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Terms in this set (190)HR management Can be the basis of sustainable competitive advantage HR management: Labor costs Effective management can produce a cost advantage HR management: Employees Customer experience is determined by the employees who select merch, provide info and assistance, and stock displays HR management: Replication Potential advantages are difficult for competitors to duplicate HR management strategic objectives Align the capabilities and behaviors of
employees with short and long term goals of retail firm HR performance measures Employee productivity and employee turnover Employee productivity Retailer's sales or profits divided by the # of employees, can be improved by increasing sales generate, reducing employees or both Employee turnover # of employees leaving their job during the year divided by the # of positions, turnover greater than 100% is quite substantial and not good HR Triad Full potential of retailers HR is realized when HR professionals, store managers, and employees work together
HR Triad: HR professionals Work out of the corporate office, has specialized knowledge of HR practices and labor laws, establish policies, enforce retailer's strategy, and provide tools for training staff HR Triad: Store managers Work in stores, bring policies to life through daily mgmt of employees HR Triad: Employees Provide feedback on policies, manage their careers, define nob functions, and evaluate managers and coworkers Special HR conditions Is very challenging due to need for part-time employees, emphasis on expensive control, and changing demographics of the workforce Part-time employees Can be more difficult to manage because they are less committed to the company and their job and more likely to quit Expensive control Often hire people with little or no experience to work at low skill jobs, since these types of jobs (waitress & sales associates) are in direct contact with customers, if there is a negative experience it can affect customer loyalty and sales
Changing demographics Will result in a chronic shortage of qualified employees, retailer need to explore various approaches for operating effectively in tight labor market Organization structure Identifies the activities to be performed by specific employees and determines the lines of authority and responsibility in the firm Important issues of retail organization design The degree to which decision making centralized or decentralized, and the approaches used to coordinate their merch and store management Centralized decision making Authority for retailing decision is delegated to corporate managers rather than to geographically dispersed managers Advantages of centralized decision making Can reduce costs and personnel in administrative functions, allows the best people to make the best decisions, and increases efficiency Disadvantages of centralized decision making Makes is more difficult for a retailer to adapt to local market conditions, no tailoring merch to local needs and competition, pay competitive wages Decentralized decision making Authority for retail decisions is assigned to lower levels in organization Coordinating merch and store management for small independent retailer More difficult for them, work with their salespeople to sell it and are in close contact with customers and know what they want Coordinating merch and store management for large retailers Organize these functions into separate divisions and assign specialized buyer for them, but don't understand customer need Improve appreciation for the store environment Increase buyers' contact with customers and improve informal communication between buyers and store personnel Making store visits Work with the departments for which they buy, provides richer view of store and improves buyers' understanding of customer needs Assigning employees to coordinating roles Maintain people in the merchandising division, planners and allocators who work with buyers, and stores who are responsible for coordinating buying and selling activities Motivating retail employees Can be difficult because employee goals my differ from those of the firm Policies and supervision Indicates what employees should do and have supervisors enforce them. Will make actions consistent with retailer strategy, but too many rules can reduce employee motivation Incentives Can be in the form of commission, bonuses, or stocks but can also distract employees from other tasks and reduce commitment Organizational culture A set of values traditions and customs of a firm that guides employee behavior passed from experienced employees to new ones Building employee commitment Reduce high turnover to increase sales and decrease costs by building an atmosphere of mutual commitment in their firms from retailer and employee Building employee commitment with developing skills Recruiting the right people, selective hiring, and good training program Building employee commitment with empower employees Mgmt shares power and decision making authority with employees making them more confident in their abilities and more opportunity to provide service and commitment Building employee commitment with creating a partnering relationship Reduce status differences, promoting from within, and enable employees to balance their careers and families Building employee commitment with flextime Job scheduling system that enable employees to choose the times they work Building employee commitment with job sharing Two employees voluntarily are responsible for a job that was previously held by one person The Customer Relation Management process Ccollecting customer data --learning→ analyzing customer data and identifying target customers → Developing CRM programs --action→ implementing CRM program then start over Retailers concentratation Providing more value to their best customers using targeted promotions and services to increase their share of wallet Share of wallet The percentage of the customers purchases made from the retailer from these customers The objective of CRM Customer loyalty Customer loyalty Customers resisting the activities of competitors attempts to attract them Collecting customer data First step of CRM process Collecting identifying information from customers Ask for phone number, email, name when ringing up a sale, info is then
