Category: Retailing

RFID Technology

RFID is an acronym which stands for radio frequency identification. It is a wireless technology which uses electromagnetic fields in identifying animals, people or objects (Violino, 2013). Many authors contend that RFID is a technology that will tend to replace or supplement other technologies such as barcode (Violino, 2013). RFID is composed of two parts; the tag and the reader.

The tag is simply a tiny microchip with a code. The code is the heart of the technology. It is invoked when identifying the object to which the tag is tied to. On the other hand, the reader is an apparatus that transmits the wireless frequencies to the tag inquiring its location. In operation, when the tag senses the request from the tag, it sends back the code fixed to it.

History of RFID

The concept of RFID technology is not a new technology in the world. It can be traced back in the 19^th century when progress in scientific inventions in the field electromagnetisms was being advanced.

Reid (2005) notes that innovation in the field of electronic induction by Faraday and the explanation put forward in the operation of electromagnetism using equation by James Maxwell laid the basis for RFID growth during the early days; this was the beginning point in RFID technology which is being widely used today.

Reid (2005) also shows that the use of automatic RFID systems begun with the development of the automated object detection systems. Among these systems was the radio transmitter. The radio transmitter designed in 1926 had the capacity to detect objects at a distance. The real application of the RFID system was during the World War II.

The technology called “Identify Friend or Foe”, IFF was used by the British Royal Air Force to facilitate pilots and radar officers distinguish between friends and enemies using RF signals (Royal Air Force, 2006). In 1960’s, the technology was fitted in trucks accessing secure facilities.

Reid (2005) indicates that by 1980’s, the technology was commercialized, hence, more chips were produced and made available to facilitate tracking and managing of properties such as razor blades, animals and railway cars on a large scale.

Why the Technology?

The problems experienced in tracking shipping containers, automobiles and train cars were enormous, hence, a creative solution to contain it was necessary. Because RFID technology had been used during the WWII and was successful, businesses viewed the used in the business environment, it will yield similar results, thus, RFID was seen as an ideal technology to adopt.

RFID was able to track and locate objects in real-time. Additionally, the mobility of the technology made possible to be tagged in rail cars. For example, by 1994, the United States had fitted RFID in rail cars.

Also, the problem in toll collection was inescapable. Hence, it was very cumbersome to collect tolls from various stations. The RFID, therefore, was important in solving this problem (FTC, 2005). Efforts to deploy RFID in the 1980s and 1990s was a success because tags fitted in the equipment’s relayed data in the database automatically and in real-time.

FTC (2005) point out that the counterfeit and insecurity were widespread in the casino industry, thus, to mitigate this concern, RFID technology was vital in containing counterfeit and enhancing security. One of the early casinos to embrace this technology was the Wynn Casino in Las Vegas.

The casino fixed the RFID chips on gaming tables and gambling tokens to detect counterfeits, fraud, prevent theft besides improving service delivery FTC, 2005). Other than casinos, most countries have incorporated chips in travel documents to guard against theft and security (FTC, 2005).

Benefits of RFID

Though the costs of implementing an RFID system are high, coupled with the risks, the technology offers countless benefits to individuals and businesses. Traiman (2001) point out that RFID reduces distribution and warehouse labour costs.

This is because the technology is efficient in replacing labour intensive activities and the point of operations. The RFID is able to track with accuracy products, cartons and pallets with sensors in wherever location they are in the warehouse.

RFID offers improved planning and forecasting (Traiman, 2001). The technology makes the supply chain management visible facilitating planning and forecasting. This helps in tracking the location of inventory in the supply chain.

Businesses lose millions of dollars per year due to theft. With RFID, these losses are avoided (Traiman, 2001). RFID track items in the supply chain creating efficiency and minimal errors. In the retail system, the technology reduces theft to higher margin as all products are tracked in real time.

RFID technology is consistent and in real-time, thus, it saves customers time in selecting the product of choice enhancing his/her experience. Similarly, customer’s product placed in a cat is easily tracked and if kiosks comprise of shopping experience, businesses are able to make automatic offers on related items improving the customer’s experience.

Advantages of RFID

Compared with other products such as bar codes, RFID has many advantages to the business and individuals. Reid (2005) illustrates that RFID perform well in different environments. For example, in adverse conditions, tags can be deployed allowing and operate without any hindrances.

RFID provides real-time updates. The tags have been designed to enhance communication and retention of information with the on-board memory. Thus, this strategy can be used by the businesses to carry out preventive maintenance of records and calibrate history among others. Reid (2005) explains that this process can be achieved automatically with no human intervention.

RFID has the advantage of trace-ability. Traiman (2001) explains the embedded chip is able to recall, document and track history of a single object or item in real-time by incorporating user data, UIC and other information on-board. This saves time which would have been otherwise used in doing the same manually.

Disadvantages

Despite fixing efficiency and streamlining operations, RFID has elicited major challenges in the society and the business world. Albrecht (2005) cites that as the RFID technology becomes less sophisticated and expensive, the concern regarding privacy has arisen. The society fears that people could be bound to specific information concerning their purchasing behaviour by unscrupulous retailers (Albrecht, 2005).

FTC (2005) illustrates that some devices such as walkie-talkies and forklifts in the neighbourhood of an RFID hamper efficiency and functionality of the technology. As both devices use radio frequencies, there is a problem of signals getting mixed up.

The cost of implementing RFID technology is high. It covers the purchase of readers, tags and softwares. Hence, basing on the size of the organization, it can be time consuming and very expensive in the long-run. FTC (2005) notes the cost of tags is high, hence, depending on the size of the organization, it might cost the organization a lot of money.

Political aspects

Mixed reactions have elicited on the use of RFID technology. One of the issues is the debate on regulatory and legal system. FTC (2005) point out the technology can be abused by people with ill intent.

It can be used to perpetuate criminal activities such as stalking, though advocates for the technology cite its usefulness in preventing crime, theft and forgery, criminal may exploit gaps in the system causing considerable harm. Thus, there is a policy vacuum on how the technology can be used effectively within the confines of the legal system to guarantee protection of users’ data.

Also, Kelly and Erickson (2005) point out the privacy concern of data stored in RFID databases. Using RFID might elicit conflict with existing regulations that guide data protection because the RFID technology is invisible. The available data protection laws in various jurisdictions are not clear on/or is not prepared to develop laws to regulate the omnipresent data processing.

Furthermore, RFID allows data to be collected and stored in a central database. Critics allay fears that this aspect can lead to theft of personal data and encourage misuse which is in contradiction to the right of privacy enjoyed by individuals (Kelly and Erickson, 2005).

However, pundits advocating for this technology cite it has beneficial to the society when used appropriately. For example, in the medical care, the technology can be used to save a life. However, the user has to make a choice of either using the technology or not (Kelly and Erickson, 2005).

Social Setting

A lot of issues generated by the use of RFID technology in a social setting are wide with far reaching implication, not only to businesses, but also on individuals. Of importance is the management of data stored on these devices. There are fears that information stored in such systems may lead to misuse of personal data because RFID tag has a unique ID which may be linked to personal identifiable information.

Violino (2013) point out that threats such as action, preference, association and constellation associated with the daily life of an individual feels threatened by the RFID technology. Similarly, Kelly and Erickson (2005) illustrates that societal privacy threats such as the erosion of individual liberties are at risk.

This is because there is rising concern that the RFID technology allows stored data to be transferred across stakeholders, networks and organizations. This concern amplifies as the data linked to different objects becomes connected to identify users without their consent.

If such data is used to fix profiles, its viability may curtail the right of choice of users and contribute to making unstructured decisions in regard to an individual (Kelly & Erickson, 2005).

Kelly and Erickson (2005) points out that as the RFID tag is becoming more widespread through deployment of related applications, there is a potential risk of “function creep”. For instance, he cites that the intention of embedding RFIG tag in casino chip was well thought.

It was intended to contain counterfeit and improve security. However, the technology together with personal identifiers might be used to track how individuals play and record winnings and losses. Such applications, coupled with profiling events which a user has no control of may cause intrusion to an individual’s privacy.

Pest Aspect

Albrecht and McIntyre (2005) indicates that an RFID microchip has been widely used in agriculture, particularly in woody plants to store and retrieve pertinent information on their health. The microchip collects various information such as pesticide usage, soil fertility among others. The information is linked to the database for analysis.

Other than incorporating RFID in plants, the technology is placed strategically in ground to automatically detect pests, making their eradication much faster (Albrecht & McIntyre, 2005). However, there are rising concerns that the using the technology has negative potential on the environment because leaky metals may leave harmful toxins in the soil causing diseases and increasing pest resistant.

Social Sorting

Social sorting is a process of using data to identify, classify, order and control the population. Various arguments have been advanced on how the RFID system perpetuates social sorting. Albrecht and McIntyre (2005) indicates that using RFID may necessitate new forms of surveillance.

Although other methods of surveillance such as access badges, internet and video cameras exists, compared to these technologies, RFID arouses more reaction because it strengthens misuse because of aggregation of information about an object or an individual.

The information collected through surveillance might be altered, cloned allowing identity usurpation and used for unintended purposes such as discrimination and victimization of individuals.

Relation to the Panoptican and RFID

Panopticon bears close resemblance to RFID technology. Samatas (2008) explains that Panopticon changed the European justice system from being a corporal punishment system to a prison architecture that fixed self-control. Prisons were constructed in a round figure that allowed prisoners at the centre to be visible to the surveillance guards.

As a prisoner was conscious of being watched, he subjected himself to the authority of the disciplinary system. Similarly, the RFID posses the same concept and is more distressing than Panopticon though its technology based. Similarly, because it is chip based surveillance is enhanced as the chip can be attached or fixed on almost everything and tracked in whichever location the object might be (Samatas, 2008).

Another similarity is that Panopticon was a perpetually stressing a de-humanizing aspect. This is in close resemblance to RFID technology. RFID knows exactly where an object is, in this way, there is an expression of fear commonly unknown to others.

Because surveillance technologies are aligned with humans, it creates emotions in human beings because they feel their independence and control is under observation (Samatas, 2008).

References

Albrecht, K 2005, Spychips: How Major Corporations and Government Plan to Track Your Every Move with RFID, Thomas Nelson Inc, Tennesse.

Albrecht, K and McIntyre, L 2005, Spychips: how major corporations and government plan to track your every move with RFID. Web.

FTC 2005, Radio Frequency Identification: Applications and Implications for Consumers. Web.

Kelly, EP and Erickson, GS 2005, “RFID tags: commercial applications v. Privacy rights”, Industrial Management & Data Systems, Vol. 105. No. 6, pp. 703 – 713.

Reid, AS 2005, “RFID Tags and the European Union: Really free internal distribution?”, Journal of International Trade Law and Policy, Vol. 4. No. 1/2, pp. 1 – 30.

Royal Air Force 2006, Royal Air Force History.

Samatas, M 2008, From thought control to traffic control: CCTV politics of expansion and resistance in post-Olympics Greece, in Mathieu Deflem, Jeffrey T. Ulmer (ed.) Surveillance and Governance: Crime Control and Beyond (Sociology of Crime Law and Deviance, Volume 10), Emerald Group Publishing Limited, pp. 345-369.

Traiman, S 2001, Tag, you’re it! The EPC tag could revolutionize the retail supply chain, Retail Systems Reseller. Web.

Violino, B 2013, What is RFID?, RFID Journal. Web.

Summary of the Article

In the article published by American Journal of Business Research, Champion et al. (2010) explore the effects of retail image on student perceptions of merchandise quality and willingness to buy. The article highlights that it has become apparent that competition continues to typify the modern business environment. As such, there has been a need for companies to differentiate themselves from their rivals.

