Business & Management - Report Example

Introduction Studio 55 is a versatile garment store. It retails Jeans, Sweaters, T-shirts, Jackets and Shirts. Like any business, Studio 55 enjoys certain competitive advantages but there are certain drawbacks that render it a competitively disadvantageous position. Studio 55, like any other organisation has to learn to exploit its competitive advantage by making and executing sound marketing strategies and keeping its overheads in control. However, due to its location it may be having a few disadvantages regarding the customer’s choice. At the core of any business operation lies its ability to market its products. All business enterprises seek to enhance their profits by keeping their costs and overheads within control. “Marketing is management process responsible for identifying, anticipating and satisfying customer requirements” is the definition given to marketing by Chartered Institute of Marketing (CIM). CIM further emphasis that for a small enterprise like (Studio 55), marketing may not always include high allocation of resources to advertisement and sales increment but small instances as improving the workplace functioning, customer dealing, tidying up the workplace bringing efficiency into systems, making the business more akin to customer demands increases the market prospects of a place. The marketing strategies become operational the moment a customer steps into the store. Retail Sector Boom in Developing Economies Retail sector is one of the most growing sectors in the developing world. It has been defined by academics that supplies goods to the end customer. Retailing has been defined as business activities involved in selling goods and services to consumers for their personal, family or household use. (Das) The retail sector business has the advantage of dealing with the customer first hand. The goods sold in retail are tangible and not much of policy formulation is required. The first hand experience of the customer can make or mar the reputation of business. While the retail sector made up around 47 percent of entrepreneurship in developing countries and only 25 percent in industrialized countries, the services sector made up 17 percent in developing countries and around 41 percent in industrialized countries. The study suggests lower requirements of investment, human resources, knowledge, and capital among the reasons that entrepreneurs may focus on the retail sector in developing countries (Breaking Entrepreneurial News). . A Retail Store—Chain of Management Functions Though outwardly an enterprise like Studio 55 may convey a very simplistic look but the multiple small functions should fit well into the marketing plan and deliver real-time results to the stake holder so that he/she gets motivation to execute further changes. Actual improvement in sales and profits of a small organisation as Studio 55, may involve an in-depth analysis of various management and marketing functions and identifying key improvement areas and initiating steps to change the environment. Competition to Studio 55 Studio 55 has to put its act together due to competitive times and high awareness levels. The store should perform at maximum efficiency using all its resources to the best possible levels to attain good profit margins. For this Studio 55 has to remain in continual improvement mode, cutting down wastages and giving the best customer satisfaction. The client servicing needs to be continuously monitored and resources need to be allocated for advertising and marketing. But prior to that Studio 55 needs to conduct an audit of its current operations and take stock of its weaknesses and strengths especially in regard to RH Jeans as its main competitor. RH Jeans unlike Studio 55 is a specialised store and caters to only one segment of the population by providing a single kind of garment. Since this is the age of diversified services Studio 55 can meets the successful business model more. But its location in a Mall puts it to competitive disadvantage and it gets its share of maximum business only on Fridays, Saturdays, and Holidays. Studio 55 through a more vigorous advertisement campaign, strategic tie-ups with other centres in Mall can exploit its location disadvantage into strength. Due to its downtown location, there may be lack of committed visitors to RH Jeans. 7Ps-- Product, Place, Promotion, Price, People, Process and Physical Evidence 7P’s are the key parameters of a business marketing management (marketing mix) in which four–Product, Place, Promotion and Price are defined to be traditional P’s that affect the business prospects. Three more Ps--People, Process and Physical Evidence were added later to increase the number to 7 (Booms and Bitner). Being a small business enterprise, Studio 55 can quickly implement change in the 7Ps’s. It doesn’t have multiple departments with multiple layers of employees that take a lot of time to adapt to change. Low number of employees and simpler business operations makes the dynamics of 7P’s easier to understand and implement. Products: All the products that are available in Studio 55 should be displayed on mannequins and on shelves. Detailed catalogues with colour, shape, size and price should be available to the customer. Care should be taken to ensure that the products carry guarantee against manufacturing or other defects. The garments should be available in as many different sizes, colour, shapes, and