CUSTOMER SERVICE

CUSTOMER SERVICE

• Customer service is the process of ensuring customer satisfaction with a product or service. Often, customer service takes place while performing a transaction for the customer, such as making a sale or returning an item. Customer service can take the form of an in-person interaction, a phone call, self-service systems, or by other means.

• All interactions between a customer and a product provider at the time of sale, and thereafter. Customer service adds value to a product and builds enduring relationship.

“To over-deliver in service to a customer is by far the most valuable thing to a business. Because there are only two ways to improve the operations of a business: increase sales or decrease costs.”

You will find it very hard to decrease costs, but you can offer better customer service and that allows you to increase sales. If that’s not enough to convince you, though, here are five reasons customer service is more important than anything else in your business.

1. The Best Customer Service Builds Trust

These days, people will only stay loyal to a company if they have very good reason to. Otherwise, there is plenty of competition available they could choose to move to. As a result, you have to work even harder to keep customers and build their trust in your brand. By providing the best in customer service, you will increase trust, and that could mean the difference between customer loyalty and customers who jump ship.

2. Customer Service Matters More Than Price

When studies and surveys have been completed, they continue to find that a large group of consumers say that customer service is much more important than price. To get the right experience, they are willing to pay more.

3. It Will Build Brand Awareness

If you don’t already know this, then it is time to learn. Word of mouth is the most powerful ally you have on your side. What your customers say to others could make or break your business. When you provide the best in customer service, guess what happens? People will talk about you. They will remember your brand. If they hear someone else talking that they need a specific kind of company, they are much more likely to say, “Oh, go to this place. They are great!”

4. Good Customer Service Reduces Problems

Problems are always going to arise for any business no matter how hard you try to avoid them. While you can’t run a perfect business with all the perfect customers, you can ensure friction doesn’t become an issue. If customers know that they can voice complaints and those issues will be handled properly, they will feel more comfortable doing business with you.

5. It Appeals to the New Customer

Once upon a time, business was all about closing the sale. It didn’t matter how you got to that point. These days, you will need to cater to the New Customer. This is someone who expects to be treated as a person, who wants more from the experience, and who does not want to be just a number. Better customer service will ensure you are providing them what they want.

When it comes to a business, nothing matters if you offer poor customer service. Keep these five things in mind so that you can understand just how important it really is for your own success. So, make sure you are offering the best in customer service, and enjoy the positive results.

Reference

http://www.daymondjohnssuccessformula.com/five-reasons-why-customer-service-is-more-important-than-anything-else/

STORE LAYOUT, DESIGN, VISUAL MERCHANDISING

Store layout and visual merchandising are factors that contribute to the uniqueness of a store. The exterior and interior of a store convey several messages about the store to the consumers. The building that houses retail store, (whether new or old) and the exterior design of the store are important aspects of the design of the store. Marquees, walkways, entrances, doors, display windows, the height and size of the building, colors and materials used, and theft prevention are some of the key factors to be kept in mind while developing a store's exterior. 

Managing space is the first and foremost concern of almost every retailer, when it comes to designing the store's interior. Space is always an expensive and scarce resource. Retailers always try to maximize the return on sales per square foot. Planning a layout for the store's interior is the first step in designing the store's interior.

There are three kinds of layouts - grid layout, race track layout and free form layout.

Allocating space to various merchandise categories in a store is very important. Allocation of space can be based on many factors like historical sales, gross margins, industry averages and strategic objectives. Apart from allocating space to various merchandise categories, space has to be allocated for carrying out some essential functions. Such space includes the back room for receiving the inventories and sorting them out, office and other functional spaces, aisles and customer service desks, floor space and wall space. 

The interior of a store influences the purchasing behavior of the customers to a great extent. Designing the interior of a store in such a way as to influence customer behavior is referred to as visual merchandising. It includes optimum and appropriate use of fixtures, displays, color, lighting, music, scent, ceilings and floor, and designing all of these properly. Merchandise presentation is the most significant aspect of store design, because it helps attract customers' attention. A retailer can resort to many forms of presentation such as idea-oriented presentation, item-oriented presentation, price lining, color presentation, vertical merchandising, tonnage merchandising and frontal presentation. 

