
Categ01y Management started with a simple principle, to meet the shopper's needs better, and then became its own subject, its own philosophy, its own topic. From simply hying to understand from the shopper - what can we improve, and then doing it, we became more sophisticated in how we saw every aspect of Category Management, and so the shopper.
As an example, the shopper, for us at MBM, became the preparer, eater and shopper. Mum buys the fish fingers - shopper, Dad cooks the fish fingers - preparer, and the kids eat the fish fingers - the eaters. By k nowing this, we can now ask different questions of each of the 3. What are their baniers? And their motivations? Dad might want to see the cooking insti·uctions more clearly so that he doesn't have to think too hard about cooking whilst helping the kids do their homework. Mum might want healthier fish fingers to feel less guilty about what she is feeding them. And the kids like the packet with Captain Birds Eye because they have seen him on TV.
This perspective makes the world more complex for a Category Manager, yet it also provides an edge over the competition.
#6 - Transparency with Suppliers
Agreeing on category objectives, measuring perf01mance against those objectives, and having tools like fo11nightly dashboards really helps to galvanise the retailer and supplier teams as one unit moving together towards common goals. Yes, there will always be adversarial discussions on costs. The impmtant pait is that they ai·e n ot the only conversations. Discussions about saving. 1 % on costs can instead be dominated by +5% improvements in sales by delivering on the XYZ opportunity together.
Categ01y Management enables suppliers to play an important role in the category because they can be a beacon of shopper understanding. As Teny Leahy, the fonner CEO of Tesco said to his board, 'With the voice of the customer, driving our change, we cannot lose'. A supplier that understands tl1e category shoppers the best will become the leading supplier in that category. Also, they will achieve the 3 legged stool analogy of winning for the supplier, the shopper, and the supennarket.
#7 - Category Definition Helps
The benefit of Category Management is the definition. By adopting the principles of Catego1y Management you define your category. Category Management is about breaking down tl1e offer into manageable groups o f products. These groups need to be shopper solution groups, with an eye on practicality.
For example, a group of p roducts that solve is a shopper's solution to the problem of - I want a meal tonight that I don't need to cook. The category is ready meals. Yet, a frozen ready meal could also be in that category. So we have to accept some practicalities of things like supply chain and citing in-store. This then defines the categ01y to be 'Fresh Ready Meals'.
By having a category definition defined by shopper solutions, we have a shopper-focused group of products. Products that we can manage, identify objectives and measures, and work towards improving category performance.
2. Explain the concept of a Balanced Scorecard with the help of a suitable diagram.
ANS: A balanced scorecard is a strategic planning framework that companies use to assign priority to their products, projects, and services; communicate about their targets or goals; and plan their routine activities. The scorecard enables companies to monitor and measure the success of their strategies to detennine how well they have performed.
The following are the key areas that a balanced scorecard focuses on:
1. Financial perspective
Under the financial perspective, the goal of a company is to ensure that it earns a return on the investments made ai1d manages key risks involved in rmming the business. The goals can be achieved by satisfying the needs of all players involved with the business, such as the shareholders, customers, and suppliers.
The shareholders are an integral part of the business since they are the providers of capital; they should be happy when the company achieves financial success. They want to be sure that the company is continually generating revenues and that the organization meets goals such as improving profitability and developing new revenue sources. Steps taken to achieve such goals m ay include intr oducing new products and services, improving the company's value proposition, and cutting down on the costs of doing business.
2. Customer perspective
The customer perspective monitors how the entity is providing value to its customers and determines the level of customer satisfaction with the company's products or se1vices. Customer satisfaction is an indicator of the company's success. How well a company treats its customers can obviously affect its profitability.
The balanced scorecard considers the company's reputation versus its competitors. How do customers see your company vis-a-vis your competitors? It enables the organization to step out of its comfort zone to view itself from the customer's point of view rather than just from an internal perspective.
Some of the strategies that a company can focus on to improve its reputation among customers include improving product quality, enhancing the customer shopping exper ience, and adjusting the po1ices of its main products and services.
3. Internal business processes perspective
A business' internal processes determine how well the entity runs. A balanced scorecard puts into perspective the measures and objectives that can help the business rnn more effectively. Also, the scorecard helps evaluate the company's products or services and determine whether they confor m to the standards that customers desire. A key part of this perspective is aiming to answer the question, "What are we good at?"
