abercrombie & fitch germany

Abercrombie & Fitch

This Retailer Analysis is on

Abercrombie & Fitch

Germany

© DataGroup

was established in 1986, and has been a brand since 1995. www.dg-di.eu

http://www.dg-di.eu/

http://www.dg-di.eu/corporate-retailer-analysis.html

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Abercrombie & Fitch - Germany

2

Abercrombie & Fitch

Germany

Abercrombie & Fitch

CONTENTS

Indicates a dynamic link to the online data

Indicates a dynamic link to an Excel spreadsheet

Indicates a dynamic link to an Access database

Indicates a dynamic link to a PDF document

Indicates a standalone installable programme

CONTENTS............................................................................................................................................. 2

Retailer Analysis - Introduction ............................................................................................................. 20

Structure of this report ....................................................................................................................... 20

1. The Retailer Report Analysis ................................................................................................ 20

Products ......................................................................................................................................... 20

Trading Area .................................................................................................................................. 20

Retail Competitors ......................................................................................................................... 21

Retailer ........................................................................................................................................... 22

Operations ..................................................................................................................................... 22

Buyers & Consumers ..................................................................................................................... 23

2. The Retailer Competitive Environment ................................................................................. 24

Products ......................................................................................................................................... 24

Trading Area .................................................................................................................................. 24

Retail Competitors ......................................................................................................................... 24

Retailer Operations ........................................................................................................................ 24

Buyers & Consumers ..................................................................................................................... 24

3. Market Research ................................................................................................................... 25

4. Business Planning ................................................................................................................. 25

SECTION 1 ........................................................................................................................................... 26

Analysis ................................................................................................................................................. 26

Part A : Base data on the Retailer ................................................................................................... 27

Part B : Financial Data ..................................................................................................................... 42


3

Part B.1 : Management figures ................................................................................................ 42

Part B.2 : Balance Sheet and Management Accounts ............................................................ 43

Part C : Product Offering ................................................................................................................. 46

Main Product Lines ........................................................................................................................ 46

In-House Brands ............................................................................................................................ 46

Third Party Brands ......................................................................................................................... 46

Ancillary and Add-Value Products & Services ............................................................................... 46

Part D : Retail Locations .................................................................................................................. 47

Demographics & Lifestyle Analysis ................................................................................................ 47

Neighbourhood Analysis ........................................................................................................... 55

Site Analytics ............................................................................................................................ 56

Footfall ...................................................................................................................................... 57

Conversion Rates ..................................................................................................................... 58

Part E : Advertising, Marketing, & Events ....................................................................................... 59

Survey of Advertising Services used ....................................................................................... 59

Consumer Evaluation of Advertisements ................................................................................. 62

Focus Panels ............................................................................................................................ 62

Consumer Opinion of Advertising Effectiveness ...................................................................... 64

Advertisement Evaluation Survey ............................................................................................ 65

General Customer Surveys - Advertising Perceptions ............................................................. 66

Consumer Marketing Test ........................................................................................................ 66

Effectiveness of marketing initiatives ....................................................................................... 68

Corporate Marketing Evaluation ............................................................................................... 68

Part F : Store Experience ........................................................................................................... 69

Exterior Store Presentation ...................................................................................................... 76

Interior Store Presentation ........................................................................................................ 79

Ambience & Layout .................................................................................................................. 81

POS & Displays ........................................................................................................................ 82

Lighting ..................................................................................................................................... 83

Store Facilities .......................................................................................................................... 83

Store Image .............................................................................................................................. 84

Conversion Rates ..................................................................................................................... 84

Overall Store Evaluation ........................................................................................................... 85

Store Personality Survey .......................................................................................................... 86

Part G : In-store Customer Purchasing Behaviours ........................................................................ 87

In-store and Impulse-buying Decisions.......................................................................................... 87


4

Purchasing Behaviours ............................................................................................................. 87

Consumer Store Behaviours .................................................................................................... 88

In-store Consumer Decision Making ........................................................................................ 89

Consumer Surveys ........................................................................................................................ 90

In-Store Purchase Process and Evaluation Survey ................................................................. 90

Shopper Involvement Study ..................................................................................................... 91

Store Entry Surveys .................................................................................................................. 93

Store Audit ................................................................................................................................ 93

Supplementary research .......................................................................................................... 94

Part H : Customer Handling............................................................................................................. 95

First Impressions Customer Survey ......................................................................................... 95

Queue & Waiting handling ........................................................................................................ 95

Interface & Dialogue ................................................................................................................. 96

Staff Response & Attitude to Customers .................................................................................. 96

Information Provided to Customers .......................................................................................... 97

Proficiency ................................................................................................................................ 97

Staff Interaction with Customers .............................................................................................. 98

Customer Complaint Handling ................................................................................................. 99

Product Returns & Refund Policy ............................................................................................. 99

Part I : Selling Strategies ............................................................................................................... 100

Stores ..................................................................................................................................... 100

Online Selling ......................................................................................................................... 100

Web Presence ........................................................................................................................ 102

Website Design ...................................................................................................................... 103

Website Information Quality ................................................................................................... 104

Website Customer Evaluation ................................................................................................ 104

Website Visitor Follow-up ....................................................................................................... 106

Website Feedback .................................................................................................................. 107

Web Demographics ................................................................................................................ 109

Internet Shopper ..................................................................................................................... 110

Online Purchases ................................................................................................................... 114

Multi-channel Retail Distribution ............................................................................................. 117

Stand-off Online Sites .................................................................................................................. 118

Events & Promotions .............................................................................................................. 119

Loyalty Schemes .......................................................................................................................... 119


5

Social Media ................................................................................................................................ 120

Part J : Pricing & Price Points ....................................................................................................... 121

Pricing Study .......................................................................................................................... 121

Pricing Strategies ......................................................................................................................... 123

Strategies ................................................................................................................................ 124

Price Discounting .................................................................................................................... 124

Impact of Unsustainable Pricing .................................................................................................. 125

Stagnant Prices ...................................................................................................................... 125

Inflation ........................................................................................................................................ 126

Profit Margins ............................................................................................................................... 126

Profitability ................................................................................................................................... 126

Customers Base ..................................................................................................................... 126

Differential Value .................................................................................................................... 127

Future Strategies ......................................................................................................................... 128

Future Pricing Strategies ........................................................................................................ 128

Preparation for Future Price Changes ......................................................................................... 128

Part K : Retailer Performance Analysis ......................................................................................... 129

Store Managers Survey .......................................................................................................... 129

Customer Satisfaction Survey ................................................................................................ 131

Inventory Control .......................................................................................................................... 132

Inventory Balancing Act .......................................................................................................... 132

Operational Performance Analysis ......................................................................................... 133

Retail Performance Intelligence ............................................................................................. 138

Business Performance Comparisons ..................................................................................... 138

Shopper Numbers and Quality ............................................................................................... 138

Optimised Store Performance ................................................................................................ 139

Site Potential & Floor Mapping .................................................................................................... 139

Comparative Site Performances .................................................................................................. 139

Physical Operations at individual sites ........................................................................................ 139

Technology Usage .................................................................................................................. 140

Technology Spending & Customer Service ................................................................................. 141

e-Commerce and Cross-channel Sales ....................................................................................... 141

Development of Cross-channel Sales .................................................................................... 141

Showrooming .......................................................................................................................... 142

Part L : Strategies .................................................................................................................... 145

Expertise and Specialisation ........................................................................................................ 146

Data Mining .................................................................................................................................. 146


6

Retail Store Evolution .................................................................................................................. 146

Bespoke Service .......................................................................................................................... 146

Collaboration ................................................................................................................................ 147

Uniqueness .................................................................................................................................. 147

Market Leadership .................................................................................................................. 147

Part L.1 : Corporate Retail Strategies ...................................................................................... 148

Operating Strategies ............................................................................................................... 148

Cash and Working Capital ...................................................................................................... 149

Retailing Operations ............................................................................................................... 150

Controls .................................................................................................................................. 152

Stakeholder Management ...................................................................................................... 152

Value Preservation ....................................................................................................................... 152

eCommerce & Multi-Channel Retail Strategy ......................................................................... 153

Part L.2 : Retail Marketing Strategy .............................................................................................. 154

Elements in Retail Strategy .................................................................................................... 154

Elements in the Market Analysis ............................................................................................ 155

Part L.3 : Strategic Planning in Retailing ................................................................................. 159

Overview of Strategic Retail Management ............................................................................. 159

Situation Analysis ................................................................................................................... 160

Organisational Mission ........................................................................................................... 160

Ownership and Management Alternatives ................................................................................... 160

Goods/Service Categories ...................................................................................................... 161

Management Abilities ............................................................................................................. 161

Financial Resources ............................................................................................................... 162

Time Constraints .................................................................................................................... 162

Objectives ............................................................................................................................... 162

Sales ....................................................................................................................................... 163

Profit ....................................................................................................................................... 163

Satisfaction of Stakeholders ................................................................................................... 163

Image Positioning ................................................................................................................... 164

Selection of Objectives ........................................................................................................... 165

Checklist ................................................................................................................................. 165

Identification of Consumer Characteristics ............................................................................. 166

Overall Strategy ...................................................................................................................... 166

Controllable Variables ............................................................................................................ 166


7

Store Location ........................................................................................................................ 167

Managing the Business .......................................................................................................... 167

Merchandise Management and Pricing .................................................................................. 168

Communicating with the Customer ........................................................................................ 168

Uncontrollable Variables ......................................................................................................... 168

Consumers ............................................................................................................................. 169

Competition ............................................................................................................................ 169

Technology ............................................................................................................................. 169

Economic Conditions .............................................................................................................. 169

Seasonality ............................................................................................................................. 170

Legal Restrictions ................................................................................................................... 170

Integrating Overall Strategy .................................................................................................... 170

Legal Constraints on Retailers ............................................................................................... 170

Tactical Decisions ................................................................................................................... 172

Controls .................................................................................................................................. 173

Feedback ................................................................................................................................ 173

Part L.4 : Recession Strategy ........................................................................................................ 174

Economic Conditions ................................................................................................................... 174

Consumption Smoothing & Product Substitution ......................................................................... 174

Managing Inventories & Costs ............................................................................................... 175

Rising Costs & Raising Prices ..................................................................................................... 177

Staff Costs .............................................................................................................................. 177

Checklist ................................................................................................................................. 178

Part L.5 : Strategic Planning in a Global Retail Context .......................................................... 179

Planning Process and Global Retailing .................................................................................. 179

Opportunities and Threats in Global Retailing ............................................................................. 180

Opportunities .......................................................................................................................... 180

Threats .................................................................................................................................... 180

Standardisation ....................................................................................................................... 180

Factors Affecting Global Retailing Strategy ............................................................................ 181

Developed Markets ................................................................................................................. 181

Developing Markets ................................................................................................................ 181

Market Entry Decisions ................................................................................................................ 182

Part M.1 : Retailing Characteristics ............................................................................................... 183

Average Value of Sales Transaction ...................................................................................... 183


8

Unplanned or Impulse Purchases .......................................................................................... 183

Retail Store Experience .......................................................................................................... 183

Application of Retail Strategies .............................................................................................. 184

Application of Retail Concepts ............................................................................................... 185

Total Retail Experience .......................................................................................................... 186

Customer Service ........................................................................................................................ 186

Relationship Retailing ............................................................................................................. 187

Part M.2 : Relationships in Retailing ........................................................................................ 189

Value & the Value Chain ........................................................................................................ 189

Value-Oriented Retailing Checklist ......................................................................................... 192

Part M.3 : Customer Relationships ................................................................................................ 193

Customer Relationships ......................................................................................................... 193

The Customer Base ................................................................................................................ 193

Core Customers ..................................................................................................................... 194

Customer Service ................................................................................................................... 195

Developing a customer service strategy ................................................................................ 196

Planning individual customer services ................................................................................... 196

Customer Satisfaction ............................................................................................................ 197

Loyalty Programs .................................................................................................................... 197

Channel Relationships ............................................................................................................ 198

Relationship Building: Goods -v- Service Retailers ................................................................ 199

Ethics & Relationships in Retailing .............................................................................................. 200

Ethics ...................................................................................................................................... 201

Social Responsibility .................................................................................................................... 201

Consumerism ......................................................................................................................... 202

Part M.4 : Planning Aspects of Service Retailing .......................................................................... 204

Successful service retailing .................................................................................................... 204

Performance of service retailers ............................................................................................. 204

Part N.1 : Supplemental Customer Survey Data ........................................................................... 206

Survey Respondent Demographics ........................................................................................ 206

Brand Survey .......................................................................................................................... 209

Retail Store Brand Personality ............................................................................................... 210

Comparative Retail Store Evaluation ..................................................................................... 210

Retail Store Evaluation ........................................................................................................... 211

Customer Surveys .................................................................................................................. 211


9

Customer Satisfaction ............................................................................................................ 216

Customer Voices .................................................................................................................... 216

Product Satisfaction and Customer Retention ....................................................................... 217

Customer Satisfaction: Product .............................................................................................. 218

Product Ownership ................................................................................................................. 219

New Product Concept Evaluation and Pricing Study ............................................................. 220

Product Concept Test ............................................................................................................. 222

Product Survey ....................................................................................................................... 223

Product Purchases ................................................................................................................. 225

Customers’ Electrical / Electronic Product Purchases ........................................................... 227

Customers’ Fashion Demographic and Retail Clothing Shopping ......................................... 233

Customers’ Fashion Attitudes ................................................................................................. 234

Shopping Life Style Battery .................................................................................................... 235

Supermarket & Food Shopping Attitudes ............................................................................... 236

Supermarket & Food Store Selection Criteria ........................................................................ 237

Where would you shop for...? ................................................................................................. 238

Service Concept Test ............................................................................................................. 239

Customer service evaluation and feedback survey ................................................................ 240

Customer Service Evaluation ................................................................................................. 241

Customer Support Satisfaction Survey .................................................................................. 245

Product or Technical Services Evaluation .............................................................................. 246

Satisfaction: Product & Technical Documentation ................................................................. 248

Customer Services Evaluation ............................................................................................... 249

Website Evaluation ................................................................................................................. 257

Online Retailer Evaluation ...................................................................................................... 258

Purchasing on the Internet ..................................................................................................... 258

Internet Habits and Uses ........................................................................................................ 260

Part N.2 : Supplemental Retail Trade Survey Data ....................................................................... 262

Business Proficiency of the Company .................................................................................... 262

Organisational Satisfaction – Internal ..................................................................................... 263

Sales Staff Training Evaluation .............................................................................................. 264

Store Manager’s View of Brand Perception by Customers .................................................... 265

Retailer Survey on their e-Commerce .................................................................................... 266

Company Web Building Activities ........................................................................................... 270

SECTION 2 ......................................................................................................................................... 273


10

Competitive Environment .................................................................................................................... 273

Competitive Environment .................................................................................................................... 274

Monthly Consumer Spending .......................................................................................................... 274

Market Opportunity .......................................................................................................................... 276

Analysis of the development of the retail trade and its life cycle ................................................. 276

Added Value and Transaction Costs across the Supply Chain ................................................... 277

Retailers per 10,000 inhabitants .................................................................................................. 278

Store Revenue per Square Meter per annum (US$) ................................................................... 278

Average Revenue per Store per annum (‘000) ............................................................................ 279

Average Store Sales Area (Square Meters) ................................................................................ 279

Existing Distribution Channels ..................................................................................................... 280

New Distribution developments ................................................................................................... 281

Online Shopping – Purchases per month .................................................................................... 282

Distribution Policies & Strategies ................................................................................................. 283

Retail Trade Life Cycle and Developments ................................................................................. 286

Future Prospects and Development of the Retail Trade ....................................................... 287

City and Town analysis ......................................................................................................... 287

Wholesaler, Trade Buyer, Retailer and Store Performance Surveys .......................................... 288

Products ....................................................................................................................................... 288

Operations ................................................................................................................................... 288

Buyers & Consumers ................................................................................................................... 289

Trading Area ................................................................................................................................ 289

Competitors .................................................................................................................................. 290

Distribution Channel Surveys ............................................................................................... 290

Decision Makers Surveys ..................................................................................................... 291

Industry Performance ........................................................................................................... 291

Value by Product Sectors ..................................................................................................... 292

City / Town Market Value ..................................................................................................... 292

Consumer Attitudes ..................................................................................................................... 293

Products ....................................................................................................................................... 293

Operations ................................................................................................................................... 293


Trading Area ................................................................................................................................ 294

Competitors .................................................................................................................................. 295

Consumer Surveys ............................................................................................................... 295

Industry Performance ........................................................................................................... 296

Competitive Factors ......................................................................................................................... 297

Retail Brands ............................................................................................................................... 297


11

Brands Price Differentials ............................................................................................................ 298

Product Price Differentials ........................................................................................................... 299

Product Value Positioning ............................................................................................................... 300

Product Pricing ................................................................................................................................ 301

Product Quality ................................................................................................................................ 302

Product Specifications ..................................................................................................................... 303

Product Target Audiences ............................................................................................................... 304

Product Volumes ............................................................................................................................. 305

Product Utility .................................................................................................................................. 306

Product Maintenance ....................................................................................................................... 307

Product Merchandising .................................................................................................................... 308

Product Advertising ......................................................................................................................... 309

Brand Positioning Tactics & Strategy .............................................................................................. 310

Current Tactical Brand Model ...................................................................................................... 310

Strategic Brand Objectives .......................................................................................................... 311

Functional Positioning - Symbolic Positioning - Experiential Positioning .................................... 312

Customer Value Propositioning ................................................................................................... 313

Value Concept & Positioning ....................................................................................................... 314

Brand Differentiation Propositions ............................................................................................... 315

Key Selling Messages.................................................................................................................. 316

Communications Tactics .............................................................................................................. 317

Advertising Tactics ....................................................................................................................... 318

Media & PR Tactics ..................................................................................................................... 319

Web & Online Tactics .................................................................................................................. 320

Point of Sale Tactics .................................................................................................................... 321

Merchandising .............................................................................................................................. 322

Product Display ............................................................................................................................ 323

Market Entry Management Factors ................................................................................................. 324

Distribution ................................................................................................................................... 324

Retail Level .................................................................................................................................. 324

Brand Competition ....................................................................................................................... 325

Value ............................................................................................................................................ 325

Location ....................................................................................................................................... 326

Supply Chain ................................................................................................................................ 326

Nature of Competition .................................................................................................................. 327

Supplier Price Differentials .......................................................................................................... 327

Retailer Reaction ......................................................................................................................... 328

Supplier Reaction ......................................................................................................................... 329

Conclusion ................................................................................................................................... 329

Distributors – Market Entry choices ............................................................................................. 332


12

Retail Presence – Market Entry choices ...................................................................................... 333

Distribution Channel: Advantages – Disadvantages ................................................................... 334

Market Entry options for Domestic Brands ...................................................................................... 335

Market Entry options for Established or Global Brands .................................................................. 336

Market Entry Features ................................................................................................................. 337

Start-up Costs .................................................................................................................................. 338

Start-up Costs, Initial Investment and Product Launch Balance sheet ....................................... 338

Inventory Costs ............................................................................................................................ 338

Brand Store Start-up Costs .......................................................................................................... 339

Independent Store Start-up Costs ............................................................................................... 340

Brand In-Store Start-up Costs ..................................................................................................... 341

Distributor / Exclusive Wholesaler Sign-up Costs ....................................................................... 342

Start Times Weeks: Brand Store ................................................................................................. 343

Start Times Weeks: Independent Store ....................................................................................... 344

Start Times Weeks: Distributor / Exclusive Wholesaler ............................................................... 345

Economies of Scale with multiple Stores ..................................................................................... 346

Cash Flow, Profit & Loss, Balance Sheet, Project Financial Analysis ............................................ 347

12 Months Cash Flow Analysis .................................................................................................... 347

First 12 months and First 3 years Profit & loss Account .............................................................. 348

1-7 Years Balance Sheet ............................................................................................................. 349

10 Years Project Financial Analysis ............................................................................................ 350

SWOT Analysis ............................................................................................................................... 351

SWOT analysis by type of Market Entry ...................................................................................... 351

Entry via Company Owned Retail Stores .................................................................................... 351

Entry via Domestic Retail Joint Venture ...................................................................................... 351

Entry via National Franchise Licensee ........................................................................................ 352

Entry via Intensive Individual Franchising.................................................................................... 352

Entry via Exclusive National Distributor ....................................................................................... 353

Entry via Intensive National Distribution / Wholesaling ............................................................... 353

Competitive Analysis ....................................................................................................................... 354

Retail Brands ............................................................................................................................... 354

Market Penetration Prospects ......................................................................................................... 355

Advancing into the target markets ............................................................................................... 355

Brand Concept ............................................................................................................................. 356

Brand Equity ................................................................................................................................ 356

Customer Based Brand Equity .................................................................................................... 357

Brand Knowledge ......................................................................................................................... 357

Substantial Brand Knowledge & Awareness – All Brands ........................................................... 357

Brand Equity Model ...................................................................................................................... 358

Substantial Brand Loyalty – All Brands........................................................................................ 359


13

Substantial Brand Quality –v Price Perceptions – All Brands ..................................................... 360

Brand Knowledge Components ................................................................................................... 361

Brand Resonance Components ................................................................................................... 361

Brand Resonance ........................................................................................................................ 362

Qualitative Brand Research ......................................................................................................... 364

Qualitative Brand Identifiers ......................................................................................................... 364

Marketing communication applied to branded products .............................................................. 365

The Brand Image in the marketing communication process ....................................................... 366

The Store Image in the marketing communication process ........................................................ 366

Consumer confidence and consumer markets ............................................................................ 367

Consumer Confidence Index ....................................................................................................... 367

Consumer Confidence ................................................................................................................. 367

Consumer Attitudes and Perceptions which impact Brands ........................................................ 369

% Usage & Purpose of purchases ............................................................................................... 370

Celebrity endorsement ................................................................................................................. 371

Relative Ranking Criteria and Consumer Habits for Product Purchases .................................... 372

Brand Selection ............................................................................................................................ 372

Price over Brand Loyalty amongst Buyers................................................................................... 373

Purchase Drivers for Buyers ........................................................................................................ 373

Domestic Brands -v- Foreign Brands ........................................................................................... 374

What do consumers want in a branded product? ........................................................................ 375

What can National brands do to counter the established Global brands? .................................. 377

How can National brands do better than the Global brands? ...................................................... 378

Novel marketing methods to distinguish oneself from the competition ....................................... 379

Unique Brand Offerings ............................................................................................................... 380

New and Untapped Market Demand ........................................................................................... 381

Niche Markets .............................................................................................................................. 381

Brand Superiority ......................................................................................................................... 382

Building Heritage Brands ............................................................................................................. 382

Brand Resonance ........................................................................................................................ 383

Brand Persistence ........................................................................................................................ 384

Brand Development Opportunities ............................................................................................... 386

Industry Checklist ......................................................................................................................... 387

Product Design and Merchandising ............................................................................................. 387

Performance Indicators ................................................................................................................ 388

Application of Design – Performance Factors ............................................................................. 389

Industry Performance Indicators .................................................................................................. 389

Performance Indicators for brand selection, development, and distribution ................................ 390

Performance Indicators for merchandising strategies ................................................................. 391

Market Strategy Insight .................................................................................................................... 392


14

Market Entry Possibilities and Criteria ......................................................................................... 392

Market Entry Difficulties ............................................................................................................... 392

Market Potential ........................................................................................................................... 393

Financial Potential ........................................................................................................................ 394

Consumer Potential & Attitudes ................................................................................................... 395

Relative Return on Investment by Market Area : 1-14 years ....................................................... 396

Relative Return on Investment by Product Category .................................................................. 397

Relative Return on Investment by market for Product Groups .................................................... 397

Opinions of the trade and retail experts on introducing new brands ........................................... 398

SECTION 3 ......................................................................................................................................... 400

Market Research ................................................................................................................................. 400

Markets ................................................................................................................................................ 400

MARKET RESEARCH COVERAGE ................................................................................................... 401

Markets & Products covered ........................................................................................................... 401

Product Sectors ........................................................................................................................... 401

Survey Data ..................................................................................................................................... 402

Consumer Surveys ................................................................................................................ 402

Distribution Channel Surveys ................................................................................................ 403

Decision Makers Surveys ...................................................................................................... 403

Industry Performance ............................................................................................................ 403

Products ....................................................................................................................................... 404

Operations ................................................................................................................................... 404


Trading Area ................................................................................................................................ 405

Retail Competitors ....................................................................................................................... 406

Geographic Coverage ..................................................................................................................... 407

Financial data ............................................................................................................................ 407

Financial Data Scenarios ............................................................................................................. 407

Financial Margins & Ratios Data Scenarios ................................................................................ 407

Market Research ............................................................................................................................. 408

General Contents ............................................................................................................................ 408

Market Research Report Table of Contents .................................................................................... 409

Core National Database Open the Core Database here ....................................................... 409

Sections ........................................................................................................................................... 409

Preface ................................................................................................................................ 409

Chapters .............................................................................................................................. 409

Databases ........................................................................................................................... 409

Financials ............................................................................................................................ 409


15

Industry ................................................................................................................................ 409

Markets ................................................................................................................................ 409

Products .............................................................................................................................. 409

Grids .................................................................................................................................... 409

Reference ............................................................................................................................ 409

Contents .............................................................................................................................. 409

Legend ................................................................................................................................. 409

Cities .................................................................................................................................... 409

Countries ............................................................................................................................. 409

Chapters .......................................................................................................................................... 410

Chapter 1 .................................................................................................................................... 410

ADMINISTRATION .............................................................................................................. 410

Chapter 2 .................................................................................................................................... 410

ADVERTISING .................................................................................................................... 410

Chapter 3 .................................................................................................................................... 410

BUYERS – COMMERCIAL OPERATIONS......................................................................... 410

Chapter 4 .................................................................................................................................... 410

BUYERS – COMPETITORS ............................................................................................... 410

Chapter 5 .................................................................................................................................... 410

BUYERS – MAJOR CITY .................................................................................................... 410

Chapter 6 .................................................................................................................................... 410

BUYERS – PRODUCTS...................................................................................................... 410

Chapter 7 .................................................................................................................................... 410

BUYERS – TRADE CELL.................................................................................................... 410

Chapter 8 .................................................................................................................................... 410

COMPETITIVE INDUSTRY ANALYSIS .............................................................................. 410

Chapter 9 .................................................................................................................................... 410

COMPETITOR ANALYSIS .................................................................................................. 410

Chapter 10 ................................................................................................................................... 410

COUNTRY FOCUS ............................................................................................................. 410

Chapter 11 ................................................................................................................................... 410

DISTRIBUTION ................................................................................................................... 410

Chapter 12 ................................................................................................................................... 410

FINANCIAL - BUSINESS DECISION SCENARIOS ........................................................... 410

Chapter 13 ................................................................................................................................... 410

FINANCIAL - CAPITAL COSTS FINANCIAL SCENARIOS ................................................ 410


16

Chapter 14 ................................................................................................................................... 410

FINANCIAL - CASHFLOW OPTION SCENARIOS ............................................................. 410

Chapter 15 ................................................................................................................................... 410

FINANCIAL - COST STRUCTURE SCENARIOS ............................................................... 410

Chapter 16 ................................................................................................................................... 410

FINANCIAL - HISTORIC INDUSTRY BALANCE SHEET ................................................... 410

Chapter 17 ................................................................................................................................... 410

FINANCIAL - HISTORIC MARKETING COSTS & MARGINS ............................................ 410

Chapter 18 ................................................................................................................................... 410

FINANCIAL - INVESTMENT + COST REDUCTION SCENARIOS .................................... 410

Chapter 19 ................................................................................................................................... 410

FINANCIAL - MARKET CLIMATE SCENARIOS................................................................. 410

Chapter 20 ................................................................................................................................... 410

FINANCIAL – MARKETING COSTS ................................................................................... 410

Chapter 21 ................................................................................................................................... 410

FINANCIAL - MARKETING EXPENDITURE SCENARIOS ................................................ 410

Chapter 22 ................................................................................................................................... 410

FINANCIAL – MARKETING MARGINS .............................................................................. 410

Chapter 23 ................................................................................................................................... 410

FINANCIAL - STRATEGIC OPTIONS SCENARIOS .......................................................... 410

Chapter 24 ................................................................................................................................... 410

FINANCIAL - SURVIVAL SCENARIOS .............................................................................. 410

Chapter 25 ................................................................................................................................... 411

FINANCIAL - TACTICAL OPTIONS SCENARIOS ............................................................. 411

Chapter 26 ................................................................................................................................... 411

GEOGRAPHIC DATA .......................................................................................................... 411

Chapter 27 ................................................................................................................................... 411

INDUSTRY - NORMS .......................................................................................................... 411

Chapter 28 ................................................................................................................................... 411

MAJOR CITY MARKET ANALYSIS .................................................................................... 411

Chapter 29 ................................................................................................................................... 411

MARKET CAPITAL ACCESS SCENARIOS ....................................................................... 411

Chapter 30 ................................................................................................................................... 411

MARKET CASHFLOW SCENARIOS .................................................................................. 411

Chapter 31 ................................................................................................................................... 411

MARKET ECONOMIC CLIMATE SCENARIOS .................................................................. 411

Chapter 32 ................................................................................................................................... 411


17

MARKET INVESTMENT + COSTS SCENARIOS .............................................................. 411

Chapter 33 ................................................................................................................................... 411

MARKET MARKETING EXPENDITURE SCENARIOS ...................................................... 411

Chapter 34 ................................................................................................................................... 411

MARKET RISK SCENARIOS .............................................................................................. 411

Chapter 35 ................................................................................................................................... 411

MARKET STRATEGIC OPTION SCENARIOS ................................................................... 411

Chapter 36 ................................................................................................................................... 411

MARKET SURVIVAL OPTION SCENARIOS...................................................................... 411

Chapter 37 ................................................................................................................................... 411

MARKET TACTICAL OPTION SCENARIOS ...................................................................... 411

Chapter 38 ................................................................................................................................... 411

MARKETING EXPENDITURE -v- MARKET SHARE .......................................................... 411

Chapter 39 ................................................................................................................................... 411

MARKETING STRATEGY DEVELOPMENT ...................................................................... 411

Chapter 40 ................................................................................................................................... 411

MARKETS ........................................................................................................................... 411

Chapter 41 ................................................................................................................................... 411

OPERATIONAL ANALYSIS ................................................................................................ 411

Chapter 42 ................................................................................................................................... 411

OVERSEAS DEVELOPMENT ............................................................................................ 411

Chapter 43 ................................................................................................................................... 411

PERSONNEL MANAGEMENT ........................................................................................... 411

Chapter 44 ................................................................................................................................... 411

PHYSICAL DISTRIBUTION + CUSTOMER HANDLING .................................................... 411

Chapter 45 ................................................................................................................................... 411

PRICING .............................................................................................................................. 411

Chapter 46 ................................................................................................................................... 411

PROCESS + ORDER HANDLING ...................................................................................... 411

Chapter 47 ................................................................................................................................... 411

PRODUCT ANALYSIS ........................................................................................................ 411

Chapter 48 ................................................................................................................................... 411

PRODUCT DEVELOPMENT .............................................................................................. 411

Chapter 49 ................................................................................................................................... 411

PRODUCT MARKETING FACTORS .................................................................................. 411

Chapter 50 ................................................................................................................................... 411

PRODUCT MIX ................................................................................................................... 411


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Chapter 51 ................................................................................................................................... 412

PRODUCT SUMMARY ....................................................................................................... 412

Chapter 52 ................................................................................................................................... 412

PROFIT RISK SCENARIOS ................................................................................................ 412

Chapter 53 ................................................................................................................................... 412

PROMOTIONAL MIX ........................................................................................................... 412

Chapter 54 ................................................................................................................................... 412

SALESFORCE DECISIONS ............................................................................................... 412

Chapter 55 ................................................................................................................................... 412

SALES PROMOTION .......................................................................................................... 412

Chapter 56 ................................................................................................................................... 412

SURVEYS ........................................................................................................................... 412

Chapter 57 ................................................................................................................................... 412

TARGETS - PRODUCT + MARKET .................................................................................. 412

Chapter 58 ................................................................................................................................... 412

TECHNOLOGY ................................................................................................................... 412

Chapter 59 ................................................................................................................................... 412

TRADE CELL ANALYSIS .................................................................................................... 412

Chapter 60 ................................................................................................................................... 412

URBAN COMPETITION ...................................................................................................... 412

Chapter 61 ................................................................................................................................... 412

TOWNS - FINANCIAL ......................................................................................................... 412

Chapter 62 ................................................................................................................................... 412

TOWNS - INDUSTRY .......................................................................................................... 412

Chapter 63 ................................................................................................................................... 412

TOWNS - MARKET ............................................................................................................. 412

SECTION 4 ......................................................................................................................................... 413

Business Planning ............................................................................................................................... 413

BUSINESS PLANNING ....................................................................................................................... 414

Checklist .......................................................................................................................................... 414

Checklist implementation ..................................................................................................... 417

Advancing your Project ................................................................................................................ 417

Cashflow .................................................................................................................................... 418

The Business Plan Programme ............................................................................................... 419

Installing the Business Plan Programme ..................................................................................... 420

Retailer Analysis Report ...................................................................................................................... 427

Methodology .................................................................................................................................... 427


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Presentation .................................................................................................................................... 427

After-Sales Service & Client Support .............................................................................................. 428

Real Time Support ....................................................................................................................... 429

Resource Webs -v- Dedicated sites ............................................................................................ 429

Product Level ............................................................................................................................... 429

Data Product levels ...................................................................................................................... 430

Getting Started with the Core Database ...................................................................................... 431

Using the data .............................................................................................................................. 431

Toolkits ......................................................................................................................................... 431

Report Cost ..................................................................................................................................... 434

Retailer Report ............................................................................................................................. 434

Report Pricing .............................................................................................................................. 434

About DataGroup ............................................................................................................................. 435

DataGroup Clients ........................................................................................................................... 435

was established in 1986, and has been a brand since 1995.

The Retailer Analysis of Abercrombie & Fitch.

Target Country: Germany

Ref: 7699899607802

Published by The DataGroup Stiftung, Vaduz, Liechtenstein. Copyright © DataGroup Stiftung.


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Retailer Analysis - Introduction Structure of this report This document is constructed as a PDF file which links to a large number of online documents, Excel spreadsheets and Access databases.

This document consists of four sections:-

1. The Retailer Report Analysis a. Analysis of the 15 most important Product Groups

These represent the most important Product Groups or Product Lines for Abercrombie & Fitch in Revenue terms.

Products

The Product Groups (1 to 15) data is shown in the tables as

Product Group #1 to Product Group #15

b. Analysis of the 15 most important Trading Areas:

1 Germany 2 North Rhine-Westphalia 3 Bavaria 4 Baden-Württemberg 5 Lower Saxony 6 Hassia 7 Saxony 8 Rhineland-Palatinate 9 Berlin 10 Schleswig-Holstein 11 Brandenburg 12 Sachsen-Anhalt 13 Thuringia 14 Hamburg 15 Mecklenburg-West Pommerania

Trading Area

The Trading Areas (1 to 15) data is shown in the tables as

Trade Area #1 to Trade Area #15

In addition data is given for all the significant Towns and Cities in Germany, a list of these can found here:-

http://www.dg-di.eu/BASE_FOLDERS/World_Cities/GM.html


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c. Analysis of the 15 most important Competitors

The algorithm ranks Competitors according to those which represent the most significant threat to Abercrombie & Fitch, when filtered for the following criteria:-

i. Chief Overall Market Competitor ii. Main National Market Competitor iii. Main Regional / Local Market Competitor iv. Main Trading Area Market Competitor v. Main National Product Superiority Competitor vi. Main Trading Area Product Superiority Competitor vii. Main National Price Competition Competitor viii. Main Trade Area Price Competition Competitor ix. Main National Financial Strength Competitor x. Main Trading Area Financial Strength Competitor xi. Main National Customer Satisfaction Competitor xii. Main Trading Area Customer Satisfaction Competitor xiii. Main National Marketing Aggression Competitor xiv. Main Trading Area Marketing Aggression Competitor xv. Main New Product Development Competitor

In this report the Retail Competitors are identified as individual companies. A list is not shown because the significance of the Competitors change on a seasonal basis and thus the final list is produced dynamically when the database is output for the specific order.

Retail Competitors

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15


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d. Analysis of the 15 most important Retailer Operations

The algorithm ranks the Retail Operations which represent the most significant for Abercrombie & Fitch:-

1. Brand Management 2. Product Management 3. Marketing & Selling Activity 4. Store Presentation & Merchandising 5. Product Offering Specifications & Characteristics 6. Product Quality Control 7. Design Research & Development 8. Customer Handling 9. Product Sourcing & Control 10. Financial Controls 11. Staff Training / Control & Relations 12. Product Throughput Capacity & Control 13. Supply System Control & Development 14. Distribution Control 15. Product Handling Systems & IT

Retailer Operations

The Retailer Operations (1 to 15) data is shown in the tables as:

Operations #1 to Operations #15


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e. Analysis of the 15 most important Customer / Buyer Profiles

The algorithm ranks the Customer Profiles which represent the most significant for Abercrombie & Fitch:-

1. Wholesalers 2. Trade Buyers 3. Retailers 4. Consumers 5. Consumers Age: <19 6. Consumers Age: 19-24 7. Consumers Age: 25-34 8. Consumers Age: 35-44 9. Consumers Age: 55-54 10. Consumers Age: 55-64 11. Consumers Age: 65+ 12. Consumers Social Group: AB 13. Consumers Social Group: C1 14. Consumers Social Group: C2 15. Consumers Social Group: DE

Buyers & Consumers

The Buyers & Consumers (1 to 15) data is shown in the tables as:

Buyers #1 to Buyers #15

f. Analysis of the internal and external issues which affect Abercrombie & Fitch

The Analysis of Abercrombie & Fitch consists of about 23 Parts or chapters with over 3600 research issues which have been investigated through Surveys of the Staff of Abercrombie & Fitch, the Customers, the Competitive companies, Trade Suppliers, Logistics companies, Trade Buyers & Decision Makers, Trade & Industry Experts, Banks & Financial Institutions, the Regulatory Authorities, and other sources.


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2. The Retailer Competitive Environment a. Analysis of the 15 most important Product Groups

Products Product Group #1 to Product Group #15

b. Analysis of the 15 most important Trading Areas

Trading Area Trade Area #1 to Trade Area #15

c. Analysis of the 15 most important Competitors

Retail Competitors Competitors #1 to Competitors #15

d. Analysis of the 15 most important Retail Operations

Retailer Operations Operations #1 to Operations #15

e. Analysis of the 15 most important Customer / Buyer Profiles

Buyers & Consumers Buyers #1 to Buyers #15

The Competitive Environment is analysed in Product, Market, Competitive, Operational, and Consumer terms.

The Competitive Environment for Abercrombie & Fitch consists of some 170 issues which have been investigated through Surveys of the Staff of Abercrombie & Fitch, the Customers, the Competitive companies, Trade Suppliers, Logistics companies, Trade Buyers & Decision Makers, Trade & Industry Experts, Banks & Financial Institutions, the Regulatory Authorities, and other sources.


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3. Market Research The market research is Country specific, and provides data on all the Cities and Towns in the home country: Germany

For a list of Cities and Towns:


The report provides historic, current and forecast Market data, Financial data for the retailers, Industry data for the trade, Survey data, and a large body of market research for each of the Germany Cities and major towns.

World Market Research data (on potential overseas expansion opportunities for Abercrombie & Fitch) is available as part of the After-Sales Service.

4. Business Planning This section provided Business Planning software and utilities.

To make the data handling easier, the documents and databases are also supplied on DVD or Hard Disk Drive which can then be used as a standalone data source or, if required, manipulated and correlated with business planning or statistical software. The breakdowns of Product Groups, Trading Areas, Competitors, Retail Operations, and Customer / Buyer Profiles are limited to 15 in each group because the Excel spreadsheets frequently analyse the correlation of data between 2 groups of 15. Because of the general limitation of record field numbers (generally 255 fields) one can only produce a 15 x 15 matrix.

SECTION 1

Analysis

Abercrombie & Fitch


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Abercrombie & Fitch

This report specifically refers to Abercrombie & Fitch

This report specifically refers to the base country: Germany

Part A : Base data on the Retailer

Abercrombie & Fitch

Base data on Abercrombie & Fitch: Part_A

Key Personnel: 1. Chairman 2. Chief Executive 3. Directors 4. Executives

Corporate Summary: 5. Company Description 6. Company History 7. Legal Entity & Ownership 8. Company Facilities 9. Company Key Assets 10. Mainline product / service 11. Product / services provided 12. Parent Company 13. Bankers 14. Year established 15. Current employees 16. Issued capital 17. Shareholders 18. Last published turnover 19. Subsidiaries 20. Associated companies 21. Companies represented 22. Agencies 23. Physical processing locations 24. Capital investment 25. Advertising expenditure 26. Advertising media 27. Advertising posture 28. Sales promotion activity 29. Method of selling 30. Distribution 31. Distribution network 32. Use of distribution channels

Corporate Observations: 33. Stores


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34. Store Brands 35. Store Sales Channels 36. Products Carried & Services Offered 37. Consumer Features & Benefits 38. Current Market Analysis 39. Competition 40. Competitive Advantage 41. Target Markets 42. Target Customers 43. Current Strategy & Implementation 44. Current Management 45. Current Financial Plan 46. Investment Fund Sources & Use of Funds 47. Future Target Customers 48. Future Retail Trends 49. Future Market Analysis 50. Projected Market Size 51. Planned Products & Services 52. Development Plans

Swot Analysis: 53. Strengths 54. Weaknesses 55. Opportunities 56. Threats

Future Strategy Planning & Implementation:

57. Philosophy 58. Product Development 59. Internet Strategy 60. Marketing Strategy 61. Sales Strategy 62. Strategic Alliances 63. Operations

Goals:

64. Renovating premises, stocking, staff hiring and marketing 65. Sponsorship & Hosting events 66. Penetrate and raise awareness in the targeted consumer market 67. Achieving a higher profit margin 68. Building the customer base 69. Generate repeat and referral sales 70. Expansion potential 71. Reputation as a quality retailer

Exit Strategies Management:

72. Organisational Structure 73. Leadership 74. Staff Members

Financial Plans:

75. Finance Requirements 76. Use of Funds 77. Cash Flow 78. Balance Sheet Topics 79. Financial Assumptions


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The above topics are covered as brief or concise elements to give an impression of the topic based on trade and industry analyses. The body of the report provides the detail.

The Corporate Observations section is a concise headlining, or sound bites, of certain issues which concern the retailer. In fact the Observations are based the analyses of several datasets which have then been distilled into as few words as possible. In order to understand the data behind these observations readers should consider the datasets shown below.

As an explanation of the topics covered by the above items:-

1. Company Description

A brief description of the activities of the company.

2. Company History

The corporate milestones for the company.

3. Legal Entity & Ownership

Listed, Private, Family.

4. Company Facilities

Retail Locations

Distribution

Property Portfolio

Production

5. Company Key Assets

Brands

Cashflow position

Copyrights

Customer Base

Customer Relations

Designers

Franchisees

Internet Presence

Investments

Liquidity

Locations

Management

Market Share

Patents

Product Range

Staff Abilities

Trademarks

Value Proposition

6. Stores

Number and location of stores

7. Store Brands

Retail brands of the stores

8. Store Sales Channels


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Company owned, Franchises, In-store departments, Joint-Ventures

9. Products Carried & Services Offered

Product Ranges of goods carried and services offered

10. Consumer Features & Benefits

Product Range

Product Value

Product Quality

Product Design

Product Fashion

Store service

Payment options

Customer services

11. Current Market Analysis

Dynamic, Increasing, Stagnant, Falling, Deteriorating

12. Competition

Very aggressive, Aggressive, Equivalent, Benign, Ineffective

13. Competitive Advantage

Value Proposition, Price, Quality, Store Locations, Customer Loyalty, Customer Services

14. Target Markets

Local, Regional, National, International

15. Target Customers

Male, Female. Under 18, Youth Trendy, Younger, Professional, General demographic, Mature, Older. Discount, Mid-priced, Upscale, Luxury

16. Current Strategy & Implementation

Very Effective, Effective, Consistent, Inconsistent, Ineffective

17. Current Management

Dynamic, Professional, Average, Lacking, Ineffective

18. Current Financial Plan

Dynamic, Productive, Consistent, Lacking, Unsuccessful

19. Investment Fund Sources & Use of Funds

Public, Institutional, Bank, Private. Use of Funds: Exceptional, Productive, Mediocre, Ill-advised, Poor.

20. Future Target Customers

New Customer Bases available. No New Customer Bases available.

21. Future Retail Trends

Dynamic, Advancing, Stable, Challenging, In decline

22. Future Market Analysis

Dynamic, Progressive, Static, Difficult, Collapsing

23. Projected Market Size

Significant increases, Increasing, Stable, Diminishing, Significant decreases


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24. Planned Products & Services

Substantial New Product/Service Offerings, Some New Product/Service Offerings, No New Product/Service Offerings, Reduction in Product/Service Offerings. No comment

25. Development Plans

Dynamic, Advanced, Progressive, Static, None


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SWOT ANALYSIS:

26. Strengths tested:

Advertising Effectiveness

Brand

Business Alliances

Business Innovation

Competition

Consumer base

Cost advantages

Culture

Customer Service

Direct delivery capability

Economies of Scale

Excellent customer service

Experience and understanding of the Retail industry

Experience in the field

Financial Resources

Future Changes available

Good reputation among customers

Good Staff Training

Good Website

Industry knowledge

Innovative sales techniques

Intangible Strengths

Large administration component

Management

Market Lead

Market Location

Market Share

Personnel

Product Uniqueness

Proprietary knowledge

Relationship marketing

Relationship with customers

Relationship with employees

Relationships with suppliers

Reputation

Shopping experience and customer service

Sole supply agreements

Standards

Store Fitting & Systems good quality

Store Locations

Strong Brands

Superior product performance vs. competitors

Technology

Training

Unique brands

Use of new technology


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27. Weaknesses analysed:

Customer service staff needs training

Future Changes difficult

High overall unit cost relative to competitors

Inferior technology

Insufficient financial resources

Intangible Weaknesses

Lack of following-up procedures

Lack industry knowledge

Lack innovation

Limited expansion potential

Limited industry experience

Limited industry knowledge

Limited Product Range

Limited Stocks

Low Market Share

Low R&D

Niche markets

Poor Customers Relations

Poor Employees Relations

Poor Management

Poor Marketing

Poor reputation among customers

Poor Suppliers Relations

Poor Website

Product line too narrow

Store brand unknown

Small Economies of Scale

Small market presence

Small store sizes

Store fittings, plant and equipment old or outdated

Untested markets

Weak Brands

Weak image

28. Opportunities evaluated:

Backward integration in the supply chain

Better Training

Better Website

Competitive opportunities

Customer Service

Database Assets

Diversification

E-commerce

Establish a product line

Expand Customer Bases

Expand Customer Catchment areas

Expand Customer Offerings

Expand Product Range

Expand Supply Sources

Favourable cultural shifts

Favourable economic outlook

Favourable regulations

Import / export opportunities


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Increased geographic coverage

Internet sales

Local competitors have worse products

Local Marketing

Loosening of regulations

Market growth

Multi-channel marketing

New demographics available

New market niche

New Market opportunities

New Products

New technologies

Online presence

Outstanding shopping experience will lead to repeat business

Removal of international trade barriers

Specific Markets

Use of new technology

29. Threats evaluated:

Buyers changing

Change in market demand

Changes in demographics

Changing consumer interests

Changing fashion trends

Cost and effectiveness of marketing to target markets

Currency fluctuations

Customers’ power growing

Direct competition

Economic climate

Emergence of substitute products

Environmental effects

Fixed Costs

Foreign exchange rates

Indirect Competition

Local conditions

Location

Loss of control of product prices

Low cost competitive products

New regulations

New retail competitors

Obsolete product range

Pressure on margins

Product substitution

Regulations

Shifts in consumer tastes

Slow or Declining market growth

Substitute product market

Suppliers’ power growing

Technology


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FUTURE STRATEGY PLANNING & IMPLEMENTATION

30. Philosophy

Contract theory / Stakeholder theory / Business as property

Contract theory:

Business contract theory holds that a business is a community of participants organized around a common purpose. These participants have legitimate interests in how the business is conducted and, therefore, they have legitimate rights over its affairs. Most contract theorists see the enterprise being run by employees and managers as a kind of representative democracy.

Stakeholder theory:

Stakeholder theorists believe that people who have legitimate interests in a business also ought to have a voice in how the business is conducted. The obvious ‘non-owner’ stakeholders are the employees. However, stakeholder theorists take contract theory a step further, maintaining that people outside of the business enterprise ought to have a say in how the business operates. Thus, for example, consumers, even community members who could be affected by what the business does, for example, by the pollutants of a factory, ought to have some control over the business.

Business as property:

This philosophy holds that the business is essentially someone's property, thereby its owners have the right to dispose of it as they see fit, within the restraints imposed by the law. Workers and consumers have no special rights over the property, other than the right not to be harmed by its use without their consent. Workers voluntarily exchange their labour for wages from the business owner; and they have no more right to tell the owner how he will dispose of his property than the owner has to tell them how to spend their wages, which is property belonging to the workers. Furthermore, consumers have no rights to govern or manage the business, which belongs to someone else.

31. Product Development

1. Diversification Strategy 1. Product Modification Strategy 2. Concept Product Development 3. No discernible strategy employed by the retailer

The development of new products or services or modifying existing products or services so they appear new, and the offering those products or services to current or new markets is an important process for all companies.