Prevention of losses due to merchandise pilferage is a major cause of concern for all retailers. This issue should be addressed at the initial stage of store design. The retailer can use many electronic security systems like CCTV and EAS for the prevention of such losses. Thus, by appropriately integrating the various elements of store design (both exterior and interior), a retailer can create an excellent image of itself in the target customer's mind.

Reference

http://fitsmallbusiness.com/planning-your-store-layout/

RETAIL COMMUNICATION MIX

PROMOTION MIX

• A specific combination of promotional methods used for one product or a family of products. Elements of a promotion mix may include print or broadcast advertising, direct marketing, personal selling, point of sale displays, and/or merchandising.

The description about the promotion method.

•Public Relations 

~Communication that fosters a favorable image for the retailer

•Nonpersonal or personal

•Paid or nonpaid

•Sponsor-controlled or not

•Publicity 

~ Non-personal form of public relations whereby messages are transmitted by mass media.

  The time or space provided by the media is not paid for, and there is no identified commercial sponsor.

Reference

http://study.com/academy/lesson/the-promotional-mix-target-markets-buying-decisions-more.html

     https://www.bayt.com/en/specialties/q/143185/define-communication-mix/

RETAIL PRICING

Retail Price

• The price of a good or product when it is sold to the end user for consumption, not for resale through a third-party distribution channel.

Factors Affecting Retail Price Strategy

• Consumers
• Government
• Manufacturer, suppliers, wholesalers
• Current and potential competitors

Price Elasticity of Demand

• The sensitivity of customers to price changes in terms of the quantities they will buy:

~Elastic – Small percentage changes in price lead to substantial percentage        changes in the number of units bought.

~Inelastic – Large percentage changes in price lead to small percentage changes in the number of units bought.


Competition and Retail Pricing

~ Market pricing – Retailers often price similarly to each other and have less control over price because consumers can easily shop around.

~ Administered pricing – Firms seek to attract consumers on the basis of distinctive retailing mixes

Price Strategy

•Demand-oriented pricing

•Cost-oriented pricing

•Competition-oriented pricing

Markup Pricing Calculation

Markup percentage         Retail Selling Price- Merchandise Cost

  (at retail)                  =                  Retail Selling Price

                                 OR

Markup percentage              Planned Retail Operating Expenses + Planned Profit

  (at retail)                   =                            Planned Net Sales

Initial and Maintained  Markup Calculation

Initial Markup             Planned Retail Operating Expenses + Planned Profit Percentage                             +Planned Retail Reductions                  

Reduction              =                  Planned Net Sales +  Planned Retail

  (at Retail)

Maintained Markup       Actual Retail Operating Expenses + Actual Profit

Percentage                  =                          Actual Net Sales

  (at Retail)

References

http://www.businessdictionary.com/definition/retail-price.html

https://www.entrepreneur.com/article/193986

http://www.bizmove.com/marketing/m2y3.htm

SITE LOCATION

Three Types of Locations

• Isolated store - An isolated store is freestanding, not adjacent to other stores. This type of location has several advantages, including no competition, low rent, flexibility, road visibility, easy parking, and lower property costs. There are also distinct disadvantages: difficulty in attracting traffic, no variety for shoppers, no shared costs, and zoning restrictions.

• Planned shopping center - A planned shopping center is centrally owned or managed and well-balanced. It usually has one or more large (anchor) stores and many smaller stores. During the past several decades, the growth of the planned shopping center has been great. This is due to extensive goods and service offerings, expanding suburbs, shared strategy planning and costs, attractive locations, parking facilities, lower rent and taxes (except for most regional shopping centers), lower theft rates, popularity of malls (although some people are now bored with shopping centers), and lesser appeal of inner-city shopping. The negative aspects of the planned center include operations inflexibility, restrictions on merchandise lines carried, and anchor store domination. There are three shopping center forms: regional, community, and neighborhood.

