Work-Life Balance Development in the UK Retail Stores

Introduction

Work is the integral part of the human life today, and it has always been so throughout the history of the mankind. Some scholars, among whom Marxists dominate, even believe that work was the factor that influenced the transition that the human being experienced in its evolution from a simian to a human being as such. But, at the same time, the eternal desire to work and the necessity to do it in order to satisfy ones personal needs and the needs of people that a certain person is responsible for, makes the conflict between the time people spend on work and the time they are allowed to have to spend on the families or on any other private purposes.

The ability to control the balance between these two sides of the human life, i. e. work and personal life, is vital especially in the modern society when the speed of life increases and people have less time for themselves.

What is demanded from the modern companies and other enterprises that employ people is that they should understand and encourage the team spirit of their workers through paying attention to preserving the work life balance in their organizational culture.

Since such an understanding is the basis of success of any modern enterprise, this paper aims at studying the state in which work life balance is preserved, if at all, in the UK retailers that include Tesco, Asda, Alsi, etc. through the prism of previous academic research on the topic and through the conduct of direct interviews and questionnaire analyses of data gathered from the certain number of sales assistants employed in the stores by the aforesaid retail companies. The comprehensive analyses of all the sources mentioned will provide the actual picture of work life balance in these companies today.

Literature Review

Background

Needless to say, the initial and basic part of any research is the review of the previous research works that have been conducted by scholars in the past. This step allows the researcher to have the clear focus of the topic, have a good command of the knowledge already retrieved on the topic and be aware of the so-called blank spots, i. e. the areas of the work life balance study that still demand research. In other words, the review of the relevant literature on the topic of work life balance will allow this research to have the originality and novelty which are lacked by some academic works in case if their authors have not been attentive enough to consider what has been done in the area and what still is to be done in it.

Thus, to start with, the basic notions of the work life balance have been studied by a number of scholars including Maslow (1943), Michael (1975), Walster, Walster & Bershcheid (1978), Stanfield and Routledge (1993), Montana and Charnov (2008), etc. These researchers retrieved a lot of experiment based data on the principles of the successful work-life balance in various enterprises and in the general theoretical framework.

For example, Maslow (1943), Michael (1975), Walster, Walster & Bershcheid (1978) did much work on finding out the most fitting theories of work life balance including the needs theory, motives theory, expectancy, theory, etc. At the same time, scholars like Bedeian, Burke, and Moffett (1998), Cockman, Evans and Reynolds (1999), etc. deal with the basic definitions of the work life balance study and outline main ways to do qualitative and quantitative research including the need to focus on either precise figures or facts and hidden reasons of certain phenomena.

Terms Definitions

However, the literature review would be incomplete without the more detailed analysis of the basic terms and notions that scholars have singled out as dominant for work life balance studies. These terms are rather numerous and include such ones as organization, work, employment, employee, work life balance, etc. but in this section of our work we are to focus on the latter two notions. Thus, the definitions of employee are rather numerous and dependant upon the context the word is used in. A number of scholars including Maylor and Blackmon (2005), Saunders, Lewis, & Thornhill (2006) agree on the pure legal definition of the term which is clearly laid out in the LLL internet page:

EMPLOYEE  A person who is hired by another person or business for a wage or fixed payment in exchange for personal services and who does not provide the services as part of an independent business; Any individual employed by an employer (LLL, 2009).

Nevertheless, other and broader definitions of the term exist to suggest, for example, the difference between the terms employee, worker, and self-employed which are often used interchangeably or misused. To avoid these misunderstandings, scholars like Locke (2001), Kopelman, Prottas, Thompson, and Jahn (2006), etc. have agreed to define employee as any person working under a contract of employment. A contract need not be in writing  it exists when you and your employer agree terms and conditions of employment. It can also be implied from your actions and those of the person you are working for (Directgov, 2009).

The definition of the work life balance is more uniform as the majority of scholars agree on the following comprehensive definition formulated by the academic workers of Broadband Cornwall:

Work life balance (WLB)  Work life balance is about people having a measure of control over when, where and how they work. It is achieved when an individuals right to a fulfilled life inside and outside paid work is accepted and respected as the norm, to the mutual benefit of the individual, business and society (Actnow, 2009).

Based on the definitions coined by the mentioned researchers it is possible to see that employee and work-life balance are the integrally connected notions as they refer to each other as a single whole to its part and vice versa. The basic theories of work life balance study are also based on this relation and on the attempts of scholars to explain the relationships that employees and employers have between each other and what effect the most updated work life balance practices have on work efficiency and productivity in various organizations.

Basic Theories

As far as the essence of the work life balance lies in the relatively equal amount of time that a person spends at work and outside it, the major theories coined by previous scholars concern the relations between the needs of people and the ways their employers find to satisfy those needs. For example, in 1943 the first theory of the kind was formulated by Maslow (1943), who singled out 5 levels of needs that people have including psychological, safety, belonging, esteem, and self-actualization needs.

People try to satisfy them level by level in all spheres of life including work, and thus the ability of the employee to do it and the ability of the employer to assist in it is vital for the fruitful cooperation of both (Maslow, 1943). Another interesting theory of the factors that make people look for the most fitting work-life balance is the need theory by McCelland (1987) (Kopelman, Prottas, Thompson, and Jahn, 2006). Its essence is close to Maslows theory in the dominant role of needs in the life development, but McCelland attributed more importance to the acquired, or learnt, needs that include the needs of achievement, affiliation, and power.

The theory of a different direction is the expectancy theory formulated by Vroom in 1964 (Montana and Charnov, 2008). It is focused on the issue of choice and the expected outcome that an employee plans to get from choosing this or that option in a working process. In other words, the option of getting a reward for the successful performance at work provides for the increase in productivity as people start working better when they clearly see what this might give them (Montana and Charnov, 2008).

Equity theory is the closest to this one as it focuses on the importance of the positive atmosphere in the working team. In other words, the author of this theory, John Adams (1962), stresses that people work better in the environment of equality and fair treatment, especially from the side of higher officials. Such equity of all the employees creates the effective work life balance in a company or an enterprise (Walster, Walster & Bershcheid, 1978).

The theory that seems to combine the best features of all the aforesaid ones is the goal setting theory by Edwin Locke (1968), who argues that the higher and the more difficult the goal an employee set for him or herself is, the greater success it can bring and the greater progress it can mean for that employee (Locke, 2001). Thus, according to Locke (1968; 2001), the more difficult the goals are, the more they facilitate the performance of employees, while the simpler goals reduce the efficiency of work and worsen the work life balance in a company as employers demand employees to spend more time on work to fulfill the same amounts of it.

In an attempt to apply these theories to the specific object of study in our research work, we can say that all the theories mentioned can be applied to the work life balance study in retailer stores like Tesco, Asda, Alsi, etc. to a different extent. According to Maslows theory (1943), we can try to find out what needs the employees pursue working, for instance, for Tesco. The same can be said about the application of the theory by McCelland (1987), while the expectancy theory is a bit harder to apply as we currently do not posses the specific information on the rewards system in Tesco stores, etc (Montana and Charnov, 2008).

Equity theory is also applicable but only after the present research clears up the organizational culture of Tesco, Asda, and other British retail stores (Walster, Walster & Bershcheid, 1978). Goal setting is also an interesting theory concerning the work life balance for retail store employees, and the proposed research work aims at finding out the basic work life balance policies and practices used by the mentioned retailers in their Human Resources Management (Locke, 2001). Thus, the theories outlined help us formulate the specific research objectives and the questions that the work will answer.

Research Objectives

Accordingly, the objectives of the proposed research are driven by both the importance and novelty of the topic and the necessity to explain the motivation of employees and employers for organizing the work life balance in retail stores like Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson. Moreover, the most important point about the novelty of the work is the attempt to consider the work life balance issues from the workers point of view as compared to the numerous studies considering the pure management point of view. Therefore, the aim of the research is to study the employee perspective of work life balance in the stores of Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson. Accordingly, the objectives of the proposed research will be as follows:

  1. To carry out the detailed review of literature on the specified topic in order to understand the possible scope of the research work and make the reasonable use of the data already retrieved by previous scholars;
  2. To conduct the primary research on the specified sample of respondents (sales assistants in the largest UK retail stores) in order to analyze their answers to questions concerning the work life balance;
  3. To find out the possible similarities and differences between the data of previous research and the data obtained during the very research through the interviews, questionnaires, and focus groups involving the workers of Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson.

Research Question

Accordingly, the research question of the proposed study will be focused on the work life balance development in the specified UK retail stores. To avoid any ambiguities and the possible biases of the research, the question should be formulated as an alternative one thus allowing the research outcomes to answer it either positively or negatively. Therefore, the research question is:

  • Is the work life balance development in stores of Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson at the proper level of its development according to the workers points of view or not?

Research Strategy

Methodology

Based on the aforesaid information, the research proposed demands a clear strategy showing what steps will be taken, when and why they will be taken and what results are expected from all those steps. Research methodology, thus, is of vital importance as stressed by Adamantios and Schlegelmilch (2000), Bogdan and Taylor (2005), etc. Drawing from the need of an empirical research whose data are retrieved from both previous research works and our research through questionnaire analyses, interviews, etc. the combination of qualitative and quantitative methods seems to be the most fitting methodology for our work.

The main argument supporting the usage of the qualitative research method in this study is that, according to the interpretative paradigm of relations, social reality is a sum of subjective experiences of people who participate in it (Smith, 1998). In this case, it is necessary to use a qualitative method of research because only this method allows seeing the reasons and the underlying facts of a certain phenomenon (Smith, 1998).

As far as the study of Tesco, Asda, etc. work life balance will be carried out through interviews with individual workers, this methods proves to be the fitting one. Furthermore, the following strengths of the qualitative method will be enumerated so that to make the usage of this approach completely grounded:

  • ability to interact directly with the subject of the research;

This advantage is enumerated here because the data obtained from people who are directly participating in the phenomenon one studies is much more reliable than the conclusions that one can make from figures obtained from statistical surveys carried out by some other researcher (Matveev, 2001).

  • usage of various tools and instruments while conducting research without limiting on figures, percentage, etc.;
  • due to the two above mentioned factors ability to get the full picture of the phenomenon under consideration (Matveev, 2001).

However, the quantitative method also has its advantages that will be of great use for the analysis and conclusion parts of our research work. The quantitative method, according to Smith (1998),is aimed at finding out the rate at which this or that phenomenon may occur the quantity of this or that phenomenon occurrences for a certain period of time (Matveev, 2001). Thus, based on the analysis of questionnaire answers results we would be able to see the frequency of certain answers and make conclusions about this or that phenomenon present in the work life balance development in retail stores by Tesco, Asda, Iceland, etc.

The very data collection procedures will be divided into the questionnaire work for which 200 sales assistants from the seven largest retail stores of UK (Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson) will be sampled. The second data collection activity will be the work in a focus group of 200 more respondents from the same set of stores. The analysis of data will be carried out through the descriptive statistics method in order to see the frequency of answers given and draw conclusions from the percentage relations of those answers to each other. All these activities will be carried out within the limits of the specific timeframe presented below.

Work Plan

Basic Resources

The specific plan of the research work proposed comprises to major sections. The first one deals with the outline of the major resources that are planned for use during the work, while the second section specifies the timeframe of the activities planned to make the research clear and fast. Thus, the first section is about the primary and secondary sources that we are planning to use during the study of the employee perspective of the work life balance in the largest UK retail stores.

