Diminishing Sales at Smart Jeans Company - Research Proposal Example

Assignment Number Course Number, Title, and Program Student Name and Number Prominent Title Date Table of Contents Diminishing Sales at Smart Jeans Company 3 Overview of Clothing and Apparel Industry in Australia 3 Research Question 5 Literature Review 6 Consumer Decision Making Processes 6 Costs, Prices, and the Customer 8 Technology and Supply Chains 9 Brand Management and Competition 11 Sustainability and Innovation 12 Research Design and Methods 13 Introduction 13 Research Method – Quantitative 13 Research Approach – Deductive 13 Data Collection Method and Tools 14 Observation 14 Questionnaires 14 Sample Selection 15 Research Process 15 Outsiders 16 Insiders 16 Data Analysis 16 Ethical Considerations 16 Likely Research Limitations 17 Summary 17 Reference 18 Diminishing Sales at Smart Jeans Company Smart Jeans Company operates in the clothing and apparel industry in Australia. In the previous years (around 3 years ago), Smart Jeans Company has been reporting increasing sales and the market share was comparatively large compared with the current situation. In the last two years, sales have diminished while the market share has reduced. The requirement of the paper is to analyze the reasons for the diminishing sales through critiquing the internal and external environment in supporting the requirements of the organization. The paper starts with overview of the clothing and apparel industry in Australia, the second section presents information on literature review while the third section discusses the methodology employed in collecting and analyzing the data. Overview of Clothing and Apparel Industry in Australia The clothing and apparel industry is facing numerous challenges such as higher rent costs for the retailing establishment, intense competition, and cautious consumer spending. According to IBISWorld (2016a), the annual growth rate of the clothing and apparel industry in Australia is estimated at 3.3%, the amount of revenue is $19 billion, and the number of people employed is 122,266 while the number of businesses is more than 12,785. IBISWorld (2016b) also analyzed the women clothing industry in the USA. IBISWorld (2016) estimated the revenues generated for women clothing in the USA is more than $42 billion, the annual growth rate is -0.9%, the number of businesses is 33,439 while the number of employment opportunities is more than 371,128. The data indicates that the number of businesses and employment are high even though there are variable views when it comes to the growth of the business. Since clothes are a basic need, it means people will continuously purchase the products but issues associated with economic, social, political and cultural variables may dictate the type and amount of purchase. The clothing and apparel industry can be seen as having a medium barriers to entry, and for the smaller establishment, it can even be lower because of costs of establishing the business including minimum technological requirements, and research and developments expectations. Some of the establishments have a single outlet while others have multiple outlets across the world. For example, some companies have online presences while others have strong supply chains strategic approaches (Bhardwaj and Fairhurst, 2010). It means that it is easier for competitors to enter the market. In addition, the diversification of manufacturing processes, whereby companies are outsourcing the manufacturing processes becomes an integral component in the clothing industry (Gupta and Hodges, 2012). For instance, many companies are seeking production services from Asian countries because of lower production costs compared with the Western countries. In addition, the customers continue to become more consciousness when it comes to the clothes and apparels. The customers are conscious of prices, quality, brand, customer care, and other associated with customer behavior (Hill and Lee, 2012). For example, the price is the first component that consumers use to review a product. Some customers want cheaper products while others require expensive products because of such customers believe the more the expensive the product, the better quality the product (Lo, Yeung and Cheng, 2012). Other consumers are influenced by the society while the political system in place also plays an important role. Thus, analyzing the internal and external environment of an establishment elaborates experiences of the businesses. Smart Jeans Company is facing challenges because of increase in competition, which directly affects the market share. Smart Jeans Company products and services are of high quality and also expensive due to the cost of production. Understanding the market dynamics and other business processes is important in developing a strategy to counter the diminishing sales and business aims. Smart Jeans Company targets different customers incorporating aspects of demographics such that it creates products and services for different genders and sizes. Understanding the requirements of the customers is one thing and developing the product to accomplish these requirements is a different approach. Therefore, reviewing the reasons contributing to the diminishing sales and variables associated with market requirements enables the creation of appropriate strategy to counter competitors’ strategies. Research Question The following is the research question: What are some of the reasons contributing to diminishing sales? The sub-questions are: Are the internal processes including strategic requirements effective in the implementation