The answer to that question can help the company f01mulate marketing strategies and pursue innovations that lead to the creation of new and improved ways of meeting tl1e needs of customers.
4. Organizational capacity pespective
Organizational capacity is impoitant in optimizing goals and objectives with favorable results. The personnel in the organization's departments are required to demonstrate high performance in terrns of leadership , the entity's culture, application of knowledge, and skill sets.
Proper infrastructure is required for the organization to deliver according to tl1e expectations of management. For example, the organization should use the latest technology to automate activities and ensure a smooth flow of activities.
3. Explain the concept of perception in influencing consumer behavior.
ANS: Perception is the most imp01tant psychological factor that affects human behavior. It is process cons1st111g of several sub-processes. These are stimulus, registration, interpretation,feedback and reaction. The first step is the presence of stimulus, or the situation which an individual faces. This is followed by registration which affects the psychological organs. Thus,the individual interprets (attaches meaning to the stimulus) and learns. Factors like learning help in the perceptual process. Feedback is the foruth element and, the fmal aspect is the resultant behavior of the individual.
Our perception of the stimuli and tl1e situation plays an impo1tant role on our behavior is the critical activity that links the individual consumer to a group, situation and marketer influences. When a person is exposed to a stimuli, he may show interest in the exposure. His attentions drawn towards the object and tl1e ne1ves transmit the sensation to the brain for processing. I nte1pretation is the assigmn ent of meaning to tl1e received sensations. This is retained by the memo1y ( only a pait of the r egistered inf01mation may be retained by the memory). This leads to consumption behavior which may have positive or negative feedback for the individual.
Figure below shows that the individual is exposed to the stimuli. His attention is attracted. He interprets the stimuli and the situation which goes to his memory and, the reactions shown by means of purchases.
When a stimuli comes under the range of sensory pr eceptors, nerve exposure occurs. Most of the stimuli to which an individual is exposed to, is self selected, e.g., switching chann els on TV,skipping pages of magazines, avoiding information that one is not interested in. We deliberately seek and avoid information of our interest. It is done to achieve the goals we aspire for. It is challenge for the marketer to hold the interest of the consumer on his commercials and exposures.
Attention
This occurs when the sensory receptor nerves are activated by the stimuli and, the brain registers sensations for processing. The market offers a variety of goods. It may take us long to go through all of them. Therefore, we selectively choose and attend to products and messages.One may not attend to warnings on cigru-ette packets or, may see the model more than the clothes. The same individual may devote different l evels of attention to the same stimulus indifferent situations. Attention is dete1mined by three factorsstimulus, the individual and the situation. These together or individually play an important role in attracting the individual.
Stimulus Factor There are certain features in a product that can attrnct greater attention. This would be the size, the intensity, the co lour and movement, position, format of the message, info1mation quality, information overload.
By size we mean that if an adve1tisement is on a full page or in column. The intensity is the number of times a message is repeated in a newspaper or a magazine, TV or any other media. Further, both co lour and movement attract attention. An advertisement may be black or white or in multi-colors. It can be shown stationary or in a moving state, which is more noticeable. Position refers to the placement of the object, whether it is placed in the Centrex Morin a corner. Similarly, the 1ight hand page advertisement may be more noticeable than the adve1tisement on the left hand side. Isolation is separating an object from other objects. In isolation, an object may stimulate and draw more attention. Similarly, the fo1mat of the message. How it is presented, what words and strncture is used? A simple format can draw greater attention that a complicated message. The messages targeted at a specific audience can also be very effective. Compressed messages which say more in fewer words can make a good impact. Information quality should be balanced or optimum. All consumers have limited capacity to process info1mation. If a lot of info1mation is given, it may confuse the individual and, he is not able to make a choice. This is known as information overload. With too much infonnation consumers get confused and become frnstrated. They may also experience pre-purchase dissonance. Marketers give relevant info1mation on packages and labels. Infonnation can also be given in brochures, pamphlets,etc.