latest trends in fashion as possible. Emphasis should, however, be retained on the products that are sold more. Place: Place is the great determining factor as far as marketing success of a retail store is concerned. Since the store is located in a Mall its customers are necessarily those that visit the Mall. Hence the marketing strategy of Mall and the retail store are related to each other. Studio 55 should study the marketing strategy of the Mall and observe any lacunae. Likewise it should draw up its advertisement plan by first filling the gaps in the Mall’s advertisement policy. Studio 55 then needs to draw up its own advertisement plan. Of primary importance is the fund allocation and type of advertisement. Whereas advertisement in publication may have greater reach, hoarding and buntings advertisement at strategic locations make a lasting impression. Other than this Studio 55 can improve its visibility by advertising through newspapers. An advertisement plan can be carried out in collaboration with a fast food outlet or any other non-garment retail store in the Mall. A coupon for discount can be given to a customer who makes a purchase at a store other than Studio 55 situated in the same Mall. This arrangement can be quid pro quo with Studio 55 offering the same kind of discount coupon for the store/or outlet with which arrangement is made. This kind of strategic marketing helps in the exploitation of full customer potential of the Mall. Promotion: The easiest method for promotion of business in this environment is ‘word of mouth. The reputation of a good organisation spreads like wild fire. The employees should endeavour to give best service which will promote its business. The other conventional methods of promotion are advertisement, strategic tie-ups and conducting of promotional programs. The customer can be asked to sign the visitors’ book and all customers are sent emails or letters greeting them on their birthdays and marriage anniversaries. The information could also be used to greet them inform the customers of latest additions in the collections. Price: Price is the only ‘P’ that is a generator of wealth (Booms and Bitner). The others add to the cost. The pricing policy of Studio 55 needs continual monitoring. While we know the average prices of jeans, sweater, t-shirts, jackets and sweaters in the Brazilian market, Studio 55 should categorise the products, based on price, into three categories 1. An Up-market category 2. Mid-Range 3. Popular People: People are the ‘living component’ of a business. People here are the staff members who deal with customers. There behaviour can make and spoil the reputation of Studio 55. Since the owner of Studio 55 is not available at the location, the onus of responsibility on the employees of Studio becomes more. They should be polite, smart, and extra cautious in customer handling. The owner of Studio 55 should take special care that the employees are not changed frequently. The manager of Studio 55 should be a person whose integrity and commitment to the business is of the highest level. She should be given a bigger share in the market than that is being given. If possible she should be shown around the works where manufacturing of the garments and fabric is taking place so that she is able to satisfy customer queries more effectively and train her staff accordingly. The staff members should be trained to handle a particular section of Studio 55 but their jobs should be swapped intermittently so that they learn to manage and cope with circumstances in absence of each other. The staff members also need to be trained in Customer Relationship Management and for this the Manager has to step ahead and keep herself abreast of latest Human Resource training needs. Process: Garment retail may be seem to be a simple business process of sale. But when seen in totality it is constituted of many such processes as Customer Relationship Management (CRM), Supply Chain Management, Inventory Management, and Operations Management. In the Studio 55 scenario it starts from sourcing of products. Only those products and of those brands should be sourced that have lowest turn-around periods, command greater customer loyalty and are cost effective and guaranteed against manufacturing defects. Inventory and stocks should be kept at the optimal level thus ensuring that no customers ever goes back without being delivered what he requires and without overstocking of brands. The customer should be attended to immediately especially during the peak load hours when there could be situations when there are more customers than can be attended to in a given time. The staff should be trained to meet such an eventuality. When the customer is being sold a particular outfit, he needs to be given ample time to choose the colour, size, quality and brand of the outfit. The procedure for return of garments should be properly defined in case he or she wants to return it due to some defect or non-fitment. Such customers should be entertained in a time-zone that is exclusively meant for complaint handling. In case of an alteration is to be made in a garment a receipt should be issued to the customer that defines the product name, its unique identity and the customer name. Peak loads of customer visits need to be observed. As most of the business transaction occurs after office hours, arrangements can be made for a part-time help in the evening. Physical Evidence: