Category: Retailing

Best Buy Incorporation is the largest retailer of consumer electronics in the country (Best Buy Co., Inc. Company Profile, 2014). The retailer expands its business by acquiring new companies. The company’s internal environment explains why it is a leading retailer in the country. The company faces numerous challenges from new competitors in the industry. The bargaining power of its suppliers is forcing the company to utilize the best business practices. The customers are expecting the company to provide quality devices and services. The industry is full of electronics from foreign marketers and manufacturers such as Samsung and Sony (Best Buy Co., Inc. Company Profile, 2014). This explains why more customers are purchasing different consumer electronics from Best Buy’s competitors. The current economic situation explains why more retailers might emerge in the coming years. These retailers will market their electronics to the existing customers.

The above Porter’s Five Forces model explains why this industry is becoming attractive and competitive. Most of the competing companies such as Amazon.com, Wal-Mart, and eBay are making it impossible for Best Buy to retain its customers. The current wave of online marketing is also attracting more retailers thus making the industry more competitive. Industrial rivalry is also on the rise. Most of the competitors in the consumer electronics industry are marketing the same products to the existing consumers (Gibson & Billings, 2003). This explains why the level of rivalry has increased in the industry (Gibson & Billings, 2003). The leading competitors such as Wal-Mart and eBay always provide better services and support to their customers. This situation explains why more companies and retailers might emerge in the future. These competitors have succeeded because of their business strategies.

The current situation also shows how companies such as Wal-Mart, Best Buy, Amazon, and eBay have continued to attract more customers in this sector. These giant retailers provide customized and quality services to their customers. The consumer electronics industry does not encounter any threat from potential new entrants. New investors will incur many expenses to open big electronic stores in the country. Best Buy has spent millions of dollars to remodel its stores. This explains why only a few retailers might invest in this sector. Best Buy’s business strategy depends on the bargaining powers of its suppliers. The leading suppliers include Dell, Yamaha, Samsung, and Apple. These “suppliers have a huge bargaining power” (Gibson & Billings, 2003, p. 64). The bargaining power of every supplier determines the success of the competitors in the consumer electronics industry (Company Information Best Buy, 2014). The case study also explains why every customer can purchase substitute goods from other retailers such as Amazon and eBay. This situation discourages new investors from joining the industry. The existing customers expect quality services and products from these retailers. This explains why a new competitor cannot provide quality services to the existing customers.

The leading competitors in the industry have established the best networks and strategies in order to succeed. This has increased the level of business rivalry. This scenario explains why the consumer electronics industry appears less attractive for new competitors. The strengths of the major companies in the industry explain why Best Buy continues to face new challenges (Ferrell & Hartline, 2010). Best Buy should reconsider the best strategies in order to achieve its goals. The company should also differentiate its business strategies in order to provide quality products to its customers.

Reference List

Best Buy Co., Inc. Company Profile. (2014). Web.

Company Information Best Buy. (2014). Web.

Ferrell, C., & Hartline, M. (2010). Marketing Strategy. New York: South-Western College Publisher.

Gibson, E., & Billings, A. (2003). Big Change at Best Buy: One Company’s Wild Ride Through Hyper-growth to Sustained Excellence. New York: Wiley.

Do you feel that this paper enhances the research on the ambiance you have reviewed until now? In what way?

I feel that the paper by Ballantine enhances the research on ambiance which has been discussed so far. First of all, the paper takes the review of ambiance a notch higher by introducing the concept of hedonic experience. In the paper, the author provides a detailed explanation of how the ambient conditions reviewed so far help in the creation of hedonic experience. Further to that, the paper groups the ambient conditions which have been discussed into two categories namely attractive and facilitating stimuli (Ballantine, Jack & Parsons 2010).

Cues that fall under the attractive stimuli category include layout, space, color, sound, and light while those which fall under the facilitating stimuli category include product display, crowding, and the employee factor. The paper further provides a deep insight into the topic of ambiance through a discussion of the research findings. The findings in the study not only expand my understanding on the topic of ambiance but they also provide a strong background on the topic and its interrelated concepts such as hedonic and utilitarian consumption (Ballantine, Jack & Parsons 2010).

Do you feel that it helps to differentiate ‘hedonic consumption’ from ‘utilitarian consumption’?

