The Role of Quality Information Sharing and Supply Chain Proximity - Case Study Example

Name Grade course Tutor Institution Date Marketing Performance Report Introduction Houzit is a home wares store in Brisbane operating a total of fifteen stores. According to a report from Lambers Consulting for a period of six months, the estimates provided by the consulting firm indicate that the market for home wares in Brisbane is $199 million per annum. This figure represents a rise from last year's figure of $175 million per annum last year. The consulting firm had predicted a growth of 10% for this year. Migration from other states has been attributed to the high growth. The building activities in Brisbane have contributed to the high numbers of migrants and Lamberts Consulting predicts that the same trend will go on for not less than coming five years. The fifteen Houzit stores have been making weekly sales averaging $28,200. The prediction had been 8.5% on the sales of $24,680 per week previously. Houzit had expected to achieve a market share of 12%. Internet market took $100,000. The company believes that the amount spent on web marketing is justified. This is because the chain of stores expects to sell more home wares online and industry trends point to the fact that online marketing is set to account for a larger share of sales for any company. The company intends to maintain the current market share and thus achieve growth which is solid and controllable. The paper therefore provides an analysis of the outcomes of the three marketing activities. Analysis 1. Analysis: (a) Magazine advertising and Public Relations The head of the Public Relations was charged with the responsibility of coming up with advertisements which would be featured in the leading magazines which focus on home wares. The company spent $250,000 on advertising, $30,000 on Public Relations. Many companies opted to cut down on their advertising budget but Houzit realized that it was the perfect opportunity to promote their goods and ensure that it met its targets. The company's head of public relations department, Marie was to make write ups which would be published in magazines and the magazines’ websites. The write ups concentrated on highlighting the strengths of the chain of stores. The write ups also set out in detail the reasons why the would-be clients should opt to purchase from Houzit store and not from any other stores. Marie is a good writer and confident when speaking to any audience and she demonstrated her mettle when addressing various workshops and expos on home wares which were organized in the city of Brisbane. The magazines in which Marie made the write ups concentrate on home wares and have a wide readership. There are many readers in Brisbane who have made subscriptions for the magazine and it is certain that many people got to know about the offers made available by the company. A review of the people who purchased and read the magazines dealing with home wares showed that it was mostly middle aged people who stuck to the traditional way of reading the written word to get the information which they deem necessary. Public Relations involved responding to queries from clients and potential clients. This is a mode of creating awareness about the quality of the company’s products and the offers and after sale services offered by the company. The advertising and public relation did produce some impressive results for the company. This was deduced from the feedback obtained from the clients who visited the stores and stated that they got the information through advertisement. (b) In store promotions and web based promotions Houzit put Tony in charge of web based promotions. He was so chosen because of his expertise in web search maximization as well as an expert in web page design. Tony was assigned the role of creating web pages which would display advertisements about the company’s products. The company’s website would also provide a platform through which customers would be able to order for goods online and make payments for the same using credit card. The chain of stores spent $60,000 on in store promotions while web based promotions took a total of $100000. In store promotions involved special offers for the clients who met certain criteria. The company offered special discounts for a given number of clients. The company also offered incentives to clients who purchased a lot of goods. The incentives offered by the company included offering free transport, gift vouchers or even tee shirts having the company logo printed on them. The chain took a lot of efforts to ensure that its presence on the web was felt. This was done through the services of Tony, a specialist in search engine optimiser. The job description of Tony involved designing web pages for the company. Tony was also a specialist in search engine optimization. Tony therefore, came up with interactive websites. The website is aimed at offering as much information as possible to the clients regarding the company products. The clients can also see the pictorial representation of the goods. People were able to pick the wares they wanted and pay for them through their credit cards and the company would then organize delivery of goods to the clients. The web based promotions registered the highest number of customers to the company. A great majority of clients reported obtaining information through the internet. (c) Changes in marketing and calculated marketing metrics (ROMI) and market share. As a result of the changed tactics by the company, Houzit was able to increase its sales by bigger margins than previously expected. The increased sales could also be explained from the influx of workers to Brisbane. The report from the research firm indicated that part of the reason why the house wares sector was doing very well was due to the people flocking the city as a result of the construction industry in Brisbane. This state of affairs has been a boon to Houzit since the first six months have posted figures which are better than expected. The company would have to change its strategy to maximize on the new workers who have been flocking and are expected to continue getting into the City due to the enlarging market base. The company would have to advance a strategy to woo the new entrants into the city who are attracted by the booming construction industry. The figures available give a clearer picture as to the real performance of the company by using certain measures which determine the level of performance of the company. The important figures in this instance include measurement of Return on Market Investment (ROMI) and calculation of the market share. These measures are only determined after determining the actual growth. By using the difference between expected growth and actual growth, the company is able to determine the extent to which the company surpassed the expectations of the management. These figures are important in setting a company on the proper path to growth. Expected Growth is 24,680*108.8%=$26,778 per store. Fifteen stores have 26,778*15=570,200. Expected sales for the year =570,200*52 Weeks=19,250,400 Actual sales are $28,200*15 stores=$423,000*52=21,996,000 per annum Return on Market Investment (ROMI)=2,745,600/860,000=3.12 Market share=821, 996,00/199m=11.05% These are the most important figures to determine the future prospects of the company and determine its current status. 