used to create a transaction database for the customer Collecting identifying information from customers: Offer a frequent shopper card/loyalty program Customer provides demographic and other info when they signed up and incentivize to identify themselves at checkout and are motivated by incentives to visit frequently
Collecting identifying information from customers: Connecting internet purchasing data with the store Customer info is captured when they use the same credit card in multiple channels from a retailer and update the purchase and record/capture info about where the customer lives Privacy and CRM concerns Customer control over their personal information and their knowledge about collection Cookies Are text files that identify visitors when they return to a web site, collect info about other sites the person has visited and what pages they have downloaded Protecting privacy Personal info definition is debatable Data mining Commonly used to develop information to help retailers develop programs for building customer loyalty and identifies patterns in data Market basket analysis Focuses on the composition of the basket, or bundle, of products purchased by a household during a single shopping occasion. Often used useful for suggesting where to place merch in store Lifetime customer value The expected contribution from the customer to the retailer's profits over their entire relationship with the retailer Customer pyramid Platinum, gold, iron, and lead Customer pyramid: Platinum Top 25% LTV, typically most loyal customers, aren't concerned about price and place more value in customer service Customer pyramid: Gold Second 25%, more price sensitive than platinum, not as loyal and probably patronize retailer competitors Customer pyramid: Iron Third 25%, don't deserve much special attention from the retailer Customer pyramid: Lead Fourth 25%, can cost the company money, often demand a lot of attention but do not buy much Recency, frequency, monetary (RFM) analysis Often used by catalog retailers and direct marketers, is a scheme for segmenting customers according to how recently they've made a purchase, how frequently they've made a purchase, and how much they bought Customer alchemy Increasing the sales made to good customers, converting gold customers to platinum, involves offering and selling more products and services to existing customers and increasing the retailer's share of wallet Cross selling Selling complementary product or service in a specific transaction, utilizes the retailer loyalty card and the shopping history ot collects to alert customers of sale items they might've previously purchased Add-on selling Involves selling additional new products and services to existing customers Implementing CRM programs Increasing
sales and profits is a challenge Value of brand image Brands provide value in both customers and retailers Brand equity Value that the brand offers retailers Building brand equity Create a high level of brand awareness, develop favorable association with brand name, consistently reinforce image of brand Brand awareness The ability for a potential customer to recognize or recall the brand name Aided recall Consumer indicates they know the brand when the name is presented to them Top-of-mind awareness Highest-level of awareness, occurs when consumers mention a specific brand when they are asked about a retailer, merch category, or service Association Anything linked to or connected with a brand in the consumers memory Common associations Merch category, price/quality, specific attributes or benefits, or lifestyle Brand image A set of associations that are usually organized around some meaningful themes Reinforce image of brand Consistently portray the same message to customers over time and across all the elements of their retail mix Integrated marketing communication program A program that integrates all of communication elements to deliver a comprehensive., consistent message Extend brand name Used to support growth strategies Extend brand name pros Minimal communication expenses are needed to create awareness and a brand image for the new concept Extend brand name cons: Retailer may not want there to be an association Paid impersonal communication Advertising, sales promotion, store atmosphere, website Advertising Paid for communication using impersonal mass media like TV, radio, or internet Sales promotion Offer extra value and incentives to customers to visit a store or make a purchase during a specific time (ex: sales, special events, in-store demo, coupons, and contests) Store atmosphere Reflects the combination of the stores' physical characteristics which together create an image in the customers mind. Communicates information about the store' service, pricing, and merch Website Used to build brand image, inform about locations, events, and merch. Also offers service of selling Paid personal communication Personal selling and e-mail Personal selling Sales people help customer satisfy their needs through face-to-face exchanges of info Used to inform customers of new merch, confirm orders, and updates. Also use targeting capabilities of the Internet to send personalized message Unpaid impersonal communication Publicity Publicity Primary method of generating unpaid impersonal communication. Communication through significant, unpaid presentations about the retailer usually a news story directed toward potential customers. Also often used to communicate with employees and investors Unpaid personal communication Word-of-mouth Word-of-mouth Very effective, but retailers encounter difficulties in generating it so they may reach out to services that help them Control in communication more using paid vs. unpaid, have less over the content/time of its delivery. Flexibility in communication Personal selling is the most because sales people can talk with each customer, discover individual needs, and develop
