Attempt all the problems
problem1) prepare brief notes on:
i) Advantages of Franchising
ii) Energy Management;
iii) Display Management;
iv) Recruitment and selection
problem2) Elaborate on the different measures commonly used to measure performance of retail store and space.
problem3) How is retail strategy reflected in retailer’s financial objectives?
problem4) Suggest Strategies to reduce Loss in Retailing?
Brand Profile and Service Expectations
Departmental store group with 30 branches operating nationwide has been successful with merchandise range of appliances for which customers’ expectations have been for the ‘standard’ service package typical of popular branded products in its core merchandise groups. The service offered has largely been determined by retailer. The merchandise offer has been based upon popular models selected from those of each of the main manufacturers. After-sales and warranty services have been set by suppliers to respond to competitive minima. The retailer identified competitive prices as being dominant feature of the overall positioning.
Some 18 months ago company was approached by the international supplier of air-conditioning equipment with the view to stocking and selling supplier’s range. They posed no main competitive threat as their price levels were between 15 and 20% above existing ranges stocked. An agreement was reached and initially sales were achieved at levels that satisfied both retailer and the supplier. The product sold on its strong international reputation and its reputation for service. Service was extensive. It involved before, during and after-sales activities. The before-sales service offer involved visiting potential customer’s homes to advice on precise model requirements based upon size of residence and lifestyle characteristics of potential customers. Initially the supplier provided liaison personnel for this function. Eventually (after six months) the supplier’s staff moved on to other duties.
Strong promotional activity, featuring high level of service together with recommendations from satisfied customers generated a large number of inquiries and potential sales.
Before long problems began to occur with increasing frequency. The product fault required return of the entire production batch. Neither supplier nor the retailer can meet replacement demand from customers who had been given to believe that premium service was the essential feature of offer made to customers. While this was the unfortunate ‘one-off’ instance, it was resolved reasonably quickly. Though, another more worrying problem was beginning to emerge. A number of customers began to complain of poor product performance. The supplier was asked to investigate and found that while products were performing to specification they were unsuitable for circumstances in which they were operating. Retailer’s staff were insufficiently experienced and/or trained for this aspect of the service function. The situation continued to deteriorate and eventually the brand was discontinued by mutual agreement.
A post mortem revealed the fact which neither supplier nor retailer had sufficiently understood strong relationship which existed between product performances.
problem1) What are the main reasons for discontinuing the brand? Suggest ways to overcome present problem faced by the company.
problem2) What are the major successes factors in efficient retail strategy.