of objectives and aims? What are the customers’ perceptions towards the companies’ products and services Is the external environment a hindrance or supportive in the implementation of Smart Jeans Company’s strategies? Smart Jeans Company main problem is the diminishing sales, and it is important to analyze the causes of the problem enabling determination of the solutions. The historical analysis of the company indicates the company was operating well and the number of sales including financial requirements was as estimated. To determine the causes of the diminishing sales, internal processes, and environmental conditions influence the operations. The employees, which forms the internal organization including the strategies may contribute to the diminishing sales. It may also mean the external factors such as competitor and government regulations may affect business operations. Consumer perceptions especially post-purchase experience may make the customer reduce demands for Smart Jeans Company’s products and services. Due to these numerous conditions and reasons, the decision to analyze the major research question and incorporation of sub-questions enables arriving at the appropriate outcome, which contributes to the formulation of recommendations to address the problems. Literature Review The fashion industry is a complex sector since numerous stages and processes are involved from design phase to distribution stage. To survive in the fashion industry, which is competitive, it requires simplification and innovation (Mostard, Teunter and De Koster, 2011). The success of any establishment such as Smart Jeans Company depends on many things and stylish designs, and convincing marketing strategy does not allow success for a company (Gupta and Hodges, 2012). It requires an understanding of numerous processes and strategies to ensure the company becomes successful. Some of the factor associated with costs, prices, and the customer; technology and supply chains; brand management and competition; and sustainability and innovation. Consumer Decision Making Processes The consumer decision making processes follow five important stages. The stages are needed recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior: Need recognition/problem recognition is usually the first step in which a need contributes to acquiring a product and service (Bhardwaj and Fairhurst, 2010). The recognition of need is based on the difference between the consumer’s actual situations compared with the ideal/desired situation. The buying behavior influences whether an individual acquires the product and markets have to target the requirement. The recognition is classified into numerous sections including internal stimuli, need for change, social need, functional need and fulfillment of Maslow’s hierarchy of needs. Information search enables the consumer to seek for possible solutions to the need. The consumers utilize different approaches to access the information including internal and external processes (Bhardwaj and Fairhurst, 2010). Internal information is commonly used in making decisions in which the consumers have experiences such as consumer packaged goods and fast moving consumer goods (Gupta and Hodges, 2012). The external information is received from the advertising agencies, the society and reviews from other users. Alternative evaluation – the consumer usually receives a variety of proposals and options meaning the consumer has to make a decision (Gupta and Hodges, 2012). The customer creates attributes based on the products, and the attributing system is different from one customer to the next (Nagurney and Yu, 2012). The consumer ways against the numerous options, analyses the benefits of the options and makes choices based on the numerous options. Purchase decision follows after the consumer picks the appropriate product and service (Bhardwaj and Fairhurst, 2010). The purchase decision is based on the products capabilities and features, and perceived value; other factors such as conditions for sale, the availability of a promotion, and quality of previous experiences with the store contributes to purchasing decision (Nagurney and Yu, 2012). Experiences and content of offering contribute immensely to the final decision that consumers take in making decisions regarding the products and services. The last phase is the post-purchase behavior in which the consumer will evaluate whether the product or service adequately meets original needs (Gupta and Hodges, 2012). It also includes whether the individual has made the right decision and if the customer is satisfied, it is likely to acquire the same product in the future, which minimizes seeking for information (Nagurney and Yu, 2012). Positive and negative reviews of the products and services will be provided based on the views and assumptions of the customers. Therefore, post purchase behavior influences future purchase and use of the products and services. Costs, Prices, and the Customer The fashion customer determines what to buy based on financial condition, status needs, and personal taste. Numerous fashion companies compete in layered price ranges in which customers chooses the products in price points (Nagurney and Yu, 2012). A fashion company that targets couture sector often develops different products for mass merchandisers and ready to wear line for department stores. Therefore, the pricing of the products incorporates numerous variables (Watchravesringkan et al. 2010). For example, the clothes targeted for the departmental stores are cheaper because of lack of additional margin requirements for the distributions (Gupta