Sustainable Growth in Convenience Food Store Business - Literature review Example

Sustainable growth in convenience food store business Sustainable growth in convenience food store business Literature Review Market orientation of retail business: use all 360 degree of marketing activity to push their product to their customer. 360 degree branding is when a business in this case retail businesses perform activities that consider the identity of the brand and inclusiveness in the approach for the presentation of the brand in all consumer contact points (Mohr, 2010). Changes in the economic environment, globalization, technological advancement, among other factors have led to the need for small business to take on new marketing orientation to allow for future growth and development (Prepletaný, June 2013). Laurel (2003) believes that the alignment of the functions of the business in terms of meeting consumer needs and success with the needs and functions of the employees is part of the 360 degrees marketing orientation required for retail business to grow rapidly in future. It also entails being able to position the retail business in a manner where the brand message is communicated through a wide array of media tools to reach the desired audience for the given consumers to change the media they prefer as a medium for their access of the information on the products. This entails selecting “communication tools that are best at accomplishing the specific objective established for the retail brand at a particular time” (Shimp, 2007, p. 14). Mitchell et al. (2012) have the view that a market orientation of 360 degrees marketing activity will be essential in ensuring the efficiency of the marketing activities of a retail business. This in their view aids the business to ensure all the participants in the marketing activities are involved fully, the audience is well selected, and the wide array of communication media ensures an all encompassing marketing for the retail business. This results in the development of the retail businesses due to the increased exposure, high client retention, ability to incorporate feedback and other changes to products and value offerings, understanding the needs of the consumers, and incorporation of the views of the consumers in the development of new products to be offered by the business (Blythe, 2012). 360 degrees marketing orientation also allows retail firms to develop authentic brands that meet the needs and demands of the consumers. There is a requirement for the provision of the real thing and not hype by the consumers in retail business and this can be achieved through the incorporation of a 360 degrees marketing orientation by retail businesses (Verhoef, 2009). The marketing opportunities recently available for retail business to harness are social marketing including the use of twitter, facebook, and instagram, internet marketing using websites and search engine optimization, guerilla marketing strategies including painting on walls, offering coupons, and service and product testing, and other marketing and advertising mechanisms that allow for increased market share and growth (Lincoln, 2009). Zarrella (2010) defines social marketing as the use of social media platforms for advertising and information dissemination purposes on the products and services offered by a business aimed at persuading the readers and users to purchase or access these products or services. Payne and Frow (2013) give the Tesco as the main retail business that has used 360 degree marketing to push for the success of its business using Tesco promotions, loyalty cards, new product launches, Tesco club card, coupons, television advertising, and reduction of prices of branded prices. The success of these strategies is measured by Tesco through the realization of the increased access of information on the needs of the clients, increased sale of products by the company, and ability to reach and extend the market share of the company within the United kingdom and globally. However, there are arguments against the use of a 360 degree marketing initiatives for a business including the inability of the retailers to determine the honesty of the feedback received. The clients may give dishonest feedback aimed at ensuring compliance to norms and virtues in the community misleading the true situation giving the retailers misleading information to which they base in decision-making. However, this disadvantage can be avoided by allowing for anonymous feedback increasing the credibility and chances of receiving honest response. The other disadvantage facing the 360 degree marketing scheme is that there is a challenge of ensuring consistent interpretation of positive and negative behaviors in the course of retail purchases and information seeking. Innovation, Research, and Development push and pull for retail business Interaction model of innovation is the situation where there is imitative behavior in the purchase decisions by the customers and is mostly common in instances where there are high innovation levels, access to information, and price inelastic demand. This can either be technology push or market pull as explained in the proceeding paragraphs in the retail sector. Technology push entails a business through research and development, product development and sales result in the generation of new inventions. Innovation, research, and development entail the efforts taken by retail business to incorporate new skills and technology in their businesses as a measure of positively influencing the purchase of retail goods by consumers in their stores. The impact this has on retail business is a reduction in service time for the clients, increased service rates, reduced costs of setting up and delivery of products to consumers, ability to ensure the marketing information reaches the consumers within a short period and at a reduced costs and increased access of the market by retailers (Javadi et al., 2012). Innovation also allows retail businesses to reduce operation costs increasing the profit margin and increasing the ability of retail businesses to compete with other businesses. Technological development is a main factor that positively influences the development of the retail business sector of the economy according to Verhoef et al (2009, 30). In their view, they believe technological advancement and its incorporation in the retail business will enhance ability of the business to serve clients faster and meet consumer needs. Technology advancement has allowed retail business to create a lively, interactive, and engaging business environment through which they can interact and create a rapport with the buyers. There has been use of smart phones and tablets for product demonstration, social media sharing, information dissemination, and payment in some high end retail stores and incorporating this in other retail outlets will positively influence the development of these retail businesses (Ellis-Chadwick, 2007, p.7). Large interactive visual display units are the other innovations that are poised to have a positive influence on consumer purchase on retail stores owing to increased interaction between the retailers and the consumers as this create a powerful, interactive engagement platform for consumers. On research, big data allows retailers can collect and store high volume of consumer data for analysis that aids in decision making purposes on the consumer needs and interests appertaining to the products and services offered at the retail stores (Tasner, 2010). This results in the augmented understanding of the retailers of the needs of the clients, the products that have to be shelved, and the kind of products to be introduced at the store. This augments the ability of the retail outlets o move with fashion and retail trends of the consumers aiding in avoidance of losses resulting from overstocking of nonmoving goods and shortage from stocking less of goods in high demand by the consumers (Swinyard, 1997, 248). Research and development also allows retail businesses to have a better understanding of the customers through taking surveys, interviews, and focus groups, analyzing the data and using