4. Distinguish between the following:
a) Merchandise on hand an d Merchandise on order
ANS: Merchandise on hand at either the beginning or end of the accounting period is called Inventory. Inventory is the array of finished goods or goods used in production held by a company. Invento1y is classified as a cmTent asset on a company's balance sheet, and it serves as a buffer between manufactming and order fulfillment.
On-Order Merchandise mean items of inventory that were ordered by Merchant in the ordinary course of business as identified by SKU on Exhibit 5. 2(b )(i) annexed hereto, which inventory was not received in the Stores or Distribution Center as of the Sale Commencement Date, but which may be received in the Stores p1ior to the Store Receipt Deadline.
Merchandise is a term that describes items or goods you 're promoting or selling. How you choose to do so requires a process or technique known as merchandising. Companies use merchandising to increase product sales through product design, selection, pricing, displays and packaging. Merchandising also helps companies to determine when, where and how to present their products to customers for optimal sales and profits.
b) Horizontal price thing and Vertical price fixing
ANS: Horizontal price-fixing
Under horizontal price-fixing, the players who were previously competing now collude with one another. They cooperate explicitly or implicitly to set p1ices and market output. In pa1ticular, we call explicit collusion a cartel. For example, OPEC members agree on their members' production levels to keep oil prices profitable.
They may also set discount limits for products on the market. That way, players do not have the opportunity to set massive discounts to attract and divert customers from competitors.
Long story sho1t, in ho1izontal price-fixing, the players act as if they are monopolists. They cooperate with each other to increase mllhial monopoly power and make higher profits. Such cooperation also reduces the intensity of competition in the market.
Horizontal price-fixing aims to coordinate prices for mutual benefits. It keeps mru:ket profits high and reduces the intensity of competition.
Such collusive practices violate antitrust laws, which prohibit collusion Companies deliberately cooperate for their benefit by reducing competition. It hmts consumers because they have to pay higher prices than when the market is operating competitively.
Vertical price-fixing
Vertical price-fixing involves various films in different stages of a supply chain. They may consist of manufacturers, wholesalers, and retailers. For example, an automaker uses it s influence to force its dish·ibutors to follow the manufacturer's suggested retail price.
Another example is resale price maintenance. In this case, the producers and distributors agree on a range of selling prices. If the distributor refuses to sell in that price range, the producer can break the conn-act and stop working.
c) Deceptive Advertising and Bait and Switch Advertising
ANS: Deceptive adve1tising, or false advertising, is any advertising that is false, misleading, or has the effect of deceiving customers.
An ad can be deceptive in many aspects, including:
Price of a product
Quantity of a product
The quality or standard of the item
Times, dates, and locations that the product is available
Infonnation regarding warranties
False facts regarding deals or sales
Confusion over interest rates or other factors
Under state and federal laws, advertising may be deemed deceptive even if the ad's creator didn't intend it to be so. A deceptive advertising claim can be raised even if the ad contains a mistake.
Bait and switch advertising is a violation of consumer laws. It is a type of fraudulent business practice where one party, such as a manufacturer or business, will offer the "bait". This could be a product that is adve1tised at a very low cost and is designed to lure in a customer. Once the customer is attracted, the manufacturer will pull the "switch". The proposed product will no longer be available at the adve1tised price, but instead it will be offered at a much higher p1ice or an altogether different product will be offered.
The purpose of the bait and switch is to convince the consumer to pay much more money than was originally planned. The idea is that the seller has ah·eady drawn the customer in with the bait and will now be free to switch the product without losing the customer.
Consumer laws will allow an aggrieved patty to sue for damages if they are the victim of a bait and switch. A competing business may also be able to take action in comt against individuals who practice the bait and s witch. Consumer laws will hold this fraudulent business liable for false adve1tising, or possibly for trademark infringement.
If the original business is losing profits due to this fraudulent practice, then it may have grounds to sue. However, consumer laws will only allow for another business to take action if the accused business is act ually engaging in a bait and switch practice. If the business is legitimately able to offer the product at a considerably lower price, then they will not be liable for any damages to competing businesses.
d) Financial goals and Profitability Goals
ANS: Financial goals are targets set by an individual to achieve financial milestones or plans. In other words, they are financial objectives that an individual wishes to accomplish within a certain time frame. For example, it could be setting up a fund for their children's education, travel, emergency, health care, etc.