and Hodges, 2012). Hence, the design of the products and the customers’ wants influence the strategies that companies have to embrace to advance the strategic requirements of the company/organization. In developing and launching the product, identification of the niche market is the beginning of customization of the product. It includes identification of different costs ranging from the price point, production costs, sourcing costs, and design requirements (Bhardwaj and Fairhurst, 2010). It includes balancing the requirements of the customer and the interests of the customers (Nagurney and Yu, 2012). The customers’ preferences and tastes are reviewed, and the inclusion of costs of production are used in determining the cost of the products (Watchravesringkan et al. 2010). Numerous financial controls have to be included in valuing the clothes and accessories to create a win-win situation for the company and customers. It is imperative to note that customers are influenced by different variables, and any business establishment aims to satisfy the customers’ preferences and wants. In the case of the status conscious consumer, the customer may not be appealed by the reasonable price, design, materials, and workmanship but other factors (Lo, Yeung and Cheng, 2012). However, such appeals may gain traction in a larger consumer group that does not require extensive differentiation and segmentation requirements (Mostard, Teunter and De Koster, 2011). It is imperative to launch the products, and after the products have gained traction in the market, the retailers such as Smart Jeans Company can penetrate into other market levels (Gupta and Hodges, 2012). It means a single entry strategy cannot succeed in all the markets and entering the markets in levels enables understanding the preferences and needs of the customers, and customize the clothes based on the requirements of the customers. Technology and Supply Chains Technology is an integral component in the clothing manufacturing industry (Lo, Yeung and Cheng, 2012). Companies employ strategies such as offshore manufacturing, which has contributed to cutting costs and allowing for quality materials and increase in accents: accents such as detailed tailoring and embroidery (Gupta and Hodges, 2012). The technology is also used in mass production of the materials and other processes in the production of the clothes (Mostard, Teunter and De Koster, 2011). These processes result in cheapening of the cost of production resulting in lowering the cost of production and the final product. However, these different services and manufacturing processes are accessible to many clothes companies, which shield the competitive advantage (Chaudhry and Hodge, 2012). It means the use of technology is not an only component that advances profitability and market share for the companies, but other factors have to be considered (Nagurney and Yu, 2012). For example, Smart Jean Company produces high quality products and high quality materials, but the customers are seeking for the cheaper alternatives. The cheaper alternatives may use the same technology, but establishments have to analyze their intended market and create or rejuvenate the products to reflect the changing market(s). The clothing industry supply chain can sometimes be risky especially when it depends on importing products manufactured internationally, and when the design houses lack the capacities to manage or do not own their overseas factors (Lo, Yeung and Cheng, 2012). Problems associated with international supply chains includes lost goods in transit or delayed delivery of products. Controlling the supply chain is important because it reduces the risks and numerous challenges while improving the competitive edge against other competitors in the market (Mostard, Teunter and De Koster, 2011). Complications in the supply chain also may increase the cost of the product, which affects the margins, and also the prices to the customer. Companies tend to compensate by increasing the cost of production (Nagurney and Yu, 2012). In addition, the cost of production may increase because of the distributor's supply costs. Successful apparel companies tend to have different distributors because of the targeted market and the geographical regions (Watchravesringkan et al. 2010). Ineffectiveness in supply chain whether international or local increases the costs of production and other ineffectiveness. Hence, companies determine the effectiveness of the supply to improve on credibility, the satisfaction of customer requirements, and efficiency in the operation processes. Brand Management and Competition Brand management incorporates numerous factors and influences the marketing strategies. Small or new entrant to the market has to utilize brand management to penetrate a crowded market that is dominated by recognized brands (Gupta and Hodges, 2012). The fashion brands convey value, utility, status, innovative design, and quality. It is important for any establishment to maintain high levels of brand and utilize different approaches in championing the brand (Mostard, Teunter and De Koster, 2011). Recognition of the brand, and utilizing the brand to develop and sell the products is important since it creates a lasting impression of the company (Watchravesringkan et al. 2010). An effective brand is important because it supports the business in a positive manner (Nagurney and Yu, 2012). Customers can recognize brands and can utilize the image of the brand to creating a lasting impression and even associated with other products. Competition is also another component that incorporates brand