Diversification Strategy:

Product diversification involves modifying the company’s product/s or service/s to expand into new markets by leveraging the company’s existing product or service experience and reputation.

This strategy is especially attractive for companies operating in a saturated market. The product diversification strategy calls for the company to go outside its existing business and develop new products or services for a customer segments and new markets. This diversification might be based on appealing to new customer demographics or price points.


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Product Modification Strategy:

By working with existing products or services in existing markets the company might attract and appeal to new customers segments. Product modification which adds new features to extend the current offering, may also appeal to existing customer bases.

Concept Product Development:

Concept product development is the process of bringing to market unique or innovative product or service. Generally the company’s existing customer base receives the product as new ideas or concepts because they have no prior knowledge or experience with these new product or service. This type of product development poses a financial risk to the company and management should rely heavily upon disciplined market research as a means of reducing risk.

Regardless of which product development strategy is utilized, the process requires thoroughness and a series of benchmarks throughout the process. These benchmarks help the company to assess whether the expensive and time consumed in the product development process should be continued.

Potential consumers must play a vital role in the product development process, and the consumer evaluation of the new products or services should be conducted at concept, prototype and final product stage.

32. Internet Strategy

Checklist:

1. Employee productivity. 2. Operational effectiveness. 3. Reduction of operating costs. 4. Competitive advantage. 5. Intra-company communications. 6. Communications with suppliers. 7. Communications with customers. 8. Marketing presence online. 9. E-Commerce & Online ordering. 10. Poor internet strategy.

Internet Strategy

The company should have a specific, fully costed, plan to invest in an Internet presence to sell product online by advertising, marketing, taking orders, fulfilling orders, invoicing and collect payment over the Internet.

1. Is the company’s online strategy fully planned? 2. Is the retailer’s website a ‘me too’ rationale? 3. Does this retailer have a valid business reason to operate an online selling site? 4. Does the online selling operation adversely reflect on the retailer’s brand? 5. Would the retailer be better advised to seek other channels to the market? 6. Will the retailer’s prospective product buyers search for them on the Internet? 7. Can the retailer adequately describe and demonstrate the value proposition of the products

over the Internet? 8. Can the retailer successfully compete in the online market space? 9. Can the retailer make a profit from the Internet?


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33. Marketing Strategy

Market selection. Product planning. Pricing. Place. Promotion.

Marketing Strategy

The marketing strategy is composed of several interrelated components which embraces the marketing mix:

The Marketing Mix

1. Market selection

Is the retailer adequately targeting their appropriate customers base or subset (segment)?

2. Product planning

Does the retailer properly segment its products for selected customers segments?

Do the retailer’s products have features which are uniquely targeting the market?

3. Pricing

Does the retailer’s pricing strategy reflect a quantitative expression of the value of the product to the customer?

Is the retailer’s pricing designed like a feature consistent with the use of the product?

Is the retailer’s Price –v- Features matrix realistic?

4. Place

Are the retailer’s stores placed for optimum effect?

Are the retailer’s channels effective in delivering the product and its benefits to the selected markets?

5. Promotion

a. Positioning: Does the retailer’s messages state the purpose and benefits of the product in the market in which it competes?

b. Selling: Does the retailer rely on indirect selling which is subject to uncontrollable conditions?

c. Communications

Are the retailer’s target customers adequately informed about the product features and benefits and thereby persuaded to buy them?

Does the retailer fully exploit branding opportunities?

d. Customer Support and Service

Can the retailer’s customers rely on good customer support and service?

e. Decision Making Unit and the Decision Making Process

The retailer’s actual selling process breaks down into two components: the decision making unit (DMU) and the decision making process (DMP).

The DMU decision making unit

The DMU consists of all of the people who will play a role in the decision to purchase a product. The marketing mix program must understand the needs of each of these individuals and find a way to communicate the marketing message to each of them. These people are typically identified as:

Buyer – the person who actually pays for the product

Decider – the person that actually says this is the product wanted


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Influencer – whomever helps the decider decide

User – the individual who actually uses the product and derives benefit from it

The DMP or Decision Making Process

The people included in the Decision Making Unit (DMU) interact to make the purchasing decision.

The (DMP) is a description of this interaction. By understanding this process the retailer can best understand who, how, and when to work on getting the customer to buy.

Does the retailer adequately understand the DMU?

Does the retailer adequately understand the DMP?

34. Sales Strategy

Customers oriented. Understands the relative complexity of the market. Differentiation from competitors. Benefits from the price –v- value function. Understands expected sales volumes and margins.

Does the retailer’s sales strategy fully understand:

The Customers and End Users?

The relative complexity of the market?

The differentiation from competitors?

The price –v- value function?

The expected sales volume?

Has the retailer defined the target market?

Has the retailer determined its outreach and which sales strategy will be most effective with the target market?

Does the retailer know the needs and aspirations of the customer?

Is the retailer able to deliver on promises and customer expectations and thereby build a relationship with the customer?

Does the retailer adequately monitor the critical aspects of their sales strategy?

35. Strategic Alliances

Many / Some / Few.

Manufacturing alliances

Logistic alliances

Supply Chain alliances

Retailing alliances & Joint ventures

Equity alliance

Non-equity alliance

Geographic alliances


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36. Operations

Evaluation of the operations strategies which influences the retailer’s performance:

New product/service development strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Vertical integration strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Facilities strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Technology strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Workforce and organization strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Capacity adjustment strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Supplier development strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Inventory strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Planning and control systems strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Improvement strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Recovery strategy: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

GOALS

Evaluation of the achievement of goals which influences the retailer’s performance:

37. Renovating premises, stocking, staff hiring and marketing

Renovating premises: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Stocking efficiencies: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Staff hiring and training: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

Marketing: Efficient / Timely / Dependable / Flexible / Cost effective / Ineffective / No comment

38. Sponsorship & Hosting events

Sponsorships: Significant / Minor. Events: Significant / Minor

39. Penetrate and raise awareness in the targeted consumer market

Target Market Penetration: Significant / Important / Moderate / Average / Insufficient

Raising awareness amongst the target consumers: Significant / Important / Moderate / Average / Insufficient


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40. Achieving a higher profit margin

Profit Margin achievements: Significant / Important / Moderate / Average / Insufficient

41. Building the customer base

Customer Base building: Significant / Important / Moderate / Average / Insufficient

42. Generate repeat and referral sales

Repeat Business: Significant / Important / Moderate / Average / Insufficient

Referral Business: Significant / Important / Moderate / Average / Insufficient

43. Expansion potential

Business expansion: Significant / Important / Moderate / Average / Insufficient

44. Reputation as a quality retailer

General Retail Reputation: Significant / Important / Moderate / Average / Insufficient

Reputation for Quality: Significant / Important / Moderate / Average / Insufficient

EXIT STRATEGIES

Envisaged / Unknown / Not planned.

Operations

Brands

Product Lines

Store Locations

Operating divisions

Operating companies

Shareholders & Investors

MANAGEMENT

Evaluation of the retailer’s management:

45. Organizational Structure

Organizational Structure: Resourceful / Professional / Dependable / Flexible / Cost effective / Ineffective / No comment

46. Leadership

Company Leadership: Resourceful / Professional / Dependable / Flexible / Cost effective / Ineffective / No comment

47. Staff Members

Company Staff: Resourceful / Professional / Dependable / Flexible / Cost effective / Ineffective / No comment


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FINANCIAL PLANS

48. Finance Requirements

Company’s Financial requirements: Well met / Sustainable / Adequately met / Unsustainable / No comment

49. Use of Funds

Company’s Use of Investment Funds: Well Planned & Implemented / Sufficiently Planned / Adequately Planned / Uncertain / No comment

50. Cash Flow

Company’s Cash Flow: Very strong / Strong / Moderate / Adequate / Insufficient / Fragile / No comment

51. Balance Sheet Topics

Company’s Balance Sheet Issues: No issues / Few issues / Some issues / Substantial issues / No comment

52. Financial Assumptions

Company’s Financial Assumptions: Conservative / Realistic / Neutral / Optimistic / Unsustainable / No comment


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Part B : Financial Data

Abercrombie & Fitch

The financial data is provided in sections:-

1. the most salient retail Management figures and margins, and

2. a full Balance Sheet and Management Accounts simulation.

Part B.1 : Management figures

Management figures for Abercrombie & Fitch: as an Excel file: Part_B_1

1. Retail Revenue

2. Retail Profitability as a % of Sales

3. Total Retail Selling Space

4. Average Store Retail Selling Space

5. Average Store Retail Revenues

6. Average Retail Store Establishment Cost

7. Fixed Assets: Premises

8. Fixed Assets: Store Fittings

9. Fixed Assets: Miscellaneous Items

10. Fixed Assets

11. Capital Expenditure on Premises

12. Capital Expenditure on Store Fittings

13. Capital Expenditure on Equipment

14. Cap. Expend. on Data Processing

15. Capital Expenditure on Misc. Items

16. Total Capital Expenditure

17. Retirements: Premises

18. Retirements: Store Fittings

19. Retirements: Miscellaneous Items

20. Total Retirements

21. Total Fixed Assets

22. Finished Product Stocks

23. Work in Progress as Stocks

24. Materials as Stocks

25. Total Stocks / Inventory

26. Debtors

27. Miscellaneous Current Assets

28. Total Current Assets

29. Total Assets

30. Creditors

31. Short Term Loans

32. Miscellaneous Current Liabilities

33. Total Current Liabilities

34. Net Assets / Capital Employed

35. Long Term Loans

36. Miscellaneous Long Term Liabilities

37. Shareholders’ Funds

38. Retail Workers

39. Total Employees


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Part B.2 : Balance Sheet and Management Accounts

Balance Sheet and Management Accounts for Abercrombie & Fitch: as an Excel file: Part_B_2

1. Return on Capital 2. Return on Assets 3. Return on Shareholders' Funds 4. Pre-tax Profit Margins 5. Operating Profit Margin 6. Trading Profit Margin 7. Return on Investment 8. Assets Utilisation (given as a ratio of Sales

to Total Assets) 9. Sales as a ratio of Fixed Assets 10. Stock Turnover (Sales as a ratio of Stocks) 11. Credit Period 12. Creditors' Ratio (given as Creditors divided

by Sales times 365 days) 13. Default Debtors given as a Ratio of Total

Debtors 14. Un-Recoverable Debts given as a Ratio of

Total Debts 15. Working Capital / Sales 16. Materials & Energy Costs as a % of Sales 17. Added Value 18. Investment as a Ratio of Added Value 19. Value of Plant & Equipment as a % of Sales 20. Vertical Integration (Value Added as a % of

Sales) 21. Research & Development Investment as a

% of Sales 22. Capital Expenditure Investment as a % of

Sales 23. Marketing Costs as a % of Sales 24. Current Ratio (Current Assets as a ratio of

Current Liabilities) 25. Quick Ratio 26. Borrowing Ratio (or Total Debt as a ratio of

Net Worth) 27. Equity Ratio (Shareholders Funds as a ratio

of Total Liabilities) 28. Income Gearing 29. Total Debt as a ratio of Working Capital 30. Debt Gearing Ratio (Long Term Loans as a

ratio of Net Worth)

31. Average Remuneration (all employees - full and part)

32. Profit per Employee 33. Sales per Employee 34. Remunerations / Sales 35. Fixed Assets per Employee 36. Capital Employed per Employee 37. Total Assets per Employee 38. Value of Average Investment per Employee 39. Value Added per Employee 40. Materials Costs as a % of Sales 41. Wage Costs as a % of Sales 42. Payroll and Wages as a Ratio to Materials 43. Variable Costs as a % of Sales 44. Fixed Costs as a % of Sales 45. Fixed Costs as a Ratio of Variable Costs 46. Distribution Costs as a % of Sales 47. Warehousing Costs as a % of Sales 48. Physical Costs as a % of Sales 49. Fixed as a Ratio of Variable Distribution

Costs 50. Fixed as a Ratio of Variable Warehousing

Costs 51. Fixed as a Ratio of Variable Physical Costs 52. Fixed as a Ratio of Variable Total

Distribution & Handling Costs 53. Product Returns & Rejections Costs as a %

of Sales 54. Product Installation & Associated Costs as a

% of Sales 55. Product Breakdown & Associated Costs as a

% of Sales 56. Product Systems & Associated Costs as a %

of Sales 57. Product Service & Associated Costs as a %

of Sales 58. Customer Complaint & Associated Costs as

a % of Sales

59. Stock Work in Progress & Materials as a Ratio of Finished Products

60. Stock Materials as a Ratio of Work in Progress


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61. Un-recoverable Debts as a Ratio of Total Debt

62. Un-recoverable Debts as a Ratio of Debts Within Agreed Terms

63. Total Sales Costs as a % of Sales 64. Total Distribution & Handling Costs as a %

of Sales 65. Total Advertising Costs as a % of Sales 66. Total After-Sales Costs as a % of Sales 67. Total Customer Compensation Costs as a

% of Sales 68. Total Variable Marketing Costs as a % of

Sales 69. Total Fixed Marketing Costs as a % of Sales 70. Total Fixed Marketing Costs : Ratio of Total

Variable Marketing Costs 71. Variable Sales Personnel Costs as a Ratio

of Marketing Costs 72. Variable Distribution & Handling Costs :

Ratio of Marketing Costs 73. Variable Advertising Costs as a Ratio of

Marketing Costs 74. Variable After-Sales Costs as a Ratio of

Marketing Costs 75. Sales Personnel Variable Costs as a Ratio

of Sales 76. Sales Personnel Variable Costs as a Ratio

of Debtors 77. Sales Personnel Variable Costs as a Ratio

of Un-Recoverable Debtors 78. Exports as a % of Sales 79. $ Hourly Pay Rate 80. $ Hourly Wage Rate 81. Capital Employed 82. Return on Capital 83. Return on Assets 84. Return on Shareholders' Funds 85. Pre-tax Profit Margins 86. Operating Profit Margin 87. Trading Profit Margin 88. Return on Investment 89. Assets Utilisation (ratio of Sales to Total

Assets) 90. Sales as a ratio of Fixed Assets

91. Stock Turnover (Sales as a ratio of Stocks) 92. Credit Period 93. Creditors' Ratio (given as Creditors divided

by Sales times 365 days) 94. Default Debtors given as a Ratio of Total

Debtors 95. Un-Recoverable Debts given as a Ratio of

Total Debts 96. Working Capital / Sales 97. Materials & Energy Costs as a % of Sales 98. Added Value 99. Investment as a Ratio of Added Value 100. Value of Plant & Equipment as a % of

Sales 101. Vertical Integration (Value Added as a %

of Sales) 102. Research & Development Investment as a

% of Sales 103. Capital Expenditure Investment as a % of

Sales 104. Marketing Costs as a % of Sales 105. Current Ratio (Current Assets as a ratio of

Current Liabilities) 106. Quick Ratio 107. Borrowing Ratio (or Total Debt as a ratio

of Net Worth) 108. Equity Ratio (Shareholders Funds as a

ratio of Total Liabilities) 109. Income Gearing 110. Total Debt as a ratio of Working Capital 111. Debt Gearing Ratio (Long Term Loans as

a ratio of Net Worth) 112. Average Remuneration (all employees -

full and part) 113. Profit per Employee 114. Sales per Employee 115. Remunerations / Sales 116. Fixed Assets per Employee 117. Capital Employed per Employee 118. Total Assets per Employee 119. Value of Average Investment per

Employee 120. Value Added per Employee


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121. Materials Costs as a % of Sales 122. Wage Costs as a % of Sales 123. Payroll and Wages as a Ratio to Materials 124. Variable Costs as a % of Sales 125. Fixed Costs as a % of Sales 126. Fixed Costs as a Ratio of Variable Costs 127. Distribution Costs as a % of Sales 128. Warehousing Costs as a % of Sales 129. Physical Costs as a % of Sales 130. Fixed as a Ratio of Variable Distribution

Costs 131. Fixed as a Ratio of Variable Warehousing

Costs 132. Fixed as a Ratio of Variable Physical

Costs 133. Fixed as a Ratio of Variable Total

Distribution & Handling Costs 134. Product Returns & Rejections Costs as a

% of Sales 135. Product Installation & Associated Costs as

a % of Sales 136. Product Breakdown & Associated Costs

as a % of Sales 137. Product Systems & Associated Costs as a

% of Sales 138. Product Service & Associated Costs as a

% of Sales 139. Customer Complaint & Associated Costs

as a % of Sales 140. Stock Work in Progress & Materials as a

Ratio of Finished Products

141. Stock Materials as a Ratio of Work in Progress

142. Un-recoverable Debts as a Ratio of Total Debt

143. Un-recoverable Debts as a Ratio of Debts Within Agreed Terms

144. Total Sales Costs as a % of Sales 145. Total Distribution & Handling Costs as a

% of Sales 146. Total Advertising Costs as a % of Sales 147. Total After-Sales Costs as a % of Sales 148. Total Customer Compensation Costs as a

% of Sales 149. Total Variable Marketing Costs as a % of

Sales 150. Total Fixed Marketing Costs as a % of

Sales 151. Total Fixed Marketing Costs : Ratio of

Total Variable Marketing Costs 152. Variable Sales Personnel Costs as a

Ratio of Marketing Costs 153. Variable Distribution & Handling Costs :

Ratio of Marketing Costs 154. Variable Advertising Costs as a Ratio of

Marketing Costs 155. Variable After-Sales Costs as a Ratio of

Marketing Costs 156. Sales Personnel Variable Costs as a

Ratio of Sales 157. Sales Personnel Variable Costs as a

Ratio of Debtors 158. Sales Personnel Variable Costs : Ratio of

Un-Recoverable Debtors 159. Exports as a % of Sales 160. $ Hourly Pay Rate 161. $ Hourly Wage Rate 162. Capital Employed


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Part C : Product Offering

Abercrombie & Fitch

Product Offerings at Abercrombie & Fitch: as an Excel file: Part_C

Main Product Lines

Data is given on the 15 main product lines which represent at least 80% of revenues at Abercrombie & Fitch.

In-House Brands

Data is given on the 15 main products which are considered as being In-House Brands or Own Brands. This is the In-House Brand addendum.

Third Party Brands

Data is given on the 15 main products which are considered as being Third Party Brands. This is the Third Party Brand addendum.

Ancillary and Add-Value Products & Services

Data is given on the 15 main Ancillary and Add-Value Products & Services. This is the Company Services addendum.


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Part D : Retail Locations

This data is available on a Corporate basis and on a Location/Site basis for Abercrombie & Fitch

Demographics & Lifestyle Analysis The composition of the retail trading area population is critical to the retailer. The population will include a variable mix of income groups, family groups, homeowners or renters, age groups, ethnic groups, educational norms, employment groups, et cetera. Each population mix will determine how the general population in the trading area is likely to purchase various consumable and durable products. To analyze market opportunities for a trading area, one needs to examine data and ask questions like the above about residents of the trading area. This data must include the absolute number of residents, as well as their household characteristics. Current and projected demographic, lifestyle and consumer spending data about the trading area from secondary sources can provide this information. Demographic and lifestyle data about the trading area can give one a starting point for an in-depth analysis of specific business and retail development opportunities. This data also can help understand how the broader population changing.

Demographic Data

It is assumed that product preferences vary across different groups of consumers. These preferences relate directly to consumer demographic characteristics, such as household type, income, age, and ethnicity. For this reason, it is not only the amount of demand that truly matters to a trading area; the Mix of Consumers also has a major impact on a trading area, and therefore must be thoroughly examined in all retail analyses. Albeit, there is a great deal of data included in these studies which then has to be analysed. The enormous amount of data can leave the user with a large number of tables and consequent information overload; therefore a number of toolkits are provided by DataGroup to assist users with software to present and interpret the data.

Relevant Data Categories

Interpretation of demographic data is often missing in market analysis; however in neglecting this data one fails to fully appreciate how consumers spend their time and money. Specifically, the data provides insights into new business or retailing opportunities in the trading areas. Understanding and interpretation of demographic data includes the following elements:-

Population and household composition data allow one to quantify the current market size and extrapolate future growth. Population is defined as all persons living in a geographic area. Households consist of one or more persons who live together in the same housing unit; regardless of their relationship to each other (this includes all occupied housing units). Households can be categorized by size, composition, or their stage in the family life cycle. Typically, demand is generated by the individual or the household as a group. Thus, the entire family influences a household purchase, such as a family car or TV. Individual purchases, on the other hand, are personal to the specific consumer. Anticipated household or population growth may indicate future opportunities for a retailer. An analysis of household and/or overall population growth provides aggregate potential retail demand in a population.

Household income data is a good indicator of the population’s spending power. Household income positively correlates with retail expenditures in many product categories. When


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evaluating a market, retailers look at the median or average household income in a trading area and will seek a minimum number of households within a certain income range before establishing a business or setting prices. Another common practice is to analyze the distribution of household incomes. Discount stores may avoid high income areas. Some speciality fashion stores target incomes above $100,000 households. A few store categories, such as auto parts, are more commonly found in areas with lower household incomes. However, using income as the sole measure of a market’s buying preferences can be deceptive and one needs to consider all categories of demographic data when analysing a market.

Highly affluent households with annual incomes above $200,000 comprise one of the fastest growing segments of the population; increasing in some countries by more than 3 percent each year since 2008. They are strong consumers, as well as physically active and conservative in their habits. Gearing a retail mix toward this segment may require a focus in luxury goods and services. High-end department and technology stores, as well as cultural amenities like museums and concert halls, are frequented by the most affluent households within a population.

Middle-income households with annual incomes between $50,000 and $100,000 are much more mindful of their expenses than highly affluent families. These households tend to be more frugal and selective in their buying behaviour, shopping at discount outlets for groceries and other goods rather than high-end stores, especially since 2008. Superstores are particularly popular for middle and low-income households.

Low-income households with annual incomes below $25,000 are in a different situation than affluent and middle-income households. Families at this income level are often living in poverty and thus spend very little on goods and services across the board. The financial circumstances of these households have deteriorated even further since 2008.

Age is an important factor to consider because personal expenditures change as individuals grow older. Purchases change throughout a family’s life cycle, and that holds true for individuals, as well. One important stage of life, and an increasingly influential category, is the 65 and older group. Realizing and providing for the needs of an aging population can be beneficial to any retailer. Consumer spending on pharmacies and health care services flourish in areas with a large elderly population; albeit, older populations tend to spend less on the majority of goods and services. Studies indicate that nightlife and entertainment spending (restaurants, bars, and entertainment) by people over 65 is roughly half that spent by those under 65. Older adults also spend considerably less on apparel than other age groups. On the other end of the spectrum, toy stores, day care centres, and stores with baby care items do well in areas with many children and infants. Clothing stores and fast food establishments also thrive in areas with a high adolescent population. Some entertainment and recreational venues, such as movie theatres and golf courses, serve a broad section of the population.

Education levels also figure into the socio-economic status of an area. Because income usually increases with advancing educational attainment, many retailers focus on income level rather than education. There are some exceptions to this, though. Bookstores are often cited by retailers as a business whose success is directly correlated with the number of college educated individuals in the trading area. Similarly, computer and software stores are often located in areas with high levels of education. In general, areas with high levels of educational attainment tend to prefer luxury items; and, they may have a preference for shopping at smaller, non-chain specialty retail stores located in the fashionable districts. They also tend to visit cultural establishments like museums and theatres at a frequency over three times greater than those without a college degree. On the other hand, less-educated populations generally have lower incomes and thus tend to prefer shopping at discount retail outlets and chain stores. This group also spends more money on car maintenance and tobacco products than those with a college degree.

Occupational concentrations of white and blue-collar workers are used as another gauge of a market’s product preferences. Speciality apparel stores thrive in middle to upper income


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areas and those with above-average white-collar employment levels. Discount clothing stores and used car dealerships are successful in areas with a higher concentration of blue-collar workers. Office supply stores and large music and video stores are especially sensitive to the occupational profile. These retailers target growth areas with a majority of white-collar workers.

Ethnicity is another factor retailers consider when choosing merchandise to carry. Data show that ethnicity affects spending habits as much as other demographic characteristics, such as income and age. Tastes in goods and services vary between ethnic groups, and local retailers are wise to cater to the different needs of ethnic groups in their trading area. Ethnicity influences retailers’ product mix, including the lines of clothing they carry, and their advertising. Retailers that use segmentation based on race and ethnic groups must make sure their efforts effectively measure the true preferences and behaviours of the community.

Housing ownership and rate of housing turnover is an important factor for some retailers to consider. Home ownership directly correlates with expenditures for home furnishings and home equipment. Furniture, appliances, hardware, paint/wallpaper, floor covering, garden centres and other home improvement products all prosper in active housing markets.

Comparing the Primary Trading Area with other Areas

Demographic statistics are especially useful if they are presented in comparison with other locations. To see how the target trading area differs from other locations, it is useful to provide comparison sets of data: comparable populations and the regional or national data as a whole. The basic trading areas for Germany are as follows:

1 Germany

2 North Rhine-Westphalia

3 Bavaria

4 Baden-Württemberg

5 Lower Saxony

6 Hassia

7 Saxony

8 Rhineland-Palatinate

9 Berlin

10 Schleswig-Holstein

11 Brandenburg

12 Sachsen-Anhalt

13 Thuringia

14 Hamburg

15 Mecklenburg-West Pommerania In addition the individual Cities and Town in Germany are provided in the Market Research in Section 3

http://www.dg-di.eu/BASE_FOLDERS/World_Cities/GM.html Comparing the target trading area with other populations and the regional data allows demographic baselines to be established. These baselines will help determine whether the target trading area has low, median, or high values in each demographic category. For instance, after examining demographics for the target trading area, it may appear that there are a high proportion of white-collar


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workers. However, this observation cannot be verified until one know what constitutes an average number of white-collar workers. Comparable populations can include five or six urban areas of similar size in the same region. The urban areas chosen should reflect similar distances from metropolitan statistical areas of the region. Depending on the geographic size of one’s primary trading area, one will need to select similar-sized trading areas. In addition to comparable populations, adding regional or national statistics will provide a broader benchmark for comparing a specific trading area. Regional or National data will include a blend of urban and rural areas. Accordingly, it will not be limited to uniform populations. However, differences between the trading area and the regional or national data (such as per capita income) will be used later in one’s analysis of retail or service business opportunities.

Demographic Data Sources

Detailed local census data is readily available from various national government agencies around the world. For example, the U.S. Bureau of Census data can be retrieved at several geographic levels (county, city/village, census tract, zip code, etc.); and similar data exists in many countries. In addition to the government data, there are numerous, national data sources that can provide demographic estimates for a particular trading area; albeit, much of this data is based on the government and other public sources. Unfortunately much government data is not packaged in user-friendly comparative formats that make it easy to compare one geographic area with another. One needs to be able to tap into the knowledge of skilled demographers who have designed data products centred on particular industry needs. The essential retail tool is the correlation of general population demographic data with individual markets and products. These DataGroup databases are designed to provide such data.

Lifestyle Data

Adding consumer lifestyle data takes the market analysis nearer to the reality of any market forecasting situation. This data recognizes that the way people live (lifestyle) influences what they purchase as much as where they live (geography) or their age, income, or occupation (demography). Lifestyle data enables one to include the consumer’s interests, opinions, and activities and the effect these have on buying behaviour in the retail analysis.

Lifestyle Segmentation Algorithm

Lifestyle Segmentation examines the relationship between a population’s lifestyle characteristics and its product preferences. Retail revenues of particular Product Group classes are stimulated by large concentrations of populations of similar characteristics and tastes. As a result, a retailer can develop product mixes targeted to specific customer segments which display a high propensity to consume the product range(s) being marketed. Concentrations of lifestyle segments create demand for specific products or services. This tendency to cluster is based on the evidence that people prefer to live close to those similar to themselves. Homes and cars in any particular neighbourhood are usually of similar size and value. If one could look inside the homes, one would find many of the same products. Neighbours also tend to participate in similar leisure, social, and cultural activities. The quality of a segmentation algorithm is directly related to the data that it inputs. High certainty algorithms allow one to reliably predict consumer behaviour. In a retail business targeting particular consumers, the algorithm allows the retailer to identify products and services that appeal to that market segment. The usefulness of a segmentation algorithm depends on how well the data


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incorporates lifestyle choices, media use, and purchase behaviour into the basic demographic mix. This supplemental data comes from various sources, such as till receipt records, credit reference agencies, automobile registrations, magazine subscription lists, consumer product-usage surveys, and so forth.

Lifestyle Data Sources

These DataGroup databases offer lifestyle cluster data, which utilize sophisticated statistical models to combine several primary and secondary data sources to create their own unique cluster profiles for each product group and market segment. Most models start with data from block groups that contain 500-1500 households. In rural areas, the data is more typically clustered by post or zip code. This data will breakdown each geographic area into one or more of the over 100 defined market segment classes based on differentiated socio-economic and demographic characteristics.

Lifestyle Segment Summary

These segments include: • Demographics • Socioeconomic Classes • Consumer Behaviours The Segmentation will include quantitative data, such as the Consumer Values Models, Product Life Cycle Models, Buying Power Index, Quality Index, Advertising Efficiency Models, and so forth, which measures potential demand for specific products or services groups. These indices compare the demand for each market segment with demand from both regional and national consumers. It is tabulated to represent a value of 100 as the average demand. The indices can be aggregated into a single value. Values above 100 indicate residents are more likely to purchase that product or participate in the respective activity. Conversely, values below 100 indicate residents are less likely to purchase the given product. These values are then shown for the Trading Area of the specific Retailer, the Regional and National values and the overall Median value. In this report there are 15 Product Groups represented:-

Product Trading Area Regional National Median

Product Group #1

Product Group #2

Product Group #3

Product Group #4

Product Group #5

Product Group #6

Product Group #7

Product Group #8

Product Group #9

Product Group #10

Product Group #11

Product Group #12

Product Group #13

Product Group #14

Product Group #15

From this data, a clear picture of the important demographic, socioeconomic, and consumer behaviour of residents in a specific Trading Area emerges.


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Lifestyle segmentation generalizes the types of customers in the trading area, which is useful in making sense of a complex market. However, this simplification may not fully capture the particular behaviours of the customer base or may overlook the propensity to consume of differentiated groups in the trading area. Since data is continually updated in these DataGroup databases, lifestyle segments are evaluated in near real-time. This is valid both where social and economic conditions remain constant and where significant changes may make a static view of the segment less representative of reality. Thus lifestyle segments can greatly help one understand customers in the trading area only where the survey data is gathered and updated on a regular and statistically valid basis.

Propensity to Consume Data

Estimates of household spending give an idea of the size of a market in value terms. For example, Secondary data are available that allow one to estimate the size of the local food or restaurant market, based on the number of households in the trading area. In addition, Primary data is useful to provide refined estimates based on local demographics. It is important to remember that these estimates measure the amount of spending by households residing in the trading area, not necessarily spending within the trading area that also includes non-residents. Conversely, residents of the trading area may choose to spend outside the trading area.

Consumer Expenditure Survey

Consumer Expenditure Surveys are the primary data source for Propensity to Consume estimates that covers a whole range of household spending. The results of the surveys provide a comprehensive picture of household spending and are used to revise the Consumer Price Index and the Purchasing Parity Index for national (and sometimes regional) markets. The Consumer Expenditure Survey usually includes a Diary Survey of daily purchases and an Interview Survey of general purchases over time. The Diary Survey reflects record-keeping by consumer units (individual and household shoppers) for two consecutive week periods. This component of the Consumer Expenditure Survey collects data on small, daily purchases that could be overlooked by the quarterly Interview Survey. The Interview Survey collects expenditure data from consumers in interviews conducted on a randomised monthly basis. The data from both surveys is integrated to provide a comprehensive database on all consumer expenditures. In addition to the Consumer Expenditure Survey, there are supplementary and complementary datasets to provide more sophisticated estimates of specific market segments and product group consumption patterns. For example, a Differential Probability Model links spending by the consumers surveyed to all households, with similar socioeconomic characteristics, with opportunity costs and differential spending patterns. The results are spending estimates based on the demographics of a particular trading area, which are reported together with the average spending per household and a spend Propensity to Consume index. The index compares the spending of the trading area’s households to the regional and national average.


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Geographic Information Systems

Demographic analysis is useful in understanding purchasing characteristics for different market segments. While demographics can be collected and analyzed without the use of geographic information systems, GIS often aids and enhances the analysis. Since the use of GIS may be costly learning curve for many retail professionals not expert in GIS, a battery of software is available in the DataGroup Toolkits provided to users to offer technical mapping assistance. Demographic data for a trading area is often reported as single values for each demographic category. For example, the trading area income is reported as one value, even though income can vary across the trading area. GIS, however, can display demographic values in finer detail by geographic unit (zip code, street blocks, etc.). Mapping these variations may reveal valuable visual information that can be used to show the attractiveness of different retailing locations and assist retail site planning. Effective demographic mapping requires an understanding of some rudimentary cartographic concepts. Perhaps the most important concept is an understanding of the problems associated with demographic densities. Obviously, urban population density is usually higher than a similar sized suburban area. Moreover, many retailers would view the large concentration of customers as a competitive advantage over a suburban location. However, a map showing the number of people in each geographic unit does not always show this relationship. In addition to understanding the propensity to consume within a specific trading area, one also needs to analyse geographic factors which may assist or impede those consumption patterns. For example, geographical barriers (rivers, railroad tracks, highways, et cetera), which may divide an area and thereby put certain locations in a ‘shadow zone’ which is difficult for consumers to reach. By contrast, rapid transit transport links may assist service industry retailers, and stores selling small or easily transported items. GIS is not limited to producing maps and graphics, but can also be used as an analytical tool in demographic analysis. Non-resident visitor profiling is vital for many companies, such as commuter transportation, catering and tourist attractions. While collecting demographics for the surrounding resident market is a straightforward process, non-resident visitors can come from a wide area; and obtaining and analysing demographics for every area that produced a non-resident visitor is unrealistic using traditional methods. In these instances, GIS can be used to profile demographics of the non-resident market. Many businesses, such as hotels, and ‘Destination’ retail venues (like flagship department stores or luxury goods shopping streets), dependent on non-resident visitors and the use of data mining techniques for customer records and payment records can be interfaced with GIS to produce a more comprehensive view of a business’ actual catchment area. Using neighbourhood demographic information as a simile, the demographics of a trading area as a whole can be used to represent the demographics of an individual visitor from that trading area. Using addresses, GIS can determine every trading area that produced a visitor and extract the demographics of those trading areas. The demographics extracted from each visitor neighbourhood can be combined to produce a useful demographic profile of the visitor market. The demographic profile is even more useful when it is given some perspective. Similar to the comparable population analysis, the visitor demographic profile can be used to determine what makes visitors demographically different from the general population. Instead of comparing local trading area demographics to those of other populations, the visitor demographics can be compared to the demographics of a larger region. For instance, if visitors primarily originate from a regional area, the visitor demographic profile can be compared to the demographics for the entire population of that region. These demographic profiles of the trading area visitors and the larger region can be compared on a category by category basis. Once the visitor origins have been mapped, GIS is used to determine the trading areas containing each visitor and extract the associated neighbourhood demographics. These neighbourhood demographics are used as a proxy for the demographics of an individual visitor.


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GIS is used to combine all of the demographics extracted from every visitor neighbourhood. Combining the trading areas creates a demographic profile of the visitors. To aid in the analysis, GIS also creates a demographic profile of the larger region. The regional demographic profile includes every trading area in the region instead of just those neighbourhoods that produced visitors. These profiles are then used to examine differences in visitor demographics.

Demographic Category Trading Area Profile Regional Profile National profile

Males

Females

Average Household Size

Median Age

Age Less Than 18

Age 16 or More

Age 25 Or More

Age 65 or More

Median Household Income

Average Household Income

Per Capita Income

Education: High School

Education: College

Education: Qualification

Education: Degree

Education: Higher Degree

Occupation: Executive

Occupation: Professional

Occupation: Technician

Occupation: Sales

Occupation: Clerical

Occupation: Services

Occupation: Production

Home Owner

Home Renter


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Neighbourhood Analysis

Catchment Area Analytics

The successful location of individual retail stores also depends on the neighbourhood or economic environment in which it is located. Whether the stores are located in a stand-alone position, a shopping street, a shopping centre or mall, within another retail premises, or some other site location, will impact on financial performance.

This is a question of Footfall Flows; being: how, from where, and when, does customer traffic interact with a particular store location. Where retailers are selling impulse or discretionary items it is necessary that customer traffic reaches their store before customers have spent their money en route. This is a similar exercise to that which is employed by supermarkets in positioning products within the aisles of their stores. One needs to encourage customers to spend their money in a logical flow process so that they spend the optimum amount.

Whereas individual retail stores may not be able to capture Footfall Flow data across the entire customer catchment area, DataGroup can provide this data and this can be interfaced with the retailer’s own in-store footfall data.

One needs to evaluate and identify (within the catchment area:

Trade Analysis of Abercrombie & Fitch: as an Excel file: Part_D

1. The spending hotspots within the consumer catchment areas.

2. The flow patterns for customer traffic, for example, en route from parking area to prime (most visited) retail location.

3. The contour map of neighbourhood retailers and their products, for example, supermarkets, food products, clothing, consumer electronics, et cetera. This will dictate the how and where the customer will first spend their money, and thereafter what they may have to spend on more discretionary purchases.

4. The traffic volumes for retail units and locations based on footfall numbers.

5. The retail segments and sites with dynamic and growing sales within the catchment area.

6. The fashionable or popular sites and retailers within the catchment area, and their particular demographic profile.

7. An analysis to identify expected customer demographics for the particular store locations.

8. A footfall flowchart to identify expected retail traffic and sales for the particular store locations.

9. A forecast of the footfall expected as a result of a particular type of marketing campaign.

10. The store costs and overheads for the particular store locations correlated with potential sales.

11. An analysis of retail store performance, product line performance, and customer segment sales for the particular store locations.

12. A profitability forecast correlated with retail traffic and sales for the particular store locations.

Shopping Centre tenant mix

Retailers should be aware that the tenant mix of any shopping centre or mall in which they locate their stores will potentially impact on their profitability.

The ideal tenant mix in which a retailer locates a store will depend on the various indicators of retail success including sales density, visitor traffic, visitor demographics and often more importantly, the nature and customer base of the other retailers in the retail space.


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Site Analytics

Performance management for individual stores

The understanding of the circumstances and causes of each and every variation in the revenues of a retail operation is the basis of every successful retailer. The analysis of retail data correlated with industry and market data allows retailers to react to events by seizing opportunities and facing challenges.

The ability to address critical issues, not only the vagaries of the market and consumer demand, but also seasonal variations, staffing levels, customer satisfaction data, retail store upgrades and layout changes, marketing initiatives, and so forth, will allow retailers to perform better than competitors.

Site Analysis

It is essential for retailers to analyse and integrate data from each site. This includes sales, inventory, visitors, conversion rates, staffing numbers, marketing and advertising promotions, public holidays, weather, and other variables. This data gathering should be automated and DataGroup can provide clients with suitable site based software that will capture this data.

Site Analytics

The analysis of the data will provide retailers with many tangible business planning tools, including:-


13. Identify their optimum ratio of staff to customers 14. Identify unused store potential & resources 15. Improve their conversion rate and average transaction values 16. Increase store profitability and customer service levels 17. Refine operations in every inch of the store to capture opportunities 18. Track the effectiveness of marketing initiatives


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Footfall

The most important component of revenue

The numbers of potential customers which cross the threshold of any store will ultimately define that store’s financial performance. The quantification of visitor numbers, and their subsequent correlation, provides an analysis to assist the retailer to produce effective business planning. These measurements will include:-


19. The footfall patterns which are typical during each month of the year.

20. The peaks or troughs which may be affecting business performance and where changes could be made, for example, expenditure on advertising and marketing activity to boost traffic, or efficient resource allocation for peak visitor periods.

21. How footfall patterns differ in each site and in a representative area.

22. Correlations between store sales revenues and regional and national monthly footfall trends

23. Variations in footfall patterns between competitive retail sectors and outlet types.

Footfall Analysis

The collection of this data is essential to the analyse and understanding of customer behaviour and trends as well as to allow retailers to understand conversion rates and retail location characteristics in order to improve their business planning and forecasts. The understanding of footfall data can allow the evaluation and understand of ‘before’ and ‘after’ scenarios for marketing and promotional activity; understand footfall during both slack as well as peak periods; benchmark performance amongst individual sites and generally in regions; and allow the use to see how and when one might improve one’s profit ratios. Essentially, one gains insight into how one might optimise sales performance through better sales efficiency, conversion rates, and customer service.

Footfall Analytics

The question of whether a retail site is performing to its full potential can only be answered if one can analyse visitor numbers and compare those with other sites, other competitors and other distribution outlets.

Essentially, the first question one must ask is if the property is properly positioned and located for maximum profit and minimum risk.

Retailers use the data to locate their store portfolio, organise their markets, and segment their customer data.

Retailers can measure the effectiveness of each location in attracting potential customers to their premises. This is done in conjunction with different methods of marketing and promotion for different store locations to develop an understanding of store performance and untapped store potential. This is then extended to analyse conversion ratios to determine whether footfall numbers can be converted into tangible sales.

Footfall Technology

The technology used to capture footfall data is relatively straightforward and essentially consists of in-store sensors which count visitors and the appropriate data recorder and software to record those visits. These sensors will consist of one or more of the following technologies, Car Counting – Retail


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Traffic, Laser Counter, Stereoscopic Video Cameras, Thermal Cameras, Wireless Infrared Beam, et cetera. The actual equipment used always depends on the individual site circumstances.

Footfall measurement should be flexible, intuitive, and non-intrusive. Systems are designed for self-administration and customised reporting of datasets:


24. Classification which differentiates product location type and discrete areas within a store.

25. Reporting routines which allow control of each type of report, report schedules, and delivery.

26. Alerts whereby managers can receive text alerts when performance crosses a pre-set threshold.

27. Rankings which identify best and worst performers according to criteria such as shopper traffic, sales, costs, performance against target and staff numbers.

28. Personalisation of the system to accommodate multiple languages and time zones and which will automatically switch to the pre-set requirements of users across the globe.

Conversion Rates

Conversion Analytics

The Conversion Rate is of course a vital issue. After having invested in footfall, the retailers want to know how to convert that footfall into revenue. These measurements also allow retailers to identify poorly performing stores where footfall is not being converted into sales.

Conversion Factors

The factors which influence conversion rates are complex; however they are decipherable with the use of suitable software. Data analysis allows all the relevant factors to be considered when evaluating and formulating store strategies. These may include the following issues:-


29. The demographic environment in which stores are located.

30. The Conversion Rate and Product Sales Analysis of each location.

31. The Customer Profile of each location and the correlation with Conversion Rates.

32. The Financial Performance of individual stores and if these equate with expected Conversion Rates.

33. The factors which are increasing or decreasing Financial Performance of individual stores, when compared with comparable stores.

34. Identification and application of Conversion Rate factors to allow specific stores to improve Financial Performance.


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Part E : Advertising, Marketing, & Events


Survey of Advertising Services used

Company Surveys of Abercrombie & Fitch: as an Excel file: Part_E

Approval and usage of advertising services for company, retail outlet or brand purposes:

1. Which of the following best describes the line decision maker’s position within the company? a. Owner b. Chief Executive c. Partner d. Senior executive in charge of advertising, marketing, brand. e. Executive in charge of advertising, marketing, brand. f. Professional consultant g. Finance/accounting/purchasing h. Marketing i. Office manager j. Outlet / Site manager k. Administrative assistant l. Technical or IT professional m. Sales professional n. Other

2. Where (Town, State, Country) is the office/site located?

3. How many employees work at this location?

a. 1 to 17 b. 18 to 19 c. 20 to 99 d. 100 to 199 e. 200 or more f. Other

4. Select the range that best describes the approximate annual sales for the company at this

location. a. Less than $100,000 b. $100,000 to $499,999 c. $500,000 to $999,999 d. $1 million to $5 million e. $5 million or greater f. Don’t know or Other

5. How much would you estimate you spent (in total) on the following advertising, sales and

marketing activities (at this location) in the past 6 months? a. $0 b. Less than $500 c. $500 to $1,500 d. $1,500 to $9,000 e. $9,000 to $20,000 f. $20,000 to $50,000 g. $50,000 or More h. Don't know


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6. Specify what percentage of your annual advertising budget is spent in the following

categories: a. Advertising in Yellow pages b. Advertising in online directory / online yellow pages c. Advertising in the local newspaper d. Advertising in on-line search engines e. E-mail marketing campaign f. Holiday & greeting cards to customers or clients g. Other greeting cards to customers or clients h. Logo clothing or promotional items (hats, t-shirts, pens, notepads) i. Press release j. Direct mail campaign k. Television advertising l. Radio advertising m. Market research & Audits

7. For each of the following advertising, sales and marketing services listed, which have your

company purchased in the past 6 months: a. Advertising in Yellow pages b. Advertising in online directory / online yellow pages c. Advertising in the local newspaper d. Advertising in on-line search engines e. E-mail marketing campaign f. Holiday greeting cards to customers or clients g. Other greeting cards to customers or clients h. Logo clothing or promotional items (hats, t-shirts, pens, notepads) i. Press release j. Direct mail campaign k. Television advertising l. Radio advertising m. Market research & Audits

8. For each of the following advertising, sales and marketing services listed, which do your

company plan to purchase in the next 6 months: a. Advertising in Yellow pages b. Advertising in online directory / online yellow pages c. Advertising in the local newspaper d. Advertising in on-line search engines e. E-mail marketing campaign f. Holiday greeting cards to customers or clients g. Other greeting cards to customers or clients h. Logo clothing or promotional items (hats, t-shirts, pens, notepads) i. Press release j. Direct mail campaign k. Television advertising l. Radio advertising m. Market research & Audits

9. If you conducted a direct mail campaign in the past 6 months, how did you go about preparing

and sending your direct mail for the most recent campaign you ran? a. Did the entire process internally (everything from writing letter, buying supplies,

printing, stamping and mailing) b. Outsourced the direct mail to an agency c. Used an on-line provider


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10. If you conducted a direct mail campaign in the past 6 months, which of the following items did you send as part of the most recent campaign you ran?

a. Postcard b. Coupon c. Letter d. Newsletter e. Brochure f. Gift item g. Other

11. How satisfied are you with the overall results of your direct mail campaigns; that is, the

increase in sales you generated or the overall impact on your business. a. Extremely satisfied b. Somewhat satisfied c. Neither satisfied nor dissatisfied d. Somewhat dissatisfied e. Extremely dissatisfied

12. If you outsourced your advertising, print production, or direct sales campaigns, what was your

opinion of the performance you received: a. Poor value for the money/ price b. Low quality of finished product c. Too complicated d. I like to be able to see the proofs or samples before the campaign e. Uncomfortable outsourcing f. Want to do it ourselves g. Slow speed of service h. Too much of a hassle to switch vendors i. Don’t trust the supplier j. Other

13. How likely would you be to outsource your advertising, print production, or direct sales

campaigns? a. Very likely b. Somewhat likely c. Somewhat unlikely d. Very unlikely e. Other

14. If you use a direct mail or sales prospect list, how did you acquire the list that you used most

recently? a. The company’s own customer list b. Purchased a list from an external list broker c. Purchased a list from a catalogue d. Purchased a list from a direct mail agency e. Purchased a list from an on-line list service f. Did not acquire a list g. Don’t know

15. Would you be likely to consider using a list from a partner company, and providing your

company list in exchange? a. We don’t use lists or use only the company’s customer list b. List quality important c. Uncomfortable with sharing d. Too much of a hassle to arrange co-operative deals e. Other


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16. Regarding the role you play in selecting Website Services for your company. For each of the items below, tell us what your individual involvement is in the purchasing process.

a. Advertising b. Determine need to purchase c. Evaluated various products/vendors d. Authorised / approved purchases e. Determined where to purchase f. Placed orders g. All of the above h. Other

Consumer Evaluation of Advertisements

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_E

Advertising Evaluation Rating. The motivating power of each advertisement campaign on a 1 to 10 scale.

17. In respect of the company’s last or current advertising campaign, was the advertising: a. Not at all motivating b. Extremely motivating c. About average for this type of product advertising

Focus Panels


In respect of the current (Test / Benchmark) advertisement campaign that promotes this company / product / brand and current advertisement campaign of 14 competitive companies / products / brands:

18. After considering the advertisements, divide them into three groups. That is, arrange the advertisements into those you:

a. Will watch over and over again b. Might watch several times c. Never want to watch again

19. What people, characters, or things stand out in the advertisements?

20. What thoughts and feelings is each person or character having during the advertisements; and how do you know that?

21. What are some ways that the product enhances the situation being shown; and where in the advertisement did you see, hear, or feel that?

22. What are some impressions that you take away from the advertisements?

23. Is that impression positive or negative?


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24. Here are listed several concepts or feelings. Pick out the concept or feeling you think is most closely associated with the advertisements:

a. achievement and success b. living an active and full life c. making smart choices d. freedom to be one's self e. self-reliance f. being accepted by others g. caring for others, particularly the underdog h. being young at heart and in appearance i. personal security j. being a good parent k. making a better world l. living a comfortable and contented life

25. Tell us about a situation in which you have consumed/used/bought/etc. the product and felt like the people or characters shown in the advertisement.

26. After watching the test or benchmark advertisement. What people, characters, or things stand out in the advertisement?

27. What thoughts and feelings is each person and character having during the advertisement? How do you know that?

28. What does the advertisement say about the product? Where in the advertisement do you see, hear, or feel that?

29. What parts of the advertisement don't seem to fit together? That is, parts of the advertisement that causes some confusion or perhaps is distracting?

