Objectives:
Students must know about retail information system and supply chain.
- Uses of technology
- Supply chain management
The Connection Between Technology and Supply Chain Management
The technical frontiers of the retail system encompass new and better ways of performing standard retail functions. The retailer must always be aware of opportunities for every operating costs.
Technological changes such as developments in computer technology (hardware) and in management techniques (software). These changes underline many of the other changes because they affect the range of choices available to consumers and suppliers. The application of technological change is often inseperable from the other changes it helps to bring about.
New technology:
1. cheaper and better products or services
2. improve customer supply chain by reducing distribution costs and iproving the availability of products to the consumer
3. grocery distribution also makes increasing use of multi-temperatured trucks that can carry dry goods, chilled goods and frozen goods, decrease cost and increase customer service. Nevertheless, it requires relatively expensive equipments; larger operating stores, transporting larger loads in larger vehicles and operating larger depots and using equipment to improve the operation of storage and shop units, with relatively little increase in staff requirement.
Technology have dramatic influence on retailing. Technological innovations are grouped under three (3) main areas:
1. supply chain management
2. customer management
3. customer satisfaction
1. SUPPLY CHAIN MANAGEMENT TECHNIQUES
QR: Quick response
JIT: Just-in-time
ECR: Efficient Consumer Response; that are already being enhanced by
DSD: Direct Store Delivery;
a. potential to fully automate all retail inventory operations from tracking vendor to pricing and order taking
b. increase accuracy and administrative efficiency, any retailers that emply this achieve cost advantages
c. improve efficient operating and stronger partnership and retailers as global competitiveness increases.
and
CPFR:collaborative planning forecasting and replenishment system; has the potential to take retailers and manufacturers far beyond continuous:
a. replenishment models in terms of reducing excess inventory levels, cutting out-of-stock at retail, and efficiently meeting consumer demand
b. eliminating costly variations and distortions throughout the supply chain
Retailers who use either one technoogies will achieve greater efficiency in their operations
2. RETAILERS understands their customers and will achieve higher levels of effectiveness; ie Retailers use technology to better target their customers and provide better service to them.
3. INCREASE CUSTOMER SATISFACTION
example: by using RFID (Radio Frequency Identifiers) for easy check-outs.
Excercise Questions:
1. According to Angie Tang & Sarah Lim in Retail Operations; How to Run Your Own Store, there are _______ types of retail information technology which are_________________________________________________________________
2. Retailers need to be aware of 3 main areas to adopt any information system in their company. The areas are:
a.
b.
c.
3. What are the elements a retailer should have in their system?
a.
b.
c.
d.
4. Before considering a system, a retailer should choose a system that is:
a.
b.
c.
d.
e.
f.
g.
h.
5. Back end system store _________________________, _______________________, _______________________ and _____________ information.
6. Benefits of information technology are:
a.
b.
c.
d.
e.
f.
g.
7. What is supply chain / channel?
8. What is primary marketing institutions?
9. Name all the facilitating marketing institutions. Include the examples for each.
10. What is direct supply chain?
11. What is indirect supply chain?
12. Indirect supply chain is divided into two types which are:
a.
b.
13. Supply chain width include _________, __________, _____________.
14. What are the advantages of franchise system?
15. What are the longer version of this acronym?
QR:
JIT:
ECR:
DSD:
CPFR:
RFID:
Wednesday, September 16, 2009
DRM5- Eid Mubarak Card
Thank you DRM5 for the Eid Mubarak card. So sweet of you. Happy Eid Mubarak, Maaf Zahir & Batin. Halalkan mana-mana yang kurang dan berhati-hati di jalanan, insya Allah ;o)Tuesday, September 15, 2009
DRM5- CHAPTER 4: FASHION RETAILER’S ON-SITE ENVIRONMENT
Author's declaration:
Notes for this chapter are from Entrepeneur's Magazine; How to Start a Clothing Store, A Step-by-step Guide to Success; GUIDE#1817 and Retailing by Dunne and Lusch; Sixth Edition)
4.1 Methods to select retail location.
a. Look at several locations before choosing your store site.
b. Check into any local ordinances and zoning regulations that apply.
c. Determine your store's parking needs.
d. Decide whether the site is worth the rent.
e. define the selling point of your store's location.
f. Determine whether the location is an area of potential growth.
g Define your store's space needs.
h. Define your store's image
4.2 Store location
Store location can be divided into two kinds:
1. Store-based format: store based retailers operate from a fixed store location that requires that customers travel to the store to view and selest merchandise and/or services. Categories of store based retailers; business district, shopping centers/malls, freestanding, nontraditional.
2. Nonstore format: non-store based retailers reach the customer at home, at work or at a place other than a store where they might be open to purchasing. Categories of nonstore retailers; street peddling,mail-order, automated merchandising system, direct selling, internet.
4.3 How to choose the location
4.4 Classification of shopping districts
1. Business Districts
a. Central-business district (CBD): Consists of an unplanned shopping area around the geographic point at which all public trasportation systems converge; it is usually in the center of the city and often where the city originated historically.
Strenghts:
i. Easy access to publis transportation
ii. Wide product assortment
iii. Variety in images, prices and images
iv. Proximity to commercial
Weaknesses:
i. inadequate (and usually expensive) parking
ii. older stores
iii. high rents and taxes
iv. traffic and delivery congestion
v. potentially high crime rate
vi. often-decaying conditions of many inner cities
b. Secondary business district (SBD): is a shopping area that is smaller than the CBD and that revolves around at least one department or variety store at a major street intersection.
c. Neighborhood business district (NBD): is a shopping area that evolves to satisfy the convenience-oriented shopping needs of a neighborhood, generally contains several small stores (with the major retailer being a supermarket or a variety store), and is located on a major artery of a residential area.
2. Shopping Centers/Malls
a. Shopping Center (or mall): is a centrally owned or managed shopping district that is planned, has balanced tenancy (the stores complement each other in merchandise offerings), and is surrounded by parking facilities. Anchor stores in a shopping center that are the most dominant and are expected to draw customers to the shopping center.
Strenghts:
i. heavy traffic resulting from the wide range of product offerings
ii. cooperative planning and sharing of common costs
iii. access to highways and availability of parking
iv. lower crime rate
v. clean, neat environment
Weaknesses:
i. inflexible store hours (the retailers must stay open during mall hours and cannot be open at other ties)
ii. high rents
iii. restrictions as to what merchandise the retailer may sell
iv. inflexible operations and required membership in the center's merchant organization
v. possibility of too much competition and the fact that much of the traffic is not interested in a particular product offering
vi. an anchor tenant's dominance of the smaller stores
3. Freestanding
Freestanding retailer generally locates along major traffic arteries and does not have any adjacent retailers to share traffic.
Strenghts:
i. lack of diect competition
ii. generally lower rents
iii. freedom in operations and hours
iv. facilities that can be adapted to individual needs
v. inexpensive parking
Weaknesses:
i. lack of drawing power of complementary stores
ii. difficulties in attracting customers for the initial visit
iii. higher advertising and promotional costs
iv. operating costs that cannot be shared with others
v. stores that may have to be built rather than rented
vi. zoning laws that may restrict some activities
4. Nontraditional
4.5 Site selection
1.1.5 Analyze occupancy considerations.
Notes for this chapter are from Entrepeneur's Magazine; How to Start a Clothing Store, A Step-by-step Guide to Success; GUIDE#1817 and Retailing by Dunne and Lusch; Sixth Edition)
4.1 Methods to select retail location.
a. Look at several locations before choosing your store site.
b. Check into any local ordinances and zoning regulations that apply.
c. Determine your store's parking needs.
d. Decide whether the site is worth the rent.
e. define the selling point of your store's location.
f. Determine whether the location is an area of potential growth.
g Define your store's space needs.
h. Define your store's image
4.2 Store location
Store location can be divided into two kinds:
1. Store-based format: store based retailers operate from a fixed store location that requires that customers travel to the store to view and selest merchandise and/or services. Categories of store based retailers; business district, shopping centers/malls, freestanding, nontraditional.
2. Nonstore format: non-store based retailers reach the customer at home, at work or at a place other than a store where they might be open to purchasing. Categories of nonstore retailers; street peddling,mail-order, automated merchandising system, direct selling, internet.
4.3 How to choose the location
4.4 Classification of shopping districts
1. Business Districts
a. Central-business district (CBD): Consists of an unplanned shopping area around the geographic point at which all public trasportation systems converge; it is usually in the center of the city and often where the city originated historically.
Strenghts:
i. Easy access to publis transportation
ii. Wide product assortment
iii. Variety in images, prices and images
iv. Proximity to commercial
Weaknesses:
i. inadequate (and usually expensive) parking
ii. older stores
iii. high rents and taxes
iv. traffic and delivery congestion
v. potentially high crime rate
vi. often-decaying conditions of many inner cities
b. Secondary business district (SBD): is a shopping area that is smaller than the CBD and that revolves around at least one department or variety store at a major street intersection.
c. Neighborhood business district (NBD): is a shopping area that evolves to satisfy the convenience-oriented shopping needs of a neighborhood, generally contains several small stores (with the major retailer being a supermarket or a variety store), and is located on a major artery of a residential area.
2. Shopping Centers/Malls
a. Shopping Center (or mall): is a centrally owned or managed shopping district that is planned, has balanced tenancy (the stores complement each other in merchandise offerings), and is surrounded by parking facilities. Anchor stores in a shopping center that are the most dominant and are expected to draw customers to the shopping center.
Strenghts:
i. heavy traffic resulting from the wide range of product offerings
ii. cooperative planning and sharing of common costs
iii. access to highways and availability of parking
iv. lower crime rate
v. clean, neat environment
Weaknesses:
i. inflexible store hours (the retailers must stay open during mall hours and cannot be open at other ties)
ii. high rents
iii. restrictions as to what merchandise the retailer may sell
iv. inflexible operations and required membership in the center's merchant organization
v. possibility of too much competition and the fact that much of the traffic is not interested in a particular product offering
vi. an anchor tenant's dominance of the smaller stores
3. Freestanding
Freestanding retailer generally locates along major traffic arteries and does not have any adjacent retailers to share traffic.
