The world is so dynamic and competitive. In this regard, most companies are capitalistic in their operation and always want more. They want more profit, more shareholder value, and more market share, among others. The realizations of these objectives have been attained through the successful initiation, development, management, and above all marketing of brands in most instances. Indeed, the effective development, management, and marketing of brands have become a major priority for all organizations of all sizes in the different industries and markets (Barney, 1991). The reasons for this are certainly clear; strong brands are positively correlated with customer loyalty and profits.
However, the efficient management of brands can present challenges, especially in the case where managers are unable to accurately evaluate and assess their brand’s particular strengths and weaknesses objectively. One major limitation that has been presented in both academic and empirical literature is on how to deal with the multifaceted issue of products development and multi-channel branding, especially where there is the need for reliance on professional retail distributors engaged in the sale and distribution of competing products.
The adoption of multi-channel retailing has been advanced as presenting numerous challenges and implications to the marketing context, and thus enlarging the complexity of marketing decisions. “A whole cocktail of factors has been presented as forming the basis for the adoption of multi-channel strategies including costs reductions in transactions, reduced growths in demands, competitive strategies and differentiation, changes in customers’ behaviors among others” (Kotler, and Amstrong, 2007).
The questions of how to manage these in an integrated context have however been presented as presenting several challenges. This becomes especially poignant when the said retailers are professionals who are engaged in the sale and distribution of similar and/or competing products. The choice as to whether to rely on such competing distributors (retailers) to differentiate the products or focus on products branding is a bottleneck facing the majority of companies in the world today (Gattorna,1998). This will essentially call for clear understanding and employment of key concepts and postulates of brand strategies, brand equity, channel strategies, and the expected overall performance, in light of product development.
Opinion Marketing is everything view
I don’t agree with this argument. This is because several factors determine the success of a company or brand in the market. These factors include customer good relation and management, quality of the product, market structure and completions and among others. In this case, it is wrong to outrightly single out marketing as everything.
Challenges in the adoption of marketing orientation in a big company
“A big company has got both economies of scale and diseconomies of scale” (Kotler and Keller, 2000; Keller, 1993). Big companies attract a pool of different people who collectively come together to pursue the objective and vision of the company but at the same time are individually driven by their aspirations and beliefs. In this regard, when it comes to marketing orientation it is difficult for all the employees to learn at the same rate and embrace the change.
Change management
According to Zeithaml (2002), most people are skeptical l to change and it takes time for them to embrace it. This is one of the challenges that most managers face in the adoption of marketing orientation in big companies.
Financial resources
Marketing normally requires a lot of financial resources which in most cases poses a lot of financial burden on big companies. This is because they must spend a lot of money on the training of their employees thereby putting financial constrain on these companies.
Conclusion
In conclusion, Marketing plays a great role in brand development and the success of a company but is not everything in business. Therefore, there several factors which contribute to the development of a brand, a company, a product, or the success of a business in a given market.
References
Barney, J, 1991. Firm Resources and Sustained Competitive Advantage. Journal of Management 17(1): 99. benefits and challenges. Journal of database management, 10 (1), 39-45.
Gattorna, J, 1998. Strategic supply chain alignment: best practice in supply chain management. Texas, TX: Gower Publishing, Ltd.
Keller, K.L, 1993, Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing, 57, 1-22.
Kotler, P and Keller, K, 2009. A framework for Marketing Management. Philadelphia: Pearson International Edition.
Kotler, P. and Amstrong, P, 2007, Principles of Marketing. New York, NY: John Wiley and Sons.
Zeithaml, K, 2002. Brand Loyalty Programs: Are They Shams? Marketing Science, 24(2): 185-19.
This paper seeks to discuss the concept of the retail method of pricing inventories and how it differs from the method that might be utilized by most manufacturing companies. This would also discuss when would say retail method be most likely be utilized by companies and under what conditions might the use of the method distort the resulting financial statements.
The retail inventory method, just like any method in accounting, is used as an option if the alternative method would become impractical and costly. Thus, it should be useful in retailing business since individual costing-based costing like job order costing may not be encouraging in terms of higher cost for doing so as against expected benefit (Bernstein, 1993) where there could be hundreds of variety of products.
On other hand, job order costing as an alternative costing is usually used by manufacturing companies where there are few varieties of product and the periodic physical count is not prohibitive in terms of cost and time (Meigs and Meigs, 1995). As a general rule, inventory valuation is required for producing reliable accounting information for decision-making by companies but each method has its own required conditions for effectiveness.
Managing inventory using the retail method is most crucial for the success of a retail business because the business would most likely not deal on one single product only. Hence the retail inventory method is adaptable to a retailing environment as compared to a manufacturing company that may be just manufacturing standardized products. Manufacturing companies may then most like apply standardized costing or job-order costing or process costing or whichever could be matched with the practicality of periodic physical count (Atkinson, et al,2005).
The retail inventory method has also its other downside. The result of inventory estimate or valuation under the retail method would produce a likely distorted result in times of inflation since prices may go up that would make the computed ratio of cost to retail no longer valid. Hence, this would result in understated ending inventory because the increased price based on the current price would be used and yet the original cost would still be maintained in the books as the basis of valuation.
This would make the retail inventory method not work well therefore if combined with the first in first out (FIFO) method for inventory costing since in times of inflation, the price would be high at the latter period which would be used in computing retail price. Since the base price would be high, the tendency is to have a lost cost ratio, and a lower cost ratio may understate ending inventory and in turn overstate income for the period. Thus the best solution suggested for the retail inventory method for it to function well is to combine the same with the last in first out method (LIFO) because the defect in using FIFO would at least be kept in check (Meigs and Meigs, 1995; Reeher, 2009).
To conclude, one that would best serve the purpose of accounting should be viewed as the benefit of which should exceed the cost. The name “retail inventory” method must be associated more with retail business which is bound to have a variety of goods over that of a manufacturing concern. Since the same method was found to be applicable in case of a wide variety of goods when the tracking of unit cost at all times would be difficult and costly, it would not be a surprise to find its use in department stores, supermarkets if the latter companies would have to maximize profits.
References
Atkinson, Anthony, et al (2005). Management Accounting. New Jersey: Person Custom Publishing.
Bernstein, J. (1993). Financial Statement Analysis, Sydney: IRWIN.
Meigs, R, Meigs, W., & Meigs, M. (1995). Financial Accounting. New York: McGraw-Hill.
Reeher, J. (2009). Retail Method of Inventory. Web.
It is seen that the retail merchandising industry is in a constant state of flux and fashion demands keep changing with almost every passing day. Therefore, it becomes necessary for fashion designers and providers to keep their fingers on the pulse of the merchandising market and to be on the right side of fashion trends, both current and future.