30. Pick out the concept or feeling you think is most closely associated with the advertisement. a. achievement and success b. living an active and full life c. making smart choices d. freedom to be one's self e. self-reliance f. being accepted by others g. caring for others, particularly the underdog h. being young at heart and in appearance i. personal security j. being a good parent k. making a better world l. living a comfortable and contented life

31. After seeing the company’s advertisement, tell me how strongly you think it will motivate people like you to purchase the product during the next one or two weeks?

32. How do you rate the advertisement?

33. Why do you think it will motivate people like you to purchase the product?


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Consumer Opinion of Advertising Effectiveness


After seeing the company advertisements:

34. How well do you remember these advertisements? a. Don't remember at all b. Remember company but not product or advertisement c. Remember company and product but not advertisement d. Remember advertisement.

35. Other than trying to get you to buy the product or service, what is the main message of these

advertisements?

36. What did you like most about these advertisements?

37. What did you like least about these advertisements?

38. If you were describing this advertisement to a friend, would you say these advertisements were:

a. Active b. Attention-getting c. Boring d. Cheerful e. Creative f. Emotional g. Energetic h. Genuine/sincere i. Honest j. Humorous k. Informative l. Irritating m. Memorable n. Natural o. Offensive p. Pleasant q. Satisfying r. Strong s. Unique t. Warm-hearted

39. Indicate how descriptive the following statements are of you:

i. Just like me ii. A lot like me iii. Somewhat like me iv. Not much like me v. Not at all like me

e. It is important to me to be treated well. f. I like the "royal treatment" in stores g. I have somewhat old-fashioned tastes and habits h. I like my clothes to look up to date i. I never have enough time to shop j. I think I am a little bit wild k. I think shopping is fun l. I often buy things on impulse m. I have lots of leisure time n. I expect to have more money next year


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40. Based on the Product features advertised, and in the Company advertisements: a. The advertisement message is understandable. b. The advertisement is believable c. The advertisement's message is relevant to me. d. The benefits described in the advertisement are believable to me.

41. After viewing this advertisement, would you consider purchasing the product?

42. These advertisements are much better than other advertisements for competitive products in this product category.

43. Indicate how descriptive the following statements are of you: i. Just like me ii. A lot like me iii. Somewhat like me iv. Not much like me v. Not at all like me

a. My world seems to be coming apart at the seams b. I think I am a smart shopper c. I like to be outrageous d. I feel I get a raw deal out of life e. I think a woman's place is in the home f. I prefer stores where prices are always low g. I never seem to have enough money h. I regularly read newspapers i. I have more money now than last year j. When I shop, I just want to get it over with

Advertisement Evaluation Survey


Evaluation of TV, Newspaper, Print, and other advertisements viewed for the retail store:

44. Indicate your evaluation of Store Newspaper or Print advertisements: a. Entertaining b. Effective c. Interesting d. Attractive e. Informative f. Professional

45. Indicate your evaluation of Store TV, Radio, and Internet advertisements:

a. Attractive b. Interesting c. Informative d. Professional e. Entertaining f. Effective

46. Indicate the number of friends, relatives or neighbours consulted while researching for this product.

47. Indicate the number of TV or radio advertisements that you remember seeing during your search for the product purchased.


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48. Indicate the number of Consumer reports that you reviewed in researching for the product purchased.

49. Indicate the number of Newspaper or magazine advertisements that you remember seeing during your search for the product purchased.

50. Where was the last place you saw or heard an advertisement for this Store? a. newspaper b. magazine c. TV d. Radio e. Internet f. Flyer g. other

51. Which radio stations do you most often listen to?

52. What time of the day do you most often watch TV?

a. morning b. afternoon c. evening d. late night

53. Which newspapers do you most often read?

54. Do you subscribe to cable, pay, or thematic TV?

General Customer Surveys - Advertising Perceptions


55. Advertising Posture: Store/Outlet Level 56. Advertising Posture: Company Level 57. Promotional Activity: Store/Outlet Level 58. Promotional Activity: Company Level

Consumer Marketing Test

Consumer Marketing Tests of products from Abercrombie & Fitch: as an Excel file: Part_E

59. How does the Company’s product(s) rate on the following attributes? a. Not At All Descriptive b. Very Descriptive

i. High quality ii. Expensive iii. A brand I can trust iv. Well built v. A good value

60. What other brands of product(s) in this category have you used? a. I haven't used the product(s), but I'm familiar with it. b. I know nothing about the product(s).

61. What is it that you like about the product(s)?

62. What do you like least about the product(s)?


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63. What would be your main reason for buying the product?

64. Overall, how interested are you in buying this product if it were available? a. Not at all Interested b. Not Very Interested c. Neither Interested nor Uninterested d. Somewhat Interested e. Very Interested

65. Which of the following best describes your need for this product? a. I really need this product because nothing else compares. b. This is a minor improvement over what I currently use. c. It looks okay but is about the same as my existing product. d. My current product would serve me better. e. I do not need this product?

66. What price would you expect to pay for the product(s)?

67. Assuming the this product is priced comparably to other major brands, would you say it is: a. Very poor value b. Somewhat poor value c. Average value d. Fairly good value e. Very good value

68. In what ways does the described product appear to be superior to other product(s) in this brand category?

69. Overall, what would be your most important factors in choosing a product(s) in this category? a. Value b. Best performance c. Good repair/Warranty service d. Recognised brand name e. High quality f. Shopping convenience g. Easy/fast service h. Discount i. Good sales personnel/dealer/outlet j. Broad selection of products k. Do not know l. Other

70. Other than the product itself, which of the following would most influence you when deciding to buy the product(s)?

a. Commentary in the media or on TV b. Commentary on the Internet c. Word-of-mouth d. Sales/service representative e. Industry publications f. Advertising g. Trade shows/events h. Guarantee/warranty offers i. Other


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Effectiveness of marketing initiatives

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_E

71. Are promotions attracting the right kind of visitor?

72. What is the impact of social versus print media?

Shopper behaviour is constantly changing and by understanding the response to different marketing approaches and channels, one ensures the best value from the marketing budget.

Site Analytics enables one to capture the timings and category of marketing campaigns, alongside all the critical site data to evaluate marketing within the context of key variables such as weather, time of year and critical outcomes such as traffic and retailer sales lift.

Corporate Marketing Evaluation

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_E

In considering the overall direction of the company's marketing effort, how would you rate:

73. the company's vision and direction?

74. the overall company operations today, compared with a year ago?

75. the financial strength of the company?

76. the efficiency of workflow in the company?

77. the company's skill in marketing products?

78. the ability to develop strong consumer promotions?

79. the regular introduction of new products?

80. the introduction of new, innovative packaging?

81. the company's focus on improving customer satisfaction?

82. the quality of relationships with distributors?

83. the company's effectiveness with retailers?

84. the quality of the promotional activities?

85. the quality of the sales support materials?


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Part F : Store Experience


Customers demand an in-store experience in return for shopping (in personal) at speciality retail outlets; and increasingly at general retailers as well. The improvement of store-level operations is often not a prime concern of senior corporate managers; however failure to be aware of the expectations of customers will only damage profitability. An effective site operations program which creates a differentiated (and hard for competitors to replicate) store experience will attract and hold the attention of shoppers.

Delivering an experience that is satisfying to customers and differentiated from competitors drives both repeat visits and improved store productivity. Conversely, a failure in satisfying the expectations of a fulfilling experience will leave customers wanting to try competitive offerings; be that a new store brand or an existing store brand with a new offer or promotion. Furthermore, a bad store experience will generate a ripple of negative comments with that customer’s family, friends, and co-workers.

For every retail situation, the interaction with the customer represents a mosaic of perceptions, neuroses (and indeed psychoses) on the part of the customer; within the container which represents both the store environment and the actions of store personnel. The help the customer (indeed to help the customer spend his or her money) the retailers must provide an appropriate store experience which includes:-

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_F

1. Product & Retail Offer design 2. Site Operations design 3. Support Program design

Whilst the Product & Retail Offer design presents to the customer the outward sign of the store experience, this can represent a major investment for the retailer, and any defects may entail major upgrades such as new layouts, a new visual image, and brand enhancements; and these often require substantial capital investment and time commitment to execute. Likewise, customers perceive the impact of offer Support Programs that might be introduced at a corporate level, however even the best programs must be underpinned by effective and consistent on-site execution. Otherwise, the retailer makes promises and offers in its advertising and other communications that many of the outlets cannot fulfil for operational reasons. By contrast, Site Operations, can be rapidly improved and this will yield improvements in the customer experience and result in improvements in revenues.

Reliable store performance to ensure a high level of customer store experience will lead to greater customer loyalty, consistent repeat business, and more flexibility to expand the product offering.

The key to reliable store performance is properly selected, trained, and motivated employees who are more productive, consistently more effective with customers, and more aware of store effectiveness and performance. In such retail environments a retailer can expect like for like outlet revenues to be 25-50% greater than the average. Notwithstanding the fact that personnel performance enhancements take time to implement, such improvements involve little or no capital outlays and help differentiate a retailer’s stores from those of competitors.


Retailers should consider and expect several factors to be critical to their operation:-

4. A consistent product offering from friendly and knowledgeable employees who quickly assist

and guide customers to the right products.


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5. Help and Advice with customer requests. 6. Consistent Product Quality 7. Spotless Store, Displays and Equipment 8. Good stock levels 9. Shelves and Displays kept uniformly tidy 10. Premium Pricing for a better store experience.

For retailers to excel in consistent site operations they must understand that sustained execution requires more than just operations manuals and a full complement of staff.

Retailers must develop and use interconnected operating system with detailed and fully defined processes that can deliver a consistent customer experience across the entire store chain.

Through clearly defined customer interaction scripts, detailed daily activities guides and employee schedules, targeted hiring, training, and development, and a motivating career path and compensation plan, employees have the tools and authority to truly focus on the customer and deliver the right experience again and again.

Without a thorough store operating system, retailers (irrespective of enormous and creative advertising, strong product offers, and high quality store designs) will be compromised.

Sales and profit margins may vary across a store network. Customer numbers and sales may vary by 200-300% across individual stores; however in trying to understand what accounts for performance differences one might naturally look at individual store locations and customer traffic flow, local competitive set and density, differences in size, layout, and age of store, and local marketing and pricing. However retailers often fail to understand the impact on revenues from an inconsistent customer experience.

Variances in customer store experience produce a 20-40% sales performance difference. In contrast to the other factors, this portion of the difference is not structural and can be remedied rapidly and effectively.

Retailers should use independent Mystery Shoppers and regular Customer satisfaction surveys to monitor these dynamics.


Site operations:-

11. Defined operational processes. 12. Uniformity of site operations 13. Customer interaction training 14. Activity guides 15. Employee training & development 16. Employee compensation and motivation packages 17. Site monitoring systems 18. Customer satisfaction monitoring systems

Evidence of inefficient or dysfunctional behaviour in the site environment:-

19. Lack of a consistent customer store experience at individual store level 20. Lack of a methodology for monitoring customer satisfaction at individual store level 21. Lack of a uniform, customer orientated, site operation 22. Lack of a methodology for updating operations and systems 23. Lack of internal planning and management coordination 24. Over-reliance on the store managers 25. Lack of monitoring of the performance of individual store staff 26. Lack of on-going staff training programmes 27. Ill-considered promotions, projects and initiatives which distract store staff from their prime

duties 28. Low value administrative tasks which could be automated at site level


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29. Senior staff not regularly spending time at store level serving customers 30. Senior staff not regularly visiting and shopping at franchisees’ stores 31. Senior staff not regularly visiting and shopping at competitors’ stores

Improving store-level operations usually yields a high return on investment and tends to increase sales and margins by between 5-15%. Good quality site operation creates a sustainable competitive advantage and differentiation, in addition to a reinforced culture of customer focus, motivated and productive employees, and lower staff turnover. Such improvements benefit retailers of all sizes, formats, and competitive positions and unlock latent value from store operations

The benchmark of all good retailers is the placing the customers at the very centre of the site operation. However much managers may be involved in hiring staff, organisation, and maintaining sites, the prime imperative must be the dynamic between customer and store experience. Retailers cannot allow this vital relationship to vary store by store due to the vagaries of either inconsistent store presentations or employee training. Managers must ensure that adequate systems exist which provide staff-customer interaction guides, customer handling scripts, service tools, and explicit systems which guarantees that employees know how to treat customers and create a consistent store experience.

Senior corporate managers at retailers should maintain a regular and rigorous, critical assessment of the current operations in order to identify if and where gaps exist with best practice.


Checklist:-

32. Site-by-site performance review and customer satisfaction scores.

33. Site-by-site standard deviation analysis which would signal inconsistent execution.

34. Identification of the performance improvements that would be attained if the average store improved performance to within 25% of the top 10 stores.

35. Identification of the ideal customer store experience.

36. Survey of store employees at individual sites which identify variations in their understanding of the ideal customer store experience.

37. Review current store operating system to see whether it conforms to the three key components of people strategies, store management, and customer interactions.

38. Clarify the key operating processes with those implementing them to understand whether these processes actually support the desired customer experience.

39. Conduct unannounced store visits.

40. Observe customer interactions and experiences.

41. Clarify with employees what drives their daily actions and efforts to serve the customer.

42. Evaluate how consistently the preferred customer experience is being delivered by stores.

The above checklist will identify which activities are weak and which need to change, how many employees will be involved, and the potential rewards to be achieved by upgrading site performance.

A professional product offerings and brand management are of course essential; however they must be complemented by consistent site execution at each outlet.


43. Product Offer design 44. Store concept and format innovation 45. Branding, image, and design


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46. Channel and brand management

47. Site and Network Operations 48. Roles and personnel staffing 49. Customer-facing activities 50. Site-management activities 51. Dealer/franchisee/distributor relationship management 52. Measurement and rewards

53. Offer support 54. Product or service offer pricing and management 55. Advertising, promotions, and CRM 56. Supply chain management 57. Network planning and real estate management 58. Administration and information Management

59. Store Visit checklist 60. Customer satisfaction 61. Customer satisfaction during past visits 62. Product mix 63. Service satisfaction 64. Display of products & POS 65. Employee attentiveness 66. Employee attitude 67. Employee product knowledge 68. Speed of service 69. Transaction handling 70. Store maintenance 71. Store cleanliness & tidiness 72. Consistence of service during peak times 73. Consistence of service during slack times


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Distribution channels

Retailers that operate franchise, license, or dealer distribution channels must seek to control the on- site operations of their distributors, especially in the matter of customer store experience.

Customers do not differentiate between one type of store operation and another, they only see the store brand and they expect and demand a consistent level of customer service.

The most successful franchisors make sure that their franchise operating system and standards enable the franchisees to execute the required customer experience.

Retailers distributing their products via third party outlets need clear guidelines for their distribution channel:-


74. Establish customer service standards which are formalised and part of the distribution channel contract.

75. The customer’s store experience must be specified in manuals and training. 76. Performance targets must be set and monitored. These may include transaction speed,

staffing levels, and response times. 77. Site operating systems to help distributors recruit and train employees, define roles and

customer interactions, manage the store’s activities and staffing, and measure performance. 78. Distributor support systems and training. 79. Enforcement of standards amongst distributors. Formalised monitoring of site operations, for

example, mystery shoppers, customer intercepts, coaching audits, surprise visits, and scorecards to ensure accurate feedback and corrective action.

80. A suitable compensation and reward system which incentives distributors to improve performance.

Multi-channel consumers re-enforce the need for positive in-store experiences

Retailers are increasingly faced with two challenges, the growth in ever mobile consumers using a variety of purchasing methodologies, and the ever more urgent need to attract consumers to a physical store location.

In recent years retailers have engaged in initiatives to produce online retail purchasing opportunities, and they have paid especial attention to the matter of mobile payments. However, if they fail to re-invent the in-store experience then they may as well shut up shop and become pure online retailers.

Some retailers have realised that rather than close stores they can strengthen and re-enforce their brand by giving their outlets an upgrade and giving their customers a better store experience.

What is needed is not just a cosmetic facelift, but the re-inventing of the store brand by creating a "brand story" to engage and involve a consumer in the shopping experience which will undoubtedly include interactive elements, intuitive and futuristic store experiences, one-to-one digital dialogues with customers, virtual shopping screens, audio/video presentations, Quick Response Code integration and other ‘attention getting’ store displays.

The store experience must have the following elements:-


81. An Emotional Focus for the brand 82. Animation and movement 83. Channelling of consumer behaviour 84. Collaborative initiatives 85. Digital Interactive communication with customers 86. Digital Media integration 87. Events


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88. Excitement 89. Innovation 90. Investment in Digital devices, POS and Display 91. Quality design concepts 92. Showcasing 93. Technology 94. The Beating Heart of the brand

With Main Streets and High Streets in decline, and evidence of tough times in shopping centres and malls, it is becoming increasingly clear that retailers cannot simply sit back and wait for consumers to pass their doors. Retailers have to develop their stores as Destinations. Consumers come to the store not because they happen to be passing down the street, but because they are specifically attracted to the store.

Retail multiples are bombarded with the constant noise and distraction of independents that open a store with a local fanfare, distract the consumer, and then equally quickly disappear. These independents, whilst being a nuisance, can act as a stimulus to established retail chains because the independents often bring innovative approaches and interesting service offerings to consumers. The retail chains can often learn from independents and apply the lesson across their network.

Multiples engage in gimmickry on an ad hoc basis from time to time. The Selfridge's department store in London produced a "No-Noise" in-store promotion whereby they attempted to sell name brand products with no logos. The store suggested that it was, "To help you find balance in this fast-paced world… customers to find a moment of peace in a world where we are bombarded by a cacophony of information and stimulation."

Burberry has used digital high tech for its brand of reinvention. The grand opening of its largest Asia Pacific store dramatized its bad weather gear by making it virtually rain during its "Burberry World Live" launch. Then Burberry turned its flagship London store on Regent Street into a "living website"—a digitally-enhanced shopping experience that filled the 44,000-square foot space with innovations of all kinds (including that previously debuted digital rain). In the Chicago store it hosted a local event that continued the theme of "retail as theatre," incorporating digital media, entertainment and fashion.

These however are more evidence of over exuberant PR people rather than any real attempt to produce meaningful in-store experiences.

More significant was when Marks & Spencer installed 10 virtual mirrors in their retail stores to coincide with their virtual mirror application available on their website. Customers can see, in-store, how cosmetics and make-up look against their skin, without actually applying the makeup. This uses technology which helps the customer consider choices and possible combinations without the time and inconvenience of the actual physical application of cosmetics.

The use of digital technology to display products, select products, pay for products and ultimately deliver products to the customer will increase in the future and retailers should offer this as an option to customers. The integration information provision to the customer and e-commerce is attractive to many customers.

For the future there is the suggestion of the availability of ad hoc product designs, indeed in one London shopping centre a company offers 3D printing which manufactures products to order. 3D printing for general use may be some way away, but it is coming.

Similarly the use of new materials is also coming. Imagine the use of Graphene and other advanced materials in a consumer context.


To future proof their positions in the market retailers have to expand their thinking:-

95. Product Offer and Network Strategy: 96. Channel and brand strategy 97. Customer experience development


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98. Customer segmentation and targeting 99. Franchise development 100. Loyalty program design 101. Market portfolio strategy and store-level investments 102. New consumer product development 103. New product offer development 104. The use of new manufacturing technologies 105. The use of new materials and technologies

Site and Network Operations:

106. Cost reduction and productivity improvements 107. Detailed store market and customer analysis 108. Developing and implementing day-to-day operating processes 109. Economic and operational benchmarking 110. Site economic analysis 111. Store employee hiring, training, and management 112. Store operations best practices 113. Store-level technology 114. Supply chain management

Implementation:

115. Advertising and promotions engineering 116. Customer-focused retailing culture 117. Franchisee management 118. Merchandising and offer development 119. New business launch 120. On-site pilot tests and execution 121. Performance measurement programs 122. Product and service pricing 123. Testing and learning tools


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Exterior Store Presentation

Identifiable Store Name

Consumers must perceive an effective store name which sets the tone and provides identification by creating an image for the consumer.

The store name has to be easy to say and remember, and be indicative of the images and emotions which the retailer wishes to implant into the consciousness of the consumer.

The store name should have longevity, and should not be too trendy or too associated with any particular identification which may prove transitory and liable to become unfashionable.

Visual Trademarks

The retailer’s identifiable trademark and logo provides a visual image to trigger the consumer’s memory recall of the store name. This is done with a combination of words, pictures, colour, shape, typeface, texture and/or style to make the image prominent. The overall image of the store must be Identifiable even in the absence of the store name (which might be obscured because of the viewing angle or some obstruction. The successful trademark image should be unique, indicative of the retailer’s products and services, and be consistent with the overall impression the retailer wishes to imprint on the consumer.

Unmistakable Storefronts

Storefronts must provide instant recognition and memory recall, both at a distance and up close. The use of a well-designed combination of exterior architecture, signing and window displays initially ensures a powerful first impression, and thereafter reinforces that impression each time it is viewed by the consumer.

Exterior Architecture The store exterior look is often referred to as the architecture, and comprises of various aspects such as building materials, architectural style and details, colours and textures.

The store’s architecture must accord with and reinforce the consumer’s expectation of the retailer and the brand.

Store Signage Store signage is the essential element of the storefront, identifying the retail brand and encouraging consumers to patronise the store. The value of strong storefront signage cannot be underestimated, both in terms of brand recognition and competitive advantage in a crowded retail landscape.

Store Façade The store frontage should entice and inform passing potential consumers. Consumers should consult a store’s windows as they might look at the store’s catalogue or web site. The more interest, movement and animation found in the store window the greater the effect on potential consumers.

Vantage Point The design of the storefront must consider the customer's vantage point, the speed of passing foot and motorised traffic, and the opportunities available to attract the attention of potential customers.

A storefront with a 90º angle of approach will very rarely be adequate, either in a street location or a shopping mall. The direction of customer traffic flow is influenced by various factors, site access points, the location of nearby parking or public transport, the nearby high traffic volume venues, and the width of streets or shopping mall corridors, et cetera. All these factors will influence how and from where consumers view the storefront. A good retail storefront design will include modular elements which will allow individual storefronts to be


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customised for the particular location. Thus the design elements can be positioned to face left right or head-on.

Store Entrance

The store entrance can be a barrier to entry or an invitation. The flow from the outside to the inside should be effortless. Whereas street locations do pose questions of security, energy conservation and the reduction of exterior nuisance; in shopping malls retailers can use wide and open entrances which allow seamless entry from the mall to the store. Many retailers rely on impulse purchases and therefore it is important to create an open storefront by removing physical barriers and providing an unobstructed view into the store interior with a glass frontage. Removing barriers also includes removing the clutter of notices, credit card signs, unrelated logos, and other muddle which tends to build up in retail locations.

Those stores which require doors for climate control, security or because the store offering suggests a need for intimacy, have less opportunity to attract impulse buyers; and therefore the task of a welcoming store entrance is even greater. For such retailers, an unobstructed and welcoming entrance accompanied with a well-designed window display is essential.

Consistent and Compelling Store Image

An impulse consumer will spend a couple of seconds scanning a store exterior before then trying to scan the store interior through the storefront. Within less than 4 seconds that consumer will have decided whether to enter the store or not.

In most instances, consumers are either on a mission to make a planned purchase, or is impulse shopping for amusement, entertainment or ideas.

Some consumers may visit a retailer to make a premeditated purchase or they may decide to enter a store because they are comparison shopping for something specific. For impulse buyers the decision to enter a particular store rests with the reinforcement of their brand confidence in that the retailer, and the assurance that in browsing they are using their time effectively.

Those with time on their hands are more inclined to enter a store impulsively, drawn by the overall impression that the retailer may have something of interest to them. The external store image gives them the impetus and the interest to enter.

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_F

First impressions are derived from the Customer Surveys:

124. Exterior Identifiable Store Name 125. Exterior Visual Trademark 126. Unmistakable Storefront 127. Exterior Architecture 128. Exterior Store Signage 129. Store Façade 130. Vantage Point 131. Store Entrance 132. Consistent and Compelling Store Image 133. Brand Hook 134. Positive impressions


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The following parameters are examined in the Customer Surveys:

135. Does the Exterior communicate to the customer who the retailer is, and what they sell? 136. Does the Fascia present the name, logo, corporate graphics and colours? 137. Is the Store entrance open, semi-open, funnel / recessed / lobby, standard door? 138. Is the Window display eye-catching? 139. Is the Orientation and Vantage point of the suitable?

140. How does the customer rate the Storefront? 141. How does the customer rate the Marquees or similar fittings? 142. How does the customer rate the Entrance/s? 143. How does the customer rate the Display Windows? 144. How does the customer rate the Height of Building? 145. How does the customer rate the Size of Building? 146. How does the customer rate the Signage? 147. How does the customer rate the Store Visibility? 148. How does the customer rate the Store Uniqueness? 149. How does the customer rate the Surrounding Stores? 150. How does the customer rate the Surrounding Areas? 151. How does the customer rate the Parking?

152. Is there sufficient Identification of Store Name? 153. Does the Store Identification set the tone of the store? 154. Does the Store distinguish itself in the customer’s mind? 155. Is the Store Name easy to say and remember? 156. Are there sufficient Visual Trademarks? 157. Does the Store Trademark provide a visual image to accompany a store name? 158. Does the Store Trademark combine words, pictures and styles to make it stand out? 159. Is the Store identifiable even without seeing store name?

160. Is the Storefront Unmistakable? 161. Did the Storefront stop passing customers? 162. Does the Storefront provide instant recognition and recall? 163. Does the Storefront project a clear and concise image of what’s inside? 164. Does the Storefront use attractive exteriors, signage, and window displays?

165. How does the customer rate the Store Entrance? 166. Is the Store Entrance good in Mall situations? 167. Is the Store Entrance free of visual clutter? 168. Is the Store Entrance unobstructed and welcoming?


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Interior Store Presentation

Visual Look

The store front, and an interesting entrance way, helps in delaying the passing of customers; and establishes a positive first impression which might lead to that customer entering the store. Once inside, the store’s visual messages should create feelings of consistency or clarity. Consistent aisle patterns, efficient merchandising and unambiguous signs support the overall brand image of the store.

Visual Hook

A visual hook is analogous to the ‘hook’ in music that produces a hit tune. It is a refrain, often repetitive, which calls attention to the store and re-enforces both the store brand and consumers sentiments towards the brand. Powerful visual hooks are created integrating visual merchandising components to give a more memorable impression. An exciting store presentation, effectively signed product offerings, powerful interior displays, in-store animation or events, all help attract customers to the store.

Effective visual hooks provide an impetus to consumers, especially the impulse buyers. By creating a compelling hook for product offerings using the appropriate techniques a retailer can greatly increase impulse buys and encourage passing trade. Increasingly brand hooks use sensory mechanisms for a total image package.

Leveraging Positive Impressions

By creating a consistent positive impression in the mind of consumers they are able to recognise and identify with particular store brands. This is especially important with retailers with multiple locations which differ in size, shape, design and merchandise mix; here the creation of continuity of image by having common elements throughout the chain is essential. By extending common exterior and interior elements to all stores the retailer can leverage the investment and create an even more durable store brand.



169. Interior Identifiable as Store Brand 170. Interior Visual Trademark 171. Interior Unmistakable as Store Brand 172. Interior Fittings 173. Interior Signage 174. Interior Displays 175. Consistent and Compelling Interior Image 176. Brand Hook 177. Positive impressions


178. Is the Store Look appealing? 179. How effective was the Visual Look? 180. Was the entrance inviting? 181. Did you have a positive first impression when you entered the store? 182. Was the store interior well organised and not confusing? 183. Were you able to navigate the store in a consistent and logical way? 184. Does the store have a Visual Hook with which you can identify? 185. How effective was the Visual Hook? 186. Did the Store Interior draw your attention? 187. Did the Store suggest that there was something interesting for you?


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188. Was the visual merchandising attractive? 189. Have you used other stores in the same chain?

190. Did you like the Store layout? 191. Was the floor plan logical? 192. Did you think the floor plan was small? 193. Did you think the floor plan was medium or average size? 194. Did you think the floor plan was large? 195. Did you like the Store’s interior in general? 196. What did you think about the interior finishes? 197. What did you think about the ceiling? 198. What did you think about the lighting? 199. What did you think about the displays? 200. Were the displays informative? 201. What did you think about the sales desk or counters? 202. Were there any sitting areas? 203. Would you prefer to stand or sit whilst waiting? 204. What did you think about the interior graphics? 205. What did you think about the advertising displays? 206. What did you think about the store image or branding elements? 207. What did you think about the product displays? 208. What did you think about the product dividers? 209. What did you think about the shelving or product stacking? 210. What did you think about the product accessibility? 211. Were the products displayed in a manner consistent with their value?

212. What did you think about the Store Lighting in general? 213. Was the lighting level sufficient? 214. Did you see any faulty light fixtures with lamps burned out? 215. Was the lights properly aimed or directed? 216. Did the store have old-style or modern lighting? 217. Did the store have accent lighting to highlight particular products? 218. Should the store upgrade or modernise the lighting?

219. What sort of Flooring did the store have? 220. Was the flooring dirty, stained, or ugly? 221. Was the flooring old or worn out? 222. Did the flooring need to be cleaned? 223. Should the store replace the flooring?

224. What did you think about the Store Floor Plan? 225. Could you easily move though the floor pattern? 226. Should the store change the floor plan?

227. What did you think about the Store Floor Colour Scheme? 228. How would you describe the Store Colour Scheme? 229. Should the store change or modernise the colour scheme?

230. What did you think about the Changing Rooms, Rest Rooms and other facilities? 231. Were the store’s facilities clean? 232. Were the store’s facilities decorated appropriately? 233. Should the store change or modernise their facilities?

234. What did you think about the Store Product Pricing system? 235. Are all products priced using a pricing system for a uniform appearance? 236. Are the prices attached in a consistent pricing channel? 237. Should the store change or modernise the Product Pricing system?

238. What did you think about the Store Interior Signing?


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239. Did the Store Interior Signing reinforce the Store Brand? 240. Did the store have old or obsolete signs displayed? 241. Did the store have inconsistent or confusing signs displayed? 242. Should the store change or modernise the Store Interior Signing system?

243. What did you think about the Store Maintenance and General Appearance? 244. Did you notice any badly maintained areas? 245. Was the sales area clear of miscellaneous paraphernalia? 246. Were the staff untidy? 247. Were the product displays badly maintained?

248. What did you think about the store in General? 249. Were you comfortable spending time in the store? 250. Were you comfortable spending your money in the store? 251. Would you be happy taking your family to the store? 252. Would you be happy taking your friends to the store?

Ambience & Layout



253. How would you describe the Store Ambience and Layout 254. What did you think about the store Lighting 255. What did you think about the store Music 256. What did you think about the store Signage 257. What did you think about the Store Front 258. What did you think about the store Display Windows 259. What did you think about the store Scent or Smell 260. What did you think about the store Fixtures 261. What did you think about the store Temperature 262. What did you think about the store Hygiene 263. What did you think about the store Theme Setting 264. What did you think about the store Posters, Signals, cards 265. What did you think about the store Floor Space 266. What did you think about the store Product Grouping 267. What did you think about the store Traffic Flow Pattern 268. What did you think about the store Colours used 269. What did you think about the store Personnel Behaviour 270. What did you think about the store Personnel Product Knowledge 271. What did you think about the store Payment systems 272. What did you think about the store availability of other facilities 273. What did you think about the overall store Style 274. What did you think about the overall store Friendliness


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POS & Displays



275. What did you think of the Store Display Lighting? 276. Did the Store Displays have any Motion or Animation? 277. Were the Store Displays Customised or did they appear to be Standard? 278. Did the Store Displays have any noticeable Features? 279. Could you see into or inspect the product content of Store Displays? 280. Were the contents of the Displays Visible? 281. Did the Store Displays send a Message, E.g. product quality or product value? 282. Were the Store Displays well Designed? 283. Did the Store Displays have a Unity or were they Confused? 284. Were the Store Displays in Proportion to the Store and to the other Store Fittings? 285. Were the Store Displays a Focal point of the store? 286. Did the Store Displays encourage you to spend more or less than you had intended?


Audit of Retail POS & Displays by Expert Observation Surveys:

287. Degree to which Displays make it into shoppers’ line of sight.

288. Identification of the Display types and locations that generate the most impressions and greatest consumer activation.

289. Amount/percentage of time spent engaging with the Displays (by audit variables such as display type, location, and placement).

290. Degrees to which the Displays are noticed, stopped at, interacted with, and drive purchases.

291. What is the emotional response (valence) to the Displays?

292. What is the shopper’s track or path throughout the store?

293. What are the search patterns and navigational strategies shoppers use to find and select products? How much time is spent considering the product categories?

Display Type:

294. Floorstands 295. Endcaps 296. Powerwings / sidekicks 297. In-line / gondola / full-line merchandisers (specialty) 298. In-store media 299. Digital signage

Location of each display:

300. End of aisle (front or back) 301. Perimeter / racetrack 302. In-aisle 303. Front end

Placement of display:

304. Primary 305. Secondary

Variables:

306. Category and brand the display is advertising 307. Static vs. Motion


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308. How was the Product positioned 309. Whether it is interactive 310. Whether it has video or audio

Lighting



311. What did you think about the Store Lighting?

312. Was the Store Lighting too little?

313. Was the Store Lighting too much?

314. Was the Store Lighting too intrusive?

315. Was the Store Lighting too hot?

316. Was the Store Lighting warm?

317. Was the Store Lighting cold?

318. Was the Store Lighting too coloured?

319. Did the Store Lighting display the products well?

320. Was the Store Lighting designed to hide the products?

321. Did the Store Lighting allow you to see the product colours or textures or details well enough?

322. Could the Store Lighting be improved?

323. How could the Store Lighting be improved?

Store Facilities



324. Did the store have any additional Facilities?

325. Which additional Facilities did you use in the store:- a. After-sales services b. Arranged appointments c. Baby strollers or Baby Changing facility d. Baby-sitting or Children’s Area e. Beauty salon f. Bridal registry g. Credit or store card facilities h. Delivery service i. Fitting rooms j. Free (or low-cost) parking k. Gift vouchers l. Gift wrapping m. Information counters n. In-house designers o. Loyalty cards or schemes p. Personal shoppers q. Refreshments r. Repair services


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s. Rest rooms t. Restaurant or cafeteria u. Samples v. Shopping bags w. Specialist advisers x. Storage y. Telephones z. Ticket outlets aa. Valuation services bb. Water fountains

326. Were you happy with the additional Facilities provided? 327. Was there excessive Self-Service? 328. How could the Facilities be improved?

Store Image



329. Do you think that the store has a particular Image? 330. How would you characterise the Image?

331. Did the store Image meet your expectation of the Store Brand? 332. Were you happy with the store Image? 333. Did the store Image confirm the Retailer’s Product Quality? 334. Did the store Image confirm the Retailer’s Product Value? 335. Did the store Image confirm the Retailer’s Product Brand/s?

336. What is your mind is the personality of the store? 337. What is the Image of the types of merchandise or services sold? 338. What is the Image of the Quality of the store? 339. What is the Image of the Sales Associates? 340. What is the Image of the Product Packaging? 341. What is the Image of the Colours of the décor? 342. What is the Image of the Fixtures and Equipment? 343. What is the Image of the Music, Lighting, Scent?

344. What is the Image of the Store Name? 345. What is the Image of the Visual Trademark? 346. What is the Image of the Store Front? 347. What is the Image of the Store Look?

Conversion Rates


Derived from the Customer Surveys:

348. Did the Exterior of the store influence your decision to enter the store? 349. Did the Interior of the store influence your decision to look at the products? 350. Did your experience of the store influence your decision to purchase?


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Overall Store Evaluation



351. What ranking do you give to your First Impression of the Store (1 to 10)? 352. What ranking do you give to the Store after your first impression (1 to 10)? 353. What ranking do you give to the Store in comparison to the competitors (1 to 10)?

Derived from the Customer Surveys. Customer Ranking of the Retail Site (1 to 10):

354. The store's location in your community 355. The store's physical location in the neighbourhood and street 356. The location and amount of parking available to customers 357. The physical appearance of the store's parking lot 358. The store's architectural design 359. The exterior colour of the store 360. The location and size of store windows 361. The location and size of store doors 362. The accessibility of the store for the physically handicapped 363. The size and location of the outside store identification signs 364. The graphic design of the outside store identification signs 365. Lighting of the outside store identification signs 366. Outside lighting around the store and parking areas 367. Outside store security 368. Landscaping around store and parking areas 369. Overall outside appearance 370. Window treatments 371. Types of window displays 372. The overall store layout 373. Aisle spacing for handicap access 374. The interior design of the building 375. The interior wall, floor and ceiling colours 376. The floor covering 377. The interior fixtures and display areas 378. The interior lighting 379. Adequate heating and air conditioning 380. Rest room facilities 381. Location of a customer service area 382. Availability of a customer courtesy telephone 383. Availability of water, coffee, beverages and snacks for customers 384. Play area, toys and activities for children 385. The organisation of the product displays 386. Demonstration area for products 387. Product information displays and counters 388. Display of specific products 389. Service department layout and access 390. Integration of technology with product displays 391. Use of product packaging in display areas 392. Storage of inventory 393. Overall housekeeping and visual appeal

Customer suggestions revealed during Customer Surveys:

394. Changes to the look of the store 395. Changes to the feel of the store 396. Changes to the layout of the store 397. Changes to the physical entry and access points 398. Changes to the store displays


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399. Changes to the product offerings 400. Changes to the product quality 401. Changes to the product values

Store Personality Survey


402. Retail store personality variables.

403. Select the scale that best indicates the way you would describe the store. a. Good selection b. High prices c. High quality d. High fashion e. Good service f. Easy to shop in g. Friendly h. Good sales and promotions i. Sophisticated j. Traditional k. Different l. Take chances m. Confident n. Creative o. Sociable p. Stands out in the crowd q. Simplified lifestyle


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Part G : In-store Customer Purchasing Behaviours


In-store and Impulse-buying Decisions Understanding the needs, purchasing behaviour, and changing lifestyles of consumers is critical in being able to deliver on their immediate and future needs. Whereas consumer decisions are no longer limited to in-store product exposure, shoppers are making an overwhelming number of their purchasing decisions in-store. In developed countries the in-store decision and impulse-buying rates are over 40% of purchases. Notwithstanding consumers being increasingly mobile, social and in control of their information sources, in-store decisions and impulse-buying seems to be here to stay.

The consumer’s route to a purchase has changed, with online information, smartphones, shopping apps, mobile coupons, and many other innovations; however in-store marketing at many different types of stores categories and brands has maintained the connection with consumers whom continue to be influences at the point-of-sale.

The effectiveness of the In-Store Experience, the in-store environment, merchandising and displays, will indicate tangible improvements to in-store purchasing decision rates.

Three key components affect the in-store decision rate factors:

Generally planned purchases Brand or Product substitution Unplanned purchases

Research shows that an important part of the marketing mix is the use of materials and devices that stimulate sales where the action is – the point of purchase.

The decision-making process of shoppers frequently does not occur until they actually see a product in the store. Therefore, the way a product is displayed in a store and is supported by in-store marketing materials can often be instrumental in leveraging sales.

Purchasing Behaviours

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_G

1. Goal orientated behaviours a. Like to get exactly what they set out for b. Aim is to complete shopping trip as rapidly as possible

2. Research & Planning behaviours

a. 40% of shoppers use pre-store media to plan their trip. b. 55% of shoppers make a shopping list whether mental, handwritten, or digital.

3. Hunter Gatherer behaviours

a. Enjoys seeing what new products are available while shopping the store. b. Enjoys getting ideas while shopping.

4. Product Offering and Selection behaviours

a. Overall product quality, good service, quick checkout and value are the most important considerations for shoppers when choosing a retailer.

5. Value seeking behaviours a. Willing to wait for sales b. Will shop multiple retailers for best prices


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Consumer Store Behaviours When consumers enter a store they are not so much revealing where they like to shop, but a complex matrix of their own lifestyle, values, interests, social orientation, work and spare time activities, income levels, and so forth.

This matrix which defines the consumer is very variable and it is increasingly difficult for retailers and brand manufacturers to pigeon-hole their customers into stereotypical groups.

Predictive shopper profiles are based on the consumers’ stated preferences, their browsing habits, and the products that they actually purchase or abandon in their shopping trips.

Consumers are clustered into segments to understand the attributes and characteristics that are most important to individuals as they decide where and when to shop. Consumer surveys investigate a broad set of lifestyle and shopping characteristics on graded scales and these are correlated and analysed to create consumer groups based on their demographic, lifestyle and shopping parameters. These factor groupings form the basis of the creation of consumer segments, which can be analysed for shopping behaviour patterns, price sensitivity, retailer preferences, retailer loyalty, demographic differences, and opportunities for conversion.

These consumer segments have unique attributes and patterns of behaviour as they relate to their shopping patterns and retailer selection. Data seems to suggest that there are four basic profiles which should be of concern to retailers:


6. Time conscious consumer a. Lifestyle time stressed b. Get in and get out of the store quickly. c. Pressure from not having enough time in store d. Always in a hurry e. Not in a low income group f. Perceived budgetary constraint g. 18-44 demographic group h. Full time employed i. No time for circulars or coupons j. Tends to use a limited number of retailers k. Random navigation of store l. Describes self as easily tempted m. Shops with children n. Does not often use a written list. o. Second highest purchases on impulse p. Highest total basket average

7. Time available consumer

a. Shopping is a hobby or social event b. Very suggestible and influenced by retailers’ promotional activities c. Enjoys shopping d. Likes to look at new products e. Likes browsing in the store f. 55+ demographic group g. Lower disposable income h. Heavy use of circulars which drives retailer choice i. Knows many retailers and is not very retailer local j. Random navigation of store k. High receptivity to stores with quality private label products l. Receptive to retailers with a variety of product types and package sizes m. Most satisfied shopper on for overall satisfaction n. Describes self as impulsive and easily tempted


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o. Highest purchases on impulse p. Makes most weekly trips q. Spend longest time in store

8. Necessity consumer

a. Shopping trip is always organised b. Purchasing goals c. Time goals d. Shopping trips executed according to plan e. Male 55+ demographic group f. Low circular use g. Tends to use few retailers h. Seeks familiarity with store layout i. Planned navigation of store j. Most retailer loyal k. Most consistent use of written list l. Not interested in bargain hunting m. Describes self as controlled and restrained n. Most accurate in predicting total spend o. Lowest purchases on impulse p. Least number of trips per week q. Shortest time in store

9. Cost conscious consumer

a. Seeks best buys and lowest prices b. Willingness to shop around for the lowest price c. 14-24 demographic group d. Least retailer loyal e. Highest circular use f. Highest coupon use g. Most likely to use pre-store media to plan trip h. Least satisfied on overall satisfaction score i. Homemaker, Housewife, House husband, Single parent family, One person

household, demographic j. Most likely to Not purchase an item which was Not budgeted for pre-store k. Lowest total basket average

In-store Consumer Decision Making Locations of consumer Purchasing Decision Making.

Retailers should be aware of how and where their customers are making a majority of their purchase decisions.

Purchases should be segmented into categories and then analysed for in-store purchase decision rates. This provides an indication of what purchases shoppers’ anticipate as opposed to what they actually purchase.

The four categories that purchases are classified into are:


10. Specifically planned: Purchases the shopper specifically identified by name or brand, before entering the store, and which they then actually purchased in-store.

11. Generally planned: Purchases that were referred to generically, before entering the store, but not bought by particular brand.

12. Unplanned: Purchases that were not mentioned, before entering the store, and were bought on impulse.


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13. Substitutes: Purchases that were specifically identified by name or brand, before entering the store, but the actual purchase reflected a substitute of brand or product.

The in-store decision rate is calculated by taking the sum of the purchases that fall under Generally Planned, Unplanned, and Substitutes categories. The average in-store decision rate, across all retail sectors, in developed countries, is about 40%.

The suggestion that shoppers are planning their purchases less, and deciding more at the shelf, is not strictly accurate as more shoppers are stating that they did not find what they were looking for when they entered the store. This means that the product, brand or size of the article they were seeking was not available and thus they had to purchase something else, or go to another store.

When shoppers do make an impulse purchase this is usually not because of ‘impulsiveness’ but because it was a purchase of something that they had forgotten and they remembering that they needed or wanted an item once in the store. The second reason for impulse buys was because shoppers say that the item was on sale or at a lower price than at a competitive store.

Consumer Surveys

In-Store Purchase Process and Evaluation Survey


14. In general, do you feel that prices are: a. Much too high b. Somewhat high c. About right d. Do you believe prices are particularly high in your area e. Do you think high prices are due to greedy companies f. Do you think high prices are due to taxes g. Do you think high prices are due to supply companies setting high prices h. Do you think high prices are due to the laws of supply and demand i. Do you think high prices are due to prices which always go up seasonally j. Do you think high prices are due to other factors

15. Thinking about the last several years, how often do you buy premium products?

a. Always b. Frequently c. Sometimes d. Seldom e. Never

16. Think about the stores you go to most often. Is they closer to:

a. Your home b. Your place of work c. Your favourite shopping area

17. About how many minutes does it take to get to the store you go to most often?

d. Under 5 minutes e. 5-10 minutes f. 10-15 minutes g. 15-20 minutes h. More than 20 minutes

18. Think about the store you go to most often. What are some reasons this store is your

favourite? a. Convenient location b. Convenient hours of operation c. Close to work


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d. Close to home e. Close to favourite shopping area f. Lowest prices g. Fast payment h. Fast in and out i. Happy with brands j. Never had trouble with their products k. Have a credit card for that brand of store l. Like the products m. Friendly service n. Force of habit o. Other

19. In an average month, about how much does your total household spend on the product?

20. Do you have a Store or a Store-linked card?

21. What are the three best features you would expect to get with a store card?

a. Generous grace period b. Bonus rewards for frequent purchases c. Low interest rate d. Use for several different companies e. Easy to get one f. End of year rebate g. Free gifts h. Promotions

Shopper Involvement Study


Indicate your agreement with each of the following statements:

i. Very Strongly Agree ii. Strongly Agree iii. Agree iv. Disagree v. Strongly Disagree vi. Very Strongly Disagree

22. At the time of the purchase decision, I had little time to search for information.

23. There was a wide difference in performance between the available choices.

24. Because the product was being offered on sale for a limited time period, I felt I needed to purchase the item quickly.

25. If this product broke down I would feel that replacement or repair was a high priority.

26. My (our) budget was very tight at the time of the purchase.

27. I felt obligated to make a careful analysis of the alternatives before making a selection.

28. I have one or two favourite stores I shop in for this type of purchase.

29. I felt it was necessary to talk to a number of friends or family because of my lack of knowledge and expertise about this product category.

30. I felt I would obtain a better deal on this item by shopping around and comparing prices.

31. I like to devote considerable time and energy when making a product choice such as this one.

32. Selecting an appropriately styled product was very important to me.


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33. I can make many connections or associations between the use of this product and experiences in my life.

34. I was very concerned about possible product problems when searching for the item I purchased.

35. Using the product I purchased is one of the most enjoyable things I do.

36. I did not have any favourite brands in this search category before beginning my search.

37. I felt quite knowledgeable about this product category before I began shopping for it.

Indicate your agreement with each of the following statements.

i. Very Strongly Agree ii. Strongly Agree iii. Agree iv. Disagree v. Strongly Disagree vi. Very Strongly Disagree

38. There were wide price differences between available choices.

39. I received considerable pressure from other family members to purchase this item quickly.

40. This purchase was difficult because the items in this product category are so technologically complex.

41. This purchase was not planned, but the item caught my eye in the store and I decided to purchase it.

42. It was my task to make the product choice the right one.

43. The amount of money I could or would spend on this item was very limited.

44. I felt comfortable judging the differences between alternatives relatively well.

45. I generally make purchases of this kind at one particular store because I believe they offer the best values around.

46. I enjoyed shopping for this product.

47. I was very concerned about the economic consequences of making a poor or incorrect choice.

48. Generally I like to make purchases quickly without shopping around at different stores, because it just is not worth my effort.

49. I am concerned about my friends' approval of my choice.

50. Because of my lifestyle, I feel this is a product that ought to be important to me.

51. I was very concerned about my product choice because of the consequences of selecting an item that did not perform as I anticipated.

52. I believe I could be quite helpful to friends who are having difficulty making a selection in this product category.

53. I had a strong brand preference in this category because of my previous experience with some of these brands.


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Store Entry Surveys Shoppers are randomly interviewed at the entrance of the store locations. Interviews are conducted during all day parts and all days of the week with a nominal duration of 10 minutes per interview.


54. Planned purchases (unaided category and brand planning) 55. Any pre-store path-to-purchase activities shopper engaged in for planned purchases and in

general 56. Amount budgeted/expect to spend for planned items and total basket 57. General shopping behaviours in channel 58. Demographics and profiling information

Upon completion of the pre-entry interview, shoppers were asked to return to the researchers after completing their shopping trip for a post-shopping interview. Information products purchased was recorded and the purchase record for each shopper was obtained through electronic capture of till receipts. The exit interview recorded products and brands purchased from shopper’s entire basket.


59. Products purchased (category and brand level information) 60. Coupon, circular, mobile phone use, etc. used in purchase decisions 61. Recall/awareness of displays for product purchases 62. Attitudes and perceptions towards retail environment and specific categories. 63. Total amount spent and by category. 64. Method of payment

Survey research methods measure contemplative opinions of the respondents and rely on techniques such as surveys or facilitated focus groups. For accuracy one need a valid sample size which is usually in the range 500-1500 valid responses.

