Conflicts that May Rise Within the Distribution Chain of Fashion Wholesalers - Essay Example

?Distribution and Retailing Table of Contents Table of Contents 2 0 Conflicts that May Rise Within the Distribution Chain of Fashion Wholesalers 3 1.1. Brief Overview of the Scenario 3 1.2. Rise of Conflict in Fashion Wholesalers 4 1.3. Recommended Ways of Managing Conflict 5 2.0. Retail Mix for a Start-Up Retailer 7 2.1. Overview of the Business 7 2.2. Physical Elements 7 2.3. Merchandising Management 9 2.4. Pricing 10 2.5. Promotion 11 References 13 1.0 Conflicts that May Rise Within the Distribution Chain of Fashion Wholesalers 1.1. Brief Overview of the Scenario The paper describes about the managerial issues faced by Katie Collins, the managing director of Fashion Wholesalers in relation to its distribution and retailing functions. Fashion Wholesalers is a clothing manufacturing company which principally targets women operating as the agents of UK with the networking comprising around 30 manufacturing Scandinavian and German clothing producers. It also supplies for approximately 120 small sized retailers. The products that are distributed through Fashion Wholesalers target primarily the housewives within the UK. The distribution activity of the company, i.e. Fashion Wholesalers, can be described on the following grounds. It has been observed that the buyers of Fashion Wholesalers, belonging to the age group of 30 to 60 years usually perform 4 trips for collecting the produced materials from the suppliers in the market. The process of ordering for the company is carried out in every season based on the scheduling of delivery of products by the buyers on a monthly basis. The produced products are then distributed to the warehouse located at Peterborough. The process of delivery in Fashion Wholesalers includes showrooms from where the buyers can directly make their purchases in person. Notably, the clothing products are manufactured all-round the year and the samples are distributed in all the seasons, along with the continuation of warehousing and dispatching activities. Contextually, it can be observed that the demands for the products are quite high attracting most of the targeted customers in the niche markets of retailing. It is worth mentioning in this context that most of the targeted customers depend on Fashion Wholesalers for supplying quality products at cheaper rates which has further accelerated the growth rate in the organisation. 1.2. Rise of Conflict in Fashion Wholesalers Channel conflict usually occurs if there are clashes of methods and goals between the members belonging to a channel of distribution. Notably, because the distribution channel of Fashion Wholesale is performed on the basis of multiple dimensions involving multiple layers such as the suppliers, the producers and the end users, which further continues throughout the year, there are high chances for Fashion Wholesalers to witness similar disruptions in their distribution process. Theoretically, distribution channel conflicts can be categorized into horizontal and vertical categories. Where horizontal channel conflicts signify gaps and limited cooperation among members belonging to similar level, the vertical channel conflict indicates dismissal among members belonging to different levels in the channel distribution (Jicheng, n.d). In the currently practiced distribution channel of Fashion Wholesalers, probability of both these conflicts to arise can be observed apparently. Additionally, resource scarcity can be determined as another significant aspect to cause conflicts in the channel of distribution. In the context of Fashion Wholesalers, it can be stated that owing to the complexity of the distribution channel framework, conflicts might occur among the members due to insufficiency of resources for manufacturing clothing products and/or due to their inefficiency to allocate the available resources efficiently so as to serve the retailers all around its target market in a time-efficient and cost-effective way. Moreover, if Fashion Wholesalers attempt to sell a proportion of the produced products by themselves directly to the end users, without informing the retailers and other participants in its distribution channel, a conflict may be witnessed among the involved parties (Rosenbloom, 2011). It can further be assumed that conflicts within the distribution channel might occur among various members, if there is a reduction of business because of lowering of royalty fees for Fashion Wholesalers. This would result in timely deliverance or supply of the produced products in warehouse for delivering to the customers in the market. It would hamper the organisational effectiveness to a considerable level and hamper the overall profitability largely. Lack of communication can also be considered as a significant causing factor of conflict among members engaged with the distribution channel of Fashion Wholesalers. In case, there is lack of adequate support from the franchisor in an organisation (Rosenbloom, 2011). 1.3. Recommended Ways of Managing Conflict With due consideration to the currently practiced distribution channel in Fashion Wholesalers and the probable causing factors which might give rise to a conflicting situation within its distribution channel, few measures need to be considered so as to mitigate these uncertainties. Concerning the influence of inadequate resources and inefficiency in resource allocation, it can be recommended to Fashion Wholesalers that resources are to be collected appropriately, based on firm calculations and forecasts with due regards to the aspects of Total Quality Management (TQM) which shall not only enhance the company’s competitiveness but shall also offer new potentialities to gain better productivity. The management and other staff officials are thus required to be careful in selecting appropriate distribution channel that would for organisational objectives by collecting adequate raw materials on a timely basis for manufacturing quality products within specified delivery time. This would certainly assist the organisation in gaining greater profits by satisfying the demands of the retailers and customers as