Since the products sold—T-shirts, Jeans, Shirts and Sweaters are not intangible; Studio 55 should pay particular attention to smooth sale of these products. The customer should be made to feel at home and is given the option of choosing any particular item. In case there is waiting period the customer should be given comfortable seating facility. Catalogues and list of items and brochures containing interviews with satisfied customers should be available to win the confidence of the customer. Besides, there should be a well lighted and secure “Trying Room” where the customer actually tries an item and feel satisfied before buying it. At the main entrance the name of “Studio 55” should be carried in very bright and bold fonts. A slogan like “Garments for All” should be inserted under the name. The polythene bags that are used by shoppers for carrying Studio products should carry the logo and the name of the studio in a big bold font. Ideally Red colour should be used against white background. The Team Studio 55 doesn’t have a uniform code of dress that gives the customer a confidence that he is talking to a Studio 55 personnel. Studio 55 needs to have a website. Website gives the management the option of continuous upgradation. The staff members need to be given regular training and thorough information and quality of products. Men and women included. All activities enumerated in Physical Evidence can also be called Market Planning. Planning the marketing strategy in face of competition is the most important part of any business. The Studio needs to focus and create a plan for the target clientele. This plan should conform to, trade laws of Brazil, and national and international trade conventions. Enterprise Leadership: The Manager of Studio 55 has to act as the epicentre of motivation by introducing training programmes, visits, workshops for her staff. She also has to ask for more decision making powers from the owners. The salary structure has to be altered and has to consist of part fixed component and part incentive based components rather than being solely incentive based. This will make her feel more at home and be a part of the management. Similar fixed component of salary can also be added to the staff members who last for a particular time period. This would give a feeling of belonging to the employees as well as increasing their confidence level and they will make special efforts to increase their sales. A person who is not sure of the salary he is going to get at the end of the month may not put in the best of efforts as remuneration is always under threat and remains susceptible to same kind of forces that threaten the enterprise itself but the profits are not as high as those enjoyed by the stake holders. Before stocking up clothes it is necessary that it is ascertained about the choice of customers that is best decided with the help of a questionnaire. Duties of Luciano (nephew of the owner) should be well-defined. His decision making powers should also be objectively stated. There shouldn’t be clash of interests between him and the manager. There should be an exchange of ideas, and sharing of views between the manager and him. Time for meetings with the manager should be slated. The meeting should be scheduled twice a week at the time of the day when customer numbers are less. This would help Studio 55 to handle the managerial and administrative work in time when it least disturbs the business. Luciano should spend more time in sourcing of more up to date products in keeping with latest changes in the fashion industry. The result of the Questionnaire (Attached) could be used to better maintain the stocks of the Studio according to the requirements of the customer. The results of the Questionnaire should help the management to arrive at suitable answers and frame the strategy of the company accordingly. SMART OBJECTIVE: Defining the SMART Objective follows the completion of environmental analysis and completion of the marketing audit. The purpose of the marketing objective is to i) enable company to control its marketing plan. ii)to help motivate individuals and teams to reach a common goal and iii) to provide agreed, consistent focus for all functions of an organisation. (www.themanager.org) The SMART Objective is defined as Specific, Measurable, Achievable, Realistic and Timed. The objectives of Studio 55 should be defined in a manner that they are focussed, in conformance to the larger plans of its owners and achievable in well defined period. The immediate targets should be specific aimed at making small gains over fixed time periods. Decision-Making: Some managerial decisions like replenishment of stocks should be best left to the manager. The manager who manages the store has more information and is better equipped to handle such decisions than the owner or a person deputed by him. The manager should also be given true feeling of being a part of the management of the store rather than just making sales. Because holding the stocks at the optimum levels are important in rotation of capital and thus affect the financial position of the store positively or adversely. Conclusions: At present Studio 55 seems to have a laid back attitude towards enterprise. Its stake holders are content with a sales profit of 35,000US$ - 45,000US. But the economic scenario in the developing world is changing at a very fast pace. Brazil is the sixth largest textile and clothing producer in the world. Textiles and clothing are, in turn, important to Brazil’s economy. In 2004 the total production value of the textile and clothing sector was equivalent to 4.1% of Brazilian GDP. Its made-up sector – comprising clothing, hosiery and home linen - is second in size only to the service industries.