Setting financial goals can help individuals maintain strict discipline while spending. It also encourages savings to attain those goals within that period. In addition, it helps individuals make conscious and informed decisions, especially on investments. These goals also give people more control of their financial decisions and future.
A business profitability goal determines the amount of revenue you need to generate from your business to meet your expenses and tum a profit.
Financial Goal Setting and Your Business
If you plan to mn your business successfully, you need cleat, specific goals in place. It's not enough to say that you want to make a lot of money. That isn't really a goal, since it's not specific and it doesn't include a series of steps to make it a reality.
Bottom-Line Goals
Instead, you need to decide how much profit you wai1t your business to generate over the yeat·. This could be a set dollar amount or a percentage increase over the previous year's sales. If this figure isn't a specific amount, you won't know whether you have reached your goal or not.
Income Goals
Set a specific goal for income and profit for your business. If you determine that you want to increase your profit by 10 percent over the previous yeat·'s figures, then you also need to determine how much more you need to collect in revenue to reach that goal. Patt of reaching your business profitability goal is keeping track of your expenses.
5. Write short notes on the following:
a) Dimensions of customer loyalty
ANS: The identification of loyalty dimensions has already commenced or rather complete and these two are, attitudinal and behavioral loyalty.
Attitudinal Loyalty - can be described as customer's attitude - loyal or disloyal type behavior towat·ds the product of interest. This type of attitude is constantly inclined towards continuous evaluation of competitors brands and the willingness to buy a product. However, this cannot be measured for obvious reasons, as we are unable to quantify the internal attitude of the customer when he/she buys our product or service.
Behavioral Loyalty -On the other hand has been more use:fol to determin e the actual mechanics and techniques of managing the relationship.
In addition and more recently, loyalty has also been identified as Situational.
Situational Loyalty -Has been defined as a dimension, that is measured on the basis of continuous and variety of purchases based on consumption situations. Word of mouth, intention of purchase etc could be used as examples here.
Cognitive Loyalty - Is also a dimension, where a customer actually understands the entire process, consults with peer groups, compares products and services on offer and makes a decision.
Emotional Loyalty-Another important dimension of loyalty, it is a result of customer's feeli ngs, inte1personal relationship with the employees of the company, expectations. These are developed through some sort of comfo1t which eventually builds trust and may also result in a long term friendship.
ANS: Inventory management refers to the process of ordering, st01ing, using, and selling a company's inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items.
Inventory managem ent is the entire process of managing inventories from raw materials to finished products.
Inventory management tries to efficiently streamline invento1ies to avoid both gluts and sh01tages. Two major methods for invent01y management are just-in-time (JID and materials requirement planning (MRP).
Inventory represents a cunent asset since a company typically intends to sell its finished goods within a short amollilt of time, typically a year. Invent01y has to be physically counted or measured before it can be put on a balance sheet. Companies typically maintain sophisticated inventory management systems capable of tJ:acking real-time inventory levels.
Inventory is accounted for using one of three methods: first-in-first-out (FIFO) costing; last-infirst- out (LIFO) costing; or weighted-average costing. An invento1y account typically consists of four separate categories:
Raw materials - represent various materials a company purchases for its production process. These materials must undergo significant work before a company can transfo1m them into a finished good ready for sale.
Work in process (also known as goods-in-process) - represents raw materials in the process of being transfonned into a finished product.
Finished goods - are completed pro ducts readily available for sale to a company's customers. Merchandise - represents finished goods a company buys from a supplier for future resale.
c) Achievements of Pantaloon Retail
ANS: Pantaloon's origin can be traced to 19 87 when the company was incorporated as Manz Wear Private Li.Jnited. O1iginally inco1porated as Manz Wear P1ivate Limited on October 12, 1987. The Company's name was changed to Manz Wear Limited on September 20,1991, further to Pantaloon Fashions (India) Limited on September 25, 1992 and to Pantaloon Retail (India) Limited on July 7 1999.