First of all, to organize the proper research it is necessary to know the basics of writing research papers and conducting studies using the combination of the qualitative and quantitative methods. To obtain the necessary data on it, the works by Adamantios and Schlegelmilch (2000), Bogdan and Taylor (2005), Blumburg (2008), Easterby-Smith, Thorpe, and Jackson (2008), Fisher (2009), etc. will be used. These sources allow clear understanding the basic principles of academic research works and writing, while the next part of sources provides the study with the main definitions and terms used while studying work life balance.

These sources include the works by Actnow (2009), Cockman, Evans, and Reynolds (1999), Directgov (2009), Duxbury and Higgins (2001), Kopelman, Prottas, Thompson, and Jahn (2006), etc. Finally, the sources on the basic theories of work life balance and working motivation will be used to back up the theoretical framework of the research (including Maslow, 1943; Kopelman, Prottas, Thompson, and Jahn, 2006; Montana and Charnov, 2008, etc.), and the specific data of the work life balance in Tesco, Sainsbury, Asda, Alsi, Iceland, Morrisons, Wilkinson will be gathered both from the questionnaires and from the official online and printed sources of the stores mentioned.

Milestone Dates

The following table presents the second part of the work plan dealing with the basic activities to be taken up and the time periods of the fulfillment. The whole research work is scheduled to be completed within the three months beginning from June, 2009 and ending in August, 2009. Therefore, there are activities that demand relatively little time, like for example putting the research results into tables and writing research conclusions, as well as those activities that will take much more time (from a week to half a month), so it is necessary to schedule them properly to have enough time for all of them:

Timeline

Activity Start date Duration Completion date
Literature review June 20, 2009 10 days June 30, 2009
Developing the questionnaire for the study June 30, 2009 3 days July 2, 2009
Developing the activities for work in focus groups July 2, 2009 3 days July 5, 2009
Survey carried out through the questionnaire on the sample of 200 sales assistants July 6, 2009 2 days July 8, 2009
Survey results analyzed July 8, 2009 6 days July 14, 2009
Focus groups work July 14, 2009 6 days July 20, 2009
Pilot study carried out to gather preliminary data July 20, 2009 2 days July 22, 2009
Basic data collection procedures July 22, 2009 7 days July 29, 2009
Data analysis and putting the analyzed data in tables for better visualization of the research results July 29, 2009 2 days July 31, 2009
Preparing the conclusions section of the research work August 1, 2009 3 days August 4, 2009
Completion of the dissertation August 4, 2009 14 days August 18, 2009

References

Actnow 2009, Glossary of Flexible Working Terms, Broadband Cornwall. Web.

Adamantios, D. and Schlegelmilch, B.B. 2000, Taking the Fear out of Data Analysis, Thomson.

Bedeian A B Burke, and R. Moffett, Outcomes of Work-family Conflict among Married Male and Female Professionals. 1998. Journal of Management, 475-491.

Blumburg, B 2008, 2nd edition, Business Research Methods. London: McGraw-Hill.

Bogdan, R., & Taylor, S.J. (2005). Introduction to qualitative research methods. New York: John Wiley.

Booth, W.C., Colomb, G.G., and Williams, J.M 2003, The Craft of Research, (2nd edition) University of Chicago Press.

Bramham, J 1999, Benchmarking for People Managers, CIPD.

Brewerton, P. and Millward, L. 2001, Organizational Research Methods. London: Sage.

Bryman, A. and Bell, E. 2007, 2nd edition, Business Research Methods. Oxford: OUP.

Cockman, P. Evans, B and Reynolds, P. 1999, Consulting for Real People, McGraw Hill.

Directgov 2009, Are you a worker, employee, or self-employed? Employment. Web.

Duxbury and Higgins, Work-Life Balance in the New Millennium: Where Are We? Where Do We Need to Go, 2001, CPRN Discussion Paper, No W/12.

Easterby-Smith, M., Thorpe, R. and Jackson, P. R. 2008, 3rd edition, Management Research. London: Sage.

Fisher, C. 2004, Researching and Writing a Dissertation for Business Students. London: Prentice Hall.

Gilbert, N. 2001, Researching Social Life, Sage.

Jankowicz, A.D. 2005, 4th edition, Business Research Projects. London: Thomson.

Johnson, P. and Duberley, J. 2000, Understanding Management Research, Sage.

Kopelman, Richard E., David J. Prottas, Cynthia A. Thompson, and Eileen White Jahn. 2006. A Multilevel Examination of Work-Life Practices: Is More Always Better?. Journal of Managerial Issues 18, no. 2: 232+.

LLL 2009, Legal Definition of Employee, Lectric Law Library. Web.

Locke, Edwin A. 2001. Motivation b Goal Setting, Handbook of Organizational Behavior, 2: 43-54.

Matveev, A.V., Rao, N., & Milter, R.G. (2001). Developing a scale to measure intercultural communication competence: A pilot study in multicultural organizations. Paper submitted to the International and Intercultural Communication Division of the National Communication Association, Atlanta, GA.

Maslow, A.H. 1943, A Theory of Human Motivation, Psychological Review 50(4): 370-96.

Maylor, H. and Blackmon 2005, Researching Business and Management. Basingstoke: Palgrave Macmillan.

Michael, J. 2005. Positive and negative reinforcement, a distinction that is no longer necessary; or a better way to talk about bad things. Journal of Orgnizational Behavior Management, 24, 207-222.

Mitchell, J. (1999). Visible, vulnerable, and viable: Emerging perspectives of a minority professor. In K. Feldman & M. Paulsen (Eds.), Teaching and learning in the college classroom (pp. 383-390). Needham Heights, MA: Simon & Schuster Custom Publishing.

Montana, Patrick J; Charnov, Bruce H, 2008, 4th edition; Management. Barrons Educational Series, Inc.

Pallant, J. 2007, The SPSS Survival Manual, (3rd edition). London: McGraw Hill.

Saunders, M., Lewis, P. & Thornhill, A. 2006, 4th edition, Research Methods for Business Students. London: Financial Times-Prentice Hall.

Silverman, D. 2007, A Very Short, Fairly Interesting and Reasonably Cheap Book about Qualitative Research. London: Sage.

Smith M.J. (1998). Contemporary communication research methods. Belmont, CA: Wadsworth, Inc.

Stanfield, J. H. and Routledge, M. D. 1993, Race and Ethnicity in Research Methods. London: Sage.

Travers, M. 2001, Qualitative Research through Case Studies. London: Sage. 10.

Usunier, J.C. 1998, International and Cross-cultural Management Research. London: Sage.

Walster, E., Walster G.W. & Bershcheid, E. 1978, Equity: Theory and Research. Allyn and Bacon, Inc.

How Big Banks Can Attract Small Retail Customers

Situation Analysis

Bank customers act as both suppliers and consumers to the banks. The customers supply the bank with money, which is the raw material for financial institutions. On the other hand, customers act as consumers by being the buyers of various products of the financial institutions.

Therefore, it is vital for a bank to have customers who would be able to supply it with large amounts of money and consume huge quantities of the banks products (Wright, Watkins and Ennew 65). Big banks prefer to attract corporate customers. The high value of the transactions of corporate customers reaps huge financial benefits to the banks. On the other hand, small retail customers undertake small value transactions.

However, the profit margins of financial transactions of small customers are usually higher than the profit margins of transactions of corporate customers. Increased competition in the retail banking market segment threatens to reduce the profit margin in this market segment (Quiry et al 264) However, big banks have enough financial resource to cope with the stiff competition in the market segment.

Problem Analysis

There is a steady increase in the amount of small retail customers that banks serve. This market segment offers a suitable growth opportunity for banks. The retail banking segment is the most profitable segment. Small retail customers require many banking services.

Some of the services include payroll management and investment products. Therefore, it is vital for banks to formulate strategies that would help in attracting small retail customers. Big banks have generally been unsuccessful in attracting and retaining small retail customers.

One of the major factors that lead to poor retention of small retail customers is the inability to offer high quality services to small retail customers. Big banks do not usually solve the problems of the small retail customers quickly and courteously. In addition, big banks charge high fees, which are prohibitive to small retail customers (Rezaee 88). Big banks do not usually have products that fulfill the needs of the small retail customers.

This is due to the wide variety of products that small retail customers need. In addition, small customers account for a small percentage of the revenue of big banks. Therefore, big banks do not prioritize the interests of the small retail customers. Mismatch of products makes small retail customers look for banking services in other financial institutions. The location of big banks is also one of the major factors that restrict big banks ability to attract small retail customers.

Big banks are usually located in upmarket areas, which are far from the location of the business establishments of small retail customers. This makes it difficult for small retail customers to access the services of big banks easily. Therefore, small retail csuromers seek financial services from financial institutions that are in their vicinity.

Solution Analysis

There is no single approach that would enable banks attract and retain small retail customers. For banks that wish to attract small retail customers, it is vital for the banks to understand the dynamics of their relationship with small retail customers.

Banks should understand the major factors that drive the profitability of the small retail customers. In addition, banks should understand the cross-selling opportunities that exist in this market segment. Cross selling would enable banks improve their profitability in this market segment significantly (Wright, Watkins and Ennew 154).

One of the major strategies that banks may use to attract and retain small retail customers is investing in innovative products. The innovative products should be responsive to the needs of the small retail customers. In addition, banks should formulate a strategy that would be responsive to the needs of the small retail customers.

Big banks should not just offer personalized products to customers; they should strive to realize the full value of their relationship with the small retail customers. Therefore, banks should offer services and pricing structures that appreciate the relationship that the bank has with the small retail customers.

Implementation Analysis

Big banks should ensure that they implement a strategy that would help to attract and retain small retail customers. However, the strategy should not contravene the major policies of the bank. Therefore, it is unlikely for big banks to move from their upmarket locations in order to attract small retail customers.

This is because the movement from upmarket locations may alter the image of the bank. This may be detrimental to the bank. However, the big banks can introduce innovative mobile and internet banking solutions that would help in attracting and retaining small retail customers. In addition, big banks should offer a wide variety of products that would fulfill the banking needs of small retail customers.

It is vital for banks to ensure that they introduce the measures that attract small retail customers systematically. Introducing drastic measures would be detrimental to image of the bank. This may trigger the exit of existing corporate customers. Big banks that attract and retain small retail customers while retaining their existing corporate customers guarantee their future financial prosperity.

Works Cited

Quiry, Pascal, Yann Le Fur, Antonio Salvi, Maurizio Dallochio and Pierre Vernimmen. Corporate finance: Theory and practice. Hoboken, NJ: John Wiley & Sons, 2006. Print.

Rezaee, Zabihollah. Financial institutions, valuations, mergers, and acquisitions: The fair value approach. Hoboken, NJ: John Wiley & Sons, 2001. Print.

Wright, Mike, Trevor Watkins and Christine Ennew. Marketing financial services. London: Routledge, 2012. Print.

Retail Industries in Saudi Arabia

In Saudi Arabia, there are several retail industries. These retail industries are specialized in different areas. There are several key issues that affect these industries but the dominant issue is the oil price (Ramady, 2010). This is because the economy of Saudi Arabia and most countries in Middle-East mainly relies on oil to support their economy. This means that a fall in the oil industry would result to an economic recession in the country. In this study, our focus shall be on four retail industries which include: Abdullah Al Othaim Markets Company, Aldrees Petroleum and Transport Services Company, National Agricultural Marketing Company and the Saudi Automotive Services Company. As we shall notice in our study, these companies are affected by almost the same issues they are all located in the same political, economical and social environment.