The current state of retail merchandizing
It would require all the ingenuity, resourcefulness and market savviness of fashion designers to anticipate future fashion trends and make available such modern-day fashion apparel appealing to a large section of the actual users even before they could possibly ask for it. Moreover, the market is in constant dynamics and provides volatile changes in designs, color blends and shapes of costumes over time. Yesterday’s fashion becomes obsolete in today’s market trends and tomorrow’s fashion demands may tell a totally different story. Or it could be even in terms of earlier fashions reappearing in the markets sporting a fresh new look and appeal for designers and wearers. Thus fashion trends are constantly changing over time and market demands, ushering in new technology and newer styles in attire.
“Branded merchandise and changing consumer perceptions/lifestyles make continual market monitoring essential.” (Mills).
Opportunities and solutions to be implemented
It is seen that in the context of strategic marketing with strong competitive elements, both within and across different geographical locations, whether in the US or on a global basis, it is necessary that owners of fashion retail outlets are alive to the need for closely observing their corporate brand image and the impact this is creating not only among users but also among rivals and competing businesses. Through market positioning, it is possible to be more selective in the choice of business promotional activities, designed to expand market share and introduce newer and better varieties of goods for better saleability and user benefits. While it is necessary that competitive markets need to be utilized and shares enhanced it is also necessary to ensure that market positioning is carried out with a great deal of ingenuity, resourcefulness and precision, especially in long-term business interests. “Better strategic retail positioning “results in better movement of products to high demand markets fuelling greater market demands, not only for current usage but also with an eye for future market development. (Mills, Strategic retail fashion market positioning: A comparative analysis).
Opinions of the writer
In the opinion of the writer, market domination has to be a sustained effort, not to displace rival competitors, but to provide economies of large-scale business practices and expand the markets exponentially, ensuring that healthy competition is existent and enforceable. This is especially true in a competitive elastic market where demand, supply, pricing and servicing factors are of paramount importance. In order to reap the benefits of large-scale/long-term business prospects, it is essential that quality aspects of products be maintained consistently and sustained ably, especially in a global context and internet deployed business where pricing and quality constraints could be critical. The business needs to reinvent and reorient itself to suit current market scenarios.
Conclusions
One aspect of the garment fashion trade is that investments are recouped within a short expanse of time, thus providing impetus for further investments. The only criticality would be in terms of making the right investments in the right product areas and at the right time.
Moreover, consumer trends are also to be critically evaluated since, in the long run, they could make all the difference between a mediocre business and a highly prosperous one. The choice would lie entirely with the business enterprise and its long-term selling policies and marketing practices.
Works Cited
Mills, Michael. K. Strategic Retail Fashion Market Positioning: A Comparative Analysis. Journal of the Academy of Marketing Science. 2007. Web.
Mills, Michael. K. Strategic retail fashion market positioning: A comparative analysis. SpringerLink. 1985. Web.
Correlation is the term used to describe that the movement of two variables is somehow related to each other (Triola, 2008). We have a positive correlation in the case when if one variable increases than even the other increases too. Vice versa, when one variable increases and the other responds by decreasing, we have a negative correlation. In our case, PiggyBank is interested in estimating if there is any correlation between e-commerce retail sales and total retail sales.
The questions to be answered are of vital importance for a business. The correlation between the variables of total retail sales and e-commerce online sales can be decisive in determining the future of the company. They have to decide where to put their efforts; should they focus more on the on-line shopper market or at the “traditional” shoppers at retail stores? Should their marketing strategy advertise more on-line or not? Should their on-line products offerings increase or it is not that profitable?
There are different methods of doing the calculations but the most useful one is to do it in a Microsoft Excel sheet. It is important to notice that the correlation coefficient, the one that will show us if the variables are correlated or not, can have a value between -1 to 1. If it is 0, it means there is no correlation at all between the variables. If it is from 0 to 1, then it is a positive correlation, and from 0 to -1, it is a negative correlation (Lanthier, 2002).
First thing to do is to input the data provided by United States Department of Commerce for the total retail sales in one column and that of the e-commerce sales in another column. The data available from the Department of Commerce is from the fourth quarter of 1999 until the second quarter of 2004. After doing that we go to the formulas bar at the top of the sheet and select “More Functions”, then “Statistical” and then “Correl”. A box will prompt in which we will have to select the cell ranges to be calculated from each column of data. After doing this, just click “finish” and the correlation coefficient between the two sets of data we wanted to measure will appear.
In our case, the correlation coefficient is: 0.805787563. This means that the correlation between the two variables measured is positive. In other words, there is a connection between the rise (and fall) in total retail sales and e-commerce on-line sales. Graphically, if we put the values if billions of $ on the Y axis and the period of time from the fourth quarter of 1999 to the second quarter of 2004, this correlation is presented by an upward growing line, from left to right. In fact, the news released by the Department of Commerce shows this graphical representation of the correlation of the data. From this correlation the PiggyBank can conclude that the e-commerce sales are becoming an important share of the total sales in the country. The data shows that when there is growth in total sales, there is growth in on-line sales. An interesting example of this can be the data from the 4th quarter of every year since 1999 to 2003.
From the 4th quarter of 1999 to that of the year 2000, the e-commerce percent share of the total sales went up from 0.7% (in 1999) to 1.1% (in 2000). Also from the 4th quarter of 2000 to that of 2001 it went from 1.1% to 1.3%. From the 4th quarter of 2002 to that of 2003 it went up from 1.3% to 1.6%. And from the 4th quarter of 2002 to the 4th quarter of 2003 it went from 1.7% to 1.9%. This means that for a period of four years the market share (percentage of the total sales) of the e-commerce on-line sales has grown more than 2.71 times. It seems from the datathat the on-line sales are becoming an increasingly bigger “shareholder” of the total sales.
This information is important for the management team at the PiggyBank in order to decide where to put their time and energy the years to come. It seems profitable to invest marketing and advertising of products in e-commerce related platforms. The questions made at the beginning begin to have an answer. I think that their on-line product offerings should be increased in order for the company to have more possibility of entering this new market sector that is developing fast. And since it is a fast growing market sector it is in the best interest of the company to put some more efforts in advertising, product offerings and total marketing issues, as soon as possible. This as a result can payback the company with a well-positioned market position and a comfortable market share that will guarantee a steady flow of cash and liquidity.
References
U.S. Census Bureau (2004). United States Department of Commerce News. Web.
Lanthier, E. (2002). Correlation. Noth Virgnia Community College Website. Web.
Triola, M. elementary Statistics with Multimedia Style Guide (10th edition). Boston: Pearson Addison Westley.