I feel that the paper helps to differentiate between hedonic and utilitarian consumption. For one, it defines hedonic consumption as those aspects of consumer behavior that are linked to the consumers’ emotions and fantasies. Utilitarian consumption on the other hand is defined as consumption in which consumers’ satisfaction is based on acquisition and ownership of products. The paper goes further to provide a differentiation of the two concepts through the analysis of the study findings. It is clearly indicated that hedonic consumption has everything to do with cues that make customers satisfied with the services which they get.

It entails the manipulation of various cues to create a balance that can attract and retain customers. The creation of hedonic experience by retailers appears to outweigh the utilitarian approach because utilitarian oriented participants in the research felt more comfortable in hedonic setups. On the other hand, hedonic oriented participants were very uncomfortable in utilitarian setups (Demangeot & Broderick 2006).

Do you think a retailer would be able to develop and manage store design using these categories? What might be the challenges in achieving successful implementation? What might be the benefits?

I think retailers can develop and manage store designs of hedonic and utilitarian orientations concurrently. The major reason for setting up stores of the two designs is that customers are not the same. There are those who are driven by their hedonic cues when doing shopping and those who detach their emotions and fantasies from their shopping needs. As a result, having the two store designs may enable retailers to meet the needs of all types of customers and maximize profits.

Having the two designs may also enable the retailers to study and know which design is profitable than the other. If for instance, they find that stores that provide hedonic experiences are more profitable than those which do not, then they may be able to invest more resources in such stores and even open others in the same locality (Kent 2007).

The challenge which retailers may face in successfully establishing the two designs concurrently is the availability of space and financial resources. Establishing the two designs requires a big space which is not easy to get in many cases. However, if retailers manage to establish the two designs successfully, they may enjoy many benefits such as more sales due to many customers, high customer satisfaction, and reduced employee turnover.

Reference List

Ballantine, P.W, Jack, R & Parsons, A.G 2010, ‘Atmospheric cues and their effect on the hedonic retail experience’, International Journal of Retail & Distribution Management, vol. 38, no.8 pp. 641- 653.

Demangeot, C & Broderick, A.J 2006, ‘Exploring the experiential intensity of online shopping environments’, Qualitative Market Research: An International Journal, vol. 9, no. 4, pp. 325-351.

Kent, T 2007, ‘Creative space: design and the retail environment’, International Journal of Retail & Distribution Management, vol. 35, no.9, pp. 734-745.

International Retailing Organizations

International integration of business organizations is a growing trend evidenced in the business arena currently. Big-Box retailing organizations are among the large business retailing organizations dealing with buying huge volumes of merchandise, and selling it at low prices, and across national borders. However, these big-box retailing business organizations are often faced with several problems. Some of these problems evidenced in these organizations include the following. Poor relations with employers and lack of coordination between different branches of these organizations are other problems evidenced in these organizations. Given a chance to acquire a big box organization characterized by the above problems, one can undertake several strategies and measures to provide remedy to such cases.

Enhancing coordination through knowledge sharing

In the field of overseas retailing, lack of coordination between a retailing organization and its suppliers can be a major concern to address if smooth relations are to be realized. Coordination problems and challenges may arise as a result of organizations’ inabilities and reluctance, to share knowledge with partnering organizations. For instance sharing information with their suppliers will help both parties in mutual understanding, which in turn creates good coordination in their trading activities.

When acquiring a big-box retailing organization characterized with coordination challenges, one can employ several measures to alleviate these challenges. For instance the firm can ensure that there is mutual inter-organizational leaning between organizations. Through establishment of knowledge-sharing networks between the supplier and the Toyota company, knowledge was easily accessed at substantially reduced costs, as well as helping in building mutual trust between all parties involved in the trading relationship (Dyer & Nobeoka, 2000). Knowledge sharing helps organizations in a relationship also helps organizations learn from their past experiences. This is an effective measure in avoiding current and future coordination challenges (Emden, Yaprak & Cavusgil, 2005). This will help in facilitating the inter-organizational understanding between the concerned and the operations will be smoother, as coordination will be highly enhanced. The partners in the alliance should strive to learn and get well acquainted with their partners. The overall benefit in information sharing will be great and productive to all parties as is evidenced in the Toyota case (Dyer & Nobeoka, 2000).