The company launched Pantaloons trouser, India's first formal trouser brand. In 1992, Pantaloon launched its IPO. In 1994, The Pantaloon Shoppe - exclusive menswear store in franchisee format was launched across the country. Pantaloon sta1ted distribution of branded garments through multibrand retail outlets across the nation. h1 2001, Big Bazaar, India's first hypennarket chain was launched. In 2002, Food Bazaar, the supermarket chain was launched. In 2006, Future Capital Holdings, the company's financial arm launched real estate funds, "Kshitij" and "Horizon" and private equityfllild "Indivision". The company is also planning forays into insurance and consumer credit.
The Pantaloon Retail (India) Limited, entered the retail market in 1997 with its first flagship store hosted by Kolkata. Pantaloons began as a fashion retail chain. The Future Group launched it as its introduct01y venture. Such was its popularity that by the year 2001, many more sub-retail lines were laW1ched that dealt in specific merchandise like footwear, fashion access01ies, food, groce1y and electronics.
India is expected to show similar trends as h1dian consumers in the past have shown an ability to leapfrog evolution cycles as has happened in the case of various consumer products such as mobile phones.
KSA Technopak estimates organized retail in India to reach 12% to 13% of the total retail market by 2010 with sales of Rs. 1700-1800 billion, aided by improved real estate infrastmcture and easier access to capital.
Rs(billion)
2002
2010
Estimated size of retail in India
10,700
14,000
Share of organised retail in India.(%)
2
12-13
Size of organised retail in India
225
1700-1800
Source: KSA Technopak
The Indian retail industry is evolving in line with the changing customer aspirations across product groups, with modem fonnats of retailing emerging.
Composition of Organized Retail
A break-up of sales in organized retail shows Lifestyle (clothing and textile, footwear, home, watches and jewelle1y and health and beauty) as the largest segment accounting for 73% in value tenns. This is followed by food and g roce1y accounting for 14 % of the organized retail value.
Break-up of consumer's expenditure in organized retail
Rapid growth of organized retailing is expected in the food segment. We believe this can be attiibuted to the highly unorganized nature of the market cun-ently, which thus presents an attractive potential, and the g rowing preference of consumers to shop at modern retail fonnats. Clothing is the other segment expected to show high growth potential.
Factors affecting changes in the retail sector
An analysis of private final consumption expenditure in India suggests that the food, beverages and tobacco segments constitute about 50% of total household expenditure, with clothing and footwear contributing just around 5%. However contribution of food and groceries to organized retailing is just 14%.
There are a large variety of retailers operating in the food retailing sector such as independent grocers, fair price shops, food specialists etc.
d) Vertical Price Fixing
ANS: Ve1tical P1ice-Fixing involves agreements to fix prices behveen paities at different levels of the same marketing channel (e.g., retailers and vendors). The agreements are usually to set prices at the Manufacturer's Suggested Retail Price (MSRP). So pricing either above or below MSRP is often a source of conflict.
Resale p1ice maintenance laws, or fair trade laws, were enacted in the early 1900s to promote ve1tical price-fixing and have had a mixed history ever since. Initially, resale price maintenance laws were primarily designed to help protect small retailers by prohibiting retailers to sell below MSRP. Congress believed that these small, often family-owned, stores couldn't compete with large chain stores like Sea.rs or Woolworth, which could buy in larger quantities and sell at discount prices. By requiring retailers to maintain manufacturers suggested retail prices, however, prices to the consumer may have been higher than they would have been in a freely competitive enviromnent.
Due to strong consumer activism, the Consumer Goods Pricing Act (I 97 5) repealed all resale p1ice maintenance laws and enabled retailers to sell products below suggested retail prices. Congress's attitude was to protect customer's right to buy at the lowest possible free market price even though some small retailers wouldn't be able to compete. For instance, in a 2000 settlement, Nine West, the women's shoe marketer, agreed with the Federal Trade Commission (FTC) not to fix the price at which dealers may adve1tise, promote, offer of sale or sell any product. The film also agreed to pay $34 million to state attorneys general. The money is being used to fund women's health, educational, vocational, and safety programs.
6. Briefly comment on the following:
a) "Probably with the success of an isolated store, many others want to open stores selling similar product lines to cash in on the shoppers' flow into the area."