unique presentation Credibility in communication Publicity and word-of-mouth are seen as the most because they are typically communicated by independent sources Cost in communication Publicity and word-of-mouth are classified as unpaid but
retailer do incur to stimulate them such as sponsorships Planning the retail communication process: Setting objectives Provide direction for people implementing program and basis for evaluating its effectiveness Communication objectives Goals related to retail communication mix's effect on the customer decision-making process Shelf-talkers Signs on shelves providing info about merch and its price Setting the communication budget: Marginal analysis The economically correct method for setting the communication budget but very hard to do Setting the communication budget: Objective-and-task method Determines budget required to undertake specific tasks to accomplish communication objectives. Retailer must first establish communication objectives then determine necessary tasks and their costs. Total cost will be budget Setting the communication budget: Rule-of-thumb methods use past sales and communication activities to determine the present communication budget Affordable budget Retailers first forecast their sales and expenses, excluding communication expenses, during their budgeting period. The difference b/w forecast sales and expenses plus desired profits is then budgeted for the communication mix Percent-of-sales Fixed percentage of forecast sales Competitive parity method Retailer's share of expenses equals its share of the market Allocation of the promotional budget Retailer decides how much of its budget to allocate the budget to specific communication elements, merchandise categories, geographic regions, or long and short term objectives Planning, implementing, and evaluating communication programs: Advertising Campaign Specify your target segment, create program to emphasize message, track results and evaluate Planning, implementing, and evaluating communication programs: Sales promotion opportunity Initiated by vendors, assess the impact on profitability before accepting, must consider: realized margin, cost of additional inventory, and potential increase and/or loss in sales Special promotion using a CRM/ campaign management tool Used to plan, design, evaluate, and implement promo Socialization Set of steps taken to transform new employees into effective committed members, goes beyond simply orienting them to the firm Orientation program Are critical in overcoming entry shock and socializing new employees, can last a few hours to several weeks, must be accompanied by a systematic follow-up to ensure that any problems and concerns arising after the initial period are considered Training store employees in structures program New employees are taught basic skills and knowledge, might include lectures, presentations, manuals, and correspondence distributed to the new employees Training store employees in on-the-job learning Assigned job, given responsibilities, and coached by their supervisors. Learning by practicing what is being taught and getting hands on experience Leader behaviors: Task performance behaviors Store manager's efforts at planning, organizing, motivating, evaluating, and coordinating store employees' activist Leader behaviors: Group maintenance behaviors Activities store managers undertake to make sure that employees are satisfied and work well together. Include considering employee' needs, showing concern for their well-being, and creating a pleasant work environment Leadership decision making: Autocratic leaders Make all decisions on their own. Use their authority and position to tell employees what to do Leadership decision making: Democratic leaders Seeks information and opinions from employees and bases their decision on this info. Shares power and info with employees and accommodates to their needs Leadership styles The greatest leaders and store managers go beyond influencing employee behaviors to change the beliefs, values, and needs of their employees using all styles depending on the situation Transformational leaders Get people to transcend their personal needs for the sake of the group or organization. Generates excitement and revitalize organization, are self-confident and delegates challenging work to employees Motivating employees Most important but also frustrating tasks for leaders Setting goals or quotas for employees Employee performance improves when they feel like their efforts will achieve expectations from managers and will be rewarded Maintaining morale at work Direct relationship with employee motivation and sales. Can increase with meeting where info is shared and educating employees Sexual Harassment Establish and post anti-sexual harassment policy and including a complaint procedure, always treat it seriously, and get important information Evaluating store employees and providing feedback Identify employees who are
and aren't performing well. Those doing well should be rewarded and considered for promotion, and plans should be made to help those who aren't doing well. Evaluating store employees and providing feedback: Frequency Most retailers evaluate annually or semi annually and the provide feedback. Can have informal evaluations in between formal ones Evaluating store employees and providing feedback: Errors Can be made by manager's personal opinions but try to use subjective data, frequent observation, and record of observation to avoid bias Compensating and rewarding store employees: Extrinsic rewards Rewards provided by either the employee's manager or the firm, such as compensation Extrinsic rewards: A la carte plans Give effective employees a choice of rewards for their good performance,
enables employees to select the rewards they want Compensating and rewarding store employees: Intrinsic rewards Rewards employees get personally from doing their job well, such personal challenge and for fun Compensation programs Attract and keep good employees, motivate them to undertake activities consistent with the retailer's objective and reward them for their efforts. Most effective for motivating and retaining employees when employees feel the plan is fair and that their compensation is related to their efforts Straight salary compensation Employees receive a fixed amount of compensation for each hour or week they work. Easy to understand but lack of immediate incentives to improve their productivity Incentive compensation plan Rewards
