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Copy of Copy of unit 29 understanding retailing

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Transcript of Copy of Copy of unit 29 understanding retailing

BTEC 90 Credit Diploma Business
MUSIC SLIDE STUFF
Unit 29 - Understanding Retailing





By James, Eoin,
Callum, Sam &Jack


What Is Retailing ?

Retailers provide service to customers to a profit. They are able to do so since the aspects of retailing – operating from an appropriate location , offering attractive product assortments, ensuring enough stock is available to meet demand – add value to the products bought from suppliers and eventually sold to customers. Retailers cut their bulk deliveries from suppliers so individual customers can buy the quantity they require – very often a single item.


Hybrid Stores offer to consumers a variety of products in the same stores. An example of a Hybrid Store could be a Costa Coffee being set up in a Smith. The shops have merged and combined in order to increase the experience for the customer. This is also a good way for both companies to increase customer awareness which overall increases profits for both organisations.

Overall 410 outlets opened in the north west countered by 542 closures, which equates to a net reduction of 132 shops, double the net change in 2013 when there was a reduction of 65 shops. And the third highest net change of the UK regions.
"Regulation has blindsided the money shops, the advance of technology has hammered some phone operators and the internet continues to dent the clothing sector.
"Despite the benign economy, the net loss of shops has accelerated. The insolvencies of Phones4U, Blockbuster, Albemarle & Bond, and La Senza, a diverse cross-section of the retail market, epitomise these factors.

Retailers That Are Clicks & Bricks
Examples of C&B could be retailers such as:
Argos
River Island
Tesco
Boots The Chemist
These shop offer to customers a physical shop and an option to purchase products online.


What Is Retailing ?

Retailers provide service to customers to a profit. They are able to do so since the aspects of retailing – operating from an appropriate location , offering attractive product assortments, ensuring enough stock is available to meet demand – add value to the products bought from suppliers and eventually sold to customers. Retailers cut their bulk deliveries from suppliers so individual customers can buy the quantity they require – very often a single item.


Different Types Of Store

Structure & Organisation Of Retail Sector

Marketing Mix Diagram

Emerging Store Types


The majority of retailer stores now offer e-retailing which enable different customers around the world to purchase products over the internet. Using the internet has different advantages compared with traditional retail outlets. Other words known as the 3 C’s
Convenience
Choice
Cost

Types Of Store

What Is Retailing ?

Retailers provide service to customers to a profit. They are able to do so since the aspects of retailing – operating from an appropriate location , offering attractive product assortments, ensuring enough stock is available to meet demand – add value to the products bought from suppliers and eventually sold to customers. Retailers cut their bulk deliveries from suppliers so individual customers can buy the quantity they require – very often a single item.


Introduction

The Majority of shopping centres can have a greater proportion or service outlets. these include:







These organisations try to provide effective Extended Marketing Mix because they are able to see the magnitude of introducing these new parts to the process:
People
Physical Evidence
Process Of Gaining New Customers
Extended Marketing Mix: this is an addition of the usual marketing mix which is Product, Price, Place & Promotion. Other words known as the four P’s









Service Versus Product Retailing

Hybrid Stores offer to consumers a variety of products in the same stores. An example of a Hybrid Store could be a Costa Coffee being set up in a Smith. The shops have merged and combined in order to increase the experience for the customer. This is also a good way for both companies to increase customer awareness which overall increases profits for both organisations.

Hybrid Stores

Overall 410 outlets opened in the north west countered by 542 closures, which equates to a net reduction of 132 shops, double the net change in 2013 when there was a reduction of 65 shops. And the third highest net change of the UK regions.
"Regulation has blindsided the money shops, the advance of technology has hammered some phone operators and the internet continues to dent the clothing sector.
"Despite the benign economy, the net loss of shops has accelerated. The insolvencies of Phones4U, Blockbuster, Albemarle & Bond, and La Senza, a diverse cross-section of the retail market, epitomise these factors.

Clicks Over Bricks: Fewer Stores Opening On North West High Streets

Retailers That Are Clicks & Bricks
Examples of C&B could be retailers such as:
Argos
River Island
Tesco
Boots The Chemist
These shop offer to customers a physical shop and an option to purchase products online.


Clicks & Bricks

Size- The UK’s retail sector is £265 billion better off than most western European countries.
The UK has the biggest retailer, Tesco’s, they employ 280,000 people in the UK alone creating more and more job opportunities.
Is there a lot of opportunity for profitability for individual businesses?
How much does retail benefit employment in the UK?