management. Analyzing the brands in the market and determining the strengths and weaknesses of these brands is important (Lo, Yeung and Cheng, 2012). Understanding the brands that compete for similar customers is important and finding an underserved niche is crucial (Mostard, Teunter and De Koster, 2011). The tastes of the customers keep changing meaning the preferences and tastes of the customers have to sample different brands to satisfy their cravings (Turker and Altuntas, 2014). New entrants fashion brands are able to enter into a new market and be able to capture major market share, and it is possible through streamlining the brand to satisfy the requirements of the customers (Nagurney and Yu, 2012). Such companies are also able to utilize the strengthened brand position to leverage in product diversification and to license the brand beyond to clothing products, such as cookware, home decoration, luggage, perfume, and eyewear. Sustainability and Innovation In numerous instances, sustainability has been associated with the production of products in an eco-friendly approach (Nagurney and Yu, 2012). In the apparel industry, sustainability refers to whether a new designer is in a position to sustain and grow the market in a competitive marketplace (Watchravesringkan et al. 2010). Distribution and marketing play an integral role in sustainability requirements; therefore, the company has to balance the requirements of sustainability and the ability of a company to continually design and produce appealing apparels (Lo, Yeung and Cheng, 2012). Constant innovation is another component that is associated with sustainability (Bhardwaj and Fairhurst, 2010). The constant innovation is based on the strategy a company undertakes in the involvement of the customer, expansion of the products, distribution, supply chain, and design process. In addition, process modeling has become an integral component in fulfilling the different design and processes in the fashion industry (Watchravesringkan et al. 2010). It employs numerous phases and research into consumer needs and buying habits, in combination with cost analysis and production methods (Nagurney and Yu, 2012). These processes are important not only to the production processes but also the production of attractive designs. Research Design and Methods Introduction In this section, the author outlines the research approach, the research process, the selection of the sample, data collection methods, the research method research strategy, type of data analysis, ethical considerations and limitations of the research. Research Method – Quantitative The quantitative method is preferred and emphases on objective measures and use of different mathematical, statistical and numerical analyses of data obtained through the use of different instruments and tools including questionnaires and polls (Creswell, 2002). The benefits of the quantitative research include it is more objective and reliable, tests hypotheses or theories, subjectivity, relationships between variables, restructure a major problem into a simple matter, and it is less detailed compared with an alternative: qualitative data (Onwuegbuzie and Leech, 2005). These advantages make quantitative approach appropriate for understanding the reasons why Jeans Smart Company reports decreased sales. Research Approach – Deductive Since it is a quantitative research, the proposed research approach is the deductive approach. The approach starts with the hypothesis and collects information to answer this hypothesis or questions. It employs available theory and voluminous literature to move from a general perspective to a specific point (Onwuegbuzie and Leech, 2005). Application of deductive approach is preferred when the wealth of literature is abundant; time availability is short while it is designed to address any risks that may occur. The deductive approach follows specific phases, which are deducing questions based on theory, formulation of hypothesis based on available variables, testing the hypothesis, and modification of the hypothesis is not confirmed. Data Collection Method and Tools In data collection, two strategies are proposed, which are observation and questionnaires: Observation The aim of observation is to analyze the market based on the clothes and apparels the consumers acquires and the communication between the sales representatives with the customers (Onwuegbuzie and Leech, 2005). During the discourse between the sales representative and the customer, it provides an opportunity to understand the views of the customers regarding the products and services. These data can be compiled and identify the trends. The observation will also be based on previous period sales and the dynamics associated with business operations (Onwuegbuzie and Leech, 2005). It includes reviewing the production data, the supply chain requirements, the prices and costing strategies, the effectiveness of the marketing strategies, and this can be ranked. Questionnaires Survey will be carried out to determine the perception of the consumers regarding the products and services. Two questionnaires will be developed to target the employees and the public. Public includes the customers and other entities who can fill the questionnaire (Onwuegbuzie and Leech, 2005). It will be an online questionnaire which targets the public and views will be collected only from customers in Melbourne region. Some of the questions will focus on cost, quality, awareness of the products, and perceptions of the products among others. Sample Selection In fulfilling the requirements of survey methodology and quality