Abdullah Al Othaim Markets Company

According to Tadawul (2010), Abdullah Al Othaim Markets Company is a company that specializes in selling foodstuff and other consumer products both in retail and wholesale. According to Johany et al (1986), this company was established by Suleh Al-Othaim trading in the year 1956 and the company is located in a city called Riyadh in Saudi Arabia. This company has several supermarkets from where food stuffs and other consumer products are distributed from. The company has several stores too. According to Johany et al (1986), other services offered by Abdullah Al Othaim Markets Company include catering, mechanics, electronics repair, computer maintenance, storage services and building.

Macro Analysis of the Company

Macro-analysis of industry is carried out using the five forces in the Porters model. They determine not only the attractiveness, but also the profitability of a given industry. They are therefore very important to an aspiring entrepreneur. The five forces include: the supplier power, buyer power, threat of entry, threat of substitutes and competitive rivalry.

To start with, the company has a favorable buyer power. This is so because Saudi Arabia has a large population hence a higher demand for products in the company. Moreover, the company gets more customers during the month of Ramadan. This is because the Saudi peoples expenditure tends to rise during this month due to the fact that most people spend a lot on food compared to other times of the year. Given the high demand for food, food prices increase during this time. Spending on food by most customers increases double during the Ramadan month. Thus, Abdullah Al Othaim Markets Company in Saudi buyers power is increased during this period.

Secondly, Abdullah Al Othaim Markets Company has great supply power. This has been achieved by the expansion of its stores and good pricing. At the same time, the company makes use of the retail industrys online website www.souq.com to make most of its supplies. Thus, most customers are able to pay for products by use of credit cards.

Thirdly, the threat of entry into the company is high. It is possible to penetrate into the company because in Saudi market, monopolistic tendencies are not encouraged. Besides, the differences between conventional and Islamic fiscal practices continue to become slim and as such barriers to new entries into the retail business are reducing.

Fourthly, the threat of substitutes in the company is high. This is because there is much importation of software programs, electrical appliances as well as food by other companies. The importation of various substitute goods has a way of reducing the prices for the local products especially when they come at low costs making consumers to prefer them. The domestic retailers will thus be forced to adjust their prices so as to compete effectively.

Finally, there is much competition rivalry. The Abdullah Al Othaim Markets Company faces much competition from the National Agricultural Marketing Company, Saudi Fisheries Company and Penn Traffic Company. This is so because these companies provide the same commodities as the Abdullah Al Othaim Markets Company hence competes for the same customers.

Apart from the five forces explained by Porters model, we have other key issues that affect the company. These issues include: oil prices, the political and environmental concern, the economic concern at the local and global level, sentiments from investors, influence of the US dollar and the new laws and policies.

First, we have oil prices. Since Saudi Arabia leads in the production and exportation of oil, the Saudi economy is largely affected by any fluctuations in oil prices. Apart from affecting the nations economic growth, the effect is also experienced at the Stock market. The stock prices in the country rise and fall when oil prices increase and decline respectively. What may result to these fluctuations in price are basically two aspects. First is because the Saudi Stock Market has a bi-directional causal or mutual predictive relationship with daily changes in the oil prices. Second, there is global demand for oil. The oil prices in Saudi Arabia affects the stock prices of the Abdullah Al Othaim Markets Company to a large extent.

Secondly, there are political and environmental concerns in Saudi Arabia and the world at large. Any changes either politically or environmentally easily affects Abdullah Al Othaim Markets Company.

The thirdly, economic concern at both the local and global level the company. Any major shock or incident in the world wide market will have a great impact on the price of the products. How the global market perms and grows greatly affects and relates to the growth of the Saudi Stock market thus affects the Abdullah Al Othaim Markets Company.

Fourthly, sentiments from investors can also affect the stock market performance, thus directly affecting the Abdullah Al Othaim Markets Company. Therefore, it is important for the investors in the Saudi economy to exercise caution with regard to the stock market. The market value can easily be propelled above our fair value estimate due to an investors sudden shift in sentiments.

Consequently, the influence of the US dollar has much impact on Abdullah Al Othaim Markets Company. Related to this is the US short term interest rate, the strength of the dollar, the global capital market and their impact to the domestic interest rate. Both local liquidity conditions and global prices of products are greatly affected by the US interest rates. The Abdullah Al Othaim Markets Company raises or lowers its prices depending on the interest rates of the US Dollar.

Finally, the new laws and policies also affect the Abdullah Al Othaim Markets Company. Three years ago, foreign investors could utilize the Saudi Stock through the swap agreement. However, the inflows that foreign investors brought were below the expectations. Within a period of about one year, foreign investors had purchased approximately 2.3 % of the total market capitalization. This was partly caused by improper timing following the crash of most global markets in 2008 as a result of a global economic depression. Another reason is due to lack of interest by foreign investors in the market access method. This is because it does not guarantee them the rights to profits or losses due to their own transactions.

Micro Analysis

The stock price for the company can be found using the following formula:

P= D/(k-g), whereby p is the estimated stock price, D is the last dividend paid , k is the discount rate and g is the growth rate of the dividend as follows:

  • P=$19.93
  • D=$2.5
  • g=3.85%.

This implies that, $19.93=$2.5/k%-3.85%.

From this, K=3.98%. The last dividend paid was $3. So, P (estimated stock price) will be $3/3.98%-3.85%= $23.

Assumption

  • k (discount rate) is constant.
  • G (growth rate of the dividend) will be consistent, hence little or no change.

Comparing this value ($23) with the theoretical value which is 19.93, we see that there is an increase in the estimated stock value, hence it is overweight.

Recommendation

Since the estimated stock sale is overweight, stocks are supposed to be sold with the assumption that these stocks will fall.

Aldrees Petroleum & Transport Services Company

According to Johany et al (1986), Aldrees Petroleum & Transport Services Company was founded in the year 1957 and the company deals with retailing petroleum and providing transport services. The company has several petrol stations and vehicles that serve both the public and private sector. The company is situated in the city of Riyadh in Saudi Arabia. Over the years, the company has experienced rampant growth and has managed to gain a lot of customers.

Macro Analysis

As stated earlier, macro-analysis of industry is carried out using the five forces in the Porters model. They determine not only the attractiveness, but also the profitability of a given industry. They are therefore very important to an aspiring entrepreneur. The five forces include: the supplier power, buyer power, threat of entry, threat of substitutes and competitive rivalry.

To start with, the company has a favorable buyer power. This is so because Saudi Arabia has a large population hence a higher demand for petroleum and transport services that are provided by the Aldrees Petroleum & Transport Services Company.

Secondly, Aldrees Petroleum Transport and Services Company have great supply power. This has been achieved by the availability of well distributed petrol filling stations and many tractor heads with cargo careers to offer transport services. At the same time, the company makes use of the retail industrys online website www.souq.com to make most of its supplies. Thus, most customers are able to pay for products and services by use of credit cards.

Thirdly, the threat of entry into the company is high. This is because it is possible to penetrate into the company because in Saudi market, monopolistic tendencies are not encouraged. Besides, the differences between conventional and Islamic fiscal practices continue to become slim and as such barriers to new entries into the retail business are reducing.

Fourthly, the threat of substitutes in the company is high. This is because there are other companies that have come up with substitutes for gas and diesel. There is also a possibility that other means of transporting cargos rather than use of tractors could be invented.

Finally, there is much competition rivalry. Aldrees Petroleum Transport and Services Company face much competition from the National Gas and Industrialization Company and the United International Transportation Company. These companies provide the same commodities as the Aldrees Petroleum Transport and Services Company hence competes for the same customers. It is also worth noting that currently, oil with low production costs in Saudi Arabia is being put to question by some geologists (Cooper, 2011).

Apart from the five forces explained by Porters model, we have other key issues that affect the company. These issues include: the political and environmental concern, the economic concern at the local and global level, sentiments from investors, influence of the US dollar and the new laws and policies.

First, there are political and environmental concerns in Saudi Arabia and the world at large. These changes could be due to diplomatic issues. Any changes either politically or environmentally easily affects Aldrees Petroleum & Transport Services Company.

Secondly, the economic concern at both the local and global level affects Aldrees Petroleum Transport and Services Company in Saudi Arabia is. Any major shock or incident in the world wide market will have a great impact on the price of the products. How the global market perms and grows greatly affects and relates to the growth of the Saudi Stock market thus affects the Aldrees Petroleum & Transport Services Company.

Thirdly, sentiments from investors will also affect the stock market performance, thus directly affecting the Aldrees Petroleum & Transport Services Company. Therefore, it is important for the investors in the Saudi economy to exercise caution with regard to the stock market. The market value can easily be propelled above our fair value estimate due to an investors sudden shift in sentiments.

Consequently, the influence of the US dollar has much impact on Abdullah Al Othaim Markets Company. Related to this is the US short term interest rate, the strength of the dollar, the global capital market and their impact to the domestic interest rate. Both local liquidity conditions and global prices of products are greatly affected by the US interest rates. The Aldrees Petroleum & Transport Services Company raises or lowers its prices depending on the interest rates of the US Dollar.

Finally, the new policies and regulations are another key aspect that affect Aldrees Petroleum & Transport Services Company. Three years ago, foreign investors could utilize the Saudi Stock through the swap agreement. However, the inflows that foreign investors brought were below the expectations. Within a period of about one year, foreign investors had purchased approximately 2.3 % of the total market capitalization. This was partly caused by improper timing following the crash of most global markets in 2008 as a result of a global economic depression and due to lack of interest by foreign investors in the market access method. This is because it did not guarantee them the rights to profits or losses due to their own transactions.

It is worth noting that most developed nations are experiencing an economic slowdown as a result of high oil prices. Therefore, while supplies are fluctuating, the demand for oil is rising signaling high oil prices. Studies from economic experts show that the cost of oil per barrel may not stop climbing. The world may need to be prepared for a third oil shock. The economy of most industrialized countries is weakening though there is not yet an outright recession. It may therefore be worth drawing the conclusion that unless the industrialized nations run into trouble, Saudi Arabia and the rest of the Middle East will continue experiencing good economic times as a result of success of Aldrees Petroleum Transport and Services Company as well as other retail industries that deal with oil and products.

Micro Analysis

The stock price for the company can be found using the following formula:

P= D/(k-g), whereby p is the estimated stock price, D is the last dividend paid , k is the discount rate and g is the growth rate of the dividend as follows:

  • P=$15.74
  • D=$ 2.0
  • g=4.18 %

From this, K=4.31%. The last dividend paid was $1.5 So, P (estimated stock price) will be $1.5/4.31%-4.18%= $11.54.

Comparing this value ($11.54) with the theoretical value which is $15.74, the estimated stock price went down. Thus, the estimated stock was underweight.

Recommendation

Since the estimated stock sale is underweight, stocks are supposed to be bought with the assumption that these stocks will rise.

National Agriculture Marketing Company

According to Ramady (2010). this company is also known as Thimar. Tadawul (2010) notes that, The National Agriculture Marketing Company was established in the year 1987 and that the companys activities involve marketing products of agriculture as well as service provision in agriculture project management and market maintenance. This company is situated in Riyadh, Saudi Arabia.

Macro Analysis of the Company

As stated earlier, macro-analysis of an industry is carried out using the five forces in the Porters model. They determine not only the attractiveness, but also the profitability of a given industry. They are therefore very important to an aspiring entrepreneur. The five forces include: the supplier power, buyer power, threat of entry, threat of substitutes and competitive rivalry.

To start with, the company has a favorable buyer power. This is so because Saudi Arabia has a large population hence a higher demand for products in the company. Moreover, the company gets more customers during the month of Ramadan. This is because the Saudi Arabia people tend to buy a lot of agricultural products during the month of Ramadan, hence the need to create more marketing on agricultural products.