Strenghts:
i. lack of diect competition
ii. generally lower rents
iii. freedom in operations and hours
iv. facilities that can be adapted to individual needs
v. inexpensive parking
Weaknesses:
i. lack of drawing power of complementary stores
ii. difficulties in attracting customers for the initial visit
iii. higher advertising and promotional costs
iv. operating costs that cannot be shared with others
v. stores that may have to be built rather than rented
vi. zoning laws that may restrict some activities
4. Nontraditional
4.5 Site selection
1.1.5 Analyze occupancy considerations.
Thursday, September 10, 2009
Course Current View (2007) - by Pn Haslina Yusof
10 hb JULAI 2008
POLITEKNIK SULTAN AZLAN SHAH
BEHRANG, PERAK
INTRODUCTION
· The economic growth of Malaysia can be considered to be relatively high for a developing country.
· One of the sectors which will benefit from the economic growth is the retail sectors.
· The retail sector in Malaysia companies a complex amalgam of varying forms of economic behavior and organizations manifest, including hawkers, street traders, small family businesses, bazaars, dry and wet markets and large scale units as supermarkets and hypermarkets.
THE IMPORTANCE OF THE RETAILING INDUSTRY IN MALAYSIA
· Contribution to the Gross Domestic Product (12%)
· Sales RM 10,760 million
· Third after manufactory and agriculture
· Number of employees employed
· Listed companies
CONCLUSION
· The industrialization and modernization process faced by Malaysia today will change the face of the retail industry in the country.
· There are different ethnic groups with different religions, cultures and languages
· Homogeneity in taste and attitude towards western style, product and behavior that view shopping as a leisure pursuit.
· The retail sectors has been very active in the last few years due to:-
- Strong economic growth
- Led to an increase in income levels
- And shopping power
· Prime target for foreign investors, Japanese, Americans and Europeans.
2007
Carrefour; 13
Tesco ; 18
Jusco ; 20
Mydin ; 26
Giant ; 100
The Store ; 76
· Introducing future products for the higher of life as well as environmentally, friendly product.
· Supply of retail space
· Government is directly involved, trying to make the capital city of Kuala Lumpur the future shopping mecca of the region
· SME (PKS) “ Produk Malaysia Citarasa Kita”
Hypermarket ; Supplier ; Product ; Sales (RM)million
Giant ; 190 ; 1900 ; 61
Tesco ; 180 ; 1788 ; 32
Carrefour ; 125 ; 1799 ; 22.5
Jusco ; 91 ; 720 ; 2.9
The Store ; 75 ; 860 ; 2.7
Mydin ; 240 ; 2000 ; 20
· ASEAN
Number of ASEAN Retailers
Indonesia ; 1,745,585
Malaysia ; 26,723
Philippines ; 552,873
Singapore ; 21,066
Thailand ; 273,314
Vietnam ; 24,241
· The Prospect of ASEAN Retailing Business
Country ; Forecasted Retail Sales(US Billion); Annual Growth %
Malaysia ; 14.6 ; 8.5
Indonesia ; 8.75 ; 7.3
Philippines ; 11.0 ; 4.9
Singapore ; 16.7 ; 3.2
Thailand ; 49.6 ; 10.1
· Halal Hub
· Pasar Tani/Pasar Tani Mega (FAMA)
· Unemployed
PROSPER/PKS
THANK YOU
linayusof@jp.puo.edu.my
013 5286883
POLITEKNIK SULTAN AZLAN SHAH
BEHRANG, PERAK
INTRODUCTION
· The economic growth of Malaysia can be considered to be relatively high for a developing country.
· One of the sectors which will benefit from the economic growth is the retail sectors.
· The retail sector in Malaysia companies a complex amalgam of varying forms of economic behavior and organizations manifest, including hawkers, street traders, small family businesses, bazaars, dry and wet markets and large scale units as supermarkets and hypermarkets.
THE IMPORTANCE OF THE RETAILING INDUSTRY IN MALAYSIA
· Contribution to the Gross Domestic Product (12%)
· Sales RM 10,760 million
· Third after manufactory and agriculture
· Number of employees employed
· Listed companies
CONCLUSION
· The industrialization and modernization process faced by Malaysia today will change the face of the retail industry in the country.
· There are different ethnic groups with different religions, cultures and languages
· Homogeneity in taste and attitude towards western style, product and behavior that view shopping as a leisure pursuit.
· The retail sectors has been very active in the last few years due to:-
- Strong economic growth
- Led to an increase in income levels
- And shopping power
· Prime target for foreign investors, Japanese, Americans and Europeans.
2007
Carrefour; 13
Tesco ; 18
Jusco ; 20
Mydin ; 26
Giant ; 100
The Store ; 76
· Introducing future products for the higher of life as well as environmentally, friendly product.
· Supply of retail space
· Government is directly involved, trying to make the capital city of Kuala Lumpur the future shopping mecca of the region
· SME (PKS) “ Produk Malaysia Citarasa Kita”
Hypermarket ; Supplier ; Product ; Sales (RM)million
Giant ; 190 ; 1900 ; 61
Tesco ; 180 ; 1788 ; 32
Carrefour ; 125 ; 1799 ; 22.5
Jusco ; 91 ; 720 ; 2.9
The Store ; 75 ; 860 ; 2.7
Mydin ; 240 ; 2000 ; 20
· ASEAN
Number of ASEAN Retailers
Indonesia ; 1,745,585
Malaysia ; 26,723
Philippines ; 552,873
Singapore ; 21,066
Thailand ; 273,314
Vietnam ; 24,241
· The Prospect of ASEAN Retailing Business
Country ; Forecasted Retail Sales(US Billion); Annual Growth %
Malaysia ; 14.6 ; 8.5
Indonesia ; 8.75 ; 7.3
Philippines ; 11.0 ; 4.9
Singapore ; 16.7 ; 3.2
Thailand ; 49.6 ; 10.1
· Halal Hub
· Pasar Tani/Pasar Tani Mega (FAMA)
· Unemployed
PROSPER/PKS
THANK YOU
linayusof@jp.puo.edu.my
013 5286883
Wednesday, September 9, 2009
Article in www.sinarharian.com.my
Hi all...
My article is posted in http://www.sinarharian.com.my/ online newspaper.
The title is CUKUPKAH HANYA DENGAN KATA-KATA MANIS?
It is about multi level marketing.
Go to the site, and click on Suara Anda then, click on Rencana Komuniti.
Maybe you'll get something out of it.
Tuesday, September 8, 2009
P4723: CHAPTER 3: FASHION CONSUMER
Objectives:
Identify fashion categories and consumer behaviour.
a. Consumer’s behaviour toward fashion.
b. Theory of fashion.
1. Adoption.
2. Consumer assessment
Identify fashion categories and consumer behaviour.
a. Consumer’s behaviour toward fashion.
b. Theory of fashion.
1. Adoption.
2. Consumer assessment
c. Fashion categories.
1. Women’s.
2. Men’s.
3. Children’s.
4. Cosmetics and perfumes.
5. Accessories.
6. Seasonal.
7. Permanent
1. Women’s.
2. Men’s.
3. Children’s.
4. Cosmetics and perfumes.
5. Accessories.
6. Seasonal.
7. Permanent
d. Promotion of fashion.
e. Consumer analysis
A. Consumer’s Behaviour Towards Fashion
Complementary approaches for understanding fashion consumers – concentrating especially on innovation theory and self-concept theory. These are two potentially relevant approaches because fashion is concerned with “newness”. Therefore innovation theory (also concerned with introducing new products and ideas) is logically important, and because fashion buying could have much to do with projecting images of how buyers see themselves (or would like to be seen, etc). Furthermore, there is evidence to suggest that buying in younger markets is related strongly to the expression of self nowadays.
These approaches could lead to an increase in fashion branding which based on a greater segmentation of fashion markets. Lastly, the use concepts from both innovation and self-concept theory could enable fashion promotion to be more targeted.
Notes:
Theory of innovation: The theory of optimal sequential search is used to study an industry where firms make homogeneous products and seek lower costs of production.
Theory of self-concept: focused on describing the ways people organize and interpret their inner world of personal existence. Three major qualities of self-concept-it is: (1) learned,
(2) organized, and (3) dynamic--have been presented. Individuals have within themselves relatively boundless potential for developing a positive and realistic self-concept. This potential can be realized by people, places, policies, programs, and processes that are intentionally designed to invite the realization of this potential.
How to promote your fashion product or service
Source (http://www.styleflair.com/how-to-promote-your-fashion-product-or-service/)
A. Consumer’s Behaviour Towards Fashion
Complementary approaches for understanding fashion consumers – concentrating especially on innovation theory and self-concept theory. These are two potentially relevant approaches because fashion is concerned with “newness”. Therefore innovation theory (also concerned with introducing new products and ideas) is logically important, and because fashion buying could have much to do with projecting images of how buyers see themselves (or would like to be seen, etc). Furthermore, there is evidence to suggest that buying in younger markets is related strongly to the expression of self nowadays.
These approaches could lead to an increase in fashion branding which based on a greater segmentation of fashion markets. Lastly, the use concepts from both innovation and self-concept theory could enable fashion promotion to be more targeted.
Notes:
Theory of innovation: The theory of optimal sequential search is used to study an industry where firms make homogeneous products and seek lower costs of production.
Theory of self-concept: focused on describing the ways people organize and interpret their inner world of personal existence. Three major qualities of self-concept-it is: (1) learned,
(2) organized, and (3) dynamic--have been presented. Individuals have within themselves relatively boundless potential for developing a positive and realistic self-concept. This potential can be realized by people, places, policies, programs, and processes that are intentionally designed to invite the realization of this potential.
How to promote your fashion product or service
Source (http://www.styleflair.com/how-to-promote-your-fashion-product-or-service/)
Know yourself and your target market
You need to be very clear about who you are as a brand so you can effectively promote your fashion products and services. Why? Because knowing what you stand for and hope to represent helps you figure out which method is best for you to use. Are you a hip, cool brand catering to the younger crowd, for example? Then you have to do your promotions in a hip, cool way as well. Otherwise, you won’t be able to send the messages you intend to, nor will you be able to steer your line to the image you want it to be associated with.
You need to be very clear about who you are as a brand so you can effectively promote your fashion products and services. Why? Because knowing what you stand for and hope to represent helps you figure out which method is best for you to use. Are you a hip, cool brand catering to the younger crowd, for example? Then you have to do your promotions in a hip, cool way as well. Otherwise, you won’t be able to send the messages you intend to, nor will you be able to steer your line to the image you want it to be associated with.