Companies may embark on promotion of image as a method to differentiate themselves. Champion et al. (2010) pinpoint that companies might also want to promote their retail stores as that witnessed when Apple launched its Apple Store.

Using an empirical study, the authors hypothesize that store image is an important aspect of competition in markets. The companies try to woo customers by changing their perception and experiences of their stores. Subsequently, the first hypothesis is that a heightened store image brings about positive change on consumer’s perception on the quality of the products.

Second, Champion et al. (2010) make a prior induction that a high store image increases the willingness of the buyers to spend. Third, an increase of positive perception brings about an increase in willingness of the customers to purchase the products.

Champion et al. (2010) highlight that, in a situation of high involvement in the decision making process, there is a high correlation of store image and perspective of the consumer on the quality of the product.

The article uses empirical methods to enhance that the results are reliable and consistent. The authors use two pretests to anticipate the results before conducting the final study. The first pretest involved the determination of the right products using a sample of 51 respondents. The research team requested the sample population to rate the level of product involvement related to varied products in a scale of 1-7.

The second pretest entailed a sample population of 95 undergraduate students in determining the right stores to research on every product. The products in both pretest experiments required that the respondents were familiar with the products and able to categorize the products to be either low or high involvement. The final study, which was the main research, aimed at testing the hypotheses among 270 students.

They were all pursuing their undergraduate courses. The research also aimed at testing the undergraduates’ perceptions of the store image product quality and willingness of the customers to purchase the products (Champion et al., 2010). Since the sample population consisted of psychology and business students, Champion et al. (2010) say that the diversity would bring about rich results.

The researchers provided each student with different versions of questionnaire where they would respond to the queries based on different products. The evaluation and description of the product was dependent on the ability of the students to give their perspectives about the product just after viewing it.

The results indicated that there is a strong association between store image and the willingness of the customers to purchase a product. Besides, Champion et al. (2010) assert that the hypothesis that a strong image store may in turn change the customer’s perception about the product’s quality is correct.

Besides, the hypothesis that the heightened store image may lead to increased willingness of the buyers to purchase the product is true. The rationale is that out of 270 students who took part in the research, over 200 hundred students responded that a store image is important in highlight the products overall quality even if there was reduced involvement with the product.

Inter relationship of marketing concepts

To this end, it is important to analyze marketing concepts in line with the above research results and their significance in the field of marketing. Mitchell (2001) says that marketing research indicates that it is critical for companies to have a marketing rationale that increases its store image. This will in turn lead to ability and willingness of the buyers to purchase the company’s products giving it an edge over their rivals.

In addition, having the appropriate marketing strategy leads to the ability of the company to producing goods that solve the needs of consumers and derive value to them due the price strategy (Van den Poel & Leunis, 1999). It is apparent that a feasible marketing mix also ensures that the store image that the company promotes will be informative to the customer.

This leads to increased willingness of the customers to purchase the products. Besides, the customers are able to access the products given that the company assumes the right channel of distribution.

Marketing strategy involves managing a particular product. A company may have a broad range of products and there is the need to manage the products through developed plan. Companies come up with a design and a plan to manage its products and activities, which culminates to the marketing strategy.

Another aspect of the marketing plan that people ought to be aware of is the concept of marketing segmentation (Mitchell, 2001). It is related to the marketing strategy since it aims at enhancing the company’s ability to meet the needs of segments of the customers uniquely. Customer segmentation implies that specific clients with similar needs receive customized products.

Throughout the fiscal year of a company, Van den Poel & Leunis (1999) articulate that the marketing strategy elicits appraisal and reviews from the marketing department. It is important for a company designs a strategy that has a specific time. As such, the strategy must be articulate on its marketing life cycles for all its products.

This is in recognition that different products have different life cycles ranging from brand awareness to maturation. In addition, the company employs a pricing strategy during the marketing process that dictates the demand for its goods. Although the pricing of goods is a major factor in increasing the company’s revenues, Champion et al. (2010) assert that the store image ought to be an integral part of the marketing strategy.

The rationale is that a heightened store image may lead to improved perception about the products’ quality regardless of the level of involvement that the customers exhibit. In addition, a company should use research as a way of identifying its target market. Target market is the segment of the population that has specific characteristics such gender belonging, race, ethnicity and nationality (Van den Poel & Leunis, 1999).

This helps the company to arrive at the market that it can reap revenues and ultimately, increase brand awareness. This is by embarking on an appropriate marketing selection process that encompasses the entire marketing strategy (Mitchell, 2001).

References

Champion, J., Hunt, J., & Hunt, T. (2010). The Effect of Retail Store on Student Perceptions of merchandise quality and willingness to buy. American Journal of Business Research, 3(1), 1-17.

Mitchell, V. (2001). Re‐conceptualizing consumer store image processing using perceived risk. Journal of Business Research, 54(2), 167‐172.

Van den Poel, D., & Leunis, J. (1999). Consumer acceptance of the internet as a channel of distribution. Journal of Business Research, 45(3), 249‐256.

Introduction

Best Buy is an international retailer dealing in electronics, computer products and mobile phone products. It also sells entertainment software, appliances and associated services. The company mainly conducts its business in North America, European countries and the Asian market. The headquarters are in Richfield, Minnesota. It has a workforce of about 170, 000 employees. It is among the leading specialty retailers in the United States.

The company vigorously markets the products to diverse markets through its dedicated employees. In order to achieve its profit targets, it ensures that the employees are motivated through appraisals leading to promotions in rank.

It also uses financial incentives and rewards to create appropriate working environment. These efforts are showing results as the company continues its expansion into the international markets. The company is gradually gaining bargaining power with its suppliers. This case study explores the marketing activities of the company.

Direct competitors

The retail market is increasingly competitive. Most of the existing and emerging retailers are venturing into the technology field to offer computing products so as to take advantage of the advancement in technology. In the last two decades, advancements in technology have presented many entrepreneurs with the opportunity to invest in different industries.

The electronic retail market is among various market divisions that many companies have invested in hence creating intensive competition. These include retail giants that initially did not deal in electronics or related services such as Wal-Mart. The opportunities in generating attractive revenues have seen these companies diversify into electronic, computing and mobile phone markets (Fitzgerald 65).

Discounters, online companies and mass dealers have intensified competition against Best Buy. Every company is striving to increase its market share. The overreliance on novel product development for compatibility with the current and emerging products further intensifies competition.

Commodities such as televisions and cameras are usually differentiated by price tag only. In this respect, retailers such as Target and Wal-Mart present Best Buy with cutthroat competition. When Best Buy decided to conduct its marketing and selling of products online, others took the cue and entered the e-commerce to sell products. In fact, Amazon is among Best Buy’s online selling competitors.

The retailer’s strategy

Over the years, the company has employed different strategies depending on the prevailing market conditions. Its flexibility to alter the strategies to take advantage of the market conditions has ensured its profitability and consequently its growth and survival. Among the most recent strategies employed by the company was the ‘space optimization’ strategy.

The company is gradually substituting 10 percent of its big box outlets formerly assigned to the physical media with additionally lucrative products. These include the company’s Samsung Experience shops and Windows stores (Lutz 1). Products that are on demand in the market tend to substitute the obsolete products attracting many clients.

The company’s Chief executive officer Hubert Joly developed a 5-point (Renew Blue) strategy to refurbish the brand. The company has reduced its workforce and vended stores in Europe. Besides, the company appears committed to the revival of the sales through the ‘omnichannel’ retailing strategy (Fitzgerald 65).

The strategy is aimed at reaching the consumers anywhere they are including the outlets, via the internet and phones. The use of technology is among the core parts of the strategy as it will reverse the expensive physical outlets into a competitive advantage. The company acknowledges that customers prefer to pay for the products online, but like picking the items themselves. Hence, this corporation added a ‘store pickup’ button to its virtual shop.

Target market and positioning

The company has a massive market. This is enabled by the wide-ranging penetration of the electronics market and dedicated marketing. The target market is composed of corporate owners and home users. It also targets offices and the general consumers. Essentially, the company targets technology-knowledgeable middle earners. The shift to online selling is targeted at the younger generations who are gradually being addicted to the use of the internet to meet their needs (Fitzgerald 65).

Retail mix

The company’s retail mix is composed of 6 components. These include value, place, advertising campaigns, stock and a variety of merchandise, excellence as well as the source of such merchandise.

Retailer’s strengths

Fundamentally, as the largest retailer in electronic specialty, the company is financially endowed. It leverages this strength by developing a customer-centric business model. This differentiates the company from its competitors. Furthermore, the company has effectively turned the good reputation and brand image it has to gain competitive advantage. Additionally, it offers its clients after-sales service and support its products thus differentiating itself from the competitors.

Weakness relative to competitors

Relative to its major competitors such as Wal-Mart and Target, the company records lower revenues. The competitors diversify into other products thus ensuring that revenues are high and can be ploughed back into electronics. While the competitors recorded increase in operating profit in 2012, Best Buy recorded 54 percent decrease. This has reduced the shareholders’ confidence thus hampering further plans to expand (Fitzgerald 66).

Logical growth opportunities

The company has the opportunity to further differentiate its products by introducing more private label that could warrant penetration into the market. That is, the company stands the chance to increase its range of exclusive products and private labels. The company may venture into the emerging markets in Africa where the demand for technological products is increasing.

Threats in the environment that may adversely affect its performance

The operational environment of the company outside the US is not certain. In fact, different countries have different regulations that may hamper the entry and operation of the company. In most African and Asian countries, the conditions are suitable and attractive as the leadership seeks to attract investors. In others such as Japan, India and China, the conditions outlined may significantly hamper the operation of the company in terms of regulations, taxes and related charges.

Performance and position in the marketplace

The company has been performing relatively well in the last decade. It has managed to attain a market position where a huge global consumer population is aware of its products and actually buys the products.

Prospects for the future

The demand for technological products in the contemporary market offers Best Buy a lifeline. The demand is increasing as consumers seek to digitize all the activities they undertake. The demand for mobile phones is on the rise with more than half of the global population using mobile phones.

The Y-generation is a potential target for the company as global economy improves. Individuals will have resources to spend on the products offered by the company. With the right marketing strategies, the company will continue to expand and gain competitive advantage over market rivals.

In future, for the company to provide strong financial returns, the company should venture into emerging markets and seek to increase its consumer base. Additionally, the company may seek to diversify to ensure that revenues lost in one product are effectively accounted for by the sale of another commodity.

Conclusion

Basically, effective marketing strategies have enabled Best Buy to gain competitive advantage in the electronic retail industry. The company has managed to expand its operations to different global markets with an increasing consumer base. Although the industry is highly competitive, the company has a promising future due to increase in demand for electronic products and advancement in technology.

Works Cited

Fitzgerald, Michael. “Best Buy Battles Back Online.” MIT Technology Review 117.1(2013): 65-66. Print.

Lutz, Ashley. Best Buy Made One Important Change that Saves its Business. 19 Nov. 2013.

Abstract

Information System (IS) is an essential component in the running and management of organizations in the modern world. The main issue discussed on this paper is how organizations incorporate IT into their IS plans to improve their productivity. The literature that was covered in this paper state that IT has become an essential component in the management of information within organizations.

However, for IT to achieve the management goals of an organization, it needs to be implemented in an effective and efficient manner. To determine this, this paper focused on the role played by IS in two organizations; The Brotherhood of St. Lawrence and Somerville Retail Services.

Despite the difference that these two organizations have in the nature of their operations, the implementation of IS plans, the manner in which they have integrated IT, and the means through which they manage IT and manage IT staff within their organization is relatively similar. It was thus concluded that IS and IT are essential in sustaining the operations of modern organizations.