This work aims to comprehensively analyze Felix’s business idea to open an online pearl retail website in Switzerland. A detailed consideration of the aspects of purchases, expenses, and income for various periods makes it possible to use different financial instruments that show the liquidity of assets and the soundness of the idea as a whole. This paper uses breakeven analysis, the construction of an income statement, a balance sheet, and potential sensitivity analysis scenarios to achieve this goal. A more differentiated, complex and comprehensive approach is proposed in terms of critical reflection since the initial data and the available marketing research do not fully take into account all possible external factors over a longer distance and business development mechanisms with related expense items. In addition, Felix does not provide data on the company’s further development, which is a crucial aspect in implementing possible business development mechanisms. Taking into account all the known initial conditions of this case, a critical assessment of starting a business in this industry, support in the first year and subsequent periods, possible risks associated with this, potential ways to solve them, and recommendations in the method of financial analysis are proposed.
Main Report
The demand for jewelry is subject to many external factors that should be considered when planning to earn money in this business sector. Crises contribute to purchasing precious metals and jewelry as a kind of investment. Retail prices for jewelry depend primarily on the exchange price of the critical raw material, gold, and the exchange rate in which these auctions take place and in which imports are settled. The supply chain factor, the prices of transportation and related industries, which Felix will use in the process of starting and supporting a business, influences. These include the information technology sector experiencing worldwide growth and correspondingly higher service prices; security companies, marketing, banking, and finance (Rocha, Ferreira, and Silva, 2018). Initially, low sales are expected with high costs for many of these aspects.
At the same time, one of the most overhead items of expenditure for the maintenance of the premises of trading floors is missing. This factor is an undoubted advantage in choosing the mode of sale exclusively via the Internet. However, at the same time, the business processes of this enterprise are associated with some risks that are not taken into account in this financial analysis. The agreement with Orohena Pearls does not take into account inflation and even the increase in the purchase price during the six years of the contract for exclusive sales rights in Switzerland. This financial analysis shows only a gradual increase in the number of purchased products, while the price has remained constant for six years. On the one hand, this factor can be documented in the contract; on the other hand, the stagnant jewelry price is unusual for this industry (Bertacchini et al., 2021). Therefore, the cost of goods sold will theoretically be higher. In addition, this factor may be affected by the difference in the exchange rate.
This phenomenon should also be taken into account for the following reasons. The current maximum demand level is around 250 pearls, excluding the contract for products with Paula. In the future, a significant increase in demand is not expected, as the maximum potential of the market will be reached. At the same time, the price tags for consumables are rising, and therefore the retail price will increase; cooperation with Paula may be limited to only one year, and new mechanisms for generating revenue will depend only on the optimization of production or pricing policy. An increase in the selling price can reduce demand, especially if external factors demonstrate a crisis, even indirectly affecting the sector.
Accordingly, Felix needs to find a balance between high initial costs and further supporting payments. For example, the security system supports monitoring for only 100 francs, which makes it quite profitable to use in the long run. The interest fee on a line of credit is less beneficial as it increases as sales increase. Felix may consider fixed monthly payment options in the future. Moreover, the contract with Paula is good to help at the initial stage, but in the future, it is not profitable in the long run, and perhaps other ways to increase the number of products sold should be looked for. At an early stage, pressure on the balance sheet will also come from a deposit in the form of a three-month rent for a safe deposit box.
Investments at 4% per annum are a step when it is impossible to diversify the business further since if Felix takes an additional loan at 6% per annum, then a significant part of the amount will be lost due to the difference in the growth rate of monetary units. Moreover, the performance of the personnel has not yet been assessed, and no measures have been implemented to control these employees. One likely is enough for the headquarters, or two is not enough, leading to recalculations of the indicated values. As the company develops, when it reaches a plateau of 250 pearls sold per month, the expansion will be required, possibly horizontally and vertically. If the service remains at the premium level, then looking for a profit in shipping and packaging is not a desirable step to avoid losing reputation. Accordingly, the different ways of the company’s development can be determined and determine the final decision to start a business or the insolvency of an idea.
Moreover, the volume of work should be extrapolated during the year, and the performance of the two hired employees should be evaluated. Site support, as well as accounting, require certain qualified specialists, which, when expanding the business, must be added to additional costs. A four-week supply for a three-week shipment is relatively small given the ever-growing demand to a plateau, but given the specifics of the jewelry market, it may be sufficient. It should be based on the factors of proximity to specific holidays, for which demand naturally and significantly increases and is accordingly reduced in other seasons. Moreover, this financial plan does not specify anything about marketing expenses, except for a study on the average price of a product in the market. Exclusive marketing rights in Switzerland create the conditions for effective advertising slogans on the country’s most famous social networks and relevant topical communities (Griffiths and Mylly, 2022). This item of expenditure is not included in this analysis but is required for online sales.
In addition, selling at the average price in the market may not bring proper growth without marketing campaigns. For example, to enter the market, Felix can use a lower price as a promo, which, given the small volume of sales, will not lead to significant losses, but in the future, it is possible to set a price higher than the market price due to exclusive rights and product quality. Given that the contract with Paula is only for a year, then in the future, it is possible to use these tools and chain suppliers to diversify products on the site with a gradual reorientation to a jewelry store with various products. Receiving payments from the bank every fifteen days, taking into account the basic monthly expenses, looks like the best solution, which gives Felix enough flexibility to manage his finances.
Therefore, a superficial analysis reveals that this plan does likely not consider many items of expenditure that can stimulate sales. On the other hand, this minimizes the cost of starting a business and, in the study, still offers steady growth for one year before reaching a plateau. Signing a contract with Paula provides important reputational, marketing, and financial support for the first year of sales. In the future, Felix can consider how to continue cooperation on more favorable terms if his products work well in the market or as an experience diversifying his products. For a more detailed assessment, it is needed to refer to breakeven analysis, balance sheet calculation, cash flow, income statement, and possible sensitivity analyses to find dependencies between non-obvious aspects of this business.
To find the breakeven point, it is needed to define fixed and variable costs per unit of production. Fixed costs include the cost of renting a pearl storage room of CHF 850, staff salaries of CHF 7200, an alarm system monitoring fee of CHF 100 and a salaried assistant of CHF 350. The remaining costs are variable and depend on the number of units purchased and sold. They include courier from Tahiti, packaging, and shipping – 15 CHF, credit card fee of 1.2% of the sale, and direct cost of pearls, which will be 86.6 for each pearl. According to Paula’s contract, the costs are fixed since the number of sales units is strictly regulated by the document. Accordingly, it is also necessary to calculate the initial costs, which include the purchase of a safe, installation of a security system, website design, marketing research, and small drig and jig to create chains. Accordingly, this analysis will show how many pearls need to be sold before all the initial costs with variable and fixed costs are paid off. It is worth noting that the chain’s sales under the contract have the same number, so the breakeven analysis does not consider their costs and revenues.