Secondly, the National Agriculture Marketing Company has great supply power. This has been achieved by strategic distribution of its accessories. At the same time, the company makes use of the retail industrys online websitewww.souq.com to make most of its supplies. Thus, most customers are able to pay for products by use of credit cards.

Thirdly, the threat of entry into the company is high. This is so because in Saudi market, monopolistic tendencies are not encouraged. Besides, the differences between conventional and Islamic fiscal practices continue to become slim and as such barriers to new entries into the retail business are reducing.

Fourthly, the threat of substitutes in the company is high. This is because there are several other agricultural and marketing companies that are coming up. At the same time, the importation of various substitute goods has a way of reducing the prices for the local products especially when they come at low costs making consumers to prefer them. The domestic retailers will thus be forced to adjust their prices so as to compete effectively.

Finally, there is much competition rivalry. The National Agriculture Marketing Company.

face competition from: Abdullah Al Othaim Markets Company, Qassim Agricultural Company and Saudi Research and Marketing group. This is so because these companies provide the same commodities as the National Agriculture Marketing Company hence competes for the same customers.

Apart from the five forces explained by Porters model, we have other key issues that affect the National Agriculture Marketing Company. These issues include: oil prices, the political and environmental concern, the economic concern at the local and global level, sentiments from investors, influence of the US dollar and the new laws and policies.

First, we have oil prices. Since Saudi Arabia leads in the production and exportation of oil, the Saudi economy in general and the National Agriculture Marketing Company is largely affected by any fluctuations in oil prices. Apart from affecting the nations economic growth, the effect is also experienced at the Stock market. The stock prices in the country rise and fall when oil prices increase and decline respectively. What may result to these fluctuations in price are basically two aspects. This is because the Saudi Stock Market has a bi-directional causal or mutual predictive relationship with daily changes in the oil prices and the global demand for oil. The oil prices in Saudi Arabia affect the stocks prices of the National Agriculture Marketing Company.

Secondly, there are political and environmental concerns in Saudi Arabia and the world at large. Any changes either politically or environmentally easily affects the National Agriculture Marketing Company.

Thirdly, the economic concern at both the local and global level affects the National Agriculture Marketing Company. Any major shock or incident in the world wide market will have a great impact on the price of the products. How the global market perms and grows greatly affects and relates to the growth of the Saudi Stock market thus affects the National Agriculture Marketing Company.

Fourthly, sentiments from investors can also affect the stock market performance, thus directly affecting the National Agriculture Marketing Company. Therefore, it is important for the investors in the Saudi economy to exercise caution with regard to the stock market. The market value can easily be propelled above our fair value estimate due to an investors sudden shift in sentiments.

Consequently, the influence of the US dollar has much impact on the National Agriculture Marketing Company. Related to this is the US short term interest rate, the strength of the dollar, the global capital market and their impact to the domestic interest rate. Both local liquidity conditions and global prices of products are greatly affected by the US interest rates. The National Agriculture Marketing Company raises or lowers its prices depending on the interest rates of the US Dollar.

Finally, the new laws and policies also affect the National Agriculture Marketing Company. Three years ago, foreign investors could utilize the Saudi Stock through the swap agreement. However, the inflows that foreign investors brought were below the expectations. Within a period of about one year, foreign investors had purchased approximately 2.3 % of the total market capitalization. This was partly caused by improper timing following the crash of most global markets in 2008 as a result of a global economic depression. Another reason is due to lack of interest by foreign investors in the market access method. This is because it does not guarantee them the rights to profits or losses due to their own transactions.

Micro Analysis

The stock price for the company can be found using the following formula:

P= D/(k-g), whereby p is the estimated stock price, D is the last dividend paid , k is the discount rate and g is the growth rate of the dividend as follows:

  • P=$3.35
  • D=$ 0
  • g=0 %

From this, K=0 %. The last dividend paid was $ 0.5 So, P (estimated stock price) will be $ 0.5/0 %-0%= $0.5.

Comparing this value ($0.5) with the theoritical value which is $ 3.35, the estimated stock price went down. Thus, the estimated stock was underweight.

Recommendation

Since the estimated stock sale is underweight, stocks are supposed to be bought with the assumption that these stocks will rise.

Saudi Automotive Services Company

According to Johany et al (1986), Saudi Automotive Services Company was established in the year 1988 and this was done in accordance to a previous ministerial decree. Tadawul (2011) states that, this company offers car services, restaurant services and beverages. According to Ramady (2010), other services offered by the company include: fuel transportation, sale of construction materials as well as purchasing and leasing of real estate. Johany et al (1986) also notes that, the company also owns an international automobile association which offers international driving licenses custom transit books. The Saudi Automotive Services Company is a public shareholding company located in Saudi Arabia.

Macro Analysis of the Company

As stated earlier, macro-analysis of industry is carried out using the five forces in the Porters model. They determine not only the attractiveness, but also the profitability of a given industry. They are therefore very important to an aspiring entrepreneur. The five forces include: the supplier power, buyer power, threat of entry, threat of substitutes and competitive rivalry.

To start with, the company has a favorable buyer power. This is so because Saudi Arabia has a large population hence a higher demand for products in the company. Moreover, the company gets more customers during the month of Ramadan. This is because the Saudi peoples expenditure tends to rise during this month due to the fact that most people spend a lot on food, leisure and recreation as compared to other times of the year. People are also frequently in need of car services as they tour many places. Given the high demand for these products, prices increase during this time. Thus, the buying power of Saudi Automotive Services Company increases during this time.

Secondly, Saudi Automotive Services Company has great supply power. This has been achieved by providing all the needs for travelers, building many motels at strategic places, and offering frequent workshop services. At the same time, the company makes use of the retail industrys online websitewww.souq.com to make most of its supplies. Thus, most customers are able to pay for products by use of credit cards.

Thirdly, the threat of entry into the company is high. This is because it is possible to penetrate into Saudi Automotive Services Company because in Saudi market, monopolistic tendencies are not encouraged. Besides, the differences between conventional and Islamic fiscal practices continue to become slim and as such barriers to new entries into the retail business are reducing.

Fourthly, the threat of substitutes in the company is high. This is because there is much competition by other companies; hence these companies may introduce substitute products. There is also much importation of substitute products. The importation of various substitute goods has a way of reducing the prices for the local products especially when they come at low costs making consumers to prefer them. The domestic retailers will thus be forced to adjust their prices so as to compete effectively.

Finally, there is much competition rivalry. The Saudi Automotive Services Company faces much competition from the Food Products Company and Red Sea Housing Company. This is so because these companies provide some common commodities as the Saudi Automotive Services Company hence competes for the same customers.

Apart from the five forces explained by Porters model, we have other key issues that affect the company. These issues include: oil prices, the political and environmental concern, the economic concern at the local and global level, sentiments from investors, influence of the US dollar and the new laws and policies.

First, we have oil prices. Since Saudi Arabia leads in the production and exportation of oil, the Saudi economy is largely affected by any fluctuations in oil prices. Apart from affecting the nations economic growth, the effect is also experienced at the Stock market. The stock prices in the country rise and fall when oil prices increase and decline respectively. What may result to these fluctuations in price are basically two aspects. First is because the Saudi Stock Market has a bi-directional causal or mutual predictive relationship with daily changes in the oil prices. Second, there is global demand for oil. The oil prices in Saudi Arabia affects the stock prices of the Saudi Automotive Services Company.

Secondly, there are political and environmental concerns in Saudi Arabia and the world at large. Any changes either politically or environmentally easily affects the Saudi Automotive Services Company.

Thirdly, economic concern at both the local and global level affects the Saudi Automotive Services Company. Any major shock or incident in the world wide market will have a great impact on the price of the products. How the global market perms and grows greatly affects and relates to the growth of the Saudi Stock market thus affects the Saudi Automotive Services Company.

Fourthly, sentiments from investors can also affect the stock market performance, thus directly affecting the Saudi Automotive Services Company. Therefore, it is important for the investors in the Saudi economy to exercise caution with regard to the stock market. The market value can easily be propelled above our fair value estimate due to an investors sudden shift in sentiments.

Consequently, the influence of the US dollar has much impact on Saudi Automotive Services Company. Related to this is the US short term interest rate, the strength of the dollar, the global capital market and their impact to the domestic interest rate. Both local liquidity conditions and global prices of products are greatly affected by the US interest rates. The Saudi Automotive Services Company raises or lowers its prices depending on the interest rates of the US Dollar.

Finally, the new laws and policies also affect the Abdullah Saudi Automotive Services Company. Three years ago, foreign investors could utilize the Saudi Stock through the swap agreement. However, the inflows that foreign investors brought were below the expectations. Within a period of about one year, foreign investors had purchased approximately 2.3 % of the total market capitalization. This was partly caused by improper timing following the crash of most global markets in 2008 as a result of a global economic depression. Another reason is due to lack of interest by foreign investors in the market access method. This is because it does not guarantee them the rights to profits or losses due to their own transactions.

Micro Analysis

The stock price for the company can be found using the following formula:

P= D/(k-g), whereby p is the estimated stock price, D is the last dividend paid , k is the discount rate and g is the growth rate of the dividend as follows:

  • P=$11.39
  • D=$ 0.5
  • g=3.82 %

From this, K=1.97 %. The last dividend paid was $ 1.0 So, P (estimated stock price) will be $1.0 /1.91 %-3.82%= -$0.52.

Comparing this value (-$0.52) with the theoretical value which is $ 11.39, the estimated stock price went down. Thus, the estimated stock was underweight.

Recommendation

Since the estimated stock sale is underweight, stocks are supposed to be bought with the assumption that these stocks will rise.

In conclusion, the key issues that affect retail industries in Saudi Arabia revolve around the porters model as well as the oil prices, the political and environmental concern, the economic concern at the local and global level, sentiments from investors, influence of the US dollar and the new laws and policies. Oil industries are the key determinants of Saudi Arabias economy. Thus, success in these industries means that there will be economic growth in the country while their decline will result to the countrys economic recession. Any changes in the political and environmental concern will impact retail industries in Saudi Arabia. On the other hand, the economic concern at both the local and global level means that any major shock or incident in the world wide market will have a great impact on the stock price. How the global market perms and grows greatly affects and relates to the growth of the Saudi Stock market. Sentiments from investors can lead to the market value being propelled against Saudi Arabias retail industries fair value. The value of the US dollar also affects the stock price of retail industries in Saudi Arabia. Policies and regulations also affect the stock price of retail industries in Saudi Arabia. In this study, three companies namely; Aldrees Petroleum Transport and Services Company, National Agricultural Marketing Company and Saudi Automotive Services Company estimated stocks value was found to be underweight while Abdullah Al Othaim Markets Company estimated stock value was found to be overweight.

References

Cooper, P.J. (2011). Just where is the Middle East Business Cycle?

Johany, A. Berne, M. & Mixon, J. (1986). The Saudi Arabian economy. London: Taylor & Francis.

Ramady, M. (2010). The Saudi Arabian economy: policies, achievements and challenges. London: Springer.

Tadawul (2011).Saudi Arabian retail industries.Web.

Loss Prevention in a Retail Chain

Loss Prevention (LP) involves formulation of policies, procedures and practices in organizations to prevent possible losses of inventory and other assets in a retail chain (LP Innovations, Inc. An Introduction to Loss Prevention par.1). Formulating effective programs to guide loss prevention concept can aid in reducing opportunities in which losses may take place and more specifically, adopt strategies to prevent losses instead of focusing on reactive approaches once they have occurred.