Introduction

Information Systems (IS) have become a critical aspect in the running and management of organizations in the modern era. Consequently, the incorporation of Information Technology (IT) to support IS plans has been increasing with the advancement in the field of Information Communication and Technology (ICT).

The literature covered in this paper show that that many organization in the world have adopted and implemented various policies and strategies in the field of IT to enhance their operations. T

he storage, retrieval and transmission of information within an organization in an effective and efficient manner has always ensured that the internal and external operations of a firm are efficient hence enabling them to achieve their short term and long term goals and objectives.

Organization Background

The Brotherhood of St. Lawrence

Located in Melbourne, Australia, The Brotherhood of St. Lawrence commenced its operations during the era of the great depression. It is during these trying times that the level of poverty, inequality and social injustice increased in Australia and the entire world in general. Based on the Christian ideologies of Father Gerald Tucker, the Brotherhood of St. Lawrence vision is to eradicate poverty and to end social injustices in Australia.

The Brotherhood of St. Lawrence is involved research and development activities all over Australia. The firm is also involved in the delivery of services and advocacy to the people of Australia. In the course of its operation, The Brotherhood of St. Lawrence focuses on the unmet needs of the society through innovate and efficient techniques from the results gathered from its studies.

This move ensures that the policies, programs and practices are developed and implemented within Australia that result in the respect of the rights and dignity of all individuals and inequality is eliminated.

This will ultimately lead to the growth and development of a sustainable society in Australia during the current and future generations. To collect relevant information for this study, Louse Segafredo, who is the Senior Manager, Knowledge Management and ICT at BSL was interviewed.

Somerville Retail Services

From humble beginnings in 1998, Somerville Retail Services has become the leading manufacturer and distributor of case meat in South East Australia. The company has built a strong brand name as a result of the consistency that it has in its production processes and delivery of its goods and services.

With the use of up to date technologies, Somerville Retail Service has the fastest turnaround time, delivering the finished product within less than 48 hours after it was ordered. To ensure that the service that the firm offers are consistent, effective and efficient, Somerville Retail Service benchmarks its services.

The firm has also adopted new technologies and has maintained a dedicated workforce over time to meet up to the demands and pressures from its clients. This move ensures that the firm has a large market share standing at a competitive edge over its rivals within South East Australia and the entire globe at large. Somerville Retail Services has a series of quality assurance services.

This has guaranteed that the firm does not compromise on the quality of its brands and the service that it offers to its clients within Australia and the rest of the world. To maintain this, the firm produces over 165 beef and pork products that are released to the market every day. To collect data for this study, William Lee, the IT manager was interviewed.

Information Systems Planning

Literature Analysis

Information is an essential component to the success of an organization. It is with regards to this fact that many organizations have come up with systems and methods that ease the process of transmission, storage, and retrieval of information (Bechor, 2009).

As Pollack (2010) asserted, information is essential in the process of supporting processes and operations within an organization, implementing management practices and in the decision making process. It is as a result of this that since the second half of the 20^th century organizations all around the world started to value information.

Organizations are usually made up of a number of individuals. These individuals possess different skills and expertise. Consequently, organizations usually have different departments. Despite all these differences, the operations of an organization are usually geared towards achieving its vision, mission, goals, and objectives.

Managers have always suggested that effective communication is the means through which the management of an organization can synchronize these differences to achieve the overall goals of an organization (Galliers, 1993). As a result, managers have always laid a lot of emphasis on effective information system planning and management (Allen, 2005).

Since the second half of the 20th century, managers have realised the importance of information in maintaining a desirable relationship among employees and in supporting their interactions (Piccoli, 2008). At the same time, managers also realised the essence of information in data management.

On these grounds, it became essential for the management of the organization to ensure that information is managed in an effective and efficient manner.

It is with regards to this that most organizations have incorporated the process of information system management with information communication and technology (Pearlson and Saunders, 2010). With the rapid growth and advancement in the field of ICT, several information management systems have been developed and advanced by scholars and managers alike (Callon, 1996).

However, these information systems do not entirely rely on ICT for their functionality. As Brown (2004) asserted, ICT is just but a component of Information Systems in modern organizations.

With regards to these words, Information Systems highly rely on the management practices of an organization, the type of employees that it has, its nature of operations, the goals and objectives that it wants to achieve and most importantly, the level at which an organization has incorporated IT in its operations (McLeod, 2007).

The improvement in production efficiency coupled with the availability of capital has increased the number of players in almost every field of the economy. This has provided customers with a variety of substitutes to choose from in order to satisfy their needs, tastes and preferences.

Therefore, for a firm to overcome this stiff competition and meet the needs of its customers, it needs to come up with strategic plans that will ensure that it stands at a competitive edge over its rivals. Developing a strategic Information System plan is one of the effective means through which a firm can achieve competitive advantage (Sprague, 2000).

An effective Information Systems plan acts as a leverage that aligns the technological resources of an organization with its strategies, goals and objectives (McLeod, 2007). This ensures that a firm operates in an effective and efficient manner hence being sustainable both in the short run and in the long run.

The Brotherhood of St. Lawrence Response

The Brotherhood of St. Lawrence (BSL) has different means through which it develops its IS plans. To ensure that BLS IS plans are in line with the business strategies of the organization, the firm has a Technical Advisory Group (TAG) that comprises of representatives from all the departments of the organization.

This group meets once a month to develop strategies and ensure that the IS plan that it developed conforms to the needs of the organization. The current IS plan is in line with the 2010-2013 ICT plan of the organization that aims at upgrading the overall process of the organization such as modernization of the help desk and improving telecommunication and up to date softwares within the organization.

However, the information system plan is under a close scrutiny of the management with its success being measured with the help of financial milestones and reports from the TAG.

Somerville Retail Services

With the directions and supervision from the IT department, the management of Somerville Retail Services (SRS) usually identifies the information systems needs of the organization. Once these needs have been identified, the management usually estimates the cost that might be involved in implementing this strategy.

However, the budget of this process highly relies on the Return on Investment (ROI) that the firm has from the previous financial year. Most IS plans that the organization has developed usually run for 6 months to 1 year. These plans are usually mapped out from IT projects to determine their budgets and timelines.

The management of the organization usually monitors the operation of the IS plan to ensure that its implementation is in accordance to the needs of the company. The success of the plan is usually determined by the reviews that are received from the involved parties and benefits that accrue from its implementation.

Comparative Analysis

From the analysis of the literature review and the practices of BSL and SRS, it is evident that IS plans are usually developed to meet specific needs of an organization. Generally, organizations develop IS plans to improve the effectiveness and efficiencies of their operations. This too was the case of BSL and SRS. Consequently, the IS plans of both organizations is in line with their overall IT strategies.

However, SRS did not have a specific team to monitor and control the implementation of the IS plan like BSL. This might have adverse effects on the success of the IS strategy within the organization. Despite this, both organizations seem to understand the essence of having an effective IS plan in sustaining and improving its operations.

IT organizations Structures

This topic focuses on the importance of IT in maintaining IS plans of organizations. This includes the adoption of computerised systems to enhance the effectiveness and efficiency of operations within a firm. This section thus focused on the relationship that IS plans have with the overall IT plans of an organization and the importance of outsourcing IT services of an organization.

Literature Analysis

Organizations are currently under increased pressure to improve their performance to gain competitive advantage along with continually review of their operations with the aim of addressing threats emanating from changes in the external environment and harnessing the opportunities (Mani et al, 2010).

The incorporation of Information Technology (IT) in the operations of organizations has been one of the effective solutions that modern managers advocate for. The incorporation of IT in the running and management of firms has saved a lot of companies and organizations from running into bankruptcy (Berger, 2006).

For example, in the early 1990s, Continental Airline was facing a drastic financial crisis that almost led to its bankruptcy (Wejman, 2010). The company however incorporated the use of IT, a move that improved the effectiveness and efficiency of their operations leading them out of bankruptcy.

The incorporation of IT can only be successful if it is embraced and supported by the managers and senior staff of a company (Wejman, 2010). IT is thus effective as it ensures that running of operations within a company is smooth, communication among the staff and between the company and customers all over the world is efficient. This will make the operations within the organization to become much faster and easier.

According to Berger (2006), companies should therefore seek for outsourcing services that will concentrate fully on their field of core competence (p. 51). In this way, such companies will save a lot of time and money.

It is always advisable for companies to adopt IT systems that are flexible in nature to ensure that they are able to keep up with the changes in technology within the industries in which they operate in and with the customer tastes, preferences, and requirements that are always dynamic in the business world. Therefore, the IT system of a company has to be flexible to meet their present and future needs (Yeaple, 2006).

However, outsourcing of IT services due to lack of competent personnel to manage the systems or as a cost reduction factor has resulted into the increasing threat of homogeneous organizations that have equivalent core competencies which results into loss of business core competencies through exploitation of best practices in IT competitive advantage (Gibb and Buchanan, 2006).

IT has provided opportunities for equivalence of service level that result in loss of brand identity and brand community and decreased market share. Development in the IT sector and Information System (IS) sector has resulted in leveraged technologies and threats of organizational quality improvement systems and adoption of equivalent quality improvement tools.

IT has also been associated with security risks that are characterized by communication networks for instance non-encrypted networks, technical threats like unauthorized system access, lack of data security. There has been increasing threats that IT cannot be implemented across continents because of threat of data access by unintended users, threats of virus and lack of device interoperability.

Therefore, the incorporation of IT within organizations has been characterized loss of organizational independence that predisposes inability to manage operating costs (Bell, 2006).

The Brotherhood of St. Lawrence

Originally, BSL had a decentralized ICT plan. In this plan, the entire server infrastructure was managed and controlled within the internal environment. In this system, each department was virtually responsible for maintaining the IT systems within their departments.

On logical grounds, this was considered as an advantage since individual members of each department could upload, download, store, and retrieve data that pertain to their operations directly. This therefore ensured that each department was in full control of the information that affects their respective departments.

Additionally, since members from each department were involved in the process of storage and retrieval of information, no extra employees were required to run and manage the IT system. More so, the extra space that might have been required to store centralized data was saved.

However, this system proved not to be viable for BSL. Despite its advantages, there were always difficulties in the retrieval of information. This was mainly because there was no specific system or procedure of storing information. Therefore, each individual staff member would have his/her own system of storing and retrieving data within the system.

Additionally, space within the system was not utilized effectively mainly due to storage of the same information under different names by different employees. Thus, the system used to break down frequently due to these inconsistencies and malfunctions. It is only during the time when the system was down that repair and maintenance of the system was conducted.

Due to these problems, BSL adopted a centralized system of IT management 8 months ago. In this plan, BSL outsourced this role to an external organization that would control and manage the server infrastructure of the organization. With this new plan, the system is constantly updated and managed by the organization.

This therefore ensures that it runs effectively and efficiently unlike in the previous plan where the system was only repaired or upgraded when it broke down. Additionally, space within the system is utilized effectively as the chances of duplication are minimal. The system is also reliable since there is a specific manner in which data is stored and retrieved within the system.

To enhance on its operations, BSL has outsourced some of its IS functions. These include:

1. Help desk services.
2. Infrastructure management and maintenance.
3. WAN delivery and maintenance.

The main reason for outsourcing these services was to improve the overall efficiency in the operations of the firm. Due to the technical nature of these services, BSL saw that it was rather wise to outsource them and let its internal staff to concentrate on issues that directly relate to achieving its set goals and objectives. Thus, since the organization commenced its outsourcing services, the IS system has been managed in a consistent manner.

Due to regular upgrades and servicing, the system has not broken down. It is with regards to these factors that BSL believes that it will continue to outsourcing these services to enhance the effectiveness and efficiency of its operations.