Listen to your target market
Aside from knowing your brand identity, you have to aware as well of your target market. Find out what makes them tick so you can devise a way that allows you to reach them in the quickest, most effective way possible. How to do that? Interviews are good because they allow you to go in depth with your target market. Interviews let you into the consumer’s psyche so you can understand behaviors that affect how consumers make their purchases.
Unfortunately, interviews can be a hassle to do unless you’re a big company that can afford to hire professional help. This doesn’t mean though that smaller companies can’t take advantage of interviews to boost their business. You only need to take a step back and go in a different direction.
Aside from knowing your brand identity, you have to aware as well of your target market. Find out what makes them tick so you can devise a way that allows you to reach them in the quickest, most effective way possible. How to do that? Interviews are good because they allow you to go in depth with your target market. Interviews let you into the consumer’s psyche so you can understand behaviors that affect how consumers make their purchases.
Unfortunately, interviews can be a hassle to do unless you’re a big company that can afford to hire professional help. This doesn’t mean though that smaller companies can’t take advantage of interviews to boost their business. You only need to take a step back and go in a different direction.
Enter The Internet.
Use the internet to promote your fashion line
1. Use online surveys
The internet is a great alternative to traditional interviews because it is highly accessible and costs less to use. You don’t have to pool your interviewees together or schedule one-on-one sessions to be able to get data. You can just send your subjects emails, or even create online surveys.
2. Submit press releases
Another way to use The Internet to promote your service is to submit press releases and articles to StyleFlair.Com. Show the world that you are an expert by writing and submitting insightful articles about fashion design.
3. Post photos of your clothes
You can also post your designs in photo sharing websites. Hundreds (if not thousands) of people will see it everyday, increasing awareness of your brand. You may even be able to sell some of your pieces online. Make sure that the photos can be downloaded / can be shared. This way, people who see the photos can email them to friends who might be interested. This multiplies exposure of your designs.
4. Consign to online stores
Finally, you can consign your designs to online fashion stores. It’s usually much easier to get online fashion stores to carry your designs than to get malls to sell your clothes. Just email the webmasters of the online store you are eyeing. Send a formal letter explaining what you want, and send along pictures of your design. You never know – Bluefly might just sell your line.
Use the internet to promote your fashion line
1. Use online surveys
The internet is a great alternative to traditional interviews because it is highly accessible and costs less to use. You don’t have to pool your interviewees together or schedule one-on-one sessions to be able to get data. You can just send your subjects emails, or even create online surveys.
2. Submit press releases
Another way to use The Internet to promote your service is to submit press releases and articles to StyleFlair.Com. Show the world that you are an expert by writing and submitting insightful articles about fashion design.
3. Post photos of your clothes
You can also post your designs in photo sharing websites. Hundreds (if not thousands) of people will see it everyday, increasing awareness of your brand. You may even be able to sell some of your pieces online. Make sure that the photos can be downloaded / can be shared. This way, people who see the photos can email them to friends who might be interested. This multiplies exposure of your designs.
4. Consign to online stores
Finally, you can consign your designs to online fashion stores. It’s usually much easier to get online fashion stores to carry your designs than to get malls to sell your clothes. Just email the webmasters of the online store you are eyeing. Send a formal letter explaining what you want, and send along pictures of your design. You never know – Bluefly might just sell your line.
Consumer Analysis
Focusing on your Target Audience
http://marketing.about.com/cs/brandmktg/a/target_market.htm
By Laura Lake, About.com
Focusing on your Target Audience
http://marketing.about.com/cs/brandmktg/a/target_market.htm
By Laura Lake, About.com
Your value proposition must be relevant to your target market. This means your target market must be clearly defined. It's not uncommon for a business to have to refocus and revisit their targeting, especially if it was not clearly identified in the beginning stages of business.
It is necessary to find the right balance when defining your target market in a way that causes your audience to recognize that you are talking specifically to them. This often requires companies to narrow down their target market.
It is necessary to find the right balance when defining your target market in a way that causes your audience to recognize that you are talking specifically to them. This often requires companies to narrow down their target market.
Why is Your Target Market Important in Branding?
It does not matter what your Brand mission is identifying and gaining the devotion of your target audience is the necessary means to reaching those objectives.
To achieve your brand marketing goals it is important that you know your target market inside and out. This requires conducting a market analysis. This market analysis must be as in-depth as possible providing you will all the data you need to reach your target effectively. By knowing your target audience you will be more confident in the steps to take to connect with that audience.
It does not matter what your Brand mission is identifying and gaining the devotion of your target audience is the necessary means to reaching those objectives.
To achieve your brand marketing goals it is important that you know your target market inside and out. This requires conducting a market analysis. This market analysis must be as in-depth as possible providing you will all the data you need to reach your target effectively. By knowing your target audience you will be more confident in the steps to take to connect with that audience.
The power of your brand relies on the ability to focus. That is why defining your target market will help to strengthen your brand's effectiveness.
There are two steps in Lesson four of the Developing Your Brand's Strategy course. The first is to conduct and informal market analysis of your target market and the second is to write a target audience definition for your company. The instructions below will walk you through the process of completing both of these steps.
There are two steps in Lesson four of the Developing Your Brand's Strategy course. The first is to conduct and informal market analysis of your target market and the second is to write a target audience definition for your company. The instructions below will walk you through the process of completing both of these steps.
Conduct Your Informal Market Analysis
The following questions will help you assess your market analysis. Make your study as complete as possible. Use the Internet to conduct research. You can also read news stories that are related to your target market. This will help you to narrow down your target by interest, demographic, and common trends.
1. Who is your target audience?
2. Where is your target audience located?
3. What do they think about your current brand?
4. What would you like them to think about your brand?
5. How will you attract them to your products or services?
6. Who else is competing for their loyalty and devotion?
7. Are you targeting business or consumer sectors?
The following questions will help you assess your market analysis. Make your study as complete as possible. Use the Internet to conduct research. You can also read news stories that are related to your target market. This will help you to narrow down your target by interest, demographic, and common trends.
1. Who is your target audience?
2. Where is your target audience located?
3. What do they think about your current brand?
4. What would you like them to think about your brand?
5. How will you attract them to your products or services?
6. Who else is competing for their loyalty and devotion?
7. Are you targeting business or consumer sectors?
Write Your Target Market Description
Using the questions below write a target market description. Be as specific as you like. The more specific the better.
Second draft a statement on the type of relationship you would like to have with your clients.
Using the questions below write a target market description. Be as specific as you like. The more specific the better.
Second draft a statement on the type of relationship you would like to have with your clients.
FW13-CONSUMER ANALYSIS
Source: http://www.freeworldacademy.com/newbizzadviser/fw13.htm
1. Customer benefit 2. Customer profile 3. Market customer 4. Do it yourself 5. Coaching
Source: http://www.freeworldacademy.com/newbizzadviser/fw13.htm
1. Customer benefit 2. Customer profile 3. Market customer 4. Do it yourself 5. Coaching
INTRODUCTION
The American Marketing Association: http://www.marketingpower.com/ defines market research as: "The systematic gathering , recording, and analysis of data about problems relating to the marketing of goods and services". Consumer analysis is an important part of this marketing research.
Without marketing research, it is quite impossible today to start any business. Consumer analysis is the first step of any marketing research.
In this module, our objective is to develop your skills in consumer analysis.
The American Marketing Association: http://www.marketingpower.com/ defines market research as: "The systematic gathering , recording, and analysis of data about problems relating to the marketing of goods and services". Consumer analysis is an important part of this marketing research.
Without marketing research, it is quite impossible today to start any business. Consumer analysis is the first step of any marketing research.
In this module, our objective is to develop your skills in consumer analysis.
Objectives:
Consumer analysis allows you to identify your prospect and segment market. The objectives of this consumer analysis lesson are to give you the fundamental notions about:
-Customer benefit.
-Customer profile.
-Market customer.
By the end , consumer analysis techniques will enable you to establish your market segmentation.
Consumer analysis allows you to identify your prospect and segment market. The objectives of this consumer analysis lesson are to give you the fundamental notions about:
-Customer benefit.
-Customer profile.
-Market customer.
By the end , consumer analysis techniques will enable you to establish your market segmentation.
1-CUSTOMER BENEFIT
The product must bring a benefit to the customer.
Customer benefit = Sales= Profit.
No customer benefit, no profit.
-Definition: A customer benefit is the value your product or your service gives to the customer.
The customer benefit is not the Unique Selling Advantage (USA). The customer benefit is included in the USA, but it focuses on the point of view of the customer and not of the investor. It implies that you put yourself in the shoes of the customer. It means that the customer benefit is a more precise concept than the USA.
There are two types of customer benefit: Functional and psychological benefits.
The product must bring a benefit to the customer.
Customer benefit = Sales= Profit.
No customer benefit, no profit.
-Definition: A customer benefit is the value your product or your service gives to the customer.
The customer benefit is not the Unique Selling Advantage (USA). The customer benefit is included in the USA, but it focuses on the point of view of the customer and not of the investor. It implies that you put yourself in the shoes of the customer. It means that the customer benefit is a more precise concept than the USA.
There are two types of customer benefit: Functional and psychological benefits.
11-Functional benefit
A functional benefit is measured in money, time, duration, or physical measures:
Examples:
-The product is cheaper than another one: The benefit is measured in money.
-This new machine saves the consumer 50% of his time: The benefit can be measured in hours or minutes.
-This car has a duration twice another car: The benefit is measured in years.
-This chair is lighter than another one ( ten kilos instead of twenty). It occupies less space (One square meter instead of two): The benefit is here calculated with physical measures.
As time and space can be converted in money, a functional benefit is quite important for a business man. If your corporate sells its products to other corporate's ( business to business) you must emphasize the functional benefit.
A functional benefit is measured in money, time, duration, or physical measures:
Examples:
-The product is cheaper than another one: The benefit is measured in money.
-This new machine saves the consumer 50% of his time: The benefit can be measured in hours or minutes.
-This car has a duration twice another car: The benefit is measured in years.
-This chair is lighter than another one ( ten kilos instead of twenty). It occupies less space (One square meter instead of two): The benefit is here calculated with physical measures.