employees in the basis of their productivity Quota compensation A target level used to motivate and evaluate performances, usually set at the same level for all employees in a department Quota-bonus plan compensation Provides sales associates with a bonus when their performance exceeds their quota. Effectiveness depends on setting reasonable, fair quotas, which can be hard. Can be difficult to reach for new employees or people with different skill sets of selling environments Group incentives compensation Encourage employees to work together even in non-selling activities, some retailers provide additional incentives based on performance of the department or store as a whole Design the compensation program Determined by market conditions. Has two elements; the amount of compensation and the percentage of compensation based on incentives. Most effective when performance is measurable easily and precisely; hard to measure customer service and merch management Legal issues in commission: Fair labor standards act Set minimum wages, maximum hours, child labor standards, and overtime pay provisions Legal issues in commission: Equal pay act Prohibits unequal pay for men and women who preform equal work or work comparable worth Controlling costs in Labor Scheduling It is difficult because of the multiple shifts and part-time workers needed to staff stores 12 hours a day, seven days a week with various customer traffic, weather, holidays causing abnormal work days Controlling costs in Store maintenance Managing the interior and exterior of the store. A store's cleanliness and neatness affect consumer perceptions of the quality of it's merchandise. Reducing inventory loss Key is determining the most effective way o protect merch while preserving an open attractive store atmosphere and a feeling among employees that they are trusted Calculating shrinkage Difference b/w the recorded value of inventory based on merch bought and received and the value of actual inventory in stores and distribution centers divided by retail sales Detecting and preventing shoplifting: Store design Be mindful of where merch is displayed throughout the store. Reduce height of fixtures and maintain open sight lines to entrances and exits allows employees to watch customers Detecting and preventing shoplifting: Employee training Can be retailer's most effective tools against shoplifting, must be aware, visible, and alert to potential shoplifting situations Detecting and preventing shoplifting: Security measures Use of cameras/dummy cameras can make shoppers uncomfortable Detecting and preventing shoplifting: Prosecution Many have a policy for it which helps deter shoplifters Reducing employee theft Accounts for for more inventory loss than
shoplifting Objectives of a good store design: Implement the retailer's strategy Primary objective, design must be consistent by meeting needs of target market and building sustainable competitive advantage Objectives of a good store design: Influence customer buying behavior Would like design to attract customers, enable them to easily located merch, keep them in store, motivate them to make unplanned purchases, and provide them with a satisfying shopping experience Objectives of a good store design: Provide flexibility The ability to physically move and store componentes and the ease with which components can be modified Objectives of a good store design: Control design and maintenance costs Consider construction of layout and fixtures and shelving. Can affect labor costs and inventory shrinkage Objectives of a good store design: Meet legal requirements Compliance with the Americans with Disabilities Act and making store and merch accessible to those people Objectives of a good store design: Trade-offs Make these between stimulating impulse purchases or making it easy to buy products, and giving customers space to shop or using space for merchandise Store layout Facilitating a specific traffic pattern and interesting design elements encourages customer exploration Store layout: Grid Has parallel aisles with merchandise on shelves on both sides of the aisles with cash registers located at entrance/exit, doesn't provide a visually exciting design but is effective in costs and ease of getting customer through the store to easily locate products. Not all customers are exposed to all merch Store layout: Racetrack Aka loop, provided a major aisle that loops around the store guiding customer traffic around difference departments within the store with cash registers located in each department. Goal is getting customers to see merch in multiple departments and make impulse purchases, guided by aisles change in color or surface Store layout: Free-form Aka boutique layout, arranges fixtures and aisles in an asymmetric pattern providing an intimate, relaxing environment that facilitates shopping and browsing. It is costly because it sacrifices storage and display space and doesn't have well defined traffic pattern Atmospherics Refers to the design of an environment through visual communications, lighting, colors, music, and scent to stimulate customers; perceptual and emotional responses and ultimately to affect their purchase behavior Atmospherics: Lighting helps create sense of excitement in the store and must provide an accurate color rendition of the merch Lighting: Popping the merch Focusing spotlights on the special feature areas and items draws the customers strategically through the store Lighting: Mood creation Promote a warm cozy ambience to feel like someone's home Lighting: Downplay features Can hide errors and outmoded store designs Atmospherics: Colors Can enhance a retailer's image and help create a mood Atmospherics: Music Can either add or detract but can easily be changed, can use to affect customer behavior, control pace of store traffic, create an image, and attract or direct customers attention Atmospherics: Scent Has a large impact