Somerville Retail Services

SRS also values the importance of IT infrastructure in its operations. It is on these grounds that the organizations strive as much as possible to ensure that the operation of all its IT components are as per the expected standards of the company.

To ensure that this is achieved, the organization usually assesses the operations of its IT architecture annually. The company views annual assessment as cost effective due to the nature of high costs that is involved in this process. However, the annual assessment and maintenance cost is always included in the financial budget of the organization.

To ensure that the IT system operates in an effective and efficient manner, SRS usually ensures that its operations is aligned with its IS plan. The IS plan usually depicts means that will allow the synchronization of individuals, departments, components and systems within the organization to achieve the set goals and objectives.

In the process, the IT system plays a critical role in the running and maintenance of the IS plan in SRS. The IT systems ensure that information within individuals and departments is conveyed in the most effective manner. Additionally, the system also supports the communication between the organization and its customers.

Therefore, the organization usually proposes amendments to the IT systems to meet its current and future operational needs and requirements. On these grounds therefore, SRS usually estimates the amount of IT hardware that it might require to manage the cumulative data that it has. However, this decision is also determined by the cost of maintaining the proposed system.

Thus, the system that the organization adopts and implements is expected to cater for the current and long term needs of the organization (a period of 3-5 years). This ensures that there is consistency and continuity in the management and maintenance of the IT system as well as the IS system.

With such a sophisticated and essential system, it is always essential to ensure that its operations are as per the expected standards of the firm. Thus, to determine the effectiveness of this system, SRS usually takes into consideration the feedback that has been received from end users.

This mainly includes staff from various departments. The organization also evaluates the effectiveness of its IT system by evaluating its everyday performance on issues such as backup and restore exercises, data processing, and overall network management.

Comparative Analysis

In the modern world, information technology has played a critical role in the running and management of organizations. In essence, IT has become an essential component in the management of information systems within organizations. It is with regards to this fact that most organizations in the world have adopted and incorporated the use of IT and ICT in their day-to-day operations.

IT has always been accredited with increasing the effectiveness and efficiency of operations of an organization through sustainable use of available resources. Therefore, IT ensures that data, manpower, machinery, plants, and equipments are used in a sustainable manner to achieve the goals and objectives of the organization.

BSL and SRS both value the importance of IT in the running of their operations. Both firms have various IT systems that enhance their internal and external operations. To ensure that IT is effectively used, these organizations have aligned the IT plans with their IS plans. In SRS, for instance, IT systems are just but a component that it used to enhance the operation of the IS plan.

In BSL on the other hand, the IT system is used to store and retrieve data and facilitate communication among employees. Thus, to ensure that the IT system is properly maintained, both organizations carry out regular maintenance checks. SRS conducts these checks on an annual basis.

However, these checks are conducted much more often in BSL due to the fact that the organization has outsourced its IT services to an external body. With this centralized system in place, the system is checked and upgraded on a regular basis increasing its performance and ensuring that the system is at par with the latest technologies.

With such measures in place, an organization is guaranteed that its operations are effective and efficient. As a result, such an organization stands high chances of having a competitive edge over its rivals hence guaranteeing its profitability and sustainability in the short run and in the long run.

Managing the IT Human Resource

This topic focuses on the importance of human resource in the management of IT and infrastructure within an organization. There are several factors that organizations need to consider to ensure that they select and maintain a strong workforce to achieve goals and objectives.

Hence, this section will focus on the role of the IS and HR departments in recruiting new employees and training them. This section will also focus on the measures that facilitate the achievement of a conducive working environment to reduce employee turnover.

Literature Review

For an organization to operate in an effective and efficient manner, it needs to have qualified employees who are capable of performing work as per their job descriptions to meet the needs and desires of the organization.

To achieve this, an organization needs to have a rigorous training exercise that ensures that the selected employees have the desired skills, knowledge, and expertise to conduct their roles effectively and efficiently (Kujnish, 2006).

The first process that the Human Resource Department of most organizations conduct while recruiting employees is to short list candidates who have applied to the various posts that have been advertised. In most cases, the firm selects candidates from two broad bases. A firm can select candidates from its internal workforce (Zoltners, 2006).

Here, the firm identifies a number of employees who are capable of taking the job opening that is available and sustaining its needs and requirements. To achieve this, the HR department can select an individual from any departments to fill in the vacant position. In other instances, the HR department can decide to select an employee from the department where the vacancy is available.

In most cases, the individual who is selected to hold the vacant position is usually from a lower or the same level of employment. Thus, this form of selection is normally viewed as a promotional exercise and plays a critical role in the motivation of employees.

Alternatively, a firm can select candidates from external sources (Zoltners, 2006). Here, the company seeks to award the vacant position to an individual who is not part of their workforce. Here, the firm normally advertises through various forms of media. Occasionally, the firm links up with renowned educational institutions from which it selects the best students to fill in the vacant position.

The selection process usually commences after the candidates have been identified and shortlisted. The selection process should be rigorous to ensure that the skills of the candidate who is selected for the job conform to the skills that are required for the job at hand (Roberts, 2008).

Therefore, most organizations usually check the educational background of the candidates, their work experience, personality, goals and objectives to determine whether they are suitable for the job at hand. The candidates’ attitudes and personalities a critical role in the selection process.

Despite the importance of the selection, recruitment and training exercises, the management also plays a critical role in ensuring that employees perform their roles and duties as per the expected standards of the firm (Bernardin, 2008). It is the role of the management therefore to monitor the performance of his/her employees as well as the achievement of their set targets.

However, since employees usually have diversified skills, expertise and needs, the respective managers are expected to develop strategies that will enhance their relationship that they have with their employees. In most cases, it has been advocated that the managers should be the mentors, facilitators, and role models within and outside the firm.

The managers should understand and try to meet the needs of their employees regardless of whether they are professional or personal. Furthermore, it is the role of the sales managers to determine the factors the motivating and de-motivating to their employees hence affecting their performance. Employees should always be regarded as assets of an organization (Robbins, 1999).

The Brotherhood of St. Lawrence

As it has been stated earlier, BSL values the critical role that IT plays to support its operations. It is with regards to this fact that the organization always strives to have the best individuals to uphold and maintain the operations of the IT department. Thus, like many other organizations out there, BSL usually conducts a rigorous recruitment exercise to ensure that it has the right candidates for its job openings.

This has always been a traditional practice within the organization. Thus, different vacancies opening requires different individuals to fill up the positions. Therefore, the manner in which the management will select the individual(s) to fill this position varies depending on the job requirements of the vacant position.

Thus, while recruiting staff in the IT department, BSL considers a number of factors. First, the organization considers whether the position that is available is a short-term post or a long-term post. This is a critical step as it lays the basis on which the recruitment exercise will be carried out. In most cases, it will be unwise to undertake a vigorous recruitment exercise for a short-term work.

Thus, this process saves the organization both time and money. There are also those instances in which the firm does not have the time or capacity to advertise and shortlist candidates. It is during these times that the organization uses recruitment agencies such as Hudson to save on time.

BSL has had a long reputation with such agencies. Most of the candidates that it has received from them have been highly qualified and competent in their work. However, this option is implemented only when BSL does not have the time for the process and the vacant position is fixed. However, before BSL agrees to use this method, it needs to consider its cost implication.

Using a hiring agency to recruit employees is always an expensive exercise. Therefore, the firm needs to consider the impacts of this move on its budget. However, in normal circumstances, the firm advocates the use of its traditional hiring methods where the process is conducted systematically to ensure that the right individuals are selected with regards to the position that is available.

The IS department of BSL comprises of a number of employees. Each individual has a specific role that he/she needs to play to ensure that the operations of the department meet the set goals and objectives. The department is headed by a manager. The IS manager heads the department. However, he/she spends some of his/her time heading another department or portfolio.

The department however has a full time help desk manager. The role of this individual is to ensure that the help desk is run effectively and efficiently. The help desk manager heads two IS support officers and a project/business administration officer. Therefore, the entire department has four different job descriptions under one level of hierarchy.

Despite the fact that BSL does not have a career progression program for its IS employees or minimum employee qualifications, the department has always experienced low turnover rates. However, to prevent the eruption of employee turnover in the future, the IS manager seeks to introduce minimum qualification measures and progression programs for the employees under his umbrella.

Somerville Retail Services

SRS also takes seriously the process of recruiting an employee into the IS department. In most cases, the department itself conducts the recruitment process. However, there are those occasions in which the IS department might require assistance from the HR department to ensure that the recruitment process is conducted in an effective and efficient manner.

This highly reduces turnover rates within the department. In the course of the recruitment process, SRS usually wants to select the right candidate for the job. Thus, the IS department usually goes an extra step in the recruitment process to ensure that this is achieved. There are a number of qualities that the IS manager and the recruitment committee look at during the recruitment process.

The personality of a candidate is important. The department needs to ensure that the selected candidate can take initiative, is attentive to details, advocates for teamwork and has the capability of making decisions on his own. Thus, the department needs to be assured that the candidate can solve issues on demand.

Thus, in the course of the recruitment process, a candidate needs to expressly show that he/she can take initiative, is willing to put his skills and expertise in the work of the department, is ready to learn and most importantly, he/she is capable of meeting tight deadlines under minimal supervision.

Other than that, the candidate also needs to prove that he/she has basic administration skills as well as desirable troubleshooting skills. These qualifications however need to be supported by the ability of the candidate to be able to solve problems in an IT related or non-IT related field.

Here, the candidate needs to expressly come up with a step by step procedure on how he/she can solve a problem within the department, measures that he/she will take to inform other members of staff including the IS manager about the situation and how it is being solved. Most importantly, the desirable candidate should be able to make independent decisions without seeking help from other members of staff.

However, this decision needs to be sound and aim at improving the operations of the organization. The candidate who might possess these qualities thus stands a high chance of being hired into the IS department in SRS.

The IS department in SRS has three different job descriptions. There is the manager, the administration representatives and the helpdesk representatives. Despite this diversification, there are no minimum qualifications of employees in this department. The members of staff however need to show their willingness to work and learn while conducting their daily services within the department.

Those employees who show that they have the initiative to work and learn stand high chances of progressing within the department especially when they are involved in IT. However, for such individuals to progress, they need to be trained in various IT roles such as application management or network management.

Comparative Analysis

It has always been argued that an organization is as good as its employees are (Zoltners, 2006). It is with regards to this that both BSL and SRS have gone to extra lengths to ensure that all its employees including the staff of the IS department are highly qualified to meet the demands and requirements of their respective jobs.

SRS and BSL have rigorous recruitment exercises to ensure that they have the right candidates for the vacant posts that are present in their respective organization. They both seek to have qualified personnel who are willing to take up the challenges and demands that are might arise in the course of their work.

However, while SRS sought support and direction from the HR department during the recruitment process, the IS department of BSL conducted its recruitment exercises independently. SRS believes that it is necessary to include the HR department in order to reduce employee turnover rates.

The only time that BSL sought external help is when the IS department did not have the time to conduct the recruitment process. In such situation, the organization sought the assistance of recruitment agencies such as Hudson. This is a common practice in most organizations in the world where they use agencies and education institutions to tap and develop talent within their organizations.

Finally, it has always been considered essential to motivate employees. This can be achieved either by monetary or non-monetary measures. Promotions and career developments are some of the non-monetary measures that can be used in this process. To achieve this, SRS has a progression program in which employees can grow and develop within the department.

Currently, BSL does not have such a program. However, due to its importance, the organization aims at introducing it. This will ensure that the management of IT personnel within the organization is effective and efficient hence enabling the organization to achieve its short term and long-term goals and objectives.