Structure of Retail (Size, Profitability and Employment)

In town shopping is stores like multiple stores, department stores and service retailers. You would find these in places like Cambridge, London and Norwich etc. This is the largest category of retail and it also accounts for the largest volume of employment and sales.

Local shopping is a plummeting sector of retail because it doesn’t offer enough variety.

Out of town shopping is an upcoming retail outlet for consumers as these retail parks, or shopping centres, offer more choice and, since there has been an increase in car ownership, these have become a lot more popular.

In Town Shopping, Local and Out of Town Shopping

Location is very important for retailers because this is key to them making profits or, in bad cases, losses.

For instance you would have a Topman in somewhere like Bournemouth because it has an ageing population and Topman aims at a different category of consumers.

Therefore, places like London and Bournemouth require totally different types of retail because London has vast ranges of consumers and Bournemouth has to aim for a certain category of people.

Location of retail stores

There are 7 types of store:
Supermarket- e.g. Tesco, Sainsbury’s and ASDA
Superstore- e.g. Tesco, Sainsbury’s and ASDA
Hypermarket- e.g. Tesco, Sainsbury’s and ASDA
Discount stores- e.g. Pound land
Multiple stores- e.g. Marks and Spencer’s
Multiple variety stores- e.g. Boots and WHSmith
Independent retailers- Convenience stores

Structure of retail- Types of Store and Ownership

Tesco

Primark

ASDA

Wilkinson's

Sainsbury’s

Marks and Spencer

John Lewis

Sports Direct

99p shop

High quality

High price

Low quality

Low price

Structure of retail- Retail positioning map.

Supply chain

Non conventional channels

Sourcing

Stock control chart

Just-in-Time (JIT)

Tesco vs university convenience store

After-sales service

Distribution

Rail:is a good way to transort good around europe however internationally over longer disantces it maybe more cost effective to transport by water

Road:is the most popular method of transport and can be found in a huge varity of sub forms of transport depending on the purpose and what the specalised job is

Air: is the fasted option to transport goods over a large distance however the costs tends to be high meaning that it isn't offerten used unless the delivery are time critical.


water:is an great way to transport large quantity of goods over seas that ant food based, takes time and products cant be demand sensitive.



Movement of goods

Tesco can add value to their products by offering a delivery service for their products. This can provide Tesco with a competitive advantage of their competitors.
Technology and services make the delivery system much more effective. Tesco will send emails to their customers for expected time of arrival.

Transport

Pros and cons of Tesco’s distribution channel

Highland spring water:
Gets collected from the highland hill in Perth shire Scotland.
Sent to Speyside Glenlivet Water Company Ltd to get packaged and bottled.
Bottles sent in chilled lorry to Tesco’s Retail Distribution centres, closest one for us is in Peterborough.
Orders come in from individual Tesco stores that get sent the amount of bottled water they require.

Example

Pros and cons of distribution channels

There are 4 main ways businesses distribute their goods from the manufacturer to the consumer. Each time it goes to a different business the price will then increase. This is because all of the businesses will want to make more profit on the products.

Distribution channels

Once a product or service has been produced then businesses must consider how they will get them to the customers. There are 5 different stages in the distribution channel.

Manufacturer: The person/company that create the products.
Agent: They represent the retailers or wholesalers. They are effectively the middle man used for communication.
Wholesaler: These are company’s that buy in stock from manufacturer’s and sell on in bulk to retailers.
Retailer: They are shops that deal directly with the customers.
Customer: The people who are buying the product or service.

Introduction

Distribution of goods and services

Understanding retailing

Effective storage of products can add value to them because it means it is easier for the product to be found. This means the products have increased availability and customers will be less likely to go to competitors.

Storage

A retail distribution centre is a warehouse or other specialized building that has refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, wholesalers or directly to consumers.
It is vital to for businesses such as Tesco to have them because it is a place where all of the manufacturers can deliver the products that Tesco have ordered. It exists because it is to stop the overload of delivery trucks from separate suppliers all going to individual Tesco stores. It allows Tesco to only distribute a few of their own trucks from the RDC to their individual stores across the country.

RDC’s

Tesco, being such a large company, will have direct contact to all of their suppliers. They will get a cheaper price because they are buying in bulk and each stage of the distribution channel will not be trying to make a profit if it goes directly to Tesco.