Therefore, initial costs include CHF 28,200, which are added fixed costs of CHF 9,050 and approximately CHF 121 variable costs. Thus, with an average selling price of 270 CHF, it turns out that Felix needs to sell more than 247 units of goods in order to reach payback. According to marketing research, this quantity will be sold in the first five months with the development of demand. Accordingly, the results of the sales plateau, which include 250 units, are satisfactory but very insufficient for significant business growth, in connection with which diversification of the lines was proposed.
It can be concluded that within the framework of the breakeven analysis, there were data obtained that indicate the viability of the idea; however, subject to the sales forecast. All costs pay off after only five months, after which a profit can be used to develop the business. Therefore, it is necessary to assess the situation after several months, how much sales approached the breakeven point as the forecast period approaches, take into account the influence of seasonal and holiday demand factors and understand different business development vectors. After passing this point, Felix will have assets like a supply of pearls, a safe, a sales site, and a security system. At the same time, long-term obligations will need to be taken only in case of significant diversification of products or another direction of business development.
Now we need to turn to the initial costs to explain to Felix in an accessible language about the cost of starting a business. Firstly, this includes already paid 28,200 CHF for the above needs. Secondly, Felix’s price for the exclusive rights to sell pearls must be determined. The calculation showed that CHF 80,474 is a net profit for the year according to the specified forecast; therefore, in order to recoup this expense item with possible risks for the year according to the breakeven analysis, we can assume an amount of up to CHF 80 thousand, which pays off with 654 units sold, which will be achieved by the end of 11-12 months in terms of net profit. A higher price for exclusive rights already carries significant risk since under certain factors of seasonal sales, insufficient marketing work, and inefficient cost optimization, sales may fall, which will increase the payback period. It should also add the purchase of the first batch of pearls, deposit to the landlord and courier services, and fixed costs for the first month. As a result, it turns out that to start a business, Felix has to spend a minimum of 120 thousand CHF. Income will begin to fully cover monthly expenses only by the end of the third – beginning of the fourth month; therefore, Felix must have capital and financial reserve for the first three months, which will be from 105 to 175 thousand CHF, depending on the price of exclusive rights for six years. In order to mitigate the risks and consequences of any crisis or emergencies, Felix is recommended to designate an initial capital of 200 thousand CHF. If there is free money, the entrepreneur can invest it at 4%, as stated in his proposal.
If we consider the first year of sales, the cash flow and income loss statement shows that the net profit on total revenue is approximately 17.7%. Moreover, in the calculations, it becomes noticeable that the contract with Paula is unprofitable due to the fact that the costs of production, purchase of chains, and packaging are not beaten off by sales, according to documents. As mentioned above, this contract is more advertising and reputational in nature, as a chance to recommend their products on the local market. Accordingly, it is not possible to extend it for the following year. In the calculations for the following years, the contract with Paula is not taken into account, sales are kept at the level of 250 jewelry per month, and the costs do not change accordingly. In a similar vein, this analysis will be very far from the truth since, again, it does not consider many external and even internal factors. These include inflation, the possible development of a business with a diversification of the line, an increase in headquarters, and a change in the cost of maintaining a site, security system, or rent. In any case, all these costs, as well as revenue, will be dynamic, and at least the error must be considered.
Nevertheless, even if all these assumptions are accepted, the net profit margin for four years in the calculations grows to more than 23%. While maintaining the gross profit ratio at the same level, this indicator is promising, even in the absence of optimization activities that improve this indicator. However, if one adds to these costs the rights fee, which can vary at any level from ten to eighty CHF, then the first year can be profitable under any condition. This range will make it possible to determine business opportunities based on the results of the first year, and even if the net profit margin remains at the level of 20.6% even in the case of the maximum price for four years, even though in the first year it can hardly be more than 0%. Subject to the signing of a contract with Paula, this venture should be viewed as a long-term investment that pays dividends in the long run with proper management and reactive policies in a relatively stable market.
The contract of exclusive rights is designed for six years; therefore, during this period, if the final recommendation of the viability of the idea from a financial point of view is justified, Felix needs to decide on the possibility of continuing this contract firmly. On the one hand, even in the worst possible case of the rights price, the net profit margin for six years only reaches 22.3%, which in comparison year on year does not bring any growth at the moment. In this case, the retention of rights depends on the price and terms of the new contract, the retention of the 35% discount, or its absence. Liquidity and profitability for this case should be calculated based on already available statistics for five years, which can be significantly changed compared to the current marketing forecast.
Sensitivity analysis with current data is quite tricky since, firstly, there have not yet been actual sales, and secondly, there is no way to compare the determinants of dead data and no investment. However, it is possible to consider various sensitivity analysis scenarios for the early stages of Felix’s business. For example, it compares sales growth in the first and second years through the context of having a contract with Paula’s pendant business. Naturally, one should immediately differentiate the various determinants of the level of sales that affect their growth or decline; however, even the search for correlation through linear regression can provide a starting point for analysis. Moreover, this analysis can be used to evaluate the introduction of diversification of the product line due to the experience of the contract with Paula. For example, Felix introduces pearl pendants and pendants into the assortment of an online store, after which he can track sales, gross profit ratio, asset turnover, and other various indicators in dynamics that will reflect liquidity and optimization of the company’s operations. In other words, the influence of such determinants can already be tracked in actual sales using this tool, which will make it possible to give more significant assessments of the idea’s viability.
Using sensitivity analysis, it is possible to extrapolate the data dynamics for further periods to understand the ratio of assets and liabilities. If sales growth associated with product diversification is driven by seasonal demand or other uncertainties, a longer time frame may be needed to estimate (Razavi et al., 2021). For example, the creation of a new line of jewelry will require the purchase of new tools, and market analysis of the market, already considering the presence of such a player as Felix. These costs must be assessed using a breakeven analysis and, simultaneously, require a comprehensive approach in terms of sensitivity. The market can meet new products at above-average prices if the brand has proven its quality. At the same time, due to the presence of many external factors not directly related to the jewelry industry – for example, the crisis that led to a decrease in the purchasing power of the workshop’s target audience – sales may fall even with the growth of the global market. To do this, there are several tools that Felix must constantly implement with a specific frequency. These include analysis of the external PESTLE macro environment and the internal SWOT environment. In the first case, a detailed analysis will be required as the business grows because, at the same time, the environmental and social responsibility of the company will grow. In the second case, the tool will provide an opportunity to constantly keep abreast of a critical assessment of the internal vector of development, which should use the business’s strengths and neutralize the weaknesses.
Critical Reflection
With the company’s further development, Felix is encouraged to use more complex and severe methods for modeling financial performance. At the moment, detailed marketing research provides an understanding of the approximate demand for the year, verbal agreements with Paula and suppliers of the leading products, the availability of discounts, and various potential benefits. In the long term, it is not easy to make any forecasts, especially without accurate sales statistics, but nevertheless, it is possible to take into account various external factors that will directly affect price dynamics. For this purpose, tools such as Porter’s five forces to assess the levels of threats from various directions, as well as accounting for a six-year contract for exclusive rights, will be suitable.