this information for better decision making allowing for marketing choices that augment the productivity and success of marketing initiatives in a business (Panda, 2009). Big data allows for the understanding of the basket size of the business influencing the growth and productivity of retail businesses. An analysis of the shopping basket aids the identification of the products purchased by the customers at a specific time (Gartner, 2004). Analysis of this data allows retailers to have customer insights for the promotion, assortment, and store design for better development and success of retail business. Basket size analysis allows the retailers to have a change in the store layout and augment service delivery for the customers due to the availability of basket size insight in the hands of the retailers (Garner, 2004). Retail businesses having an understanding of the basket size of the consumer during different periods and seasons and in different localities allow them to conduct business operations and activities for the facilitation of better service delivery and provision of food to meet the different needs of the consumers (Hess, 2009). The main ways through which Tesco has used technology push in its retail business is the introduction of self-service stations to reduce reliance on high human resource in its operations, data collection from club cards allowing for the analysis of client requirements, and research and development aimed at further development of products and better service delivery. Market push entails ensuring the needs and demands of the customers are met by the innovation instituted in a retail store. Innovation can be harnessed to lead to the development of retail business is formatting of the stores. The formats of the stores in different areas have to be formatted in a manner that augments the ability of the population accessing the retails shops and making purchases. The different formats of the stores include the use of multipronged store format approach consisting of supermarkets in the neighborhood, discount stores, online stores, hypermarkets, and convenience stores. Online stores are boosted by the augmented use of the internet by the members of the population and an increase number of people using the internet in making purchase from retail stores (Vel & mosavi, 2010). Innovation incorporation in retail business as noted by Sikiti da Silva (17 Jul 2006) will entail a migration to multiple from single sale points, having customer focused systems in the stores, and marketing through dynamic digital display. He also believes it entail making stores intelligent and connected to the needs of the clients, incorporation of wireless technology for easy deployment, empowering employees with updated information (Sikiti DA Silva, 17 Jul 2006). Research and development also aid in the development of payment options including electronic payment such as cell phone based promotions and payments, sign and go IBM system, finger-touch payment system resulting in the accruement of benefits such as fast payments, reduction of fraud, and less handling of cash (Chou, 2010). Market push innovation is evident in the activities of Carrefour through the development of new payment methods, introduction of new products, and creation of new product display facilities for the customers. However, technology push and market push innovation may result in the complexity of products and use of many resources in the development phase of the services and the products resulting in increased prices. The other disadvantage of this method is the need to invest higher amount of funds for the achievement of the development needs of the business in terms of well trained personnel and technologically advanced machinery that may not correlate with the revenue streams from sales (Morris et al, 2008). Information from internal data collection systems in a company is beneficial through allowing the management to assess different aspects of business performance, generation of data for decision-making, and realization of the benefits of varying intervention on the satisfaction of employees and customers. Franchise system for Retail business Franchising involves a small organization, mainly a startup, purchases a franchise from a large organization to benefit from the brand name of the organization, as the organization is already established and functional (Barkoff & Selden, 2008). Retail businesses have a high chance of growth and development through the adoption of franchising system of business and this is coupled with the availability of different advantages that the retail businesses will accrue from franchising. The benefits these retail businesses will access include access to talent for the management of the stores giving other members of staff and the management the incentive to better work performance. This is due to the preference by people to work hard at bettering the business than as an employee making retail businesses better when they are run as franchises (Sidhpuria, 2009). The other benefits accrued by retail businesses as franchise are the available of capital for expansion as franchises put in capital for opening franchises of the retail business and minimizes the risks expansion and growth of the business. Franchising of retail businesses generates high profits and financial returns at a lowered risk due to the earning of sale royalties at different franchises with little financial obligation for the business. Franchising also enables retail businesses to reduce management control over the employees as the franchises are run as independent businesses with differing goals from the franchisor reducing the chances of conflict of interest increasing the ability of the retail businesses to grow and develop in future. Franchises also offer an opportunity for retail business to grow and develop in future due to the ability to augment market penetration. This is due to the presence of knowledge of the franchisee in the community from other business operations and better understanding of the needs of the clients at a community level allow for the franchisor to customize the products to the needs of the community. Franchising also allows for greater commitment of the business due to the investment by the franchisee on the retail business and accrues direct benefits from the success of the business. This commitment is higher than when the retail business employs workers to manage its businesses increases the efficiency of the operations, increasing customer satisfaction, and ability for the franchise to optimize the use of the resources. Real service provision by the franchisee of the retail business gives them pride and allows them to strive to exceed client expectations allowing for word of mouth advertising and customer loyalty to boost the operations and augment the success of the retail business in a franchise system (Boylan, 2001). Master franchising allows retail businesses to explore and expand operations to the international level through replication of the operations in a specific country in another country with the same needs and characteristics. The only requirement is for the franchise business to adapt the operations to the local requirements in terms of language, legal requirements, and business customs. These allows for the retail business to have international operations, generate revenue, and profits without the need for registration of subsidiary companies and company branches in countries of operations (Sorescu, 1, 2011). Franchising is, therefore another important factor that will propel retail businesses to increase profitability and growth in future. This is visible owing to the benefits that have been derived by franchises including McDonalds, bata, Atklanta Bread Company, Family Mart, Nandos, Pacha, Wendy’s, among other franchises globally (Longenecker et al, 2003). The other option available for retail businesses as an alternative to having a franchise system is running operations by its self as a retail operator through no allowance of selling of licenses to the public as is done by Wal-Mart in running its retail business. 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