Improving Work Conditions

The issue regarding working conditions has a great influence on relation between organizations and their work either within the premise or in other international organizations linked in their business operations. Issues such as Underpayment and bad working conditions can have great effect on the sustenance of productive and smooth relations between an organization and its workers. The issue of underpayment to laborers is a big challenge to organizations conducting business activities across regions. This is an issue that can be highly detrimental to an organization’s overall productivity and profitability. Big box organizations with business units across regions are not spared either by this practice of underpayment to their workers in other regions.

Kristof & Wuddun (2000), noted that underpayment of workers was rampant in overseas companies based in Asia. In a specific case observed in a factory in Bangkok, where a lady worker claimed that she was paid two dollars per day after toiling for nine hours, in a company concerned with exporting clothing to America. In addition to the pay the working conditions were not favorable at all. Cases of American companies overseas, with dismal working conditions have also been criticized by western press for oppressing their workers. When acquiring a big box retailing organization with such dismal practices to their workers, one needs to evaluate the amount of payment to the workers and the working conditions to be in compliance with World Trade Organization stipulations.

Taming cultural differences among employees working in different cultural backgrounds can be an effective strategy in enhancing working conditions. These cultural differences are likely to arouse conflicts. Even though cultural differences may not be the real causes of retailers’ problems, they may be overrated (Pressey & Selassie, 2003).

Ensuring legitimacy in all procedures

The business activities of organizations operating across the borders should be in conformity with the regions or country’s legal structures and frameworks, otherwise the resulting effects can be interruptions on the smooth operations as well as the productivity of the organizations in the alliance. A case study involving legitimacy problems was evidenced in the sportswear industry, involving companies like Nike and Reebok, where they were outsourcing their production services to low-wage Asian countries (Nijhof, Forterre and Jeurissen, 2008). These companies oppressed workers in terms of wages, building bad and negative relations with customers and consumers. For instance, Nijhof et al (2008) noted that Nike sportswear products were associated with negative social images such as ‘slave wages’. The main legitimacy problems were related to the violation of labor standards, undermining human rights of the workers in the industries and the environmental damage during their course of operations. When acquiring a business organization operating across borders with various legal complications, some strategic remedy measures can be adopted (Nijhof, et al, 2008).

In acquiring a big box retailing organization, one can have a clear statement encompassing the codes and conducts of operations, and its expectations from the other partners overseas such as suppliers and branch manufacturers. One can also acquire programs to deal with problems regarding labor exploitation especially when outsourcing through overseas contractors, as in the case of Nike 2002, when it implemented a program to oversee labor standards for its overseas contractors (Nijhof, et al, 2008). A big box retailing organization will effectively tackle legitimacy cases if it goes on to put in place departments to be in charge of reporting issues taking place across the borders, especially issues surrounding the production and supply processes.

When one acquires a retailing firm, it becomes a necessary move to ensure that its operations comply with all legal norms as stipulated in business laws, and that all the stakeholders are aware of their duties and rights. This will enable the owner to create a good working environment, hence the promotion of coordination and good relations (Nijhof, et al, 2008). After acquiring the organization, the new owner can decide to embark on training program for all employees of the organization, with the aim of making them have a self-awareness of their rights.

Establishment of a global sourcing system

It is an effective strategy to establish of a global sourcing system, which ensures that legal processes are adhered to, and to make sure that its activities are socially acceptable within the areas of operations. A proper system will help in enhancing their relations especially with global suppliers. Coordinating business processes and practices as well as planning activities between organizations will greatly improve their relations hence global sourcing system is an effective strategy to be utilized after acquiring an organization with problems in relating with other stakeholders in the industry (Trent & Monczka, 2002). GE medical systems’ (2002), noted that a global sourcing system should involve a long-term process of finding suitable global suppliers as well as proper integration of the suppliers into their system.

Regular evaluation and good communication systems

Another strategy that can be highly effective when adopted in big box retail organizations experiencing problems in relationships is incorporating regular evaluation procedures. This strategy will help the owner to ascertain the effectiveness of new strategies acquired in relation to establishing better relationships between all the stakeholders and parties involved in the operations of the organization (Nijhof, et al, 2008). These evaluation studies should involve activities such as monitoring supplier’s conformity to the set guidelines of operation, and assessing whether causes of bad relations, such as poor working conditions are well tackled. Specifically in the retailing industry, working conditions will be improved when suppliers improve their working schedules. Good communication channels should be in place to address new ideas, such as in the implementation of new technology (Plenert, 1990)

Conclusion

In the process of acquiring a big box retailing organization, good relations between all the stakeholders should be present for the organization’s activities to be successful. However in circumstances where coordination problems and unproductive are present between partnering organizations, the acquiring owner can put in place several measures to alleviate the problems. Some of the major strategies include mutual inter-organizational commitment in learning and understanding and adherence to international labor norms. The acquiring firm on adopting all the necessary strategies to restore good relations especially with suppliers and all other parties involved, will greatly enhance the working conditions and in turn enhance its productivity.