• Unplanned business district - An unplanned business district generally has such points as these in its favor: variety of goods, services, and prices; access to public transit; nearness to commercial and social facilities; and pedestrian traffic. Yet, this type of location's shortcomings have led to the growth of the planned shopping center: inadequate parking, older facilities, high rents and taxes, discontinuity of offerings, traffic and delivery congestion, high theft rates, and some declining central cities..

Reference

http://smallbusiness.chron.com/three-types-locations-businesses-74244.html

RETAIL LOCATION

Where you choose to locate your retail business will have a major impact on everything your shop does. The difference between selecting the wrong location and the right site could be the difference between business failure and success.

Before choosing a retail store location, define how you see your business, both now and in the future.

• What do your customers look like?
• Can you visualize your building?

• Do you know what you want to sell and what you want your business to be known for?
• Have you determined how much retail space, storage area, or the size of the office you need?

Type of Goods

Examine what kind of products you sell, as some goods will require certain types of locations. Would your store be considered a convenience store, a specialty shop or a shopping store?

Convenience goods require easy access, allowing the customer to quickly make a purchase. A mall would not be a good location for convenience goods. This product type is lower priced and purchased by a wide range of customers.

Specialty goods are more unique than most products and customers generally won't mind traveling out of the way to purchase this type of product. This type of store may also do well near other shopping stores.

A shopping store usually sells items at a higher price which are bought infrequently by the customer. Furniture, cars and upscale clothing are examples of goods found at a shopping store. Because the prices of theses items are higher, this type of customer will want to compare prices before making a purchase.

Therefore, retailers will do well to locate their store near like stores.

Population and Your Customer

If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. Any of these sources should have information on the area's population, income and age.

You know who your customers are, so make sure you find a location where your customers live, work and shop.

Accessibility, Visibility and Traffic

Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if that shopper meets the definition of their target market. Small retail stores may benefit from the traffic of nearby larger stores.

• How many people walk or drive past the location.
• Is the area served by public transportation?
• Can customers and delivery trucks easily get in and out of the parking lot?
• Is there adequate parking?

Depending on the type of business, it would be wise to have somewhere between 5 to 8 parking spaces per 1,000 square feet of retail space.

When considering visibility, look at the location from the customer's view point. Can the store be seen from the main flow of traffic? Will your sign be easily seen? In many cases, the better visibility your retail store has, the less advertising needed.

A specialty retail store located six miles out of town in a free standing building will need more marketing than a shopping store located in a mall.

Signage, Zoning and Planning

Before signing a lease, be sure you understand all the rules, policies and procedures related to your retail store location.

Contact the local city hall and zoning commission for information on regulations regarding signage. Ask about any restrictions that may affect your retail operation and any future planning that could change traffic, such as highway construction.

Competition and Neighbors

Other area businesses in your prospective location can actually help or hurt your retail shop. Determine if the types of businesses nearby are compatible you're your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store. Place it next to a nail or hair salon and it may do much more business.

Location Costs

Besides the base rent, consider all costs involved when choosing a retail store location.

• Who pays for lawn care, building maintenance, utilities and security?
• Who pays for the upkeep and repair of the heating/air units?
• If the location is remote, how much additional marketing will it take for customers to find you?
• How much is the average utility bill?
• Will you need to make any repairs, do any painting or remodeling to have the location fit your needs?

• Will the retailer be responsible for property taxes?

The location you can afford now and what you can afford in the future should vary. It is difficult to create sales projects on a new business, but one way to get help in determining how much rent you can pay is to find out what sales similar retail businesses are making and how much rent they're paying.

Personal Factors

If you plan to work in your store, think about your personality, the distance from the shop to home and other personal considerations. If you spend much of your time traveling to and from work, the commute may overshadow the exhilaration of being your own boss. Also, many restrictions placed on a tenant by a landlord, management company or community can hamper a retailer's independence.