As time and space can be converted in money, a functional benefit is quite important for a business man. If your corporate sells its products to other corporate's ( business to business) you must emphasize the functional benefit.
12-Psychological benefit
A psychological benefit gives to the customer a pleasant feeling such as self esteem, feeling of power, pleasant view and so on.
Examples:
-This product looks attractive and beautiful: Beauty depends on subjective choice.
-This big and expensive car allows you to enjoy speed: As traffic regulations limit speed, the benefit is only a feeling of power.
For starting a business, we recommend to focus on the functional benefit that does not depend on fads. It does not prevent you to add further some psychological benefits.
The next drawing shows a product offering both functional and psychological benefits.
As a good or a service offers different kinds of benefits. You have to rate them from 1 (low) to 5 (very high) according to their importance for the customer. Of course a low price is rated 5 because it represents a greater benefit to the customer than a high price. In the next drawing the product offers a low price (functional benefit) and is quite attractive (psychological benefit). On the contrary, it does not save any time: It can be a fashionable gadget.
Once again, try to forget your own point of view. May be, you think that your low price is an important benefit but in asking around you, you will realize that the customer emphasizes on the time saved, thanks to your product. This analysis is important because it allows you to target your advertisement on the benefits which really matter for the customers.
A psychological benefit gives to the customer a pleasant feeling such as self esteem, feeling of power, pleasant view and so on.
Examples:
-This product looks attractive and beautiful: Beauty depends on subjective choice.
-This big and expensive car allows you to enjoy speed: As traffic regulations limit speed, the benefit is only a feeling of power.
For starting a business, we recommend to focus on the functional benefit that does not depend on fads. It does not prevent you to add further some psychological benefits.
The next drawing shows a product offering both functional and psychological benefits.
As a good or a service offers different kinds of benefits. You have to rate them from 1 (low) to 5 (very high) according to their importance for the customer. Of course a low price is rated 5 because it represents a greater benefit to the customer than a high price. In the next drawing the product offers a low price (functional benefit) and is quite attractive (psychological benefit). On the contrary, it does not save any time: It can be a fashionable gadget.
Once again, try to forget your own point of view. May be, you think that your low price is an important benefit but in asking around you, you will realize that the customer emphasizes on the time saved, thanks to your product. This analysis is important because it allows you to target your advertisement on the benefits which really matter for the customers.
13-High and low involvement benefits
Now, we have to examine another topic: Are these functional or psychological benefits quite important for the customer. It means that we have to distinguish low and high involvement products.
Definition: If a consumer pays attention to buy a product, then it is considered as a high involvement product. If he does not pay too much attention, there is a low involvement product.
Of course, all the expensive products are always high involvement products: Flats, cars, antiques and so on. Nevertheless, some inexpensive products can be said high involvement products: For example, the consumers pay attention in buying cheap drugs because health is an important stake. What is more, this feature depends also on the customer: For example, a fashionable dress is a psychological benefit but it becomes also a high involvement item for a theater actor who is mainly judged on his appearance.
So, it is always fruitful to bring some high involvement topics to your product. For example, if you can assert that your yogurt contains specific vitamins, you bring a high involvement feature to a quite basic product. It enables you to differentiate your product from the competition and to charge a high price.
Finally, the product which gives the greater benefit to the consumer must gather both three characteristics: Functional benefits, psychological benefits, high involvement features.
In this drawing, the big circle represents a star because the product combines both functional, psychological and high involvement benefits.
Now, we have to examine another topic: Are these functional or psychological benefits quite important for the customer. It means that we have to distinguish low and high involvement products.
Definition: If a consumer pays attention to buy a product, then it is considered as a high involvement product. If he does not pay too much attention, there is a low involvement product.
Of course, all the expensive products are always high involvement products: Flats, cars, antiques and so on. Nevertheless, some inexpensive products can be said high involvement products: For example, the consumers pay attention in buying cheap drugs because health is an important stake. What is more, this feature depends also on the customer: For example, a fashionable dress is a psychological benefit but it becomes also a high involvement item for a theater actor who is mainly judged on his appearance.
So, it is always fruitful to bring some high involvement topics to your product. For example, if you can assert that your yogurt contains specific vitamins, you bring a high involvement feature to a quite basic product. It enables you to differentiate your product from the competition and to charge a high price.
Finally, the product which gives the greater benefit to the consumer must gather both three characteristics: Functional benefits, psychological benefits, high involvement features.
In this drawing, the big circle represents a star because the product combines both functional, psychological and high involvement benefits.
14-User and purchaser benefit
During this analysis, you have to distinguish the user and the purchaser
In business to business, You sell a big computer or a software to the heads of the corporate and you are not keeping in touch with the final consumer. Nevertheless, you have to emphasize on the user benefit because the head will not buy a product deprived of benefits !
In business to consumer, you sell to a wholesaler or a retailer. Of course you must emphasize on the final customer benefit but you have also to take in account the wholesaler or retailer benefit. These business intermediaries should mainly focus on some functional benefit such as margins or time saving in the delivery of the product.
During this analysis, you have to distinguish the user and the purchaser
In business to business, You sell a big computer or a software to the heads of the corporate and you are not keeping in touch with the final consumer. Nevertheless, you have to emphasize on the user benefit because the head will not buy a product deprived of benefits !
In business to consumer, you sell to a wholesaler or a retailer. Of course you must emphasize on the final customer benefit but you have also to take in account the wholesaler or retailer benefit. These business intermediaries should mainly focus on some functional benefit such as margins or time saving in the delivery of the product.
Real life example:
Times ago, the french chickens were scarcely presented on the German market. Nevertheless, the final consumers were currently saying that they preferred the french chickens because they were gusty.
One asked me to deal with this problem. After a close examination, I realized that the german wholesalers were reluctant to buy french chickens because the product was packaged in box weighting twenty five kilos. As they employed young people in their stores, they had better to buy to the Danes who packaged their chickens by ten kilos only.
When the french producers adopted this packaging, their sales began to shoot up on the german market.
2-CUSTOMER PROFILE
The customer profile is deduced from the customer benefit. It includes also the customer buying process.
Definition: The customer profile describes the characteristics of the customer who could really benefit of your product or service.
Clearly, if you intend to sell fun boards, your customer profile is not those of aged persons!
Times ago, the french chickens were scarcely presented on the German market. Nevertheless, the final consumers were currently saying that they preferred the french chickens because they were gusty.
One asked me to deal with this problem. After a close examination, I realized that the german wholesalers were reluctant to buy french chickens because the product was packaged in box weighting twenty five kilos. As they employed young people in their stores, they had better to buy to the Danes who packaged their chickens by ten kilos only.
When the french producers adopted this packaging, their sales began to shoot up on the german market.
2-CUSTOMER PROFILE
The customer profile is deduced from the customer benefit. It includes also the customer buying process.
Definition: The customer profile describes the characteristics of the customer who could really benefit of your product or service.
Clearly, if you intend to sell fun boards, your customer profile is not those of aged persons!
21-Customer characteristics
You can start by defining your ideal customer and list all characteristics you will expect in this profile:
-Business to consumer: The main characteristics are quite unlimited: Geographic area, age, sex, income, level of study, employment and so on. So keep close to your benefit analysis and just list the characteristics that correspond to the benefits you offer: If you sell bathing suit, you will not care for people living in north pole. If you sell fur clothes, do not loose your time with the characteristics of people living in Central Africa!
-Business to business: The main characteristics are the company size, the products or services, the level of technology, the turnover, the staff number, the location and so on.
You must describe the required customer profile according to your product or service
Example: What's the customer profile for fun board
-Demographic characteristics: 15 to 25 years old, male, healthy
-Economic characteristics: Student or young professional, not less than $30,000 income coming from parents or work.
-Social characteristics: Middle and upper-middle class.
-Geographical area: North America, Australia, Northern Europe.
-Special interests: Sport like and sea like.
You just have to Think in order to define your customer profile: Of course, he is a young man. He has good money because you cannot afford to buy a fun board when you are short for your daily living. So, you can expect that he comes from developed countries. Obviously, he likes sports and sea very much.
Why do you need all these characteristics? The response is that you need the larger information to channel effectively your advertisement: For example, the fact to know where he is located will conduct you to advertise mainly in english and in sportsmen newspapers.
You can start by defining your ideal customer and list all characteristics you will expect in this profile:
-Business to consumer: The main characteristics are quite unlimited: Geographic area, age, sex, income, level of study, employment and so on. So keep close to your benefit analysis and just list the characteristics that correspond to the benefits you offer: If you sell bathing suit, you will not care for people living in north pole. If you sell fur clothes, do not loose your time with the characteristics of people living in Central Africa!
-Business to business: The main characteristics are the company size, the products or services, the level of technology, the turnover, the staff number, the location and so on.
You must describe the required customer profile according to your product or service
Example: What's the customer profile for fun board
-Demographic characteristics: 15 to 25 years old, male, healthy
-Economic characteristics: Student or young professional, not less than $30,000 income coming from parents or work.
-Social characteristics: Middle and upper-middle class.
-Geographical area: North America, Australia, Northern Europe.
-Special interests: Sport like and sea like.
You just have to Think in order to define your customer profile: Of course, he is a young man. He has good money because you cannot afford to buy a fun board when you are short for your daily living. So, you can expect that he comes from developed countries. Obviously, he likes sports and sea very much.
Why do you need all these characteristics? The response is that you need the larger information to channel effectively your advertisement: For example, the fact to know where he is located will conduct you to advertise mainly in english and in sportsmen newspapers.
22-Customer buying process
According to your customer profile, you have to focus on the customer buying process. It is not the same thing to buy a candy, a car or a real estate. You have to emphasize on the following aspects. I call it the DTHP process:
-Who is the decision making person? In business to business, the purchaser may be a top ranking executive: The more hierarchical levels involved, the more difficult the sale.
In business to consumer, the buying process could imply on person or the entire family. The same observation applies: The more individuals or groups involved, the more difficult the sale.
-At what time or period, does he buy? Consider frequency and regularity of the purchases. Some business follow seasoning periods such as the toys, the bathing suit. This period can be short: For example, the selling of flowers on sunday, or the clothes during the discount periods.
-How does he buy: The buying decision includes the following process:
-The customer becomes aware of a need: The need could originate from an impulse (candy) or from a recognized deficiency (such as a refrigerator)
-The customer begins to explore how meeting the need: He reads newspapers, yellow pages, and so on. It is very important to know how does he explore to target advertisement channels.
