Retailer Branding and Store Design - Case Study Example

An Investigating Into Retailer Branding and Store Design and Merchandise Assortment Introduction Popularity among the retail chain stores has to do with the satisfaction of the consumers. This will be determined by fair pricing and god services that can be appreciated by the customers. Therefore, Harvey Norman and JB Hi- Fi are two of the stores that have built a positive reputation in the market due to their popularity among the consumers. Harvey Norman specialises in household appliances and it is situated in Australia. Its success has significantly developed over the years and is now a franchisor to other chain stores (Chugh & Ghandh, 2010, p. 236). Moreover, the store itself is a franchise and the main brand is owned by Harvey Norman Holdings Limited. The store was opened in 1961 by Grey Harvey and Ian Norman and they focused their store on electric goods and appliances. The success of the business is attributed to heir innovative approach to business as they decided to invest on expansion of the business. By 1979, Harvey Norman was recognised as one of the largest retail stores since it had 42 stores, which made a lot of sales and, the profit rates were quite high (Merilees & Miller, 1998, p.899). JB Hi- Fi just like Harvey Norman is recognised as a successful retail chain store that specialises in the electronic and household appliances. The store was established in 1974 by John Barbuto who then decided to sell his business to other investors, Richard Bouris David Rodd (Chugh & Ghandhi, 2010, p. 236). After the two businessmen had taken over, they decided on expanding the business, which was a success because in 2000, they had 10 stores and high rates of profit. The main advantage that JB Hi- Fi has when starting out was that they specialised on unique products. This was evident when they first cleared out their stock and speclialised on CDs mainly making them the first store to in the music retailers department to do so. Literature Review Harvey Norman The main idea of expanding the business was a risk that paid of quite well as the reception in the market was good. After a period of war between Alan Bond and Grace Bros on taking over the stores, Alan Bond took over the chain and shortly after Harvey and Norman were fired from the store. After the incident, the store focused on expansion and the purchase of new stores. By the end of 2000, the success of the stores was recognised beyond Australia in nations such as the United States as it had 10 stores and had acquired a strong position in the furniture and computer market (Chugh & Ghandhi, 2010, p.237). The evolution of technology has been a positive factor for the stores as it means the availability of innovative new products thus, breaking monotony for the customers. Company structure The operating structure adopted by the company is quite unique on the terms that a separate franchisee operates each department store. The main advantage in this strategy is that each franchise is contributing to the revenue of Harvey Norman Holdings Limited. This also sets out a policy that is advantageous for the consumers and the employees as well (Merilees & Miller, 1998, p.899). The salespeople are allowed to work in their franchise as each section is a separate franchise. Hence, the employee working in the computer department cannot be allowed to assist customers in the furniture department and the system ahs been very efficient over the past years. Home Renovations The stores have a Harvey Norman design and renovation department that specialises in the design and renovation of kitchen, bedrooms, offices, bathrooms and other related areas. Its success has led to the closing of other stores that specialize in the department in Australia. Move into Stationery The company and decided on investing in the supply of office works in 2007. They achieved their goals by establishing five stores but late on opted to close them as they were not competitive and were rather unprofitable. The Company has invested their time, money and energy in the international markets and, they have been building a strong market in the process. In the process of building their reputation, the company has had many controversies on the leadership aspect, misleading the customers on tax benefits and problems with other countries (Chugh & Ghandhi, 2010, p. 237). This has led to some criticism but this has not affected their goals as they their success is still evident. JB Hi- Fi After focusing their attention on CDs, the success of JB Hi- Fi has been evident as they have been able to open many stores in Melbourne. The retail store has also focused on the international market and they have been able to build their market in New Zealand in one of the largest cities. The store has also been able to import the CDs from other nations such as United States, United Kingdom and even form South Africa (Merilees & Miller, 1998, p.900). This has greatly increased the popularity of the store in Australia and New Zealand. In 2007, the store was marked as Australia’s largest CD retailer making a record of 131 stores in Australia and 10 in New Zealand. The store has been able to invest in other products, which are mainly the electric appliances such as the plasma and LCD