Conclusion

In the modern world, an organization needs to have a reliable, effective and sound information system that will sustain its internal and external operations. To achieve this, IT has always been incorporated in the running and management of firms.

Due to its simplicity and effectiveness, IT has become an essential component of IS within an organization. These two factors usually improve the overall performance of an organization enabling it to stand at a competitive edge of its rivals and guaranteeing its sustainability in the short run and in the long run.

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Introduction

Marketing and its underlying thoughts and principles have evolved over the years. The evolution over the past few decades has widened the scope of this field. Such areas as business-to-business marketing, relationship marketing, and services marketing have become common in this field. Service marketing constitutes a major sub-discipline in this field.

Contrary to the impressions created by the name, this sub-discipline covers the marketing of both goods and services. According to Bessom and Donald (1975, p. 45), marketing of goods is a two-pronged phenomenon. It entails the promotion of durables and fast moving consumer products. On its part, service marketing entails the promotion of business-to-consumer and business-to-business services.

The current paper is written against this background. In the paper, the author conducts a case analysis focusing on the retailing sector in the UK. The clothing and footwear retail sector in this country is the case that is used in this analysis. The service marketing issues affecting this industry are critically reviewed in this paper. More specifically, the current study focuses on the competitive sector of sports apparel and footwear industry. The sports footwear sector is analysed in detail.

Introduction to Service Marketing

The concept of service marketing is relatively new in contemporary global market. According to Lovelock and Wirtz (2001, p. 99), the concept of service marketing introduces a new dominant logic in the entire marketing spectrum.

Lovelock and Wirtz (2001) describe this new development as the ‘service dominant logic’. What this means is that promotion of services shifts the focus of marketing from operand resources. Such resources include, among others, land, plants, and animals. Service marketing introduces a new element of operant resources. The new resources include knowledge and skills.

The marketing of services brings together many industries in the global market. Some of these industries include those operating in the telecommunications, health care, aviation, and professional services sectors. Others operate in the hospitality and financial services segment of the economy.

Services constitute a major source of revenue for the developed economies. For example, such economies as the UK rely more on services compared to developing economies like those in Africa. As a result of this, it is apparent that service marketing is vital not only to the success of individual businesses, but also to the growth of the entire national economy.

Service Marketing in the UK Retail Sector

An Overview of the UK Retail Sector

The service sector in the UK and other economies can be determined from various perspectives. For instance, Burt and Sparks (2003, para. 3) highlight one of these perspectives in their definition of the service sector. Burt and Sparks (2003) conceptualise this sector as the wider group of industries that remain when agriculture, mining, and manufacturing industries are removed from the equation.

Going by this definition, it is clear that the scope of the services industry in the UK includes, among others, the transport and communication industries. It also involves the provision of professional services, as well as public administration.

Other examples of service industry sectors include, as already indicated above, financial services, hospitality, healthcare, and retailing. Professional services include the provision of such products as legal and accounting aid. On its part, the hospitality sector is made up of restaurants, accommodation outlets, and ski resorts. Examples of healthcare services include eye care, dentistry, and medical practice. Finally, retailing services involves merchandising and such other endeavours (Burt & Sparks 2003).

Retailing is one of the major economic sectors in the UK. Burt and Sparks (2003) capture the significance of this sector when they analyse the number of individuals engaged actively in it. According to Burt and Sparks (2003), the sector employs an estimated 3 million people in the UK.

It also records sales of up to £221 billion per annum. In addition, more than 300,000 shops operate in this sector in the UK. Leading retailers in the country include large multinational businesses. The businesses contribute significantly to the country’s GDP. According to Burt and Sparks (2003), these multinationals are the ones that dominate the country’s retail sector. The operations of retailers in the UK range from major supercentres and hypermarkets to medium and small convenience stores.

The UK retail sector covers a broad market spectrum. Some of the strategic groupings in this sector of the economy include the clothing and footwear retail operators, food retailers, book vendors, and providers of health and beauty services. Other entrepreneurs involved in this sector are engaged in the provision of electrical and related services (Burt & Sparks 2003).

Clothing and Footwear Retail Sector in the UK

The clothing and footwear retail sector is a major contributor to the UK economy. Burt and Sparks estimate that the market value of the clothing and footwear industry is about £29-31 billion (2013). It is a very volatile sector. The growth and performance of this industry sector varies between the various retail sub-sector segments. There are various strategic clusters of operators in the UK’s clothing and footwear industry. The clusters are made up of accessories, children wear, sportswear, and casual wear among others.

According to Bainbridge (2011), the sales made in the footwear and sports clothing industry in the UK were estimated at £4.8bn for the year 2011. The record was an 18% increase from the sales made in 2006. The role of service marketing in this sector influenced these outcomes substantially. It is noted that the different players in this sub-sector provide the consumers with a range of largely similar products.

As a result, the major determinant of the growth of the sportswear sub-sector is the quality of services offered by the various competitors. The services are supported by the kind of consumer relationship developed by the company. The marketers of sportswear products have leveraged their service offerings. The leveraging is carried out in a bid to differentiate them from their competition and attract more customers as a result.

Service marketing is highly applicable in the sportswear industry. The reason for this is that the distinction between the brands is created by the quality of services and not by the tangible products offered to the consumers. That is why service marketing is indispensable to those professionals charged with the responsibility of spurring growth in the companies associated with the manufacture and distribution of sportswear.

Opportunities and Threats facing the Sportswear Industry in the UK

Opportunities facing the industry

The sports footwear sector has witnessed significant outward and in inward movements over the last two decades. The movement has taken place with regards to the wholesaling dimension of the various types of products. The sector has seen a shift starting from wholesaling and transiting through trial shops. The movement has finally settled at the establishment of retail chain outlets (Kotler et al. 2001, p. 94). Consequently, players in the sports footwear industry benefit from the opportunities presented by these outlets.

According to Ligerakis (2004), the sports footwear industry is undergoing a major revolution today. To this end, it is noted that sports fashion is taking root in the sector. Currently, sports footwear consumers are going for the models that were dominant in the 1960s. In addition, many consumers in this sector are more concerned with the comfort and functionality aspect of their shoes.

Most of them are less concerned with the style of their footwear (Ligerakis 2004). Sports footwear companies benefit from the possibilities of increased market share and profits. All they need to do to fully exploit these opportunities is to embrace the sports fashion sense in the industry. The growing fashionability in the market segment provides the operators with the opportunity to reach out to more consumers.

The sports apparel and footwear industry is increasingly moving towards globalisation. Globalisation is especially evident in the sports footwear sector. As a result, establishing and sustaining a competitiveness edge in the industry largely relies on a global strategy. By moving towards globalisation, the sector provides the entrepreneurs with opportunities for reduced cost of goods and related factors. The investors in this sector can also exploit the numerous opportunities presented on the global platform. They can achieve this through service marketing.

Other opportunities associated with the sportswear industry in the UK include technological advancements. The advancements make it possible to develop high quality footwear. Technology also supports service marketing endeavours carried out by these companies (Vargo & Lusch 2004a).

Technological innovations enhance efficiency and increased productivity. In addition, they improve the distribution channels used by business persons in the industry. Such companies as Adidas and Nike are continually exploiting technology to improve the performance of their products on the global market. The brands are able to attract a lot of attention from consumers and increase demand in the long term (Zwan & Bhamra 2003).

An example of technological exploitation in the sports footwear industry is the development of a new brand of shoes by Adidas Company. The new shoes are capable of monitoring the walking and running patterns of the wearer (Zeithaml, Bitner & Gremler 2002). Consumers are embracing such developments and associated services. It is as a result of this that technology is regarded as an opportunity in the industry. The high-tech sports footwear helps manufacturers to remain relevant in the dynamic global market.

Lifestyle centres have become a major attraction for many shoppers in the recent past. The popularity of these centres has surpassed that of the conventional shopping malls (Wurtzel n.d). As retail outlets, these centres are opportunities that can be exploited to enhance growth in the sports footwear retail sector. Players in this sector stand to establish their dominance in the market by tapping into these retail outlets.

Threats facing the industry

One of the main threats facing the sports footwear sector is economic recession. Recessions have negative impacts on almost every sector of the economy. According to Zeithaml, Bitner & Gremler 2010), the initial economic meltdown was confined to the U.S. However, it eventually spread to other parts of the world.

The UK was one of the countries affected by this economic downturn. Some of the effects of economic recession on businesses include low sales volumes and reduced prices. Although the recession has tapered off, the future occurrence of such economic downturns remains a major threat in the industry.

Globalisation has become a necessity in the sports clothing and footwear industry. According to Zwikael and Shlomo (2007), all businesses operating in the global market have to globalise to retain their relevance. The home markets, especially for the sports clothing and footwear industry retailers, have become saturated and slow with regards to growth. Failure to globalise may lead to elimination from the market. The reason is that sustaining the domestic in operations of these companies is becoming unviable (Anderson & Mittal 2000).

The threat of new entrants is a major concern in the industry. Retailing in the sports footwear sector requires low capital investment, making it easy for new investors. In addition, the nature of competitor product lines and geographical expansions makes entry into this market a relatively easy undertaking.

According to Lusch, Vargo and O’Brien (2007), retailing, as a business, requires relatively low capital investment. Instead, what is needed is more trade offers. Such a scenario increases the opportunities for entrepreneurship among people of low means. The low entry barrier may erode the market share of dominant players in the industry.

A Comparative Analysis of Service Marketing Strategies among Major Industry Players in the UK

Overview

According to Zeithaml et al. (2010), service marketing strategies usually focuses on specific elements. The elements include the delivery of processes to consumers. It also involves delivering experiences and other forms of intangibles to the end users (Laing et al. 2002). It is very different from the delivery of physical goods and promotion of transactions in the market. What this means is that service marketing focuses on the consumer.

Operators in the sports footwear industry seek to harmonise their company functions. Such functions include marketing, selling, and operations.

Harmonising these processes facilitates the formulation and implementation of service marketing strategies. Leading sports footwear suppliers in the UK have shifted their focus from the traditional goods marketing. Such conventional marketing majored on transactions and exchange. They are now focusing more on their consumers through the use of service marketing strategies (Vargo and Lusch 2004a).

The sports apparel and footwear industry in the UK is characterised by a number of business outlets. The outlets include Adidas and Nike. Other major players include Reebok, Speedo, JD Sports, JJB, and Sports Direct. The service marketing plans adopted by these businesses vary. For example, Adidas and Nike, the dominant players, have strategies that are significantly different from those of the other companies.

Similarities between the Service Marketing Strategies Adopted by Adidas and Nike

One of the major similarities between the two companies in relation to their service marketing policies is the focus on customer service. According to Vargo and Lusch (2004b), customer service does not increase revenues for the organisation directly. On the contrary, it concentrates on addressing customer queries and complaints. The strategy provides the customers with answers and solutions as required.

Nike and Adidas have come up with a strategy where follow-ups are conducted on customers. The aim is to customise the products and services offered in a bid to meet the dynamic customer expectations. Both companies keep in touch with their consumers on social media and such other platforms. The strategy used by these two major companies also addresses the issue of technology and sustainability. The companies achieve this through customer empowerment and cultivation of loyalty (Lovelock 1994).

The service marketing plans in these companies also focuses on value-addition in the production chain (Vargo & Lusch 2004a). Innovation, research, and development are major undertakings in Nike and Adidas. Both companies enhance service delivery through quality, comfort, and customised products. Delivery of services is improved through sports footwear products that reduce or eliminate injury (Mattila 2001). In addition, the two entities improve athletic performance through maximisation of comfort (Wurtzel n.d).

