Customer is King: Evolution of the Retail Food Industry Essay

It is common understanding that you cannot have a business if you do not have customers to buy the product you produce or services you deliver; therefore customer is an integral part of every business. There was a time when customers was treated less critical and vocal by the businesses and markets was treated just as dumping grounds for the products, however this situation does not prevail anymore because of the tremendous transformation happening in the retail food industry since last five decades. Today customers have more choices than ever before, through more diverse channels. Even the expectations of customer are higher than ever before. Companies who fail to leave up to the expectation are finding hard to get or retain the customers- Majority of the unsatisfied customer do not complain they just change the suppliers. Therefore retailers have realised that the only way to sustain in the competitive market is by being customer centric. (Barnes & Glynn, 1993) Today every businesses treat customer as king and aware that only exceptional level of customer service can differentiate them from the competition in an increasingly saturated marketplace. Customer is often treated as the asset of the company and considered in the strategic level decision making. Therefore I certainly agree with this frequently used marketing cliche â€Å"customer is king†. To better explain my position I have presented my views based on two contexts. The first being how customer is king? This is explained by describing the customer’s role in the evolution of the retail food industry and its implications. The second being why customer is king? This is explained by detailing the significance of customers in the retail food business. The evolution of the retail food industry and its implications: Retail food industry has undergone a tremendous transformation in the last five decades, these transformations can be classified into four different phases- Predevelopment, Development, Saturation and Decline phase (Terbeek, 1999). During the predevelopment phase shopping was a social event, relationships between the customer and grocer was important. Shopping experience was logical, retail was more of a personalised business where the customer was treated as an individual and his or her needs were well known and understood by the businesses. Also there existed a long term personal relationship between the businesses and the customer (Steidtman, 2005). Therefore during this phase more emphasis was given to the customer and customer service, however this situation did not prevail long. During the development phase, small and neighbourhood stores started to decline due to the raise of supermarket. Customers were no more trusting grocer rather they started to trust brands. No longer there existed a personal relationship between the businesses and the customer. Even management was centralised and employees were ignorant of the customer behaviour, old values which existed during the predevelopment stage relating to employee and customer relationship almost disappeared, the customer becomes a consumer. However due to logistics efficiency and introduction in new model of central buying and distribution of standard products to standard stores led in the decline of product prices. Even though retailer was the ultimate connection to the customer but manufacturer had more control over the market demand and retailer was just acting as distributor. Manufacturer assumed that every market was standard and started using push marketing model to sell his products, therefore emphasis on customer was neglected and customer service was taken a backseat (Terbeek, 1999) During the saturation phase the competition between the retailers intensified, there was a rise of many stores even the products increased from 8000 to 30000 items and above, which resulted in making a decision making stressful for the customers. However the growth of the industry slowdown and the real growth for supermarkets came from taking businesses away from each other. Marketing cost intensified because of the competition between supermarkets, even value created by supermarkets become less easy to distinguish because of the availability of the identical products in every store. Therefore Price become the way for many stores to differentiate them, which gave rise to the new mantra of super markets called â€Å"more products and lower prices†. Competition among the manufacturers also heated up which led retailers to get better incentives for the self-space. Therefore retailers was busy concerned on making deal money which was more profitable then customer service, Customer was almost invisible and the relationship between the retailer and the customer no longer existed(Terbeek, 1999). During the decline phase the might of the supermarkets reduced drastically by the entry of fast food chains and low cost department stores (Wal-Mart, Target etc. – which started competing for the stomach share of the consumer. Therefore retailers try to differentiate themselves by introducing new merchandising strategies such as home meal replacement and solution selling, also another strategy for growth was geographic expansion through consolidation and globalisation. Retailers were more concerned on making profits and increasing market share, however even in this phase they neglected the fact that customer is one of the important ass et and failed to be customer oriented. Therefore retailers still moved even further away from the customer. Following the decline phase of the retail food market is the â€Å"current† (2000+) situation which can perhaps be termed as the frictionless phase (Terbeek, 1999). It’s not surprising that in this phase, the focus is once again on the customer. The one size fits all concept of retail is no longer applicable and there is need to deliver personalized services and products on an individual basis to distinguish them from others and to stay ahead in the market. Therefore customer has become the central focus in this era, even the retailers have realised that customer service, customer loyalty and customer retention plays a major role in sales and profitability of the concern. Thanks to Technological transformation, which has enabled