ANS: An isolated store is defined as a retail store placed on the freeway or on a big road that doesn't have any other retailers in its vicinity. This means that the isolated store is the only retailer from which customers can make a purchase in that area. This type of store is common on freeways where there are just a few shops spread over hundreds of miles.
The benefits and disadvantages of owning an isolated stores Just like any type of store, an isolated shop comes with advantages and disadvantages. The main advantage is, of course, not having any competition. People will be compelled to shop from you because they don't have an alternative. However, one of the disadvantages is that people usually don't make large purchases from isolated stores and they use them just in case of an emergency.
b) "Earlier retailers used to outsource certain functions to an outside agency because they were not experienced in the said function or were finding it uneconomical".
ANS: Outsourcing is a business practice wherein you hire a paity outside your company to perfonn ce1tain functions. T hese functions are usually those that your people don't specialize in, or the process consumes too much time.
By outsourcing such functions, you help your workforce with free time and energy to devote to the tasks that they specialize in. Moreover, when you outsource, productivity increases manifolds. Not only this, but your employees also become more likely to experience the psychological state of flow while working, which niggers deep enjoyment.
Increased productivity happens naturally when employees are engaged in tasks that they specialize in and are meaningful to them. As a result, they become more engaged and engrossed in their dayto- day tasks, enlrnncing their efficiency.
To sum up, outsourcing some business functions can work wonders for sparking the productivity of your workforce. But, what exactly are the business functions that are worth outsourcing? If you also wonder the same, this blog is for you.
Many entrepreneurs find it challenging to hire a well-qualified and skilled accountant for their business. These days, experienced accountants demand a high salary, and that's why many businesses have started outsourcing accounting. But, no doubt, you may feel that accounting and bookkeeping are the functions that should be handled within your organization.
c) "All retailers who are involved in sale of merchandise makes an implied warranty of merchantability".
ANS: Implied wananties are presumed by operation of law unless the seller properly disclaims them in their contract with the purchaser of goods. The purpose of this article is to briefly touch on one of the most imp01tant implied warranties: the waiTanty of merchantability.
The implied wauanty of merchantability is based on the unstated, reasonable expectation of the purchaser that the goods purchased are not defective and are fit for the ordinary purposes for which they are used.
As the name implies, a seller generally makes an implied warranty that the goods in which it is selling are merchantable. This means the goods must at least (i) pass without objection in the t ade under the contract description, (ii) in case of fungible goods, be of fair average quality within the description, (iii) be fit for the ordinaiy purposes for which they ai·e used, (iv) within variations pe1mitted by the agreement, be of even kind, quality, and quantity within each unit and among all units, (v) be adequately packaged and labeled as the agreement may require, and (vi) confo1m to any promises or affirmation of facts on the container or label, if any.
For example, dishwasher detergent is "merchantable" if it (i) actually cleans, (ii) does not cause damage to dishes or the dishwasher, and (iii) conforms to any descriptions, promises, or statements on the product's label.
As you can imagine, it is in the seller's interest to tty and minimize its risk in breaching this watrnnty with its purchaser. One mechanism available to sellers to accomplish this is called a "disclaimer", where the seller expressly (in its contract with a purchaser of goods) disclaims any and all warranties of merchantability.
d) "The human resource compensation plays important role in the motivation of personnel".
ANS: Compensation management is an organized practice that involves balancing the workemployee relation b y providing monetary and non-monetary benefits to employees. Compe nsation includes payments such as bonuses, profit sharing, overtime pay, recognition rewards and sales commission. (JetHR, 2013). According to JetHr corporate strategy, compensation can also include non-monetary perks such as a company-paid car, company-paid housing and stock options. Compensation is an integral pa1t of human resource management which helps in motivating the employees and improving organizational effectiveness. When it comes to international assignment management, expatliate compensation is the most strategic and fundamental role of its purpose. Yet as the savage rivahy for outside ability increments, compensating expatt-iates is undoubtedly becoming more and more complex. It was with a smvey by Ernst and Young that fully capitalize on the imp01tance of compensation for expatriates and how it benefits them. In the srnvey, the data analysis found that 67 percent of mobility managers repo1ted that compensation packages as the largest arena where international assignee expectations ai·e not met. The contributing factor highlights the changing economic enviromn ent such as exchange rates and their fluctuations, inflation, competition of locations in emerging markets, variable income tax rates, a scope of new recompense are being introduced.