Tesco’s Distribution Channel

Retailers are constantly under pressure to get all of the products in the right place and right time. They need all of their products to be available to maximise profits.
If the products are not available then customers will go to competitors to buy the product and may not return.

Why are distribution channels important?

Retailers utilise having a shop that is open 24/7 online. They can advertise all of their products as well as using different guys and distribution channels to get the product from the warehouse to the customer. This can be done in the form of home delivery guys.

E-retailing

Retailers have begun to use their own reliable brands to sell products to customers. Tesco have two main different own brands. Tesco value, Tesco finest and Tesco everyday value.

Retail brands

Thank you for listening

Please feel free to ask any questions you may still have
Considered as one of the ‘big four’ in the supermarket rankings – always competing

Affects customer service - may have to alter their company decisions and how they treat their customers

Competitor changes in customer service may mean Tesco have to alter the way they operate

- Increasing awareness of loyalty schemes

Adapting to a changing market for their customers to be satisfied and Tesco can stay in front of their opposition

- Changes in the way they serve their customers as the other leading supermarkets could be treating their customers with better benefits than Tesco

- In order to keep on top of them, they would have to replicate this or better it

Opposition


For most retailers, technology has had an enormous impact on the way that they operate. As for Tesco, there have been many changes which they have implemented in order to stay up to date and offer more convenience for their customers.

Online Shopping -
Weekly online shop delivered to home instead of instore
Use of Tesco app or website to order desired goods
Less one-to-one customer service
- Profits increased but less success instore


Technology


Winner or a loser in the retail industry
It can have a major influence on whether a company succeeds or falls behind their competitor

Reasons why customer service is so important for Tesco:
- RAPPORT
- CONFIDENCE
- WORD OF MOUTH & CUSTOMER SPENDING
- RELIABILITY
- APPROACHABLE & RECOGNISABLE
- COMPETITORS & LOYALTY

Starting out afresh with them

New customer more than likely to have transferred from a competing supermarket such as Asda or Sainsbury’s

Wanting a better deal and service

Not always one-to-one service in store - may the way they treat their customers

For example Tesco’s Clubcard or the promotions they offer in store and online

This is how new customers are integrated into the company

20 years ago online shopping did not exist - harder to promote to a new customer

Competition would be much smaller than it is now

Easier to promote products and promotions through personal e-mail & social media

New Customer

Countries which Tesco operate in fall into a recession - the way they serve their customers and loyalty bonuses would have to be altered

2008 UK recession which continued into a double dip

Some of the changes Tesco made in order for customers to stay loyal and returning..

Survival Strategies & link to customer service change –
Tesco Price Promise

Local produce for local stores – customer loyalty

Price cuts – altering pricing strategies,

Prices more competitive with the opposing supermarkets - returning customers


Promoting own brand ‘Tesco Value’ products more heavily – raising awareness to those with less disposable income


Decreased the amount of stores they had in the UK

Recession

Customer service has developed a lot over the past 20 years – especially for Tesco.
The development of customer service for retailers explained
T ECHNOLOGY
O PPOSTION
R ECESSION
N EW CUSTOMER

Development of Customer Service

After sales service refers to various processes which make sure customers are satisfied with the products and services of the organization.
good after sale service can lead to an improved
brands reputation and increased loyalty in a company because of the services in which they
provided.
in terms of there distribution channels
Advantages include
· Lower stock holding leading to lower rent and insurance costs
· Less likely that items are going to go out of date and losing the company money

Disadvantages are
· Less room for error
· Heavily reliant on stock being supplied on time

Storage in important
If products are stored efficiently this can save the business money as well as if the products Tesco store can be stocked as soon as the customer requires then this could lead to increased sales and
better customers satisfaction.

And if the products are not in store
then the majority of consumers are
likely to go to a competitor instead.




is the whole process of the raw materials being sourced and then eventually making its way to the consumers.
sourcing local products (UK)
advantages
lower shipping costs
unique selling point (local british beef)
easy to monitor transportation process
is a grey area which isn't illegal and entrepreneurs can purchase products likely cigarettes and electrical items at whole sale price and distribute else where.
Effects on Tesco profits & effects on customer satisfaction
When customer service is good, then Tesco's profits will be higher than when customer service is not as good, as it creates a rapport with the customer and they feel safe about giving their money to Tesco. Customer satisfaction is higher when customer service is better, which makes them more inclined to spend money with Tesco, thus increasing Tesco's profits.
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