Any organizations that suffer losses are losing incomes, which in turn affect their final profitability. Lost inventory needs to be replenished at costs to retailers. On the other hand, lost incomes cannot be replaced. Costs associated with losses directly affect profitability and inventory items in a companys balance sheet. Lost profits affect the companys strategies to acquire new merchandise, its expansion strategies, better employees compensations, organizational net incomes or increased EBIDTA.

There are several business reasons for an organization to adopt loss prevention functions. Loss prevention programs are suitable for any other form of a business. For instance, loss prevention functions can focus on sales department and long the supply chain. Hence, it is important for an organization to develop loss prevention functions around the supply chain, human resources and in any other department that may experience losses to prevent losses.

A number of factors may influence the type of loss prevention programs that an organization may implement. These may include the number of retail outlets, characteristics of the supply chain, types of goods sold or service areas, possible threats and other associated risks to an organization. Once an organization has established loss prevention functions, it is necessary to adopt effective evaluation systems in order to ensure that a retailer is profitable and not prone to some specific forms of preventable losses.

How losses occur

Organizations have reported several cases of losses but in certain categories that include internal losses, external losses and losses that take place through employees mistakes.

Internal losses

Internal losses are responsible for the largest percentage of losses in an organization, irrespective of size or business segments. These losses are usually associated with employee theft. While many may wonder why internal losses are the significant contributors to losses in organizations, in most cases, however, surveys have shown that employees steal from business the most compared to other stakeholders.

Employee theft takes place through several diverse ways. For instance, there is a simple pilfering of items, collusion with other employees and large mega thefts, which lead to massive inventory losses. These practices deplete stocks available for sales while eventually drain profits from a business.

At the same time, dishonest employees also manipulate activities at the point-of-sales to steal. Employees may take cash from the till, engage in fraud such as refunds, theft through discounts, loyalty reward programs and other well-orchestrated frauds. In fact, retailers can suffer double-dip losses that involve both cash and inventory at the same time at the point-of-sale in a single transaction.

External theft

Such thefts often result from acts of thefts that originate outside an organization. While external sources of losses could be limited and less relative to internal thefts, they also constitute a significant amount of losses to the retail industry yearly. Employees must understand how external theft takes place and appropriate methods to counteract them.

These processes require training, effective customer service, identification of potential areas of weaknesses and appropriate methods of protecting a company. It is necessary for an organization to investment in security solutions that can deter external thefts. These may include robbery and shoplifting prevention and effective ways of enhancing customer service and people management. Internal loss prevention strategies may also assist in reducing cases of external sources of losses.

Errors

Errors also contribute to losses in organizations. In most cases, losses from errors are related to paperwork, and they contribute to nearly 20 percent of losses every year. Employees at various departments cause these errors and thus related losses. Hence, employees are the main causes of losses in any organization.

Errors can take place anywhere in the supply chain. These errors may occur at any point along the supply chain, including product shipment and distribution. Errors could be noted in incorrect counting, inappropriate discounting or wrong records on sales. These errors may be trivial mistakes, but they have substantial costs yearly for any retailer.

Identifying a loss prevention problem

Losses may originate from several sources and occur for various reasons through diverse methods. Retailers, therefore, should look for potential indicators that a business is not doing well due to losses. Some indicators might include rising costs of inventory with flat or decreasing sales, missing items, empty stocks, reported cases of shoplifting, identified cases of robberies, lost inventory, losses noted when certain employees work, inappropriate cash register and certain high refunds, voids, discounts and other rewards and transactions linked to specific employees.

These are only few of the possible indicators that an organization could be experiencing a loss prevention challenge.

Loss Prevention Strategies and Best Practices

Loss prevention has often been touted as effective across different industry reports and media channels through the realized success of certain adopted programs. Hence, loss prevention has become a critical element, and it determines business success in the retail sector.

While giant retailers may have mastered several approaches of mitigating losses, several small startups continue to struggle with loss prevention. Organizations that are successful in loss prevention have also demonstrated best practices and specific approaches. The most common approach to loss prevention is audit function.

Loss Prevention and Internal Audit

The strategy of auditing retail supply has become a crucial way to provide insights on effectiveness of any loss prevention programs. Retailers experience significant challenges on areas for auditing and specific audit measures to adopt for certain areas. Retailers may consider both operational audits and shrink audits across various departments (LP Innovations, Inc. Developing Effective Audit Programs par. 1).

Retailers should conduct inventory control and inventory audits to prevent losses. Physical tracking of the inventory is a cumbersome task for any organization. Nevertheless, retailers require effective inventory control and appropriate inventory audits in order to succeed. They should also conduct year-end audits.

This is appropriate for tracking business performances and losses throughout the year. Inventory accuracy, availability and efficiency are audit management practices to ensure reliability of loss prevention practices. These practices ensure optimal efficiency and low wastage.

Retailers should also conduct supply chain management audits regularly. This ensures that retailers have effective audit processes in place. At the same time, they can identify gaps and mitigate related threats if required.

Purchase management audits are required to evaluate costs of products and services sold. Therefore, firms would always like to track purchase processes. However, retailers may lack adequate resources to ensure constant monitoring of all processes involved in product sourcing and purchasing processes.

Operational audits focus on general areas of operations for the business. Such audits cut across the entire organization and focuses on areas like finance and management among other core areas of operations. Generally, operational audits focus on the entire organization to provide a general outlook of loss prevention programs.

Conversely, shrink audits are categorical and ensure that employees or organizations adhere to and follow guidelines created by governments such as accounting standards and practices and Sarbanes-Oxley among others. Shrink audits may also evaluate some elements of operational audits.

Operational audits may involve the evaluation of employees knowledge on retail supply chain management, security and deposit management among others. Operational audit acts as a checklist for an organization. Employees who conduct such audits should be highly knowledgeable and experienced to detect more obvious loss prevention issues. However, organizations may lack employees with deeper knowledge on audit issues and thus require external assistance.

Shrink audits offers relatively specialized approach on loss prevention practices for an organization. These audit activities go beyond the general approach to audits found in operational audits. Specifically, shrink audits look at areas of losses. They rely on data obtained from compliance audits. For instance, practices in shrink audit may require the auditor to review all data of merchandise obtained to detect any trends and patterns that could show possible fraud in an organization.

Shrink audits involve careful evaluation of information through discussions with relevant teams. There is no hurried review of data. For example, auditors may not simply assess employees knowledge on processes, policies and procedures for loss prevention, instead they must evaluate relationships with external stakeholders, including customers. Therefore, companies may get opportunities to improve their loss prevention and operational procedures and policies. At the same time, they will also understand the effectiveness of their loss prevention programs.

Based on results of audits, an organization can embark on strategies of enhancing loss prevention programs. Organizations need to understand the type of audit approaches that will work best for their supply chain. Audit approaches mainly depend on what results are expected.

Any organization that relies on internal teams to conduct shrink audits may not yield the intended results because some key indicators of losses may not be covered in the report. In addition, internal teams who conduct shrink audits may also compromise the quality of the report. Shrink audits explore highly sensitive elements of loss prevention, particularly financial reports and related practices.

Internal teams can effectively conduct operational audits to assess possible areas of weaknesses. For example, the team may evaluate aspects of customer service that could result into losses and make appropriate recommendations.

There are professionals or specialized firms that offer loss prevention programs to retailers. Such loss prevention programs lessen shrink and protect the companys profitability. Nevertheless, loss prevention programs could be expensive for organizations. Indeed, a good loss prevention program requires precise, consistent and meticulous review of existing policies and procedures.

Yet, organizations find it difficult to maintain policies and procedures, particularly when internal teams have to work on widely distributed retail outlets and supply chain. Companies have to deal with loss prevention problems in a more consistent and better ways and prevent losses of incomes.

It is imperative for organizations to enhance audits for organization-wide efficiency. Today, various retailers depend on factory warehouses, retail stores and e-commerce platforms to store, distribute and sell their products. Retailers cannot effectively manage such supply chain with limited internal staff. In fact, the small size of a loss prevention department can result into challenges.

First, retail outlets may be located in different states, which contribute to significant costs of travel while shrink audits may be cumbersome to complete as scheduled. Shrink audits may need much time to complete for every given store. Internal loss prevention team may only focus on operational audits to review issues related to product pricing, store conditions and relationships with customers among others.

The external loss prevention team has to review specific policies and procedures with staff and audit members. Second, many retailers lack reliable data of loss prevention activities. Past audits are imperative for decision-making and identifying trends and patterns across various stores in the supply chain. A single audit may not be adequate for drawing appropriate conclusion. Therefore, retailers require regular audits to support decision-making and draw effective conclusions based on the observed patterns and trends over a long period.

Organizations have internal audit teams in their financial departments. In addition, they may also have loss prevention departments. In such situations, there could be conflict between these departments. Both units of an organization work to prevent losses and ensure compliance with government regulations.

Certainly, loss prevention should take lead in controls required in retail stores and inventory controls needed to avert losses. Further, Sarbanes-Oxley provides various components for organizations to ensure compliance and prevent fraud. Hence, loss prevention departments should handle loss prevention requirements.

While some individuals may consider the internal audit activities as extremely objective practices in organization, loss prevention, based on the reporting structure, may not always be considered in a similar manner. This could be challenging to some companies. On this note, it is imperative to note that internal audit and loss prevention functions have different areas of focus. For instance, one critical area of focus for loss prevention is the companys store.

Loss prevention requires collaboration with various departments, including individuals who work with store associates. A working relationship is necessary to ensure effective assessment of various reports. This is a major different between loss prevention and internal audits. In fact, many internal audit departments are mainly found in corporate head offices and they usually audit centralized roles.

Loss prevention and internal audits may appear unusual in responsibilities, particularly when headed by a single person or run from one department. Loss prevention and internal audit functions should create a natural synergy (Lee par. 34). Both functions concentrate on ensuring organizational profitability and effectively run operations, which could be achieved within the companys constraints with available resources and styles of management.

While internal audits and loss prevention may complete their roles rather differently, they have chances to collaborate more efficiently and accomplish much in their current operations. For instance, there are several elements of corporate internal audit noted from operational perspective, which could be solved through the expertise and experience of the loss prevention programs to support their roles and responsibilities.

Conversely, there are instances in which loss prevention functions require expertise and knowledge of internal audits to support their activities and evaluation processes.

Conclusion

Retailers can enhance loss prevention programs by adopting exception-based reporting systems. These systems enhance effectiveness, efficiency in monitoring and dealing with exceptional issues as they occur. Inventory management systems have evolved over time and they have become more effective.

Consequently, such systems offer better data for loss prevention, stores and inventory organization. Monitoring systems have enhanced loss prevention environment, increased performance, eliminated redundancy and increased organization-wide control for improved profitability.

New systems provide good auditing of collected information, exception reporting and abilities to control potential areas of weaknesses such as gift and credit card frauds, refunds and any other behaviors that may perpetuate losses. Individuals who use these systems require adequate training in order to realize maximum benefits in loss prevention programs.

Retailers need effective loss prevention strategies in place to handle potential losses through various means, particularly losses related to employees activities. It is not simple to determine loss prevention strategies in large organizations with several outlets in various states. Staffing needs for loss prevention is equally difficult to determine.

Therefore, it is imperative for any organization to review its loss prevention policies and appropriate recommendations based on highly technical aspects of the programs. They must consider organizational structure, resources, staffing, productivity and intended outcomes among others. Organizations must ensure that loss prevention programs are cost-effective and highly effective in planning, resource distribution, auditing, budgeting, and policy formulations.