The income statement model should be differentiated approximately for the next six years every month. The main disadvantage of this business plan is that Felix does not have the value background of even such a small company, on which the mission and vision should usually be based. Given the current model, Felix is content with stagnation after the first year of sales with no room for further development, a withdrawn contract from Paula, and a stable income. First, it is necessary to implement inflation and an approximate percentage of sales growth in the model based on a clear plan for the development of product diversification. The line of pearl jewelry has a classic and understandable interpretation and possible ways of improvement, proven over the years. Pearls can be combined with silver and gold, depending on the target audience discovered and their budget. Diversification can also be horizontal to cover more market segments. After successful scenarios of this approach, it is possible to search for suppliers of other gemstones and consider the possibility of creating a network franchise in neighboring countries.
Secondly, the model should consider more unforeseen expenses for an adequate assessment of the initial capital. To achieve this goal, it is necessary to implement more marketing campaigns and research based on the market segmentation, and sales by these segments will be known. As a result, it will be possible to draw up a positioning map with direct competitors to identify an unoccupied niche and the corresponding pricing policy, service, and delivery in advertising companies (Gigauri, 2019). As expected, sustainability can never be in a permanently dormant state, with a plateau of 250 pearls sold per month. If a maximum is reached in any product, following the analysis of positioning and marketing, it is necessary to implement new products in line with a price justified by the target segment’s needs. Accordingly, the model should consider the seasonal factor of sales in Switzerland, which should include an increase before significant holidays and a decrease in other periods. These percentages should be based on the company’s direct competitors’ actual statistics or financial reports.
Thirdly, the preliminary financial analysis already included Felix’s specific decisions, which were not subject to discussion. The recommendation, in this case, is to take a more comprehensive approach to market analysis for each item of expenditure. First, analysis of the real estate market can be based not only on comfortable distance but also on transport accessibility, good environmental infrastructure, and other determinants that were not considered by Felix but influenced the cost. Secondly, in the field of banking services, there is a wide choice of banks that provide various offers to small and medium-sized businesses. Quite often, some offer promotions to capture this segment over competitors; therefore, a credit card may have a lower percentage under certain conditions of use, which are best suited to the specifics of Felix’s business. A lively discussion of cooperation and negotiations with representatives of banks can give a more profitable result for doing business, reducing the payback period and increasing the net profit margin over time, even in the first year.
Finally, the critical analysis of this financial plan is relatively optimistic, as it is assumed that all expenses in the first year will be documented and will not succumb to any price fluctuations and external factors. However, including all costs and risks, Felix must be prepared for the fact that, according to the first year’s results, even zero in terms of payback may not be achieved due to the influence of a combination of determinants beyond the control of the entrepreneur. In the long run, payback is almost inevitable with proper management, constant monitoring with the help of various financial and market instruments, and appropriate response. Felix must be ready to diversify products based on market research, which should be more, and also be open to investment to open up the possibility of another source of income for development. A detailed financial plan is possible only for the next year, while for future years, a less detailed but understandable in terms of development vector plan should be developed, which will include a basis in the form of the mission and vision of the company and the corresponding steps to achieve it. Even if Felix wants to keep the local business without large-scale development, it is necessary to develop mechanisms to prevent stagnation, which will naturally lead to huge losses. Such mechanisms include demand-side marketing campaigns, seasonal holiday tie-ins, and loyalty programs for regular customers.
As a result, according to the financial analysis carried out in this work, we can conclude that the idea is viable even in the short term of the year and can lead to self-sufficiency already in the third month of work, as well as to fully recoup the initial costs by the end of the year. In the worst case, Felix will receive net profit from the second year of the company’s operation; in the best – much earlier, as shown by the profit and loss statement and balance sheet. Because the breakeven point has a relatively actual number of units for sale, taking into account the conducted marketing research, this financial instrument speaks in favor of this idea. Confirmation is also found in the calculation of the net profit margin and various application scenarios of sensitivity analysis, which will be an integral marketing tool for assessing the development of this business in the jewelry industry. The final verdict regarding the liquidity and profitability of this pearl selling idea is favorable, subject to proper control, management, and a more profound and more comprehensive attitude towards the company’s fundamental values, which must be established even in such a small staff.
Griffiths, J., and Mylly, T. (Eds.). (2022) Global Intellectual Property Protection and New Constitutionalism: Hedging Exclusive Rights. Oxford, UK: Oxford University Press.
Over the past 20 years, the book retail industry has undergone seismic transformations, repercussions reverberating through the organization and distribution of book products. These transformations are characterized by the increased digitalization of retail stores, allowing the customers to buy products entirely online, without leaving home, which Amazon initiated by opening their online bookstore in 1995. This online business significantly reshaped the industry environment through the forces of reduced bargaining power of buyers and the high barriers to entry.
From approximately 5,500 retail stores in 7,000 locations in 1995 to nearly 1,700 stores in 2,100 areas in 2021, the last two decades saw the previously brick-and-mortar industry acquiesce to the online-favoring reality (Rosen, 2022). As streaming platforms displaced Blockbuster stores, Amazon has been steadily driving out independent physical stores by easing its customers into the new possibilities of online shopping. The customer behavior was now characterized by the ability to continue previous actions, such as preview, choose, compare, and “save to cart,” but faster, with additional abilities to read/leave customer reviews and door-to-door delivery. By luring customers with reduced physical constraints, time-saving, and low switching costs, with a limited number of competitors, Amazon’s online bookstore effectively increased its power over buyers, essentially lowering the buyers’ bargaining power. This allowed the company to not only pioneer a unique online subsector within the larger retail industry but also limit its profitability potential for independent offline stores. The current book retail landscape is essentially characterized by online bookstores superseding physical stores, with Amazon at the helm, carving out a monopoly for itself, with millions of loyal customers and high customer switching costs.
According to Statista’s 2019 analysis, 47% of book purchases happened online, primarily through Amazon, with wholesalers, libraries, Barnes & Noble, and independent bookstores accounting for the rest half (Kunst, 2022). Amazon essentially came to rule this other half of all book sales because of its willingness to lose profit for almost ten consecutive years to build the necessary online infrastructure. The underpinning of this Amazon infrastructure are carefully automated and highly efficient warehouses, delivery systems, and online services that holistically bring together a comfortable online purchasing experience, offering unique customer gains. In attaining a sizeable market share in online book retail alongside Amazon, a competing company must not only be willing to face many unprofitable quarters but also have the necessary capital and talent resources. These challenges might be escalated by regulatory challenges, training employees, and finding a unique selling point to achieve customer loyalty, which sets up high barriers to entry, as it requires a significant up-front investment. Furthermore, as Amazon’s financial struggles in the beginning indicate, incremental improvements in service efficiency do not effectively correspond to financial growth, emphasizing the high barriers of the online book retail business.