retail to return to what it once – a personalised business, today businesses have realised that customer is a strategic asset of the organisation and treating customer as a â€Å"King† is vital for the long term sustainability. Significance of customers in the retail food business: The food and beverage market is often the largest industrial sector in developed economies. In the US, expenditures on food in both retail stores and food service establishments account for nearly 30 percent of all retail spending. Food retailing alone is among the largest of all retailing sectors in most countries(Gomez, McLaughlin, & Wittink, 2003). The most recent Consumer Expenditure Survey from the Department of Labour indicates that 58 percent of food expenditures are on food consumed at home and Groceries represent a $700 billion business in US alone (George, 2005). Due to the market size today retail sector is not only growing in the rapid pace but also becoming more competitive, even the customers have become more demanding than ever. Retailers have realised that the only way to sustain in the competitive market is through differentiation; Rita Heise of Cargill says differentiation must be a top priority of almost any company today (Tuck, 2003). Today differentiation in terms of pricing, product offering are also becoming commonplace so companies need new ways to differentiate themselves. In the verge of finding differentiating strategies, retailers have realised that the only way of differentiating them form others is by being customer centric(Gomez et al. , 2003). Today customers are vital for the retail businesses, treating customers like a King is really important because this leads to more satisfied customers. The more satisfied the customers are, the more loyal the customers will be- which in turn helps in maintaining customer loyalty. Therefore customer satisfaction, customer loyalty and customer retention all these three terms are interrelated which has a significant impact on the profitability, sales and market share of the businesses. Customer satisfaction: Customer satisfaction and retention are generally considered among the most important long term objectives of firms (Cooil, Keiningham, Aksoy, & Hsu, 2007). The satisfied customers will remain loyal to the company and also create a positive brand image by word of mouth. In recent research of over 1,000 kiwis, respondents said they were twice as likely to tell others about a bad experience over a positive one. With stories being told online, rather than person-to-person, they are accessible to a much wider audience and live on long after the initial compromising incident occurred (Meyer, 2011). Therefore businesses which fail to meet the customer expectations will not only lose customers but also may create a negative brand image. Linking customer satisfaction and customer loyalty/retention: The marketing concept suggests that a satisfied buyer will likely return to purchase again, or at least, consider purchasing again(Keith, 1960). According to Reichheld and Sasser repeat customers cost less to serve than new buyers, benefiting a firm’s cost structure. Additionally, maximizing customer retention rates and minimizing customer defections are primary strategic objectives for most firms because of the competitive retail environment and low switching costs(Reichheld, 1990). Customer satisfaction is positively linked to loyalty and customer retention, therefore businesses should be customer oriented in order to maximise the profits, market share and also to increase the sales. Linking profitability or market share to customer satisfaction and customer loyalty: According to one study, a 2 percent increase in customer retention has the same effect on profits as cutting costs by 10 percent. Similarly, a 5 percent reduction in customer defection rate can increase profits by 25-125 percent (Min, 2011). It is logical that both satisfaction and loyalty are directly related to profitability(Pleshko & Baqer, 2008). Loyal and satisfied customers will increase the customer base by positive word of mouth advertising, which in turn increase the market share and also the sales, even lowers the market retention costs. Satisfied and loyal customers gives businesses a clear understanding about their needs and wants which helps the retailers to grow businesses and profits based on their deep knowledge and understanding of customers. Satisfied customers also create brand equity and even retailers will be insured with better protection during downturn- due to more loyal customers. Therefore today retailers are continuously focusing on keeping their customers happy and satisfied. Businesses which do not satisfy the customers run the risk of customer base eductions, smaller sales and also lose the market share for the retailers who serve better to the customers. Being customer centric cannot be treated simply as the strategy of an individual company because modern food system is complex, dynamic and international (Schaffer, 1998). It includes suppliers of farm inputs, agricultural producers, packaging suppliers, processors and manufacturers, commodity merchants, wholesalers, food retailers, restraints, institutions, and facilitating industries etc. (Schaffer, 1998). Therefore to be successful and competitive, all the players in the food system should be customer centric. Businesses in the food supply chain have realised this and every businesses are taking customer centric approach in the recent years. Today’s retail market in the developed world are becoming more customers centric and treating customers as Kings because retailers have realised that customer centric approach is directly linked to profitability of the firm and also can become a key source of competitive differentiation. By excelling at the strategic customer-centric approach can deliver a superior shopping experience that could not only result in consistently high customer satisfaction but also might encourage customers to shop more often and spend more with their favoured retailers. Therefore we can say that today businesses have realised that customers have the power to dictate their profits, market share and also the sales in the businesses, so treating customers as Kings has become vital for the retail businesses success today.