Organizations that lack highly experienced and qualified staff on loss prevention may outsource such services (Harris par. 3). At the same time, they must understand the differences between internal auditing and loss prevention functions while acknowledging the synergy that these two units may create for the business to ensure compliance, controls and profitability.

Works Cited

Harris, Erin. Outsource Loss Prevention, Reduce Shrink. Integrated Solutions For Retailers. 2009.

Lee, James. The Dual Role of Internal Audit and Loss Prevention. LP Magazine. 2004.

LP Innovations, Inc. An Introduction to Loss Prevention: Loss Prevention 101. 2013.

. Developing Effective Audit Programs: Store Audit Development: Operational Audits vs. Shrink Audits. 2009.

Digital Technologies in Retail Trends of 2025

The contemporary technologies evolve at an extremely fast pace. The modern consumers have more devices and digital technologies at their service than at any other time in human history. Today, the technologies have grown to penetrate every sphere of our life. Retail, marketing, and shopping have not become an exception. Some of the modern shopping practices are very different from those popular just several decades ago (credit cards, QR codes, online shopping). However, shopping at brick-and-mortar stores is still very similar to that of the past. In this paper, I theorize about the likely retail trends and in-store experiences that might be popular in 2025. The discussion involves handheld devices as humanized digital assistants and interactive in-shop experiences.

Clients of the Future and Their Needs

As the Millennial generation is now recognized as one of the largest and includes people born between 1981 and 2000, this generation represents the future consumer base for all spheres of retails and services. This tendency means that the buyers of the future are going to be tech-savvy with heavy reliance on the latest technologies as their ever-present helpers. Moreover, the modern consumers have time as one of their most appreciated values. That way, the future customers would want their shopping experiences to be maximally efficient and active.

Handheld Devices as Humanized Digital Assistants

Mobile devices and tablets will play a key role in helping massive information sharing over the Internet seamlessly interwoven into daily life. These handheld devices will become even smarter, quicker and collectively provide information tailored to users lifestyles and preferences. As a result, these changes will eventually turn our phones and tablets into digital assistants that have emotions and feelings. They will not only be able to analyze data, track behaviors, and give quick feedback to the users but also serve as more humanized digital assistants that communicate and connect with the users on a more intimate level.

This will be executed through a computer program like Apples Siri or Googles Google Now but in a more advanced and complicated form. Users will be able to start an uninterrupted, personal conversation in a way just like talking to their friends and family face to face, but with their devices. This type of humanized digital assistant will take on any possible topics and give back answers that are helpful and precise. The stores will have ports where the handheld devices will be able to connect to their database so the humanized assistants could be able to answer questions about each store in particular (for example, whether or not it has certain products, and what the prices are).

This option would encourage the marketers to provide more information about their goods so the buyers could learn more about them (for instance, their ingredients, where they come from, how organic they are). The devices could have the option to memorize various wish lists to scan the store databases for these goods and inform the buyer about their presence. Besides, they will have the option of expenditures monitoring. A user would need to insert the approved amount of money for each day, and the device would notify them when the limit is approached. The same can be done to bank accounts; the devices would be able to track them and inform the users when the costs on their accounts are running out.

Automatic Authorization of Goods

All the products would have stickers with all the necessary information about them for both the shoppers and the retailers. These stickers would be provided by the manufacturers at the stage of packing goods. As a result, when the goods are delivered to the stores by trucks, the vehicles would have to pass through special scanning frame that will capture the information on all the stickers inside of the truck and instantly identify them and add to the stores database so they can be delivered or put on the shelves right away without the lengthy registration. This technology will benefit the buyers as well since they would not need to wait in lines for the cashiers to scan each products code. Instead, they would have to move the cart through the scanning frame and within seconds all the items inside would be registered, so the buyer would only have to pay for them.

Advertising

As a vital part of retail, advertisement is going to make its way to the future but alter its form to attract more tech-savvy consumers. First of all, the advertising screens placed inside and outside of stores are going to become interactive. That way, whenever a client sees something they are interested in, they will have the ability to pause an advertisement, re-start it, or skip through various products and search for a particular one. Besides, since communication is one of the most important aspects of the future society, the advertisement screens are going to have a send button.

With the help of this option, the clients would be able to share advertisements with their friends and family members. Besides, the interactive shopping screens in the stores and supermarkets are going to add interactive commercials to the buyers generating them based on the goods each particular customer is viewing. Product testing is going to be another important aspect of the future advertising. As it would include many aspects of online shopping, the users would need to connect with the goods. Testing can be altered based on the types of goods sold in every store. For example, perfume stores would have machines not only equipped with interactive shopping screens but able to give away the samples of selected perfume.

The same can be done with fabrics, makeup, or some kinds of food. To attract the customers of the future the appearance of the stores is to change. Targeting tech-savvy Millennials, the stores would have to advertise themselves fighting for the buyers. That way, the standard looking supermarkets are not likely to be popular in the future. I, personally, imagine the stores of 2025 similar to the contemporary Apple stores with a lot of soft light, minimalistic design, and a highly technical approach to everything. In other words, the outside and inside space of the stores (doors, walls, shelves, ceiling, and stairs) would be designed to contribute to the experience desired by the clients.

Conclusion

To sum up, the stores of the future are going to have convenience, speedy service of high-quality, and technologies as their main orientation as these are the values of the future buyers. The experience of shopping in a retail store of the future would be a combination of online shopping and visiting brick-and-mortar stores merging the advantages of both and eliminating the inconveniences. The buyers would be assisted by the humanized devices raising their shopping experiences to the next level and taking over such activities as searching for specific goods, processing their details, selecting the best ones, and monitoring the expenditures.

Spatial Strategies for Auto-Parts Retail Network

The author of this article looks into demand and delivery services in an auto-part retail store, and how they relate to the amount of revenue gained by the store. Furthermore, the author looks into factors relating to supply and demand and how they can be worked out to increase the revenue of the store without affecting customer loyalty. Therefore, the author brings out major changes that a store can do to overcome the challenges of increasing revenue, and, at the same time, giving its customers better and quality services. The author gives concrete and elaborate findings that if an auto-part retail shop adopted an area-based delivery strategy, the store would be able to improve on its efficiency, and, at the same time, bring a match between the revenue generated from a sale to a specific customer and the trips made to the said customer.

The article gives concrete arguments. However, there are some concepts in the arguments that are not refutable. A retail store, as argued, comprises of customers, distribution centres, and a bridge between the two, which in this case, transport. Irrefutable. Therefore, it is important that all of these three aspects of a retail store be considered when analyzing and coming up with conclusive support for the arguments, and the author has effectively considered all the above in the arguments given. The use of a Geographic Information System, commonly referred to as GIS, is very important in determining the viability of a certain customer in relation to locality and sales with respect to the nearest distribution centre. For example, Supercheap Auto, in their website, have established or created an area where you can input your data, and the GIS will locate the nearest store from where you can place your order. This will not only reduce the cost of transportation but also the time required to deliver the product, thus boosting on revenue generated without compromising on customer loyalty.

On the demand analysis, the authors pose the question, are all customers equal, or are some more equal than others? According to business ethics, all customers should be treated equally regardless of the number of sales a store makes towards them. However, in as much as all customers should be given equal treatment, there are repercussions involved. These repercussions should be considered where prioritizing your customer based on the revenue they bring to the store. Therefore, it will be prudent to go against the general business rule and consider some customers more important than others as long the revenue generated through this set of customers is agreeable. Therefore, in this contest, it does not matter where the customer is located from the point of sale as long as the revenue generated can cater for the delivery cost and still retain maximum profitability. As a matter of fact, the demand analysis discussed counters the general aspect of the spatial model as stipulated by the author. However, he gives a conclusion that there are customers who should be considered more important gauging on the revenue they generate into the store.

On service delivery analysis, it was evident that stores incur reduced revenue as a result of delivering products to customers who are based in widely spread and large areas and have low sales. However, the conclusion of ignoring this client is not the answer to the underlying problem and goes against the protocols of any business. Businesses need to expand, therefore, the solution will be to link these customers together and deliver the goods at a specific date prior to each making their individual orders. On the other hand, service given to the customer should be of high quality and does not exclude delivery time. Therefore, if a store finds out that it is experiencing an influx of demand from a certain region, the best way to counter it without affecting its revenue is to open a new store at a location that will best serve the whole region with minimum distance travelled. The author has clearly explained how this is done and how effective it is, through his service usage analysis passage. Additionally, the implementation of a website such as that implemented by major auto-parts stores like Supercheap Auto, Repco and Autobarn which have incorporated a store locator will play a great role in using the closet store to deliver goods to the customer.

It is important for a store to do a thorough survey on its market before opening new stores, to eliminate the issue of distributing centres of the same store from competing for the same customers. Therefore, based on the market area analysis, it is important to set up a distribution centre that can serve more than 80% of its clientele at a distance of not more than 15 minutes drive. However, in this part, it will be unwise for the store to close a distributing centre just because it is within another centres range, as most customers usually pop-in to the nearest store. As a matter of fact, this will result in loss of revenue for the store.

The passage in the article brings out a clear picture of what should be done, and based on the argument of the author; it will be prudent for an auto-part store to follow the direction of each passage if it were to increase the revenue it generates.

The Use of Online Advertising and Online Retailing

Effectiveness of online marketing

Risk investment and low advertising costs are the main reasons why firms engage in online marketing. The sole purpose for starting and running any business venture is to reap decent returns on investment. Besides, businesses also target to maximize sales in the course of undertaking a marketing campaign. If online marketing is carried out effectively, there are scores of benefits that can be gained by a business entity (Breuer, Brettel & Engelen, 2011).

In other words, online marketing is effective in the sense that a large audience (both targeted and untargeted) can be reached within a very short duration. Besides, online marketing is relatively cost-effective. Therefore, it can be sustained for a long time. Planned campaign strategies and cost-effective design are indeed some of the strengths of online marketing compared to other forms of advertisements.

Second, online marketing is not coercive since consumers are not compelled to purchase products before they make up their minds. This creates a lasting reputation of both the business entity and products being sold to the market. Hence, consumers are in a position to make the right choices (Brettel & Spilker-Attig, 2010).

In order to gain a competitive advantage through online marketing, firms can employ a number of tools. For instance, the uniqueness of the website address or domain name is a crucial factor to consider. The name should clearly and briefly articulate the position of a business organization in regards to products being offered. Second, an effective online marketing site should have the most appropriate content. Other factors to consider include the use of relevant blogs, simplicity, and regular updates. Firms can rapidly gain a competitive advantage when these tools are employed accordingly (Werner, 2013).

Online distribution

The online grocery delivery system adopted by Amazon is an excellent move by the company to boost its return on investment (Breuer, Brettel & Engelen, 2011). While there are myriads of physical grocery stores spread across major markets, online marketing adds value to the entire concept of competition. Hence, online grocery delivery is expected to act as a marketing strategy for Amazons line of products and also improve the competitive potential of the company. However, the organization may miss out on competitive advantage if the online distribution platform is not carried out properly. Online distribution channels may sometimes be counterproductive especially if the producer does not fully understand the varying tastes, needs and preferences of consumers (Gazzoli, Kim, & Palakurthi, 2008).

Netgrocer is my most favorite grocery store. To begin with, this store has an excellent shopping experience mainly due to its large and varied collection of grocery products. The wide selection of goods often makes it possible for buyers to settle on the exact specifications of the product required. In addition, products are neatly arranged in the store. It is usually fast, easy, and enjoyable to buy grocery products from this store.