-According to the need and his income, the customer refines the buying criteria and defines a budget.
-He narrows the field of his choice in comparing quality/price ratio. He could need physical touch or face to face interaction such as a test drive.
-Finally he closes the sales. In many process, he needs to be helped by a salesman!
How does he pay: Does he use cash, check, or credit card? Does he ask for times payment? Does he need a loan? If you could link some financial services to your product, such as times payments, it should give you a high advantage especially for expensive items.
According to your customer profile, you have to focus on the customer buying process. It is not the same thing to buy a candy, a car or a real estate. You have to emphasize on the following aspects. I call it the DTHP process:
-Who is the decision making person? In business to business, the purchaser may be a top ranking executive: The more hierarchical levels involved, the more difficult the sale.
In business to consumer, the buying process could imply on person or the entire family. The same observation applies: The more individuals or groups involved, the more difficult the sale.
-At what time or period, does he buy? Consider frequency and regularity of the purchases. Some business follow seasoning periods such as the toys, the bathing suit. This period can be short: For example, the selling of flowers on sunday, or the clothes during the discount periods.
-How does he buy: The buying decision includes the following process:
-The customer becomes aware of a need: The need could originate from an impulse (candy) or from a recognized deficiency (such as a refrigerator)
-The customer begins to explore how meeting the need: He reads newspapers, yellow pages, and so on. It is very important to know how does he explore to target advertisement channels.
-According to the need and his income, the customer refines the buying criteria and defines a budget.
-He narrows the field of his choice in comparing quality/price ratio. He could need physical touch or face to face interaction such as a test drive.
-Finally he closes the sales. In many process, he needs to be helped by a salesman!
How does he pay: Does he use cash, check, or credit card? Does he ask for times payment? Does he need a loan? If you could link some financial services to your product, such as times payments, it should give you a high advantage especially for expensive items.
External readings:
The decision making process is simple for a soda, more complicated for a car: Click on: http://www.smartcarguide.com/. This reading will show you that the buying process for a car implies twenty different steps!
Click also on: ecommerce.vanderbilt.edu then click on "student project", then on "filing the gap in online retailing" and finally on "buying process". This reading compares the buying process in physical world and on line, for books, clothes, flowers, and cars. As you could see, there is a gap in the on line buying process because the customer does not get any physical touch.
The best way to get information about the buying process of your product is to talk with the retailers. You don't need a questionnaire or a customer form. Take it easy: just talk with people in an informal way, have chat about the weather, and ask some short questions to collect right information's.
3-MARKET CUSTOMER
You do not intend to sell to only one person. So knowing the customer profile, you have now to group all the persons sharing the same profile: It is your market customer
Definition: A market is a group of customers ( or prospects ) sharing the characteristics which cope with the benefits offered by your product or service.
Example:
-There is a group of persons eager to travel: there is the tourist market.
-There is a group of persons who use car. There is the car market.
Then we have to separate undifferentiated markets and market segments.
The decision making process is simple for a soda, more complicated for a car: Click on: http://www.smartcarguide.com/. This reading will show you that the buying process for a car implies twenty different steps!
Click also on: ecommerce.vanderbilt.edu then click on "student project", then on "filing the gap in online retailing" and finally on "buying process". This reading compares the buying process in physical world and on line, for books, clothes, flowers, and cars. As you could see, there is a gap in the on line buying process because the customer does not get any physical touch.
The best way to get information about the buying process of your product is to talk with the retailers. You don't need a questionnaire or a customer form. Take it easy: just talk with people in an informal way, have chat about the weather, and ask some short questions to collect right information's.
3-MARKET CUSTOMER
You do not intend to sell to only one person. So knowing the customer profile, you have now to group all the persons sharing the same profile: It is your market customer
Definition: A market is a group of customers ( or prospects ) sharing the characteristics which cope with the benefits offered by your product or service.
Example:
-There is a group of persons eager to travel: there is the tourist market.
-There is a group of persons who use car. There is the car market.
Then we have to separate undifferentiated markets and market segments.
31-Undifferentiated market
If your product brings benefits to everyone, you can treat the market as a whole. For example, anybody whatever his age, sex or revenue drink soda. Nevertheless, you have to take notice of the geographical area. For a retailer, the soda market is around his shop. For Coca cola, that is the entire world.
If your product brings benefits to everyone, you can treat the market as a whole. For example, anybody whatever his age, sex or revenue drink soda. Nevertheless, you have to take notice of the geographical area. For a retailer, the soda market is around his shop. For Coca cola, that is the entire world.
32-Market segments
In most cases, inside a broad market, you have to differentiate segments. It means that the market segmentation is one of the most basic concept in marketing.
-Definition: The market segmentation is the process of splitting customers within a market customer, into different groups sharing some specific characteristics.
Compare with the definition of the market customer. The important word is the adjective "specific". Among the common characteristics of your market customer, you only focus on some "specific characteristics".
Examples:
-If your project is to manage an hostel, the tourist market is your customer market but it is not very useful. The tourist market includes cruisers, hostels, tour trip, trekking and so on. Within the tourist market, you have to study the hostel market and inside this broad segment the specific one which corresponds to the benefit your hostel will offer ( Is it a five stars or a two stars hostel? is it located on sea shore or in the Rocky Mountains?)
-We have defined above the customer profile for fun board and consequently our customer market. Right now, we will focus on only one geographical characteristic. It means, for example, that we only focus on North America and inside it on USA. In doing so, we isolate a market segment within our broad market.
With a segment you can execute your advertising activities to yield your business targets. Without a segment, you risk wasting money.
Once again, three major variables are used :
- Geographic segmentations divide the market by country, region and city: It is often a good starting point to begin with a single geographical territory. Once you have completed the segmentation for it, you can test the applicability to other and larger areas.
- Demographic segmentations divide the population on measurable variables such as age, sex, income, educational level and so on,
- Psychological segmentation is often quite difficult and needs costly surveys.
In most cases, inside a broad market, you have to differentiate segments. It means that the market segmentation is one of the most basic concept in marketing.
-Definition: The market segmentation is the process of splitting customers within a market customer, into different groups sharing some specific characteristics.
Compare with the definition of the market customer. The important word is the adjective "specific". Among the common characteristics of your market customer, you only focus on some "specific characteristics".
Examples:
-If your project is to manage an hostel, the tourist market is your customer market but it is not very useful. The tourist market includes cruisers, hostels, tour trip, trekking and so on. Within the tourist market, you have to study the hostel market and inside this broad segment the specific one which corresponds to the benefit your hostel will offer ( Is it a five stars or a two stars hostel? is it located on sea shore or in the Rocky Mountains?)
-We have defined above the customer profile for fun board and consequently our customer market. Right now, we will focus on only one geographical characteristic. It means, for example, that we only focus on North America and inside it on USA. In doing so, we isolate a market segment within our broad market.
With a segment you can execute your advertising activities to yield your business targets. Without a segment, you risk wasting money.
Once again, three major variables are used :
- Geographic segmentations divide the market by country, region and city: It is often a good starting point to begin with a single geographical territory. Once you have completed the segmentation for it, you can test the applicability to other and larger areas.
- Demographic segmentations divide the population on measurable variables such as age, sex, income, educational level and so on,
- Psychological segmentation is often quite difficult and needs costly surveys.
External readings:
The next reading shows a list of detailed criteria currently used: Click on http://www.businessplans.org/ . Click on "business planning resources" and then on "segmentation". You will find here many ideas about possible criteria. Some of them could apply to your product. In using them, you will be able to narrow your segment.
Anyway, each segment must be:
-Homogeneous: It's the first quality required for a segment. It means that a segment must be clearly different to others segments in the same broad market. For example, a segment having people income ranking from $20,000 to $200,000 is not homogeneous and worthless for a marketing strategy.
-Consistent: If your segment counts only three prospects, and except you sell nuclear plant, it's not enough to develop sales and profits. A segment must count a large number of prospects.
The factors which can influence the size of the segment are the increase in population, the situation of employment and the changes in income, the supply of resources, the evolution of laws, the consumer tastes and preferences and notably the fads.
-Profitable: A segment must generate profit. It means that the prospects in the segment have a sufficient income with regard of the product price. If you sell luxurious car, it's not very smart to isolate a segment which only contains deprived people!
-Executable: It means that you can reach the segment through advertising, sales force, distribution. It is worthless to isolate a segment if you are unable to join the people who are inside it. For example, there is certainly a consistent segment for fun board in China but If you do not speak chinese, you will never make a dollar with it.
From a practical point of view, your first task is to evaluate the size of the segment. Easy to say but it's a real hurdle, because you have to calculate the entire sales volumes of all the suppliers in the segment. It means that you should add all the turnovers of the competitors existing in this segment. How could you manage that in the specific case of our fun boards?
The next reading shows a list of detailed criteria currently used: Click on http://www.businessplans.org/ . Click on "business planning resources" and then on "segmentation". You will find here many ideas about possible criteria. Some of them could apply to your product. In using them, you will be able to narrow your segment.
Anyway, each segment must be:
-Homogeneous: It's the first quality required for a segment. It means that a segment must be clearly different to others segments in the same broad market. For example, a segment having people income ranking from $20,000 to $200,000 is not homogeneous and worthless for a marketing strategy.
-Consistent: If your segment counts only three prospects, and except you sell nuclear plant, it's not enough to develop sales and profits. A segment must count a large number of prospects.
The factors which can influence the size of the segment are the increase in population, the situation of employment and the changes in income, the supply of resources, the evolution of laws, the consumer tastes and preferences and notably the fads.
-Profitable: A segment must generate profit. It means that the prospects in the segment have a sufficient income with regard of the product price. If you sell luxurious car, it's not very smart to isolate a segment which only contains deprived people!
-Executable: It means that you can reach the segment through advertising, sales force, distribution. It is worthless to isolate a segment if you are unable to join the people who are inside it. For example, there is certainly a consistent segment for fun board in China but If you do not speak chinese, you will never make a dollar with it.
From a practical point of view, your first task is to evaluate the size of the segment. Easy to say but it's a real hurdle, because you have to calculate the entire sales volumes of all the suppliers in the segment. It means that you should add all the turnovers of the competitors existing in this segment. How could you manage that in the specific case of our fun boards?