7. Explain the organization structure normally used by a national retail chain.
ANS: The retail organization structure lays out the different functions at a retail company and the flow of hierarchy from top to bottom. This defines the heads of each function and the teams that report to them.
Retail organization stt·uchue is different at the head office from the retail stores, and in this ai-ticle we will explain both.
Chief Operating Officer (COO)
Responsible for all operational functions at stores and warehouses.
The operations team will handle day-to-day running of stores and warehouses at different regions where the retail organization exists.
Chief Commercial Officer (CCO)
Responsible for all the commercial aspects of the retail business.
This includes:
Buying
Vendor management
Merchandising
Visual merchandising in stores
Managing the life cycle of inventory
Pricing
Markdowns
The commercial team will include the buyers, merchandise planners, merchand isers, visual merchandising managers and inventory controllers.
This function is also considered a core function.
Chief Financial Officer (CFO)
Responsible for all the financial aspects of the business.
This includes:
Budgeting & planning,
Financing
Audit
Financial reporting.
This team will include finance managers, accountants, auditors and financial controllers.
It is considered a support function.
Chief HR Officer (CHRO)
Responsible for the human resources function at the organization.
This includes:
Recmitment & Hiring
Talent management and development
Payroll
Employee benefits
Employee g rievances management
Company culture
The HR team is usually present centrally at the head quaiters, as well as at each region the company operates in.
This is considered a support function.
Chief Marketing Officer (CMO)
Responsible for all the marketing and creative aspects of the business.
This includes:
Advertising
Social media marketing
SEO
PPC
Marketing materials and posters sourcing
Partnerships
In-store activations and events.
The marketing team is primarily located at the head office, with small presence in different regions for marketing operations.
8. Explain the concept of store planning and its elements.
ANS: For retailers, planning and constantly monitoring year- over-year store pe1fonnance is a critical prut of running the business. Store planning enables retailers to constru1tly assess which stores ru·e performing adequately to help achieve the overall corporate objectives established during financial planning. Store planning also b ecomes a key factor when considering new store openings, store closing, and relocations.
Aisle Spacing: Tight aisles ru·e bad for business. Shoppers need an environment where they can linger and move ru·ound comf011ably at their own speed. Aisle spacing should be no less than four feet across. If a customer looks down an aisle where someone is ah·eady shopping and she knows she'll have to brush up against that person to pass, chances are she won't bother going down that aisle at all. Customers in busy aisles tend to get annoyed once they've been bumped, and irritated shoppers won't hang around for very long or may leave without buying a thing. Worse yet, a confrontation may scar a person's perception of your store altogether.
Many customers like to study labels before buying -especially when it comes to health & beauty products. If shoppers don't feel comfortable in your store, they won't spend two seconds; much less buy any product that requires a little study. A way to increase the perceived aisle space is to stagger the shelves like a pyramid with the deeper shelves at the bottom, then progressively narrower in the "sweet zone", from the waist to shoulders.
Store Layout: Impulse buys can generate a la rge portion of your overall sales. 90% of shoppers buy items, not on their shopping list. 61% of those off-list shoppers purchase an additional one to three items. TI1e more merchandise your customers are exposed to the better. High volume sales items ru·e best positioned at the rear and comers of the store. Putting these products and se1vices to the back helps accomplish "four corner penetration" - the pulling of customers into every pru·t of your establishment. By doing so, customers that show up to pick up their prescriptions will have to walk through more merchandise to reach their destination. This design fundamental assures that they will be dra,vn to sections of the store they hadn't planned to visit, enabling you to position other display types, tactics, & tools that lead them to purchase more products.
Product Visibility: Merchandise should always be easy to find. Good visibility can't be stressed enough. Impulse sales are all about seeing the product. No product should have to scream, I'm in here somewhere, come find me!'' Buried merchandise is not only frustrating to customers; it means you're likely missing out on a great opportunity to generate more impulse sales. One solution is to group related products and items together. If a customer is buying cold medication, she shouldn't have to go to the other side of the store to find tissues and hand sanitizers. Implement this tactic and you 're bound to improve sales. Shelf talkers are another way of highlighting new or higherm argin products. You could have a "Pharmacist Pick of the Month", such as your favorite vitamin supplement or any other product. You could do this with all your employees and let them write a note on why it's their favorite and what it's done for them. Give your employees incentives to push their "favorite" products.