well as maintaining sustainability in the global market context. Adequacy in resources would further enhance the overall organisational effectiveness along with its competitiveness by facilitating customer demand. Moreover, it can be assumed that effective communication network among members of distribution channels and management can mitigate the risks of conflict situation to a larger extent regarding payment of royalty fees. Furthermore, by providing available data in a detailed and timely way to the engaged participants in the distribution channel of Fashion Wholesalers can further assist in mitigating conflicts arising due to poor communication and increasing stakeholders’ commitment towards the organisation (Rosenbloom, 2011). Additionally, solution to conflicts can be carried out through negotiations and consultations among the members engaged with the distribution channel in Fashion Wholesalers. With the assistance of negotiation, it would be possible for the channel members to bargain upon their interests transparently and thus assist Fashion Wholesalers in avoiding such conflict situations (Lamb & et. al., 2011). Apart from the above stated measures to combat the risks of conflict in the distribution channel of Fashion Wholesalers, it can also be recommended that the organisation should focus on restructuring its overall array of supply in a more comprehensive way. This will in turn assist in minimizing the complexities and the possible transparency issues among the members and thus ensure better productivity as well as commitment from the stakeholders. 2.0. Retail Mix for a Start-Up Retailer 2.1. Overview of the Business For the start-up business, in the retail market in UK, the targeted customers would be primarily the male section, for both A and B graded customers belonging to the age group of over 40 years. The main competitors in the retail market of UK can be identified as department stores and specialty stores as well as bespoke tailor stores. Contextually, the company will be selling goods rather than focusing on selling to the individuals or end users of its targeted market. It is in this context that in the UK market, the department stores provides tough challenge for the retailers when selling goods in the menswear section. Irrespective of the fierce competition and unfavourable economic conditions, the retail market in the UK was accounted to have increased by 3.3% during 2011, recording revenue of ?43.1billion (Key Note Limited, 2012). Hence, it can be argued that it is necessary to have an effective retail mix for satisfying the demands of the customers along with attaining the objectives of the business and thus ensuring a sustainable growth in the long-run. The retailing mix comprises of the following that includes physical elements, management of merchandise, pricing as well as promotion (Mcgraw Hill, n.d.). 2.2. Physical Elements In the context of physical elements, while start up business, it is necessary to execute a proper business plan where different attributes such as resources, manpower and technology can be taken into consideration. It can also be stated in this regard that while starting a retail business in the markets of the UK, selection of appropriate location to set up the business is crucial so as to mitigate the possible challenges that might arise in the future owing to the improper selection of place. Contextually, as a start-up firm, the retailer must focus on selecting a place with less density of large and medium sized retailers in the clothing industry. This might in turn imply lesser competitive forces and better demand prospects for the business (Giffels, 2001). Additionally, the other attribute of physical elements, i.e. manpower are to be recruited efficiently with due significance to the requirements of the organisation. In this context, the retailer can employ both experienced and inexperienced workers, where the experienced workforce will be able to sell the goods in the markets of UK with greater efficiency, possessing adequate knowledge regarding customers’ preferences and satisfaction. Similarly, the inexperienced workers can be trained and thus, the foundation for a larger workforce can be developed (Giffels, 2001). The retail stores are to be designed in such a manner that can attract extensive male customers. It is been observed that the market for men’s clothing in the UK has become worse as compared to the retail market for women particularly owing to the economic fluctuations and rising trend of online shopping (Giffels, 2001). It is in this context that the retailer must focus on developing attractive designer stores in the selected location along with perform internet promotions to attract adequate numbers of targeted customers towards the brand. Similarly, in the context of selling clothing for men advanced technology is required in order to decorate the retail stores for giving it a better outlook. It would also help in attracting customers, especially the men section of the society purchasing clothing goods in the markets of UK. The selection of appropriate personnel for selling the offered clothing goods such as apparels, shirts, trousers, T-shirts would also assists in maintaining greater productivity in the retail stores. Stating precisely, skilled and talented employees are required to provide training to enhance their skills required for selling the clothing products to the targeted sections of customers in the UK. However, before starting the business, it is required for the retailer to survey the conditions of the market, in order to gain adequate knowledge regarding the customer buying behaviour and competitive scenario. This would assist the retailer to devise the strategies according to the conduction of the survey before initiating the business. 