Down-earth advice:
With chambers of commerce, producer associations, and so on, you can know how many cars, how many tons of cotton, rice, crude oil and so on, have been produced and imported in the US, and consequently consumed. By the same way, you can know the global amount in $ of the sport sales in the USA by year 2002
Let's suppose that your own segment is in Arizona. First you do the following calculations:
Total sales USA*Arizona population/ US population=Arizona sales
You know the amount of sport stuff sold in Arizona by 2002. Now, you will meet in your area three big retailers selling sport articles and you should just ask them one question: When you are selling $10,000, what is the percentage of fun boards? Suppose they answer one fifth ($2000). Then you have just the calculate:
Sport articles sales in Arizona/5= Estimated fun board sales in Arizona.
You have the total sales of fun board in Arizona. Now, evaluate the average price of a fun board ( just visit a lot of shops and quote the prices) and divide the sales volume by the average price:
Fun board sales in Arizona/ average price= number of fun board sold.
You were in the dark at the beginning and now you know the estimated numbers of fun board sold in Arizona by 2002! These calculations look rough but do not worry. By experience, I know that the consulting group which are charging heavy fees just proceed like that!
Be very serious about stats: Too often, people do not like too much the figures and only trust their intuition. In this matter, intuition appears often to be wrong.
With chambers of commerce, producer associations, and so on, you can know how many cars, how many tons of cotton, rice, crude oil and so on, have been produced and imported in the US, and consequently consumed. By the same way, you can know the global amount in $ of the sport sales in the USA by year 2002
Let's suppose that your own segment is in Arizona. First you do the following calculations:
Total sales USA*Arizona population/ US population=Arizona sales
You know the amount of sport stuff sold in Arizona by 2002. Now, you will meet in your area three big retailers selling sport articles and you should just ask them one question: When you are selling $10,000, what is the percentage of fun boards? Suppose they answer one fifth ($2000). Then you have just the calculate:
Sport articles sales in Arizona/5= Estimated fun board sales in Arizona.
You have the total sales of fun board in Arizona. Now, evaluate the average price of a fun board ( just visit a lot of shops and quote the prices) and divide the sales volume by the average price:
Fun board sales in Arizona/ average price= number of fun board sold.
You were in the dark at the beginning and now you know the estimated numbers of fun board sold in Arizona by 2002! These calculations look rough but do not worry. By experience, I know that the consulting group which are charging heavy fees just proceed like that!
Be very serious about stats: Too often, people do not like too much the figures and only trust their intuition. In this matter, intuition appears often to be wrong.
Real life example:
In the sixties, an European consulting group decided to study the world milk market. Most of the top executives were convinced that the market was made up with crude milk in bottle and concentrated milk in can. At this time, the European were not familiar with powder milk.
In charge of this study, I scrutinized the import and export stats of about 120 countries. It was not a cool job! In reward, I discovered that the world market was made up of powder milk by 80%!
The executives who had trust their intuition were quite astonished by these results!
When you get a homogeneous, consistent,profitable and executable segment, it means that you have a marketable product.
External readings:
For example, the next site shows how these concepts are applied to the agricultural sector: www.gov.mb.ca/agriculture/financial/agribus/agribusiness.html . Go to Manitoba! Click on "new product development" and read "sections 1, 2 and 3".
In the sixties, an European consulting group decided to study the world milk market. Most of the top executives were convinced that the market was made up with crude milk in bottle and concentrated milk in can. At this time, the European were not familiar with powder milk.
In charge of this study, I scrutinized the import and export stats of about 120 countries. It was not a cool job! In reward, I discovered that the world market was made up of powder milk by 80%!
The executives who had trust their intuition were quite astonished by these results!
When you get a homogeneous, consistent,profitable and executable segment, it means that you have a marketable product.
External readings:
For example, the next site shows how these concepts are applied to the agricultural sector: www.gov.mb.ca/agriculture/financial/agribus/agribusiness.html . Go to Manitoba! Click on "new product development" and read "sections 1, 2 and 3".
33-Cluster analysis
To target your customers, you can split the segment into little groups according to a multi-criteria approach:
Example: With our fun board market, we have defined a market segment in Arizona. Now, we shall split this segment in clusters, according to new criteria's: People who focus on price, people who had subscribed life insurance, people who only buy from well known brand.
External reading:
To see the methods used, look at: http://www.sdrnet.com/ and click on "analytical services" and then on "market segmentation".
As data do not give answers about such characteristics, you can create a sample. It's a little group of persons that represent all the characteristics of a larger population. It may be created with friends, relations, chambers of commerce and so on. You must be sure that it is really representative of your whole segment.
When your sample is established, send to each person a short questionnaire. Ask questions that produce answers and only focus on the important topics: four or five questions; no more! Test your questionnaire before to field it.
Thanks to the internet, some consulting groups suggest to split the cluster into individuals. Nevertheless, this ultimate approach raises some problems.
In short, the advanced marketing segmentation looks like the precision guided munitions! I am quite cautious about it, because it needs complex computer software, pool opinions, sample analysis and high fees charged by consulting groups. It 's good for big corporate's that can afford it.
Anyway, remember that the market segmentation is a compulsory step to define a marketable product. Keep also in mind that only marketable products make money. This point must be underlined
Lesson summary:
A product or a service must bring a benefit to the customer. The customer benefit may be functional and psychological. It may represent a low or a high involvement.
The best benefit gathers both functional, psychological and high involvement features. Any benefit analysis must be conduct both for the user and the purchaser.
The customer profile is deduced of the customer benefit. A market gathers the customers who share the same profile and who could benefit from the product.
A market segment focuses on some specific characteristics of the customer profile. It must be homogeneous, consistent, profitable and executable.
DO IT YOURSELF:
1-You have now to establish for your own business project:
-Your Customer benefit
-Your Customer profile
-Your Market customer
-Your Segment market
Please, follow the logical process you have just learnt: It means that if your customer profile is a young man, your segment can't include a grand mother! Starting with a broad approach, you will more and more focus on your target!
Useful link:
To perform this job, you will need a lot of data. They are mainly available on the web. So search it by yourself in using keywords. For example, you can use the census web site: www.census.gov
2-Put this analysis in your business plan
Open your plan ware folders and put the analysis under the chapter " Marketing"
Remember that without this analysis you have no hope to succeed in your future business!
To target your customers, you can split the segment into little groups according to a multi-criteria approach:
Example: With our fun board market, we have defined a market segment in Arizona. Now, we shall split this segment in clusters, according to new criteria's: People who focus on price, people who had subscribed life insurance, people who only buy from well known brand.
External reading:
To see the methods used, look at: http://www.sdrnet.com/ and click on "analytical services" and then on "market segmentation".
As data do not give answers about such characteristics, you can create a sample. It's a little group of persons that represent all the characteristics of a larger population. It may be created with friends, relations, chambers of commerce and so on. You must be sure that it is really representative of your whole segment.
When your sample is established, send to each person a short questionnaire. Ask questions that produce answers and only focus on the important topics: four or five questions; no more! Test your questionnaire before to field it.
Thanks to the internet, some consulting groups suggest to split the cluster into individuals. Nevertheless, this ultimate approach raises some problems.
In short, the advanced marketing segmentation looks like the precision guided munitions! I am quite cautious about it, because it needs complex computer software, pool opinions, sample analysis and high fees charged by consulting groups. It 's good for big corporate's that can afford it.
Anyway, remember that the market segmentation is a compulsory step to define a marketable product. Keep also in mind that only marketable products make money. This point must be underlined
Lesson summary:
A product or a service must bring a benefit to the customer. The customer benefit may be functional and psychological. It may represent a low or a high involvement.
The best benefit gathers both functional, psychological and high involvement features. Any benefit analysis must be conduct both for the user and the purchaser.
The customer profile is deduced of the customer benefit. A market gathers the customers who share the same profile and who could benefit from the product.
A market segment focuses on some specific characteristics of the customer profile. It must be homogeneous, consistent, profitable and executable.
DO IT YOURSELF:
1-You have now to establish for your own business project:
-Your Customer benefit
-Your Customer profile
-Your Market customer
-Your Segment market
Please, follow the logical process you have just learnt: It means that if your customer profile is a young man, your segment can't include a grand mother! Starting with a broad approach, you will more and more focus on your target!
Useful link:
To perform this job, you will need a lot of data. They are mainly available on the web. So search it by yourself in using keywords. For example, you can use the census web site: www.census.gov
2-Put this analysis in your business plan
Open your plan ware folders and put the analysis under the chapter " Marketing"
Remember that without this analysis you have no hope to succeed in your future business!
AUTHOR Click on Contact
Friday, September 4, 2009
DRM Club General Meeting, July Session 2009
This announcement is for every DRM student
Please be infromed that the DRM Club General Meeting is on:
Date : 8 September 2009
Day : Tuesday
Time: 9.00 a.m
Venue: M202
Attendance is compulsory and Semester 1 students may attend at 940 a.m after the test.
Hail to Our New Head of DRM Program
Let it known to all that Mrs. Rosmanizah binti Derahman is now the Head of DRM Program. So, any matters regarding classes or welfare of DRM students, please come and see her.Wednesday, September 2, 2009
Congratulations to Our Students
Anugerah Ketua Jabatan Recipients July 2009 Session
These are the 21 out of 31 students of DRM5 July Session 2009, which means 67.7% received the acknowledgement of maintaining the GPA of 3.5 and above.
Congratulations and may this occassion be an example for all DRM students at PUO
Declaration of Chapter 2 Notes for P4723 Fashion Merchandising
Let it be known to everyone that the notes in the previous blog post entitled P4723-Fashion Merchandising; CHAPTER 2 - ORGANIZATIONAL STRUCTURE is not a product of the blogger. The blogger found it usable as notes for the course and cite the sites which the notes were from as below
The original authors for the notes are
1. Notes from Wikipedia (http://en.wikipedia.org/wiki/Organizational_structure) and
2. Shari Waters from About.com
The original authors for the notes are
1. Notes from Wikipedia (http://en.wikipedia.org/wiki/Organizational_structure) and
2. Shari Waters from About.com
Tuesday, September 1, 2009
DRM5 - P4723 Fashion Merchandising
CHAPTER 2: ORGANIZATIONAL STRUCTURE
This chapter introduces and explains to the students about the organizational structures and organization charts of fashion retailing. This topic also covers on the needs and importance of organizational structures.