References

Dyer, J.H. & Nobeoka, K. (2000). “Creating and managing a high performance knowledge-sharing network: The Toyota case”, Strategic Management Journal, 21, 345-367.

Emden, Z., Yaprak, A. & Cavusgil, S.T. (2005). “Learning from experience in international alliances: antecedents and firm performance implications”, Journal of Business Research, 58. 883-892.

General Electric Medical Systems. (2002). In Developing Strategic Capabilities: Building Layers of Competitive Advantage. 266-287.

Kristof, N. D. and WuDunn, S. (2000). Two cheers for sweatshops. New York Times Magazine. pg70.

.Nijhof, A., Forterre, D. and Jeurissen, R. (2008). Managing legitimacy issues in global Supply chains: the case of the athletic footwear industry. Corporate Governance. 8(4), 506-517.

Plenert, G. (1990). “Developing a production system in Mexico”. Interfaces, 20(3), 14-23.

Trent, J. R and Monczka, R. M. (2002). Pursuing Competitive advantage through Integrated global sourcing. Academy of Management Executive.16 (2), 2-4.

Effectiveness of online marketing

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

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

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

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

Online distribution

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

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

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

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

Free shipping and coupons

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

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

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

References

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

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

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

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

Cochran, C. (2006). Building a balanced scorecard. Web.

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

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

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

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

Introduction

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

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

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

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

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

Creating an association in the consumer’s mind between the product and a particular idea.

The advantages of using celebrity endorsement are:

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

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

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

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

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

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

Decoding a message

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

Meaning transfer:

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

Meaning capture:

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

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

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

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

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

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

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

Primary research rationale behind the product-endorser pairs chosen:

Product 1

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

Product 2

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

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

Product 3

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

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

Product 4

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

Product 5

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

Pros and cons of celebrity endorsements

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

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

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

Conclusions

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

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

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

Reference List

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

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

Chedi, C. R. (n.d.). Preference on brand image transfer: A research on brand event congruity in sponsorship. University of Twente, p.2. Web.

Corley, H. (2007).Top organic baby food brand. About.Com: Baby products. Web.

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

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

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

Introduction

This was a clothes store. It specialized in retailing women’s designer clothes and perfumes together with other women’s accessories such as jewelry and shoes. I t was located in Pennsylvania and was the first department store in the region. It was in operation for a total of ninety years, the period between 1870 and 1960. The business was started as a family enterprise owned and run by a small Italian settler in the city of Pennsylvania. However, with time and with favorable market conditions, it flourished to become one of the largest public companies to be listed in the securities market in New York in 1900.

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

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

Customer analysis

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

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

Business life

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

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

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

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

Bibliography

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

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

Kawakatsu, Harrison and Martin Morey. “Financial liberalization and stock market efficiency: an empirical examination of nine emerging market countries.” Journal of Multinational Financial Management 9.3(1999):353–371. Print.

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

Is the forecast of the e-retail market too realistic and Main barrier in developing home delivery channel?

The e-retailing industry has experienced tremendous growth rates over the years. The e-retail market constitutes of business to customer (B2C) where business sell their products and services via online web services. The e-retailing business is viewed to have great benefits as compared to having physical retail outlets. The advantages of e-retailing for businesses are low operation costs and savings on storage and human capital. The prices and buy deals offered to customers online are more attractive as businesses tend to save on this offerings because of the factors mentioned previously. Certain disadvantages from the customer-side could include accessibility to internet, payment issues and most important trust which they invest in such online businesses. The e-retailing is expected to grow despite of its considered disadvantages and 1990s internet market crash (Harris and Dennis 2002). Some e-retail business lines including grocery, sex related items, books and clothing have outperformed store retailing.