Classic Knitwear Essay

Classic Knitwear, founded in 1995, began production of a unique line of unbranded casual knit apparel. Included in their product line were such clothing as T-shirts, sport shirts, sweatshirts and other wearing apparel. Although the company saw exceptional revenues as of 2005, they still felt that they were not meeting certain criteria when it came to their gross margin. They sought to increase their gross margin, currently sitting at 18%, to that of a more comfortable number of 20%. To combat this issue, Classic Knitwear decided to team up with Guardian, a producer of odorless repellant protection against bugs, and combine their fortes into a line of clothing infused with the bug repellant technology. These new products would hopefully to rise the gross margin to the 20% they were hoping to accomplish. The non-fashion casual knitwear market consisted of products that range from casual t-shirts to even underwear. Within this industry, it can be divided into two categories, those manufacturers who brand their products with their name and those companies who choose not to brand their line of products. On the branded side of the industry, Classic competed with three major brands. These brands were JamesBrands (which accounted for $4.5 billion in revenue from sales), Flowerknit (which accounted for $1.25 billion in revenue from sales), and Greenville Corporation’s TopTops Division (which accounted for $630 million in revenue from sales). These branded labels competed on the level of private- labeled businesses. On the other side of the industry, Classic competed with one company in terms of unlabeled products. B&B Activewear were major competitors as they generated $590 million or 23.6% market share, which made them a leader in the market. Although not directly involved within this sector, Jamesbrand, Flowerknit and Greenville Corporation’s TopTops Division still were involved with Classic on this level. Distribution channels are essential when it comes to the wholesales of these companies products. 90% of the product distribution from these companies go directly to two distinct types of retailers. Almost 50% of these sales are accounted for from mixed retailers, such as Wal-Mart and Kohls, who sell clothing as well as wide variety of other products. The other 40% is sold towards clothing specialist retailers, such as Gap and Brooks Brothers, who only specialize in the selling of clothing related products. The remaining 10% of the distribution channels contained bits from non- grocery retailers, home shopping, internet retailing and direct selling to the customers. In order for manufacturers to compete for retail business, they used a variety of strategies in order to gain attention from these retailers. Some of these tactics involved prices, variety of products, and efficiency of delivery. Classic Knitwear, since its inception, has been a simple manufacturing company whose focus is on creating and distributing unbranded casual knit apparel which includes T-shirts, sweatshirts and fleece like products. Unlike other companies that chose to have expensive products which carried prestigious fashion labels, Classic decided to venture away from them and focus on products that were categorized as non- fashioned knitwear. With this strategy, Classic accounted for $550 million in revenues from domestic sales. They have also decided to sell only in the United States, as foreign markets were too much of a risk that could have negative consequences. 75% of this revenue came from the selling of their products to wholesalers, who in turn, resold the Classic clothing to screen- print channels which customized the products with logos and images. Ortiz and Chong decided to concentrate on this pathway because it offered the fastest growth potential than trying to sell like ordinary retailers. As a result, Classic Knitwear had established itself as the #2 seller in the market, accounting for 16.5% of the market share. Classic generated the remaining 25% of their revenues from mass retail channels under private labeling. Classic would sell their products to retailers such as Wal-Mart and Dollar General and would be carried under the name of the retailer or through a house brand that was developed by the retailers themselves. In fact, these two retailers accounted for 57% of those revenue sales. To help accomplish such high revenues, Classic had to achieve low production costs throughout the entire company. To ensure that such goals were obtainable, Classic