I have also noted that the shopping order at this store is done faster than other outlets. The store has drawn my patronage to its products by the welcoming nature of its employees. Its staff members clearly understand the techniques of serving customers in the most satisfactory manner. For example, any direct inquiry made by a buyer is expeditiously addressed and the impending issue resolved as soon as possible. The latter is one of the factors that will continue to retain my loyalty towards the store (Arjoon & Rambocas, 2011).

Apart from the above positive attributes of the store, I also tend to be attracted by the low cost of its products compared to other grocery chains. At least, Netgrocer has products that can be affordable to every buyer.

Free shipping and coupons

It is evident that the willingness of consumers to buy through an online channel is largely affected by the cost of shipping. In most cases, shipping costs might even surpass the cost of the product depending on the geographical destination and size of the good being sold. Hence, flat or free shipping offers to play an important role in the marketing of products through online portals especially during the holiday season (Burnsed, 2009).

In the case of consumers who buy gifts for holidays, it is a big deal for them to be presented with shipping offers. Their final buying decisions are remarkably influenced by free offers. As a matter of fact, consumers often settle for sites that offer free shipping. If the seller takes charge of both the handling and shipping fees, it becomes a great reprieve for the targeted consumers. Although free offers are used to market products with the aim of boosting sales, there is a need to utilize the same offers in the most correct manner. In other words, offers should be taken as selling expenses (Cochran, 2006).

Free offers are obviously more effective than coupons since buyers often prefer instant claims instead of waiting for some time. When it comes to free or flat shipping deals, most online buyers rush for it with the expectation of cutting down their budgets. On the other hand, coupons might fail to attract customers as expected bearing in mind that customers are usually entitled to them only after making some purchases. Therefore, most buyers will not settle for coupons especially in the presence of free shipping (Hill, 2010). Moreover, revenue per catalog can only be significantly increased through free shipping since all the online products available for sale have to be shipped after purchases.

References

Arjoon, S. & Rambocas, M. (2011). Ethics and customer loyalty: Some insights into online retailing services. International Journal of Business and Social Science, 2(14), 1-3.

Brettel, M., & Spilker-Attig, A. (2010). Online advertising effectiveness: A cross- cultural comparison. Journal of Research in Interactive Marketing, 4(3), 176-196.

Breuer, R., Brettel, M., & Engelen, A. (2011). Incorporating long-term effects in determining the effectiveness of different types of online advertising. Marketing Letters, 22(4), 327-340.

Burnsed, B. (2009). In Luxury Sector, Discounting Can Be Dangerous. Web.

Cochran, C. (2006). . Web.

Gazzoli, G., Kim, W. G., & Palakurthi, R. (2008). Online distribution strategies and competition: Are the global hotel companies getting it right? International Journal of Contemporary Hospitality Management, 20(4), 375-387.

Hill, D. (2010). Why Leading with Price will Kill Your Advertising and Your Brand. Web.

Werner, M. (2013). The effect of the use of online advertising and online retailing on marketing strategy for products. Journal of American Academy of Business, Cambridge, 18(2), 16-22.

Xing, Y., Grant, D. B., McKinnon, A. C. & Fernie, J. (2010). Physical distribution service quality in online retailing. International Journal of Physical Distribution & Logistics Management, 40(5), 415-432.

Marketing: Retail Advertising and Celebrity Endorsement

Introduction

The primary objective of marketing is to reach the target market and earns a maximum profit. However, it is not that easy to influence the consumers tastes and shift their preferences, promoting a particular product. Todays market is flooded with a variety of products and services. Marketers of new products might have difficulties with occupying a certain market sector. The abundance of marketing messages and information overload may result in thcoconsumers confusion. To stand up in the crowd, the marketers of the product using brand endorsers According to McCracken (1989), endorsers can leverage their own popularity to create positive associations for brands in the minds of consumers. Brand managers are hoping to transfer this creation of associations to their own produ t (Chedi, n.d, p.2).

Today one of the best ways for retail advertising is using celebrity endorsement. 25% of all television advertisements are using celebrities to promote their brand. Today marketers are investing a huge amount of advertisement budget for celebrity endorsement for promoting their brand. The reason for celebrity endorsement is that the image of the celebrity will positively influence the processing of selling. Attractiveness and trustworthiness of the celebrity are the main two instruments of influencing thcoconsumers preference or celebrity endorsements to be truly effective; attempts should be made to employ celebrity spokespersons who have direct connections with their endorsed products and who are perceived to be experts by the target respondent s (Bruce et al., 2004, p. 127).

The brand endorser is always an expert in some field; their words will get good acceptance from the public. A brand endorser is a person who is popular in that target market, and he/she must be credible, physically attractive, and likeability to the public.

The brand endorsers will provide information about the product and consumers and services and influence the consumers to buy the product. Their interaction may be short, but they are giving a strong influence on the minds of consumers.

  • Responsibility of a brand endorser:
  • Increasing the product awareness
  • Providing
  • product information to the consumers

Creating an association in the consumers mind between the product and a particular idea.

The advantages of using celebrity endorsement are:

  1. It facilitates brand identification
  2. It helps to remove the negative attitude towards the brand
  3. It gives attention at the time of repositioning a brand it helpful for positioning a brand in a domestic and foreign country
  4. It affecting the purchase intention of consumers; consumers will give more attention to the product endorser than the quality and other aspects of the product.
  5. The advertisement of product using celebrity/brand endorser will remain iconconsumersmemory.
  6. By using brand endorsers/celebrities for promoting their product, the product will get the value and image of that endorser.

The studies show that using celebrities or brand endorser causes to increase the positive attitude of consumers towards the advertisement, and ultimately it creates a positive attitude towards the product.

The disadvantage of using a brand endorser is that the negative aspects/incidents relating to the brand endorser are affected the product.

The fitness of the brand endorser/ celebrity to the product is a crucial one.

The role of brand endorser in the selling of a product:

Here Grant McCracken explaining the role of brand endorser with his theory- Meaning transfer theory. According to this theory, the image of every celebrity communicates a number of information units that will be transferred on their perception of the endorsed product. According to this theory, there are three main components of the meaning transfer process, such as decoding the message, transferring its meaning, and accepting it.

Decoding a message

The Pspespecialistsefforts are always aimed at creating a particular image of a celebrity in the public consciousness. Coupled with age and gender characteristics, thconconsumersopinion of the person contributes to decoding the message.

Meaning transfer:

The meaning of the message needs to be adapted to the personal peculiarities of the consumer.

Meaning capture:

Selecting a product from a wide range of similar brands, a consumer pays attention not only to its functional value but to its attractiveness and symbolism as well. According to this theory, consumer purchases a product because of capturing some of the meaning inserted the celebrities on the product.

Decoding a message
(Kulkarni & Gaulkar, 2007, para.9).

Examples of the best fit of the brand endorser and product and its implications

Tigerwood; he has the best combination for the software products, watches, energy drink, telecom, etc. He will attract all the kind of peoples and have influence in the standard peoples.

Angelina Jolie; is the best matching with the organic baby food, inner wears, body fit instruments, lipstick, etc. She is with the attraction among the ladies with her child-caring nature and is a good model.

Donald Trump; has the best combination of a model for business school, car, watches, etc. His business experience attracts all the students.

Kate Moss; is also the best combination for innerwear, jeans, diamonds, and I-pod. She makes the young ladies happy with her model life.

David Beckham; the best combination for the Beckham is jeans, hair cream, energy drink, sports shoe, etc. His style and personality make him get the attraction to the crowd.

Primary research rationale behind the product-endorser pairs chosen:

Product 1

The encyclopedia is mainly targeted at the customers like students and teachers. This product will attract the reading peoples only. It is mainly targeted to the learning customers. These types of customers like to find their doubts and interesting topics from the encyclopedia. Tiger woods is a golf legend who is having lots of fans all over the world. With the advertisement of encyclopedia which will attract the intellectual customers, they like the peoples in that level as an endorser. Thus it will be the worst match to the product. For the software items, the survey reported Tiger woods will be the most matching combination. These customers will be attracted by the endorser and will result in more sales.

Product 2

Organic baby foods are now becoming the target of most of the FMCG companies organic baby foods are a fast-growing segment of the prepared baby food market. Many parents today are choosing to feed their babies organic foods, even if the parentdondonteat organics regularly themselves s (Corley, 2007, para.1).

The customers are the mothers who were having small children and infant babies. The target of the baby food companies is the loving and caring mothers who like to feed nutritious food to their babies. They will have various anxieties and worries with their children, mainly due to the eating habits. To exploit this situation, the endorser like Angelina Jolie, who is having a loving position among ladies all over the world, will attract customers. As she is famous for her beauty and acting skills, she had attracted the hearts of the people, and surely they will like her in this organic baby food ad. Thus this will be a good match. Apart from that, the survey participants mentioned the second-best combination as the endorser of jewels and then with the inner wears. Angelina is the worst in the endorser as TV advertisements.

Product 3

Business schools are popular among students. All the students like to get an admission in any of the reputed business schools where they can improve their talents business school rankings have had a major impact on business schools themselves. At present most business schools implement marketing strategies for the purpose of increasing the ranking of the educational institution and attracting new applicants. Full-day workers develop programs aimed at enhancing public awareness and creating a positive image of the school. Though some experts doubt the effectiveness of these marketing efforts, the importance of branding the school and protecting its reputation cannot be underestimated, having a significant impact on thstustudentschoice.

Donald Trump is a celebrity by the NBC reality show. He is one of the business magnates from America. He is running several business enterprises and is the author of several books. A person like Trump can maximum exploit the mind of young business learners, and this type of endorser will always make a fine match to the advertisement of business school. The customers have the perception of the visuals by seeing Donald Trump in that. They will have a deep impact by seeing him in this ad, and the parents will allow their kids to go and study there. The people like to see him as the endorser of business schools, and then they like him as the endorser of the car.

Product 4

English supermodel, Kate Moss, called as skinny supermodel us seen in her innerwear and skinny jeans as a model for several advertisements. Thus the survey participants are matching Kate moss as the endorser of innerwear. They chose her in this endorsement as she was a perfect model and had huge fans. The worst combination will be in the advertisements for the bike. No one likes to see a lady as the promoter of a bike advertisement in the lead role. High fat and high-calorie foods are now in the market in the form of dairy products, burgers, cheese, castle pudding, etc., making a huge response from the consumers. The high fat-containing foods are called junk foods, which will produce lots of troubles in health. Sometimes, these high-fat foods contain high calories also, and most people are fond of these kinds of varieties. This will also be a far good option for Kate Moss.

Product 5

Most of the peoples like the sports. They will be very much attracted to sports and games. There are various events going on in countries like the UK and the USA. A celebrity from the sports section itself will gain the attraction of the advertisements for the sports varieties. After the football world cup and ahead of the 2012 London Olympics, people are attracted towards the sports, and this time, the organizations can gain huge profits. They can make these events colorful by promoting their sports costumes. A sportsmanlike David Beckham can initiate this task. He is a well-known footballer, and he is the person getting more income through his various advertisements in the world. He is familiar with the ambassador of the sports in England. A person like David Beckham can make the maximum use of the endorsement with the advertisement of jeans and then hair creams as he is a person with a variety of hairstyles. But the survey shows there will be the worst combination with the furniture ads, and no one likes him as the endorser of the furniture products.