televisions. The store has built its success over the years on making certain acquisitions and in 2010, it liquidated some of its businesses in New Zealand wishing to try out different strategies in the market. The retail stores have also been involve din various controversies where it was reported in breaching the Trade Act contract and misleading the consumers. However, this has not affected the market of the stores as they still have a strong position in the market. Comparison of Harvey Norman and JB Hi- Fi Stores Harvey Norman and JB Hi- Fi retail stores have a strong reputation in Australia and some parts of New Zealand due to their services and products that they are providing to the customers. However, they may be considered to be competitors due to the fact that they specialise in the same products in terms of electrical appliances although they have also invested in other markets (Chugh & Ghandhi, 2010, p.237). As much as they seem to have adopted the same trend in their business approach, they have contrast in different areas especially in their store design and merchandise assortment. Store Design: Harvey Norman Stores The three main Harvey Norman stores in Australia have been completed by Broad. Therefore, they have a distinct style that is present in all the three stores. The locations of the stores are at Whyalla, Mount Gambier and the latest retail store is situated at Munno Para (Anon., 2011). The location of the stores was decided on by Broad on convenience terms as they would be easily accessible by the public and after seeking developmental and planning approval, the construction continued. On the outside, each of the stores possesses different designs, which are considered to be quite unique. However, on the inside, the stores have features that are quite similar. E ach of the stores ahs a showroom area used for the display of the products where each product has its own show room so as to create a distinction for the consumers. There is a room for exclusively for the furniture and bedding and for the electrical appliances, and computers. The presence of the extensive warehouse is another unique feature present in all the stores. The warehouse, amenities and administration department are all located on the mezzanine floor, which is conveniently located near the extensive warehouse (Anon., 2011). The three stores also have tilt panel concrete walls, steel clad roof structures, steel frames and the installation of mechanical and electric services. The external environment is designed to satisfy the customers as the extensive care space is very important due to the many customers that the stores have and there is also a hardstand area for service vehicles also fit to serve the customers. Merchandise Assortment The merchandise assortment in the store is quite convenient as the products are in different locations depending on the franchise. The furniture and bedding is found on different locations from the electrical appliances and the computers. The available furniture is unique and of different designs giving the customers a wide variety. The household appliances are many making it convenient for the customers to get most of the appliances under one roof (Anon., 2011). Looking at the electrical appliances and computers, the store has the latest products in terms of technology and is of a wide variety giving the customers the same opportunity of having different products in the same location. Store Design: JB Hi- Fi The JB Hi- Fi store in Sydney is very attractive; the exterior of the store is designed in a manner that suggests the type of products sold in the store. The building is designed to support the selling of the music CDs as well as the electrical appliances. The store has different display sections where they display the latest electrical appliances and the computers. There is also a room for the music CDs where the customers can have the opportunity of listening to the music in the show room (Anon., 2011). Although the stores lack showrooms like those present at Harvey Norman, the display sections serve the same purpose as the showrooms and have been quite effective. The design is quite convenient for the customers more than for the workers. The store is very colorful making it quite attractive and one can easily view the products through the glass windows as the products are on display (Chugh & Ghandhi, 2010, p. 237). However, unlike the Harvey Norman store, JB Hi- Fi does not have an extensive warehouse although there they have a warehouse located in the store. The parking space is also not extensive as there are other stores using the location. Merchandise Assortment The JB Hi- Fi store is widely known for its wide variety of the electrical appliances. The store is a designed a catalogue that shows the wide variety of products in alphabetical orders. This has proven to be very efficient as the consumers can first inquire before visiting the stores and making the purchases (Merilees & Miller, 1998, p.901). The store is organised in a manner that is very convenient for the customers in locating the products. Recommendations and Justifications The Harvey Norman store has specialised in two fields of products that are not quite related but very applicable to the consumers. The furniture department has attracted a