established state-of-the-art production factories that were situated off shore, mainly in the Dominican Republic. Being situated not in the United States allowed them to have much lower production costs than those produced domestically. Although other companies had also set up production factories in other countries, Classic was able to have a slight competitive advantage over these other companies. What helped them keep this competitive advantage was a high volume- low SKU (stock keeping unit) strategy. This ensured that they would produce high quantities of products without the large variety of products that other companies had. As of 2005, Classic felt that it would never reach their goal of 20% gross margins through various controlled labels or tie in promotions. However, Classic Knitwear had an epiphany which could potentially shoot their gross profits to levels that they would feel satisfied with. With the rise of the West Nile virus across the Americas, more and more people were looking for ways to prevent the transmission of the diseases. Classic thought it would generate the attention of customers to produce a new line of clothing that would be infused with chemicals that would be able to repel insects that carried the West Nile virus. With the help of another company, Guardian, who specialized in insect repellants, they would be able to create such a line of products. The reason that they chose Guardian was due to their flagship repellant, have established them as one of the top producers in insect repellant. The products would consist of a short and long sleeve T-shirt, a Men’s polo, and a Men’s fleece. Along with the production of these chemical infused clothing, Classic was targeting males 18-35, seeing as these individuals would most likely be outside during times when insects are active. The initial investment of such a line could cost about $10 million, which would help to generate 50% unaided awareness across the United States. In order to get the needed awareness of their product out to the public to ensure increased gross margins, Classic relied heavily on marketing. They had studied how other brands that were selling similar brands of insect repellant clothing and how they were successful, establishing themselves into small niche markets. Based on those already established companies, Classic decided to sell their product lines to retail stores with cardboard displays housing the different styles of shirts. On the outside of each of the boxes would display pictures of outdoor related activities that would promote the proper use of each shirt. Some of these retail stores would be outdoor related stores such as Bass Pro Shops and L.L. Bean. Classic wanted to have 10,000 displays in stores over the next 2 years after the product line was to begin production. To help get these displays in stores, they offered discounts on the sale of T-shirts if the store agreed to have a display in their store. Classic, with the production of these chemical infused shirts, could have a possible juggernaut to help generate sales, but there could be other possibilities that could help them reach their target gross margin of 20%. One alternative would be to not produce the new line of shirts, relying on frequent customers to help generate the extra sales to gain the extra gross margin. Another possibility would be to vertical integrate with one of the screen-pressing companies that create the logos which are later screened onto the sold shirts. By integrating, they could possibly cut unnecessary costs that would also help create higher gross margins. Lastly, another possible alternative to this problem would be to establish a brand of clothing that is positioned near the high labeled brands. They would have to compete with the big three companies with sales, but could possibly steal sales away from them to help establish themselves. Classic Knitwear was set with a problem of what to do to try and earn more in their gross profits. To solve such case, it would be recommended that they continue with the production of these insect repellant shirts. With the outbreak of the West Nile virus and outdoorsmen wanting styled brands to wear, this idea would help to generate the sales need to raise the gross profits. Based on Consumer.com surveys, it was concluded that there was a strong desire for such a product, especially one whose clothing was made out Classic’s materials. In the end, the continuation of this line would help generate the extra gross margin they had hope to gain.