Store Audit In preparation for the customer surveys the store layout was surveyed and each day an audit of specific display types throughout the store was conducted prior to the start of interviewing. The purpose of the store audit is to record and identify the display materials which produce a measureable impact on customer decision-making and emotional response.

The store audit includes, a traffic flow pattern, an aisle schematic, photographs and spatial position of each display present as well as coding of the following information:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_G

65. Display Type: a. Floorstands b. Endcaps c. Powerwings/sidekicks d. In-line/gondola/full-line merchandisers (specialty) e. In-store media f. Digital signage

66. Location of each display: a. End of aisle (front or back) b. Perimeter/racetrack c. In-aisle d. Front end


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67. Placement of display: a. Primary b. Secondary

68. Other variables: a. Category and brand the display is advertising b. Static vs. motion c. Product on it vs. no product d. Whether it is interactive e. Whether it has video or audio

Supplementary research Researchers and mystery shoppers equipped with smartphone and mobile applications which could register reactions are able to analyse the impact of displays:-

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_G

69. Degree to which displays (as defined earlier) make it into shoppers’ line of sight. 70. Identify the display types and locations that generate the most impressions and greatest

activation. 71. Amount/percentage of time spent engaging with these displays (by audit variables such as

display type, location, and placement). 72. Degrees to which these displays are noticed, stopped at, interacted with and drive purchases. 73. What is the emotional response (valence) to these displays? 74. What is the shopper’s track or path throughout the store? 75. What are the search patterns and navigational strategies shoppers use to find and select

products? 76. How much time is spent considering these categories?


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Part H : Customer Handling


First Impressions Customer Survey

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_H


1. What did you think of the store opening hours?

2. What did you think of parking availability?

3. What did you think of the shopper-friendliness of the store layout?

4. What did you think of the salespeople?

5. What did you think of the politeness of the store staff?

6. Did you have to wait too long before being served?

7. What did you think of the checkout lines and queues?

8. Did you have to wait too long before being able to finalise your purchases and leave the store?

9. What did you think of the payment & credit acceptance?

10. What did you think of the delivery policies?

11. What did you think of the amenities?

12. What did you think of the customer follow-up?

13. What did you think about complaints handling?

Queue & Waiting handling

Queue performance is a very important issue for retailers and those who get sales desk staffing

wrong, or have lengthy queues risk creating a poor store image which can harm sales. Customers

hate and avoid queuing and will typically avoid retailers where queues are common.

If shoppers are in a store where they see long queues at the checkout they can be deter from making

full use of their shopping time or budget; indeed they may abandon their planned purchases

altogether and go to another store. Retailer should have empirical evidence of average wait times and

overall transaction times at each location.

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_H

Audit of Retail Sites by Expert Observation Surveys:

14. Observations reveal staff schedules are determined by changing customer demand and trading patterns.

15. Observations reveal that the retailer predicts the optimum number of tills needed to open in 15 to 30 minute time slices to maintain a desired service level.

16. Observations reveal a correlation between wait times and conversion rates to help capitalise on every opportunity.


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17. Observations reveal that the retailer is probably aware of the optimum ratio of till staff to customers at which marginal sales exceed the incremental staffing costs.

18. Observations reveal that the retailer is using traffic detectors at store entrances and till points

to monitor shopper numbers and queuing behaviour.

19. Observations reveal that the retailer is able to calculate average queue lengths, wait times

and transaction times.

Interface & Dialogue



77. Did the salesperson smile when greeting you?

78. Did the salesperson use age-appropriate and gender-appropriate greetings?

79. Did the salesperson avoid using negative stereotypical phraseology when referring to customers or fellow employees?

80. Was the salesperson proactive and ask how he/she may be of service?

81. Was the salesperson immediately visible and available?

82. Did the salesperson hover or make you feel uneasy?

83. Did the salesperson turn away, walk away, or become occupied when you approached?

84. Did the salesperson give precedence over you when someone else approached or to take a phone call?

85. Did the salesperson seem to take regard of your age, gender or appearance?

86. Did you see evidence of food and beverages left by employees?

87. Did the salesperson mention an upcoming break or other call on his/her time?

88. Were any salespersons making personal calls within the earshot of customers?

Staff Response & Attitude to Customers



89. Do you think that the salesperson was able to read the body language of customers?

90. Did the salesperson let chatty customers monopolise their time while leaving other customers waiting?

91. Did the salesperson call for backup support when lines were forming?

92. Was the salesperson discrete in relation to credit and payment arrangements?

93. Did the salesperson discuss your personal details in front of other customers?

94. Did the salesperson inspect merchandise before bagging it to make sure it was not defective or the wrong size?

95. Did the salesperson make sure that you received everything you paid for before leave the store?

96. Did the salesperson smile at you and say goodbye and encourage you to come again?


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Information Provided to Customers



97. Did the salesperson seem to lack knowledge about some aspect of the product or business?

98. Did the salesperson offer to find out about anything which he/she was uncertain about?

99. Did the salesperson offer to go to the stock room and try to find it an item which was not on display?

100. Did the salesperson offer to call another store or order an item not in stock?

Proficiency



101. Credibility: Store/Outlet Level 102. Credibility: Branded Specialities 103. Credibility: Company Advertising 104. Credibility: Company Level 105. Credibility: Company Offers & Promotions 106. Credibility: Counter Staff 107. Credibility: Dedicated Specialities Staff 108. Branded Product Information: Store/Outlet Level 109. Branded Product Information: Company Level 110. Branded Product Information: Counter Staff 111. Branded Product Information: Dedicated Specialities Staff 112. Staff Awareness of Product: Branded Specialities 113. Staff Awareness of Product: Counter Staff 114. Staff Awareness of Product: Dedicated Specialities Staff 115. Staff Comprehension of Product: Branded Specialities 116. Staff Comprehension of Product: Counter Staff 117. Staff Comprehension of Product: Dedicated Specialities Staff 118. Staff Confidence in Product: Branded Specialities 119. Staff Confidence in Product: Counter Staff 120. Staff Confidence in Product: Dedicated Specialities Staff 121. Staff Efficiency: Store/Outlet Level 122. Staff Efficiency: Branded Specialities 123. Staff Efficiency: Company Level 124. Staff Efficiency: Counter Staff 125. Staff Efficiency: Dedicated Specialities Staff 126. Staff Efficiency: Offers & Promotions 127. Staff Efficiency: Problem Solving 128. Staff Integrity: Advertising & Promotions 129. Staff Integrity: Store/Outlet Level 130. Staff Integrity: Branded Specialities 131. Staff Integrity: Company Level 132. Staff Integrity: Counter Staff 133. Staff Integrity: Dedicated Specialities Staff 134. Staff Integrity: Offers & Promotions 135. Staff Performance: Store/Outlet Level 136. Staff Performance: Branded Specialities 137. Staff Performance: Company Level 138. Staff Performance: Counter Staff 139. Staff Performance: Dedicated Specialities Staff 140. Staff Performance: Offers & Promotions


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141. Staff Performance: Overall Customer Handling 142. Truth & Honesty: Advertising & Promotions 143. Truth & Honesty: Store/Outlet Level 144. Truth & Honesty: Branded Specialities 145. Truth & Honesty: Company Level 146. Truth & Honesty: Counter Staff 147. Truth & Honesty: Dedicated Specialities Staff 148. Truth & Honesty: Offers 149. Reputation at Store/Outlet Level 150. Reputation at Company Level 151. Reputation of Branded Specialities 152. Reputation of Counter Staff 153. Reputation of Dedicated Specialities Staff

Staff Interaction with Customers



154. Verbal Contact: Store/Outlet Level 155. Verbal Contact: Branded Specialities 156. Verbal Contact: Company Level 157. Verbal Contact: Counter Staff 158. Verbal Contact: Dedicated Specialities Staff 159. Written / Internet / Telephone Communications: Store/Outlet Level 160. Written / Internet / Telephone Communications: Branded Fashion 161. Written / Internet / Telephone Communications: Company Level 162. Written / Internet / Telephone Communications: Counter Staff 163. Written / Internet / Telephone Communications: Dedicated Fashion Staff 164. Written / Internet / Telephone Communications: Promotions & Offers 165. Contract Documentation: Store/Outlet Level 166. Contract Documentation: Company Level 167. Counter Staff Customer Handling: Store/Outlet Level 168. Counter Staff Customer Handling: Branded Specialities 169. Counter Staff Customer Handling: Company Level 170. Counter Staff Customer Handling: Counter Staff 171. Counter Staff Customer Handling: Dedicated Specialities Staff 172. Customer Awareness of Product: Store/Outlet Level 173. Customer Awareness of Product: Company Level 174. Customer Comprehension of Product: Store/Outlet Level 175. Customer Comprehension of Product: Company Level 176. Customer Confidence at Store/Outlet Level 177. Customer Confidence at Company Level 178. Customer Confidence in Branded Specialities 179. Customer Confidence in Company Advertising 180. Customer Confidence in Company Offers & Promotions 181. Customer Confidence in Counter Staff 182. Customer Confidence in Dedicated Specialities Staff 183. Customer Confidence in Product: Store/Outlet Level 184. Customer Confidence in Product: Company Level 185. Customer Handling: Store/Outlet Level 186. Customer Handling: Branded Specialities 187. Customer Handling: Company Level 188. Customer Handling: Counter Staff 189. Customer Handling: Dedicated Specialities Staff 190. Customer Problem Solving: Store/Outlet Level 191. Customer Problem Solving: Branded Specialities 192. Customer Problem Solving: Company Level


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193. Customer Problem Solving: Counter Staff 194. Customer Problem Solving: Dedicated Specialities Staff 195. Customer Service: Store/Outlet Level 196. Customer Service: Branded Specialities 197. Customer Service: Company Level 198. Customer Service: Counter Staff 199. Customer Service: Dedicated Specialities Staff 200. Customer Service: Offers & Promotions

Customer Complaint Handling



201. Customer Complaint Handling: Store/Outlet Level 202. Customer Complaint Handling: Branded Specialities 203. Customer Complaint Handling: Company Level 204. Customer Complaint Handling: Counter Staff 205. Customer Complaint Handling: Dedicated Specialities Staff

Product Returns & Refund Policy



206. Satisfaction with Existing Retailer’s Returns Policy 207. Satisfaction with Existing Retailer’s Refund Policy


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Part I : Selling Strategies

This data is available on a Corporate basis for Abercrombie & Fitch

Stores

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_I

The following parameters are examined by Expert Appraisal:

1. Brand Management 2. Product Management 3. Marketing & Selling Activity 4. Store Presentation & Merchandising 5. Product Offering Specifications & Characteristics 6. Product Quality Control 7. Retail Developments 8. Customer Handling 9. Product Sourcing & Control 10. Financial Controls 11. Staff Training / Control & Relations 12. Product Throughput Capacity & Control 13. Supply System Control & Development 14. Distribution Control 15. Product Handling Systems & IT

Online Selling Globalisation and technology is at the heart of future growth. Retail is increasingly a global business, bringing about changes in consumer wealth distribution and the manner in which their demands are met. A middle class with disposable incomes is now to be found in many developing countries and this has altered the landscape of retail distribution, with the need to service both domestic as well as overseas consumers.

As input materials prices, wages and transportation costs fluctuate, and as currency rates shift around the world, there is a dynamic within the retail supply chain in relation to where goods are manufactured, how they are distributed, and how they are shipped to their final consumers. Retailers increasingly have to turn their focus away from domestic consumption, and to the complexity of cross-border sales, made even more complex due to different platforms of selling internationally to more sophisticated global consumers.

Over 25% of online shoppers around the world (mainly the younger demographics in the developing countries) made their first online purchase within the two years. Furthermore consumers in the rapidly developing economies are shopping online nearly four times as often as those in the post-industrial developed countries. Social media also allows people to research or follow specific retailers or brands without limits on borders. Each of these trends, as they continue to evolve globally, creates both direct and indirect impacts on how bricks-and-mortar stores are perceived in different countries.

Each year some 50 million consumers in the Asia-Pacific region will join the ranks of online consumers. By 2020 these new consumers will be spending an amount equivalent to that spent by consumers in developed countries now. E-commerce sales growth in the Asia-Pacific countries is increasing at greater annual rates than those in developed countries. The reason for this is not only the nature of the consumer demographics in these countries, but also the deficiencies in the nature and distribution of traditional retailers.

As e-commerce and mobile commerce and supporting infrastructure accelerates around the world, it is encouraging new distribution channels in developing markets. Multinational retailers can test the


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water by opening an online store in untested overseas markets before committing to a physical presence which involves considerably greater capital investment.

Multi-channel access to existing and potential customers (from bricks-and-mortar to catalogues to online and mobile) is an important consideration when making a market entry, and establishing a presence separate from physical outlets is a useful and relatively risk-free strategy given that local companies are already likely to control the prime retail sites.

The consumer’s retail store expectations and perception in new markets must be well deliberated and planned, however new stores in new markets can operate as flagship locations, primarily in high traffic and high impact destinations, and also take on the role of directly ‘show casing’ the retailer's product offerings. Such flagship locations can then act as a template for future expansion and examples to franchisees and joint-ventures.

It is essential for multinational retailers to fully understand consumers in different markets, and their different expectations, preferences and needs. Then use this knowledge to produce market plans for multi-channel sales execution. Consumers in all locations want the same thing, a simple, seamless, trouble-free purchasing experience. This might lead to increasing levels of complexity for retailers; however such complexities are easily solved by technological solutions.

Whilst technology may expand commerce in developing markets, logistics infrastructure may not adequately enable retailers to keep the pace with demands and this might result in a reduction in the consumer purchasing experience. The inability of domestic logistics service providers to fulfil high volumes of customer parcel shipping at low costs and within a reasonable delivery timeframe dramatically impacts the direct-to-customer channel in many areas. Therefore, retailers have to establish their own distribution networks or rely on outsourced express shippers in order to achieve fulfilment efficiencies.

Various impacting factors in transnational retailing include rising transportation and energy costs, fluctuations in currency values, the shipment modes, pricing and timing, and so forth. These factors require retailers to adapt the way their goods are transported from source supplier to final sales destinations.

Retail trade buyers who are unable to use sea transport due to lengthy shipping times are turning to supply sources geographically closer. In addition as transport costs rise in addition to labour rates in Asia there is ever more need to find alternatives to supply sources. Reasonable priced and more quickly delivered domestic supply sources are increasingly more important for many retailers. Indeed, with production closer to demand, retailers can more easily interact with product designers and suppliers and thereby respond immediately to trends and changes in buying patterns.

As consumers around the world increase their reach and capacity to spend, fulfilling their demand for retail products and brands is becoming very complex. As information technology and communications becomes widespread around the world, from developed economies to emerging and developing markets, retailers encounter new challenges as well as the ability to profit from new opportunities. Finding and using the right channels, methodologies and business models will be essential in tapping this potential.

Multi-channel retailing has opened up new markets; both in developed and developing countries, and online sales are growing strong both in developed and developing countries. However, supply chain disruptions will undoubtedly occur and therefore retailers must pre-plan and add diversification to their business model to mitigate these risks as much as possible. Online Selling Performance:


The following parameters are examined by Expert Appraisal:

16. Brand Management 17. Product Management 18. Marketing & Selling Activity 19. Product Offering Specifications & Characteristics 20. Product Quality Control 21. Online Developments


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22. Customer Handling 23. Product Sourcing & Control 24. Financial Controls 25. Product Throughput Capacity & Control 26. Supply System Control & Development 27. Distribution Control 28. Product Handling Systems & IT 29. Delivery Promptness 30. Complete Delivery

Web Presence Retail website, product and satisfaction survey:

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_I

31. How often do you visit the company’s site? a. Every day b. Several times a week c. Several times a month d. About once a month e. Less than once a month f. Never visited

32. How did you get to the company’s site?

g. I knew the site name h. Search engine i. Guessed the address j. Saw on TV, heard on radio k. Newspaper or magazine advertisement l. Friend told me m. Internet advertisement n. Link from another page

33. How often do you use the web to find product information?

o. Everyday p. Several times a week q. About once a week r. Several times a month

34. Did you find what you were looking for on the company’s site?

s. Yes, I found exactly what I was looking for t. Yes, but not the brand/size/colour/ etc. u. I found a related product but not what I wanted v. No, I didn't find what I was looking for

35. If you did not find exactly what you wanted, explain where you found it.

36. Do you have one or two specific suggestions about how we should add to or improve the site?


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Website Design


General Website Evaluation of the retailer:

37. Did the menu of items on the home page make sense to you?

38. If no, what would you like to see changed?

39. Did you experience any problems downloading files?

40. Approximately how many pages did you browse during this visit?

41. How satisfied are you with your experience with the web site?

42. If you are not totally satisfied, describe the reasons for your dissatisfaction below?

43. What additional information or features would you like included on the web site?

44. How frequently do you visit the company’s website? a. Once only b. Daily c. Weekly d. Monthly e. Infrequently (less than once a month)

45. What prompted your visit on the last occasion?

f. Doing research for work g. Doing research for school h. Recommendation of friend/associate i. Just curious j. Found the site while surfing k. Wanted to download files l. Looking for update on earlier information m. Professional development n. Linked from other site o. Other

46. How would you rate yourself as an Internet user?

p. Expert q. Good r. Beginner


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Website Information Quality Quality and completeness of web site documentation and information:


47. Were you able to find suitable answers to your questions while browsing the website?

48. How much time did it take to find your answer? a. A lot less than I expected b. Less than I expected c. About what I expected d. More than I expected e. A lot more than I expected

49. Based on your experience, how would you rate the quality of the company’s website?

f. Very high quality g. High quality h. Average i. Below average j. Unacceptable

50. Tell us what can be done to improve the quality of the information on the company’s website?

Website Customer Evaluation Company Website visit history, success in finding products searching for, and satisfaction.


51. How often do you visit the company’s site? a. Every Day b. Several Times a Week c. Several Times a Month d. About Once a Month e. Less than Once a Month f. I have never visited the site

52. How did you get to the company’s site?

a. I knew the site Name b. Search Engine c. Guessed the Address d. Saw on TV, Heard on Radio e. Newspaper or Magazine advertisement f. Friend Told Me g. Internet advertisement h. Link from another Page

53. How often do you use the web to find product information?

a. Everyday b. Several Times a Week c. About Once a Week d. Several Times a Month


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54. Did you find what you were looking for on the company’s site?

a. Yes, I found exactly what I was looking for b. Yes, but not the Brand / Size / Colour / Etc. c. I found a related product, but not what I wanted d. No, I didn't find what I was looking for e. Other

55. If you did not find exactly what you wanted, explain what you were looking for.

56. How likely are you to recommend and revisit the company’s site?

a. Very Likely b. Likely c. Unsure d. Unlikely e. Extremely Unlikely f. Other

57. Do you have a suggestion or recommendation to improve the company’s site?

58. How likely are you to return to the company’s Web site?

59. How likely are you to recommend the company’s Web site?

60. What features had influenced your decision to continue using the website?

61. What is it about the site that you would most like to see improved?

62. What changes or additional features would you suggest for the website?

63. In a typical week, how many hours do you spend visiting this website? a. 0 to 1 b. 1 to 2 c. 2 to 4 d. 4 to 10 e. More than 10

64. How did you first hear about this site? a. Search engine b. Another web site c. Newspaper/magazine article d. Friend or business associate e. Advertisement f. Don't know/don't remember g. Other


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Website Visitor Follow-up Demographics, how did the visitor find the site, what are they look for, hobbies, access, suggestions.


65. How did you find out about the company’s site? a. Followed link from another web page b. Followed a graphical banner/icon from another web page c. Found by using a search engine d. Saw postings to www-related news groups e. Received e-mail from mailing list f. Was told URL by friend g. Read about it in newspaper/magazine h. Don't remember or Other

66. What is your age?

a. under 13 b. 13-17 c. 18-34 d. 35-49 e. 50-64 f. 65 or older

67. How many hours per day are you on-line?

a. 0-1 b. 1-2 c. 2-3 d. 3-4 e. 4-5 f. More than 5

68. What do you enjoy doing in your spare time?

a. Theatre or cinema b. Hunting c. Sports d. Reading e. Video / Computer Games f. Movies g. Fishing h. Arts and Crafts i. Automobiles j. Trivia k. Restaurants l. Gardening m. Cooking n. Computers o. Other

69. What do you use the internet for?

a. Information Gathering b. Academic Research c. Shopping d. Games e. News f. Sports News g. Real Estate h. E-mail i. Job Hunting j. Classifieds k. Stock Market


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l. Other

70. From where do you most often access the Internet? a. Home b. School c. Office d. Leisure site or Other

71. If you have, or plan to purchase goods on the Internet, what kinds of goods would you be

most interested in? a. Food b. Clothing c. Household goods & articles d. Electricals & Electronic products e. Computers or peripherals f. Software g. CDs/DVDs h. Flowers i. Concert tickets j. Travel k. Fast food l. Books or magazines m. Services n. Financial & Insurance product

Website Feedback Website feedback and respondent Internet usage:


72. Rate the company’s web pages for the following aspects: a. Homepage b. Customer Support information c. Product information d. Contact information e. Downloads

73. What were your reasons for your last visit to the company’s site?

a. Product information b. Customer Support information c. Competitive information

How likely are you to?

74. Revisit this site on a regular basis

75. Recommend the company’s site

76. Where did you hear about the company’s website? a. Online or link from another web site b. Online news service c. Newspaper or magazine d. Friend e. Search engine f. E-mail advertisement

77. How often do you visit the company’s site?

a. Every day b. Several times a week


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c. About once a week d. Several times a month e. About once a month f. Less than once a month g. Never visited

78. When browsing the company’s site, how long do you typically spend here?

79. How frequently do you surf the web?

a. Every day b. Several times a week c. About once a week d. Several times a month e. About once a month f. Less than once a month g. Not sure (don't keep track)

80. In a typical week, how many hours do you spend surfing?

81. What do you regularly use the web for?

a. News b. Work research c. Personal research d. Investments e. Shopping f. Auctions g. E-mail h. Chat/communities i. Web-based address book/calendaring j. Banking

82. How often have you used the web to gather product information?

a. Every day b. Several times a week c. About once a week d. Several times a month e. About once a month f. Less than once a month g. This is my first time

83. When do you plan to purchase a product via the internet?

a. Immediately b. Within the next week c. Within about a month d. Within 3 months e. Within 6 months f. Within a year g. More than a year h. Not sure

84. What is your primary use of the product(s) / service(s)?

a. For work b. For home c. For school


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Web Demographics


85. How did you find about the company’s site? a. Followed a text link from another web page b. Followed a graphical banner/icon from another web page c. Found using a search engine d. Saw posting on a newsgroup e. Guessed the URL address f. Was told URL by friend g. Read about it in a newspaper/magazine h. Remembered to participate from last survey i. Don't remember

86. How long have you been using the Internet (including using e-mail, gopher, ftp, etc.)?

a. Less than 6 months b. 6 to 12 months c. 1 to 3 years d. 4 to 6 years e. 7 years or more

87. What is your primary language (i.e., the one you speak most of the time)?

88. This is a sensitive question that can help Internet developers to understand the needs of

current web users - it is not intended to offend. a. Are you disabled or impaired? b. Rather not say c. Vision impaired d. Hearing impaired e. Motor impaired f. Cognitively impaired g. Not impaired

89. How frequently do you access the internet from the following places?

a. Home b. Work c. School d. Leisure location e. Other

90. Who pays for your Internet access?

a. Self/spouse b. Parents c. Work d. School e. Don't know f. Other


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Internet Shopper Study benchmarking internet use and shopper profiles and behaviour:


91. Did you personally make, influence, or participate in any purchases on the Internet during the past 3 months?

92. About how much in total did you spend on those purchases:

93. About how much of this was spent on gifts for others:

94. What types of products did you purchase on the Internet? a. Groceries b. Software c. Books or magazines d. Computer hardware e. Music, CDs, recordings f. DVDs g. Home Electronics h. Travel (airlines, car rentals, hotels) i. Clothing j. Flowers k. Tickets (concert, movies, etc.) l. Services (insurance, legal) m. Other items n. Other services

95. About how much did you & all other people in your household spend for gift-giving during this past 3 months?

96. Overall gift purchases, in total:

97. About how much of that was spent on: a. Purchases at local retail stores: b. Purchases through mail-order catalogues: c. Purchases on the Internet:

98. About how many hours per week is a computer in your home usually used on-line for e-mail or the Internet?

99. How many hours per week is spent on your home computer: a. personally on-line for e-mail or Internet access b. personally for purposes other than on-line access c. by someone else on-line for e-mail or Internet access d. by someone else for purposes other than on-line access

100. Think about your own personal use of a computer in your home just during the last 3 months. About how often did you use it for each of the following activities?

i. Daily ii. 2-3 times a week iii. Once a week iv. 2-3 times a month v. Once a month vi. Under once a month vii. Not at all

a. Check or send e-mail messages b. Look at financial information (stocks, trends) c. Read on-line news or magazines d. Conduct business-related work e. Visit Internet sites related to my hobbies f. Visit auction sites g. Visit other retail sites looking for merchandise


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h. Visit sites looking for tickets or reservations i. Play games j. Look for job opportunities k. Find & view photographs, clipart, or images l. Search for or download software m. Chat on-line n. Visit message news-groups

Below are some statements of people’s attitudes toward the Internet.

“Which best indicates how well the statement describes you personally. “

“Even if you don’t use the Internet, from what you may have heard about it, which best reflects your impressions. “

How well does the statement describe you?

101. I think on-line buying is (or would be) a novel, fun way to shop.

102. I like the help & friendliness I can get at local stores.

103. For me, shopping in stores is a hassle.

104. I think Internet shopping would avoid the hassle of local shopping.

105. Local stores have better prices & promotions than Internet stores.

106. I’d have a hard time searching the Internet to find what I need.

107. I don’t think Internet stores carry things I want.

108. I dislike the delivery problems & backorders of Internet buying.

109. I find the Internet ordering process is hard to understand & use.


110. I don't want to give out my credit card number to a computer.

111. I think Internet shopping offers better quality than local stores.

112. I don't know much about using the Internet.

113. I often go to the Internet to preview products.

114. I would like not having to leave home when shopping.

115. I like it that no car is necessary when shopping on the Internet.

116. I often go to the Internet for product reviews or recommendations.

117. I like having products delivered to me at home.

118. I want to see things in person before I buy.


119. I think Internet shopping offers better selection than local stores.

120. I don’t like having to wait for products to arrive in the mail.

121. None of my friends shop on the Internet.

122. I would shop on the Internet (more) if the prices were lower.

123. I dislike the idea of shipping charges when buying on the Internet.


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124. I often buy using lay-away or store payment programs.

125. I think local stores have better service policies than Internet stores.

126. I always search for the lowest price in just about everything I buy.

127. I worry about my credit card number being stolen on the Internet.


128. I want my purchases to be absolutely private.

129. Buying things on the Internet scares me.

130. I often return items I have purchased.

131. It would be a real hassle to return merchandise bought on-line.

132. I think the Internet offers lower prices than local stores.

133. It’s hard to judge the quality of merchandise on the Internet.

134. I like the ‘energy’ & fun of shopping at local retail stores.

135. I enjoy buying things on the Internet.

136. I like browsing on the Internet.

137. I like to go shopping with my friends.

138. I just don’t trust Internet retailers.


139. When it comes to promoting causes, I am a doer & not just a talker. I use the Internet to actively support causes that make people or communities better.

140. I hate repetition & I don’t want the same old thing. I am excited by a million web pages to explore.

141. In today’s competitive world, you make dust or eat dust. I use the Internet to make me more competitive.

142. I want my family to run smoothly & I use the Internet to make me & those I love more productive & successful.

143. Internet games unlock my imagination & help me to meet interesting people & do neat stuff.

144. Hobbies are a very important part of my life. I use the Internet to expand my world of fascinating hobbies, interests, & activities.

145. I am fascinated by art, culture, & knowledge from around the world. I use the Internet to explore art & culture.

146. I consider myself an expert on the computer. When people have questions about the Internet, I always have the answer.

147. I have lots of friends & stay close to my family. I spend a lot of time on the Internet writing family & friends with e-mail.

148. On-the-job productivity is the key concern for me. I use the Internet to help me get more done with the time & energy I have to spend on work-related activities.

149. I use the Internet to meet interesting people. I watch chat rooms & participate with people on topics I find interesting.

150. I love using the Internet to shop. It’s fun & easy.


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151. For some people the following things are hard; but not for others. Tell us which are hard for you:

a. Sending or reading email messages b. Using word-processing programs c. Installing computer software d. Configuring computer drivers e. Fixing a system (e.g., Windows) problem f. Installing an operating system (e.g., Windows) g. Browsing the Internet h. Using an Internet search engine i. Making a purchase on the Internet j. Finding the best price on the Internet k. Using an Internet shopping App l. Finding Internet-retailer ratings


152. It is important to me to be treated well

153. I like the ‘royal treatment’ in stores

154. I have somewhat old-fashioned tastes and habits

155. I like my clothes to look up to date

156. I never have enough time to shop

157. I think I am a little bit wild

158. I think shopping is fun

159. I often buy things on impulse

160. I have lots of leisure time


161. I expect to have more money next year

162. My world seems to be coming apart at the seams

163. I think I am a smart shopper

164. I like to be outrageous

165. I feel I get a raw deal out of life

166. I think a woman's place is in the home

167. I prefer stores where prices are always low

168. I never seem to have enough money

169. I regularly read the newspaper

170. I have more money now than last year

171. When I shop, I just want to get it over with


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Online Purchases


172. How many online purchases have you made in the last month?

a. None

b. 1-4

c. 5-10

d. 11-15

e. 16+

173. For whom do you primarily shop for online?

a. Yourself

b. Family members

c. Friends

d. Business

e. Other

174. What is your most important consideration when shopping online?

a. Product selection

b. Competitive prices

c. Convenience

d. Promotions

e. Ease of use

f. Security

g. Other

175. When you purchase online, you purchase for:

a. Holidays

b. Birthdays

c. Special Events

d. Personal Interests

e. Travel

f. Business

g. Other

176. What are the top two Product or Special Interest Group sites you visit?

177. Before starting this survey, how familiar were you with the company’s website?

a. Not familiar

b. Heard of website

c. Visited website

d. Made purchases

178. How did you hear about the company’s website?

a. Did not hear about it

b. In store advertising

c. Friend or family

d. Advertising

e. Referred by another website

f. Other


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179. How many times did you visit the company’s website over the last month?

a. Never

b. 1-3

c. 4-6

d. 7-10

e. 11+

f. Don't remember

180. How beneficial is the idea of the company’s website to you?

a. Not beneficial

b. Somewhat beneficial

c. Beneficial

d. Very beneficial

181. Which item would you be interested in purchasing from the company’s website?

182. Given the item you have specified, now how beneficial might the website be to you?

a. Not beneficial

b. Somewhat beneficial

c. Beneficial

d. Very beneficial

183. If you were buying a GIFT, which items on the company’s website would you consider?

184. How many purchases have you made at the company’s website over the last year?

a. None

b. 1-3

c. 4-6

d. 7-10

e. Don't remember

185. How would you describe your experience visiting the company’s website?

a. Never visited site

b. Poor

c. Mediocre

d. Neutral

e. Good

f. Excellent

186. Do you have any comments or suggestions for the website?

187. How satisfied are you with the product(s) purchased?

a. Overall quality

b. Value

c. Purchase experience

d. First use experience

e. Usage experience

f. After purchase service (warranty, repair, help desk)


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188. How long have you used the product(s)?

a. Less than 1 month

b. 1 to 6 months

c. 6 months to 1 year

d. 1 to 2 years

e. 2 years or more

f. Never used

189. How often do you use the product(s)?

a. Once a week or more often

b. 2 to 3 times a month

c. Once a month

d. Every 2-3 months

e. 2-3 times a year

f. Once a year or less often

g. Do not use

190. Overall, how satisfied are you with the product(s)?

a. Very Unsatisfied

b. Unsatisfied

c. Somewhat Satisfied

d. Very Satisfied

e. Extremely Satisfied

191. Compared to other product(s) in this category that are available, would you say that

the product(s) is:

a. Much better

b. Somewhat better

c. About the same

d. Somewhat worse

e. Much worse

f. Don't know or never used

192. Will you use/purchase the product(s) again?

a. Definitely will

b. Probably will

c. Might or might not

d. Probably will not

e. Definitely will not

f. Never used

193. How likely are you to recommend the product(s) to others?

a. Definitely will recommend

b. Probably will recommend

c. Not sure

d. Probably will not recommend

e. Definitely will not recommend

f. Never Used


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194. Based on your experience with the product(s), how likely are you to again buy a

Company Product?

a. Very Unlikely

b. Unlikely

c. Somewhat Unlikely

d. Very Likely

e. Extremely Likely

195. If you have contacted customer service, were all problems resolved to your complete

satisfaction?

a. Yes, by the company or its representatives

b. Yes, by me or someone outside the company

c. No, the problem was not resolved

d. No problems / No contact with customer service

Multi-channel Retail Distribution As technological and communications devices become more commonplace, consumers have been able to adapt how they shop, how they make purchasing decisions and what they expect and demand from retailers. Differentiation between purchasing channels, from mobile, to online, to retail store, is quickly disappearing. Coupled and complementary with this phenomenon are the innovations being made within the logistics and distribution industry, which are providing important solutions for suppliers and retailers to bring products to consumers across the world.

Consumers have at their disposal substantial product and pricing information and competitive offerings are only a few clicks away. When consumers shop online they expect their orders to be processed immediately and shipped to their home within a few days. Retailers tend to believe that when consumers are in the store they can easily check for a lower price, however the research shows that consumer are more confident in finding lower pries online.

Where retailers with physical stores can out-perform online sales is in the provision of a buying or store experience and in the provision of purchasing gratification and other emotional needs.

Consumers now find themselves with a ‘perfect market’ as they have more information on prices and sources of supply; thus they have become more demanding. Albeit in gathering this information, and making electronic based purchases, they also willing reveal a huge amount of information about themselves and their purchasing habits. Retailers are increasingly harnessing this information to convert more sales and to efficiently move product within their supply chains, especially as consumer behaviour continues to develop and evolve along with technology. The tactics and strategies employed by online and traditional retailers alike are changing the way goods are moved, stored and sold; and indeed they are changing the way retailers choose and use physical sites from distribution centres to retail stores.

The advent of e-commerce has entirely changed the retail trade. Technological has led to an increase in information availability, and use of this data has given consumers the ability to shop regardless of either their location or the location of the retailer. The result is that the retailer must be everywhere: on the consumer’s smartphone, at their home and office and at the traditional retail site. The economic downturn, the destruction of much private wealth and disposable income, the restriction of credit availability, and the pressure on household budgets have influenced consumer buying trends in terms of what consumers buy, how much they are willing to pay, and from where they will source their purchases. Consumers are not indifferent about how they make purchases. By contract, retailers must find ways to meet consumer demand regardless of the sales channel, while also providing a level of experience, customised product delivery and overall satisfaction to support continued sales.

This new retail landscape and consumer demands require retailers to re-think and revise their strategies. This pattern is being repeated, with greater force and urgency, in the developing countries and consumer behaviours and demands are converging across the world.


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The retail environment has gone from single channel (retail sites or online) to multi-channel or omni-channel. All retailers now have to consider a multi-channel approach to the market.



196. Order online for home delivery

197. Order online and pick up in store

198. Visit the store and order online via a kiosk

199. Visit the store and shop the retailer’s website via their mobile phones

200. Visit the store and shop on another retailer’s website

201. Visit the store, compare prices, and find the product at another physical store at a lower price

Consumers perceive few boundaries in their shopping behaviours and retailers need to find efficient and effective ways to manage the intricate logistics involved in serving consumers.

Whether retailers fully appreciate these changes in the retail distribution world is debatable and one must analyse the technological developments and the implications for order fulfilment.


202. Growth in e-commerce and its influence on the movement, storage and sale of merchandise from production through consumer

203. The impact of technology on the supply chain and consumer behaviour

204. The increasing pace of trend cycles and inventory management which affect all parts of the retail supply chain

205. The changing nature of retail in a global shopping environment

Stand-off Online Sites Stand-off online sites are those used by retailers to liquidate or dump obsolete or remaindered stock. These are usually sites which are not identified as being connected with the retailer’s main brand and thereby they do not impact on or contaminate the retailer’s main stream offerings.

Stand-off sites can also include shops on EBay, Amazon, and other third party sites.

Retailers should incorporate sales on such sites with their existing inventory control and order fulfilment.


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Events & Promotions Most successful retailers organise Events and Promotions at least six times per year because this reminds customers to come back to the store. By keeping customers interested, and getting them excited about shopping at the store, more customers visit more often.


206. Sales goals should be set for each promotion and a bonus reward should be offered to each salesperson that reaches their goals.

207. Effective planning to have enough staff on hand to make the events run effectively.

208. Sufficient or additional inventory. Special items and assortments.

209. Evaluating the best promotional days and months. Selection of days and months that you drive the most traffic to the store.

210. Detailed planning of the event and systemisation of the process.

211. Effective planning of advertising and direct mail.

212. Press release effectiveness.

213. Event ‘Hook’ that draws the attention of potential visitors quickly before the direct mail is lost.

214. Creating an excitement that it triggers a ‘Fear of Loss’ in the customer’s mind.

215. Effective Event or Promotion Theme different to competitors.

216. Social Media to generate word of mouth advertising.

Loyalty Schemes Customer loyalty schemes are an effective way to improve your customer-retention levels. The high cost of bringing in new business compared to retaining existing clients is undisputed, thus increasing customer retention can significantly boost bottom-line profits. Notwithstanding, many companies are missing a trick when it comes to building customer loyalty.

In a competitive marketplace where customers find it easy to switch supplier, loyalty schemes are an effective way to increase customer retention and improve profitability. To build a loyal clientele, keeping the customer satisfied with one’s day-to-day operations is not always enough. The fact that customers are satisfied does not stop them from taking their business to a competitor who offers them something extra.

To increase loyalty, one needs to recognise and reward the best customers. A loyalty scheme can be used to incentivise and delight the most valued customers. That in turn can increase profitability.

Loyalty initiatives allow one to focus on the best customers and improve customer satisfaction levels. Loyal customers buy more and are often willing to pay more, which boosts cashflow. By increasing loyalty, one can increase profitability and extend the time they place their business with the company.

Loyal customers are also good for business because the customer become the best advocates of the company. They recommend the company to others, saving marketing costs. A loyal customer's endorsement is more powerful to their friends and family than any advertising campaign.

Customers like loyalty schemes because they feel they are getting rewarded for giving the company their business. Thus the scheme needs to offer customers something they will appreciate. However, it should also be devised with profit in mind.

The company is trying to reward customers for behaving in the way that it wants.

The rewards offered to regular customers can vary from fixed discounts to extra goods or prizes. Foremost, the scheme should be simple to use and the rewards should be attractive and attainable. If


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customers have to spend a lot to get a small gift, they will be insulted. At the same time, the company must make sure it can recover the cost reasonably quickly.

The data generated by a loyalty scheme can also be used to improve business. Loyalty programmes put the spotlight on customer behaviour. They can show the best clients - and highlight the worst.

It can be more profitable to lose bad customers than to gain new ones. While the best customers may be bringing in the lion's share of profit, the worst customers, the bargain-hunters that spend little and only buy discounted goods, can actually cost money. The loyalty scheme can significantly improve this scenario by rewarding customers and actively dissuading the worst.

Loyalty schemes can also be used to win back lapsed customers. These customers are much easier to win over than cold prospects. They know the company and the company knows them, their buying history and where and how to reach them.

The data generated by a loyalty scheme can offer other valuable insights. It can highlight defection patterns and can also help the company improve your product range and stock selection. Knowing what the best customers frequently buy helps one choose which lines to stock - and which lines to expand.

Social Media Social media in a retail context is the action of Peer pressure to create sales.

As social media had evolved, so has how consumers make purchase decisions, particularly the younger and more suggestible demographics.

The constant interconnectedness of social media sites, coupled on mobile devices have snowballed the effects of peer opinion on purchases. “Crowd Sourcing”, meaning the tapping of the collective awareness of one’s peer group, or a section of the audience, is a growing trend.

Over 50% of this younger demographic is likely to explore brands via a social network, versus less that 27% of older demographics.

Over 50% of this younger demographic versus less that 20% of older demographics use mobile devices to access user opinion before buying a product.

The growth of photo-sharing and similar websites that allows users to create and share products and ideas go viral faster than before. Over 30% of online shoppers have made a purchase based on what they saw on such sites. Retailers are increasingly using these sites for marketing promotions.

Caution should however be exercised before large marketing investments are made in this area. As with all trendy and fashion driven activities, especially those concerning the younger demographics, the shelf life of these market efforts are limited and unpredictable. There are already signs of user fatigue with social media sites and user growth in these activities will become unsustainable in the future. When that happens, the use of these promotional venues by retailers will become counter-productive.


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Part J : Pricing & Price Points


Pricing Study This survey is about the Company’s brand(s) / product(s) / service(s) as described to respondents individually and as a basket of products.

The baseline for this survey is the 15 major Product Lines of the Company. A more comprehensive, with individual products and more product groups is available on request.

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_J

1. How would you best describe your familiarity with the Company’s brand(s) / product(s) / service(s)?

a. I was not aware of the brand / product / service b. Only generally aware c. Have investigated or researched such products d. Have demonstrated a product like this e. Have purchased or regularly use a product like this

2. About how many units of these products would you buy over the next year at each price point listed below (FMV Fair Market Value)?

a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. FMV = Estimated Fair Market Value = Recommended Retail Price f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

3. About what price would you expect to pay for these products / services?

4. At what price would these products begin to look inexpensive or cheap?

a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%


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5. At what price would these products begin to look Good Value? a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

6. At what price would these products begin to look too expensive?


7. At what price would these products begin to look so expensive that you would never consider

buying them? a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

8. If you knew that the average price of similar brand / product / service was [Price], would you

expect to pay more or less to buy the described brand / product / service? a. (20-30%) more b. (5-10%) more c. No more, no less d. (5-10%) less e. (20-30%) less

9. If you are a current user of a similar brand / product / service, how long have you used the

brand / product / service? a. Under 1 month b. 1-6 months c. 6 months to 1 year d. 1-2 years e. 3 years or more f. Do not currently use

10. How often could you find a use for the described brand / product / service?

a. Once a week or more often b. 2-3 times a month c. Once a month d. Every 2-3 months e. 2-3 times a year f. Once a year g. Would not use


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11. Based on the description, how interested would you be in buying the described brand / product / service; if priced within your budget?

a. Not at all interested b. Not very interested c. Not sure d. Somewhat interested e. Very interested

12. What is it that you like most about the described brand / product / service?

13. What do you like least about the described brand / product / service?

14. Which of the following best describes your need for the described brand / product / service? a. I really need this product because nothing else can solve this problem. b. This is a minor improvement over what I currently use. c. Looks okay but is about the same as what I'm using now. d. My current product would serve me better. e. I am not at all interested in this product.

Pricing Strategies

Price Discounting

Many retailers reacted very quickly to the financial crisis by discounting prices across the board without fully understanding the impact on demand or profitability. This has had a dramatic effect in many retail sectors where recession-driven discounting has fundamentally eroded both the value of the market, and the value proposition of the product sold. Consumers’ price expectations are lower and buying behaviour has changed.

Unsustainable Pricing

Whilst retailers know that current price levels are not sustainable, they also recognise that downturn discounting has re-set the price baseline for consumers, who are now unwilling to pay more. This problem is compounded by inflation and rising input costs, causing retailers to be squeezed from both sides.

Customers Segments

Retailers cannot identify their most profitable customers segments, and do not have the information available to understand the impact of price changes on demand patterns. Recession-driven discounting has attracted and retained less profitable customers and this has serious implications for the go-to-market strategy.


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Strategies

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_J

15. Pricing strategy as a Boardroom decision

16. Align pricing to the overall business strategy, and the new market dynamics

17. Obtain accurate customer, competitor and market information

18. Drive consistent execution

19. Prepare for future challenges

Price Discounting When demand fell in the wake of the financial crisis, retailers were driven by the need to maintain sales volumes and protect market share, therefore critical pricing decisions were taken in a hurry and many retailers resorted to price reductions across their product and service portfolios.

55% of companies reduced prices across the board

65% of business leaders fear recession-driven discounting has hit profits

50% conducted price wars with competitors

Retailers were forced to make reactive pricing decisions without adequate information and many companies felt compelled to competing on price.

50% of retailers entered into price wars with competitors.

55% of retailers reduced prices which resulted in reduced margins.


20. When survival is the key driver, dropping price is an understandable response as volumes fall.

21. Discounting products or services which are price elastic result in an increase in sales volumes.

22. Clear understanding of the trade-off between volumes and margin.

23. Impact of price changes on demand, and the impact on profitability.

24. Understanding of the customer base and the price elasticity of various customer segments.

25. Discounts are often driven not by an informed understanding of market dynamics but by sales personnel and their incentives.

26. Store success is frequently measured by sales volume, rather than the profitability of the revenue.

27. Retailers needed to look at their pricing processes and controls to ensure their pricing strategy was effectively implemented and monitored.

28. Performance metrics should be linked to profit as well as volumes; and appropriate controls, such as target and limit prices, should be embedded into company policies.


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Impact of Unsustainable Pricing

72% of retailers state that their current pricing is not sustainable

66% of retailers state that increasing prices from recession discount levels presents a significant challenge

55% of retailers state that they are unable to pass on cost inflation to customers

Stagnant Prices

65% of retailers state that recession-driven discounting will not be sustainable in the long term.

52% of retailers state that their company’s overall pricing strategy is not sustainable.

Retailers fear that price increases will face stiff market resistance, because customers used to a decade of low inflation, followed by heavy price-cutting, perceive discounts to be the norm. A majority of retailers, 56%, state that customers who enjoyed discounts during recession will be unwilling to pay higher prices in better times.


29. Reactive, recession-driven discounting cannot now be sustainable.

30. Retailers that think customers will pay higher prices in better times are being highly optimistic.

31. Once customers have been educated on a new price point, it is exceptionally difficult to bring that point back up.

32. Unemployment, government cuts, public sector redundancies, increases in taxation, and the economic climate will continue to have a bearing on changing buying habits.

33. Discounted prices are out of kilter with the fixed cost base of many retailers, and aligning the business model and cost base with post-recessionary pricing will be formidable; thus retailers have to re-visit their cost structures and potentially make some radical decisions to ensure they are fit to compete and succeed in the future.

34. To achieve the necessary cost re-structuring, retailers might have to divest part of their business, stop some unprofitable activities, or implement a different sourcing model.

35. What this requires is an in-depth review of markets, business models and pricing strategy.

36. Businesses need to decide exactly which market they are competing in. In retail the lower cost ‘value’ traders which have thrived by attracting increasingly price-conscious consumers are here to stay. Their business model is predicated on ensuring their costs are kept low, to allowing them to make sustainable margins.

37. Alternatively the low volume / premium price market retailers need to understand exactly what their customers value, build a strong brand, and have an exceptional store experience and offering.

38. To exacerbate this price lag effect there is fear of first-mover disadvantage. Over 53% of firms are delaying significant increases in the current climate, and 65% believe they risk losing customers and damaging sales volumes if their organisation is first to remove discounts.

39. The basis of the pricing issue is that retailers are locked into their current prices.


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Inflation

With consumer product prices stagnant, rising commodity and price inflation compounds the problems of retailers. 53% of retailers are experiencing cost inflation, and forecasting further rising costs.

70% of retailers state that they will have problems in passing on rising input costs to their customers; and 53% state categorically that they will be unable to do so.

Profit Margins

Price erosion coupled with cost inflation may be depressing retailer’s profits by 3-12%.

Profitability 40. Retailers are unlikely to recover their profit position in the next 12-36 months.

41. The restoration of pricing levels will take longer that the predictions generally make in the retail trade.

42. Low customer purchasing power is likely to ensure that prices remain depressed for at least 24 months. After this time, retailers will not have the same price / customer / product mix which they enjoyed before the recession.

Customers Base

Lacking critical business intelligence, companies have been pricing their way through recession in the dark. 70% of retailers state that determining a coherent pricing strategy is very difficult, and 60% state that it is extremely difficult to obtain accurate data on the impact of pricing on profitability. 50% believe that recession discounting policies have attracted less profitable customers

60% of retailers state that they do not have accurate data on the impact of pricing on sales performance and profitability.

45% of retailers state that their company lacks the management tools and right information to support informed and effective pricing decisions.

55% of retailers state that identifying the most profitable customers presents is difficult as does identifying the most profitable products or services. Over half of retailers state that they do not understand what customers require and what is the value proposition they seek.

Two thirds of retailers state that they do not have a consistent and coherent pricing strategy.


43. Developing and agreeing a consistent and coherent pricing strategy

44. Identifying what customers value

45. Understanding customer requirements

46. Identifying the most profitable products/services

47. Identifying the most profitable customers

48. Obtaining accurate data to enable visibility of the impact of pricing on profitability

49. Obtaining accurate data to enable visibility of the impact of pricing on sales performance

50. Identifying the most profitable customers, products and services is clearly a more challenging task than most retailers acknowledge.


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51. To understand profitability by customer, retailers need visibility of the true ‘cost to serve’, and how that may change over time.

52. Few retailers have a strong, granular understanding of their costs to serve by customer, product or channel. This limits their ability to accurately analyse the likely impact on profitability of pricing and other changes.