2.3. Merchandising Management The management of merchandising in the retail marketing for a start-up business is fundamentally based on various steps that include developing a merchandising mix and establishment of merchandising budget to strategize a logistic system for the procurement activities. After performing these steps, the retailer must also implement effective pricing strategies that would focus on the customer bargaining power and the switching costs to obtain competitive advantages in the targeted marketplace. The retailer must then focus on organizing the support of the customers by enabling efficient services to them taking into account the characteristics of its major competitors, i.e. departmental stores, specialty stores and bespoke tailors and thus inculcating the most advantageous features of its competitors in the planned merchandizing. Management of personal selling of goods can also be considered as significant aspect in this context (SlideShare Inc., 2013). However, the retailer is also required to plan for managing financial aspects through proper budgeting that can be used for determining the investments carried out in the inventory process during the particular time period. Moreover, to obtain a strong foothold and gain competitive advantages, the retailer must develop effective strategies concerning the offered product line with suitable customer service strategies. For instance, the retailer can focus on rendering free bespoke services to its customers at the various retail stores along with the opportunity to order their requirements online which can enhance customer loyalty and satisfaction substantially for the company. Furthermore, the merchandising practiced by the retailer should focus on developing an eye-catching display for products at the retail stores that would enhance the productivity of the organisation by a large extent. It will also help in generating awareness regarding the brand and play a major role to attract males in the markets of UK (SlideShare Inc., 2013). 2.4. Pricing Pricing can be regarded as one of the most important aspects for initiating a business in the global market context, especially in a fiercely competitive market scenario similar to clothing retailers. Contextually, it can be affirmed that the retailer should focus on determining the price dimensions when selling clothing products to male customers in the UK market, taking into account the product range and the buying behaviour of the customers. Thus, it is necessary for the retailer to set the prices of the products according to the consumer demands and surveying at competitive prices offered by its major competitors including the departmental stores, specialty stores and bespoke tailors in the same location in order to maintain sustainability in the market by capturing greater customer base. It is in this context that customer’s switching cost must be appropriately forecasted by the retailer in order to take advantages from the persisting competitive trends in the targeted retail market. Furthermore, the margin of pricing of the goods to be sold should be in the level of acceptance for the customers to be satisfied with the products offered along with the services (Walker, 1950). In this context the retailer can implement a penetration pricing strategy by offering products at a decreased rate from the market price to lure the customers in the initial stage of the business and then increase the price once the customers are observed to be loyalty with the brands. However, as this particular strategy is often criticized to increase the risk of customer dissatisfaction, with the increasing prices charged by the retailer, due significance should also be provided towards offering value added services to preserve their satisfaction and loyalty at a high margin (Berman, 2007). 2.5. Promotion In respect to promotion in retail marketing mix, the retailer should follow six steps in developing the advertising campaigning that includes developing the objectives of advertising, determination of the advertising budgets, media selection, advertisement scheduling and measurement of advertising effectiveness. Hence, it can be stated that most of the customers in the UK market focuses on branded products as well as purchase various clothing products through online sources. Additionally, it has also been observed that half of the male population tends to be eager for payment for branded products including about one third prefer purchasing through online purchasing in the UK retail market (Mintel Group Ltd., 2012). It is in this context that the retailer should focus on inculcating these attributes to establish the brand effectively in the targeted marketplace, i.e. through the use of online promotion as well as personal selling. Notably, the initial objective of the retailer should be to develop adequate brand awareness in its targeted UK market owing to the persisting trend of customer purchasing behaviour (IBS Center for Management Research, 2012). Furthermore, as compared to its competitor, i.e. specialty stores, the retailer can also emphasize on promoting the offered goods with exclusive offers during holidays as well as during festive seasons to accelerate the sales by a large extent and generate better brand awareness (University at Buffalo, 2013). Similarly, it can be stated that for enhancing sales as a new retail store, it is necessary for the retailer to provide discount offers as well as gifts with purchased products which would stimulate the customers’ purchase behaviour in and reward competitive advantages by capturing greater customer base in the targeted UK market. References Berman, 2007. Retail Management: A Strategic Approach, 10/E. Pearson Education India. Giffels, M. 2001. The Market. Overview. [Online] Available at: http://www.grin.com/en/e-book/99429/analysis-of-next-plc-and-its-environment [Accessed April 06, 2013]. IBS Center for Management Research, 2012. Retail Management. Home. 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Cengage Learning. SlideShare Inc., 2013. Merchandise Management. Steps in Retail Merchandising Process. [Online] Available at: http://www.slideshare.net/Annie05/merchandise-management-presentation-704616 [Accessed April 06, 2013]. University at Buffalo, 2013. Specialty Stores Don’t Need Lower Prices. News. [Online] Available at: http://www.buffalo.edu/ubreporter/archive/2012_11_08/specialty_stores_prices.html [Accessed April 06, 2013]. Walker, F. 1950. Some Principle of Department Store Pricing. Journal of Marketing, Vol. 14, No. 4, pp. 529. Read More