Barings Bank Case Essay

1. What was Nick Leeson’s strategy to earn trading profits on derivatives? Nick Leeson’s strategy to earn trading profits on derivatives was to trade futures on the Nikkei 225 stock index and the Japanese government bonds. This strategy would have either provided huge gains or huge losses. This went completely against what Barings was expecting him to do. He opened a secret trading account to avoid being caught. 2. What went wrong that caused his strategy to fail? Leeson oversaw trading and back office functions meaning there ws no checks and balances. That’s a big mistake. Also Leeson experience in trading was limited, from the beginning he was loosing money and he continued to loose money throughout the years. According to the article, â€Å"By mid February 1995, he had accumulated an enormous position—half the open interest in the Nikkei future and 85% of the open interest in the JGB [Japanese Government Bond] future. The market was aware of this and probably traded against him. â€Å" Instead of admitting to his mistakes Leeson continued to dig a deeper hole. He traded based on emotion versus taking calculated risks. 3.Why did Nick Leeson establish a bogus error account (88888) when a †¨legitimate account (99002) already existed? Leeson created this account to try to cover his tracks and not be noticed. If things went bad he could deny that account being his. 4.Why did Barings and its auditors not discover that the error account was used †¨by Leeson for unauthorized trading? Leeson had the background and experience in the paperwork department and new the system in and out. Baring’s computer system was not the best and was incapable of monitoring the bank’s trading. Leeson used his bck office knowledge to conceal the problem and he had the authority to as well. 5.Why was Barings Bank willing to transfer large cash sums to Barings Futures †¨Singapore? Barings Bank was willing to transfer large cash sums to Barings Futures Singapore because Leeson was respected and trusted and he was close to top management. He was allowed more leeway than any other counterparts in other firms. 6.Why did the attempt by the Bank of England to organize a bailout for Barings fail? Barings was declared insolvent. They were unable to meet SIMEX’s margin call, and this resulted in Dutch Bank â€Å"ING† purchasing Barings and taking on all it’s liabilities.

The Court Decisions and Powers Over Educational Financing Essay

The Court Decisions and Powers Over Educational Financing - Essay Example The disparity in education financing has been the major issue with the judicial system. Legal provisions for equal protection, based on the 14th amendment, have formed the basis of the litigation regarding the finances. According to the clauses, every person is entitled to equal treatment and no disparity should, therefore, exist on education financing (Ryu, 2015). While the courts made significant efforts in enforcing existing laws to regulate educational financing, reforms that the courts initiated had little effects in solving the financing inequality that the society realized. Ryu further argues that court decisions on educational reforms have argued for adequacy of available education and not on financial neutrality. The ineffectiveness in previous courts’ attempt to regulate educational financing suggests a lack of power to implement the decisions and indicate a possible occurrence in future. The change in focus from fiscal neutrality also means possible elimination of t he jurisdiction from the judicial system and suggests that the courts are not likely making decisions on the issue (Ryu, 2015). The Supreme Court decision on fundamentality of education as a constitutional right and the court’s final decision on related cases is another indicator that courts have ceded their power on educational financing and are not likely to make any ruling on a case that seeks to challenge educational financing policies. The Supreme Court noted that education is not a fundamental right and should therefore not be considered under the equal opportunity clauses and any other amendments that provide for human rights.