53. Retailers have not come to terms with different sales volumes, changing customer behaviours and the impact of falling prices. These factors do not affect the ‘cost-to-serve’ equation in a linear fashion, and for this reason retailers are finding it difficult to understand which product offerings and which market segments are actually generating a profit.

Differential Value


54. Retailers know that in striving to maintain sales volumes, they have been operating in markets they might not have chosen to play in. 50% of retailers state that they believe that discounting policies have attracted and retained less profitable customers during the recession.

55. Retailers will produce a tiered pricing structure for different customer segments in the future.

56. Retailers will not be able to focus discounts on their most profitable or highest-spending customers segments in the future.

57. Retailers face risks in shifting customer demographic focus.

58. Business plans, growth projections and investments are all made on the basis of an accepted customer demographic, and buying habits.

59. Known customers demographic have known spending patterns and spending power.

60. Retailers who offered discount promotions during the recession need to be careful of how this may have affected the customer base as they have educated their customers to a price point and a level of value that they might not be able to maintain.

61. Retailers may not have the ability to spot such a shift, as internal reporting systems are often too slow to recognise this until it is too late.

62. Many retailers do not know which customers and product lines drive profit.

63. Underlying retailer transactional systems fail to provide the information to accurately calculate costs to serve.

64. It is often impossible to determine profitability by customer, product or channel.

65. Business intelligence is critical to provide the insight to identify where value is really generated in an organisation.

66. Retailers need to invest in information gathering; however there is often reluctance to undertake this because heavy investment in ERP (Enterprising Planning) systems has often failed to realise the anticipated benefits.

67. The omission of a business intelligence input has meant an inability to capitalise on the data and business insight ERP can provide.

68. More efficient and accurate cost allocation provides an understanding of true profitability by customer, product and channel. Retailers can then focus on retaining and growing the accounts of their most profitable customers and shedding unprofitable product lines.


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Future Strategies Retailers understand the need to re-align pricing and are keen to introduce premium priced products or variable pricing, however there is not a great deal of confidence in being able to execute such strategies.

Future Pricing Strategies

65% of retailers state that after a few years there will be a return to premium pricing.

60% of retailers state that discount price offerings will remain important.

70% of retailers state that variable pricing will also form a key part of the pricing mix.

55% of retailers state that they will introduce premium price products and services.


69. Implementing new contracting arrangements

70. Increasing joint business planning with key customers

71. Introducing lower cost, lower price products and services

72. Introducing premium price products and services Introducing variable / pay-as-you-go pricing

73. Customer Surveys suggest that the plans of retailers to higher prices may not be successful.

74. Customer Surveys suggest that they are sceptical about premium priced products.

75. Supplier Surveys suggest that new ways of servicing retail customers, such as payment for performance and on-demand delivery, may be difficult for retailers to deliver.

76. Senior Management time should be dedicated to setting the most profitable pricing strategy.

77. Pricing strategy should be a part of a full business strategy review.

78. Market dynamics and customer buying habits have changed and previously held assumptions around market dynamics must be reviewed andthe business model re-evaluated.

79. Setting and executing pricing policy will be a critical element of this to drive profitable growth.

80. Access to the right information

81. Retailers should have access to robust, accurate and timely data to inform pricing decisions.

82. Data should include a granular, or item by item, level of understanding of the profitability of products and customers.

83. Effective business intelligence does not just drive action, it drives decisions and strategy.

84. Drive consistent execution

85. Be prepared to take on the significant challenge of changing the behaviour of sales personnel.

86. Embed the right selling incentives, processes and controls that are required to ensure pricing strategy is executed consistently, and sales personnel are delivering profit, not just volumes.

Preparation for Future Price Changes 87. Invest in understanding how pricing models in market sectors are likely to change in the

future, and how to prepare to implement those changes successfully.


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Part K : Retailer Performance Analysis


Store Managers Survey

Store Personnel Surveys of Abercrombie & Fitch: as an Excel file: Part_K

1. Confidence that the company will gain additional market share in the industry in the coming 2

years? a. Very confident b. Confident c. Somewhat confident d. Not sure e. Somewhat doubtful f. Doubtful

2. What is the range of your outlets sales volume of company products last year?

i. $250,000 - $499,000 ii. $500,000 - $999,000 iii. $1,000,000 - $2,999,000 iv. $3,000,000 - $4,999,000 v. $5,000,000 - $9,999,000 vi. $10,000,000 - $19,999,000 vii. $20,000,000 or more

3. How long has your outlet been established?

a. 1-5 years b. 5+ years

4. How much of your business volume is accounted for by this company’s own products?

a. 24% or less b. 25% - 49% c. 50% - 74% d. 75% or more

5. How much of your profit is derived from this company’s own products?

a. 24% or less b. 25% - 49% c. 50% - 74% d. 75% or more

6. Which of the following company product lines do you fully support at this time?

7. Compared to the market leader, how do your products offer advantages in selling situations?

a. Strong advantage b. Slight advantage c. About the same d. Slight disadvantage e. Strong disadvantage

8. Compared to the market leader, how do your products offer advantages in profitability?


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a. Strong advantage b. Slight advantage c. About the same d. Slight disadvantage e. Strong disadvantage

9. Compared to the market leader, how do your products offer advantages in service and

supplies business? a. Strong advantage b. Slight advantage c. About the same d. Slight disadvantage e. Strong disadvantage

10. Which product line do you see as offering a stronger competitive position to your company?

11. Overall, have actions taken by company senior sales and marketing management over the

past year had an impact one way or another on your business? a. Very positive impact b. Positive impact c. Somewhat positive impact d. Not sure e. Somewhat negative impact f. Negative impact g. Very negative impact

12. Describe which actions had the greatest impact on your business, and why:

13. Which of the following best describes the influence you feel you have with company senior

management? a. A lot of influence b. Some influence c. Very little influence d. No influence

14. On average, which of the following best describes company management's timeliness in

response to your requests and inquiries? a. Very timely b. Somewhat timely c. Mixed d. Somewhat slow e. Very slow

15. How do you rate your company’s operational abilities?

16. Which of the following administrative areas would you say presents the greatest opportunity

for improvement? a. Order processing b. Shipping c. Inventory tracking d. Billing and credits

17. How do you rate your company’s marketing and sales programs?


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18. Compared with the investment support level in your company business this year, what are the

investment support plans for next year? a. Greatly increase support b. Increase support c. Maintain same level of support d. Decrease support e. Greatly decrease support

19. Why did you answered the way you did about your investment support plans for your

company business for next year?

20. What suggestions do you have for company senior management which would help you improve the success of your company business next year?

Customer Satisfaction Survey

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_K

21. Overall, I am very satisfied with the way the retailer performed (is performing):

a. Strongly Disagree

b. Somewhat Disagree

c. Neither Agree nor Disagree

d. Somewhat Agree

e. Strongly Agree

22. Sales Personnel are well trained.

23. Sales Personnel are well supervised.

24. Sales Personnel adhere to professional standards of conduct.

25. Sales Personnel act in my best interest.

26. Overall, I am satisfied with the Sales Personnel


b. Somewhat

c. Disagree

d. Neither Agree nor Disagree

e. Somewhat Agree

f. Strongly Agree

27. The store senior staff are knowledgeable and professional.

28. The store senior staff are making a positive contribution to customer service.

29. The store senior staff responded to my inquiries in a timely manner.

30. Overall, I am very satisfied with the store senior staff.

31. Compared to how you felt about the retailer before this purchase, what is the likelihood of

completing another purchase with the retailer?

a. Better, based on performance


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b. About the same

c. Worse, based on performance

32. Considering the overall value, you paid for the product, was it…

a. An exceptional value, worth more than you paid for it

b. A good value, worth about what you paid for it

c. A poor value, worth less than you paid for it

Inventory Control Product life cycles are shrinking, which adds pressure to get final products into consumers' hands much faster than before.

With more aggressive competition, keeping inventory lean while still meeting fluctuating demand patterns becomes critical, and underlines the need for technological solutions to manage inventory and orders.

Inventory Balancing Act Retailers must balance how much inventory to stock in-store versus distribution centres and warehouses. This calculation bears consideration of the required coordination between all possible channels such as:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_K

33. Buy online, pick up in local store

34. Buy anywhere, ship from store to home

35. Buy online, transfer to store for pick-up

36. Research online, reserve in store

37. Buy online, return to store

Just-in-time inventory

Just-in-time inventory management allows for the reduction of stock and storage costs, but may increase transportation costs and potentially delivery times. The Speed versus Cost equation is well known to all retailers and these considerations will particularly impact retailers with seasonal, short shelf life and trend based products.

Microwave merchandising

The fast-fashion global retailers from Sweden, Spain, the UK and other countries, have dominated the clothing industry in recent years, by attracting considerable consumer bases, expanding revenues and expanding aggressively in prime markets in both developed and developing countries. The success of retailers like Zara, H&M, and others is the quick turnaround times for product ranges and store displays. This stimulates interest and demand.

These retailers are changing and defining buyer expectations. Consumers are now seeking new product ranges in 6 to 9 weeks as opposed to 6 to 9 months. Many of these retailers manage the entire production and distribution process in-house; this reduces risk and ensures an efficient supply chain.

Those retailers without upstream integration processes must respond with a strategy of smaller orders distributed amongst a greater pool of suppliers. This however tend to lead to increased unit costs and therefore the long-term competitiveness of such a strategy is uncertain.


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Speed and Cost

Clearly the cost of sea transport is substantially less than air freight. In general Sea transportation is used by over 60% of long-distance shippers whilst Air is user by 30% of long-distance shippers. Retailers are having to evaluate the trade-off between increased velocity and flexibility, and transportation costs, in the light of both inventory requirements and product-to-market times.


38. Factors for Just-in-time management 39. Supply chain agility 40. Supply chains visibility and flexibility 41. Inventory certainty 42. Transit visibility and flexibility 43. Distribution centre management 44. Store stock holdings 45. Back order management

46. Inventory optimisation 47. Supply chain optimisation 48. Customer service optimisation 49. Speed to market 50. Integration of orders into the stock processing schedule

51. In-house manufacturing 52. Own private label products 53. Product availability 54. Supplier mark-ups

Operational Performance Analysis A survey of Consumers and Retail Customers to analyze overall Retailer Performance Issues:


55. Attitudes Towards Discount / Store Own-Brand Products 56. Availability -v- Price Question 57. Perceptions of Currently Global Brands 58. Perceptions of Currently Store Brands 59. Price Sensitivity 60. Product Awareness 61. Product Awareness of Store Brands 62. Purchasing Criteria: Current 63. Purchasing Criteria: Current of Store Brands 64. Purchasing Criteria: Future Trends 65. Purchasing Criteria: Future Trends of Store Brands 66. Quality -v- Price Question 67. Reaction to Advertising & Sales Promotion 68. Reaction to Advertising & Sales Promotion of Store Brands 69. Reaction to P.O.S. & Merchandising 70. Satisfaction with Existing Branded Outlets 71. Satisfaction with Existing Store Brand Products 72. Satisfaction with Existing Products 73. Satisfaction with Existing Retailers 74. Satisfaction with Store Brand Product Design 75. Satisfaction with Store Brand Product Packaging


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76. Satisfaction with Store Brand Product Packaging Design 77. Satisfaction with Store Brand Product Quality 78. Satisfaction with Product Availability 79. Satisfaction with Product Design 80. Satisfaction with Product Packaging 81. Satisfaction with Product Packaging Design 82. Satisfaction with Product Quality 83. Satisfaction with Retailers Stock Levels 84. Willingness to Purchase Foreign Brands 85. Willingness to Purchase Store Brands 86. Advertising Posture: Store/Outlet Level 87. Advertising Posture: Company Level 88. Branded Product Information: Store/Outlet Level 89. Branded Product Information: Branded Products 90. Branded Product Information: Company Level 91. Branded Product Information: Counter Staff 92. Branded Product Information: Dedicated Products Staff 93. Contract Documentation: Store/Outlet Level 94. Contract Documentation: Company Level 95. Counter Staff Customer Handling: Store/Outlet Level 96. Counter Staff Customer Handling: Branded Products 97. Counter Staff Customer Handling: Company Level 98. Counter Staff Customer Handling: Counter Staff 99. Counter Staff Customer Handling: Dedicated Products Staff 100. Credibility: Store/Outlet Level 101. Credibility: Branded Products 102. Credibility: Company Advertising 103. Credibility: Company Level 104. Credibility: Company Offers & Promotions 105. Credibility: Counter Staff 106. Credibility: Dedicated Products Staff 107. Customer Awareness of Product: Store/Outlet Level 108. Customer Awareness of Product: Company Level 109. Customer Complaint Handling: Store/Outlet Level 110. Customer Complaint Handling: Branded Products 111. Customer Complaint Handling: Company Level 112. Customer Complaint Handling: Counter Staff 113. Customer Complaint Handling: Dedicated Products Staff 114. Customer Comprehension of Product: Store/Outlet Level 115. Customer Comprehension of Product: Company Level 116. Customer Confidence at Store/Outlet Level 117. Customer Confidence at Company Level 118. Customer Confidence in Branded Products 119. Customer Confidence in Company Advertising 120. Customer Confidence in Company Offers & Promotions 121. Customer Confidence in Counter Staff 122. Customer Confidence in Dedicated Products Staff 123. Customer Confidence in Product: Store/Outlet Level 124. Customer Confidence in Product: Company Level 125. Customer Handling: Store/Outlet Level 126. Customer Handling: Branded Products 127. Customer Handling: Company Level 128. Customer Handling: Counter Staff 129. Customer Handling: Dedicated Products Staff 130. Customer Problem Solving: Store/Outlet Level 131. Customer Problem Solving: Branded Products 132. Customer Problem Solving: Company Level 133. Customer Problem Solving: Counter Staff 134. Customer Problem Solving: Dedicated Products Staff 135. Customer Service: Store/Outlet Level


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136. Customer Service: Branded Products 137. Customer Service: Company Level 138. Customer Service: Counter Staff 139. Customer Service: Dedicated Products Staff 140. Customer Service: Offers & Promotions 141. Promotional Activity: Store/Outlet Level 142. Promotional Activity: Company Level 143. Reputation at Store/Outlet Level 144. Reputation at Company Level 145. Reputation of Branded Products 146. Reputation of Counter Staff 147. Reputation of Dedicated Products Staff 148. Staff Awareness of Product: Branded Products 149. Staff Awareness of Product: Counter Staff 150. Staff Awareness of Product: Dedicated Products Staff 151. Staff Comprehension of Product: Branded Products 152. Staff Comprehension of Product: Counter Staff 153. Staff Comprehension of Product: Dedicated Products Staff 154. Staff Confidence in Product: Branded Products 155. Staff Confidence in Product: Counter Staff 156. Staff Confidence in Product: Dedicated Products Staff 157. Staff Efficiency: Store/Outlet Level 158. Staff Efficiency: Branded Products 159. Staff Efficiency: Company Level 160. Staff Efficiency: Counter Staff 161. Staff Efficiency: Dedicated Products Staff 162. Staff Efficiency: Offers & Promotions 163. Staff Efficiency: Problem Solving 164. Staff Integrity: Advertising & Promotions 165. Staff Integrity: Store/Outlet Level 166. Staff Integrity: Branded Products 167. Staff Integrity: Company Level 168. Staff Integrity: Counter Staff 169. Staff Integrity: Dedicated Products Staff 170. Staff Integrity: Offers & Promotions 171. Staff Performance: Store/Outlet Level 172. Staff Performance: Branded Products 173. Staff Performance: Company Level 174. Staff Performance: Counter Staff 175. Staff Performance: Dedicated Products Staff 176. Staff Performance: Offers & Promotions 177. Staff Performance: Overall Customer Handling 178. Truth & Honesty: Advertising & Promotions 179. Truth & Honesty: Store/Outlet Level 180. Truth & Honesty: Branded Products 181. Truth & Honesty: Company Level 182. Truth & Honesty: Counter Staff 183. Truth & Honesty: Dedicated Products Staff 184. Truth & Honesty: Offers & Promotions 185. Verbal Contact: Store/Outlet Level 186. Verbal Contact: Branded Products 187. Verbal Contact: Company Level 188. Verbal Contact: Counter Staff 189. Verbal Contact: Dedicated Products Staff 190. Written / Internet / Telephone Communications: Store/Outlet Level 191. Written / Internet / Telephone Communications: Branded Products 192. Written / Internet / Telephone Communications: Company Level 193. Written / Internet / Telephone Communications: Counter Staff 194. Written / Internet / Telephone Communications: Dedicated Products Staff 195. Written / Internet / Telephone Communications: Promotions & Offers


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Issues covered with Trade Wholesalers, Brand Managers, Trade Buyers, Retailers, In-store Retail Negotiators include:


196. Retail Management Performance: Person/s Approving / Authorising Order/s 197. Retail Management: Person/s Deciding What Products / Brands are to be Stocked 198. Retail Management Performance: Person/s Evaluating Products & Brands Available 199. Retail Management Performance: Person/s Initiating Decision to Increase Amounts

Purchased / Total Inventory 200. Retail Management Performance: Person/s Initiating Decision to Introduce New

Products or Brands 201. Retail Management Performance: Person/s Initiating Decision to Re-Order 202. Retail Management Performance: Person/s Monitoring Results of Purchases & Sales 203. Retail Management Performance: Person/s Negotiating Terms with Suppliers 204. Retail Management: Person/s Preparing Orders / Specifications for Purchases 205. Retail Management: Person/s Surveying Suppliers & Seeking Quotations

206. Wholesaler Management Performance: Person/s Approving / Authorising Order/s 207. Wholesaler Management Performance: Person/s Deciding What Products / Brands

are to be Stocked 208. Wholesaler Management: Person/s Evaluating Products & Brands Available 209. Wholesaler Management Performance: Person/s Initiating Decision to Increase

Amounts Purchased / Total Inventory 210. Wholesaler Management Performance: Person/s Initiating Decision to Introduce New

Products Or Brands 211. Wholesaler Management Performance: Person/s Initiating Decision to Re-Order 212. Wholesaler Management: Person/s Monitoring Results of Purchases & Sales 213. Wholesaler Management Performance: Person/s Negotiating Terms with Suppliers 214. Wholesaler Management Performance: Person/s Preparing Orders / Specifications

for Purchases 215. Wholesaler Management: Person/s Surveying Suppliers & Seeking Quotations

216. Retail Buyers: Attitudes Towards Discount / Own-Brand Products 217. Retail Buyers: Availability -v- Price Question 218. Retail Buyers: Buying Patterns 219. Retail Buyers: Current Purchasing Criteria 220. Retail Buyers: Frequency of Deliveries 221. Retail Buyers: Frequency of Purchase/s 222. Retail Buyers: Method of Payment for Supplies 223. Retail Buyers: Ordering Procedures 224. Retail Buyers: Product Reject/Return Rate by Customers 225. Retail Buyers: Product Reject/Returns Rate at Goods Inwards 226. Retail Buyers: Product Reject/spoilage Rate Whilst Held in Stock 227. Retail Buyers: Purchasing Criteria - Future Trends 228. Retail Buyers: Quality -v- Price Question 229. Retail Buyers: Reactions to Advertising & Sales Promotion 230. Retail Buyers: Satisfaction with After-Sales Services Received From Suppliers 231. Retail Buyers: Satisfaction with Availability of Advertising Support & POS /

Promotional Materials 232. Retail Buyers: Satisfaction with Availability of Supplies 233. Retail Buyers: Satisfaction with Deliveries / Frequency & Up-Take 234. Retail Buyers: Satisfaction with Existing Methods of Supply & Distribution 235. Retail Buyers: Satisfaction with Existing Products 236. Retail Buyers: Satisfaction with Existing Suppliers & Sources 237. Retail Buyers: Satisfaction with Ordering Procedures 238. Retail Buyers: Satisfaction with Quality & Specifications of Supplies 239. Retail Buyers: Satisfaction with Suppliers' Stock Levels 240. Retail Buyers: Satisfaction with Promotional & Advertising Assistance Received


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241. Retail Buyers: Satisfaction with P.O.S. & Marketing Materials 242. Retail Buyers: Satisfaction with Terms of Trading 243. Retail Buyers: Source of Supply 244. Retail Buyers: Supplier Loyalty

245. Wholesale Buyers: Attitudes Towards Discount / Unbranded / Own-Brand Products 246. Wholesale Buyers: Availability -v- Price Question 247. Wholesale Buyers: Buying Patterns 248. Wholesale Buyers: Current Purchasing Criteria 249. Wholesale Buyers: Problems with Products 250. Wholesale Buyers: Sales Promotional Activities Mix 251. Wholesale Buyers: Sales Promotional Activities to their Retailers 252. Wholesale Buyers: Delivery / Service Area 253. Wholesale Buyers: Discounts Offered to Retailers 254. Wholesale Buyers: Experiences of Product Reject Claims 255. Wholesale Buyers: Frequency of Deliveries to Retailers 256. Wholesale Buyers: Frequency of Purchase/s 257. Wholesale Buyers: Inventory Financing 258. Wholesale Buyers: Mode of Ordering by Retailers 259. Wholesale Buyers: Mode of Payment by Retailers 260. Wholesale Buyers: Number of Competitive Producers Represented 261. Wholesale Buyers: Producers Sales Promotion Most Influencing Dealers 262. Wholesale Buyers: Purchasing Criteria - Future Trends 263. Wholesale Buyers: Quality -v- Price Question 264. Wholesale Buyers: Retailers Attitude Towards Price -v- Availability 265. Wholesale Buyers: Sales Call Frequency Per Regular Customer ( Average - Delivery

& Servicing ) 266. Wholesale Buyers: Satisfaction with After-Sales Services Received From Suppliers 267. Wholesale Buyers: Satisfaction with Availability of Advertising Support & POS /

Promotional Materials 268. Wholesale Buyers: Satisfaction with Availability of Supplies 269. Wholesale Buyers: Satisfaction with Documentation / Instructions 270. Wholesale Buyers: Satisfaction with Existing Methods of Supply & Distribution 271. Wholesale Buyers: Satisfaction with Existing Products & Product Ranges 272. Wholesale Buyers: Satisfaction with Existing Suppliers & Sources 273. Wholesale Buyers: Satisfaction with Own Stock Levels 274. Wholesale Buyers: Satisfaction with Producers Ability to Fulfil Orders On Time 275. Wholesale Buyers: Satisfaction with Producers Credit & Other Financial Details 276. Wholesale Buyers: Satisfaction with Producers Delivery Frequency & Up-Take 277. Wholesale Buyers: Satisfaction with Producers Ordering Procedures & Formalities 278. Wholesale Buyers: Satisfaction with Producers Stock Levels 279. Wholesale Buyers: Satisfaction with Producers Terms of Trading 280. Wholesale Buyers: Satisfaction with Quality & Specifications of Supplies 281. Wholesale Buyers: Satisfaction with Quality of Supplies Received 282. Wholesale Buyers: Satisfaction with Promotional & Advertising Assistance Received 283. Wholesale Buyers: Supplier Loyalty


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Retail Performance Intelligence Retail performance intelligence is vital to key business decision making, whether in one’s own company or in order to effectively compete with other companies.

Retailers need to monitor their performance in real terms, and thereby have immediate control of their decision making. The ability to interrogate business data and site performance in real time allows managers to make timely decisions.


284. Site performance comparisons and ranking

285. Performance comparisons according to date /week / hour / day of the week / period

286. Site or data comparisons for key performance indicators e.g. sales conversion

287. Contextual information relevant for evaluating performance e.g. weather and events

288. Data should be predefined, scheduled and distributed according to the requirements of the managers concerned.

Business Performance Comparisons Managers can only analyse the situation through accurate data on what is going on not only in one’s own stores, and shopping areas, but also compare it with one’s competitors by size, type and location. Correlations and hidden patterns over time help one identify the problems and opportunities.


289. Retail space performance 290. Optimum shopper to staff ratio 291. Customer service 292. Cost controls 293. Conversion rates 294. Competitive analyses 295. Historic and forecast performance data

Shopper Numbers and Quality Retailers are aware that attracting the right demographic will lead to the higher conversion rates and average transaction values. The use of live data around consumers’ behaviour and preferences, coupled with synchronised advertising and marketing activity will draw quality traffic. Where and how shoppers buy reveal the effectiveness of promotions in increasing traffic and sales.


296. Demographic targeting by location 297. Consumer Drivers and Purchasing Behaviours by location 298. Promotional targeting by demographic and location 299. Monitoring traffic, conversion rates and sales results


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Optimised Store Performance Retailers look for empirical evidence which demonstrates which products and promotional activities will generate healthy traffic at each retail site; and that this will translate into profitable sales. Essential metrics include:


300. Average spend per visitor

301. Breakdown of sales across different retail product groups

302. Sales performance of adjacent (owned and competitive) retail units

303. Performance evaluations of each site

304. Sales density across sites in the portfolio

305. Stores that are over-trading and can be moved to larger units with lower costs due to economies of scale

306. Stores which are under-trading and require action can be taken to mitigate the situation

Site Potential & Floor Mapping Retailers have to ensure every part of their retail space generates the maximum return on investment. Footfall numbers are simply not enough and one needs to encourage a steady flow of traffic around every area of the store. Floor space mapping analyses the site by discrete areas enabling one to identify hot and cold spots; and thereby understanding those areas that are under and over-performing. This allows the retailer to take appropriate action to optimise the situation.

Comparative Site Performances Retailers have to compare individual site performance across their entire store portfolio by a range of criteria including geographic region, size, type and store age to identify under and over-performing stores. As one of the key factors informing the portfolio decision is whether to buy, sell or refurbish particular stores, this objective data will prove useful to managers working to increase the value of the whole portfolio.

Physical Operations at individual sites Armed with detailed information on footfall traffic volumes, day by day, and hour by hour, the individual store’s HVAC and lighting systems can be programmed to more closely mirror store use, cutting energy costs considerably. Store usage patterns can also be factored in when drawing up rosters for cleaning and security staff, thereby creating additional savings in personnel costs.


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Technology Usage The use of communications technology by consumers, and the evolution of diverse retail channels require that retailers be able to sell and deliver wherever the customer is located. Consumers expect a wider variety of products from a single source and better product value without any loss in product or service quality. To enable retailers to adequately compete they need to capture and utilise the necessary business data:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel Part_K

307. Technological investment 308. Point of sale terminal data gathering 309. Online sales data gathering 310. Supply chain data 311. Site level of inventory 312. Distribution centre inventory 313. Social media integration 314. Search engine integration 315. Targeted web page advertising 316. Web identification and activity tracking 317. Consumer targeting 318. Target demographic surveillance 319. Online advertising calibration

320. Sales personnel support systems 321. Supply chain visibility 322. Goods-in-transit 323. Delivery windows 324. Stock requirement predictions

325. Real time availability of stock information to sales personnel 326. Kiosks where customers can check inventory 327. Kiosks where customers can purchase and have them directly shipped to their home

328. Retail channels:

a. in store b. catalogue/call centre c. traditional web d. mobile web e. social media f. digital signage g. kiosks

329. Retail supply chain resources:

a. WMS (Warehouse management software) b. OMS (Order management software) c. DOM (Distributed order management) d. POS (Point of sale) e. ERP-CRM (Enterprise resource planning, client relationship management) f. RFID (radio frequency ID) g. Social media data

330. Retailer systems:

a. Retailers POS and e-commerce data management b. Social and mobile initiatives c. Real-time visibility across the entire supply chain d. Retail site technology, handheld tablets and kiosks


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Technology Spending & Customer Service The retail scene is constantly changing due to continual mergers, new store entry, foreign brands, multi-channel selling, e-commerce, and so forth. Intense competition among retailers has increased the awareness of the new and emerging retail technologies.

Technology budgets have grown year-on-year for over two decades and these investments have not only reduced a great deal of human interaction, but has helped to create positive customer service experiences.

By using efficient and original technologies retailers have more dependable in-store customer data to create better- designed performance measures, customer research, and analytics. These technology solutions help the retailer focus completely on their customers.

e-Commerce and Cross-channel Sales The percentage of sales made at traditional retail sites will fall form 93% in 2012 to less that 65% in 2019; however retailers are forecasting an increase in store portfolios and the maintenance of present store sizes.

Of course retailers have often miscalculated the future and history is littered with failed retail brands. Thus either some retailers are unrealistic about the impact of e-commerce on their business and the need to decrease their store numbers and space in the future; or the function of these stores will change from simply a point-in-sale to something more complex and integrated into the multi-channel supply chain.

Development of Cross-channel Sales The growth in cross-channel sales will average 12-15% per year over the next few years, outperforming both e-commerce growth and retail sales growth. This means that multi-channel coordination is becoming more critical as part of retailers’ operational strategy.

Audit of Retail Operation by Expert Appraisal:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel File: Part_K

331. Omni-channel selling plans 332. Merging with new shopping channels 333. Online competition strategy 334. Store footprint strategy 335. Total inventory levels

336. Dedicated pick-up space in-store 337. Front, back, or curb-side collection

338. Staffing capacity 339. Store layout 340. Orders processing and fulfilment

341. Retailer on-shelf stocks 342. Short turnaround re-stocking 343. Cost-effective order fulfilment 344. Store footprint and space efficiency

345. Order management system 346. Positioning of source inventory 347. Warehouse picking 348. Pack and ship tactics 349. Supplier shipping directly to store


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350. Inventory pooling 351. Safety stock levels 352. Stock space

353. Picking tactics 354. Labour intensity & costs 355. Order fulfilment strategies 356. Order fulfilment technologies 357. Optimisation of space 358. Handling Equipment Capital Costs

359. Picking carts systems 360. Batch picking 361. Picking technologies 362. Picking accuracy

363. “Put” systems 364. Cart batching 365. Racking, shelving & carousels 366. Automated storage and retrieval systems (AS/RS or sorters) 367. Sorter units

368. “Goods to operator” technologies 369. Operator work station 370. Horizontal or vertical carousels 371. Automated storage and retrieval machines (mini-load AS/RS) 372. Automated guided vehicles

Showrooming Future retail strategies include the use of retail stores more as showrooms or giant catalogues for consumers to feel and touch the product.

Traditional retailers were compromised when Amazon released a price-checking app that allowed users to scan barcodes in rival stores and check for cheaper prices online. What this means is that any retailer providing a ‘showroom’ may be doing so for the benefit of a third party online merchant.

Retailers have made enormous long-term capital investments creating distribution centres which move crates and pallets to stores. Now however they must develop distribution networks capable of getting single items to the customer’s door. Amazon is the leader in this field, using site selection, automation and tax strategy to deliver pricing and delivery service that is challenging the traditional retail traders. In the futuristic distribution centres of its subsidiary, Zappos, order picking is handled by robots. The robots enable Amazon to turn off the lights and forget about air conditioning in a large portion of its enabled distribution centres. It allows them to employ a fraction of workers in what was a traditionally labour-intensive operation.

Amazon acquired the maker of these robots, Kiva Systems, and will likely automate a great deal more of its operations in the future. In the meantime, Amazon continues to build distribution centres faster than anyone else.

While most distribution centres do not have the robotic labour, they are still a blend of high technology and a lot of manual labour. The 2,000 workers in Amazon’s 1-million-square-foot Chattanooga, Tennessee facility are connected by about seven miles of fibre and 700 internet access points. Amazon invested in a mezzanine level for this facility; and that will nearly double the floor space. With so much investment and such specific facility requirements it is clear why Amazon has gone the build-to-suit route. Between its two existing facilities in Tennessee, Amazon has spent over $140 million.

Due to the material handling needs, each centre processes a different type of goods. The Chattanooga centre is set up to handle mostly smaller items, while the Cleveland, Tennessee site handles large items like televisions. Amazon is adding two more sites in Tennessee for an additional investment of $150 million.


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Audit of Retail Operation by Expert Appraisal:


373. ‘Showrooming’ strategies 374. Unique products or “bundles” that are not for sale elsewhere 375. Co-operation with manufacturers to release products earlier than competitors 376. Price matching with online offerings 377. Build relationships with consumers 378. Boosting consumer loyalty 379. Encouraging product recommendations 380. Special deals for loyal consumers 381. Providing information 382. Providing exceptional service 383. Creating interactive environments for consumers

Of course it is not only Amazon investing in advanced automated materials handling and distribution centres, retailers from all sectors have little alternative but to invest in such facilities in order to compete in terms of both operating margins and customer service. These distribution centres also demonstrate the trend towards larger facilities which allow economies of scale and operational time efficiencies.

Audit of Retailer Factors by Expert Appraisal:


384. Awareness in trends in technology 385. Awareness of consumer behaviour patterns

386. Operational speed improvements 387. Faster trends cycles 388. Faster merchandise transits

389. Handling volatility in commodity prices 390. Handling volatility in transportation costs 391. Handling volatility in input pricing 392. Handling volatility in swings in consumer behaviours

393. Handling current inventory levels 394. Handling upstream operations 395. Handling downstream operations

396. Handling consumer price sensitivity 397. Handling consumer demand and trend cycles 398. Handling consumer buying patterns

399. Expanding product offerings 400. Expanding social media initiatives 401. Expanding delivery flexibility

402. Management of logistics & movement of goods 403. Management of suppliers and producers 404. Management of wholesalers 405. Management of own distribution centres 406. Management of store stocks

407. Strategy for changing labour requirements 408. Strategy for changing raw material usage


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409. Strategy for changing transportation costs 410. Strategy for changing financial costs 411. Strategy for changing inventories levels 412. Strategy for changing merchandising systems 413. Strategy for changing information systems 414. Strategy for changing distribution systems


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Part L : Strategies


Retailers must fully analyse the strategy of retailing from each perspective of a strategic methodology which has to plan for and adapt to a complex, changing environment. Both opportunities and threats must be considered. By engaging in strategic retail management, the retailer is encouraged to study competitors, suppliers, economic factors, consumer changes, marketplace trends, legal restrictions, and other elements. A retailer prospers if its competitive strengths match the opportunities in the environment, weaknesses are eliminated or minimised, and plans look to the future (as well as the past).

Retailer strategy consists of many factors, including:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_L

1. Building relationships 2. Ownership and store mix 3. E-commerce, non-store and non-traditional retailing formats 4. Consumer behaviour and information gathering 5. Store locations 6. Managing the business 7. Planning, handling, and pricing merchandise 8. Communicating with the customer 9. Integrating, analysing, and improving strategic planning 10. Trans-international retailing 11. Franchising

The point of sale is becoming increasingly important for two reasons. Firstly because the consumer media environment is becoming more fragmented making it more difficult to reach shoppers with traditional tactics; and secondly, because retailers are getting stronger, smarter and better at marketing.

The power that used to rest almost entirely with the national brand marketers who used advertising to direct people to the stores to demand their products is shifting to the retailer. The advertising industry has taken its eye off the ball by not understanding the importance of distribution-channel management and thereby the brand owners have suffered.

In turn, there is no doubt that the adage ‘change or die’ will define the retailing sectors in the immediate future. Whether individual retailer die will depend on if they change.

The change is often simply the ability to provide a multichannel sales environment to one’s customers.

It is not that physical retail sites are dead, physical locations allow shoppers to touch and feel products. In certain retail sectors this is essential. Retail outlets have real people who can provide the kind of personal advice and service that’s essential to certain product sales. These attributes can be harnessed and used to provide consumers with a real shopping experience.

For retailers to address the challenges of the future they need to embrace their customers’ preferences and expectations.


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Expertise and Specialisation Online retailers like Amazon have the consumer image of offering all things to all people, thereby being a jack of all trades and master of none. This is especially true where advice and presentation are a big part of the purchase experience.

Multichannel retailers can exploit this weakness on the part of pure online traders by making themselves category experts offering service and advice, and positioning themselves as specialists. By offering the best of their product sector, retailers can appear to be on the side of the customer by giving sage advice and help. Retailers should be on the side of the customer and become their advisors.

By providing expert publications, reviews and recommendations, being associated with trade experts who can help customers, developing specialised supply of products, generating an environment which engages customers and supplies expertise to help customers make informed choices, a retailer can become differentiated. Stores can offer trained sales staff with expertise in their category. Retailers can use video chat lines to provide customers with remote experts to answer questions on the spot.

Data Mining The enormous availability of data allows retailers not only to identifying segments, but also to target micro-segments based on patterns in individual consumers’ research and purchase behaviour. This kind of analysis enables a stronger relationship with customers as the data specificity allows retailers to cater to specific needs and wants.

This approach can help develop offers tailored to the individual and target underserved consumer segments, with distinct marketing and product offerings. Some retailers have developed micro-sites targeted at specific consumer segments.

Retail Store Evolution As consumers use greater digital technology this should be used by retailers and become more integrated with the shopping experience. Store retailers should re-invent the role played by their stores by embracing the emerging innovations which are redefining what product knowledge and convenience means to customers. This is more than just allowing customers to use physical stores to pick up or return goods bought online; it is more about using the store as a service hub. By developing the store facilities and space allocation across channels, and by altering the character and atmosphere of a store, retailers could lead customers attitudes and behaviour patterns; and not just struggle to react to and keep up with the customer.

Bespoke Service While technology has allowed for more sophisticated targeting, it is important to remember that consumers shop at stores for the Store Experience and contact with a real person.

Retailers offering personal shoppers across multiple channels can bring a valuable store experience that is supported by just-in-time data. Some retailers enhance the bespoke service with a phone app that identifies when customers enter the store and prompts staff to engage with the customer armed with that customer’s purchase history and preferences.

An important part of making personal contact with customers is by creating familiar neighbourhood connections. Various mobile apps offer local businesses innovative ways to use product offers that encourage shoppers into their stores, and then keep them coming back with further offers, events and promotions.


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Collaboration Retailers need to find new partners and collaborators to get the capabilities, expertise, and access to customer bases that they cannot easily develop on their own. Cross-retailer loyalty schemes help create the same multi-category loyalty experience that Amazon has created through their Prime offer. Retailers can look to promote products and services across the on- and offline worlds through personal one-to-one marketing delivering email and text offers to mobile phones. This can be triggered when the consumer is in the neighbourhood of one of the retailer’s stores.

Uniqueness Brand images are becoming depreciated and consumers perceive even the prime brands as being commonplace. This has led to a reduction in the price premiums previous expected by brand retailers.

Retailers need to develop unique products, with fresh brands and innovative presentation and promotion. Exclusive lines of merchandise, private label offerings, and ‘celebrity endorsed collections’ help to differentiate one retailer from another.

Market Leadership Store retailers can move into new, untapped markets where competitors do not have a foothold or do not have an adequate product offering. Highly fragmented markets attract online suppliers, and here there are opportunities to bring a lot of buyers and sellers together. The developing Asian and other markets are extremely attractive in this respect.

Multichannel retailers need to perfect the digital shopping experience; customers increasingly demand a trouble-free and effortless interaction with retailers. The ability of retailers to turn physical stores into profit centres will determine if they are able to prosper or become another victim of the irresistible digital revolution.

Audit of Retailer Strategy by Expert Appraisal:

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_L

12. Expertise and Specialisation 13. Data Mining 14. Retail store evolution 15. Bespoke service 16. Collaboration 17. Uniqueness 18. Market leadership


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Part L.1 : Corporate Retail Strategies

Many retailers that expanded rapidly before the downturn did not have a worst case scenario market strategy; and they are now suffering in the absence of a cogent business plan to carry them through the bad times. Difficult trading conditions mean that it is a challenge to make any headway in an aggressive and uncertain market place.

The challenge is to develop a strategy to fit the changing demands of the market.

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_L.1

Key target demographics

1. Key customers bases served 2. Key competitors 3. Drivers of sales and margins 4. Retail offering 5. Multi-channel offerings 6. Cost base 7. Business plan effectiveness 8. Pricing strategy 9. Product buying channels

Challenging economic conditions are impacting on the retail sector across the world and underlying problems need to be addressed.

Not only does rising inflation diminish discretionary spend, but spending patterns and product demand is also evolving and retailers may not have the necessary resources to survive these changing circumstances.

Retailers need to critically analyse their internal organisation to confirm that they have the basics:


10. a clear strategy; 11. experienced retail business specialists in charge; 12. understand the key drivers for the business; 13. the right retail offering; 14. tested business model; 15. plans for future development.

Operating Strategies Retailers that expanded when easy capital was available and the economy was growing are now struggling because they neglected to develop a strategic business plan incorporating different economic scenarios. Even those business managers who did plan for uncertainty may not have incorporated all the variables and scenarios which have been experienced recently. Few managers could have foreseen such a dramatic change in consumer purchasing behaviour, economic instability and challenging market conditions.

Whilst there exists economic uncertain in many markets, and despite the fact that many businesses have taken steps to ensure their survival, there is still ambiguity in profitability forecasts.

Understanding the underlying operational and market factors allow the development of a competitive and sustainable strategy. Business plans and projections, investments decisions, and future strategies are all made on the basis of a known customer demographic and fully understood customers purchasing behaviours. When customer demographic, spending patterns, spending levels, and product preferences change, then the consequences always impact on profitability. Knowing which factors are controllable, and those which are not, is critical to survival.


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16. Business planning 17. Research and understand customer base dynamics. 18. Evaluate competitors and competitive strategies. 19. Adapt to the evolving needs of customers. 20. Critically view pricing strategy. 21. Clarify and secure buying channels. 22. Ensure that managers are able to properly execute the business plan.

23. Cost efficiencies 24. Reducing costs, 25. Negotiating better input prices and supply sources, 26. Developing supply chain efficiencies, 27. Researching innovative products which cost less to produce, 28. Developing business models with variable scenarios, 29. Increasing margins.

30. Investment in cost reduction systems 31. Systems investments for cost and strategic growth initiatives 32. IT systems for customer relationship management 33. Enterprise resource planning software 34. Automated business intelligence and forecasting systems 35. Mobile payments 36. Cross-sector partnerships and alliances 37. Integrated IT systems

38. Market Pricing 39. Consumers’ pricing propensity research 40. Competitive pricing benchmarks 41. Input costs and scenarios 42. Inflation 43. Review of pricing strategy variables 44. Dynamic Product Pricing 45. Review of sustainability of discounted prices 46. Pricing baseline for consumers 47. Short, Medium, and Long term pricing strategies for product groups

48. Product Value Proposition 49. Consumers’ perceived product values 50. Value promotions effects on consumers 51. Level of value required by consumers 52. Short, Medium, and Long term product value strategies for product groups

Cash and Working Capital The basis of most of the financial difficulties amongst retailers is the shortage of cash or refinancing options. Retailers often did not sufficiently plan for lean times. Retail businesses often have insufficient funds to invest in stock, refurbish stores or meet their store overheads.

There is evidence in many countries of a crisis in the cashflow of retailers.

For many retail sectors sales are highly seasonal; whether that is fashion or style based, holiday based, Christmas, or depended on the weather. In each case the sales achieved at these peak periods will dictate overall cashflow, margins, and the funds available for re-stocking and capital investments for the entire year.


53. Price Discounting & reduced gross margins 54. Seasonal / Peak sales success


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55. Current financial year sales 56. Input product prices 57. Re-stocking finances 58. Increased Variable Costs 59. Increased Fixed Costs 60. Capital Investment financing 61. Cash constraints 62. Availability of third party / lender capital investment 63. Availability of third party / lender working capital 64. Excess inventory position 65. Further potential price markdowns 66. Further potential reduced margins

Cash management

Optimising cash management is the key to retail management in the present economic conditions.

Maximising cash flow and working capital by strict budgeting and benchmarking should be the focus for all managers. The maintenance of sufficient cash balances and the identification of unforeseen calls on cash together with specific and timely plans for corrective actions must be a fundamental goal.


67. Visibility of financial situation 68. Cash management systems 69. Short and medium term cash flow forecasting processes 70. Identification of future cash calls 71. Tax planning & tax relief 72. Reduction of variable costs 73. Cash retention mechanisms 74. Working capital management 75. Systemised Cash Controls

Retailing Operations Operational efficiencies, continual systems improvement, better customer service, exceeding customer expectations, are the focus points for all retailers.

Evolving customer expectations

Customer expectations are continually evolving. With the increased use of mobile technology, online transactions and contactless payment options retailers are able to harvest considerable costs savings; however retailers need to adapt to enable transaction effectiveness and product deliver to the customer. Sales should be improved by developing or enhancing multi-channel strategies.

Just as payment preferences amongst customers are changing, so too are their lifestyles, product preferences and economic circumstances. Retailers much continually research their target customer demographic and the overall market circumstances to have the data necessary to adjust product offerings, merchandising, and service levels in order to maximise the appeal of their business.

Value engineering, product sizes, and product quality options help retailers both to maintain margins and satisfy customer segments. The proper communication of such engineered product options to the target customer demographic is essential to maintain the integrity of the business. Integrated communications, promotional planning, and transparency help to maximise customer confidence.


76. Payment options 77. Ease of purchase 78. Transaction speed 79. Product delivery


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80. Research collection 81. Product offerings 82. Merchandising & POS 83. Service levels 84. Value engineering 85. Product size variations 86. Product quality options 87. Integrated communications 88. Promotional planning 89. Transparency 90. Customer confidence

Financial Planning

Indirect taxation is frequently a retailer’s third largest burden on cashflow and as such, has a major influence on the company's operation and financial performance. Retailers are now more able to use multi-channel selling and distribution, and transfer pricing mechanisms, to optimise both cashflow and retail prices. The use of distribution from lower cost sales or value added tax jurisdictions may provide significant opportunities to improve margins and cash management.


91. Use of multi-channel selling 92. Use of offshore distribution channels 93. Use of efficient price transfer mechanisms 94. Use of capital allowances and incentives 95. Tax incentives for fixed asset expenditures 96. Incentives for ‘green’ investments

Data management

Effective data management and its use as a vital resource can greatly assist retailers. In conjunction with this is the absolute need for data security. Recent breaches in data security at high profile retailers have highlighted the importance of adequate protection of customer data. The retail sector is particularly vulnerable to cyber-attack, considering the huge amount of customer data held from online shopping, loyalty schemes and other marketing incentives. Adverse publicity about stolen data will damage reputations and potentially could damage sales revenues.


97. CRM systems 98. Data security 99. Secure systems 100. Data leakage prevention

Supply chain efficiencies

Retailers are especially prone to inefficiencies in the supply chain and failures at any point can have a significant impact on financial performance. The inability to move the right products to the right locations at the right time can compromise retailers, damage customer relations and reduce margins.

Supplier relations and purchasing efficiencies:


101. Logistic operations 102. Warehousing & distribution 103. Inventory control systems 104. Ethical sourcing 105. Sustainable procurement 106. Supply chain perspectives 107. Sustainability strategy


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108. Social responsibility in procurement 109. Supplier risk reviews 110. Project management capacity 111. Performance requirements

Controls Many recent corporate failures were as a result of ineffective control on stock, cash and management information. Know what is happening in the business on a day-to-day basis through the right management information and act on it before it’s too late.


112. Retail controls 113. Key retail indicators 114. Customer requirements 115. Customer preferences 116. Product offering adjustments 117. Stock selection 118. Selling space allocation 119. Cash controls of working capital 120. Debtor & Creditor days 121. Invoice discounting 122. Supplier & procurement alternatives 123. Contingency plans & systems

Stakeholder Management A company’s strategic plans should include mechanisms to support, and in turn retain the support of, key stakeholders; especially in tough economic times, when support from stakeholders, from investors to creditors are critical. Ideally one maintains a dialogue with all the stakeholders, and the more adept one is in this respect the more one is likely to succeed in the long term.


124. Shareholders 125. Bankers 126. Landlords 127. Suppliers 128. Trade Creditors 129. Insurers 130. Financial services providers 131. Tax authorities 132. Regulators authorities 133. Employee relations 134. Public Relations 135. Customer communications

Value Preservation Retailer financial health will range from intensive care in an effort to turn the business around, to stable good health, to vigorous and expansive acquisition activity. However, whatever the health of the company, the key driver will be the preservation of value.

The current economic circumstances have seen some failures and much stagnation which encourages restructuring to decrease costs or increase margins. Albeit there are also a number of retailers for whom this period will provide an opportunity to expand their business through M & A.


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For retailers in a precarious financial position one strategy is to consider finding shelter from the storm through capital restructuring or creditor arrangements; and if that fails then a white knight take-over. In these circumstances the preservation of any residual values becomes even more critical.

eCommerce & Multi-Channel Retail Strategy Retailers must re-position themselves as Omni-channel or Multi-channel operations which offer customers a compelling product, an excellent value proposition, the best service and ease of access.