However, it is commented by Verdict (2000) that ‘the proliferation of female-oriented sites…have failed to motivate women to shop significantly more’. This is mainly due to lack of interest and customers prefer to purchase from e-sites operated by high street retailers. For business there are issues of developing customer loyalty as the switching costs for customer is negligible and it is not possible to limit customers from buying similar products from somewhere else. Also there are certain products which customers want to see and touch before buying that undermines the scope of products to some extent. The convenience associated with internet buying is overcome in some situations due to delays in delivery (Johnston, 2000). A projection by Price Waterhouse Coopers suggests in 2007 that by 2011 virtually everyone under age of 55 will have used online purchasing and 70% of UK citizens will be using online services. The market is expected to grow to £35 billion that is 3 times its current value (Herrod 2007). The expectations seem debatable as the economic crisis which is yet to take its toll on consumer spending however prices on online services being attractive may lead to their further expansion. It is therefore concluded that forecasts related to e-retailing may seem unrealistic to some but it cannot be completed rejected at the same time.

The factor of convenient buying is important from customers’ perspectives however businesses offering online services are faced with certain barriers which undermine their working. Transportation is crucial as customers are put off by high postage charges and insurances they have to buy which is often included in the price. Further delays in transport may affect the reputation of the business however this varies for different products as for media download there are no issues of transport (Sinha and Rabinovich 2004 ). 3PLs is a combination of warehouse management and delivery goods by delegating to a third party which puts companies on less controlling terms and shrinks their margins (Southard 2009). The customers are also hesitant to use e-retailing services because of lack of after sales care service. The smaller retailers often lack support systems to provide these services which are important for customers. Other issues such as concerns regarding refunds and return of goods as it is difficult to find redress once goods and services are received. A report published by a company Verdict, UK highlighted that ‘retailers need to improve the refund process, making it easier for customers to return unwanted or faulty goods’ (2008). Therefore, we could conclude that e-retailers still need to do more to induce home based customer purchasing and build their trust in their offerings.

Category Management within the context of ECR

The Role of Category Management

The concept of category management has been introduced as a tool of efficient retailing marketing. It is defined as ‘a retailer/supplier process of managing categories as strategic business units, aiming to enhance results by focusing on delivering consumer value’ (Dennis, Fenech and Merrilees 2004). In this the total range of products sold by retailers or perfectionists are broken in different groups of similar or related products. These groups are known as categories of a product. The implementation of category requires collaborative and co-operative supply partnerships with suppliers (Varley & Gillooley, 2001).

A key reason for the Category Management introduction was the desire of the perfectionists for suppliers to add value to their businesses before suppliers’ own businesses. The categorization of products with similar trends and demands make the retailing business more successful and has resulted in increased revenues for businesses. However, it is to be understood that by doing so the net profit remains unaffected in situations where suppose supplier A promotes its products, the sales of supplier B would descend for the quantity that A would enlarge. The Category Management allows retailer to supply products that customers want and meet their demand at the right time and in the right place. This could also have impact on costs as efficient and focused promotional activities allow suppliers to cut down costs of their ongoing promotions (Varley and Gillooley, 2001). Thus, the product selling becomes more directed and sales information regarding products in same category becomes easy to be recorded and important business decisions are taken at the right time.

A second reason was the execution that only a finite quantity of profit could be squeezed of negotiations of price and that there was more profit to be done to enlarge the total level of sales. The category management minimizes stocks and speed of response to customer requirements.

A third reason was that the contribution with the supplier signified that the skill of that supplier about the market could be utilized, and also that a considerable quantity of load of work to develop the category could be delegated to the supplier. Efficient supply chains could be achieved with computer network links between suppliers and retailers.

Disadvantages of Category Management

The concept of category management as the rest of ECR relies heavily of theory and jargon with its costs overweighing the resulting benefits. Further to this, Wills (1999) also added that the implementation of category management requires heavy investment in reorganizing and faces various problems including flaws in specific product’s strategic planning, hesitance to change, skills shortages, reluctance to accept suppliers as close associates and sharing information with them.

Too much emphasis of category management can also run into problems as retailers focus on achieving logistics and merchandising efficiency often face with a risk of customer experience being poor. This could arise as retailers aim for category managed product ranges which offers safe marketing leading products but the limitation of choice could actually make the customer experience ‘uninspiring and ubiquitous’ (Webb, 1999).

This management technique could have serious impact on small suppliers businesses. Large suppliers often manipulate to take advantage of their position and push small suppliers away. However, some retailers have adopted buying-led organizational structure and not category management e.g. Selfridges (Wills 1999) and also some countries have allowed retailers through legislation to allocate certain portion of shelf to small suppliers e.g. France (McCawley, 2000).