market of its own and the electrical appliances a different market. However, as much as the success of the stores is evident globally, there have been several complaints from the consumers. Some of the customers claim that some of the products advertised in the catalogues are not present in the stores and the staff is insufficient in assisting the customers. The stores should be able to change the catalogues if the products are out of stock and may take time to renew it. The stores should also look at their supply chain since making customers wait for months after booking the product is not fair. The products should be readily available and if not the staff should be able to advise the consumers on different options. Since the store specialises on the policy of each franchise having their own sales people, the staff should be able to conduct their duties effectively (Chugh & Ghandhi, 2010, p. 237). The fact hat the design of the stores provides different rooms for different products makes it more convenient for the staff as they should be able to conduct their duties without any confusion. The expansion project of the stores is very profitable and their new customers from foreign countries appear to be enjoying the services offered. The JB Hi- Fi stores are quite focused on specialising in products that are quite related. The music CDs and the electric appliances revolve around the concept of technology and the sales are quite related. The consumers can purchase the music players and at the same time the music CDs, it quite convenient for the customers as they can get a variety of products in the same store without necessarily having to look for them in other locations. The electrical appliance available in the store are not the only functions of the stores as there are also other services available such as printing. There have not been many complaints from the customers other that a mistake made by the stores on the advertising of some of their products. This created a controversy that was soon solved. Engaging in activities such as recycling could be beneficial as the go green initiative is being highly embraced by different companies. Conclusion In general, the paper has looked at the Harvey Norman stores and the JB Hi- Fi stores. Harvey Norman has had a lot of successes in the industry attributing it to their expansion strategy and the franchising of goods. The controversies that the stores have been faced with over the recent years have involved the pricing of their goods and criticism from Gerry Harvey. However, this has not stopped them from continuing to flourish. The same trend has been observed in JB Hi- Fi stores where the success of the store has been significantly increasing despite the few controversies encountered. The two stores are similar on different grounds but also have their differences in terms of store design. Both stores can be considered to be competitors as they specialise in electric and household appliances. However, the customer claim to be having satisfactory services and goods form the stores other than a few complaints. APPENDICES Appendix 1: Check List Search for information form textbooks and articles Visit the selected stores Conduct a survey through observation only on both stores Make conclusions from what I have observed Appendix 2: Individual Reflection on Increased awareness According to the information available on both stores Harvey Norman and JB Hi- Fi, the retail marketing is a profitable market based on the many opportunities available. However, the market can be very competitive and one has to come up with innovative management strategies in order to gain a large market share. Both stores started out as a single store and expanded with time as it did not happen spontaneously. The main advantage that the two stores when they were starting out is that the market was still new and not many investors had discovered it. However, looking at the market now it has significantly developed with time and the rate at which it is growing is very high. Therefore, one has to approach the market diligently applying innovative skills in the management of the employees as they are in direct contact with the customers. This will help build a good relationship with the customers, which is a positive attribute. Serving the customers appropriately is the main aspect that will make the business grow and one can be able to invest in other areas as well. As much as both retail stores have chosen to invest in few different products, providing a variety of products to the consumers is very efficient. Consumers appreciate getting their products from one location and the variety will help sustain this fact. Bibliographies List Broad, 2011, Harvey Norman stores, SA. [Online] Available at http://www.broad.com.au/by-state/south-australia/item/199-harvey-norman-stores-sa.html [Accessed 4April 2011]. Chugh R, & Grandhi S 2010, Electronic retailing in Australia: A review of Australia's top 20 retailers, Information Management and Engineering Journal pp.235- 241. JB Hi- Fi official site, 2011, JB Hi- Fi store locations and products. [Online] Available at http://www.jbhifi.co.nz/stores/ Merilees B & Miller D 1998, The superstore format in Australia: opportunities and limitations, Long Range Planning 30(6), 899- 905. Read More