In summary, the book retail industry has significantly evolved since 1995, as online retail represents nearly half of the market share, with Amazon at the vanguard, leading to the downfall of brick-and-mortar stores. While this evolution enabled a more comfortable customer experience that introduced new opportunities and alleviated inconveniencies of physical shopping, it also reduced the buyers’ bargaining power due to their growing dependence on monopolistic Amazon. Furthermore, along with this notion of evolution, this cut-throat online industry has driven out most of Amazon’s competitors almost with a “natural selection” approach due to the high barriers of entry that require substantial investment.
Market expansion is a common phenomenon in the business environment especially with multinational organizations. The increased competition and the desire to expand into external markets have made many businesses in the work place to go global. Consequently globalization has become a tradition that is admired by every business entity. The pressure to record high profit margins, reduce operational costs, and maintain competitive strategy has plunged most organizations in to a flurry of activities. With changing customer preferences and needs it is significantly improving a reality in the field of research and development that new product versions and designs hit the market almost on a daily basis.
In this situation we see Anthropologie a large scale retailer with a bid to venture into Thailand’s retail industry specializing in fashion designs and clothing attires. The business must have made careful considerations before reaching this decision. The ability of a company to undertake market expansion decisions reflects what kind of visions it has for the future. Thailand is a growing economy with the increasing tourism activities, and represents the pattern in the current economic trend and therefore requires aggressive retail investment that is likely to take into account the growing demand.
Successful implementation of this idea is likely to lead to Anthropologies’ international market positioning and established customer satisfaction in global brands. However a number of issues should be thoroughly understood before the actual business commences. This is to help determine the probability and possibility of any unexpected events whose occurrences are likely to cause potential damage to the entire development phases of this idea. These issues relate to the extent of data analysis and the feasibility studies.
Overview of Data
Market expansion is a large investment that requires heavy financial outlay in addition to time, personnel and careful planning. This means more spending and organizations should carry out a cost benefit analysis to determine the economic viability of such projects. In this scenario we are going to perform a critical evaluation to the type of information provided to us by the respondents in order to ascertain the validity and authenticity of this interview. We have three different types of respondents i.e. the Thailand customers, Thailand professionals working in the central stores and the response from the management of Anthropologies.
Thailand customers
As a business it is important to obtain information from customer that should become your target. This information concerns their preferences, their economic status and their religious and cultural diversities. From the different customers interviewed it may be easy for one to deduce that Thailand clients like shopping at malls and marts. This will act as a guide in informing Anthropologie that they should reserve more capital to build marts and malls since they are the preferred shopping centers.
Most Thai customers do not restrict themselves to their country’s home made products but are ready to buy from anywhere as long as the products are appealing and attractive. In the modern world most markets have been liberalized and the traditional rigid procedures are now history. Consequently local markets have become flooded with foreign products. This signifies that most customers have been exposed to the outside world and part of their tastes is constituted by foreign goods. This is likely to provide a strategic advantage to Anthropologie. Again one can reasonably believe that the Thailand economy is not doing bad, this is evidenced by the fact that out of the three customers interviewed the least amount that they can spend is 1000 Baht. This means that if this idea is implemented then the stock turn over will be very high.
In an economy where people have free flowing money retail industry will grow with the surcharges in seasonal demand occasioned by the customers growing desire to buy more and more goods. Anthropologie should take advantage of this situation. At least one out of three customers knows the existence of Anthropologie. This is already an added advantage to the company.
Those who work at the Central Department store
Most managers believe that expansion into Thailand market is actually a good idea. Since the company is unique in its presentation and structure it will definitely attract large fanatics that with time may grow into solid customer base. This is the feeling of Yuwadee Chirathivat who is the president of central department store. The same feeling is shared by Natira Boonsri the manager in charge of special projects of central department store though slightly different, he says that already Anthropologie has customers in Thailand and given the fact that it’s positioning is unique and suitable design for the Thai customers the expansion is highly possible.
The most important information that one gets out of this company is that it has established a strong competitive advantage that is not easily breakable. This implies that managers are constantly working both day and night to ensure that Anthropology meets its core objectives. The presence of numerous fashion retail shops and marts suggests that there is fierce competition between the players in the industry.
In any market there must barriers, however for Anthropologie these barriers could prove breakable. In this industry the government has decided to raise the import tax to 30% a figure that has left many international key players reconsidering their investment decisions regarding the Thailand market.
Finding a suitable location for this retail fashion marts could be another barrier. Remember that the success of any retail outlet may be largely influenced by its location, strategic places such as towns and urban places are desirable for such retail outlets. Anthropologie should determine the best place for such investment in order to be able to attract a good public attention.
Despite the current economic downturn retail future prospects are still eminent in the Thai markets. This is being occasioned by the growth in the tourism sector and the Thais cultural buying habits, the ability to accept and nature their tastes towards the ever changing world’s economic modern trend in foodstuffs and fashion wares. This is likely to be a big boost to Anthropologie that prides itself of being unique in offering client tailored fashion designs and clothing attires.
Competition is critical in any industry however in the Thailand market most retail marts focus on client requirements by stocking different product versions, charging low prices and constantly relying on good customer care. These are very important information that Anthropologie should be able to take into account in order to position itself to better serve the Thai. To be able to catch up with the competitors it is therefore the responsibility of the management to evaluate their scales of operation. Already there are many different types of retail outlets and shopping with big financial influence in the market.
The managers from Anthropologie
Managers are willing to undertake expansion responsibility and expect the company to increase its market niche and eventually increase its revenues and profitability. They are also looking at it from diversification perspective, where they intend to diversify their markets to include Asia. This they argue will lead to established brand awareness and popularity that will make Anthropologie to stand a better chance to achieve current and future profitability.
The modern business society requires that entities become flexible. This is the value that Anthropology cherishes; managers assert that they are flexible and thus responsive enough to customers. They stock and provide customers with products that reflect their needs and carry regular research on customers changing requirements today and in the future. This is enough to inform anybody that Anthropology is a customer focused organization.
Summary of findings
Thailand market is competitive. Any organization that wishes to enter into this environment should be adequately equipped to better face the challenges. Competition is in terms of price, product differentiation and customer service. For Anthropology to enter and catch up it must be able to produce different product versions, charge lower prices and focus on customer attention.
Most buyers shop at retail fashion outlets, malls, marts, supermarkets and hyper marts. Organizations with ambitions to expand into this market should focus on establishing these infrastructures in order to meet the expectations of many Thais. These outlets are readily available the urban centers, towns and busy places are instrumental. To enter this market one needs to accept to pay the high import tax which is charged at 30%, identify strategic locations for these marts; be able to maintain the prevailing market standards. If this is not done then success in the Thailand market can be hard to come by.