Differences between the Service Marketing Strategies used in Adidas and Nike

According to Ligerakis (2004), Adidas has a marketing strategy that concentrates on developing cultural relevance for the brand. The company aims at improving the acceptability of its products not only in Europe, but also in other parts of the world. The strategy helps consumers to identify with Adidas sports footwear products through enhanced quality and support services.

Nike, on the other hand, has focused its service marketing strategy on greater adoption of new technologies. The adoption is especially notable in relation to the company’s presence on social media (Ligerakis 2004). The marketing plan aims at establishing a live link with consumers. Such a link facilitates the development of products and support services that are in line with current market demands. The service strategy employed by Nike also seeks to establish sustainable relationships with consumers in the sports footwear sector.

Nike’s Key Strategic Service Marketing Issues for the Next Five Years

Nike Inc.: Highlight

The company is a multinational corporation with origins in the USA. In spite of this, Nike has a significant presence in the UK’s sports footwear industry. The presence is facilitated by the company’s global success. It is a global leader in the sports footwear, accessories, and apparel industry (Gronroos 2007). However, in spite of its success on the global front, Nike Inc. faces several challenges in relation to strategic service marketing.

Services Design and Delivery

Services design and delivery is one of the key issues in Nike’s strategic marketing policy. According to Bainbridge (2011), delivery of quality services to customers relies on building the organisation’s tasks around consumer needs. Such a strategy closes the gap between customer expectations and the quality of product provided.

Nike is faced with the task of ensuring that its footwear products meet the quality standards that are claimed by the company. It should meet the demands of consumers. The company should realise that the main aspect of service marketing is striking a balance between serving the customer and generating revenues for the organisation (Bitner 1995). The design and delivery of services should lead to the creation of sustainable relationships with the customers.

Zeithaml et al. (2010) illustrate some of the dimensions of quality service delivery. One of the dimensions includes knowledge associated with the employees. The employees should be capable of inspiring trust and confidence among customers. The other dimension entails the ability of the product to deliver the promised services (Zeithaml et al. 2010).

Another element of service delivery is responsiveness. It involves the desire to help the customers and addressing their concerns promptly. The tangible dimension of service delivery, on the other hand, pertains to the appearance of the physical products (Zwikael & Shlomo 2007).

In the next five years, the service delivery system at Nike Inc. should strive to address all the aforementioned dimensions of quality services. The resultant service marketing strategy would ensure that the footwear retailer overcomes the various issues associated with service design and delivery. In the long term, the plan would lead to sustainable profitability for the organisation.

Over the next five years, Nike Inc. can address the issue of service delivery and design with the help of other service marketing strategies. The strategies include the realignment of human resource aspects. To this end, the company should focus on hiring, rewarding, and training of employees based on the delivery of excellent services (Wurtzel n.d). In addition, the company can increase its adoption of technological innovations. Such a strategy will promote the online presence of the company.

Communication, Demand, and Capacity Synchronisation

In addition to the element of service quality and design, Nike Inc. faces other issues that affect its performance. For example, the company has to address concerns over customer communication, demand, and capacity synchronisation.

The company may provide high quality services, but fail to meet consumer expectations. Such a failure may result from a breakdown in communication between the company and the customers (Bessom & Donald 1975). To address this problem, the company should fill the gap between the services delivered and consumer expectations. Failure to achieve this synchronisation would lead to a poor and an ineffective service marketing strategy for the organisation.

Nike Inc. can use a number of service marketing policies to resolve this key issue over the next five years. For example, the company can develop internal communication mechanisms aimed at avoiding making unrealistic promises to customers (Hogg, Laing, & Winkelman 2003). Pricing the products appropriately based on their level of service delivery also facilitates the synchronisation process.

An appropriate service marketing plan resolves other issues related to communication, demand, and capacity. The company’s brand image, which is reinforced through promotion campaigns, harmonises the perceptions associated with given brand (Varey 1995). The logo used by Nike Inc. is unique. It enhances the image of the brand and reduces the communication gap between the consumers and the company.

Relationship between Nike’s Key Issue of Service Design and Delivery and Theoretical Principles of Service Marketing

As indicated earlier, the element of service design and delivery is critical to the success of Nike’s service marketing plans. It is a fact that service marketing focuses more on service oriented business processes. However, the concept is also relevant in products oriented processes. Services can be the primary source of business for a given business organisation. In some cases, they can be used to support the generation and distribution of core business products (Zwan & Bhamra 2003).

The marketing perspective adopted by Nike Inc. entails the promotion of services supporting sports footwear products offered by the company. As such, the element of services design and delivery in relation to Nike’s products is relatively complex. According to Zeithaml et al. (2010), the four major Ps of marketing address the issue of service marketing only partially.

Due to this, the additional Ps of processes, people, and physical evidence are needed. Solving the problem of services design and delivery in relation to Nike’s business operations requires the combination of all these theoretical aspects of service marketing. As far as retailing of sports footwear products is concerned, there is close link between production and consumption of services and products. The customer is at the centre of the footwear retailer’s business operations.

Conclusion

It is hard to distinguish between service marketing and traditional products marketing. The distinction is especially difficult in situations where the promotion of services m takes place in relation to tangible products. Services marketing plans usually focus on the experiences of consumers.

Businesses involved in the offering of products undertake service marketing at some point in their operations. The reason is that the production and delivery of tangibles entail the utilisation of intangible services.

For instance, the distribution of physical products calls for customer service policies to address consumer needs. Delivering experiences and processes to end users is a complicated undertaking. The success of this undertaking is determining by a number of factors.

The current study focused on service marketing with regards to the retail sports footwear sector in the UK. It was found the competitiveness of the country’s sporting apparel and footwear industry relies a lot on service marketing. Establishing customer loyalty is a necessity in this industry. The loyalty is developed through the provision of high quality products, which helps in sustaining a company’s market share.

Customers demand to get value for their money. As a result, footwear companies in the UK find it important to inform the consumers about the value offered by their products. Communicating the value of the products is determined to a large extent by the nature of service marketing policies adopted. It is one of the reasons why promotion of services has become a major aspect of marketing in today’s global market.

References

Anderson, E & Mittal, V 2000, ‘Strengthening the satisfaction–profit chain’, Journal of Service Research, vol. 3 no.2, pp.107-120.

Bessom, R & Donald, J 1975, ‘Service retailing: a strategic marketing approach’, Journal of Retailing, vol. 51 no. 2, pp75-84.

Bitner, M 1995, ‘Building service relationships: it’s all about promises’, Journal of the Academy of Marketing Science, vol. 23 no.4, pp. 246-251.

Burt, S & Sparks, L 2003, Department of trade and industry: competitive analysis of the retail sector in the UK. Web.

Gronroos, C 2007, Service management and marketing: customer management in service competition, 3rd edn, Wiley, Chichester.

Hogg, G, Laing, A & Winkelman, D 2003, ‘The professional service encounter in the age of the internet: an exploratory study’, Journal of Services Marketing, vol. 17 no. 5, pp. 476-494.

Kotler, P, Keller, K, Koshy, A, & Jha, M. 2001. Marketing management: a South Asian perspective, 14th edn, Pearson Education, London.

Laing, A, Lewis, B, Foxall, G, & Hogg, G. 2002. ‘Predicting a diverse future: directions and issues in the marketing of services’, European Journal of Marketing, vol. 36 no. 4, pp. 479-494.

Ligerakis, M 2004, ‘Adidas sweats it out’, B&T Weekly, February 2004 supplement, p. 28.

Lovelock, C & Wirtz, J 2001, Services marketing: people, technology, strategy, 7th edn, Pearson Education, New Jersey.

Lovelock, C 1994, Product plus: product plus service equals competitive advantage, McGraw-Hill, New York.

Lusch, R, Vargo, S & O’Brien, M 2007, ‘Competing through services: insights from service-dominant logic’, Journal of Retailing, vol. 83 no. 1, pp. 5-18.

Mattila, A 2001, ‘Emotional bonding and restaurant loyalty’, Cornell Hotel and Restaurant Administration Quarterly, vol. 42 no. 6, 73-79.

Varey, R 1995, ‘A Model of internal marketing for building and sustaining a competitive service advantage’, Journal of Marketing Management, vol. 11, pp. 41-54.

Vargo, S & Lusch, R 2004a, ‘Evolving to a new dominant logic for marketing’, Journal of Marketing, vol. 68 no.1, pp. 1–17.

Vargo, S & Lusch, R 2004b, ‘The four service marketing myths: remnants of a goods-based, manufacturing model’, Journal of Service Research, vol. 6 no. 4, pp. 324-335.

Wurtzel, N n.d., Consumers trend toward customised and personalised products. Web.

Zeithaml, A, Bitner, M & Gremler, D 2010, Services marketing strategy. Web.

Zeithaml, V, Bitner, M & Gremler, D 2002, Services marketing: integrating customer focus across the firm, 3rd edn, Mcgraw-Hill Publishing, New York.

Zwan, F & Bhamra, T 2003, ‘Services marketing: taking up the sustainable development challenge’, Journal of Services Marketing, vol. 17 no. 4, p. 341-356.

Zwikael, O & Shlomo, G 2007, ‘Quality management: a key process in the service industries,’ Service Industries Journal, vol. 27, no. 8, pp.1007-1020.

Introduction

A market strategy in allows an organization to focus its resources to the most profitable of opportunities with the objective of maintaining and increasing sales and gain a competitive edge as against other similar or alternative competitor organizations. They are therefore a fundamental tool in every organization in as far as achievement of the market objectives is concerned. (Gupta and Lehmann 2005, p70-77)

Background

The retail establishment specialized on the sale of electronic products majority of which were computers and communication devices such as cell phones. The retail outlet has a turnover of $50000 and has wide and characteristically differentiated market. There are numerous similar stores that sell alternative or similar electronic products and therefore the market environment is highly aggressive and competitive.

The establishment has a reliable supply source and is therefore able to cut on warehousing costs that are otherwise incurred by other retailers. It also has a resourceful labor force that is employed on a permanent basis hence reducing the unpredictability of casual and on demand labor.

It has also managed to cut on its management overheads by implementing an impress system that has increased the level of accountability and reduced wastage. The establishment has also invested heavily in surveillance technology that has ensured that there is little or no loss from theft of products from the shelves. It has also allowed them to stock high value equipment, which is not available in other retail shops.

The retail establishment has also partnered with an advertising company that purchases their products at discounted prices in return for constant and frequent advertising. This has ensured that the establishment acquires new markets every day and maintains leadership in the current market.

Generic marketing strategy

The internal and external factors in the establishment have led the manager to implement a cost leadership strategy. The strategy is motivated by the ability to cut down on costs and maintain a profit margin even at these low costs. The retile shop offers low prices on small value products. It also maintains leadership in the high value products by offering them at the same price as all others but with warranties of varying periods.

Segmentation strategy

Market segmentation is segregating the customer base into groups of similar interests or needs (Goldstein 2007, pp 2-30). The electronics market has a complicated need base and therefore presents a great challenge in as far as segmentation is concerned. The establishment has therefore segmented the customers by the price.

This therefore means that there are two main categories of customers, these who buy low value products and those who buy high value products. Low value products are those whose price is below $2000 awhile the high value products are those whose value is above $2000. These customers receive different treatment in as far as price and discounts are concerned.

Recommendation and implementation

The marketing and market segmentation strategies fall just in line with the position of the establishment in as far as internal and external factors are concerned. The strategy therefore is just convenient for the business as it is in the short run. The organization however has the opportunity to explore more avenues by either altering or improving the current strategy.

The market segmentation strategy should include a third category of customers who purchase products valued between $ 2000 and $10000. The current strategy allows a discount to low vale products since these products require little or no repair after purchase. The high value products on the other hand attract a warranty in the alternative of a discount due to their nature and disposable life.