References

J. A Dawson and S Burt (1983) Hypermarkets and Superstores Bibliography. Euromonitor : London.

J A Dawson (1985) Issues in Retailing : trends and implications for the planning of retail provision in the major Scottish cities. Scottish Development Department, Edinburgh.

J A Dawson (1988) Environmental Improvements in Existing Town Centres. Scottish Development Department, Edinburgh.

Smith A (1997) Retailing and Small Shops. The Scottish Office Central Research Unit, Edinburgh.

Fernie J (1998) Logistics and Retail Management. Kogan Page : London (Also translated and published in Spanish and being translated into Japanese for 2006 publication).

Town Centre Uses in Scotland. (1998) The Scottish Office Central Research Unit, Edinburgh.

Findlay A (1999) A Bibliography of Retail Planning. NRPF: London With subsequent updates in 2000, 2001, 2002, a second revised edition in 2002 and a further update for 2003 and 2004 (with A Findlay).

C Baret and S Lehndorff (2000) Flexible Working in Food Retailing. Routledge :London.

Gustafsson K, Jonson G and Smith DLG(2006) Retail Logistics and Fresh Food Packaging. Kogan Page : London.

Dawson J A (1983) Politica commerciale, programmazione, interventi legislativie normativi. p147-232 of La Distribuzione in Gran Bretagna. Cesdit : Milan.

Introduction

In Argentina, the environment for doing business for the textile industry is favorable which can be seen from the information provided below.

Since 2002, the textile sector has demonstrated considerable growth. In 2004, the annual growth was 75 percent (Kakati, 2008). In the following years, consumption boom preconditioned subsequent growth in the textile industry. Increase in consumption took place due to the improvement of purchasing power of the local population and the steady growth of tourist purchases.

According to Kakati (2008), “the total Argentinean textile market is estimated to be worth US$ 12 Billion… annual production of clothing items is valued at US$2.27 billion. The sector boasts about 11,600 manufacturing and design companies and 30,100 retail stores.” (para. 17). The growing demand for high fashion clothing will stimulate the further growth of the textile industry. Both local and foreign players will find opportunities for gaining increased profits. In addition, cultural assimilation that takes place due to the promotion of the western lifestyle among the young population developed steady brand awareness among consumers (Daniels, Radebaugh & Sullivan, 2013).

Argentinean textile market is characterized by the prevalence of informal activity and small retail forms owned by families and employing up to fifty members of staff. Low supplying and workforce prices allow high profitability of local manufactures. Besides the market has favorable conditions for import. In 2005, clothing import was valued at more than US$ 911.55 million (Kakati, 2008).

Brazil: The Retail Textile Industry

In Brazil, the environment for doing business for the textile industry is rather positive which can be seen from the following data.

With more than 52% of middle class population, Brazil is a very attractive textile market (“Brazil’s textile industry”, 2012). Moreover, the country is the fourth largest textile exporter in the word (“Brazil’s textile industry”, 2012). The overall worth of textile industry is U.S. $63 billion. 30,000 companies are estimated to operate the market (“Brazil’s textile industry”, 2012).

Since the labour and supply costs are high in Brazil, the country has favourable import conditions. In this vein, the total amount of China garment import is U. S. $1.45 billion annually (“Brazil’s textile industry”, 2012). However, Brazilian market is characterized by the high degree of bureaucratization, which creates obstacles for the enterprises entering it (Daniels, Radebaugh & Sullivan, 2013).

Opportunity-Risk Matrix

Argentina

Brazil

Market-Penetration Grid 1

References

Brazil’s textile industry: a world of untapped potential. (2012) Guardian Professional. Web.

Daniels, J., Radebaugh, L., & Sullivan, D. (2013). International business, 14th ed. New York: Prentice Hall.

Kakati, W. (2008). Argentine textile industry: An export snapshot. SME Times. Web.

Gone are the days when consumer needs to visit hyper markets and stores in order to make purchasing of groceries and other stuff. Now with the penetration of internet throughout the societies in the world, e-commerce has taken place of conventional business methods. E-commerce is the name given to business conducted by using internet. E-retailing is the concept of establishing an online retail store for the customers. Once the customer identify their needs, they can go to the store’s website and make purchases of their required items with the help of credit card.