Pros and cons of celebrity endorsements

From the above, it is crystal clear that to a very large extent, the use of celebrity endorsement could be a good marketing ploy for product makers, not only to increase revenue generation but also to compete confidently and competently in the fiercely competitive business market. The fact that celebrities endorse products gives an impression (sometimes false) that these people have actually tested and used these products or services, which, however, may not always be true. The fact that a celebrity endorses a food product does not necessarily mean that he/she uses this food product, or rides the car which he endorses, or wears exotic perfumes or costumes which he or she endorses. The main reason may be purely commercial, to get an exorbitant sum for allowing himself to be an advertising medium for products. For instance, Britney Spears used to endorse Pepsi products, but she is often photographed carrying a can oPepPepsiscompetitive product, Coca Cola. So, people who believe that celebrity endorsements could mean an excellent and well-used product may not always be true.

There are several dangers of celebrity endorsement, as many producers could vouch for. For one, often it is the celebrity who gets all the publicity and not the product. For instance, when Michael Jordan promotes Nike sportswear, it is more often than not, Jordan who gets maximum publicity, and not the Nike product. Similarly, research studies have shown that when Britney Spears endorses Pepsi, it is she and not Pepsi who hogs the limelight. Perhaps this was one of the major reasons why Pepsi did not renew M Sp Spearss contract since she was much larger than life than Pepsi, which the sponsors felt was not in tune with advertising and publicity objectives.

Another aspect is that this would trigger off a product war, which would have no end. With Pepsi signing in Spears, Coca-cola and other soft drink makers would be perforced to sign up other celebrities, and there would be no end to the competition. This does not really serve any purpose except escalate competitive bidding for products and services of all kinds and indirectly even hike up the prices of such products. It is important to pay attention to matching thcecelebritys image and the product brand in thcoconsumers consciousness A generic, well-liked celebrity endorsement will not have the same punh as a celebrity endorsement in which the image of the celebrity matches the image of the bra d (Maclnnis, 2009, p. 117).

Conclusions

Celebrity endorsement alone cannot make a useless product a bestseller. The consumer is well aware that celebrities more often than not endorse for status and money and not because they are fond of the products, although this cannot be ruled out for all cases. The chief argument is that when the product is excellent and could sell on its own merits, what is the use of celebrity endorsements? In other words, not so good products need to be propped up with artificial marketing tactics, and celebrity endorsements could be one of them.

However, one needs also to consider the competitive markets and the strategies the rivals and competing firms employ, which may erode profitability and market share of the business. If the endorsement of celebrities could boost the bottom line and introduce the products to new and unexplored markets, why not try this option out also Celebrity endorsements can be an effective marketing strategy when the celebrity image, brand image, and consumer aspirations are taken into consideration, particularly for symbolic bran s (Maclnnis, 2009, p. 118).

In this context, it is also necessary to consider that the endorsements by celebrities should serve to endorse the products advertised by them and not enhance their own image, which is what is happening in the modern context. Most celebrity ads fail because it is the celebrities that get mileage and not the products they endorse. Companies should make sure that this does not happen under any circumstances, and the money which they pay should be used exclusively for promoting and adding value to products and not increase the public image and enhance the publicity of concerned celebrities.

Reference List

Brand ambassador. (2010). Face Book. Web.

Bruce, M., Moore, C, & Birtwhistle, G. (2004). International retail marketing: A case study approach. Oxford, Elsevier Ltd.

Chedi, C. R. (n.d.). University of Twente, p.2. Web.

Corley, H. (2007). About.Com: Baby products. Web.

Katyal, S. (2010). Impact of celebrity endorsement on a brand: Compatibility of the celebritys persona with the overall brand image. Chill Breeze. Web.

Kulkarni, S. A., & Gaulkar, S. U. (2007). Impact of celebrity endorsement on overall brand. Indianmba.Com. Web.

Maclnnis, D., Park, C., & Priester, J. (2009). Handbook of brand relationships. New York, NY: Society for Consumer Psychology.

Wanamakers Store: Retail Reinvention Project

Introduction

This was a clothes store. It specialized in retailing womens designer clothes and perfumes together with other womens accessories such as jewelry and shoes. I t was located in Pennsylvania and was the first department store in the region. It was in operation for a total of ninety years, the period between 1870 and 1960. The business was started as a family enterprise owned and run by a small Italian settler in the city of Pennsylvania. However, with time and with favorable market conditions, it flourished to become one of the largest public companies to be listed in the securities market in New York in 1900.

At the time of inception, the American economy was barely coming to terms with the changes of having shifted from a largely capitalist to a mixed economy. This shift enabled more and more people financial security and quite several families were raising their standards to a middle-class level. With the widening of this class, people started giving more attention to luxury and their dress codes became of major concern. There was a shift from the second-hand clothes that had filled the market as more people began to demand original first-hand clothes. Women, which were the target market for this store, spearheaded the migration. The first introduction of such designers as Victoria got hold of the market and with every new design that she subsequently released receiving quite a good reception. The prices of these designs never bothered the market that had started laying more importance on quality than the prices (Britton and Jorissen 45).

The long lifetime of the store came in 1892 when a decision was made to diversify its product range. Initially, it had operated only in the clothes but from this year such women treasured accessories as perfumes and makeup were introduced to the store with a section being expanded solely for them. This was a breakthrough at the time as the clients who had attached more quality to the products from the store could now get all the quality accessories under one roof. The subsequent years recorded great success as the name Wanamakers became a household name. This flourishing trend was to hit a snag in the year 1948 when the company first recorded a loss that had not been recorded ever since it was set up. The years to follow became unbearable leading to its final liquidation in 1960.

Customer analysis

The store was set up after serious scrutiny of the market trends and this was a major contributor to the fact that it survived for so long. Women are more frequent shoppers than men. This was established in the research, the management, therefore, decided to come up with a way of capturing more of the female shoppers could be possible. It was later established that women give more attention to how they look and they take more pride in their attire. This formed the catch, an idea behind which the clothes store was set up.

The shift to the mixed economy made more people financially secure and people became more at ease buying expensively from the market. This necessitated the store venturing out in the designer garments which would assure the customers of much quality for the money they spend.

Business life

The ninety years within which the business existed comprised of both bad and good times. These were brought forth by several decisions. Some of the good decisions that brought success to the firm included: listing it on the stock market. When the company was made public, most of its loyal customers bought shares and were very proud of the store. They maintained their monthly shopping and this was coupled with the sense of belonging. With more capital and a wide customer base, the venture was assured of a longer survival time. The idea to diversify its product range was another good decision that resulted in more capital (Kawakatsu & Morey 234)

By 1948 the business started recording low returns, this was as a result of some factors key among them being competition. More boutiques were opening up in Brooklyn and the entire New York City. The competition required that the store become more aggressive and get hold of its market positioning through improved brand visibility. It required more advertising an aspect that the management was not willing to consider. While other firms filled the medias airtime and newspaper pages with adverts, Wanamakers stood its ground counting on its customer loyalty mechanism of holding onto the customers.

With a receding profit level each year but with a large number of shareholders who expected more dividends, the company began making losses investing less and less each year. The shareholders began expressing dissatisfaction with the performance of the companys stock at the market and this resulted in depreciating investment in the companys shares. When the company could not sustain itself anymore it was declared bankrupt in the early 1960 and finally wound up operations (Kuntara & Nuttawat 245).

Market players must put into consideration the role that advertising plays in the development of any business venture. Social media offers cheaper alternatives to this currently (Jeffery 65). If the firm, Wanamakers is to employ these mechanisms, it would still stand a chance to resurface as a market player once again.

Bibliography

Britton, Alex and A.Jorissen. International Financial Reporting and Analysis. Oxford: oxford university press, 2010. Print.

Jeffery,Benson. Introduction to Business Law, Boston: Boston University press, 2001. Print.

Kawakatsu, Harrison and Martin Morey. Financial liberalization and stock market efficiency: an empirical examination of nine emerging market countries. Journal of Multinational Financial Management 9.3(1999):353371. Print.

Kuntara, Peter & Nuttawat Valery. Commonality in liquidity: Evidence from the Stock Exchange of Thailand. Pacific-Basin Finance Journal 17.1(2009): 80-99.Print.

Correlation Between Retail Online and Total Sales

Correlation is the term used to describe that the movement of two variables is somehow related to each other (Triola, 2008). We have a positive correlation in the case when if one variable increases than even the other increases too. Vice versa, when one variable increases and the other responds by decreasing, we have a negative correlation. In our case, PiggyBank is interested in estimating if there is any correlation between e-commerce retail sales and total retail sales.

The questions to be answered are of vital importance for a business. The correlation between the variables of total retail sales and e-commerce online sales can be decisive in determining the future of the company. They have to decide where to put their efforts; should they focus more on the on-line shopper market or at the traditional shoppers at retail stores? Should their marketing strategy advertise more on-line or not? Should their on-line products offerings increase or it is not that profitable?

There are different methods of doing the calculations but the most useful one is to do it in a Microsoft Excel sheet. It is important to notice that the correlation coefficient, the one that will show us if the variables are correlated or not, can have a value between -1 to 1. If it is 0, it means there is no correlation at all between the variables. If it is from 0 to 1, then it is a positive correlation, and from 0 to -1, it is a negative correlation (Lanthier, 2002).

First thing to do is to input the data provided by United States Department of Commerce for the total retail sales in one column and that of the e-commerce sales in another column. The data available from the Department of Commerce is from the fourth quarter of 1999 until the second quarter of 2004. After doing that we go to the formulas bar at the top of the sheet and select More Functions, then Statistical and then Correl. A box will prompt in which we will have to select the cell ranges to be calculated from each column of data. After doing this, just click finish and the correlation coefficient between the two sets of data we wanted to measure will appear.

In our case, the correlation coefficient is: 0.805787563. This means that the correlation between the two variables measured is positive. In other words, there is a connection between the rise (and fall) in total retail sales and e-commerce on-line sales. Graphically, if we put the values if billions of $ on the Y axis and the period of time from the fourth quarter of 1999 to the second quarter of 2004, this correlation is presented by an upward growing line, from left to right. In fact, the news released by the Department of Commerce shows this graphical representation of the correlation of the data. From this correlation the PiggyBank can conclude that the e-commerce sales are becoming an important share of the total sales in the country. The data shows that when there is growth in total sales, there is growth in on-line sales. An interesting example of this can be the data from the 4th quarter of every year since 1999 to 2003.

From the 4th quarter of 1999 to that of the year 2000, the e-commerce percent share of the total sales went up from 0.7% (in 1999) to 1.1% (in 2000). Also from the 4th quarter of 2000 to that of 2001 it went from 1.1% to 1.3%. From the 4th quarter of 2002 to that of 2003 it went up from 1.3% to 1.6%. And from the 4th quarter of 2002 to the 4th quarter of 2003 it went from 1.7% to 1.9%. This means that for a period of four years the market share (percentage of the total sales) of the e-commerce on-line sales has grown more than 2.71 times. It seems from the datathat the on-line sales are becoming an increasingly bigger shareholder of the total sales.

This information is important for the management team at the PiggyBank in order to decide where to put their time and energy the years to come. It seems profitable to invest marketing and advertising of products in e-commerce related platforms. The questions made at the beginning begin to have an answer. I think that their on-line product offerings should be increased in order for the company to have more possibility of entering this new market sector that is developing fast. And since it is a fast growing market sector it is in the best interest of the company to put some more efforts in advertising, product offerings and total marketing issues, as soon as possible. This as a result can payback the company with a well-positioned market position and a comfortable market share that will guarantee a steady flow of cash and liquidity.

References

U.S. Census Bureau (2004). United States Department of Commerce News. Web.

Lanthier, E. (2002). Correlation. Noth Virgnia Community College Website. Web.

Triola, M. elementary Statistics with Multimedia Style Guide (10th edition). Boston: Pearson Addison Westley.