on emotions , may improve customer subjective shopping experience by making them feel that they are spending less time examining merch or waiting for sales help or check out, has positive impact on impulse buying behavior and customer satisfaction Strategic advantage through customer service Keeps customers returning to a retailer and generates positive word-of-mouth communication, which attract new customers. Increases value of merch Customer service strategies: Customization approach Encourages service providers to tailor their service to meet each customer's personal needs, can be costly. Typically results in most consumers receiving superior service, but might be inconsistent depending on judgement and capabilities of provider. Used a lot for clothing Customer service strategies: Standardization approach Based on establishing a set of rules and procedures and being sure that they are implemented consistently, relies more on policy, procedures, and store and web design and layout. Used a lot in restaurants Customer service strategies: Cost of customer service Can be expensive but in many cases it can actually reduce costs and increase profits. The cost of acquiring a new customer than generate repeat business from present customers Customer evaluation of service quality They compare their perceptions of the service they receive with their expectations. Customers are satisfied when their perceived service meets or exceeds their expectations Roles of expectations of service quality Based on a customer's knowledge and experiences and can vary based on type of store Perceived services Base their evaluations of store service, affected by the actual service provided which is difficult to evaluate accurately 5 customer service characteristic: Reliability Accuracy of billing, meeting promised delivery dates 5 customer service characteristic: Assurance Or trust, guarantees and warranties, return policy 5 customer service characteristic: Tangibility Appearance of store, salespeople 5 customer service characteristic: Empathy Personalized services, receipts of notes and emails, recognition by name 5 customer service characteristic: Responsiveness Returning calls and email, giving prompt service Service Gap The difference b/w customer expectations and perceptions of customer service Knowing what customers want: Knowledge Gap The difference b/w customer expectations and the retailer's perception of customer expectations Delivery Gap The difference b/w the retailer's service standards and the actual service provided to customers Communication Gap The difference b/w the actual service provided to customers and the service promised in the retailer's promotional program Using customer research The knowledge gap is only reduce when retailers use it to improve service. Managers should review the suggestions and comments made by customers daily, summarize the info, and distribute it to store employees and managers Setting service standards: The standards gap The difference b/w the retailer's perception of customer expectations and the customer service standards it sets. Commitment to service quality Occurs only when top management provides leadership and demonstrates commitment, must be willing to accept the temporary difficulties and even the increased costs Defining the roles of service providers Need clear direction and expectations of the retailer Setting service goals Need to be specific and measurable and made in collaboration with service providers, usually based on their beliefs about proper operation of the business rather than the customer' needs and expectations Measure service performance Need to assess service quality continuously to ensure that goals will be achieved, by conducting surveys or using mystery shoppers with feedback given at the end Giving information and training Need to know about the retailer's service standards and the merch, and customer needs so that they can answer questions and suggest products Service recovery Rather than dwelling on negative aspects of customer problems, retailers should focus on the positive opportunities they generate, offer excellent source of info about the retailer's merch and service to increase customer satisfaction Service recovery: Listen to customer Allow customer to air complaints without interruptions and follow up with a sympathetic response and listen for a solution that will be perceived as fair to customer Service recovery: Providing a fair solution Focus on how to win the customer back not just solve the problem. Customers compare how they were treated in relation to similar problems/situations with other service providers Providing a fair solution: Distributive fairness A customer's perception of the benefits received compared with their costs Providing a fair solution: Procedural fairness The perceived fairness of the process used to resolve complaints; Did employee collect info on situation? Was info used to resolve complaint? Did the customer have some influence over outcome? Service recovery: Resolving problems quickly Store employees who deal with customers should be made as self-sufficient as possible to handle problems, can minimize time by reducing the number of people the customer must contact, providing clear instructions, and speaking in the customer's language Sets with similar termsFinal: Fashion Retail Industry49 terms mstambol Ch. 18-Customer Service41 terms kailey_steele Retail Marketing Final69 terms patten_sammy MKT 4280 - Service Marketing Test 3 (Ch. 13-16) -…55 terms meghan_martin20 Sets found in the same folderRetailing, MKT 3113, Utecht-- Test 1109 terms sammyjam66 Public Relations105 terms Matthew_Almas Advertising, MKT 3043, Utecht, Test 1167 terms pod_seanndrah Public Relations Midterm48 terms Asloan900PLUS Other sets by this creatorMKT Capstone18 terms madisonbaberr Retailing Exam 3 - Crossword25 terms madisonbaberr SET 3333 - Exam 325 terms madisonbaberr Retailing Ex 2 Crossword17 terms madisonbaberr Recommended textbook solutionsOperations Management: Sustainability and Supply Chain Management12th EditionBarry Render, Chuck Munson, Jay Heizer 1,698 solutions
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