This chapter introduces and explains to the students about the organizational structures and organization charts of fashion retailing. This topic also covers on the needs and importance of organizational structures.
Objectives:
Understand the structure and chart of a fashion retailing organization.
1. The needs for organizational structures.
2. Organization charts on fashion retailing.
1. The Need for Organizational Structures
Notes from Wikipedia (http://en.wikipedia.org/wiki/Organizational_structure)
Understand the structure and chart of a fashion retailing organization.
1. The needs for organizational structures.
2. Organization charts on fashion retailing.
1. The Need for Organizational Structures
Notes from Wikipedia (http://en.wikipedia.org/wiki/Organizational_structure)
Contents
1 Operational organizations and Informal organizations
2 Success factors
3 History
3.1 Organizational Structure Types
3.1.1 Pre-bureaucratic structures
3.1.2 Bureaucratic structures
3.1.3 Post-Bureaucratic
3.1.4 Functional Structure
3.1.5 Divisional Structure
3.1.6 Matrix Structure
3.2 Organizational Circle: Moving back to flat
3.3 Team
3.4 Network
3.5 Boundaryless structure
3.5.1 Virtual
4 See also
5 References
1 Operational organizations and Informal organizations
2 Success factors
3 History
3.1 Organizational Structure Types
3.1.1 Pre-bureaucratic structures
3.1.2 Bureaucratic structures
3.1.3 Post-Bureaucratic
3.1.4 Functional Structure
3.1.5 Divisional Structure
3.1.6 Matrix Structure
3.2 Organizational Circle: Moving back to flat
3.3 Team
3.4 Network
3.5 Boundaryless structure
3.5.1 Virtual
4 See also
5 References
Operational organizations and Informal organizations
The set organizational structure may not coincide with facts, evolving in operational action. Such divergence decreases performance, when growing. E.g. a wrong organizational structure may hamper cooperation and thus hinder the completion of orders in due time and within limits of resources and budgets. Organizational structures shall be adaptive to process requirements, aiming to optimize the ratio of effort and input to output.
An effective organizational structure shall facilitate working relationships between various entities in the organization and may improve the working efficiency within the organizational units. Organization shall retain a set order and control to enable monitoring the processes. Organization shall support command for coping with a mix of orders and a change of conditions while performing work. Organization shall allow for application of individual skills to enable high flexibility and apply creativity. When a business expands, the chain of command will lengthen and the spans of control will widen. When an organization comes to age, the flexibility will decrease and the creativity will fatigue. Therefore organizational structures shall be altered from time to time to enable recovery. If such alteration is prevented internally, the final escape is to turn down the organization to prepare for a re-launch in an entirely new set up.
The set organizational structure may not coincide with facts, evolving in operational action. Such divergence decreases performance, when growing. E.g. a wrong organizational structure may hamper cooperation and thus hinder the completion of orders in due time and within limits of resources and budgets. Organizational structures shall be adaptive to process requirements, aiming to optimize the ratio of effort and input to output.
An effective organizational structure shall facilitate working relationships between various entities in the organization and may improve the working efficiency within the organizational units. Organization shall retain a set order and control to enable monitoring the processes. Organization shall support command for coping with a mix of orders and a change of conditions while performing work. Organization shall allow for application of individual skills to enable high flexibility and apply creativity. When a business expands, the chain of command will lengthen and the spans of control will widen. When an organization comes to age, the flexibility will decrease and the creativity will fatigue. Therefore organizational structures shall be altered from time to time to enable recovery. If such alteration is prevented internally, the final escape is to turn down the organization to prepare for a re-launch in an entirely new set up.
Success factors
Common success criteria for organizational structures are:
Decentralized reporting
Flat hierarchy
High transient speed
High transparency
Low residual mass
Permanent monitoring
Rapid response
Shared reliability
Matrix hierarchy
Common success criteria for organizational structures are:
Decentralized reporting
Flat hierarchy
High transient speed
High transparency
Low residual mass
Permanent monitoring
Rapid response
Shared reliability
Matrix hierarchy
History
Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.
Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today's post-industrial structures.
Organizational Structure Types
- Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is most common in smaller organizations and is best used to solve simple tasks. The structure is totally centralized. The strategic leader makes all key decisions and most communication is done by one on one conversations. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development.
They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority. - Bureaucratic structures
Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations. They usually adopt a tall structure. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker[1] distinction between mechanistic and organic structures. - Post-Bureaucratic
The term of post bureaucratic is used in two senses in the organizational literature: one generic and one much more specific [2]. In the generic sense the term post bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's ideal type Bureaucracy. This may include Total Quality Management, Culture Management and the Matrix Organization amongst others. None of these however has left behind the core tenets of Bureaucracy. Hierarchies still exist, authority is still Weber's rational, legal type, and the organisation is still rule bound. Heckscher, arguing along these lines, describes them as cleaned up bureaucracies [3], rather than a fundamental shift away from bureaucracy. Gideon Kunda, in his classic study of culture management at 'Tech' argued that 'the essence of bureaucratic control - the formalisation, codification and enforcement of rules and regulations - does not change in principle.....it shifts focus from organizational structure to the organization's culture'.
Another smaller group of theorists have developed the theory of the Post-Bureaucratic Organization. [4], provide a detailed discussion which attempts to describe an organization that is fundamentally not bureaucratic. Charles Heckscher has developed an ideal type Post-Bureaucratic Organization in which decisions are based on dialogue and consensus rather than authority and command, the organization is a network rather than a hierarchy, open at the boundaries (in direct contrast to culture management); there is an emphasis on meta-decision making rules rather than decision making rules. This sort of horizontal decision making by consensus model is often used in Housing cooperatives, other Cooperatives and when running a non-profit or Community organization. It is used in order to encourage participation and help to empower people who normally experience Oppression in groups.
Still other theorists are developing a resurgence of interest in Complexity Theory and Organizations, and have focused on how simple structures can be used to engender organizational adaptations. For instance, Miner and colleagues (2000) studied how simple structures could be used to generate improvisational outcomes in product development. Their study makes links to simple structures and improviseal learning. Other scholars such as Jan Rivkin and Sigglekow[5], and Nelson Repenning [6] revive an older interest in how structure and strategy relate in dynamic environments. - Functional Structure
In a functional structure, the division of labor in an organization is grouped by the main activities or functions that need to be performed within the organization -- sales, marketing, human resources, and so on. Each functional group within the organization is vertically integrated from the bottom to the top of the organization. For example, a Vice President of Marketing would lead all the marketing people, grouped into the marketing department.
Employees within the functional divisions of an organization tend to perform a specialized set of tasks, for instance the engineering department would be staffed only with engineers. This leads to operational efficiencies within that group. However it could also lead to a lack of communication between the functional groups within an organization, making the organization slow and inflexible.
As a whole, a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. Coordination and specialization of tasks are centralized in a functional structure, which makes producing a limited amount of products or services efficient and predictable. Moreover, efficiencies can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost [7]. For instance, a small business could start making the components it requires for production of its products instead of procuring it from an external organization. - Divisional Structure
Also called a "Product Structure", the divisional structure groups each organizational function into a divisions. Each division within a divisional structure contains all the necessary resources and functions within it. For example, an automobile company with a divisional structure might have one division for SUVs, another division for subcompact cars, and another division for sedans. Each division would have its own sales, engineering and marketing departments. - Matrix Structure
Matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. An example would be a company that produces two products, "product a" and "product b". Using the matrix structure, this company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. Matrix structure is the most complex of the different organizational structures. - Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross- functional aspects of the project. The functional managers maintain control over their resources and project areas.
Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared equally between the project manager and the functional managers. It brings the best aspects of functional and projectized organizations. However, this is the most difficult system to maintain as the sharing power is delicate proposition.
Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers provide technical expertise and assign resources as needed.
Among these matrixes, there is no best format; implementation success always depends on organisation's purpose and function.
Organizational Circle: Moving back to flat
The flat structure is common in enterprenerial start-ups, university spin offs or small companies in general. As the company grows, however, it becomes more complex and hierarchical, which leads to an expanded structure, with more levels and departments.
Often, it would result in bureaucracy, the most prevalent structure in the past. It is still, however, relevant in former Soviet Republics and China, as well as in most governmental organizations all over the world. Shell Group used to represent the typical bureaucracy: top-heavy and hierarchical. It featured multiple levels of command and duplicate service companies existing in different regions. All this made Shell apprehensive to market changes [8], leading to its incapacity to grow and develop further. The failure of this structure became the main reason for the company restructuring into a matrix.
Starbucks is one of the numerous large organizations that successfully developed the matrix structure supporting their focused strategy. Its design combines functional and product based divisions, with employees reporting to two heads [9]. Creating a team spirit, the company empowers employees to make their own decisions and train them to develop both hard and soft skills. That makes Starbucks one of the best at customer service.
Some experts also mention the multinational design [10], common in global companies, such as Procter & Gamble, Toyota and Unilever. This structure can be seen as a complex form of the matrix, as it maintains coordination among products, functions and geographic areas.
In general, over the last decade, it has become increasingly clear that through the forces of globalization, competition and more demanding customers, the structure of many companies has become flatter, less hierarchical, more fluid and even virtual. [11]
Team
One of the newest organizational structures developed in the 20th century is team. In small businesses, the team structure can define the entire organization [12]. Teams can be both horizontal and vertical. [13] While an organisation is constituted as a set of people who, together, synergise individual competencies to achieve newer dimensions, the Quality of organizational structure revolves around the competencies of Teams in totality. [14][15] To cite an example, every one of Whole Foods Market' stores, the largest natural-foods grocer in the US developing a focused strategy, is an autonomous profit centre composed of an average of 10 self-managed teams, while team leaders in each store and each region are also a team. Larger bureaucratic organisations can benefit from the flexibility of teams as well. Xerox, Motorola, and DaimlerChrysler are all among the companies that actively use teams to perform tasks.