assurance, sampling is an important component because it defines the individuals from a population to enable estimation of characteristics of the population (Onwuegbuzie and Leech, 2005). Two probability sampling techniques are employed in collecting the data, which are a stratified and random sample. Random sample gives each respondent in the population equal likelihood of participating in the study (Johnson and Onwuegbuzie, 2004). This strategy is used to collect the information from the public such as customers, and each customer is allowed the freedom to communicate their respective feelings. It ensures firsthand views from the customers are obtained and used to determine the reasons for bad business. The second approach is stratified, and this targets the internal processes and employees at Smart Jean Company (Onwuegbuzie and Leech, 2005). The strategy is to collect the information based on the departments and these individuals from the departments are required to present reasons why problems exist in the company (Johnson and Onwuegbuzie, 2004). For example, the marketing department are provided with a questionnaire and other departments are also provide with the questions. It is estimated that three individuals from each department will be required to fill the questionnaires (Brannen, 2005). The aim is to enable understanding of the internal processes and how the processes can be changed to reflect positive outcomes within the organization. Research Process Since the internal processes are analyzed and external variables, the research process takes two approaches which are outsiders vs. insiders: Outsiders The outsiders are the public and individuals beyond the influence of the Smart Jeans Company. The research process employed is creating a questionnaire that incorporates demographic information, geographical, behavioral and social factors to understand the views of the customers. The questionnaire will be posted online, and online reviews obtained that will be used to address the research questions. Insiders The employees have a better understanding of the customers because they frequently engage the customers and have exposure to the public (Brannen, 2005). The employees may also have viewpoints, which have to be integrated into the operation processes to increase revenues and profitability (Johnson and Onwuegbuzie, 2004). A questionnaire will be developed, which will be based online, and the employees requested to fill the questionnaire anonymously. The purpose is to prevent blame games, and the employees should be free and open to present their respective views and aspirations. Data Analysis The data obtained will be numerical in nature, and the proposed software to analyze the data is Microsoft Excel. Microsoft Excel has inbuilt functions that enable grouping and analyzing the data. The data will be presented in graphical forms including the use of tables, charts, and graphs. Ethical Considerations Ethical considerations are integral to the success of any project. The researcher will seek certifications/permits/permission from the ethics department to pursue the study and collect the data from the respondents (Johnson and Onwuegbuzie, 2004). Plagiarism and using information from other people inappropriately is wrong, and the research continues to acknowledge the sources of materials and information (Brannen, 2005). The respondents have the prerogative right to determine inclusion of the study and other requirements of the study. The respondents will be required to consent to the study and be informed they can stop or withdraw from the research at any time (Johnson and Onwuegbuzie, 2004). The information collected is private meaning confidentiality and privacy is capitalized. These processes improve the ethical requirements through ensuring privacy, confidentiality, and integrity are used in completing the study. Likely Research Limitations The following are some of the likely limitations of the study: Few respondents may fill the online questionnaires Smart Jeans Company employees may refuse to fill the questionnaire because of perceived negative influences on their careers The quality of the filled forms, reliability and validity problems may occur because of the approach respondents take to fill the questionnaires Summary The apparel and clothing industry in Australia is growing but faces numerous challenges. The challenges range from costs associated with renting spaces and salary requirements. Competition and changing consumer requirements mean the establishments such as Smart Jeans Company has to innovate and provide customer-focused services. The apparel and clothing industry has to address numerous theories and frameworks to succeed or influence operational requirements. Some of the areas of focus include consumer decision making processes, costs, prices and the consumer, technology, and supply chains, brand management and competition, sustainability and innovation. The research methods have presented strategies to be implemented in collecting and analyzing the data. A quantitative research approach is employed, and a questionnaire is used to collect the information and data from respondents. The respondents are divided into two groups, and numerous questions will be asked ranging from behavioral questions to demographic questions. Reference Bhardwaj, V., and Fairhurst, A. (2010). 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(2010). “The competitive position of Thailand's apparel industry: Challenges and opportunities for globalization.” Journal of Fashion Marketing and Management: An International Journal, 14(4), pp. 576-597. Read More