Currently Thailand lacks a multi-concept store like Anthropologie where fashionable women can shop for apparels accessories, jewelries and home products in one place that is fascinating. This is a business for many entrepreneurs who may be willing to venture into the Thai markets. Thais also have a vibrant economy characterized by a relatively low poverty index. This has ensured that there is sufficient money in circulation and therefore people are able to spend reasonable amounts shopping at their convenience.
Conclusion on the overall findings
The rational behind carrying out research is to investigate the immediate cause of a problem and find solutions for it. At times it may involve establishing the truth about something or finding the requirement about phenomenon. This interview is not an exception; the purpose of this research is to look into circumstances under which successful market expansion can be achieved in Thailand.
The institution or person in question wants to identify factors to consider before venturing into Thailand’s market. These factors can be broken into two main categories i.e. external and internal. Under external we have seen how taxation can influence a business. The import tax for operating into Thailand’s market is charged at the rate of 30%. This means that for one to trade in this market it must record high profit margin in order to absorb this taxation cost. In my opinion I would request the government of Thailand to review its taxation so that it can be able to attract more foreign investments in the country.
Another external factor is competition; in this environment we have found out that there is an intense competition. This has been occasioned by similarity of goods and small scope of markets. To survive this competition Anthropology must be ready to offer different but quality products cheaper than its competitors and ever focus on customer requirements. The success can only be realized when the identified factors are implemented. Design products which are tailor made, qualitative but cheap and efficient in favor of the company. Maintain client’s relationship through formation of reward schemes where loyal customers are rewarded on attendance.
Limitations of the Findings
Biasness
The use of interviews as a method of data collection may encourage stereotyping and subjectivity. Where this is the case the desired information may not be obtained. This can adversely affect the research out come. In this case only a few people are interviewed and these guys do not represent the whole population in Thailand. It can therefore distort and mislead the researcher.
The finding only focus on competition, legislation, location, tastes and preferences, the buying power, and the future performance but fails to recognize the human population that creates market for commodities in the marts and malls. Studying the Thailand’s demographic trend can provide important information about the future and help an entrepreneur strategize. This is not discussed any where in the interview. This may question the validity of this process. The current economic world requires that enterprises diversify their products in a vibrant economy, our finding are limited to the fashion design and clothing attires. This may complicate matters incase one may wish to diversify its products in the future. Product diversification can also be a competitive advantage especially where the probability of risk occurrence becomes high.
Our finding is again restricted to individual’s buying behavior and hence fails to recognize the organization’s behavior. The research is tailored towards individuals but not organizations. We have corporate organizations like hospitals, schools, colleges, clubs and societies. How do they benefit from a single fashion mart? What is the marketing plan appropriate for them, what influences their tastes and preference for instance? These are the few areas that our interviews failed to capture.
Conclusion
When carrying out research it is the responsibility of the researcher to determine the most appropriate method to use. Obsolete and invalid methods of data collection may distort the required information and hence mislead the researcher in the overall objectives. Sophisticated methods are equally unreliable because they may require complicated tools interpretation. These tools are expensive to use and buy. The purpose is to pass important information that can be relied upon by third parties.
In this chapter is about market analysis. The reader should be able to understand the different ways of analyzing markets whether it involves the SWOT analysis or not. This particular chapter talks about market analysis through the use of Michael Porter’s Five Force Module though not exclusive as it is. For Anthropologie to score it must be ready to implement the research findings.
Overall conclusion and Recommendation for the topic
In research data analysis forms the heart bone of core activities. It is a process that requires accuracy, careful thinking and high integrity. We have analyzed data from the Thailand market, this data is subsequently going to be used by the management of Anthroplogie a company that specializes in offering women fashion design with ambitious plan to venture into Thailand’s retail industry. If these data is not carefully interpreted then there will be no basis for carrying out the research.
If Anthropology really wants to venture into this market then the following recommendations should be considered:
Thais’ are fashionable and always accept foreign products. This means that customers in this region like new product versions. Anthropologie should therefore have the capacity to revitalize its products in order to capture the attention of the market.
Secondly there is a strong competition here. In such situations only strategic organizations survive. In order to succeed there are two possible competitive strategies that the management of this company can adopt; cost leadership, this involves producing the same products as competitors but selling them at relatively lower price than competitors. This is target price sensitive customers. The next one is price differentiation. This refers to making its products completely different from its competitors by presentation, design, grading, quality, packaging and etc. if this is put into consideration in addition to superb customer focus then Anthropologie is likely to succeed.
Omnichannel is one of the most successful strategies of luxury brands, and not only because the Internet traffic on the brands’ websites significantly exceeds customers’ visits to offline locations. While traditional mono-brand stores also serve as the primary channels for selling luxury goods, their market share declines (Bell et al., 2018). Although the trends indicate that luxury goods sales through traditional retail channels will continue to fall, it is not the primary point for the transition. The growth rate of sales through the online channel is significantly higher than the growth rate of sales through traditional retail (Bell et al., 2018). This essay discusses why the most successful retail concepts are those that offer omnichannel sales.
This notion continues to amass new attention due to its immense success, as shown by multiple significant businesses. Market leaders believe that the omnichannel strategy helps to increase customer lifetime value, reach new customer segments, improve operational efficiency, and increase market share (Von Briel, 2018). The omnichannel approach is also essential for marketers when planning budgets since it give consistency not only to communication channels but to all marketing processes (Bell et al., 2018). Its essence is not that there are many contacts between the brand and the client, but that the user can naturally navigate through all channels, and the history of communications with the brand will be preserved.
One of the examples of omnichannel marketing is the international beauty retailer Sephora. Sephora does not simply blur the boundaries between online and offline, the retailer turns shopping into a fun, interactive experience by combining their mobile application with an offline experience (Bell et al., 2018). Oasis, a UK-based apparel retailer, is another prime example of a combination of an online store, a mobile app, and a retail outlet. Its employees serve the same customers both offline and online. For example, if the product is out of stock, the buyer can use the “Seek & Send” service, and employees will find it in other stores in the chain and send the product to the customer. Another example is Decathlon S.A., which demonstrates the successful transition of an online retailer to an offline environment. Decathlon’s first offline store in Singapore replicated the online user experience. By using radio frequency identification technology to manage a user’s virtual and physical cart simultaneously, Decathlon instantly integrates a customer into its network (Bell et al., 2018). Every buyer, both online and offline, is automatically enrolled in a loyalty program, allowing Decathlon to recognize customers across all channels and devices.
There are significant challenges that companies must overcome to implement an efficient omnichannel network. The balance of the luxury brand, its buyers, and the omnichannel requires a complex framework that will connect all aspects of both store operations and customer experience into a single continuous process. In this trio of factors, it is crucial for retailers to keep in mind that the primary focus is the fulfillment of customers’ expectations. Therefore, retailers must combine offline and online channels on customer touchpoints and deliver features that will empower consumers (Von Briel, 2018). To summarize, the brand and the omnichannel must work as a single entity that focuses its attention on consumers.