Network
Another modern structure is network. While business giants risk becoming too clumsy to proact, act and react efficiently [16], the new network organisations contract out any business function, that can be done better or more cheaply. In essence, managers in network structures spend most of their time coordinating and controlling external relations, usually by electronic means. H&M's is outsourcing its clothing to a network of 700 suppliers, more than two-thirds of which are based in low-cost Asian countries. Not owning any factories, H&M can be more flexible than many other retailers in lowering its costs, which aligns with its low-cost strategy[17]. The potential management opportunities offered by recent advances in complex networks theory have been demonstrated [18] including applications to product design and development [19], and innovation problem in markets and industries [20].
Boundaryless structure
The most radical concept in today's organisational design is the concept of 'boundarylessness', which seeks to overcome traditional boundaries between layers of management (vertical), functional areas (horizontal), as well as geographic boundaries. Some claim the boundaryless structure is a combination of team and network structures, with the addition of temporariness [21]. Ikea, the world's largest furniture manufacture, has been successful in implementing the boundaryless structure.The company works closely with suppliers by providing technical assistance, leasing them equipment, and giving advice. It also refined the role of the customer, putting responsibility on them to cart the furniture home and assemble it themselves. As a result, the company can offer lower prices [22], which supports its low-cost focused strategy.
- Virtual
A special form of boundaryless organisation is virtual. It works in a network of external alliances, using the Internet. This means while the core of the organisation can be small but still the company can operate globally be a market leader in its niche. According to Anderson, because of the unlimited shelf space of the Web, the cost of reaching niche goods is falling dramatically. Although none sell in huge numbers, there are so many niche products that collectively they make a significant profit, and that is what made highly innovative Amazon.com so successful [23].
As we can see, organizations develop, modify and change their structures so that they align with their strategies. And the main trend for the last decades seems to be coming back to flatter structures. Although this structure seems suitable for small companies only, large organizations can take elements of it in harder times. Being at risk of losing profits or even going bankrupt due to the major financial downturn today, a lot of companies are moving to flatter structures [24]. Not only are they unable to maintain multiple management levels any more, they are also in need of a more flexible structure to cope with new threats.
The sources [14] and [15] listed for this section are no longer valid.
References
^ Burns, T. and G. Stalker. (1961) The Management of Innovation. London: Tavistock.
^ Grey C., Garsten C., 2001, Trust, Control and Post-Bureaucracy, Sage Publishing)
^ Heckscher C. (Editor), Donnellon A. (Editor), 1994, The Post-Bureaucratic Organization: New Perspectives on Organizational Change, Sage Publications
^ Heckscher C. (Editor), Donnellon A. (Editor), 1994, The Post-Bureaucratic Organization: New Perspectives on Organizational Change, Sage Publications
^ Nicolaj Sigglekow and Jan W. Rivkin, October 2003, Speed, Search and the Failure of Simple Contingency, No. 04-019
^ Repenning, N. (2002). A Simulation-Based Approach to Understanding the Dynamics of Innovation Implementation. Organization Science, 13, 2: 109-127.
^ Raymond E. Miles, Charles C. Snow, Causes of Failure in Network Organizations, California Management Review, Summer 1992
^ Grant, R.M. (2008). History of the Royal Dutch/Shell Group. Available at: http://www.blackwellpublishing.com/grant/docs/07Shell.pdf (accessed 20/10/08)
^ (Starbucks.com (2008). Starbucks Coffee International. Available at: http://www.starbucks.com/aboutus/international.asp (accessed 20/10/08))
^ Robbins, S.F., Judge, T.A. (2007). Organizational Behaviour. 12th edition. Pearson Education Inc., p. 551-557.
^ Gratton, L. (2004). The Democratic Enterprise, Financial Times Prentice Hall, pp. xii-xiv.
^ Robbins, S.F., Judge, T.A. (2007). Organizational Behaviour. 12th edition. Pearson Education Inc., p. 551-557.
^ Thareja P(2008), "Total Quality Organization Thru’ People,Each one is Capable",FOUNDRY, Vol. XX, No. 4, July/Aug 2008
^ http://www.foundry-planet.com/detailview-technical-reports.html?&L=09917&tx_ttnews[tt_news]=3516&tx_ttnews[backPid]=85&cHash=6e30c4a05e
^ http://www.thareja.com/2008/11/03/is-each-one-capable/
^ Gummesson, E. (2002). Total Marketing Control. Butterworth-Heinemann, p. 266.
^ Capell, K. H&M Defies Retail Gloom. Available at: http://www.businessweek.com/globalbiz/content/sep2008/gb2008093_150758.htm (accessed 20/10/08).
^ Amaral, L.A.N. and B. Uzzi. (2007) Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems. Management Science, 53, 7: 1033–1035.
^ Braha, D. and Y. Bar-Yam. (2007) The Statistical Mechanics of Complex Product Development: Empirical and Analytical Results. Management Science, 53, 7: 1127–1145.
^ Kogut, B., P. Urso, and G. Walker. (2007) Emergent Properties of a New Financial Market: American Venture Capital Syndication, 1960–2005. Management Science, 53, 7: 1181-1198.
^ Pang, L. (2002). Flat and Boundaryless Structures. Available at: http://mysite.verizon.net/lpang10473/web/ldc_flat.htm (accessed 07 Aug 09).
^ Pang, L. (2002). Flat and Boundaryless Structures. Available at: http://mysite.verizon.net/lpang10473/web/ldc_flat.htm (accessed 07 Aug 09).
^ Anderson, C. (2007). The Long Tail. Random House Business Books, pp. 23, 53.
^ Ramienski, D. (2008). Looking For a Holistic Approach. Available at: http://www.federalnewsradio.com/?nid=169&sid=1377323 accessed 20/10/08)
Retrieved from "http://en.wikipedia.org/wiki/Organizational_structure"
2. Retail Store Organization
Structuring Your Business
By Shari Waters, About.com
The organizational structure of a retail store will vary by the size and type of the business. Most tasks involved with operating a retail business will be the same. However, small or independent retail stores may combine many sectors together under one division, while larger stores create various divisions for each particular function along with many layers of management.
For example, the small specialty shop may have all of its employees under one category called Store Operations. A large department store may have a complete staff consisting of a manager, assistant manager and sales associates for its Sporting Goods department, Home and Garden, Bed and Bath, and each additional department.
In order to define the store's organization, start by specifying all tasks that need to be performed. Then divide those responsibilities among various individuals or channels. Group and classify each task into a job with a title and description. The final step is to develop an organizational chart.
Retailing Structure
The following is a brief outline of some of the divisions in a retail organization.
1. Owner/CEO or President
2. Store Operations: Management, Cashier, Sales, Receiving, Loss Prevention
3. Marketing: Visual Displays, Public Relations, Promotions
4. Merchandising: Planning, Buying, Inventory Control
5. Human Relations: Personnel, Training
6. Finance: Accounting, Credit
7. Technology: Information Technology
MANAGEMENT: As the store grows and the retail business evolves, the dynamics of the organization's structure will change too. Therefore it is paramount to redesign the store's organizational chart to support the decision-making, collaboration and leadership capabilities that are essential during and after a growth period.
The function of the store manager is to oversee the daily operations of a retail store.
Key Responsibilities: Store managers work towards meeting personal and location sales metrics and customer satisfaction standards by maximizing the customer's experience. He/she manages all phases of store operations to ensure maximum sales and profitability. Retail store managers focus on key business initiatives, store presentation, marketing execution, inventory management, loss prevention, payroll management, risk management, and daily operational cost control.
Summary of Experience: Must be organized with attention to detail and proven follow-up skills. Store managers should posses the ability to manage multiple priorities with demonstrated management skills to include; coaching, training, recruiting and communication.
Education Required: As with most retail positions, a high school diploma or GED is usually the only education requirement. College degree in business, or a closely related field, may substitute for a portion of the required experience. Supervisory experiences in a retail environment a plus.
Compensation: Base salary will vary with store's sales volume and location. Compensation ranges from around $25,000 to $50,000. Store managers are usually offered benefit packages and may receive bonuses based on sales performance.
VISUAL MERCHANDISER: The function of the visual merchandiser is to create an inviting, visually appealing environment for the customer's shopping pleasure.
Key Responsibilities: Visual merchandisers will have knowledge of colors, patterns and floor-sets. Their job is to communicate with store managers to work out the floor layout and display points, as well as how and what items are to be displayed. Window designs, internal displays and other merchandising of promotional events to entice the customer to buy may be required. Visual merchandisers will be responsible for using appropriate lighting for the best presentation possible, arranging signage and coordinating the take down of displays after promotion.
Summary of Experience: Previous retail experience and good physical condition is a must. Visual merchandisers will be highly creative, enthusiastic and have a natural finesse for color, balance and composition. A strong understanding of current market trends and innovative visual approaches are extremely helpful.
Education Required: As with most retail positions, a high school diploma or GED is the only education requirement. College degree in business, or a closely related field, may substitute for a portion of the required experience.
Compensation: Salary will vary with store sales and location. Compensation ranges from around $20,000 to $35,000. Visual merchandisers may receive medical benefits.
RETAIL BUYER: A retail buyer selects merchandise and develops product assortments to grow the business and increase market share.
Key Responsibilities: Retail buyers are responsible for developing product assortments using market trend analysis information as well as managing sales and margins. It is a multi-faceted position that includes contract negotiations, inventory management, sales planning, forecasting and close coordination with the merchandising and operations teams. Buyers will identify growth opportunities and risks in assortment, and develop contingency plans. This person will be expected to build strong vendor relations and put together solid business plans, including strong and detailed promotional programs. Some travel may be required.
Summary of Experience: Retail buyers need a sense of retail and product trends and strong analytical experience. Previous retail experience required. Buyers will have computer skills and working knowledge of resource planning and forecasting. Excellent leadership, negotiating, and planning skills also a must.
Education Required: A Bachelor's degree in retail, fashion, marketing or other related field preferred. Additional computer training may also be required.
Compensation: Salary will vary with size of operation and number of departments buying is responsible for. Compensation ranges from around $45,000 to $80,000. Buyers generally receive full benefits package, and occasionally relocation allocation.
An example of a simple organization chart for a one-person retail business.
The Buying Function: checking catalogues, finding suppliers, placing orders, receiving and stocking, seeing salespersons, taking inventory, viewing showrooms
The Selling Function: advertising, prepare inside displays, maintain store cleanliness, pricing, selling, trimming windows
The Controlling Function: cashiering, checking invoices, issuing credit, keeping records, making bank deposits, paying bills, securing loans
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