The customer is therefore more likely to go for a product with a warranty as opposed to that with a discount. However the consumers of products whose value is between $ 2000 and $10000 are at the point of indifference and will therefore either go for a product with a warranty or a product with a discount whichever is more beneficial. This means that the establishment looses a considerable number of customers.

The alternative approach would be to grant this third category of customers a partial discount and a partial warranty. This ensures that the customers benefit either way.

Conclusion

The organization ha effectively managed t implement the cost leadership strategy and has a good chance at improving its market segmentation. Implementation of the alterative strategy will increase the consumer base as well as increase the sales revenue.

References

Gupta, S. and Lehmann, R. (2005). Managing Customers as Investments: The Strategic Value of Customers in the Long Run. Upper Saddle River, NJ: Pearson Education/Wharton School Publishing, pages 70-77.

Goldstein, D. (2007). “What is Customer Segmentation?” New York, NY. Retrieved from http://www.mindofmarketing.net/2007/05/customer-segmentation-why-exactly-does.html

Introduction: Type and category of retail channel

Hennes and Mauritz (H&M) retail store deals with men, women, and children’s clothing. The company specializes in designing, manufacturing, and selling of all types of clothing across the world. It also distributes cosmetic products, footwear, home textiles, and accessories in more than 40 stores across the world. Other than selling its products in its branded stores, the company makes online and catalogue sales in various first-class nations (Hennes & Mauritz 15).

Norway, Denmark, Netherlands, United States, and Germany are some of the nations that the company targets when making online and catalogue sales. From one time to another, the company launches new online stores. It opened its online store in the United States in August 2013, and after that, the company launched its first store in Australia in April 2014. H&M has employed various strategies of ensuring that it attains profitability, it maintains competitive advantage, and it employs technological leadership.

The executives of the company ensure that they have more highs than lows following the recent rises and lows in sales tax and net profit. H&M’s core competency strategy is expansion through opening new stores in new locations. In the stores, customers are assured of obtaining quality garments at attractive prices. Lastly, the company insists on technological leadership, which helps in maintaining a good relationship with the suppliers, and it helps in lowering manufacturing costs.

Reason for choosing the channel

H&M is an interesting company that anyone would wish to investigate. Other than offering the latest fashion, the place has the most affordable prices. In the contemporary world, one would expect a fashion retail store to sell its products at very high prices; however, H&M challenges other dealers of retail clothing because of its low prices. Indeed, if any clothing dealer tried to compete with H&M in terms of prices, it would receive a big blow. There is a very high probability the executives of the company are very particular about the manufacturing costs.

Moreover, they only aim at generating little profits for every product that they manufacture. Due to its low prices, the company achieves the economies of scale competitive advantage. The most interesting thing about the company is its ability to meet the diverse needs of women, men, teenagers, and children in the contemporary world. Probably, the company executives have invested in research about fashion and the desires of people in the evolving world. Interestingly, with its low prices, H&M still achieves to make massive profits and its employees and customers’ level of satisfaction is beyond expectation.

Background of the chosen channel

History

In 1946, Persson founded the famous H&M Company, and he opened a women’s clothing shop in Sweden. The shop was named Hennes, but before long, he acquired Mauritz Widforss, and the company’s name changed from Hennes to Hennes & Mauritz (H&M). Mauritz was an apparel retailer that specialized in menswear collections.

Thus, its acquisition enabled Persson’s business to include menswear in its stores. Since then, the company has expanded and opened new stores in major nations across the world. The company has opened more than 2500 stores across the world, and it has more than 116,000 employees. The company operates in 54 different countries, and its garments are made in Asia and Europe. It aims at increasing its growth by 10-15% per annum, and by 2015, the company aims at increasing its sales revenue and earnings per share by 20% and 30% respectively.

Location evaluation

H&M is very particular when it comes to identifying the location of their retail store in any new country. The marketers of the company make a stringent analysis of the demographic structure, economic growth, political risks, and environmental sustainability levels of the area that they intend to open a new retail store. H&M stores are always located in the best settings in major towns in a country. Interestingly, the company leases its retail premises.

Thus, it is capable of relocating if the current location becomes unfeasible. In Asia, Europe, America, Oceania, and all continents in which H&M operates, its retail stores lie in the most attractive streets and shopping centers.

Mission statement

The company’s mission statement is to provide fashionable and quality products at low prices. The company has a highly valued design department that is in charge of monitoring fashion trends. The department is keen on developing unique clothing that captures the eyes of the customers at first sight. The design department is obligated to have a wide range of designs and materials, where the designers ought to order quality materials in large volumes.

The finance department is very particular with the manufacturing costs at every stage of production. H&M emphasizes on good working conditions of the machinery to cut on the overhead costs. It is noteworthy that human labor is significantly cheap in Asia, where the company has its biggest manufacturing firm. Overall, the well-organized company can carry out its operations in an ordered manner that enables it to achieve its mission of providing fashionable products at low prices.

Franchising

It is noteworthy that H&M does not have any interest in franchising in spite of its aim of increasing its number of stores annually. Probably, the company has little trust in other people, who would have an interest in operating their businesses using the firms’ royal name. H&M runs all its stores apart from some few stores that are managed by franchising companies.

Customer services, philosophies, and programs

The driving force of offering fashionable products at the best price is the guiding principle towards offering quality customer care services. The company ensures that customers can obtain products that exceed customers’ expectations.

The philosophy guiding H&M inclines towards ensuring customer satisfaction. The company has an excellent online customer service site that answers all the queries of the customers. Customers who have difficulties in placing orders, tracking orders, making payments, or returning unwanted products can always obtain the services online (“International Accord at H&M” 3). A customer can reach the H&M staff through a contact phone number and email address.

Interestingly, customers can even make split payments for the products that they intend to purchase if they do not have sufficient money. The company website informs customers of the latest fashion, and customers have 28 days to decide if the item is right for them. Customers who are dissatisfied with a garment, for example, can return the unworn garments within 28 days from the date of purchase. They can opt to exchange the product or obtain a merchandise credit.

The society comprises of the largest number of customers that are likely to purchase a company’s products. H&M has invested in various programs that ensure that the company’s operations have positive effects on the people and the entire environment in which it operates. The Corporate Social Responsibility (CSR) programs that the company engages in play a great role in winning the trust of the customers.

The donations to charitable organizations and health organizations help in popularizing the company and its products. H&M invests in advertising programs that inform the customers of the latest fashions and the discounts that the company has to offer. Although H&M has not fully explored the customer loyalty programs, it has an opportunity to launch such programs to enhance the loyalty of the customers.

Employee relations, philosophies, and programs

Employees are very important stakeholders of any company, and H&M has a good conscience in caring for its employees. H&M employees receive fair wages for their human power, and the human resource department ensures that the employee relations are admirable. The number of working hours is controlled, and the value-driven workplace enables the employees to strive to offer their best.

The equality philosophy and high ethical standards play a great role in motivating employees and strengthening their relationships. Essentially, all employees have equal opportunities to grow and develop their careers within the company. The enduring values of the company can attract skilled people to join the company and offer their esteemed services.

Further, the company has a way of appreciating and satisfying its employees. Straightforwardness and teamwork spirit is another approach that the company employs to avoid unnecessary bureaucracy. Therefore, the ability to retain the right employees enables the company to succeed and outshine other companies operating in the clothing industry. H&M invests in training programs that play a great role in educating the workers. Through the workshops, the employees can obtain a clear understanding of the company’s values. Moreover, the programs enable the workers to air their views regarding the operations of the company.

Price range

H&M aims to provide fashionable and quality products at low prices. This is the main factor that drives customers crazy about H&M’s trendy fashions at considerably low prices. Teenagers are fond of visiting the retail shop to purchase fashionable outfits for $30 or less. Essentially, the average price of any item in H&M is $18. Everything in the mall is attractive, and the customers always find stuff in H&M to be cheaper than any other retail shop. The retail store gives discounts from one time to another.

A customer can purchase a woven top for $20 and a bikini top for $8.95 after obtaining a 50% discount. Ladies enjoy the summer season as H&M has a variety of light outfits for them. H&M categorizes its products according to the wearer. The prices for the women’s outfit lie between $1.66 and $251.67. The cheapest male outfit is about $1.68, while the most expensive item for the males is $251.67 (EDITD 3). The outfits for the children are relatively cheap as they range from $1.68 to $67.1. A pair of leather leggings is somewhat expensive for the female outfits while the men have to part with quite some amount to have a leather jacket.

Further, the company categorizes the prices according to the nature of the item. The prices of tops, bottoms, dresses, nightwears, and accessories go for less than $50, whereas outwears and foot wares are highly-priced. Generally, the price of an item depends on the type of material, the size, and the nature of the item, among other factors. The company can maintain the best prices by having few intermediaries, purchasing fashionable input materials in bulk, being cost-conscious in the production process, and having efficient distribution channels.

Conclusion

From the discussions, it is evident that H&M is doing a great role in meeting the customers’ needs. The company gains its strength out of its ability to produce fashionable and quality products at a low cost. Consequently, it can sell its products at low prices and make profits. Moreover, the retail channel enjoys the cost leadership strategy that achieves the economies of scale competitive advantage. However, the fact the company does not have a firm loyalty program is depressing. It is a high time that H&M introduced a customer loyalty program to reward loyal customers.

Moreover, the fact that the company does not employ the franchising expansion strategy fully is illogical. It is noteworthy that most multinational companies sell the rights to use their firms’ name to other entrepreneurs who desire to open businesses in unexplored localities. H&M has not explored the developing nations, and franchising would enable the business to distribute goods without having the liability of the chain stores.

The approach would play a great role in enabling the company to expand and have its name known globally. Moreover, franchising will bring diversity, and it will create new job opportunities. In the future, H&M should consider embracing the franchising expansion strategy fully, as long as the franchisees agree to adhere to the franchising agreements.

Works Cited

EDITD 2014, Australian Market Report April 2014. PDF file.

Hennes & Mauritz. ” Annual Report 2013.” Business Wire 4.2 (2014): 1-18. Print.

“International Accord at H&M.” European Industrial Relations Review 360.1 (2004): 2-3. Print.

Hickory Outdoor is a famous retail store. Its main specialties are camping, hunting, fishing, and other outdoor equipment. The company also specialises in supplies. This also includes several items from a wide array of outdoor sports. Over a period of the previous five years, the company has maintained its customers’ database. This implies that the marketing team can utilise data mining with the focus of improving its marketing strategies.

Ways of using Data Mining

Majority of the companies possesses immense loads of praiseworthy customer data. The unfortunate thing is that these companies have no idea that the data is valuable and, therefore, do nothing about it.

The good news is that this data is a rich source of insight. This insight is extremely useful in minimising client churn, unlocking hidden profitability, and escalating customer loyalty. After reading this paper, Hickory Outdoor will realize how the customer’s data contained in their database is valuable. Moreover, they will learn ways through which data mining can be beneficial, and the marketing programs that can be formulated from the data (KISSmetrics, 2013).

Affinity/ Basket Analysis

Through an analysis of the items bought previously by customers, Hickory Outdoor can improve the layouts used, and acquire ideas on related products that they can sell. Basket analysis is based on the assumption of future customer behaviour’ prediction from previous inclinations, buying, and routine (KISSmetrics, 2013). Moreover, basket analysis is vital in evaluating credit card use, telephone use patterns, and recognising fraud insurance claims.

Merchandise Planning

Hickory Outdoor can use data mining to assess the necessity for adding stores. The level of merchandise can be evaluated through assessing the current store’s exact layout. Moreover, it is useful for judging the necessity for portfolio warehousing and stocking choices. Data mining is useful for updating inventories, selecting the wanted products, balancing stock, and pricing.

