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Retail Marketing and Distribution

Sony Style

Iskandar Al

on 14 August 2011

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Transcript of Retail Marketing and Distribution

Double click anywhere & add an idea SONY LOOKS TO A SMALL-STORE FORMAT Background Established in 1946

Dealing with TVs, DVD player, and other electronics

Small company-owned Sony Style shop

Sales reached $740million as of 2006

Annual revenues are in the $1billion range Features: Sony Style Stores Convenient Store locations – can be located in upscale shopping centres/ CBD areas

Small Sized Format Retail - relatively small compared to conventional electronics retailers

Targeting at Women - aisles designed to accommodate strollers/ opening stores near female-oriented firms

Training and concierge services – each shopper can be greeted Question 1 Identify the pros and cons
of Sony’s small-store format Shoppers friendly products display

Convenience/ Location

Personalized customer service

Customer feedback

Hands-on experience

Well educated staff/ Knowledge Pros of Sony’s small-store format Limited product range – focus on high-return profit items

High operating costs – rent/ fixtures

Limited size of stores – need to consider ‘merchandise assortments’, ‘fixture’, ‘store layout’

A lack of attention – consumers may not notice them Cons of Sony’s small-store format Question 2 a) Should Sony use prototype stores? b) Should it use rationalized retailing? Definition Prototype stores – multiple outlets conform to relatively uniform construction, layout, and operations standards. Prototype stores make: -

Centralized management control easier

Reduce construction costs

Standardize operations

Facilitate the interchange of employees among outlets

Allow fixtures and other materials to be bought in quantity. Costs savings/ reductions

Display a consistent chain image a) Should Sony use prototype stores? b) Should Sony use rationalized retailing? But, a strict reliance on prototypes may lead to: -


Failure to adapt to or capitalize on local customer needs

Too little creativity Definition Rationalized retailing – combine a high degree of centralized management control with strict operating procedures for every phrase of business. Virtually identical manner

Rigid control and standardization – easy to enact and manage

Add significant number of stores Question 3 a) Pros & Cons of a top-down space management approach for Sony

b) Pros & Cons of a bottom-up space management approach for Sony Definition Top – Down Space Management

With a top-down space management approach, a retailer starts with its total available store space (by outlet and for the overall firm, if a chain), divides the space into categories, and then works on product layouts. a) Pros & Cons of a top-down space management approach for Sony Pros –
Quick and Easy to implement
Easier to manage
Greater impact

Cons –
Provides limited coverage in the first phases.
The implementation cost is likely to be higher. Definition Bottom-Up Space Management

A bottom-up space management approach begins planning at the individual product level and then proceeds to the category, total store, and over-all company levels. Pros –
Higher impact to organization
User and business awareness of the product. Benefits are realized in the early phases.
High Flexibility of product position – replace many manual process with early automation

Cons –
Practicality - Some consumers may prefer to have a ‘Showroom’ like top-down space management. Its easier for them to get the whole concept of Sony products. b) Pros & Cons of a bottom-up space management approach for Sony Question 4 Discuss the inventory management issues Sony needs to understand in managing its stores Definition Inventory

goods or materials held available in stock by a business

Inventory Management

primarily about specifying the size and placement of stocked goods Inventory Management Balance the costs of inventory with the benefits of inventory

Businesses need to understand the true costs of carrying inventory

There is a fine a line between keeping too much and not enough inventory Maintain a wide assortment of inventory

Increase inventory turnover

Keep optimum stock level

Have an adequate inventory on hand

Obtain lower prices by making volume purchases It is important that stores:- Issues Sony needs to understand Ordering plan

Hold products in stock at the moment products are needed

Ordering requires advance planning

Must make the commitments without procrastination

Avoid last minute panic orders

Must determine how long the inventory will last Issues Sony needs to understand Inventory control

maintain wanted products and to dispose unwanted products

Principal goal is to determine the minimum possible annual cost of ordering and stocking each product

Formulate a plan to ensure inventory is on hand Issues Sony needs to understand Inventory delivery 1) At time of delivery

Verify count

Carefully inspect delivery for visible damage

2) After inspection

Keep damaged materials Conclusion Small store concept gives Sony more freedom in demonstrating its products

Small store concepts allow Sony to provide the best customer service to its customers

Sony must have an optimum level of inventory in stock. THE END
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