This requires a variety of definite strategies:-


136. Optimal product assortment 137. Store by store inventory planning 138. Sale or return and returns policies 139. Consignment stock arrangements 140. Pricing strategy across channels 141. Online user experience 142. Multi-channel user experience 143. Cross-channels marketing plans 144. Support operations 145. Order fulfilment systems 146. Technologies to support these operations 147. Skills and organisational structure 148. Identification of inter-related business drivers 149. Simplification and merging of operational activities 150. Business case and financial plan to implement the strategies 151. Supplier terms 152. Identification of working capital cycles 153. Real-time data analysis to reduce the forecast cycle from monthly to daily 154. Real-time evaluation of action scenarios and outcome forecasting


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Part L.2 : Retail Marketing Strategy

Elements in Retail Strategy Audit of Retailer Strategy by Expert Appraisal:


1. Target Markets 2. Customer Needs 3. Retail Formats 4. Method for Satisfying Needs 5. Bases for Building Sustainable Competitive Advantage 6. Defending Position Against Competitors 7. Methods for Segmenting Markets 8. Buying Situations 9. Benefits Sought by Customers 10. Customers Demographics 11. Customers Location & Geographic 12. Customers Lifestyle 13. Customers Psychographics

14. Develop a Sustainable Competitive Advantage: 15. Dropping the price of merchandise 16. Better store locations 17. Selling more popular merchandise 18. Increasing levels of advertising 19. Attracting & training better store personnel 20. Paying higher wages and incentives 21. Providing better customer service

22. Internal and External Bases for Competitive Advantage: 23. Sources of Capital 24. Vendors & Suppliers Terms 25. Retail Operation 26. Low Cost 27. Large Size 28. Efficient Distribution 29. Efficient Operations 30. Unique Knowledge 31. Loyal Employees 32. Customers Base Improvement 33. Creating Store Loyalty 34. Mental and Emotional Attachments to the Store brand

35. Elements in a Strong Brand: 36. Top of the Mind Awareness 37. Associations with Brand/Store Name 38. Methods Used to Develop a Strong Brand 39. Massive Exposure 40. Symbols to Reinforce Image 41. Consistent Positioning Creating Strong Associations 42. Limited Brand Extensions

43. Supplier Relationships: 44. Low Cost 45. Efficiency Through Coordination 46. Electronic Data Interchange (EDI) 47. Collaborative Planning and Forecasting to Reduce Inventory and Distribution Costs


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48. Exclusive Sale of Desirable Brands 49. Special Treatment 50. Early Delivery of New Styles 51. Shipment of Scare Merchandise

52. High Quality Customer Service: 53. Achievement goals 54. Employees are Not Machines 55. Consistent Personnel Policies 56. Retail Sales Personnel of good quality 57. Hiring Good People at Higher Wages 58. Continual Training programme 59. Organisational Culture

60. Growth Opportunities: 61. Market Penetration 62. Market Expansion 63. Retail Format Development 64. Diversification 65. Related vs. Unrelated markets

66. Retail Planning Process: 67. Defined business mission 68. Situation audit 69. Market attractiveness analysis 70. Competitor analysis 71. Self-analysis 72. Identification of strategic opportunities 73. Evaluation of strategic alternatives 74. Establishment of specific objectives and resources allocation 75. Evaluation of performance 76. Development of the retail mix to implement strategy

Elements in the Market Analysis


77. Market Factors: 78. Size 79. Growth 80. Seasonality 81. Business cycles

82. Competitive Factors: 83. Barriers to entry 84. Bargaining power of vendors 85. Competitive rivalry 86. Threat of superior new formats

87. Environmental Factors: 88. Technology 89. Economic 90. Regulatory 91. Social

92. Analysis of Strengths & Weaknesses: 93. Management capabilities 94. Financial resources


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95. Locations 96. Operations 97. Merchandise 98. Store Management 99. Customer loyalty 100. Five Forces: 101. Bargaining Power of Vendors 102. Barriers to Entry 103. Competitive Rivalry 104. Threat of Substitution 105. Large Customers

106. Using Market Attractiveness: 107. Competitive Position Matrix 108. Defined strategic opportunities 109. Identification of market attractiveness and competitive position factors 110. Assigned weightings based on importance of factors 111. Rated opportunities on market attractiveness and competitive position 112. Calculated scores and evaluate opportunities

113. Evaluation of Retail Market Opportunities:

114. Retailing Concept: 115. Customer Orientation 116. Value-drivers 117. Coordinated Effort 118. Goal-Oriented

119. Relationship Retailing: 120. Seek long-term relationships with customers 121. Focus on customer satisfaction over time 122. Satisfaction through meeting or exceeding customer expectations 123. Customer Equality 124. Customer Value 125. Core Customers identification

126. Retail Value Chain: 127. Bundle of benefits provide to consumers 128. Ambience 129. Quality of products 130. Brands offered 131. Discounts/good prices 132. Shipping 133. Convenient Location 134. Service

135. Strategic Planning Checklist: 136. Situational Analysis 137. Opportunities, threats, mission 138. Set Objectives 139. Sales, profits, image/positioning 140. Identify Target Market 141. Mass marketing -v- Concentrated -v- Differentiated 142. Aggregation -v- Segmentation 143. Identify Specific Tactics 144. Control Process/ Retail Audit System 145. Strategies and tactics are evaluated and revised 146. Feedback 147. Performance measures (turnover, sales, profits)


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148. Strategic Planning Factors 149. Develop Broad Strategy 150. Competition (Intratype –v- Intertype) 151. Sustainable competitive advantage

152. Sustainable Factors: 153. Price 154. Location 155. Vendor relations 156. MIS-technology 157. Low cost operations

158. Business Grow Factors: 159. Market Penetration 160. Present customers, same segment 161. Market Expansion 162. Existing format to new customers (new geographic area or demographic group)

163. Future Business Growth: 164. Retail Format Development 165. New format to existing customers 166. Diversification 167. New format to new segments

168. Institutional Change in Retailing 169. Wheel of Retailing 170. Accordion Theory 171. Dialectic Process 172. Natural Selection 173. Retail Life Cycle

174. Wheel of Retailing Strategy considerations: 175. New types of retailers enter a market as low-margin, low-price, low status merchants 176. These retailers gradually trade up which increases their operating costs 177. Retailers become high cost merchants and then are vulnerable to new competitors

178. Retail Accordion Theory Strategy considerations: 179. Broad-based outlets with wide assortment 180. More specialised with narrow assortment 181. Back to wide assortment

182. Dialectic Process Strategy considerations: 183. Retailers mutually adapt in the face of competition from “opposites”

184. When challenged by a competitor with a differential advantage, the established retailer will

adopt strategies and tactics in the direction of that advantage (making the innovator less attractive)

185. Natural Selection and Adaptive Behaviour Strategy considerations: 186. Environmental need for a certain kind of retailing institutions which will evolve 187. Need ceases to exist and the institution will tend to disappear 188. Retailers that effectively adapt to environmental changes are most likely to survive

189. Retail Life Cycle Strategy considerations: 190. Introduction 191. Growth/ Accelerated Development 192. Maturity 193. Remodel stores


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194. Lower costs 195. MIS – technology 196. Lower prices 197. Re-evaluate operational practices and service 198. Value delivery 199. Decline


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Part L.3 : Strategic Planning in Retailing Chapter 3

Even the largest retailer sometimes drops the ball and is left without a defined and well-integrated strategy and is then left unable to cope with the marketplace.


The retailer’s process of strategic retail planning:

1. Provide a thorough analysis of the requirements for doing business for different product and market segments

2. Outline the retail goals

3. Determine how to differentiate itself from competitors and develop an offering that appeals to each customer segment

4. Fully understand the legal, economic, and competitive environment

5. The retailer’s total efforts are coordinated

6. Crises are anticipated and avoided

Overview of Strategic Retail Management


7. Retailing objectives

8. Building and Sustaining the Retailing Relationships

9. Strategic Planning in Retailing

10. Situation Analysis: a. Capital requirements b. Store-Based Strategy Mix c. Web, Non-store-based, and other forms of multi-channel trading

11. Targeting Customers and Information Gathering:

a. Identifying and Understanding Consumers b. Information Gathering and Processing

12. Store Locations:

a. Trading Area Analysis b. Site Selection

13. Managing the Business:

a. Organisation and Human Resource Management b. Operations Management: Financial c. Operations Management: Operational

14. Merchandise Management and Pricing:

a. Developing Merchandise Plans b. Implementing Merchandise Plans c. Financial Merchandise Management d. Pricing

15. Communicating with the Customer

a. Establishing and Maintaining a Retail Image b. Promotional Strategy

16. Integrating and Controlling the Retail Strategy


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Situation Analysis


Situation analysis is an honest evaluation of the opportunities and threats facing the retailer:

17. What is the firm’s current status?

18. In which direction should the retailer be heading? a. Organisational mission b. Ownership and financing c. Management options d. Goods / Service sold

19. Opportunities and marketplace openings 20. Market gaps retailers have not yet not capitalised on 21. Competitive threats 22. Adverse marketplace factors 23. Trend spotting 24. Customers satisfaction 25. Competitive advantages 26. Merchandising shifts 27. Store locations 28. Price points 29. Promotional strategy 30. Retailer image

Organisational Mission


The organisational mission is the retailer’s commitment to a type of business and to a distinctive role in the marketplace.

31. Attitude toward consumers 32. Attitude toward employees 33. Attitude toward suppliers 34. Attitude toward competitors 35. Attitude toward regulations 36. Is the business based on the goods and services sold or consumer needs? 37. Is the retailer a market leader or a follower? 38. Does the retailer seek a broad customer or a narrower customer base? 39. Does the retailer change company goals as a reaction to a dynamic retail environment?

40. Does the retailer have good organisational skills? a. Strong customer service b. Popular products c. Community involvement d. Excellent retail locations e. Excellent execution in delivering products f. Consistent delivery of its value proposition

Ownership and Management Alternatives An essential aspect of situation analysis is assessing ownership and management alternatives. Ownership is crucial because it dictates both the existing financial structure of the retailer and the future availability of capital funding and/or how capital investments can be funded.


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Management options range from the owner–manager to a complex arrangement of professional managers. The size of the company can be irrelevant as is seen from many large multi-national companies which are in fact controlled by one patriarchal figure who perceived himself as the Owner-Manager, despite what the shareholders think.

Strategically, the management format also has a dramatic impact. With an owner–manager (actual or perceived), planning tends to be less formal and more intuitive, and many tasks are reserved for that person. With professional management, planning tends to be more formal and systematic. Yet, professional managers are more constrained in their authority than is an owner–manager. In a centralised structure, planning clout lies with top management or ownership; managers in individual departments have major input into decisions with a decentralised structure.

Goods/Service Categories The strategic plan is centred on the selection of goods/service categories, the lines of business, in which the retailer operates.


41. Type of business 42. Management abilities 43. Financial resources 44. Time constraints

Management Abilities Management abilities depend on the aptitudes of the managers:


45. Experience of the type of business 46. Potential to be effective 47. Education & formal qualifications 48. Retail practices and policies 49. Previous experience 50. Initiatives 51. Reaction to competitive developments 52. Customer interaction 53. Staff interaction 54. Supplier interaction


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Financial Resources Adequate projection of the financial resources needed is essential to the retailer.


55. Tendency to underestimate financial problems 56. Operational expenses controls 57. Profitability stages 58. Budget and expenditures controls 59. Miscalculations of costs of renovation or operation of existing facilities 60. Investment funding 61. Merchandise assortment funding & outlay 62. Inventory investment 63. Location & facilities investments

Time Constraints Time constraints on managers differ significantly by goods or service category:


64. Automation of operations 65. Outsourcing of activities 66. Managing time-pressed customers 67. Store opening hours & shift patterns 68. Seasonal market factors 69. Self-service 70. Standardisation of operations 71. Formalisation of financial controls 72. Key service providers’ time constraints 73. Delegating of work to back-office operations 74. Levels of personal services 75. Staff shortages due to costs 76. Cash controls 77. Off-hours activities

a. Cleaning b. Stocking shelves c. Financial reconciliation

Objectives The situation analysis leads to how the retailer sets objectives for the long-term and short-terms performance targets required.


Such goals relate to:

78. Sales 79. Profit 80. Satisfaction of stakeholders 81. Image 82. Increasing comparable store sales 83. Gross margins 84. Return on investment 85. Earnings per share


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Sales Sales objectives are related to the volume of goods and services a retailer sells and includes:


86. Sales growth 87. Revenue stability 88. Market share

89. Short-term profits 90. Opening new units 91. Maintaining sales volume 92. Maintaining market share 93. Maintaining price lines 94. Market share by category sales

95. Discount sales strategies 96. Moderate price/units sales strategies 97. Prestige sales strategies 98. Price inflation

Profit With profitability objectives the retailer will seek a minimum profit level during a designated period.


99. Pre-tax profit 100. Return on investment 101. Operating margin

Satisfaction of Stakeholders Retailers typically strive to satisfy their stakeholders: shareholders, customers, suppliers, employees, and regulators.


102. Shareholder satisfaction a. Short-run b. Long-run c. Stable dividends

103. Customer satisfaction

a. Criticism b. Adaption

104. Supplier relations

a. Favourable purchase terms b. New products c. Good return policies d. Shipments e. Cooperation

105. Labour relations

a. Absenteeism


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b. Treatment of customers c. Staffing turnover

106. Regulatory relations

Image Positioning Image positioning is how the retailer wished to, and possibly is, perceived by consumers and others.


107. Innovative 108. Conservative 109. Radical 110. Specialised 111. Broad-based 112. Discount-oriented 113. Upscale

114. Image relative to retail category 115. Image relative to competitors 116. Image relative to product positioning 117. Image relative to positive consumer responses

118. Mass merchandising

a. Discount or value-oriented image b. Wide and/or deep merchandise selection c. Large store facilities d. Low operating costs & stores e. Economy outlets f. Value-conscious shoppers g. Popularity h. Broad customer base i. High customer traffic j. High stock turnover

119. Retailers Niche in the market

a. Specific customer segments b. Segmented market c. High level of loyalty d. Chosen demographic e. Stress factors other than price f. Better customer focus g. Convergence of product lines

120. Category incursion / cross-channel

a. Muddled value proposition b. Convenience c. Positioning changes

121. Retail positioning map

a. Price and service b. Product lines offered c. Price -v- service d. Product assortment & selection e. Customer service


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Selection of Objectives Clearly set goals and a strategy to achieve:


122. Sales growth aspirations 123. Operating earnings per share 124. Capital expenditure goals 125. Market share requirement 126. Maintenance of supplier rating 127. Sales per square foot 128. Brands coverage 129. Flexibility 130. Adaption of goals 131. Competitive on price 132. Differentiation 133. Productivity 134. Management Focus

Checklist


135. Capital investment 136. Goodwill 137. Sales 138. Inventory levels 139. Profits 140. Customer base 141. Sales seasonality 142. Debts 143. Property 144. Storefronts 145. Store fixtures 146. Merchandise assortment 147. Advertising policy 148. Customer service policy 149. Pricing policy 150. Units & locations 151. Trading area overlaps of stores


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Identification of Consumer Characteristics


The retailer’s target market:

152. Mass marketing, selling goods and services to a broad spectrum of consumers

153. Concentrated marketing, zeroing in on one specific group

154. Differentiated marketing, aiming at two or more distinct consumer groups, with different retailing approaches for each group

155. Define target markets 156. Wide assortment of medium-quality items at popular prices 157. Narrow, deep product assortment at above-average prices 158. Multiple market segments 159. Unique goods and services for each market segment

Competitive advantages and strategy mix:

160. Competencies of the retailer relative to competitors 161. Consumers target advantages 162. Store locations 163. Product quality 164. Advertising 165. Customer services 166. Product prices 167. Brands 168. Consumer behaviour

Overall Strategy


This involves two components:

169. controllable variables (the aspects of business the retailer can directly affect) 170. uncontrollable variables (those to which the retailer must adapt)

Controllable Variables


171. Store location 172. Managing the business 173. Merchandise management 174. Pricing 175. Communicating with the customer


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Store Location


176. Store location decisions 177. Store and/or non-store format 178. Competitor locations 179. Transportation access 180. Population density 181. Type of neighbourhood 182. Nearness to suppliers 183. Pedestrian traffic 184. Store composition

Managing the Business


185. Retail organisation 186. Human resource management 187. Operations management 188. Task management 189. Defined policies 190. Resources management 191. Authority delegation 192. Managers’ responsibility 193. Managers’ rewards 194. Employee hiring 195. Employee training 196. Employee compensation 197. Employee supervision 198. Human resource management techniques 199. Job functions 200. Employee responsibility 201. Chain of command 202. Satisfaction of customers 203. Satisfaction of employees 204. Fulfilment of management goals 205. Asset management 206. Budgeting 207. Resource allocation 208. Store format and sizes 209. Store personnel use 210. Store maintenance 211. Energy management 212. Store security 213. Insurance 214. Credit management 215. Computerisation 216. Crisis management


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Merchandise Management and Pricing


217. Quality of the goods and services offered 218. Width of assortment 219. Product categories carried 220. Depth of assortment 221. Variety of products carried in any category 222. Buying decisions 223. Buying frequency 224. Buying terms 225. Suppliers 226. Purchase forecasting 227. Purchase budgeting 228. Accounting procedures 229. Inventory by type of merchandise 230. Assess of items sold and left in stock 231. Range of prices 232. Prices within each product category 233. Markdowns planning

Communicating with the Customer


234. Image creation 235. Image maintenance 236. Influence on consumer perceptions 237. Storefront 238. Store layouts and displays, floor colours, lighting, scents, music 239. Store sales personnel 240. Community relations 241. Advertising campaigns 242. Personal selling 243. Sales promotion 244. Publicity campaigns

Uncontrollable Variables


245. Consumers 246. Competition 247. Technology 248. Economic conditions 249. Seasonality 250. Legal restrictions


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Consumers


251. Demographic trends 252. Lifestyle patterns 253. Tastes 254. Consumer trends and desires 255. Price range of customer purchases

Competition


256. Entry of competitors 257. New or established competitors 258. Competitors’ target markets 259. Competitors’ merchandising focus 260. Competitive edge

Technology


261. Computer systems 262. Inventory control 263. Checkout operations. 264. Warehouse 265. Transport of merchandise 266. Consumer ordering 267. Online activities

Economic Conditions


268. Unemployment 269. Interest rates 270. Inflation 271. Tax levels 272. Annual gross domestic product (GDP) growth 273. Economic factors 274. International economic factors 275. National economic factors 276. Provincial & local economic factors


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Seasonality


277. Seasonality 278. Weather 279. Cycle of demand

Legal Restrictions


280. Statutory laws and regulations 281. Competition laws 282. Fair trading practices 283. Zoning laws 284. Blue laws which limit the times during which retailers can conduct business 285. Construction codes 286. Consumer restrictions 287. Licensing 288. City / town jurisdictions

Integrating Overall Strategy


289. Coordinated approach

290. Consistent approach

291. Integrated strategy

292. Systematically appraisal of uncontrollable variables

Legal Constraints on Retailers


293. Store locations and Zoning laws

294. Blue laws restrict the days and hours during which retailers may operate.

295. Environmental laws limit the retail uses of certain sites.

296. Door-to-door (direct) selling laws protect consumer privacy.

297. Local ordinances involve fire, smoking, outside lighting, capacity, and other rules.

298. Leases and mortgages require parties to abide by stipulations in tenancy documents.

299. Managing the Licensing provisions mandate minimum education and/or experience for certain personnel.

300. Business Personnel laws involve non-discriminatory hiring, promoting, and firing of employees.

301. Antitrust laws limit large firm mergers and expansion.

302. Franchise agreements require parties to abide by various legal provisions.


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303. Business taxes include real-estate and income taxes.

304. Recycling laws mandate that retailers participate in the recycling process for various materials.

305. Merchandise Trademarks provide retailers with exclusive rights to the brand names they develop.

306. Management and Merchandise restrictions forbid some retailers from selling specified goods or services.

307. Pricing Product liability laws allow retailers to be sued if they sell defective products.

308. Lemon laws specify consumer rights if products, such as autos, require continuing repairs.

309. Sales taxes are required in most provinces or territories, although tax-free days have been introduced in some locales to encourage consumer shopping.

310. Unit-pricing laws require price per unit to be displayed (most often applied to supermarkets).

311. Collusion laws prohibit retailers from discussing selling prices with competitors.

312. Sale prices must be a reduction from the retailer’s normal selling prices.

313. Price discrimination laws prohibit suppliers from offering unjustified discounts to large retailers that are unavailable to smaller ones.

314. Communicating Truth-in-advertising and -selling laws require retailers to be honest and not omit key facts.

315. Customer Truth-in-credit laws require that shoppers be informed of all credit terms.

316. Telemarketing laws protect the privacy and rights of consumers regarding telephone sales.

317. Bait-and-switch laws make it illegal to lure shoppers into a store to buy low-priced items and then to aggressively try to switch them to higher-priced ones.

318. Inventory laws mandate that retailers must have sufficient stock when running sales.

319. Labelling laws require merchandise to be correctly labelled and displayed.

320. Cooling-off laws let customers cancel completed orders.


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Tactical Decisions Tactical or Short-run decisions for each controllable part of the strategy:


321. Store locations and trading-area analysis which gauges the area from which customers are drawn.

322. Level of saturation in a trading area.

323. Optimised relationships with nearby retailers.

324. Positioning of new outlets.

325. Clear chain of command from managers to store workers.

326. Organisation structure on how personnel are hired, trained, and supervised.

327. Asset management which track assets and liabilities.

328. Budget spending controls.

329. Operations systemisation.

330. Merchandise management and pricing:

331. Assortments and space allocations in each department.

332. Innovative new merchandise.

333. Liquidation of slow-moving items.

334. Purchase terms negotiated and suppliers appointed.

335. Selling prices reflecting the firm’s image and target market.

336. Prices offer consumers choice.

337. Adaptive actions to respond to higher supplier prices and react to competitors’ prices.

338. Communicating with the customer:

339. Storefront and display windows.

340. Store layout and merchandise displays.

341. Gaining consumer enthusiasm

342. Looking fresh and modern.

343. New products.

344. React to changing seasons.

345. Advertising placed during the proper time and in the proper media.

346. Deployment of sales personnel varied by merchandise category and season.


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Controls


347. Systematic process for analysing the performance of the retailer.

348. Retail audits

349. Strengths and weaknesses revealed as performance is reviewed.

350. Identification of profit drivers.

351. Identification of profit problems.

Feedback


352. Management receives systematic feedback

353. Positive feedback on sales low employee turnover.

354. Negative on falling sales and high employee turnover.


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Part L.4 : Recession Strategy

Whatever politicians might say about the economic climate, and whatever their prognosis is for the future, the fact is that economic conditions have radically changed in recent years, and are forecast to remain difficult for retailers in the immediate future.

Recent retail bankruptcies, store closings, and increasingly vacant retail space is all too evident in many countries.

The retail is one of the largest commercial sectors in all countries the effects of a retail downturn ripples throughout the national economies of all countries. Consumer spending also accounts for 50 to 65% of most national economies and this is the key indicator of the state of a national economy.

Economic Conditions The current economic conditions are not encouraging to retailers. It is normal in bad economic times that the small retailers suffer, usually disproportionately, however there is also evidence that the largest of retailer group are also suffering.

The factors which are effecting the economy also include rising commodity prices, rising product prices, lower disposable incomes, lower savings rates, declining consumer spending, a housing slowdown, and rising unemployment. All of these indicators guarantee that the period of strong retail expansion and increasing profit margins and over for the foreseeable future. Retail is of course the final link in the supply chain and as demand weakens the effects will ripple through the supply chain, the logistic providers, and the manufacturing base.

The impact on manufacturing, distribution, and employment in other industries may endure for far longer than the events that actually triggered the economic decline. As economic forces slow or stop altogether, retail demand further weakens thus exacerbating the decline. In the end, the retail industry as a whole is severely affected and here the losers will outnumber the winners.

Forecasts for retail are negative and it is probable that the retail sectors will not even meet the lowered expectations of recent government forecasts.

Retailers will have to change their business planning and business models to survive in the long term.

Consumption Smoothing & Product Substitution The basic economic concept of consumption smoothing can help understanding of how the retail situation has developed and what can be expected next. Consumption smoothing refers to the consumer’s preference to maintain a certain standard of living over time. Consumption Smoothing also means consumers will use savings as a tool to compensate when incomes are low, or save more when incomes are high, thus “smoothing” their consumption patterns. This does not mean that spending will not increase or decrease as incomes levels change, but rather that the peaks and troughs will be less pronounced.

The theory suggests that people will not match income reduction with an equivalent amount of expenditure reduction, and vice versa. Instead they will mitigate income reductions by turning to credit in bad times and by the same token they will not spend all their income in good times by turning to savings products. Evidence of this trend can be found in the proliferation of credit cards and their increased use in rough economic patches.

In that a certain amount of consumer consumption is fixed and does not vary with income, shortages are made up by the liquidation of savings or increasing debt to maintain the habitual standard of living. Financing personal consumption when income is decreasing comes down to a choice between debt and equity, and most recently with the historic rise in housing values saw this framework altered. As housing prices inflated, individuals had more paper wealth, and this triggered spending increases by using the paper wealth as a real stream of income.


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Consumers felt wealthier and they spent more, thereby fuelling the expansion of consumption, which in turn simultaneous stimulated the growth and inflation in the housing market. At the start of the demand growth stage, consumers paid off credit card debt accumulated in the previous periods by refinancing their homes. Unfortunately, real incomes did not rising during this period and many consumers smoothed their new “wealthier” consumption levels with more credit card debt. Many households refinanced their homes more than once during this expansion, only to be faced with the reality of the situation when home prices did cannot continue to increase at the same rate and the equity in the home did not have the same liquidity as traditional savings.

Consumers are not at a stage where they have liquidated much of their savings, and are unable to obtain credit, and therefore must sustain a lower level of spending and accept a reduced standard of living. This response to economic times entrenches the downturn, and increases its duration.

Whereas Consumption Smoothing explains the fundamental choices behind savings and spending for the consumer, it does not explain their specific spending decisions. During a recession, the typical consumer is forced to make difficult decisions and economic trade-offs. In terms of consumption these choices are often manifested as substitution between goods.

When budgets are constrained, the typical consumer will substitute down or choose inferior products. Consumers will replace an expensive branded food item with a less expensive or own-brand food item.

This trading down is a type of consumption smoothing allowing the consumer to get the same level of consumption but at a lesser quality per unit. This theory of product substitution holds when there are inferior products to trade down to and they are reasonably product substitutes for the more expensive product. This process is frequently seen is the consumer’s choice of where to shop. While most retailers are experiencing sales declines, discount retailers are thriving as people trade down from expensive specialty and department stores to shop at discount and wholesale stores. These trends have great impacts on a retailer’s strategy to survive a recession or downturn.

Managing Inventories & Costs Profit maximisation at any given inventory level is a challenge in the best of economic times, during a recession it becomes both more critical to success, and much more difficult. For small retailers and independent stores this task is increasingly complicated due to payment terms and minimum order sizes. It is necessary to reduce inventories for most retail establishments particularly those specialty items which are not sold in any large numbers. Reducing existing inventory is typically done via store sales and promotions which allow the retailers to convert some of their existing assets into cash. Converting inventory to cash is an important first step; however, most retailers cannot sustain themselves through a recession on existing inventories and therefore must place orders for new inventory under a great deal of uncertainty.

Reductions in demand for new inventory sends ripples throughout the supply chain and this coupled with high fuel prices results in larger minimum order sizes and less favourable terms for delayed payment. The most prudent retail strategy under these circumstances is to order the minimum necessary to sustain existing demand. This is a difficult balancing act as no retailer wants to take the chance of being out of a mainstay item and losing a shopper to a competitive retailer. One strategy is to have ample supply of items that sell daily or frequently, typically these are the items that get people into the store. Another strategy is to vary selection, offering less high end items and more inexpensive to moderately priced items for budget conscious consumers.

When inventories are limited care must be taken in the appearance of the store as sparse stocks can convey a negative impression to customers. A well-stocked store implies quality and a successful retailer and encourages better customer relations. When inventory is limited retailers need to convey the same message of abundance and quality to consumers using reduced stocks; and this means they must change the appearance of the store display areas. A redesign of the store layout can be done inexpensively and with great results and impact. Optimal merchandising and use of space is one cost-effective method which retailers have to counter tough times.

Suppliers facing their own constraints and recognising retailers need to pull back on inventory spending will offer deep discounts to retailers who place large orders or pay their invoice quickly. For


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the majority of small and independent retailers these “deals” are not a good investment and can exacerbate the effects of the downturn. The discounts are intuitively appealing to retailers; however inventory is only as useful to a retailer as its ability to be converted to cash quickly. Even with a heavy discount, on infrequently sold items there is little or no profit in the sale.

Retailers, big and small, must put their liquidity ahead of considerations such as profits and mark-ups per unit. Often retailers are hesitant to liquidate or reduce inventory at a loss per unit in tough times and therefore feel a cash-flow crunch. With no cash safety net or reserves, any additional shock to their demand can make fundamental business expense payments difficult to maintain. During a recession, many retailers are bankrupted for cashflow and liquidity reasons.

Many retailers were unprofessional and did not anticipate the downturn; many then compounded this by underestimating its severity and duration. This demonstrated inadequate management and bad business planning. These retailers were not realistic about their sales prospects and did not make the difficult planning decisions necessary.

Retailers needed to analyze the inventory for the essential items and then actively reduce the stock of non-essential items. Retailers needed to set limits for ordering new inventory and then produce firm plans for on-going management, presentation and marketing of the inventory they had. The successful retailers retained as many months of cash reserves as possible that would be sufficient to cover basic expenses such as rent, utilities, and wages.

Audit of Retailer Economic Strategy by Expert Appraisal:


1. Order size reductions 2. Supplier payment terms negotiated 3. Minimum order sizes negotiated 4. Company de-stocking 5. Store inventory reduction 6. Store sales & promotions

7. Product selection adjustments 8. Concentration on key product offerings 9. Product price point adjustments 10. Product price range adjustments

11. Store stock reductions 12. Store display redesigns 13. Store space re-allocations

14. Liquidity maintenance 15. Cash reserves 16. Cashflow maintenance

17. Assessment of business planning 18. Ability to predict economic conditions 19. Ability to forecast sales revenues


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Rising Costs & Raising Prices Retailers in all sectors are experiencing rapidly rising operational costs and inventory prices. The interaction of inflationary price increases at a time of recession and reduced sales makes it difficult for retailers to make the compensatory product price rises for fear of losing even more revenue.

Product price increases cannot be passed on to consumers at a time when they are dramatically cutting back on spending.

In a downturn retailers may be content to maintain their previous levels of income or profit; however they do not want to make a loss. Thus the temptation is to raise product prices, if not immediately, then immediately that there are signs of an up-turn in the economy. What many retailers fail to fully appreciate are the effects of Consumption Smoothing, Demand Lag and Price Elasticity.

The demand formula in the perfect market states that an equilibrium product price is achieved when supply meets demand. The price range achieved would ideally include a healthy mark-up for the retailer. However when product prices become detached from normal demand then consumption collapses.

Retailers need to very specifically monitor the Price Elasticity for each product group. Certain product groups, such as basic foodstuffs, fuel, basic clothing, et cetera are price inelastic and retailers may increase prices within an elasticity range. Many specialist and discretionary products however can be price elastic, often in an irrational way which reflects consumer psychology more than marginal propensity to consume. In addition products which have substitutes also tend to be price elastic as price increases can be readily countered by the consumer through product substitution.

Thus for speciality retailers understanding the nature of demand for a product enhances their ability to pitch a product price at the optimum level. Pricing products based on their elasticity, and likely product substitution, is an essential retail tool during times of economic difficulty.

Without knowing how long input prices will be affected it is difficult for many retailers to incur the additional expense to raise prices. This transaction cost theory is less applicable when input prices are rising due to long term economic trends and less in response to price shocks. However, the theory does point to an interesting dilemma for some retailers as it is more costly for them to raise prices due to operational costs which then compounding the problem because the product is elastic and the fall in demand costs as much as the operational costs incurred. When the economy moves into a recession, consumers cut back on discretionary purchases and tend to look for product substitutes to compensate them. Retailers can themselves hedge their bets by offering consumers a choice of a high price product of a known value or a lower price substitute product; which in fact the consumer will assume is a lower value product. Consumers know that prices are rising and they know that retailers have to in turn raise their prices; if a retailer can offer the consumer an appropriate option then the consumer is likely to remain loyal to that store.

Staff Costs Audit of Retailer Economic Strategy by Expert Appraisal:


20. Total staff remuneration 21. Levels of employment 22. Overall labour costs 23. Staff lay offs 24. Full time staff 25. Part time staff 26. Full to part time staff transition 27. Employees per shift 28. Reduced store hours


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Checklist


29. Excessive inventory financing 30. Profitable inventory 31. Unproductive inventory 32. Supplier Debt levels

33. Lower product price substitutes

34. Sales and promotions to liquidate unproductive inventory

35. Maintenance of sales levels 36. Maintenance of customer numbers

37. Price increases 38. Price decreases 39. Price elasticity

40. Inventory control 41. Stock levels

42. Retail layout redesign & reallocation 43. Retail space reduction

44. Strategic contingency plans

45. Customer dialogue mechanisms 46. Customer continuity 47. Customer loyalty programmes 48. Best prices policy 49. Best environment and service 50. Customer convenience, deliveries, opening hours


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Part L.5 : Strategic Planning in a Global Retail Context

The strategic planning challenge for both medium scale and large retailers is clear and increasingly global. Global retail strategy must consist of several factors:


1. The retailer must offer a competitively superior product as defined by local consumers.

2. The retailer must develop superior economics across the value chain that delivers the product to the local consumer.

3. The retailer must execute in the local environment.

Planning Process and Global Retailing Retailers looking to operate globally must consider:


4. Assess the international potential 5. Focussing on assessing international potential 6. Getting data on the trends in the retail sector 7. The retailer’s domestic position in that retail sector 8. Effects that international activity may have on current operations 9. Status of in-house resources 10. Estimate of sales potential 11. Research & market intelligence. 12. Fundamental cultural considerations 13. Local partnering 14. Resource allocation

15. Expert and professional advice and research:

a. Government assistance for export credits b. Government agency assistance

16. Selection of target countries:

a. Economic strength b. Political stability c. Regulatory environment d. Tax policy e. Infrastructure development f. Population size g. Cultural factors h. Government regulations i. Technological stage of the country

17. Development and implement of the international retailing strategy:

a. Strategy identifies and manages objectives b. Specification of tactics c. Schedules of activities and deadlines d. Allocation of resources e. Sales offerings to be sold f. Competitors’ strength g. Conditions in target countries


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h. Key marketing factors i. Exploitation of unique local conditions and circumstances j. Local competition

Opportunities and Threats in Global Retailing

Opportunities


18. Foreign markets used to supplement domestic sales.

19. Foreign markets represent good growth opportunities when domestic markets are saturated or stagnant.

20. The retailer is able to offer goods, services, or technology not yet available in foreign markets.

21. Competition is less in foreign markets.

22. Tax or investment advantages in foreign markets.

23. Government and economic shifts allow entry to foreign firms.

24. Communications is easier. Online activities enable the retailer to reach customers and suppliers outside the domestic markets.

Threats


25. Cultural differences between domestic and foreign markets.

26. Management styles not easily adaptable.

27. Foreign governments place restrictions on some operations.

28. Personal income poorly distributed among consumers in foreign markets.

29. Distribution systems and technology inadequate.

30. Institutional formats vary too greatly.

31. Currencies and exchange rate problems.

Standardisation


32. Application of domestic strategies directly to the foreign markets

33. Standardisation of personnel systems

34. Standardisation of physical facilities

35. Standardisation of operations

36. Standardisation of advertising messages

37. Standardisation of product lines

38. Standardisation of factors to be adapted to local conditions and needs


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Factors Affecting Global Retailing Strategy Factors which affect the international retailing strategy:


39. Timing: a. First to the market b. Wrong-foot competitors with innovative products or systems

40. Balanced international program: a. National market selection

41. Growing middle class: b. Expandable income c. Propensity to consumer new product offerings

42. Matching concept to market: a. Developed markets b. Quality offering c. Style & fashion d. Specialty operations e. Developing markets f. Discount / combination merchandise g. Price h. Assortment i. Value j. Convenience

Developed Markets


43. Issues: a. Increasing competition, deteriorating margins, and saturation b. Consolidation and rationalisation (cost cutting), forcing poor performers out of the

market c. New enabling technologies d. Demanding customers e. Limited growth

44. Implications: a. Retailers must focus on maximising operational efficiencies, vendor relationships,

infrastructure, and technology b. For growth, large retailers are expanding regionally and then globally into developed

or developing markets

Developing Markets


45. Issues: a. Minimal purchasing power per capita, yet strong economic growth, pent-up demand b. Huge customer base, representing up to 70% of the world’s population c. Infrastructure issues, transportation, communication, etc., may pose problems d. Disorganised, fragmented retail structures that are vulnerable to new entrants e. The number of indigenous large retailers is small to none f. Strong protectionist measures may exist

46. Implications: a. Tremendous opportunity for large retailers, limited competition, huge growth potential b. Initial entry may need to be through intermediary, joint venture, etc.


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Market Entry Decisions 47. Solo - joint ventures - franchisees 48. Store locations and facilities 49. Product selection 50. Service levels 51. Marketing support costs 52. Advertising to sales ratios 53. Retail space footage per capita 54. Brand image 55. Cluster strategies 56. Critical mass considerations 57. Specialist skills 58. Specialisations


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Part M.1 : Retailing Characteristics


Three factors in retailing are of particular relevance to businesses and each factor imposes unique requirements on retailers.

Average Value of Sales Transaction

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_M.1

The average value of sales transaction per shopping trip is substantially less than US$100 for department stores, specialty stores, and supermarkets. This modest level of income per customer visit creates a need:

1. To tightly control the costs associated with each transaction (for example, payment card costs, sales personnel, bagging, et cetera)

2. To maximise the number of customers drawn to the retailer 3. To ensure marketing expenditure is effective 4. To ensure that sales are augmented through promotions 5. To increase impulse sales by more aggressive selling 6. To keep operational costs in control 7. To automated and systemise inventory management 8. To ensure proper in-stock levels 9. To ensure proper product selection 10. To computerised inventory systems, stock control and stock ordering

Unplanned or Impulse Purchases A large percentage of consumers do not look at advertising before shopping trips, do not prepare shopping lists (or they deviate from the lists once in stores), and make fully unplanned purchases.

Such consumer behaviour shows the value of in-store displays, attractive store layouts, and well-organised stores, catalogues, and web sites.


11. Positioning of impulse products 12. Visibility of impulse products 13. Merchandise management of high-traffic areas 14. Stock control of impulse products

Retail Store Experience Notwithstanding the inroads made by non-store retailers, most retail transactions are still conducted in stores. Many consumers like to shop in person, they want to touch, smell, and/or try on products; they like to browse for unplanned purchases; they feel more comfortable taking a purchase home with them than waiting for a delivery; and they desire privacy while at home.

This store-based shopping orientation has implications for retailers; they must work to attract shoppers to their stores and consider such factors as store locations, transportation, store hours, proximity of competitors, product selection, parking, and advertising.

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_M.1 15. Events and promotions to promote products


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16. Shopper interaction planning with products 17. Sales staff availability to sell discretionary products

Application of Retail Strategies The application of a retail strategy provides the retailer with an overall plan which guides the retail operation. It is designed to influence company’s business activities and its responses to market forces, such as competition and the economy. All retailers, regardless of size or type, produce a specific retail strategy which would include the following:


18. Definition of the type of business in terms of the goods or service categories and the specific company orientation (such as full service or “no frills”).

19. Setting long-term and short- term objectives for sales & profit, market share, image, et cetera.

20. Determination of the customer sectors to target on the basis of their characteristics (such as gender and income level) and needs (such as product and brand preferences).

21. An overall, long- term plan that gives general direction to the company and its employees.

22. Implementation of an integrated strategy that combines such factors as store locations, product assortment, pricing, and advertising and displays to achieve objectives.

23. Evaluation of performance on scheduled basic.

24. Formalised mechanisms to correct weaknesses or problems when identified.

Audit of Retailer Strategies by Expert Appraisal:

25. Growth-oriented objectives 26. Use of cashflow generated to grow the business

27. Appeal to prime markets

28. Multi-format 29. Diversity of the customer base 30. Diversity and range of retail formats 31. Distinctive image

32. Retail Focus

33. Strong customer service and overall execution 34. Execution of the value proposition

35. Employee relations.

36. Innovation 37. Innovative products and services 38. Controlled labels 39. Speciality products 40. Sub-brands 41. In-store or on-site subsidiary products & services

42. Commitment to technology 43. Technology planning 44. Distribution channel technologies 45. Loyalty programs 46. Financial operations 47. Data mining


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48. Community involvement

49. Constant performance monitoring 50. Performance indicators 51. Key financial metrics 52. Sales growth 53. Earnings per share 54. Debt to equity 55. ROI (return on investment) 56. Market share 57. Development of new control label products 58. Operating and administrative cost management

Application of Retail Concepts Retailers, especially those with a large footprint, have to ensure a corporate culture to ensure a vigorous and enforceable corporate culture which is customer focussed. This means an institutionalised approach to strategy development and implementation which is value-driven and has defined goals.


59. Customer orientation which determines the attributes and needs of customers and endeavours to satisfy these needs to the fullest.

60. Coordinated effort which integrates all plans and activities to maximise efficiency.

61. Value-driven focus which offers good value to customers, whether it be upscale or discount. This means having prices appropriate for the level of products and customer service.

62. Goal orientation which sets goals and then uses its strategy to attain them: a. Clear concept of customer needs b. Precise planning c. Prices that reflect the value offered d. Feedback from customers e. Communicating with shoppers f. Placing shoppers desires at the heart of the company’s success g. Consistent strategies (brands, plentiful sales personnel, attractive displays, and

above-average prices for a quality service) h. Offering prices perceived as “fair” and good value for the money i. Development of the total retail experience j. Development of customer service k. Development of relationship retailing


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Total Retail Experience Irrespective of how consumers may shop, at a discount retailer, at a convenience store, or at a full-service firm, all these diverse customers have something crucial in common: each encounters a total retail experience (everything from parking to the checkout counter) in making a purchase.


The ideal retail store characteristics are:

63. Appearance 64. Cleanliness 65. Convenience 66. Store ambience 67. Relaxed and comfortable 68. Good place to spend time and browse

The total retail experience includes all the elements in a retail offering that encourage or inhibit consumers during their contact with a retailer. Many elements (for example, number of salespeople, displays, prices, brands, and stocks) are controllable by a retailer; whereas other elements (for example, adequacy of on-street parking and sales taxes) are not. If some part of the total retail experience is unsatisfactory, consumers may not make a purchase, they may even decide not to patronise a retailer again.

In planning strategy, the retailer must ensure that all strategic elements are in place for each of the consumer segments they are targeting; with a total retail experience aimed at fulfilling each segment’s expectations.

Customer Service Customer service refers to the identifiable, but sometimes intangible, activities undertaken by a retailer in conjunction with the basic goods and services it sells. It has a strong impact on the total retail experience. Among the factors composing a customer service strategy are store hours, parking, shopper-friendliness of the store layout, credit acceptance, salespeople, such amenities as gift wrapping, rest rooms, employee politeness, delivery policies, the time shoppers spend in checkout lines, customer follow-up, and so forth.

Satisfaction with customer service is affected by expectations (based on the type of retailer) and past experience, and shopper’s assessment of customer service depends on their perceptions, not necessarily reality. Different people may evaluate the same service quite differently.

The same person may even rate a retailer’s customer service differently at a different time, or in a different location, because of its intangibility, though the service stays constant. Service varies widely from one retailer to the next, and from one shopping channel to the next. The challenge for retailers is to ask shoppers what they expect in the way of service, listen to what they say, and then make every attempt to satisfy them.

Unfortunately, the customer is not always right. Just as retailers know they can never underestimate the taste or intelligence of their customers, so too they can never overestimate the propensity of some of their customers to engage in sharp practice. Of course, just as hotels cost into their pricing the fact that some of their customers will steal the towels, so too those retailers whom offer a liberal refund policy cost into their pricing the returns. Whereas in good times retail purchase return may be 4-6%, in bad times this increases to 5-8%; and this has an even greater impact because retailers are already suffering from a reduction in sales, margins and profits.

Clearly retailers must think very seriously about the balance of good customer service and excessive pandering to customers.


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Relationship Retailing Retailers have the best possible motive to engage in relationship retailing, whereby they seek to establish and maintain long-term bonds with customers, rather than act as if each sales transaction is a completely new encounter. The motive for adopting such relationships is of course that it is more profitable for the retailer.


Relationship retailing means concentrating on the total retail experience:

69. Monitoring satisfaction with customer service 70. Staying in touch with customers 71. The majority of all buying decisions are not made until the consumer is standing in front of

a store shelf, choosing which of many brands to put in the shopping basket 72. Customer Respect Perceptions 73. Trust in customers 74. Stand behind products 75. Deal with customer problems 76. Frontline workers empowered to respond properly to a problem 77. Provide suitable product guarantees 78. Keep commitments to customers 79. Sufficient stocks 80. Value customer time 81. Facilities and service systems convenient and efficient for customers to use 82. Employees understand that serving customers supersedes all other priorities 83. Communicate with customers respectfully 84. Store information helpful 85. Advertising truthfulness 86. Contact personnel professional

87. Treat all customers with respect, regardless of their appearance, age, race, gender, status, or size of purchase or account

88. Special precautions to minimise discriminatory treatment of certain customers 89. Thank customers for their business 90. Respect employees 91. Ensure that employees are respectfully treated by customers

To be effective in relationship retailing, one should consider two factors:

92. It is harder to make new customers than to make existing ones happy. For a retailer to gain in the long run, by attracting shoppers, making sales, and earning profits); the customer must also gain in the long run, by receiving good value, being treated with respect, and feel welcomed in the store.

93. The advances in information technology mean that it is now much easier to develop a customer database with information on shopper’s attributes and past shopping behaviour. On-going customer contact can be better, more frequent, and more focused.

Audit of Provider Concepts by Expert Appraisal:

94. Customisation of product offering. No more one size fits all. Retailers must adopt a more robust portfolio approach to the market to appeal to the multi-channel consumer mind-set.

95. Market power of the Majors. All retailers must come to terms that the majors are here to stay and that they will continue to dominate almost every national market in the world.

96. Supercentres are here to stay because they are merely the reflection of consumer choice.

97. Speciality Retailers have to develop concepts to both work with supercentres and to offer alternatives to the supercentres.


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98. Department stores will find it difficult to survive the mass retailers and lifestyle specialists and will need to re-invent themselves.

99. Shopping malls will need to change to maintain their market share.

100. Compressed lifecycles for products, stronger retail concepts, and global brands mean the days of the large, mass-merchandised specialty chain are over.

101. Experiential retailing concepts will mix context and commerce in the future.

102. E-commerce will act as more of a vehicle for retailing than as the cash register. The majority of sales will continue to be channel through retail stores.

103. Consumers will embrace new technologies that give them better information and more control over the shopping process.

104. Stores and sales staff will have greater capabilities as retailers adopt technologies to better utilise retail space and allow greater employee productivity. Over time, some smart store solutions will displace human resources with technology.

105. M-commerce remains a mainly a B2B (business to business) than B2C (business to consumer) sales method. The consumer is still attracted to more tangible methods of purchasing and the store experience.

106. Globalisation of retailers will accelerate as national borders disappear and trade is de-regulated and liberalised.

107. As retailers become more globalised they will seek alternative and more secure sources of supply and this will mean that retailers become more involved in manufacturing.

108. Retailers will become brand managers as the search for competitive differentiation accelerates. This will include more own branding, higher quality own brands and the ownership of stand-alone brands.

109. Retailers will Brand-Share by integrating with complimentary retail brands, sharing customer bases and leverage location strength through innovative store-within-a-store, or brand-sharing, partnerships.

110. Retailers will attempt greater Brand Extension and seek to extend their brand into other consumer and business markets thereby transcend competitive boundaries

111. Suppliers will strive to become providers of best-in-class categories as they take on an increasing number of activities that traditionally have been the responsibility of the retailer.

112. As more suppliers get locked out of traditional retail channels, supplier direct to consumer will become a more viable scenario for the future.

113. In a buyer’s market, where technology is changing the dynamics of the buyer–seller interface, the relationship between retailers and consumers will become much more symmetrical and will favour the consumer.

114. For Retailers and Suppliers alike, survival will mean developing a New Concept of their business model rather than just trying another redesign.


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Part M.2 : Relationships in Retailing


Retailer must strictly apply the concepts of Value and Relationship so that customers strongly believe that the firm offers good value for the money, and that both customers and channel members want to do business with that retailer.

Consumers demand better value from the shopping experience.


1. Time and budget constrain consumers and they spend less time shopping, make fewer trips, visit fewer stores, and shop more purposefully.

2. Consumers use different retail formats for different needs. Specifically, they split the commodity shopping trip from the value-added shopping trip.

3. Consumers are more sceptical about price. Under the barrage of sales, price has lost its meaning; gimmicks have lost their appeal. To regain consumer confidence, pricing by retailers and manufacturers alike must become clearer, more sensible, and more sophisticated.

Relationship retailing with regard to customers and channel partners, the differences in relationship building between goods and service retailers, technology and relationships, and ethics and relationships are considerations which will provide value.

Value & the Value Chain In many channels of distribution, there are several parties: manufacturer, wholesaler, retailer, and customer. These parties are most apt to be satisfied with their interactions when they have similar beliefs about the value provided and received and agree on the payment for that level of value.

From the perspective of the manufacturer, wholesaler, and retailer, Value is embodied by a series of activities and processes, the Value Chain, that provides a certain value for the consumer. It is the totality of the tangible and intangible product and customer service attributes offered to shoppers. The level of value relates to each retailer’s desire for a fair profit and its market niche (such as discount vs. upscale).Where firms may differ is in rewarding the value each provides and in allocating the activities undertaken.

From the customer’s perspective, Value is the perception the shopper has of a value chain. It is the customer’s view of all the benefits from a purchase (formed by the total retail experience). Value is based on the perceived benefits received versus the price paid. It varies by type of shopper. Price-oriented shoppers want low prices, service-oriented shoppers will pay more for superior customer service, and status-oriented shoppers will pay a lot to patronise prestigious stores.


Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_M.2

4. Customers always believe they got their money’s worth

5. Customers perceive the level of value provided is the same as the retailer intends.

6. Customer Segments confirm that they receive the desired Value. Value is desired by all customers; however, it means different things to different customers.