The Checkout: The cash register is your last chance to make a sale. Don't waste it. This area should be clean & organized. Your goal is to offer an asso1tment of last-second convenience items that will nigger a previously unknown need and promote that final impulse sale. However, too much emphasis is no emphasis. It's impo1iant to strike a balance between a variety of different items versus a cluttered counter full of junk. You also want this transaction to be smooth & efficient. Much like having a great meal at a restaurant, if you have to wait too long for the check, it can spoil the whole experience.
Going through the four parts of this outline should help you identify your store's design strengths and weaknesses. Regardless of what you find, leam to emphasize your company's strong points. Yon and your competition have access to the same merchandise, so the way you display your products and services is what can give you the edge. You 're a specialty retailer with a niche market that has great growth potential for the years ahead. Investing in the look and design of your store doesn't cost, it pays.
9. What are the major purposes of public relations exercises? Explain the advantages and disadvantages of the same
ANS: When you conduct a PR activity, you have to set the parameters of evaluating your PR exercise then and there itself. This is a prerequisite to analyze public relations activities in order to assess the performance of an organization. Many PR professionals evaluate the results of PR operations against the intended b usiness objectives of a company, but one must not forget that value addition is equally important to assess that has been gained for the brand/client tlu-ough PR. When you analyze the effectiveness of your campaigns, you must assess each operation individually. Different techniques for measming the efficacy of PR campaigns are available. There are certain key outcome areas to assess a PR campaign. The areas of perfonnance include metrics such as total sales, employment, and earnings. The success of a PR plan is measured by total sales before and after the campaign. PR professionals tend to use company-specific demographics and adve1tising. For example, if the main objective of a school campaign is to educate more female students, you can assess the results of the effectiveness of your campaigns in the increase in enrollment of female students in the school.
ADVANTAGES:
1. Happier Staff - Better Performance
Perspiration is not the only output dming exercise. A chemical called dopamine that is responsible for creating a sense of well-being and happiness is also being released! As work becomes ove1whehning, it is possible that we exhaust our stores of this chemical necessary for happiness and pleasure.
2. Healthier Staff - Better Service Quality
This is for fellow bosses out there: Providing fitness facilities/ opp01tunities for your employees is not a waste of money. Here's why:
Firstly, we have established that a healthy worker is more likely to be a happy worker. And that means the same healthy, happy employee will be in good spirits to take good care of your clients/customers. Quality work and attitude, check!
Secondly, healthy people are less susceptible to talcing medical leave. So think long te1m, what is invested in health is returned in the fonn of productivity!
3. Hardier Staff- Better Results
Every d ay is a battle ground, a competition for better sales, better results and better performance. Proper exercise training demands the skill set of setting goals and realising them. With these skills transferred to the work place, you'll see employees motivated and empowered to strive more aggressively for better results.
Goal-getting individuals are valuable assets to the company, but on top of that, it is great team work that makes up the t:J:ue essence of a successful business. There is no better way to create a united and h ardier team than to bond through exercise as we challenge each other's limits.
DISADVANTAGES:
Public relations activities may turn out be firing back because of mismanagement and a lack of coordination with the marketing depa1tment. When the marketing and the PR department of a company operate independently, there is always a risk of getting stuck in inconsistency in communication.
Lack of control is another disadvantage. Companies can cont:J:·ol tl1eir ad campaigns; however, they cannot control how they are p ainted by the media, when their message will be processed, and where it will be placed.
Not all organisations have the skills to run sophisticated PR campaigns. Particularly, digital public relations may require different and special skills which may then require organisations to hire specialist employees resulting in incurring more costs.
Examples/techniques of public relations (PR)
Some of the best examples/techniques of PR are press release, p romotional videos, exhibition, celebrity endorsement, newsletters and m agazines, employee conference, company brochure, annual rep01ts, and sh areholders meeting . Most of the organisations around the world conduct some kind of PR campaigns now and then.