Contemporary Essay Example | Topics and Well Written Essays - 500 words - 1

Contemporary - Essay Example Lastly, technological advances such as synthesizers became prevalent in the field of music and began to be used in ways classical music had never before experienced. Naturally, such a time of political and societal unrest gave way to many new ideologies, new movements, new perspectives, and most importantly for purposes of this brief analysis, new forms of classical music. Classical music composers were faced with all of the aforementioned issues and in addition to that were given new tools with which to accentuate their music. The birth of the synthesizer and the use of computers in musical compositions were both immediately co-opted into music as composers and musicians alike attempted to delineate their music through their use. Likewise, greater and more prolific use of atonality, dissonance, and minimalism were employed to a greater and greater extent. Arnold Schoenberg, a composer whose career spanned both 20th century and contemporary periods, will be analyzed in this brief study. Schoenberg’s characteristically atonal, experimental, and minimalist styles can be amply heard in A Survivor of Warsaw Op. 46 1947. The piece is symbolic of Schoenberg’s unique style, the elements of the contemporary period, as well as the socio-political disturbances that gave rise to so much of the anxt filled music of the era. Firstly and most prominently, the piece features Schoenberg’s full and extravagant use of atonality and dissonance which had become such a characteristic of the prior 20th century; however, in addition, Schoenberg fully employed the 12 tone technique (also known as dodecaphony) for which he became renowned. This piece critiques modern society in that the atonality, the purposeful confusion, and the minimalism all work towards describing the sheer and utter depravity of humankind without taking away from the story by an overly ornate or complex musical tone. Simply stated, where other pieces may have lost some meaning by purposely

1000 words Health Promotion in the Workplace Essay

1000 words Health Promotion in the Workplace - Essay Example Legislations are the rules that the government creates and imposes them on all health care organizations (Ashcroft, 2007). The state does this to ensure that health care givers treat patients using the safest methods. Legislations also help to protect the rights of both patients and health care givers. Ethical issues, on the other hand, are standards that help to determine actions that may be accepted by the society (Scriven, 2010). Ethical considerations help to emphasize and complement legislations. This means that health promoters use ethics whether there are legislations or not. This is because both ethics and legislations support one another when they exist, and when one is absent, the other is applicable (Seedhouse, 2009). For example, when an individual is suffering from type 2 diabetes, ethical considerations require health care givers to maintain the confidentiality of the disease between them and patients. Legislation on the other hand prevents individuals from compelling others to inform when they are suffering from illnesses such as type 2 diabetes. State legislations help to safeguard patients from being discriminated against and from being provided with poor services in health care centres. For example, the â€Å"Equality Act of 2010† protects diabetes victims from being shown prejudice at the workplace (Kronenfeld, 2012). This rule requires employers to give diabetes patients equal employment opportunities like others who do not suffer from the illness. Legislations also enable diabetes patients to enjoy the freedom of autonomy by requiring health providers to maintain the confidentiality of patient’s information. Health care givers are not supposed to expose the diabetes condition of a patient without the consent of that recipient (Ham, 2009). Health care givers also have the right to maintain the confidentiality of their condition when they suffer

Project Management Essay Example | Topics and Well Written Essays - 250 words - 11

Project Management - Essay Example There must be a staunch and dedicated leader, behind the excellence of any initiated project within the society. All the benefits behind the projects emanates from good leadership. I would want to be a team leader in the community development funds board to help in the coordination and initiation of community based development projects. The project management can help in the achieving my goals. It will enable me to schedule my entire project plan and tackle them chronologically to achieve the predefined goals. The project management would equip me with required management skills for the success of a project in progress. As project leader, I would ensure that all the key plans for success are in control. For example, clarification of the objectives, before the start of the project, it must be subject to review by the team leaders. Development of the plan would help in managing the project in phases, making it easy to accomplish a bigger task in smaller bits (Carroll 10). The risk management plans enable the planning and implementation of precautionary measures that can inhibit the smooth evolution of the proposed project. I would engage in management and motivation of team members to ensure team cohesion in achieving the goals. Effective leadership demands four types of intelligence including intellectual, physical, emotional, and spiritual intelligence to institutionalize moral