(Textile Intelligence) Studio 55 has to capitalise on the overall positive scenario for garment retail in Brazil by making sound marketing plans, giving greater impetus to sales through vesting of authority in its workers and involving its customers for eliciting feedback for future growth. Incentive to it workers and making them a part of the decision making process. Small enterprises are being thrown out of business by entry of Multinational Chains and big corporate houses in retail sector. The garment and fabric industry is quickly affected by any economic or socio-cultural change. Studio 55 has to rise out of small enterprise psychology and has to push itself to make more profits. The increase in profits should not only be utilised to make sound marketing plans, hard hitting advertisement campaigns to achieve a greater client base. The increased client base can be utilised by expanding the business and opening more outlets. But Studio 55 has to make small term goals and its staff and management has to make discrete small time goals. Questionnaire Foreword to the Questionnaire This questionnaire is intended to improve upon the service of Studio 55 and enhance customer satisfaction. The answers you give in to the questionnaire (Yes/No) will help us to arrive at important conclusions regarding our current performance levels and customer expectations. It will take a few moments for you to answer the questionnaire but will help us a lot to improve. However, you have the discretion to not answer any or all the questions that you may find uncomfortable to answer. The feedback generated in the questionnaire shall only be employed to improve upon the services of Studio 55 and will be kept confidential and not shared with any individual under any condition. 1. Are you satisfied with the quality of service? 2. Do feel the range of men’s and women’s garment is sufficient? 3. Should Studio 55 add men’s and women’s accessories to the shelves? 4. What is your age? 5. Sex (M/F) 6. Do you believe clothes go out of fashion after three months? 7. Do you believe in following others when it comes to choosing a garment? 8. Should there be both male and female staff at Studio 55? 9. Do you belong to this city? 10. Are you employed? 11. Is your monthly expenditure on the wardrobe more than 5 five percent of your salary? 12. Is your waist size more than 32 inches (for males) or more than 26 inches (for females)? 13. Is it often that your sizes increase and you as a consequence go in for changing your wardrobe? 14. Do you buy garments exclusively from Studio 55? 15. Are you satisfied with the quality of the products available at Stuido 55? 16. Are you satisfied with the pricing policy of Studio 55? 17. Do you think the items available are competitively priced? 18. You are a student/professional/self-employed/ employed or retired? 19. You are above 25 years? 20. Are you passionate about clothes you wear? This questionnaire should be available in Studio 55 and whenever a customer has made a purchase, he should be approached to fill in the questionnaire. Though it is mentioned at the top of the questionnaire that the customer reserves the right to not answer any question, this can also be conveyed to the customer verbally before handing the questionnaire to him. It is felt that the customer may find questions related to age, income group and sex related matters difficult to answer. Maximum effort has been included not to include the questions that hurt the sensibilities of the customers. But wherever the questionnaire may transgress the forbidden area, it is left to the answerer to not take up those questions. For additional security, the questionnaire shouldn’t be identified with the name of the customer and could be kept confidential. Detailed results of the feedback generated from the Questionnaire can be conducted by analysis of the answers with the help of a database management tool. However, a generalised study can be made by observing the answer patterns. If we award one point to a ‘Yes’ and minus one point for a ‘No’ then 12 or above points for each questionnaire should show that our marketing plans are proceeding in the right direction. References: 1. Knowledge Hub, Marketing and the 7P’s, The chartered institute of marketing, http://www.cim.co.uk/mediastore/FactFiles/Factifile7ps.pdf accessed on 2007-09-22 2. Breaking Entrepreneurial News, Entrepreneurs boost economies in developing world, Published September 14, 2007, http://www.inc.com/news/briefs/200709/0914economy.html accessed on 2007-09-22. 3. Smart Objectives, How do you make objectives SMART?, http://marketingteacher.com/Lessons/lesson_objectives.htm accessed on 2007-09-22 4. Booms, Bernard H. and Bitner, Mary J. 7-Ps Extended Marketing Mix, Value based management .net, http://www.valuebasedmanagement.net/methods_booms_bitner_7Ps.html accessed on 2007-09-07. 5. Das, Subrata, Rapidly expanding garment retail sector, consumer testing laboratories, http://www.fibre2fashion.com/industry-article/free-retail-industry-article/rapidly-expanding-garment-retail-sector/rapidly-expanding-garment-retail-sector1.asp accessed on 2007-09-07. Read More