Customer loyalty

Considering the competitiveness in outdoor businesses, customers are likely to shift to competitors offering fewer prices. Therefore, data mining can be effective in reducing customer churn, particularly in social media. Through employee innovation, insights for product development, customer engagement, and business expansion can be gathered (Dringus & Ellis, 2005).

Marketing Programs Based on Data Mining

Planned obsolescence strategies

This involves an assessment of what customers bought previously, and a prediction of what they are likely to buy in the future. This analysis aids in determining prearranged obsolescence policies. This is in addition to appraising the complimentary products to be sold. Through such strategies, the company will have a clear picture of the number of customers they have, and how many to expect at a particular time.

Database marketing

Through assessing customer purchasing habits and the avenues for building customer profiles, Hickory Outdoor can come up with products that will sell themselves (Dringus & Ellis, 2005). Database information is obtained from questionnaires, subscriptions, surveys, and targets. Customers can consequently be focused on, basing on this intelligence. For effective database marketing, there is a need to gather information and look for avenues for discount promotions (Clow & Baack, 2009).

Other Marketing Programs from the Database

Card marketing

Hickory Outdoor can introduce marketing through the use of credit cards. According to Clow and Baack (2009), the cards can be used to gather information, identify customer segments, and develop programs that can escalate acquisition, improve retention, and design process. Through scrutinizing customer buying arrangements through the use of credit cards, the company can gain insights of customer habits, which are suitable for programs for client loyalty and greater revenues, as well as promotions.

References

Clow, K., & Baack, D. (2009). Integrated Advertising, Promotion, and Marketing Communications (5th ed.). New York: Prentice Hall.

Dringus, L. P., & Ellis, T. (2005). Using data mining as a strategy for assessing asynchronous discussion forums. Computers & Education, 45, 141–160.

KISSmetrics. (2013). 10 Ways Data Mining Can Help You Get a Competitive Edge. Web.

Introduction

Nine West Retail Stores (NRWS) is an example of a well-organized and well-managed store that has experienced continuous growth since its inception. A retail store that started off as a manufacturer and wholesaler specialized in women’s footwear has since diversified. It diversified from manufacturing to include retailing of different types of women’s footwear and other accessories. This saw the company earn enormous revenue and experience continuous growth over the years. As a result, the company aimed at becoming the best lifestyle store with a global presence. The success of NWRS is due to well-organized merchandise. Merchandising at NWRS is organized in a way that ensures optimal performance. This has placed the retail store in its current position in the retail stores’ category.

History of NWRS

The history of NRWS is a success story that can be discussed with respect to its organizational structure. The structure has given it a competitive advantage in the market. NWRS is just a division of the Nine West Group Inc. This division is the most profitable one, accounting for 49% of the total company’s revenues. The success is attributable to its structuring. In 1997, there were 429 stores belonging to NWRS. The retail store focused on opening up new outlets to get closer to the customer.

Growth was achieved through the acquisition of other footwear companies and opening up of new store outlets, both locally and internationally. In May 1995, Nine West purchased the footwear division of the U.S. Shoe Corporation. The purchase enabled it to add new brands of shoes to its product line, making it a giant in the women’s footwear industry. On the other hand, acquisition and opening up of new stores made NWRS gain a remarkable presence in Asia and Europe.

NWRS’s quest for a new store made it an international retail store, especially after buying the UK-based Shoe Studio Group. In addition, NWRS’s strategy to become a complete lifestyle company made it expand its product line to include handbags, legwear, and jewelry, among other items. NWRS has two separate divisions: the merchandising and store organization (Raman and Welch 24). The merchandising organization deals with assortment, purchasing, pricing, and decides on how goods should be displayed. Store organization is responsible for staffing, customer service, and controlling of selling expenses.

The overall organization of NWRS gives the company a competitive advantage. Acquisition and opening of new stores increase its market coverage enabling it to get closer to the customer. Purchasing new companies enables it to increase its product brands, making it the preferred place for shopping. In addition, being a full lifestyle company makes it the preferred destination for shopping (Raman and Welch 26).

Merchants and Retail Directors at NWRS

Merchants and retail directors play a vital role at NWRS. Their first role is to market the products sold by the store. They communicate directly with customers and sell their products on behalf of the company. Secondly, they monitor and advise the management on new trends. The information provided is used by the management in deciding how to allocate resources and deciding the kind of products to offer. Thirdly, they preview the product in a forthcoming windfall. The information they collect from the preview is used to stock the retail stores. Finally, they forecast product demand. The forecast is used to stock the store.

Merchandising Organization and Incentives

The success of the retail stores is attributed to the company’s merchant organization and incentives. The company’s retail directors are centrally located at the company’s headquarters and are accountable for 50 to 60 stores. The retail directors are assisted by teams of assistant directors who carry out market research and report to them. The president makes decisions concerning the company based on information provided by by-merchandise managers. The company fosters good performance by rewarding retail directors with year-end bonuses based on their performance. It rewards them with15% of their annual salary if they exceed the year’s expectations (Raman and Welch 13).

The organization structure ensures that the president and the merchandise manager maintain control over retail directors by virtue of their location at the headquarters and the fact that they report to the merchandise manager.

NWRS versus other Fashion Stores

NWRS is different from other fashion stores in the way it is structured. Merchandising hierarchy at NWRS is organized according to the region, with one director managing 50 to 60 stores. On the contrary, other fashion stores are organized according to responsibility. For instance, at Wal-Mart Store Inc, each store has its retail manager located in the region where the store operates. The retail manager is answerable to a regional manager (Yang). Secondly, NWRS deals with lifestyle products where retail managers are actively involved in stocking and decision-making concerning stores in their region. However, for Wal-Mart, the stocks are usually pre-determined, and the retail manager is not actively involved in decision-making (Yang).

Conclusion

Merchandising at NWRS is organized to ensure optimal performance. It is its performance that has placed it in its current position in the retail stores’ category. The company’s strategy to use incentives to stimulate performance has many results. One of them is it ensures that the retail managers make decisions that are optimal for the company. Furthermore, the organizational structure ensures efficient control of the company and also reduced internal competition. NWRS’s structure and the organization have scaled it to what it is today, one of the best lifestyle stores in the world.

Works Cited

Raman, Ananth, and Colin Welch. Merchandising at Nine West Retail Stores. 2nd ed. Harvard Business School Case, 2001. Print.

Yang, Fan. “Strategic Analysis of Wal-Mart.” Washington Research Writing Consortium. N.p., 2009. Web.

Introduction and the background of the company

Wet Seal is a clothing retailer that is oriented primarily towards the needs of young women as well as teenage girls. This company operates 470 stores located in the United States and Puerto Rico. It includes two divisions, namely, Wet Seal and Arden B. Currently, this organization has to struggle with the competition of fast fashion retailers and junior specialty stores. Moreover, the financial performance of this business has declined in 2013 in comparison with the previous year (Wet Seal). For instance, in Arden B, the revenues decreased by 28 %; in turn, the total sales diminished by 7 percent (Wet Seal). These are some of the main challenges that need should be taken into consideration.

Thesis Statement

Overall, the difficulties of Wet Seal can be explained by the competition faced by this organization. Nevertheless, this business can cope with these challenges, provided that it makes a more efficient use of social media which enable clients to share impressions about different products.

Case Analysis

Action Point One: Target audience

The company has properly identified its target audience. It should be noted that this organization serves the needs of females whose age ranges from 17 to 25. These people represent various ethnic, racial, and cultural groups. Overall, they can be described as middle-class customers because they purchase mostly economy-priced apparel or footwear. In most cases, these buyers are unmarried. Furthermore, it is possible to argue that they attend college, and as a rule, their professional career has only begun. These are the main demographic characteristics of these people, and they should not be overlooked.

The customers of this company want to purchase informal clothing that can help them express their individuality. In many cases, they are willing to experiment with new forms and styles in order to emphasize their physical attractiveness. Moreover, these females take an active part in social life. These females value independence, but they also attach much importance to intimacy. Additionally, many of them are driven by the need for achievement and self-actualization. These are the main peculiarities of their profile.

Admittedly, one may suggest that the target audience of the company should also include males representing the same age group. Such an approach can increase the market share of this business. However, it is important to remember that the company has been known as a retailer which serves the needs of females. The mission of this business is to assist females, rather than males. In order to change the public opinion and attract new clients, this organization would spend significant capital on rebranding and advertising. This organization can become less appealing to female clients, if they choose to sell male apparel. The problem is that this business can eventually lose its differentiation.

Action Point Two: Product Categories

Jeans

The selected items can be described as high-wasted jeans that are expected to become a major trend in the spring of 2014. The prices for these products range from $ 28.19 to $ 39.50. To a great extent, this pricing is consistent with the purchasing power of the target audience served by Wet Seal. Overall, this product category will be important for the overall sales of the company.

Shoes

This category is represented by a variety of models and designs. Currently, it is difficult to determine which model will become the major trend during the next four months. Some of the products, which are expected to be popular, can be described as luxury brands, and they cannot be afforded by potential clients. The selected shoes are intended for people who want to buy informal footwear. These customers may represent different age groups, including those people, aged between 17 and 25. Similarly, the pricing reflects the purchasing power of these people.

Skirts

This category of merchandize has been selected because such products are often bought by female customers who want to underline their physical attractiveness. The price range for these items will be between $ 14.90 to and $ 20.90. Provided that, the prices are higher, the clients of Wet Seal may not be ready to buy these products.

Shorts

The customers of Wet Seal expect to see a wide selection of shorts. The price for these products should not exceed $ 25. The items that have been selected represent the fashion trends which can be observed in the spring of 2014. These models can enjoy significant demand among a wide range of buyers. This is one of the points that can be singled out.

T-shirts

This product category is also important for the profitability of businesses like Wet Seal. These products are in usually in great demand among female clients aged between 17 and 25. The following photographs depict some of the items that the company can offer. These products will be priced at approximately $ 20 since in this way, one can offer the best ratio of price and quality.

Action Point Three:

Finally, it is necessary to discuss on the development of the marketing strategy that Wet Seal can adopt. First of all, the company should focus on the reduction of prices. This goal is important for attracting the target audience. It should be kept in mind that the purchasing power of these people is not very high, and the company should offer products that are more affordable to them. Nevertheless, the management should also focus on advertising and promotion. In particular, much attention should be paid to the use of social media, for example, one can mention such websites as Facebook or YouTube. The company should use SEO (search engine optimization) methods to make sure that the Facebook account of Wet Seal is visible to potential accounts (Enge 340; Odom 25).

Secondly, they need to make sure that the website of the company can be accessed via smartphones. The clients should be able to see new offerings of the company. Additionally, this organization should rely on such a technique as viral marketing (Weinberg 22; Weir 33). This approach is based on the premise that clients share the information of products. The clients of this organization tend to share their impressions about products and services. In some case, they send post links to the websites of businesses. The use of social media can make advertising less obtrusive. These are the main aspects that can be identified.

Works Cited

Enge, Eric. The Art of SEO, New York, O’Reilly Media, 2012. Print.

Odom, Sean. SEO For 2011: Search Engine Optimization Secrets, New York:MediaWorksPublising, 2010. Print.

Weinberg, Tamar. The New Community Rules: Marketing on the Social Web, O’Reilly Media, 2009. Print.

Weir, Michael. QR Codes & Mobile Marketing for the Small Business Owner, New York, Cengage Learning, 2010. Print.

Wet Seal. “The Wet Seal, Inc. Announces Fourth Quarter and Full Year Fiscal 2013 Sales Results”. Wet Seal, 2014. Web.