If Tiffany & Co. expresses a desire to introduce the OCR in Singapore, it must work on several critical aspects of this mode of retail to become successful. First of all, the company has to develop an e-commerce website specific to the Asian luxury consumer. Technology is a crucial component of the omnichannel experience and will only grow in importance. Offline stores are also part of the omnichannel process as most customers start looking for an item online and end up buying it from a physical store (Reddy et al., 2018). There is no better way to build trust with visitors than utilizing their language in all situations and accepting the local currency. As a result, this strategy will improve interaction with the client and increase customer loyalty. With the help of the omnichannel, there will be more opportunities to anticipate the needs of the target audience and increase the efficiency of advertising campaigns.
In conclusion, to integrate the omnichannel strategy in its operations, the company must adhere to its customers’ desires and aim to fulfill their demands. Since Tiffany & Co. wants to provide users with a complete omnichannel experience, it is not enough to translate the site into another language and host it locally. Store operations must be adapted to the tastes of the target population and direct them to both physical and digital stores, emphasizing this feature. The entire customer service must be focused on Singaporeans and their preferences, including customer support and reviews, which must come from other Singaporeans. The brand must consider the culture it attempts to integrate into and modify its logo, assortment, and website accordingly. When bringing the Tiffany brand into a full-scale omnichannel platform, it is vital to collaborate with local businesses and place advertisements explicitly aimed at the residents of this country (Reddy et al., 2018). The company should pick up local trends and consider the preferred payment methods. Tiffany & Co. can start promoting its product on social media by using local influencers, as well as opening physical stores to create a fully omnichannel experience.
References
Bell, D. R., Gallino, S., & Moreno, A. (2018). Offline showrooms in omnichannel retail: Demand and operational benefits. Management Science, 64(4), 1629-1651.
Von Briel, F. (2018). The future of omnichannel retail: A four-stage Delphi study. Technological Forecasting and Social Change, 132, 217–229. Web.
Reddy, S. K., da Silva, G., & Bhardwaj, S. (2018). Tiffany & Co: Omni-channel strategy for the Asian luxury consumer. Singapore Management University, 1-22.
The Gifted Legit Wear is a retail store specializing in selling legitimate good quality clothing and footwear for the whole family. The retail store will be keen and emphasize the sale of a full assortment of children’s, women’s, and men’s official and athletic clothing and accessories. The store will provide the customers with professional knowledge on suitable fit and official wear for their occasions. The ultimate goal is to be the best store for serving a larger community to ensure everyone looks amazing in official wear by offering technical and knowledgeable consumer service.
The Existing External Opportunities
The growing economy and population in the local areas of the store location promise a good target market. Both corporate workers put on official wear during most of their days of the week, and the sports lovers go for runs and athletic exercises whenever they can (Ekanem, 2017). The growth in online business and marketing is also a target for advertisement and selling where orders can be made and delivered.
The Internal Strengths
Having excellent knowledge in business planning and projections gives me an upper hand in the market. Fashion and designs have been my passion for a longer time, and bringing up this enterprise will be an excellent opportunity to enjoy doing what I love. I also want to be remembered for doing good to society by offering job opportunities whenever possible; hence, great motivation within strengthens me.
Strategy for My Life
Setting milestones that align with my goals for the next two years will propel me towards achieving my goals. Hence, I will set specific milestones with specific timeframes for them to be fulfilled.
Failures from the Past and Strategy for Future
I had a plan to start an ice cream store, but I never went ahead with it because I was waiting to have more money for capital. I have learned that waiting is not a plan; executing the idea, no matter how small, will enable the store to come into existence and gradually grow.
Entrepreneurial Ethics, Personal “Board of Directors,” and Six-Word Summary
I will ensure that I uphold ethical practices by maintaining my products’ integrity, great customer service, fairness during the hiring process, and telling the truth about my products during marketing. I will seek guidance from my parents, role models (a successful uncle), and teachers. The six-word story is “customer-friendly, suitable fit, profitable goods.”
The emergence of E-commerce has profoundly influenced customers’ shopping habits in behaviors. While online shopping has plenty of benefits for the customer, it has also become potentially detrimental to offline retail stores, causing a phenomenon called showrooming. According to Greene (2012), showrooming is defined as a practice in which consumers visit a store to inspect a physical product and then opt to buy it online, often at a lower price. Although the prevalence of showrooming could potentially put real-life businesses on the verge of extinction, there are specific strategies to retain customers and revenue.
Showrooming poses a threat to physical retailers as it drains the store’s resources without offering any financial interest. The owner of a conventional store should relocate their funds to pay for the maintenance of a physical location, including bills, rent, and staff (Greene, 2012). Moreover, repeated examination of physical products can damage the goods and result in financial loss. Essentially, when a customer browses a store to examine the merchandise and then purchases the intended product online, the online store grows at the expense of the resources of the brick-and-mortar shop.
One way to combat the effects of showrooming is to gain a comprehensive understanding of the customer. Employing new technologies across multiple channels to identify the target audience and customer’s individual needs is essential to achieve a smoother purchase journey. If all the data about prospective and current clients are gathered into a single data set, the analysis of such a holistic overview could give the physical stores an edge over their online rivals (“The issue of showrooming,” 2015). Using the so-called single customer view, the data gathered from multiple sources, can be helpful in many departments, such as marketing, product design, and sales, to better target the appropriate segments. As a result, this information can be used to create a better engagement campaign with the customer.
The approach mentioned above can be advanced by improving the customer experience by making it easy and seamless. Bridging the gap between offline and online should be central to the development of a customer-centric approach. For instance, retailers could implement a store pick-up strategy, in which a customer purchases products online but is then able to pick up their order at the physical location. A carefully crafted product layout could then persuade the customer to buy additional goods. Alternatively, a shop could introduce a bonus system where a customer gets credit for purchasing online.
The key to addressing the negative consequences of showrooming is ensuring the happiness of the customer. Conventional stores can introduce new technologies, such as in-store tablets, that allow for comparing similar products by providing reviews and information on product availability (“The issue of showrooming,” 2015). Training staff to provide the customer with a better experience could also help conventional retailers retain customers by establishing a personal, customer-centric connection with a client.
The phenomenon of showrooming is inevitable because it is driven by the desire to gain the best possible deal and save money. There are ways to battle showrooming and convert browsers into buyers. Conventional real-life retail stores should utilize various technological channels (for example, smartphones) to gain a better understanding of their customers. If the data is used to its full extent, a brick-and-mortar store could effectively provide the customer with a persuading experience and, as a result, retain customers and stay in business.