2. Key Performance Indicators (KPIs): Key Performance Indicators aid an organization is defining and assessing the progress it has made with respect to the goals that the organization has set to achieve. An organization need to first redefine its mission, know who its stakeholders are and in addition define the goals that it seeks to achieve. Key Performance Indicators are used by a company to determine whether it is moving towards attaining the goals that have been set out. Key Performance Indicators should be measurable and should be determined in advance (Narasimhan and Nair 303). Key Performance Indicators are supposed to be based on the most important factors for the success of the organization. It should not be expected that all organization should have the same Key Performance Indicators. Key Performance Indicators ought to reflect the goals set out by the organization. An example is with Houzit setting a goal to increase its market share to a certain percentage. For a Key Performance Indicator to be valuable it should be possible to measure it with accuracy having earlier defined it (Parmenter 29). There are a number of Key Performance Indicators that can be brought out from Houzit's plans. An important point to note is that once a Key Performance Indicator has been defined; the same definition should be constant and not subject to change after every year. It is a prerequisite that targets should be set for every Key Performance Indicator. For a company seeking to be considered as the most reliable employer, it could come up with a way of coming up with the rate of staff turnover which is Key Performance Indicator for such a company (Narasimhan and Nair 305). For the purposes of Houzit, it has clearly defined its Key Performance Indicators. The first Key Performance Indicator is having a growth of 10% in sales for the current year. Another Key Performance Indicator by the company is to increase its market share by 12%. These figures are extremely important whether a company has achieved its target or not since they are always to be relied upon whenever decisions have to be made regarding the future. With regard to sales, the averages for the stores have grown to $28,200 per week per store. The company had expected to achieve a growth of 8.5% on the previous figure of $24,680 per week per store. The stores' average performance had been expected to rise to $2677.8 but in fact the company made an average of $28,200 per week per store. With regard to sales, the company had set a figure which is quantifiable being a growth of 8.5% over the previous average sales for each of the chain's fifteen stores. The company had aimed to achieve a market share of 12% but figures show that it has achieved a market share of 11.05%. This is a company which has identified what its Key Performance Indicators are and these are sales and market share. The company has been able to achieve and surpass its expectations with regard to the sale while it has failed to achieve its objective with regard to the market share. There could be a possible explanation for this kind of scenario. It is highly likely that there are many players in the home wares business in Brisbane. It is also worth noting that Houzit did not find it necessary to increase the number of the stores from the current number which is fifteen. 3. Targets Some of the over performances are reflected from the report by Lambert Consulting which estimated that the market for home wares in Brisbane had gone up from $715 million per annum the previous year to $199 million per annum for the current year. The other over performance which is directly linked to efforts by Houzit is the increase in sales by over the projected 8.5%. Lambert Consulting expects the growth in the home wares business to continue growing at probably the same rate for the next five years. The company needs to be even more aggressive in its advertising if it is to achieve its set objectives. The past six months saw $250,000 being spent on advertising. The company spent $30,000 on Public Relations; $60,000 on in store promotions while internet marketing took a handsome amount of money which is $100,000.The Company believes that it has been for a good cause to spend the extra money for web marketing. The reason for this is that the company expects to increase its sales conducted over the internet. The current web marketing activities point to the shifting nature of sales and marketing point to the fact that people are shifting from the traditional ways of marketing. The modern way of advertising and selling goods is through the internet. This is a mode which is gaining currency among many business owners around the country. For any business to survive in a changing environment, it has to change and conform to the latest ways of conducting business (Narasimhan and Nair 307). Where possible, business owners should strive to stay ahead of the pack. This can only be achieved by finding novel and innovative ways of doing business. Constant research and vigilance are very vital determinants of whether a business is able to stay afloat or it succumbs to pressures of competition and flounders. Based on the encouraging figures from Lambers Consulting Company and the outcomes of the past six months, it is important that Houzit changes tact and sets up new targets for the coming one to one and a half years. The basic thing would be that the Key Performance Indicators do not change but only the projected figures would change. The company made the decision not to push to an increased share in a market which is growing. This decision was tactful in the sense that the company wishes to have a smooth administration and offer high quality services to its clientele. It is trite that even if the company retained the same size of market share, it is possible to increase it sales since projections indicate that more and more people will be drawn to Brisbane due to the construction boom in the port city. It would be prudent for the company to set its projections within a duration which is neither too long nor too short. It would be wise for Houzit to set its estimates for duration of one year. These figures could however, be subject to be reviewed probably after a quarter or even after six months. Expected sales could be based on the actual sales that the company achieved in the first six months. It would also be good enough for the company to set a target for customers who are to purchase its products through the web. Actual sales are $28,200*15 stores=$423,000*52=21,996,000 per annum This figure could be retained but replace the current projections for the year. Works Cited Narasimhan, Ram and Nair, Anand. The antecedent role of quality, information sharing and supply chain proximity on strategic alliance formation and performance. International Journal of Production Economics, 96. 3 (2005): Pages 301–313. Parmenter, David. Key Performance Indicators (KPI): Developing, Implementing, and Using Winning KPIs. New York: Key Performance Indicators (KPI): Developing, Implementing, and Using Winning KPIs. Print. Read More