Doing Business in China: Marketing Retail

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What are some of the unique aspects and challenges of doing business in China that Sarah Harrison has encountered?

Doing business in China involves several unique aspects and challenges, as Sarah Harrison has found out. Firstly, there is a political challenge in the form of guanxi wang. This refers to a type of social network system that is common in the Chinese business practice. Guanxi wang mainly involves conducting business through social networks or connections. From her diary, Sarah informs us that both Professor Wong and the general manager at the First Department Store are close associates. In fact, professor Wong has done consultation work for the department store in the past. He has now brought Sarah Harrison as a consultant presumably to return the favor.

Language barrier is another challenge of doing business in China. Sarah Harrison experiences this challenge firsthand when she goes to buy an umbrella at the First Department Store. Before entering the store, Sarah sees a sign that welcomes visitors into the store written in English. She therefore assumes that she will have to difficulty in making the purchase but to her dismay, nobody at the store speaks English. As a result, Sarah has to rely on hand gestures and nodding of the head to communicate with the staff.

What are the problems facing the store?

There are many problems facing First Department Store. To start with, the merchandise at the store is poorly organized. Most of the items have been crammed together and this makes it hard for customers to have a good look at the items on display. Another problem facing the store is over-staffing. Sarah finds several employees manning a single merchandise area. While purchasing an umbrella at the store, Sarah is served by more than 5 employees. The Kunshan store also has many employees. On the day that Sarah visited the store, most employees were idle. While some of the employees were busy reading magazines, a good number of them were napping.

Another problem facing the store is poor display of items. Sarah gives the example of tightly packed garments hanging or racks in the same plastic covers they were transported in from the factory. The store also lacks a streamlined system of purchase. For example, once a customer has identified an item that he/she wants to buy, he/she has to queue in order to be invoiced for the item by the store clerk.

the clerk issues them with an invoice. The customer queues once more to settle the invoice, before collecting the item. Consequently, the customer spends more time buying an item at the store.

The store is also dirty and clattered, as evidenced by the dirty entrance and facade. The entrance door is very narrow, and customers have to line up to enter the store. The walking areas are also narrow, while the floor is poorly designed. This has resulted in crowded aisles. The store also lacks an inventory management system to track sales made and keep an inventory of the movement of goods in and out of the store.

What recommendations should Sarah offer to the management of First Department Store? Why?

In order for the store to overcome the challenges facing it, Sarah should consider offering the following recommendations to the management of First Department Store:

There is need for improved store layout and design

The entrance door should be wide enough to handle traffic. The design at the store entrance should also be improved for enhanced visual appeal. Additionally, the management should consider using nonskid flooring materials. It is also important to ensure that the store remains clean, especially the entrance and the stairs.

Improved physical layout of store merchandise on display

The management should improve the display of merchandise on the store to enhance store success. As Piotrowski and Rogers (23) have noted, the interior design and layout of a store is greatly influenced by the kind of customers that the store hopes to attract and the type of merchandise on sale. Therefore, the store management needs to conduct considerable merchandising and marketing research to determine traffic patterns and the kind of merchandise that attracts customers to the store.

Store inventory management software

Sarah should also advice the management of the First Department Store to install a store inventory management software. This will increase the efficient movement of goods in and out of the store. The inventory management software will also help the management to keep track of stock on order and inventory trends. This will go a long way in improving the store’s operational efficiencies (Muller 41) and inventory replenishment.

What other information should Sarah get to help her in making the recommendations to the store’s management?

If Sarah is to make a solid recommendation to the store’s management, she needs to get detailed statistics on the store’s sales per square foot, sales per employee, inventory turnover, customer traffic, and competitor statistics like their location, items catalogue, and traffic. This information should be provided by the store’s headquarter at Suzhou.

Works Cited

Muller, Max. Essentials of Inventory Management, New York: AMACOM Div American Mgmt Assn, 2011. Print.

Piotrowski, Christine, and E. Rogers. Designing Commercial Interiors 2nd ed, New York: John Wiley & Sons, 2013. Print.

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