In Saudi Arabia, e-retailing is relatively a new trend, and with the increase in usage of internet by the Saudi society, e-retailing has emerged as a facilitator of shopping experience. Why Saudi’s are attracted towards making purchases online is that it provides facility as the customers do not need to visit the store. At the same time, transactions made against the purchases of goods are secure and hassle free. The website of a retail store provides detailed information about the product and the customer can spend as much time as he or she want on studying and understand the idea of the product, its usage and after sales services details. Additionally, purchases made on e-retailing stores are delivered on the doorstep of the customer which further adds to the attraction of shopping online.

Given the popularity of online medium of retailing, the government in Saudi Arabia has also taken steps such as establishing cybercrime laws to make e-commerce related transactions safe, reliable and secure. Moreover, products offered on e-retailing websites are also provided with subsidies so as to ensure that maximum customers make use of online shopping experience. New and established businesses in retail sector are also considering the options of closing down their conventional business format and start an online retailing business as it helps them to cut down costs and increase profitability of the business.

List of References

AlGhamdi, R and Drew, S 2011, Seven Key Drivers to Online Retailing Growth in KSA. Web.

AlGhamdi, R, Drew, S and Alhussain, T 2012, A Conceptual Framework for the Promotion of Trusted Online Retailing Environment in Saudi Arabia. Web.

Alghamdi, R., Drew, S. and Alkhalaf, S., 2011, Government Initiatives: The Missing Key for E-commerce Growth in KSA. Web.

Alghamdi, R, Nguyen, A, Nguyen, J and Drew, S 2011, Factors Influencing Saudi Customers’ Decisions to Purchase From Online Retailers in KSA: A Quantitative Analysis. Web.

Dant, RP and Brown, JR 2009, A Journal of Retailing Retrospective Based on ISI Web of Knowledge, Journal of Retailing, 85(4), p.527.

Gong, W 2009, National culture and global diffusion of business-to-consumer e-commerce, Cross Cultural Management: An International Journal, 16(1), pp. 83-101.

Pantano, E and Naccarato, G 2010, Entertainment in retailing: The influences of advanced technologies, Journal of Retailing and Consumer Services, 17(3), pp. 200-04.

Rose, S, Clark, M, Samouel, P and Hair, N 2012, Online Customer Experience in e-Retailing: An empirical model of Antecedents and Outcomes, Journal of Retailing, 88(2), p.308.

Ryerson University 2012, Tale of two e-retailers: study finds U.S. online consumers bigger risk-takers, more trusting than Korean shoppers. Web.

Tuunainen, VK and Rossi, M 2002, E-Business in Apparel Retailing Industry-Critical Issues. Web.

Taking into account that our store has been in operation for some time, it is logical to consider the next step, which is expansion. Any profit-making entity is established with the sole objective of growth and, thus, a plan to expand its operations and services is vital if the firm is to achieve its objectives. This can be achieved by opening a new store in the neighborhood. The benefits arising out of such a plan include increased revenue and profitability which results from a large customer base, improved service delivery to the customers, better handling of the customers because the physical location of the store will be increased and lastly, provision of additional services to customers will be easy. Moreover, investing in this project will solve some of the setbacks currently being experienced in the store. They include late deliveries and long queues by customers waiting to be attended to. Above all, the project aligns with the mission, vision, and strategy of our store, which aims at improving customer satisfaction, becoming a leading retail store in every community, and achieving yearly sales of $3 million. Therefore, if the firm decides to invest in this project, it is projected that the total profit will increase by a margin of at least 20% as a result of growth and expansion.

Having discussed the benefits of the project, it is also important to look at the cost of the project. If the benefits outweigh the cost, then the firm can proceed with the project and vice versa (cost-profit analysis). The major resources required and costs that will be incurred by the store are summarized in the table below:

From the table above, the overall monthly cost of setting up the new retail store is $22,100. The expenses are not very high and the parent store has enough resources to cater to the project. The research conducted by the parent company revealed that setting up a new retail store in the neighborhood would increase the store’s profit by 20%. Comparing the profit against the costs involved, one can be certain that the return outweighs the expenditure. Thus, it is rational for the parent store to invest in the new project which will take approximately 3-4 months to start its operations.

The major risks involved in this project include the risk of collapse or failure of the business. This might be caused by competition from existing stores. Other risks involved include physical destruction by natural calamities, e.g. floods and destruction of perishable goods due to the reduced product market. This can be resolved through the acquisition of a proper and up-to-date insurance policy.