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7. Consumers believe that the retailer’s prices have moved close to competitors. Comparison shopping for prices is very easily done online and thus prices have moved closer together for different types of retailers.

8. Consumer believe that the Retailer is differentiation and the retailer is not perceived as a “me too” retailer.

9. Consumers believe that there is a specific value/price level for each product offering.

10. Consumers believe that the Retailer can command a higher price for the same article by adding better customer service.

The retail Value Chain represents the total bundle of benefits offered to consumers through a channel of distribution. Consumers are only concerned with the results of a value chain, not the process.

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_M.2


11. Store location 12. Parking 13. Retailer ambience 14. Level of customer service 15. Products carried 16. Brands carried 17. Product quality 18. In-stock position 19. Delivery or shipping 20. Prices 21. Retailer’s image

Consumer visible Value Chain elements:

22. Display windows 23. Store hours 24. Sales personnel 25. Point-of-sale equipment 26. Upscale store ambience 27. Plentiful sales personnel 28. Shopping carts 29. Self-service & self-check-out

Behind the counter Value Chain elements:

30. Store location planning 31. Credit processing 32. Warehousing 33. Merchandising decisions

There are three aspects of a value-oriented retail strategy:

expected, augmented, and potential


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Audit of Value Chain Attributes by Expert Appraisal:


34. Expected retail strategy (the minimum Value Chain elements a given customer segment expects from the retailer; failing which, customer dissatisfaction will cause the retailer to lose customers):

a. Store cleanliness b. Convenient hours c. Well-informed employees d. Timely service e. Popular products in stock f. Parking g. Returns privileges

35. Augmented retail strategy (extra Value Chain elements that differentiate the retailer from

others and are the key to continued customer patronage): h. Exclusive brands i. Superior salespeople j. Loyalty programs k. Delivery l. Personal shoppers m. Special services n. Valet parking

36. Potential retail strategy (Value Chain elements not yet perfected by the retailer’s competitors

in the same category were the retailer to capitalise on potential features gain a head start over their adversaries):

o. 24/7 store hours p. Unlimited customer return privileges q. Full-scale product customisation r. Instant fulfilment through in-store orders accompanied by free delivery s. In-mall facilities t. Transportation

Retailers have to avoid the potential pitfalls of a value-oriented retail strategy.

Audit of Value Chain Attributes by Expert Appraisal:


37. Planning value with just a price perspective. Value is tied to two factors, benefits and prices; however most customers expect the retailer to absorb credit card costs even on discount or low margin products.

38. Providing value-enhancing services that customers do not want and therefore will not pay extra.

39. Competing in the wrong value / price segment. Retailers must ensure that their pricing points are commensurate with the value offered, and that the value / price position reflect consumer perceptions of the retail segment.

40. The belief that augmented elements alone create value. Retailers may offer a high-end benefit not available from competitors, however this will not compensate for the unavailability of more basic like adequate parking.

41. Paying lip service to customer service. Retailers may believe that the customer is always right; however they sometimes act contrary to this philosophy. This may include having a high


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turnover of sales staff, charging for returned goods that have been opened, and not offer ordering of out of stock items.

Value-Oriented Retailing Checklist


42. Defined values from the consumer perspective

43. Clear value / price point

44. Value position which is competitively defensible

45. Channel partners capable of delivering value-enhancing services

46. Distinction between expected and augmented value chain elements

47. Identification of meaningful potential value chain elements

48. Value-oriented approach aimed at distinct market segments

49. Consistent value-oriented approach

50. Value-oriented approach effectively communicated to the target market

51. Target market’s clear identification of the retailer’s positioning strategy

52. Retailer’s positioning strategy considers trade-offs in sales versus profits

53. Retailer sets customer satisfaction goals

54. Retailer periodically measure customer satisfaction levels

55. Retailer careful to avoid the pitfalls in value-oriented retailing

56. Retailer always looking out for new opportunities that will create customer value


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Part M.3 : Customer Relationships


Relationship Retailing is the process whereby retailers seek to form and maintain long-term bonds with customers, rather than act as if each sales transaction is a new encounter with them. For relationship retailing to work, enduring value-driven relationships are needed with other channel members, as well as with customers; developing these is a challenge.

Customer Relationships Loyal customers are the backbone of a business and in retailing this can have profound effects on profitability as 30% of a retailer’s customers will represented over 70% of a retailers profits.

In relationship retailing, there are factors to keep in mind:


1. The customer base 2. Customer service 3. Customer satisfaction 4. Loyalty programs 5. Defection rates

The Customer Base Retailers must regularly analyze their customer base in demographic and other terms:


6. Population demographics 7. Lifestyle trends 8. Attitudes toward and reasons for shopping 9. The level of loyalty 10. The mix of new versus loyal customers

11. Populations aging 12. Household size 13. Population mobility 14. Population location & urbanisation 15. Working population distribution by gender and age 16. Population distribution by social class and income levels 17. Immigration and emigration 18. Consumer gender roles 19. Market segment diversification 20. Interest in spending time shopping 21. Use of time-saving goods and services 22. Consumer demands of retailers

There are various factors that influence shopping behaviour:


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23. More women than men enjoy shopping 24. Men shop more quickly than women 25. Shopping behaviour of younger men (ages 18 to 34) is more similar to their female

counterparts 26. Time constraints 27. Consumers time spent during shopping by gender type by type of shopping area 28. Consumers time spent during shopping by gender type by type of retailer 29. Purchases by gender type by type of shopping area 30. Purchases by gender type by type of retailer

31. Consumers reasons to shop by type of retailer

a. See and feel the product b. Product availability c. Ease in finding products d. Confidence in products e. Ease of shopping f. Convenience of the location g. Price h. Assortment i. Quality of merchandise j. Store physical attributes k. Product labelling

Core Customers It is worth nurturing relationships with some customers rather than with others; these are the retailer’s core customers, being their most regular customers. This group of customers need to be identified, tagged and retained.


32. Customers that are the most profitable and the most loyal a. Spend more money b. Pay their bills promptly c. Reasonable in their customer service requests d. Prefer stable, long-term relationships

33. Customers that place the greatest value on what the retailer has to offer

a. Customers that prefer the retailer’s products b. Customers that prefer the retailer’s customer services c. Customers that prefer the retailer’s special strengths or uniqueness

34. Customers that are worth more to you than the retailer’s competitors

a. Customers that warrant extra effort and investment b. Customers who are worth more to a competitor will eventually defect

The retailer’s desired mix of new versus loyal customers depends on that retailer’s stage in its life cycle, goals, and resources, and its competitors’ actions.

A mature retailer is more apt to rely on core customers and supplement its revenues with new shoppers. A new retailer faces the dual tasks of attracting shoppers and building a loyal following; it cannot do the latter without the former. If goals are growth-oriented, the customer base must be expanded by adding stores, increasing advertising, and so on; the challenge is to do this in a way that does not deflect attention from core customers. Although it is more costly to attract new customers than to serve existing ones, core customers are not cost-free. If competitors try to take away a retailer’s existing customers with price cuts and special promotions, a retailer may feel that it must


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pursue competitors’ customers in the same way. Again, it must be careful not to alienate core customers.

Customer Service Customer service refers to the identifiable, but sometimes intangible, activities undertaken by a retailer in conjunction with the goods and services it sells. Customer service affects the total retail experience. Consistent with a value chain philosophy, retailers must apply two elements of customer service: expected customer service is the service level that customers want to receive from any retailer, such as basic employee courtesy; augmented customer service includes the activities that enhance the shopping experience and give retailers a competitive advantage.

The attributes of personnel who interact with customers (such as politeness and knowledge), as well as the number and variety of customer services offered, have a strong effect on the relationship created.

Planning the best customer service strategy can be complex and challenging especially during economically difficult times which is causing retailers to cut costs in many areas of their businesses; albeit customers still expect the same level of service. Customer service satisfaction has always been a key for positive financial results. Businesses must not make customer service investments only to keep pace with growth, they should view their spending as a strategic benefit to bring greater customer satisfaction and retention.

Some retailers realise that customer service is better when they utilise employee empowerment, whereby workers have the discretion to do what they believe is necessary, within reason, to satisfy the customer, even if this means bending some rules.

Audit of Employee performance by Expert Appraisal:


35. Employee turnover rates 36. High performing employees 37. Employees paid commission 38. Employee orientation training 39. Employee on-going training 40. Discretion for employees to make on-the-spot decisions 41. Employees perceive themselves as consultants and problem solvers


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Developing a customer service strategy Fundamental issues for the retailer.


For the retailer, what customer services are expected and what customer services are augmented:

42. The level of customer service which complements the retailer’s image 43. Choices of customer services 44. Payment for customer services 45. Measurement of customer benefits versus costs 46. Termination of customer services

Planning individual customer services


47. Having outlined a broad customer service plan, the retailer then identifies individual customer services.

a. Alterations b. Baby strollers or Baby Changing facilities c. Baby-sitting or Children’s Areas d. Beauty salon e. Bridal registry f. Complaints and returns handling g. Credit facilities h. Designers i. Dressing rooms j. Extended store hours k. Fitting rooms l. Free parking m. Gift certificates n. Gift wrapping o. Information services p. Installation / Technical services q. Layaway r. Mail and phone orders s. Open credit account t. Option credit account u. Packaging (gift wrapping) v. Parking w. Personal shoppers x. Phones y. Rest rooms z. Restaurant aa. Retailer-sponsored credit cards bb. Shopping bags cc. Sitting areas dd. Special sales for regular customers ee. Storage ff. Ticket outlets gg. Trade-ins hh. Trial purchases ii. Water fountains


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Customer Satisfaction Customer satisfaction occurs when the value and customer service provided through a retailing experience meet or exceed consumer expectations. Only “very satisfied” customers are likely to remain loyal in the long run.


48. Retailer customer satisfaction 49. Customer satisfaction deficits 50. Customer Satisfaction Index rating 51. Perceived quality 52. Perceived value 53. Satisfaction score

54. Consumers not complaining when dissatisfied 55. Perception that complaining produces few or no positive results 56. Complaining difficult 57. Unable to find the staff to whom to complain 58. Access to complaints process restricted 59. Complaints procedure too bureaucratic 60. Complaint forms to complex

61. Customer feedback 62. On-going customer satisfaction surveys 63. Customers rating customer services 64. Customer services exceed expectations 65. Customer services appreciated 66. Customer services disliked

Loyalty Programs Consumer loyalty programs reward the retailer’s best customers, those with whom it wants long-lasting relationships.


67. Percentage of retailer’s customers participating 68. Structure of loyalty program 69. Types of Incentive 70. Cash discount on purchases 71. Notices of upcoming promotions

72. Special vouchers 73. Coupons for new products 74. Referral coupons on goods and services from other vendors 75. Gifts with purchases 76. Special Events 77. Preferred parking 78. Personal shopping assistance

79. Privacy issues 80. Consumer fatigue with program 81. Defection rates


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Channel Relationships Within a value chain, the members of a distribution channel (manufacturers, wholesalers, and retailers) jointly represent a Value Delivery System, which comprises all the parties that develop, produce, deliver, and sell and service particular goods and services.

The ramifications for retailers include:


82. Each channel member is dependent on the others. When consumers shop with a certain retailer, they often do so because of both the retailer and the products it carries.

83. All value delivery system activities must be enumerated and responsibility assigned for them.

84. Small retailers may have to use suppliers outside the normal distribution channel to get the products they want and gain adequate supplier support. Although large retailers may be able to buy directly from manufacturers, smaller retailers may have to buy through wholesalers that handle small accounts.

85. A value delivery system is as good as its weakest link. No matter how well a retailer performs its activities, it will still have unhappy shoppers if suppliers deliver late or do not honour warranties.

86. The nature of a given value delivery system must be related to target market expectations.

87. Channel member costs and functions are influenced by each party’s role. Long-term cooperation and two-way information flows foster efficiency.

88. Value delivery systems are complex due to the vast product assortment of superstores, the many forms of retailing, and the use of multiple distribution channels by some manufacturers.

89. Non-store retailing (such as mail-order, phone, and online transactions) requires a different delivery system than does store retailing.

90. Due to conflicting goals about profit margins, shelf space, and so on, some channel members are adversarial—to the detriment of the value delivery system and channel relationships.

When members of a Value Delivery System forge strong positive channel relationships, they better serve each other and the final consumer.


91. Traditionally, the relationship between retailers and suppliers was, at best, arm’s length.

92. The manufacturers’ goal was to move the greatest volume of goods at the highest price.

93. The retailers’ goal was to negotiate the lowest price for the goods.

94. Competitive pressures led to a new paradigm. It focused on a simple idea: make sure the right product at the right price is on the shelf when the customer enters the store, while maintaining the lowest possible inventory at all points in the pipeline from suppliers to retailer. This requires cooperation between retailers and upstream suppliers.

95. Category management whereby channel members collaborate to manage products by category rather than by individual item. Category management is based on these principles:

a. Retailers listen more to customers and stock what they want.

b. Profitability is improved because inventory matches demand more closely.


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c. By being better focused, each department is more desirable for shoppers.

d. Retail buyers are given more responsibilities and accountability for category results.

e. Retailers and suppliers must share data and be more computerised.

f. Retailers and suppliers must plan together.

Relationship Building: Goods -v- Service Retailers The consumer interest in services makes it crucial to understand the differences in relationship building between retailers that market services and those that market goods. This applies to store-based and non-store-based retailers, those offering only goods or services, and those offering goods and services.

Goods Retailing is defined as the sale of tangible (physical) products, whereas Service Retailing involves transactions in which consumers do not purchase or acquire ownership of tangible products. Some retailers engage in either goods retailing (such as hardware stores) or service retailing (such as travel agencies); others offer a combination of the two (such as stores that rent as well as sell movies). The latter format is the fastest-growing. For example, many department stores have beauty salons, and many hotels have gift shops, and so on.

Service Retailing encompasses such diverse businesses as personal services, hotels and motels, auto repair and rental, and recreational services. In addition, although several services have not been commonly considered a part of retailing (such as medical, dental, legal, and educational services), they should be when they entail final consumer sales.

There are three kinds of service retailing:

Rented-goods services, whereby consumers lease and use goods for specified periods of time. Tangible goods are leased for a fixed time, but ownership is not obtained and the good must be returned when the rental period is up. Examples are car rentals, carpet cleaner rentals at a supermarket, and video rentals at a convenience store.

Owned-goods services, whereby goods owned by consumers are repaired, improved, or maintained. In this grouping, the retailer providing the service never owns the good involved. Illustrations include watch repair, lawn care, and an annual air-conditioner tune-up.

Non-goods services, whereby intangible personal services are offered to consumers, who then experience the services rather than possess them. The seller offers personal expertise for a specified time in return for a fee; tangible goods are not involved. Some examples are stockbrokers, travel agents, real-estate brokers, and personal trainers.

The terms customer service and service retailing are not interchangeable. Customer service refers to the activities undertaken in conjunction with the retailer’s main business; they are part of the total retail experience. Service Retailing refers to situations in which services are sold to consumers.

There are four unique aspects of service retailing that influence relationship building and customer retention.


96. The intangibility of many services makes a consumer’s choice of competitive offerings tougher than with goods.

97. The service provider and his or her services are sometimes inseparable (thereby localising marketing efforts).

98. The perishability of many services prevents storage and increases risks.

99. The aspect of human nature involved in many services makes them more variable.


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The intangible (and possibly abstract) nature of services makes it harder for a retailer to develop a clear consumer-oriented strategy, particularly because many retailers (such as opticians, repair people, and landscapers) start service businesses on the basis of their product expertise. The inseparability of the service provider and his or her services means that the owner–operator is often indispensable and good customer relations are pivotal.

100. Perishability presents a risk that in many cases cannot be overcome. Thus, revenues from an unrented hotel room are forever lost.

101. Variability means that service quality may differ for each shopping experience, store, or service provider.

Service retailing is much more dependent on personal interactions and word-of-mouth communication than is goods retailing:

Relationship marketing benefits the customer, as well as the firm. For services that are personally important, variable in quality, and/or complex, many customers will desire to be “relationship customers.” Medical, banking, insurance, and hairstyling services illustrate some or all of the significant factors, importance, variability, and complexity, which would cause many customers to desire continuity with the same provider, a proactive service attitude, and customised service delivery.

The intangible nature of services makes them difficult for customers to evaluate prior to purchase.

The heterogeneity of labour-intensive services encourages customer loyalty when excellent service is experienced. Not only does the auto repair firm want to find customers who will be loyal, but customers want to find an auto repair firm that evokes their loyalty.

Knowledge of the customer combined with social rapport built over a series of service encounters facilitates the tailoring of service to customer specifications. Relationship marketing does not apply to every service situation. However, for those services distinguished by the characteristics discussed here, it is potent.

Ethics & Relationships in Retailing Ethical challenges fall into three interconnected categories:

Ethics relates to the retailer’s moral principles and values. Social responsibility involves acts benefiting society. Consumerism entails protecting consumer rights.

“Good” behaviour depends not only on the retailer but also on the expectations of the community in which it does business.


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Ethics In dealing with their constituencies (customers, the general public, employees, suppliers, competitors, and others), retailers have a moral obligation to act ethically. Furthermore, due to the attention paid to firms’ behaviour and the high expectations people have today, a failure to be ethical may lead to adverse publicity, lawsuits, the loss of customers, and a lack of self-respect among employees.

When a retailer has a sense of ethics, it acts in a trustworthy, fair, honest, and respectful manner with each of its constituencies. Executives must articulate to employees and channel partners which kinds of behaviour are acceptable and which are not. The best way to avoid unethical acts is for firms to have written ethics codes, to distribute them to employees and channel partners, to monitor behaviour, and to punish poor behaviour, and for managers to be highly ethical in their own conduct.

Often society may deem certain behaviour to be unethical even if laws do not forbid it. Most observers would agree that such practices as these are unethical (and sometimes illegal, too):


102. Raising prices on scarce products after natural events. 103. Not having adequate stock when a sale is advertised.

104. Charging high prices in low-income areas because consumers there do not have the transportation mobility to shop out of their neighbourhoods.

105. Selling alcohol and tobacco products to children. 106. Having a salesperson pose as a market researcher when engaged in telemarketing. 107. Defaming competitors. 108. Selling refurbished merchandise as new.

109. Pressuring employees to push high-profit items to shoppers, even if these items are not the best products for them.

110. Selling information from a customer database.

111. Offers not clear, honest, and complete.

112. Disparagement of anyone on grounds of race, colour, religion, national origin, gender, marital status, or age.

113. Contacts which do not disclose the sponsor and the purpose of the contact. 114. Competition prizes not advertised in a clear, honest, and complete way. 115. Merchandise shipped without receiving customer permission. 116. Telemarketers knowingly call a consumer with an unlisted or unpublished phone number.

Social Responsibility A retailer exhibiting social responsibility acts in the best interests of society, as well as itself. The challenge is to balance corporate citizenship with a fair level of profits for shareholders, management, and employees. Some forms of social responsibility are virtually cost-free, such as having employees participate in community events or disposing of waste products in a more careful way. Some are more costly, such as making donations to charitable groups or giving away goods and services to a school.

Still others mean going above and beyond the letter of the law, such as having free loaner wheelchairs for persons with disabilities in addition to having legally mandated wheelchair accessibility to retail premises.

Retailers know that socially responsible acts do not go unnoticed. Though the acts may not stimulate extra profits for firms with weak strategies, they can be a customer inducement for those otherwise viewed as “me too” entities. It may also be possible to profit from good deeds; a retailer donates excess inventory to a charity for the poor, it can take a tax deduction equal to the cost of the goods.


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Consumerism Consumerism involves the activities of government, business, and other organisations to protect people from practices infringing upon their rights as consumers. These actions recognise that consumers have basic rights that should be safeguarded.

Retailers and their channel partners need to avoid business practices that violate consumer rights and to do all they can to understand and protect them, for reasons that include the following:


Retail practices are covered by legislation.

117. Consumers are more knowledgeable, price-conscious, and selective than in the past.

118. Large retailers may be viewed as indifferent by consumers. They may not provide enough personal attention for shoppers or may have inadequate control over employees.

119. The use of self-service is increasing, and it can cause frustration for some shoppers.

120. Innovative technology is unsettling to many consumers, who must learn new shopping behaviour.

121. Retailers are in direct customer contact, so they are often blamed for and asked to resolve problems caused by manufacturers (such as defective products).

To avoid customer relations problems, retailers must devised programs to protect consumer rights without waiting for government or consumer pressure to do so.

Retailers should enacted programs to test merchandise for specific attributes:

122. Value 123. Quality 124. Misrepresentation of contents 125. Safety 126. Durability

Other consumerism activities should be undertaken by the retailer:

127. Setting clear procedures for handling customer complaints 128. Sponsoring consumer education programs 129. Training personnel to interact properly with customer

Summary:

130. Understand what “value” really means and highlight its pivotal role in building and sustaining relationships.

a. Undertake activities and processes to provide a given level of value for the consumer. b. Consumers perceive the value offered, based on the perceived benefits received

versus the prices paid. c. Perceived value varies by type of shopper. d. Value chain represents the total bundle of benefits offered by a channel of

distribution. e. Value chain comprises store location, ambience, customer service, the

products/brands carried, product quality, the in-stock position, shipping, prices, the retailer’s image, and so forth.

f. Elements of a retail value chain visible to shoppers. g. Expected retail strategy which represents the minimum value chain elements a given

customer segment would expect from the retailer. h. Augmented retail strategy which includes the extra elements that differentiate the

retailer. i. Potential retail strategy includes value chain elements not yet perfected in the

retailer’s industry category.


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131. Understand both customer relationships and channel relationships which may be nurtured. a. Enduring relationships with other channel members, as well as with customers. b. Realisation that loyal customers are the backbone of their business. c. Applying relationship retailing with consumers which identify factors which should be

considered: i. the customer base ii. customer service iii. customer satisfaction iv. loyalty programs v. defection rates.

d. Which shoppers are more worth nurturing because they are a retailer’s core customers. e. The attributes of personnel who interact with customers f. Number and variety of customer services offered. g. Improved customer service by empowering personnel h. Implementation of specific tactics as to credit, delivery, and so forth. i. Customer satisfaction because the value and customer service provided in a retail

experience meet or exceed expectations. j. Loyalty programs which reward the best customers with whom a retailer wants to develop

long-lasting relationships. k. Sound value-driven retail strategy. l. Study of defections, how many customers are lost, and why they no longer patronise the

store. m. Members of a distribution channel jointly representing the value delivery system. n. Distribution activities which are enumerated and responsibility assigned. o. Category management.

132. Differences in relationship building between goods and service retailers.

a. Focus on selling tangible products. b. Service retailing.

i. rented-goods services ii. owned-goods services iii. non-goods services

133. Impact of technology on relationships in retailing.

a. Improved information flow between the retailer and suppliers b. Improved information flow between the retailer and customers c. Faster, smoother transactions d. Electronic banking services e. Nature of supplier/ retailer/customer interactions

134. Interplay between the retailer’s ethical performance and relationships in retailing.

a. Ethics of the retailer’s moral principles and values b. Social responsibility c. Consumerism d. Act in a trustworthy, fair, honest, and respectful way. e. Avoids unethical behaviour through written ethics codes, communicate them to

employees, monitor and punish poor behaviour, and has ethical executives f. Recycling and conservation programs g. Consumer rights to safety, to be informed, to choose, and to be heard.


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Part M.4 : Planning Aspects of Service Retailing


Consumers in developed countries spend most of their after-tax income on such services as travel, recreation, personal care, education, medical care, and housing. In developed countries between 70-80% of the labour force works in services.

During the past 30 years, the prices of services have risen more than the prices of many goods because manufacturing has migrated to low cost countries and of course services incur the local labour costs. In addition, technological advances, automation has substantially reduced manufacturing labour costs, but many services remain labour-intensive because of their personal nature.

Many traditional goods retailers are now turning their attention to the provision of services and the historic dividing lines between goods and services retailers is now very blurred.

Successful service retailing The inter-personal abilities required in service retailing are usually quite distinct from those in goods retailing:


1. Specific retailer skills.

2. Difficulties in changing and transferring their skills to another area.

3. Service operators may be required to have licences or certification to run their businesses depending on national regulations

4. Those employed in service businesses must enjoy their jobs and have the aptitude for them.

5. Service retailers can operate on lower overall investments and lower annual revenues than can goods retailers.

6. Costs can be held down in service businesses whereas a goods retailer needs a good product assortment and inventory on hand, which may be costly and require storage facilities.

7. Considerations of time commitment of a service retailer differ by type of business.

8. More service retailers fall into the high time-investment category.

Performance of service retailers


Service tangibility can be increased:

9. By stressing service provider reliability 10. Promoting a continuous image 11. Describing specific results 12. Offering warranties

Demand and supply can be better matched:

13. By offering similar services to market segments with different demand patterns 14. New services with demand patterns that are countercyclical from existing services 15. New services that complement existing ones 16. Special deals during nonpeak times 17. New services not subject to existing capacity constraints


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Standardising services:

18. Reduces their variability 19. Makes it easier to set prices 20. Improves efficiency

Services can be standardised:

21. By clearly defining each of the tasks involved 22. Determining the minimum and maximum times needed to complete each task 23. Selecting the best order in which to do tasks 24. Noting the optimum time and quality of the entire service

Service retailers may be able to make services more efficient:

25. By automating them and substituting machinery for labour. 26. Optimum location of a service centres 27. Use of mobile customer service facilities

Pricing decisions can be improved:

28. Communicate value through their pricing 29. Satisfaction-based pricing recognises and reduces customer perceptions of uncertainty that

service intangibility magnifies 30. Service guarantees 31. Benefit-driven pricing 32. Flat-rate pricing. 33. Relationship pricing which encourages long-term relationships with valuable customers

through long-term contracts and price bundling 34. Cost leadership techniques 35. Negotiated pricing where the retailer works out a one-time pricing arrangements with

individual customers because of a unique or complex service 36. Contingency pricing where the retailer does not get paid until after the service is performed

and payment is contingent on the service’s being satisfactory.


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Part N.1 : Supplemental Customer Survey Data


This section provides a battery of supplemental Customer Surveys.

Survey Respondent Demographics Survey data is provided for the total consumer demographic. However the survey data can be extracted for particular demographics. The Filtering of the demographic is done for individual demographic characteristics or for one or more demographic characteristics.

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_N.1.1

1. Gender

2. Age

a. Under 13

b. 13-17

c. 18-25

d. 26-34

e. 35-54

f. 55-64

g. 65 or over

3. Marital status

a. Single, never married

b. Married without children

c. Married with children

d. Divorced

e. Separated

f. Widowed

g. Living with partner

4. Highest level of education you have completed

a. Less than High School

b. High School

c. Some College

d. 2-year College Degree

e. 4-year College Degree

f. Master’s Degree

g. Doctoral Degree

h. Professional Degree

5. Are there any children in at home, if so, what are their ages a. Under 10 b. 10 to 15 c. 16 to 19 d. No, no children at home


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6. Indicate the number of children in your household under the age of 18. a. 0 b. 1 c. 2 d. 3 e. 4 or more f. How many Boys g. How many Girls

7. Including yourself, how many persons are in your household?

a. 1 b. 2 c. 3 d. 4 e. 5 or more

8. What type of housing to you live in

a. Apartment b. Condominium c. Mobile/Trailer d. Single unit home e. Other

9. Do you

a. Own b. Rent your home c. Other

10. Which of the following best describes the area you live in?

a. Inner city / downtown b. Urban c. Suburban d. Rural

11. What is your total yearly household income, before taxes

a. Under $30,000 b. $30-$39,999 c. $40-$49,999 d. $50-$59,999 e. $60-$69,999 f. $70-$79,999 g. $80-$89,999 h. $90-$99,999 i. $100-$150,000 j. Over $150,00

12. Are you currently registered to vote

a. Rather not say b. No c. Yes d. Not applicable

13. What is your current work status?

a. Work outside home full time b. Work outside home part time c. Do not work outside home

14. In what type of organisation do you work?

15. Which of the following best describes your job role?


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a. Upper Management b. Middle Management c. Junior Management d. Administrative Staff e. Support or Functional Staff f. Student

16. The organisation you work for comes under which of the following categories?

a. Public sector (e.g. government) b. Private sector (e.g. most businesses and individuals) c. Not-for-profit sector d. Do not know e. Other

17. Can you estimate your organisation's total budget for this year?

a. less than $1 million (US) b. $1 million to $10 million (US) c. $10 million to $100 million (US) d. $100 million to $500 million (US) e. $500 million to $1 billion (US) f. over $1 billion (US) g. Do not know or Rather not say

18. During an average week, most of your professional correspondence (postal mail or e-mail) is

with which of the following: a. Public sector (e.g. government) b. Private sector (e.g. most businesses and individuals) c. Not-for-profit sector d. Do not know e. Other

19. Indicate which of the following are sources of revenue for your organisation:

a. Sales to individuals or private organisations (but not contracts) b. Sale to government organisations (but not contracts) c. Contracts to do work for private organisations d. Contracts to do work for government organisations e. Contracts to do work for other organisations f. Government appropriations g. User charges and fees h. Donations i. Don't know or Other

20. What is the present occupation of the head of household?

a. Professional/technical b. Manager/official/proprietor c. Clerical d. Sales e. Crafts/trades f. Operator g. Manual worker h. Service worker i. Retired j. Homemaker k. Student l. Unemployed or Other


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Brand Survey Derived from the Customer Surveys:


1. Attitudes Towards Discount / Store Own-Brand Products 2. Brand Availability -v- Price Question 3. Perceptions of Currently Imported Brands 4. Perceptions of Currently Store Brands 5. Brand Price Sensitivity 6. Brand Product Awareness 7. Product Awareness of Store Brands 8. Brand Purchasing Criteria: Current 9. Purchasing Criteria: Current of Store Brands 10. Brand Purchasing Criteria: Future Trends 11. Purchasing Criteria: Future Trends of Store Brands 12. Quality -v- Price Question 13. Reaction to Advertising & Sales Promotion of Brands 14. Reaction to Advertising & Sales Promotion of Store Brands 15. Reaction to P.O.S. & Merchandising of Brands 16. Satisfaction with Existing Branded Outlets 17. Satisfaction with Existing Foreign Brand Products 18. Satisfaction with Existing Brands Products 19. Satisfaction with Existing Brands Retailers 20. Satisfaction with Foreign Brand Product Design 21. Satisfaction with Foreign Brand Product Packaging 22. Satisfaction with Foreign Brand Product Packaging Design 23. Satisfaction with Foreign Brand Product Quality 24. Satisfaction with Product Brands Availability 25. Satisfaction with Product Brands Design 26. Satisfaction with Product Brands Packaging 27. Satisfaction with Product Brands Packaging Design 28. Satisfaction with Product Brands Quality 29. Satisfaction with Retailers Brands Stock Levels 30. Willingness to Purchase Foreign Brands 31. Willingness to Purchase Store Brands

32. Brands Advertising Posture: Branch/Outlet Level 33. Brands Advertising Posture: Company Level 34. Brands Promotional Activity: Branch/Outlet Level 35. Brands Promotional Activity: Company Level


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Retail Store Brand Personality Derived from the Customer Surveys:


Retail store personality variables:

1. Select the answer that best indicates the way you would describe this Retailer’s Brand. a. Good selection b. High prices c. High quality d. High fashion e. Good service f. Easy to shop in g. Friendly h. Good sales and promotions i. Sophisticated j. Traditional k. Different l. Take chances m. Confident n. Creative o. Sociable p. Stands out in the crowd q. Simplified lifestyle

Comparative Retail Store Evaluation Battery of questions focusing on merchandise quality, value, layout, convenience. Comparisons across 15 competitive retailers within the catchment area.


Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_N.1.4 Considering the 15 stores, which store:

1. consistently provides the best values for your money? 2. is most likely to have what you want in stock? 3. has the best advertised sales and specials? 4. has the best quality merchandise? 5. maintains the best everyday price for most merchandise? 6. has the lowest prices overall? 7. provides the least value for your money? 8. has the highest prices overall? 9. has the poorest quality merchandise? 10. has the most convenient store layout for shopping? 11. has the widest selection of national brand merchandise? 12. offers the lowest everyday prices on household essentials such as cleaning supplies, paper

goods, and health and beauty aids? 13. has the best cafeteria?


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Retail Store Evaluation Derived from the Customer Surveys:

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_N.1.5 Retail store customer service and merchandise evaluation survey:

1. This store has modern-looking equipment and fixtures. 2. The physical facilities at this store are visually appealing. 3. Materials associated with this store's service (such as shopping bags, catalogues, or

statements) are visually appealing. 4. This store has clean, attractive, and convenient public areas (restrooms, fitting rooms). 5. The store layout at this store makes it easy for customers to find what they need. 6. The store layout at this store makes it easy for customers to move around the store. 7. When this store promises to do something by a certain time, it will do so. 8. This store provides its services at the time it promises to do so. 9. This store performs the service right the first time. 10. This store has merchandise available when the customers want it. 11. This store insists on error-free sales transactions and records. 12. Employees in this store have the knowledge to answer customers' questions. 13. The behaviour of employees in this store instils confidence in customers. 14. Customers feel safe in their transactions with this store. 15. Employees in this store give prompt service to customers. 16. Employees in this store tell customers exactly when services will be performed. 17. Employees in this store are never too busy to respond to customer's requests. 18. This store gives customers individual attention. 19. Employees in this store are consistently courteous with customers. 20. Employees of this store treat customers courteously on the telephone. 21. This store willingly handles returns and exchanges. 22. When a customer has a problem, this store shows a sincere interest in solving it. 23. Employees of this store are able to handle customer complaints directly and immediately. 24. This store offers high quality merchandise. 25. This store provides plenty of convenient parking for customers. 26. This store has operating hours convenient to all their customers. 27. This store accepts most major credit cards. 28. This store offers its own credit card.

Customer Surveys


1. Stores are conveniently located.

2. Store hours are convenient for my shopping needs.

3. Store atmosphere and decor are appealing.

4. A good selection of products was present.

5. Store has the best prices in the area.

6. Merchandise sold is of the highest quality.

7. The merchandise sold is a good value for the money.

8. Merchandise displays are attractive.

9. Advertised merchandise was in stock.

10. Overall, I am very satisfied with the store.

11. I am very satisfied with the price I paid for what I bought.

12. I am very satisfied with the merchandise I bought.


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13. In thinking about your most recent experience with the retailer, was the quality of customer

service you received:

a. Very Poor

b. Somewhat Unsatisfactory

c. About Average

d. Very Satisfactory

e. Superior

14. Characteristics of the sales person:

a. Poor

b. Fair

c. Good

d. Very Good

e. Excellent

f. Knowledge of the product

g. Courteousness

h. Willingness to help

i. Efficiency/quickness

j. Ability to complete transaction

15. How satisfied are you with the product(s) regarding the following items?

a. Overall quality

b. Value



e. Usage experience

f. After purchase service (warranty, repair, customer service etc.)


17. Overall, how satisfied are you with the product(s)?

a. Very Unsatisfied

b. Unsatisfied

c. Somewhat Satisfied

d. Very Satisfied

e. Extremely Satisfied

18. Compared to other product(s) in this category that are available, would you say that the

product(s) is/are:

a. Much better

b. Somewhat better

c. About the same

d. Somewhat worse

e. Much worse

19. Will you use/purchase the product(s) again?

a. Definitely will

b. Probably will





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20. How likely are you to recommend the product(s) to others?

a. Definitely will recommend

b. Probably will recommend

c. Not sure

d. Probably will not recommend

e. Definitely will not recommend

21. Based on your experience with the product(s), how likely are you to buy again?

a. Very Unlikely

b. Unlikely

c. Somewhat Unlikely

d. Very Likely

e. Extremely Likely

22. If you contacted the company‘s customer service, were all problems resolved to your

complete satisfaction?

23. In evaluating your most recent customer service experience, was the quality of service you

received:

a. Very poor

b. Somewhat unsatisfactory

c. About average

d. Very satisfactory

e. Superior

Particular aspects of the service experience:

24. The process of getting your problem resolved was:

a. Very poor

b. Somewhat unsatisfactory

c. About average

d. Very satisfactory

e. Superior

Particular aspects of the problem solving process:

25. The customer service representative was very courteous:

a. Strongly disagree

b. Somewhat disagree

c. Neutral

d. Somewhat agree

e. Strongly agree

26. Which of the following qualities of the service representative stood out (as being superior)?

a. Patient

b. Enthusiastic

c. Listened carefully

d. Friendly

e. Responsive

f. Other

27. What qualities of the customer service representative irked you?

a. Not patient


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b. Not enthusiastic

c. Didn't listen carefully

d. Unfriendly

e. Unresponsive

f. Other

g. No qualities irked me

28. The customer service representative handled my call quickly:



c. Neutral

d. Somewhat agree

e. Strongly agree

29. What would best describe your experience, when you called?

a. Kept me waiting on hold

b. Had to explain several times

c. Didn't know how to handle problem

d. Had to ask others

e. Spoke slowly

f. Other

g. No improvement needed

30. The customer service representative was very knowledgeable.



c. Neutral

d. Somewhat agree

e. Strongly agree

31. The Customer Service: a. Gave me the wrong information b. Didn't understand the question c. Gave unclear answers d. Couldn't solve problem e. Disorganised f. Other g. No improvement needed

32. The waiting time for having my question addressed was satisfactory.



c. Neutral

d. Somewhat agree

e. Strongly agree

33. My phone call was quickly transferred to the person who could best assist me:



c. Neutral

d. Somewhat agree

e. Strongly agree


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34. Over the next 12 months, how likely are you to replace your product with another (product or

brand)?

a. Certain

b. High chance

c. Equal chance

d. Low chance

e. Never

35. In your most recent customer service experience, how did you contact the representative?

a. In Person

b. By Telephone

c. Internet

d. Through a Dealer/Retailer/Broker

e. Other

f. Sufficient information was available on the internet to solve my problem.

36. About how long did you have to wait before speaking to a representative?

a. I was taken care of immediately

b. Within 3 minutes

c. 3-5 minutes

d. 5-10 minutes

e. More than 10 minutes

37. Did the service representative:

a. Quickly identify the problem

b. Appear knowledgeable and competent

c. Help you understand the cause and the solution to the problem

d. Handle issues with courtesy and professionalism

38. About how long did it take to get this problem resolved?

a. Immediate Resolution

b. Less than a day

c. Between 2 and 3 days

d. Between 3 and 5 days

e. More than a week

f. The problem is still not resolved

39. How many times did you have to contact customer service before the problem was corrected?

a. Once

b. Twice

c. Three Times

d. More than Three times

40. Overall, how satisfied are you with the customer service experience?

41. If you were less than totally satisfied, what could have been done to serve you better?


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Customer Satisfaction


Net Promoter Score (NPS) TYPE survey. The *Net Promoter Score is a common test of

customer satisfaction.

The score is calculated by sorting respondents into Promoters (High), Neutrals (Middle) and Detractors (Low), then subtracting the percentage of respondents that are Detractors from the percentage that are Promoters. This survey calculates a Net Promoter Score type for two instances: the purchase of a specific Brand Model and overall feelings of the Brand. In addition, it collects other feedback and demographic information for future segmentation. *The Net Promoter Score is a registered trademark of Bain & Company and Satmetrix.

1. Considering only your most recent purchase experience, how likely would you be to

recommend the purchase of the product(s) to a friend or colleague? (0 is not at all likely, 10 is

extremely likely)

2. Considering your complete experience with the company, how likely would you be to

recommend the company to a friend or colleague? (0 is not at all likely, 10 is extremely

likely)

3. What can the company do in the future to earn a score of 9 or 10?

4. What did the company do really well?

5. What can the company do to be even better?

Customer Voices


1. There would be something missing in my life if the store / brand did not exist.

2. I have the feeling that I really understand the store / brand.

3. I have feelings for the store / brand that I do not have for other companies/brands.

4. The store / brand has always been good for me.

5. The store / brand and I have a lot in common.

6. The store / brand reminds me of things I have done and places where I have been.

7. The store / brand can always count on me.

8. I trust the store / brand

9. I am satisfied with the quality of products of the store.

10. The quality of the products of the store is important to me.

11. I am satisfied with the value for money I get from store.

12. The value for money I get from store is important for me.

13. I am satisfied with the reliability of the products of the store.

14. The reliability of products of the store is important to me.

15. I am satisfied with the product guarantee from the store.

16. The product guarantees at the store is important to me.

17. I am satisfied with the expertise of the store service staff.

18. The expertise of the store service staff is important to me

19. I am satisfied with the fast response of the store service staff

20. The fast response of the store service staff is important to me.

21. The store sales people are friendly.

22. The friendliness of the store sales people is important to me.


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23. The expertise of the store sales people is high.

24. The expertise of the store sales people is important to me.

25. The store understands me and my needs.

26. Are you likely to provide enthusiastic referrals for store?

27. Do you have any comments suggestions for store?

Product Satisfaction and Customer Retention This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


1. How often do you typically use the product?

a. Once a year

b. Daily

c. Weekly

d. Once a month

e. Every 2-3 months

f. 2-3 times a year less often

g. Do not use

2. How did your product(s) perform?

a. Miserably

b. Somewhat Satisfactory

c. Very Satisfactory

d. Delightfully

3. How important was performance on these attributes?

a. Overall quality

b. Value



e. Usage experience

f. After purchase service (warranty, repair, customer service etc.)

4. Overall, how satisfied were you with the new product(s)?

a. Not at all satisfied

b. Somewhat Satisfied

c. Satisfied

d. Very Satisfied

e. Delighted

5. Have you ever contacted customer service?

6. If you contacted customer service, have all problems been resolved to your complete

satisfaction?

a. Yes, by the company or its representatives.

b. Yes, by me or someone outside the company

c. No, the problem was not resolved

7. Based on your awareness of the product(s) / service(s), is it better, the same, or worse than

other brands?


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a. Much Better

b. Better

c. About the same

d. Worse

e. Much Worse

8. How could the product(s) / service(s) do better?

9. Based on your experience with the product(s), how likely are you to buy the product(s) again?

a. Definitely will

b. Probably will




10. Based on your experience with the product(s), would you recommend this product to a friend?

a. Definitely will

b. Probably will




Customer Satisfaction: Product This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


1. Purchase Satisfaction: How much do you agree or disagree with the following statements

about the product(s)?

i. Strongly Disagree

ii. Disagree

iii. Somewhat Disagree

iv. Neither Agree nor Disagree

v. Somewhat Agree

vi. Agree

vii. Agree Strongly

a. This is one of the best products I could have bought.

b. This product is exactly what I need.

c. This product hasn’t worked out as well as I thought it would.

d. I am satisfied with my decision to buy this product.

e. Sometimes I have mixed feelings about keeping the product(s).

f. My choice to buy this product was a wise one.

g. If I could do it over again, I’d buy a different make/brand.

h. I have truly enjoyed this product.

i. I feel bad about my decision to buy this product.

j. I am not happy that I bought this product.

k. Owning this product has been a good experience.

l. I’m sure it was the right thing to buy this product.


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2. How much do you agree or disagree with the following statements about the product(s)?

i. Strongly Disagree

ii. Disagree

iii. Somewhat Disagree

iv. Neither Agree nor Disagree

v. Somewhat Agree

vi. Agree

vii. Agree Strongly

a. I am pretty satisfied with the product(s) I chose.

b. I am pretty certain that I made the best decision about which product(s) to select.

c. I felt confused while shopping for the product(s).

d. I am pretty sure that one of the other brands of the product(s) that I did not

choose would have been equal to or better than the brand I chose to satisfy my

desires and expectations.

e. It is likely that the brand of the product(s) I chose is better than the other brands

of the product(s) I am currently familiar with.

f. If I could do it over again, I’d buy a different make/brand.

Product Ownership This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


1. Did you receive this product as a gift? 2. How did you first discover this product was available for purchase?

a. Advertising - TV, newspaper, magazine, radio b. Ad in another product - brochure, preview c. Friends/Family/Someone told me about it d. Read a magazine article/review e. Saw it in the store/Browsing in store f. Through the mail/mail catalogue g. Other

3. What is the one reason you purchased this product?

a. Someone asked for it b. Makes a great gift c. Own other (products) and wanted more d. It is a classic e. Good for the whole family f. Saw it in the store g. I like the product h. Price/Good value i. Other

4. What was the name of the store where this product was bought? 5. What price did you pay for this product? 6. How many Company products do you own? 7. How many similar products of any brand do you own? 8. How many Company products have you bought in the past 12 months? 9. How many similar products of any brand have you bought in the past 12 months?


220

New Product Concept Evaluation and Pricing Study This Survey is on specific New Product Items. A list of the available new product items will be found in the Core Database:


This survey is about the Company’s new brand(s) / product(s) / service(s) as described:

1. How would you best describe your familiarity with a brand / product / service like that described above?

a. I was not aware of such a New product/service b. Only generally aware c. Have investigated or researched such products d. Have demonstrated a product like this e. Have purchased or regularly use a product like this

2. About how many units of this new product would you buy over the next year at each price

point listed below (FMV Fair Market Value)? a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. FMV = Estimated Fair Market Value = Recommended Retail Price f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

3. About what would you expect to pay for the new product(s) / service(s) like the one

described? (Nearest dollar)

4. At what price would this new product begin to look inexpensive or cheap? a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

5. At what price would this new product begin to look Fair Value?


6. At what price would the product begin to look too expensive?

a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5%


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g. FMV - 10% h. FMV - 20% i. FMV - 30%

7. At what price would the product begin to look so expensive that you would never consider

buying it? a. FMV + 30% b. FMV + 20% c. FMV + 10% d. FMV + 5% e. Estimated FMV f. FMV - 5% g. FMV - 10% h. FMV - 20% i. FMV - 30%

8. If you knew that the average price of similar New brand / product / service was [Price], would

you expect to pay more or less to buy the described new brand / product / service? a. (20-30%) more b. (5-10%) more c. No more, no less d. (5-10%) less e. (20-30%) less

9. If you are a current user of a similar brand / product / service, how long have you used the

brand / product / service? a. Under 1 month b. 1-6 months c. 6 months to 1 year d. 1-2 years e. 3 years or more f. Do not currently use

10. How often could you find a use for the described new brand / product / service?

a. Once a week or more often b. 2-3 times a month c. Once a month d. Every 2-3 months e. 2-3 times a year f. Once a year g. Would not use

11. Based on the description, how interested would you be in buying the described new brand /

product / service; if priced within your budget? a. Not at all interested b. Not very interested c. Not sure d. Somewhat interested e. Very interested

12. What is it that you like most about the described new brand / product / service?

13. What do you like least about the described new brand / product / service?

14. Which of the following best describes your need for this new brand / product / service?

a. I really need this product because nothing else can solve this problem. b. This is a minor improvement over what I currently use. c. Looks okay but is about the same as what I'm using now. d. My current product would serve me better. e. I am not at all interested in this product.