Special Considerations

Your retail shop may require special considerations. Make a list of any unique characteristic of your business that may need to be addressed.

• Will the store require special lighting, fixtures or other hardware installed?
• Are restrooms for staff and customers available?
• Is there adequate fire and police protection for the area?
• Is there sanitation service available?
• Does the parking lot and building exterior have adequate lighting?
• Does the building have a canopy that provides shelter if raining?
• What is the crime rate in the area?
• Are there (blue laws) restrictions on Sunday sales?

References

http://smallbusiness.chron.com/location-business-important-43239.html

http://www.yourarticlelibrary.com/retailing/shopping-malls-and-its-types-with-statistics/48436/

http://ezinearticles.com/?The-Different-Types-of-Shopping-Malls&id=9147109

RETAIL MARKETING STRATEGY

Element In Retail Strategy

•         Target Market - the market segment which the retailer plans to focus its resources and retail mix.

•         Retail Format - the nature of the retailer’s operations, its retail mix.

•         Sustainable Competitive Advantage - an advantage over the competition,

Competitive Advantage

        A competitive advantage is what makes you better than the competition in your customers' minds. Businesses were the first to adopt this method of success. But it is true for anyone, from an employee to a country. Before determining your competitive advantage, you've got to know these three determinants.

1. What you produce. Whether it's a good or service, you must be clear on what you are providing. It must be something that offers real value. That means you need to describe the advantages and benefits of your product or service. You've must be aware of trends that affect your product, especially new technology. For example, the Internet forced newspapers to redefine how they delivered the news.

1. Target market. Who are your customers? You've got to know exactly who buys from you, and how you can make them happier. That increases demand, the driver of all economic growth. Newspapers found out their target market drifted to older people. That's because they weren't comfortable getting their news online.
2. Competition. That's not just other similar companies or products. It includes anything else your customer does to meet that particular need. Newspapers thought their competition was other newspapers until they realized it was the Internet. How could they compete with a news provider that was instant and free?
3. 
   

Sustainable Competitive Advantage

Just because a company is the market leader now, doesn't mean it has a sustainable competitive advantage.

A temporary price cut to gain market share might work in the short-term. But that lead will disappear when it restores those prices to a profitable level. A company must create clear goals, strategies, and operations to sustain its competitive advantage. The corporate culture and values of the employees must be in alignment with those goals, as well. It's difficult to do all those things well. That's why few companies can create a sustainable competitive advantage.

Opportunities For Retailers To Develop Sustainable Competitive Advantages

- Customer Loyalty

- Location

- Human Resource Management

- Distribution and Information Systems

- Unique Merchandise

- Vendor Relations

- Customer Service

3 Approaches For Sustainable Competitive Advantage

• Build strong relationship with customers
• Build strong relationship with suppliers
• Efficient internal operationsHow Countries Use Competitive Advantage

How Countries Use Competitive Advantage

A country can also create competitive advantage. That's called national competitive advantage, or comparative advantage. For example, China uses cost leadership. It exports low-cost products at a reasonable quality level. It can do this because its standard of living is lower, so it can pay its workers less. It also fixes the value of its currency, the yuan, at a lower value than the dollar.

India started as a cost leader but is moving toward differentiation. It provides skilled technical, English-speaking workers at a reasonable wage. Japan changed its competitive advantage. In the 1960s, it excelled at cheap electronics. By the 1980s, it had shifted up to quality brands, such as Sony.

America's comparative advantage is innovation. U.S. companies bring innovative products to market faster than other countries. A great example is Silicon Valley, America's innovative advantage.

The reason for that is America's vast and affluent domestic consumer base. It's easy to test new product ideas and work out the bugs at home. They are marketed throughout the world once they are successful. Amar Bhidé makes a good point in The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Even if the United States starts to lag behind other countries in producing engineers, it's still better at bringing those innovations to market.

References

http://www.forbes.com/sites/susanadams/2013/05/30/the-worlds-most-competitive-countries/#4412a0a7b058