222

Product Concept Test This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


This survey is about the Company’s brand(s) / product(s) / service(s) as described here:

1. How would you best describe your familiarity with a brand / product / service like that described above?

a. I was not aware of such a product/service b. Only generally aware c. Have investigated or researched such products d. Have demonstrated a product like this e. Have purchased or regularly use a product like this

2. Having been told / seen a list of features that are part of the product: How important is each

feature to you? a. Not At All Important b. Extremely Important

3. Rank the features in order of importance:

4. How favourable is your overall reaction to the Product/Service?

a. Poor b. Fair c. Good d. Very good e. Excellent

5. What is it that you like most about the product(s)?

6. What do you like least about the product(s)?

7. Based on the product description, how interested would you be in buying this product if it

were within your budget? a. Not at all interested b. Not very interested c. Not sure d. Somewhat interested e. Extremely interested

8. About what would you expect to pay for the product(s)?

9. How often do you / would you use product(s) in this category?

a. Once a week or more often b. 2-3 times a month c. Once a month d. Every 2-3 months e. 2-3 times a year f. Once a year or less g. Do not use


223

Product Survey This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


1. Have you ever purchased the product(s) from the retailer?

2. Overall, how would you rate the retailer?

a. Excellent b. Good c. Average d. Poor e. Terrible

3. How satisfied are you with the service from the retailer?

a. Extremely satisfied b. Very satisfied c. Neutral d. Very dissatisfied e. Extremely dissatisfied

4. Would you recommend the retailer to a friend? If not, why not?

5. For your NEXT product purchase, how likely are you to purchase from the retailer?

a. Very likely b. Somewhat likely c. Not sure d. Somewhat unlikely e. Very unlikely

6. Which of the following modes did you use for your last purchase of the product(s)?

a. Store b. Mail order c. Internet d. Over the phone e. Other

7. What are the THREE main reasons you didn't purchase the product(s) from the retailer?

8. If you could change something about the retailer what would it be?

9. Are there any other comments you have for the retailer?

10. How did you first discover this product was available for purchase?

a. Advertising - TV, newspaper, magazine, radio

b. Ad in another product(s) - brochure, preview

c. Friends/Family/Someone told me about it

d. Read a magazine article/review

e. Saw it in the store/Browsing in store

f. Through the mail/mail catalogue

g. Other

11. What is the one reason you purchased this product?

a. Someone asked for it

b. Own other products and wanted more


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c. It is familiar

d. Good for the whole family

e. Saw it in the store

f. I like the product(s)

g. It was on sale

h. Other

12. Which store did you purchase this product from?

13. How much did you pay for this product?

14. How many total products do you own?

15. How many total products of any brand do you own?

16. How many total products have you purchased in the past 12 months?

17. How many total products of any brand have you purchased in the past 12 months?

18. If you do not have all of your service work done at this company, tell us why:

a. Location

b. Quality of service

c. Price

d. Parts not available

e. Treatment by personnel

f. Cannot get work done quickly enough

g. Service Department hours

h. Length of time to get service at companies

i. Time it takes to get repair order written up

j. Other

19. Have you returned to this company for any type of service during the past 12 months?

a. Yes

b. No

c. Not sure

20. For your most recent visit to this company, what type of service did you have done?

a. Routine maintenance

b. Repairs

c. Service repairs you paid for

d. Warranty-covered repairs

e. Other

21. Overall, how satisfied are you with this service experience?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied

e. Very Dissatisfied

22. Did you have any concerns with the company’s handling of this service visit?

a. Yes

b. No

23. Did you let the company know about your concern(s)?

a. Yes

b. No


225

24. Was your concern(s) resolved?

a. Yes

b. No

25. How satisfied were you with the action taken by the company to address your concern(s)?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied


Product Purchases This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:


1. How often do you buy the product(s)?

a. Once per week or more often

b. 2 to 3 times per month

c. Once per month

d. Once every 2-3 months

e. Once or twice a year

f. Less than once a year

g. Not sure

2. How likely are you to buy the product(s) in the future?

a. Very Unlikely

b. Somewhat Unlikely

c. Not sure

d. Somewhat likely

e. Very likely

3. Over all, how satisfied are you with the product(s)

a. Very satisfied

b. Somewhat satisfied

c. Neutral

d. Somewhat dissatisfied

e. Very dissatisfied

4. What are some aspects of the product(s) that can be improved?

5. Based on your experience, how does the product(s) compare with other brand product?

a. the product(s) is better

b. About the same

c. the product(s) is worst

d. Not sure

6. How often do you typically use the product(s)?

a. Daily

b. Weekly


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c. Less than monthly

d. Do not use

e. Not sure

7. Where do you primarily use the product(s)?

a. At home

b. At the office

c. Another location

d. Do not use it

8. How frequently are you using the product(s) as compared to a month ago?

a. More frequently

b. About the same

c. Less

d. Not sure

9. Do you wait for the product(s) to go on sale to purchase it?

10. Do you typically read the back and side panel of the products package?

a. Yes

b. No

c. Don't remember

11. How familiar are you with the product(s)

a. Use it on a regular basis

b. Use it sporadically

c. Heard of it but never used it

d. Never heard of it

12. What other brands of product(s) in this category have you heard of or used before?

a. Brand A

b. Brand B

c. Brand n

d. Don't know

e. None or Other

13. Which of the following attributes enticed you to try the product(s) initially?

a. Looks good

b. Easy to use/convenient

c. Price Value

d. Solves Problem

e. Readily available

f. Best quality

g. Good selection

h. Just what I need

i. Advertising

j. Not sure or Other


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Customers’ Electrical / Electronic Product Purchases This is a Differential Analysis Survey.

This Survey is on specific Product Items. A list of the available product items will be found in the Core Database:

Customer Surveys as an Excel file: Part_N.1.16

1. Approximately how many times did you shop for electrical or electronic products in the past

year?

2. Indicate the approximate total amount your family spent on electrical or electronic products

within the last year.

a. Less than $300

b. $300 - $499

c. $500 - $799

d. $800 - $999

e. $1,000 - $2,499

f. More than $2,500

g. Don't know/Not sure

3. During the past year, have you or a member of your family purchased a major electrical or

electronic product?

4. If yes, what item was purchased?

a. TV (priced more than $800)

b. TV (priced between $400 and $799)

c. TV (priced less than $400)

d. DVD Recorder / Home cinema

e. Home Computer

f. Household White Goods

5. What was the total amount spent on the item(s)?

6. If you purchased accessories, how much did you pay for these items?

7. While deciding to purchase the products:

a. How many phone calls were made to retailers for information about the product?

b. How many visits did you make to different retailers?

8. The total number of hours spent inside retail stores while making this decision?

9. How many brands or individual products did you examine in the different retail stores?

10. The item was purchased:

a. as a gift for someone not in your household.

b. as a gift for someone in your household.

c. to be used mostly by other members of your household.

d. to be used mostly by yourself.

e. Other

11. How many times have you purchased items in this product category in the past 10 years?

a. 0

b. 1

c. 2

d. 3-4

e. More than 5 times

f. Don't know/Not sure


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12. Which of the following have you purchased most recently?

a. Microwaves

b. Audio/car stereo/radios

c. Calculators

d. Video / Computer games

e. Computer

f. Phones

g. TVs

h. DVDs

i. Cameras

j. Household white goods

k. Other

13. Approximately how many times did you shop for electronic products in the past year?

14. Indicate the approximate total amount your family spent on electronic product within the last

year.

a. Less than $300

b. $300 - $499

c. $500 - $799

d. $800 - $999

e. $1,000 - $2,499

f. More than $2,500

g. Can't say

15. During the past year, have you or a member of your family purchased a major home

appliance or white good product?

16. How much did you pay for the item(s)?

17. If you purchased accessories, how much did you pay for these items?

18. How many phone calls were made to retailers while deciding to purchase this product?

19. How many times did you visit the different retail stores?

20. The total number of hours spent inside retail stores while making this decision?

21. How many brands or individual products did you examine in the different retail stores?

22. The item was purchased for the following reasons

23. How many times have you purchased items in this product category in the past 10 years?

a. 0

b. 1

c. 2

d. 3-4

e. 5-6

f. More than 6 times

24. Which of the following have you purchased within the last month?

a. Microwave

b. Household white goods

c. audio/car stereo/radio/cassette

d. Calculator

e. Video / computer game

f. Computer

g. Phone

h. TV


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i. DVD or Home cinema

j. Camera

k. Other

25. In thinking about your most recent experience with the Company, was the quality of customer

service you received:

a. Excellent b. Good c. Average d. Poor e. Very poor

26. If you were not totally satisfied with the customer service, describe the reasons for your

dissatisfaction.

27. Was the process for getting your question resolved:


28. If you were not totally satisfied with the process of getting your problem resolved, describe the

reasons for your dissatisfaction.

29. Would you say the value of the Company product, as compared to its price, is:


30. The following questions pertain to the customer service representative you spoke to most

recently:


b. Somewhat Disagree

c. Neutral

d. Somewhat Agree

e. Strongly Agree

31. The customer service representative was very courteous.

32. The customer service representative handled my call quickly.


The following questions pertain to the process by which your most recent service contract

was handled:

34. The waiting time for having my questions addressed was satisfactory.

35. My phone call was quickly transferred to the person who best could answer my question.

36. The automated phone system made the customer service experience more satisfying.

37. Consider the total package of the Company including customer service, features and benefits,

and cost. How satisfied are you with the company?

38. If the Company’s Products were no longer available, what would you replace it with?

a. Functional Competitors


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b. In-Kind Competitors

39. All things considered, over the next 12 months how likely are you to replace the Company's

Products?

a. Certain

b. High Chance

c. Not sure

d. Low Chance

e. Never

40. If you are looking to replace Company's Products, what are some of the reasons for doing

so?

41. Overall how satisfied are you with the product(s)?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied


42. What are some things that the Product/Service could do better?

43. In your opinion is the product better, about the same or worse than other company’s

product(s)?

a. Better

b. About the same

c. Worse

44. How often do you typically use the product?

a. Daily

b. weekly

c. Less than monthly

d. Do not use

45. Where do you primarily use the product(s)?

a. At home

b. At the office

c. Another location outside the house

d. Not using it

e. Other

46. How often are you using the product(s) as compared to a month ago?

a. More

b. About the same

c. Less

d. Can't say

47. Do you usually buy this product on sale?

a. Yes

b. No

c. Doesn't matter

48. Do you typically read the back and side panel of the products package?

a. Yes


231

b. No

c. Not sure

49. How familiar are you with the product(s)?

a. Very familiar (use on a regular basis)

b. Somewhat familiar (use it only sometimes)

c. Familiar but never used it

d. Never heard of product before

50. What other brands of product(s) in this category have you heard of?

51. What were reasons for trying this product?

a. Looks good

b. Easy to use/convenient

c. Price Value

d. Solves Problem

e. Readily available

f. Best quality

g. Good selection

h. Just what I need

i. Advertising

j. Have not used

k. Other

52. How much did you pay for the product(s)?

53. How long have you used the product(s)?

a. Less than 1 month

b. 1 to 6 months


d. 1 to 3 years

e. Not sure

f. Never used

g. Other


a. Daily

b. Once/week

c. 2 to 3 times a month

d. Once/month

e. Ever 2-3 months

f. 2-3 times a year or less

g. Not sure

h. Other

55. Overall, how satisfied are you with the Product / Service?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied


f. Not sure


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56. How likely are you to use/purchase the product(s) again?

a. Definitely

b. Probably

c. Not sure

d. Probably not

e. Definitely not

f. Never used

57. Would you recommend the Product or Service to others?

a. Definitely

b. Probably

c. Not sure

d. Probably not

e. Definitely not

f. Never used

58. What recommendations would you offer for improving the Product or Service?

Differential Analysis

Decision making technique in which evaluation is confined to only those factors which are different or

unique among possible alternatives. In market forecasting methodology it usually involves 4 steps: (1)

compute all costs associated with each alternative, (2) ignore the sunk or past costs, (3) ignore costs

that remain largely constant among the alternatives, and (4) select the alternative offering the best

cost-to-benefit ratio. This algorithm is also called incremental analysis or relevant cost analysis.


233

Customers’ Fashion Demographic and Retail Clothing Shopping

This is a Differential Analysis Survey of female respondents.

Customer Surveys as an Excel file: Part_N.1.17 Demographics plus use of clothes price to help profile the shopper:

1. Within what price range are the daytime clothes you typically purchase?

a. $30.00 or less b. $30.01 to $50.00 c. $50.01 to $70.00 d. $70.01 to $90.00 e. $90.01 to $110.00 f. $110.01 to $130.00 g. $130.01 to $150.00 h. $150.01 to $170.00 i. $170.01 to $210.00 j. More than $210.00

2. When shopping for everyday clothes, how many stores do you typically visit?








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Customers’ Fashion Attitudes

This is a Differential Analysis Survey of female respondents. Attitudes and Life Style for clothing and fashion shopping:

Customer Surveys as an Excel file: Part_N.1.18 Listed below are statements about shopping behaviour for clothes and about clothing fashions:

1. I buy clothes I like, regardless of current fashion. 2. I buy new fashion looks only when they are well accepted. 3. I am not as concerned about fashion as I am about modest prices and functionality. 4. I prefer to buy well-known designer labels rather than take a chance on something new. 5. My friends regard me as a good source of advice on fashion selection. 6. I am confident of my own good taste in clothing. 7. I'm not afraid to be the first to wear something different in fashion looks. 8. I like to buy clothes. 9. I feel good when I buy something new. 10. I like clothes that make the most of my figure. 11. I am the first to try new fashions; therefore many people regard me as being a fashion

pacesetter. 12. In this period of rising prices, spending excessive amounts of money on clothes is ridiculous.

13. What you think of yourself is reflected by what you wear. 14. I plan my shopping trips carefully. 15. You can tell you are just a bit better than someone else if you dress better than they do. 16. A man wouldn't look twice at a woman who wasn't well dressed. 17. A woman wouldn't look twice at a man who wasn't well dressed. 18. Wearing good clothes is part of leading the good life. 19. I plan my wardrobe carefully. 20. I resent being told what to wear by so-called fashion experts. 21. I like clothes that emphasise my femininity. 22. Fashion in clothing is just a way to get more money from the consumer. 23. I often find I don't have all the accessories to go with my outfits. 24. I shop for coordinated outfits. 25. There is something wrong with a woman who doesn't care about dressing nicely. 26. There is something wrong with a man who doesn't care about dressing nicely.








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Shopping Life Style Battery Life style questions for classification of retail shoppers:

Customer Surveys as an Excel file: Part_N.1.19 Statements about shopping behaviour for clothes and about clothing fashions.

1. I don't like to go shopping. 2. I buy less clothing because of rising prices. 3. I like having something suitable to wear for any occasion. 4. I make purchases only when there is a need, not on impulse. 5. I often go shopping to get ideas even though I have no intention of buying. 6. I prefer to shop in stores that offer a wide variety of clothing selections. 7. I shop only when I have to replace items which have worn out or are out of style. 8. I go shopping often. 9. I like to go to stores to see what's new in clothing. 10. I make fewer shopping trips because of the high cost of gasoline. 11. Because of my active lifestyle I need a wide variety of clothes. 12. I like to shop in many different stores. 13. I find more of my clothes and accessories in off-beat shops than in traditional department and

specialty shops. 14. I am current with forward fashion trends as pictured in advanced fashion magazines. 15. I like to experiment with my clothes so that I won't look like everyone else. 16. I like classic looks, but only if they are updated to reflect current fashion trends. 17. I don't buy clothes that would make me stand out from everyone else. 18. I prefer traditional styling in my clothes. 19. If I have the time to select clothes, I tend to buy fewer








236

Supermarket & Food Shopping Attitudes This is a Differential Analysis Survey. Supermarket & Food shopping attitude inventory:


Views on supermarket & food store shopping issues.

1. I prefer to invite friends over for dinner rather than take them out to eat. 2. If a product is out of stock in a supermarket I would substitute rather than go to another store

to get it. 3. I would rather shop in a large supermarket than a small supermarket. 4. I enjoy preparing meals at home. 5. I plan meals ahead of my shopping trip. 6. A supermarket is a good place to buy CDs and tapes. 7. I like supermarket shopping. 8. If they were available, I would buy hot, ready-to-eat foods (e.g., pizza, chicken) in a

supermarket. 9. Supermarkets make too much money. 10. I use as many coupons as I can to keep my grocery bill down. 11. A supermarket is a good place to buy automotive products. 12. I like to try new grocery products when they first come out. 13. Supermarkets do a good job in meeting the needs of single shoppers. 14. Too many products are out of stock when I shop. 15. The way supermarkets are laid out makes it easy to find the products I need. 16. Supermarkets would overcharge if they thought they could. 17. I try to save time by buying all groceries at one store. 18. I have been buying less Convenience Foods to cut back on my grocery spending. 19. Computerised checkout scanners benefit shoppers. 20. I normally buy some products on my grocery shopping trip that I hadn't planned to.








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Supermarket & Food Store Selection Criteria This is a Differential Analysis Survey. Battery of questions to identify factors important in selection of a Supermarket or Food Store:

Customer Surveys as an Excel file: Part_N.1.21 Select the answer that best expresses how important you think the factor is to you in selecting a supermarket.

1. Fast checkout 2. A gourmet food section 3. Low priced advertised specials 4. Close to where you live 5. Offers coupons in newspaper advertisements 6. Courteous, friendly employees 7. Offers generic products 8. Makes it easy to cash checks 9. Large selection of wines 10. Offers several brands to choose from in a category 11. Provides menu and recipe ideas 12. Convenience of parking 13. High quality fruits and vegetables 14. Has a prescription pharmacy in store 15. Wide selection of ethnic foods (i.e., Mexican, Japanese, etc.) 16. Open 24 hours 17. Quality of meat cuts 18. Wide selection of store private labels 19. A service deli (with clerks to prepare product of your choice) 20. Provides nutritional information about products 21. Wide selection of national brands 22. Has bakery in the store 23. Offers a variety of health and personal care products 24. Offers variety of smaller size (e.g., single serving) products 25. Large selection of fruits and vegetables 26. Sells fresh seafood








238

Where would you shop for...? This is a Differential Analysis Survey. Comparative list of retail merchandise items to profile store preference by merchandise category:

Customer Surveys of Abercrombie & Fitch: as an Excel file: Part_N.1.22 Thinking of all the stores in this area where you or your family might shop, in which store would you most likely shop for the following items?

1. Men's underwear 2. Women's underwear 3. Sports equipment 4. Men's sweaters 5. Women's dresses 6. Fishing tackle 7. Costume jewellery 8. Maintenance-free battery for a car 9. Auto oil filter and/or motor oil 10. Power lawnmower and other power garden tools 11. Exterior house and trim paint 12. Jeans for yourself 13. Small kitchen appliances 14. Sports or casual slacks 15. Portable TV 16. A digital camera 17. Installation of a car exhaust system 18. Ceiling fans and accessories 19. Paint for your living room 20. Small power tools such as a power drill 21. Mobile phone 22. Hand tools such as hammers, screw drivers 23. Easy to assemble furniture 24. Exercise equipment 25. Bicycles for yourself or your children








239

Service Concept Test This is a Differential Analysis Survey.


1. Rating of the Company’s Service Offerings: a. Low b. High c. Quality d. Price e. Trustworthy Brand f. Craftsmanship/Design g. Value for Price Paid

2. What features/attributes of this service are the most valuable to you? 3. What do you find least appealing about this service?

4. Overall, how interested are you in buying this service in the future?

a. Not at all interested b. Not very interested c. Neither interested nor uninterested d. Somewhat interested e. Extremely interested

5. Based on the description, what price would you expect to pay for the service? 6. If additional features were added to the basic concept, what would expect to pay?

7. If you wanted to buy/have this new service, which purchase method would you most prefer?

a. Calling and ordering by telephone b. Ordering through the mail c. Going to the company/place of business/office d. Using the Internet e. Other

8. Which groups of people do you expect to be the greatest users of this service?

a. Self b. Family member c. Co-worker d. Business/Organisation e. Student f. Other adult g. Teen 13-18 years h. Child 8-12 years i. Child 2-7 years j. Infants

9. How often do you use products from this service(s) category?

a. Every day b. Once a week c. About every two weeks d. Once a month e. Every three months f. Two-three times a year g. Once a year h. Less often i. Never used

10. How aware are you of the following companies that offer similar services?


240

Customer service evaluation and feedback survey


1. How did you contact customer service? a. Email b. Fax c. Telephone d. Web e. In person f. Other

2. If you called on the phone, how quickly did you get through?

a. Immediately b. Under 30 seconds c. About 1 minute d. 2-5 minutes e. More than 5 minutes f. I left a message g. Does not apply h. Other

3. If you contacted customer service by fax or email, how long did it take to get a response?

a. Under 2 hours b. 2-6 hours c. 6-12 hours d. 1 business day e. More than 1 business day f. They didn't get back to me g. Does not apply

4. What was your reason for contacting customer service?

a. Not satisfied with product b. Did not receive product c. Unable to order product/service d. Problem with Web site e. Needed more product information f. Cancel subscription or membership g. Other

5. Overall how satisfied are you with the company’s customer service representative?

a. Very satisfied b. Satisfied c. Average d. Dissatisfied e. Very dissatisfied f. Very dissatisfied


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Customer Service Evaluation


1. Have you ever bought / ordered the product(s) from the retailer?

2. Overall, how would you rate the Customer Service from retailer?

a. Excellent b. Good c. Average d. Poor e. Terrible f. Not Sure

3. How satisfied are you with the Customer Service from the retailer?

a. Extremely satisfied b. Very satisfied c. Neutral d. Very dissatisfied e. Extremely dissatisfied

4. Would you recommend the Customer Service from the retailer to a friend?

a. Yes b. No c. Not Sure d. If no, why not?

5. For your NEXT product(s) purchase, how likely are you to purchase from the retailer?

a. Definitely would buy b. Probably would buy c. Might or might not buy d. Probably would not buy e. Definitely would not buy

6. Which of the following modes did you use to place the order for the product(s)?

a. In-store b. Mail order c. Internet d. Over the phone e. Fax f. Other

7. What are the THREE main reasons you didn't purchase the product(s) from another

company?

8. What would you change about the process of purchasing the product(s) (i.e. placing the order, mode of payment, delivery, etc.) from the retailer?

9. How did you contact customer service?

a. Email b. Fax c. Telephone d. Web e. In person f. Other

10. If you called on the phone, how quickly did you get through?

a. Immediately b. Under 30 seconds


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c. About 1 minute d. 2-5 minutes e. More than 5 minutes f. I left a message

11. If you contacted customer service by fax or email, how long did it take to get a response?

a. Under 2 hours b. 2-6 hours c. 6-12 hours d. 1 business day e. More than 1 business day f. They didn't get back to me

12. What was your reason for contacting customer service?

a. Not satisfied with product b. Did not receive product c. Unable to order product/service d. Problem with Web site e. Needed more product information f. Cancel subscription or membership g. Other

13. Overall, how would you rate your satisfaction with the company’s customer service

representative? a. Extremely satisfied b. Satisfied c. Neutral d. Unsatisfied e. Extremely unsatisfied

14. Do you have comments or suggestions that would help us improve the company’s customer

service?

15. Overall, I am very satisfied with the way the retailer performed (is performing). a. Strongly disagree b. Somewhat disagree c. Neutral d. Somewhat agree e. Strongly agree

16. Service representatives are well trained. 17. Service representatives are well supervised. 18. Service representatives adhere to professional standards of conduct. 19. Service representatives act in the company’s best interest. 20. Overall, I am satisfied with the service representatives.

21. The senior staff are knowledgeable and professional. 22. I feel like I have a good personal relationship with the senior staff. 23. The senior staff are making a positive contribution to the company’s business. 24. The senior staff responds to the company’s inquiries in a timely manner. 25. Overall, I am very satisfied with the senior staff.

26. What would be the primary reason for being very satisfied with the retailer service

representatives?

27. What would be the primary reason for being very satisfied with the retailer store senior staff?

28. Compared to how you felt about the retailer before, what would you say is the likelihood of purchasing again?

a. Better, based on performance


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b. About the same c. Worse, based on performance d. Not sure

29. Considering the overall value of the project you paid for, was it

a. An exceptional value, worth more than you paid for it b. A good value, worth about what you paid for it c. A poor value, worth less than you paid for it d. Not sure

30. Overall, how do you feel about your experience the service provided?

a. Excellent b. Very Good c. Good or Fair d. Poor

31. How would you rate the product for ease of use?

a. Excellent b. Very Good c. Adequate d. Poor or Very Poor

32. In speaking with the support representative, how would you rate the following?

a. Friendly b. As friendly as I expected c. Friendly d. Average e. Less friendly than I expected f. Unfriendly

33. Professionalism

a. As professional as I expected b. Professional c. Neither professional nor unprofessional d. Less professional than I expected e. Unprofessional

34. Interest in solving your problem

a. As interested as I expected b. Very interested c. Interested d. Neither interested nor uninterested e. Uninterested

35. When solving your problem, how would you rate the information provided?

a. Extremely well presented and understandable b. Well presented and understandable c. Sufficient to solve the problem d. Difficult to understand e. Extremely difficult to understand

36. Understanding of the problem

a. Very satisfied that my problem was understood b. Somewhat satisfied that my problem was understood c. Unsure that my problem was understood d. My problem was not understood e. Did not have the ability to solve my problem

37. Was your problem solved on this call?

a. Yes


244

b. No

38. If you needed to contact the company's support service again and were given the option to speak with this representative, would you?

a. Yes b. No

39. How would you rate the company's support as compared to that of other companies?

a. much better than other companies' support. b. better than other companies' support. c. about the same quality as other companies' support. d. worse than other companies' support. e. much worse than other companies' support. f. I have never contacted another company for support.

40. What features/attributes of this support service are the most valuable to you? 41. What do you find least appealing about this support service? 42. Overall, how interested are you in buying this support service?

a. Not at all interested b. Not very interested c. Neither interested nor uninterested d. Somewhat interested e. Extremely interested

43. Based on the description, what price would you expect to pay for the support service?

44. If you wanted to use the support service, which purchase method would you most prefer?

a. Calling and ordering by telephone b. Ordering through the mail c. Going to the company/place of business/office d. Using the Internet e. Other

45. Who do you expect will use the support service most?

a. Self b. Family member c. Co-worker d. Business/Organisation e. Student f. Other

46. How often do you use products from this product(s) in this category?

a. Every day b. Once a week c. Once a month d. Every three months e. several times a year f. Less often g. Never used

47. How aware are you of the following companies that offer similar services?


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Customer Support Satisfaction Survey


1. Do you consider the problem resolved?

2. Was your question or issue resolved the first time you contacted technical support?

3. What is your overall satisfaction with this particular phone support experience?

4. Did you attempt to use the company’s online support web site before making this call?

5. If yes, how satisfied were you overall with this online support experience?

6. How satisfied are you with the company’s technical support in general?

7. We sincerely appreciate any comments or suggestions you have which will improve your satisfaction with the company’s service.

8. In your most recent customer service experience, how did you contact the representative? a. In person b. By telephone c. Internet d. Through a dealer e. Other

9. There was sufficient information available on the support web site to solve my problem. a. Strongly Agree b. Somewhat Agree c. Neutral d. Somewhat Disagree e. Strongly Disagree

Did the company’s representative:

10. Quickly identify the problem

11. Appear very knowledgeable and competent

12. Help you understand the causes and solution to your problem

13. Handle problems with courtesy and professionalism

14. About how long did you have to wait before speaking to a representative? a. I was taken care of immediately b. Within 3 minutes c. 3-5 minutes d. 5-10 minutes e. More than 10 minutes

15. About how long did it take to get this problem resolved? a. Immediate resolution b. Less than one day c. Between 1 and 3 days d. Between 3 to 5 days e. More than a week f. The problem is still unresolved

16. How many times did you have to contact customer service before the problem was corrected? a. Once b. Twice c. Three times d. More than three times e. The problem is still not resolved


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17. Overall, how satisfied are you with the customer service experience? a. Very satisfied b. Satisfied c. Neutral d. Dissatisfied e. Very dissatisfied

18. If you were less than totally satisfied, what could have been done to serve you better?

Product or Technical Services Evaluation Where applicable.


How satisfied are you: 1. With your experience of the most recent company Product or Technical Services?

2. With the timeliness of the company's Product or Technical Services?

3. With the quality of the Product or Technical Services?

4. That company Product or Technical Services personnel are sufficiently knowledgeable and

professional?

5. With the company's Technical service overall?

a. Strongly agree

b. Agree

c. Neutral

d. Disagree

e. Strongly disagree

f. Not sure

6. With the communication between you and the company overall?

a. Very satisfied

b. Satisfied

c. Neutral

d. Dissatisfied


f. Not sure

7. With the overall quality of the company's sales service?

a. Excellent

b. Very good

c. Good

d. Fair

e. Poor

8. With the overall value of the company's services compared with the price paid?

a. Excellent

b. Very good

c. Good

d. Fair

e. Poor

9. Would you recommend the company’s services?

a. Yes


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b. No

c. Not sure

Information about the Product / Brand purchased:

10. Name of store where purchased:

11. What type of Brand / product did you purchase?

12. How would you describe this purchase?

a. First time purchase

b. Addition to current Brand product(s) owned

c. Addition to product owned (other brand)

d. Replacement of Brand product owned

e. Replacement of product owned (other brand)

13. What other brands did you consider?

14. How do you plan to use this product?

a. For Home

b. For Work

c. For School

d. For the Outdoors

e. Other

15. Was this product...

a. received as a gift?

b. purchased?

16. How did you first learn about Brand products?

a. Friend/relative

b. Salesperson

c. Ads/promotions

d. Via the internet/website

e. In-store display

f. Other

17. Which of the following MOST influenced your purchase of Brand products?

a. In-store display

b. Previous experience with the brand

c. Price/Good value

d. Style/Appearance

e. Colour/Design

f. Size/Capacity

g. Weight

h. Warranty

i. Comfortable

j. Quality construction

k. Durability


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Satisfaction: Product & Technical Documentation


1. How satisfied are you with the Technical Documentation

a. Very Satisfied

b. Satisfied

c. Neutral

d. Dissatisfied


2. Technical Documentation: with the appropriateness of the documentation to your needs?

3. Technical Documentation: with the quality of the documentation delivered?

4. Technical Documentation: with the accuracy of the documentation delivered?

5. Technical Documentation: with the usability of the documentation provided?

6. Technical Documentation: overall with the documentation provided?

7. What should the retailer do to improve the quality of the documentation?

8. The retailer understands the service needs of their customers.

a. Strongly agree

b. Agree

c. Neutral

d. Disagree

e. Strongly disagree

9. How would you rate the retailer overall?

a. Poor Fair

b. Good

c. Very Good

d. Excellent

10. Overall, the quality of Company's sales service is:

a. Poor Fair

b. Good

c. Very Good

d. Excellent

11. Overall, the value of Company's services compared with the price paid is:

e. Poor Fair

f. Good

g. Very Good

h. Excellent

12. Would you recommend Company's products / services to friends or colleagues?


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Customer Services Evaluation


How satisfied are you: 1. with your experience of the most recent Technical Services or Product Services? 2. with the timeliness of the company’s Services? 3. with the quality of the company’s Services? 4. that the personnel are sufficiently knowledgeable and professional? 5. with the company’s installation service overall?

6. The company understands my service needs.

a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree f. Not sure

7. Overall, how satisfied are you with the amount of contact between you and the company?

a. Very satisfied b. Satisfied c. Neutral d. Dissatisfied e. Very dissatisfied f. Not sure

8. Overall, the quality of the company's sales organisation's service is:

a. Excellent b. Very good c. Good d. Fair e. Poor

9. Overall, the value of the company's services compared with the price paid is:


10. Would you recommend the company's services to family, friends or colleagues?

a. Yes b. No c. Not sure

Rate your satisfaction with the dealer service department on each of the following:

11. How satisfied are you with?

a. Ease of scheduling service? b. Completion of the service in the time promised? c. Explanation of the work performed? d. Effort of the dealership to obtain parts e. Overall performance of the person who prepared your service order? f. Effort of the dealership to see that the service was done right?


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12. Select the category of service work performed for the last service visit:

a. Warranty b. Non-warranty c. Scheduled maintenance d. Other

13. Was your product fixed right the first time?

a. Yes b. No c. Not sure

14. After your service visit, did someone from the company contact you by phone or by mail to

see if you were satisfied with the overall service experience?

15. Would you recommend this company to a friend or relative as a place to have their products serviced?

a. Definitely b. Probably c. Not sure d. Probably not e. Definitely not

16. Should you need service again, would you return to this company?

a. Definitely b. Probably c. Not sure d. Probably not e. Definitely not

17. If you are not totally satisfied with the service, state below the reason(s) for your

dissatisfaction.

Indicate your opinion of the following statements about salespersons:

18. Salespeople are knowledgeable about their products. 19. Salespeople promptly service customers as they enter the store. 20. Salespeople are courteous. 21. Salespeople are well groomed. 22. Salespeople accurately presented product information. 23. Salespeople adequately explained service policy. 24. Salespeople are friendly. 25. I am very satisfied with the customer service at the store.

26. How long did you have to wait before a salesperson attended to you?

a. 0-2 minutes b. 3-5 minutes c. 6-10 minutes d. 11-15 minutes e. more than 15 minutes

27. On your most recent service, how would you rate the service in the following areas?

a. Quality of work performed b. Avoiding inconveniencing you c. Making you feel comfortable d. Willingness to go out of their way to satisfy you e. Friendliness and helpfulness of cashiers f. Having convenient hours for service g. Ease of obtaining an appointment


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h. Quickly acknowledging your arrival i. Promptness in handling repair work j. Arranging replacement k. Performance of repairs l. Clean, comfortable waiting area m. On time delivery

28. Did the following things occur on your most recent service visit?

a. You were explained the work to be performed beforehand. b. You were explained the work performed and the breakdown of the charges. c. You were informed when the work was done. d. The paperwork was completed and waiting e. They contacted you to ensure the work was performed to your satisfaction

29. What could the company do to improve the service experience?

30. How satisfied are you with the customer service you received most recently:

a. Very satisfied b. Satisfied c. Neutral d. Dissatisfied e. Very dissatisfied

31. If you were not totally satisfied with the customer service, describe the reason(s) for your

dissatisfaction? 32. Describe the aspects of the service that you were completely satisfied with?

33. How satisfied are you with the process of getting your question resolved.


34. If you were not totally satisfied with the process of getting your question resolved, describe

the reason(s) for your dissatisfaction? 35. If you were satisfied with the process of getting your question resolved, describe the

reason(s) for your satisfaction?

36. How would you rate the product's value for money: a. Excellent b. Good c. Fair d. Poor e. Not sure

37. What aspects of the product(s) were of no benefit to you? 38. What aspects of the product(s) were most beneficial for you?

Choose an option that closely represents your opinion about the customer service representative that you spoke to recently:

39. The customer service representative was very courteous. a. Strongly Disagree b. Somewhat Disagree c. Neutral d. Somewhat Agree e. Strongly Agree


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a. Strongly Disagree b. Somewhat Disagree c. Neutral d. Somewhat Agree e. Strongly Agree



Choose an option that closely represents your opinion about the process with which your most recent service contract was handled:

42. The waiting time for having my questions addressed was satisfactory.




44. The automated phone system made the customer service experience more satisfying.


Consider the total package i.e. the customer service, the product(s) features, benefits, and cost:

45. How satisfied are you with the company?

a. Very Satisfied b. Satisfied c. Neutral d. Dissatisfied e. Very Dissatisfied

46. If the product(s) were no longer supplied by the company, what would you replace it with?

a. Functional Competitors b. In-Kind Competitors

47. All things considered, over the next 12 months how likely are you to replace the Company’s product(s) with a Competitor’s Products?

a. Very certain b. High chance c. Low chance d. No chance


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e. Not sure

48. What are some of the reasons that you are looking to replace the Company’s product(s) during this year?

Help Desk Support:

How satisfied are you with: 49. overall quality of telephone support? 50. overall quality of on-site support? 51. knowledge and professionalism of the help desk support staff? 52. knowledge and professionalism of on-site support engineers? 53. communication and follow-up on problem resolution? 54. ability of help desk to diagnose your problem? 55. ability of the help desk to solve your problem? 56. time required to resolve your problem? 57. overall quality of the solution? 58. maintenance services offered?

59. How could the company improve the quality of support we provide to you?

60. The company understands the service I need. a. Strongly agree b. Agree c. Neutral d. Disagree e. Strongly disagree f. Not sure

61. Overall, how satisfied are you with the amount of contact between you and the company?

a. Very satisfied b. Satisfied c. Neutral d. Dissatisfied e. Very dissatisfied f. Not sure

62. Overall, the quality of the company's sales department service is:


63. Overall, the value of the company services compared with the price paid is:


64. Would you recommend the company services to family and friends?

a. Yes b. No c. Not sure d. Other


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65. In evaluating your most recent customer service experience, was the quality of service you received:

a. Very poor b. Somewhat unsatisfactory c. About average d. Very satisfactory e. Excellent

66. What about the service experience stands out?

67. Was the process for getting your problem resolved:

a. Very poor b. Somewhat unsatisfactory c. About average d. Very satisfactory e. Excellent

68. What about the process of getting your problem resolved stands out?

Evaluate the customer service representative:

69. The customer service representative as very courteous.

a. Strongly disagree b. Somewhat disagree c. Neutral d. Somewhat agree e. Strongly agree

70. Was there anything about the courteousness of the service that stands out as being

superior? a. Patient b. Enthusiastic c. Listened carefully d. Friendly e. Responsive f. Other

71. What about the representative could be improved?

a. Not patient b. Not enthusiastic c. Didn't listen carefully d. Unfriendly e. Unresponsive f. No improvement needed g. Other



73. What would best describe what happened?

a. Kept me waiting on hold b. Had to explain several times c. Didn't know how to handle the problem d. Had to ask others e. Spoke slowly


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f. No improvement needed g. Other

74. The customer service representative was very knowledgeable. a. Strongly disagree b. Somewhat disagree c. Neutral d. Somewhat agree e. Strongly agree

75. What would best describe what happened?

a. Gave me the wrong information b. They didn't understand the question c. Gave unclear answers d. Couldn't solve problem e. Disorganised f. No improvement needed g. Other

76. The waiting time for having my question addressed was satisfactory.




78. How long have you used the service(s)

a. Less than one month b. 1 to 6 months c. 6 months to a year d. 1 to 3 years e. Over 3 years f. Never g. Other

79. How often do you use the product(s) / service(s)?

a. Daily b. Once/week or more c. 1 to 3 times a month d. Once/month e. Every 2-3 months f. 2-3 times a year g. Other

80. Overall, how satisfied are you with the product(s) / service(s)?



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81. How likely are you to use/purchase the product(s) / service(s) again? a. Very likely b. Probably c. Maybe d. Probably not e. Definitely not f. Never used

82. Would you recommend the product or service to others?

a. Definitely b. Probably c. Maybe d. Probably not e. Definitely not f. Never used

83. What recommendations would you offer for improving the product(s) / service(s)?








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Website Evaluation


1. How often you visit the company’s website. a. Everyday b. Once a week c. Once a month d. Rarely

2. When you visit the site, are you using the computer from

a. Office b. Home (including a home office) c. Equally from the home and office d. Other

3. Would you say the company’s web site is:

a. Very attractive b. Somewhat attractive c. Average d. Not very attractive

4. How much effort did you have to take to find the company’s web site?

a. A lot less than I expected b. Less than I expected c. About what I expected d. More than I expected

5. From your experience with other sites, rate the following features of the web pages:

a. Visual appearance/layout b. Content c. Writing style

6. From your experience, what do you find is the biggest challenge in using the company’s site?

a. I am new to the Internet b. Information I am looking for is not available c. Information is not well organised d. There is just too much information e. Hard to navigate through the information f. Takes too long to load a page g. Downloadable files or forms are in a format I cannot use

7. Did the menu of items on the home page make sense to you? 8. Did you experience any problems downloading files?

9. How did you hear about the Website?

a. Literatures: list source b. Hotline c. Retailer d. Industry e. Newsletters/literature f. Media (newspaper, radio, TV) g. Associate/friend h. Followed Link from another web page i. Search engine or Other


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Online Retailer Evaluation Battery of questions focusing on attitudes about purchasing online and at this company’s site:


Thinking about your experience with this internet retailer, indicate your opinions about the following statements:

1. I prefer making a purchase from this Internet retailer over using local offices, malls or stores.

2. I prefer this Internet retailer over other home shopping services (i.e., catalogues, "1-800" services or television).

3. This Internet retailer doesn't just sell products or services--it entertains me.

4. I received special rewards and discounts from doing business with this Internet retailer.

5. I say positive things about this Internet retailer to other people.

6. I consider this Internet retailer to be my first choice when I need products or services of this type.

7. The "look" of this Internet site is appealing to me.

8. I really like doing business with this Internet retailer.

9. I intend to continue to visit this Internet retailer's site in the future.

10. I intend to purchase from this Internet retailer in the future.

11. This Internet retailer is one of the first places I intend to look when I need the type of merchandise or services it provides.

12. It would require a lot of time and effort on my part, to set up an account with another Internet retailer.

13. It would take a lot of time and energy to look for another Internet retailer for this type of product.

14. The products and/or services I purchased from this Internet retailer were a good value.

15. I enjoy doing business with this Internet retailer.

Purchasing on the Internet


1. Have you purchased products online, who did you purchase from, what did you spend?

2. In the past three months, have you purchased products or services through the Internet, for your personal use?

3. Which products or services categories have you most recently purchased online? a. Food b. Clothing c. Household goods & articles d. Electricals & Electronic products e. Computers or peripherals f. Software g. CDs/DVDs h. Flowers i. Concert tickets j. Travel k. Fast food


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l. Books or magazines m. Services n. Financial & Insurance products o. Other

4. Thinking back to the Internet retailers you've purchased from, have you ever: a. provided feedback of the product or services they sell b. completed a survey for that Internet retailer c. communicated with other users via e-mail or chat rooms d. When you began shopping on the last occasion, were you:

i. Just surfing the net ii. Intending to make a purchase. iii. Other

5. How much did you spend on your most recent transaction?

a. Less than $25 b. $26-$50 c. $51-$75 d. $76-$100 e. Over $100

6. Did you return the merchandise or cancel the service after you received it? 7. Did you contact the customer service department of this Internet retailer with a complaint or

problem?

8. How much would you estimate you have spent with this Internet retailer in the past twelve months?

a. less than $50 b. $51-$100 c. $101-$150 d. $151-$200 e. more than $200

9. How many transactions have you made with this Internet retailer over the past 12 months?

10. Which Internet retailers do you use most?

11. When you began shopping on the last occasion, were you: a. Surfing the net with no intent to purchase b. Surfing the net with intent to make a purchase. c. Other


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Internet Habits and Uses Habits and uses of Internet users:


1. How comfortable do you feel using the Internet? a. Very comfortable b. Somewhat comfortable c. Neither comfortable nor uncomfortable d. Somewhat uncomfortable e. Very uncomfortable

2. How satisfied are you with your current skills for using the Internet?

a. Very satisfied - I can do everything that I want to do b. Somewhat satisfied - I can do most things I want to do c. Neither satisfied nor unsatisfied d. Somewhat unsatisfied - I can't do many things I would like to do e. Very unsatisfied - I can't do most things I would like to do

3. How comfortable do you feel using computers, in general?

a. Very comfortable b. Somewhat comfortable c. Neither comfortable nor uncomfortable d. Somewhat uncomfortable e. Very uncomfortable

4. Some websites ask for you to register with the site by providing personal information. What

percentage of the time do you enter false information when asked to register? a. Rather not say b. I've never falsified information c. Under 25% of the time d. 26 - 50% of the time e. 51 - 75% of the time f. Over 75% of the time g. I've never registered with a site

5. Why don't you purchase more products and services on the web, either for yourself or for

your work/business? a. Not applicable b. Never tried it c. Too complicated to place order d. Faster/easier to purchase locally e. Not familiar with vendor f. Don't trust that my credit card number will be secure g. No receipt/documentation h. Difficult to judge the quality of a product/service i. Not enough information to make a decision j. Generally uncomfortable with the idea k. Other

6. In your opinion, what is the single most critical issue facing the Internet?

a. Finding things/navigating around b. Speed/bandwidth c. Government regulation d. Equal access for all e. Unacceptable adult content f. Internet crime (e.g. hate crimes, stalking) g. Paying for online services or information h. Censorship i. Privacy


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j. Other

7. Which of these groups have you become more connected to through the Internet? a. None b. People who share my political interests c. People who share my hobbies/recreational activities d. People who share my religion e. People in my profession f. People in my family g. People in similar life situations (e.g. self-help groups, support groups) h. Other groups

8. Complete the following sentence in the way that comes closest to your own views: "Since

getting on the Internet, I have " a. become MORE connected with people like me. b. become LESS connected with people like me. c. Don't know/can't say

9. Which of the following have you done?

a. Ordered a product/service from a business, government or educational entity by filling out a form on the web

b. Made a purchase online for more than $100 c. Created a web page d. Customised a web page for yourself (e.g. Google, Yahoo, News Services) e. Changed your browser's "startup" or "home" page f. Changed your "cookie" preferences g. Participated in an online chat or discussion (not including e-mail) h. Listened to a radio broadcast online i. Made a telephone call online j. Used a nationwide online directory to find an address or telephone number k. Taken a seminar or class about the Web or Internet l. Bought a book to learn more about the Web or Internet








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Part N.2 : Supplemental Retail Trade Survey Data


This section provides a battery of supplemental Trade and Industry Surveys.

Business Proficiency of the Company

Expert and Industry Appraisal of Abercrombie & Fitch: as an Excel file: Part_N.2.1

1. Company leadership is fully committed to the long-term success of their sales partners. 2. Top management responds adequately to needs in the marketplace. 3. Top management strengthens the company's competitive position. 4. Company leadership can be trusted to do what they say they will do. 5. Company leadership is committed to support and work with the sales team. 6. The company and the sales team are unified, moving in one direction together. 7. The company and the sales team share a positive, winning attitude. 8. There is effective communications between the promotion agency and the company. 9. The promotion agency listens to and understands the sales team's needs. 10. The company's marketing is aligned in support of the sales network. 11. There is effective communications between the company's marketing group and the sales

teams in the field. 12. The marketing group listens to and understands sales teams' needs. 13. Employees understand the company's vision and values.

Ranking of the effectiveness of the Brand: 14. The strategic direction of the Brand. 15. The marketing plans for the Brand. 16. The company's investment in brand marketing this year. 17. The company's plan for media advertising. 18. The advertising creative executions. 19. The Brand Slogan advertising for product. 20. The company's planned channel support.

In evaluating the Company's competitive position, are they: 21. Aggressively pursuing market leadership. 22. Flexible in meeting customer's needs. 23. Reactive, following major competitors' actions. 24. Less effective than other competitors.

25. Retailer / Franchisee / Dealer Feedback

26. To what extent will the company give greater emphasis to effective business planning over

the next few years? a. Great extent b. Moderate extent c. Slight extent d. Not at all


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Organisational Satisfaction – Internal

Employee Surveys at Abercrombie & Fitch: as an Excel file: Part_N.2.2

1. In your opinion, how have customer satisfaction ratings changed at your organisation in the

past year?

a. Improved considerably b. Improved somewhat c. Has remained about the same d. Has declined somewhat e. Has declined considerably f. Don't know

2. In your opinion, how important is customer satisfaction within your organisation?

a. It's a high priority b. It's a mid-level priority c. It's a low priority d. Don't know

3. Does your organisation have managers/staff dedicated to customer -satisfaction matters?

a. Yes b. No c. Don't know

4. How often does your organisation conduct surveys to evaluate customer satisfaction?

a. Monthly or more often b. Quarterly c. Semi-annually d. Yearly or less often e. We don't

5. Which one of the following means is used to evaluate customer satisfaction?

a. Questionnaires sent through the mail (in-house efforts)

b. Follow-up telephone calls (in-house efforts) c. An outside firm has been hired to track customer satisfaction d. Suggestion boxes placed in facilities e. Other

6. Has your organisation initiated programs to improve customer satisfaction within the past

year?

a. Yes b. No c. Don't know

7. What sector of the industry do you believe needs the most improvement in customer

satisfaction?

8. What is the most compelling reason for your organisation to improve customer satisfaction?

a. Fear of losing customer to competitors b. Fear of losing revenue c. Fear of increased consumerism d. Fear of damage to organisation's reputation e. Other

9. In your opinion, has customer satisfaction been shown to have a direct effect on your

organisation's bottom line?

a. Yes


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b. No c. Don't know

10. All employee applicants are screened with a test to determine their desire to serve customers.

11. We offer an unconditional 100% guarantee of satisfaction for everything we sell or service--

we make it easy for customers to return anything, without hassle.

12. We trust the judgment of the company’s employees and empower them to resolve customer

complaints on the spot.

13. We believe that the company’s employees and associates are the best ambassadors of the

company’s brand.

14. We measure customer satisfaction several times throughout the year.

15. Every employee and sales associate always greets customers by their names whenever we

speak to them.

16. Our customers can always talk to a "real" person.

Sales Staff Training Evaluation


1. When did you start in your current position?

2. Were you given formal sales training with the company before you started your job?

3. Have you been given continuous sales training?

4. When was the last time you attended a training course?

5. Was the course arranged and conducted in-house, or has it conducted by an outside training company.

6. Overall, how satisfied were you with your last training course: a. Extremely Satisfied b. Satisfied c. Neutral d. Dissatisfied e. Extremely Dissatisfied

7. with the materials you received before the course and their value in preparing you to more fully participate in the sessions?

8. with the "skill-based" training that emphasises interaction and participation?

9. with applying the business process to a specific product line?

10. with your ability to apply the knowledge and skills from the sessions?

11. with the overall logic and consistency to the series of sessions you attended?

12. that you received at least one specific skill or tool that will enable you to become more effective in selling company products?

13. with the tools you have been provided to improve the satisfaction rating with your customers?

14. that there was a sufficient amount of time allocated to cover the content in the individual sessions?


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15. that the information and skill building were relevant to your learning needs?

16. that the sessions changed your behaviour and enhanced your effectiveness in launching new products?

17. that the information and skill building activities on maintaining and developing accounts were relevant to your learning needs?

18. that you are incorporating the use of your existing sales analysis tools frequently enough in calling on your existing accounts?

19. that you are focusing on providing Total Customer Satisfaction with every customer by soliciting their problems and needs which are not being met?

Store Manager’s View of Brand Perception by Customers


The Brand Test

1. Do you know, from your customers' perspective, what the most distinctive attributes are that differentiate your brand from competitors?

2. Does your organisation have a brand promise, mission or vision statement?

3. Do you know your customers' perspectives regarding how they view your brand when compared to your closest competitor?

4. Is your organisation’s leadership responsible for the brand’s success as opposed to the marketing department?

5. In general, can most employees recite the brand promise, mission, vision statement, or their key messages?

6. When important decisions need to be made regarding the brand, does someone represent the customer's viewpoint?

7. Do you place a priority on being perceived by consumers--first and foremost--as a "friend"?

8. How familiar are your customers with the product(s)?

a. Never heard of it b. I am aware but have never used it c. Use it only sometimes d. Use it on a regular basis

9. Which of these listed product Brands have your customers used?

10. How did your customers first hear about the product(s)?

a. TV

b. Radio

c. Magazine

d. Newspaper

e. Internet

f. Friend/relative/associate

g. Haven't heard of it before

h. Not sure

11. Overall, how do your customers rate the quality of the product(s)?


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a. Poor

b. Fair

c. Good

d. Very Good

e. Excellent

12. What is it that you personally would most like to change about the product(s)?

13. Would your customers recommend the product(s) to a friend or associate?

a. Definitely Not

b. Probably Not

c. Not sure

d. Probably

e. Definitely

14. When was the last time you personally used the product(s)?

a. Under 1 month

b. 1 to 6 months


d. Not sure

Retailer Survey on their e-Commerce This survey is designed to obtain a better understanding of the retailer and their e-commerce operations:


1. What is the main retail category that your brick-and-mortar store(s) operates in?

Retail Brand on the Internet:

2. Compared to your online competitors, how would you rate the strength of your company's retail brand on the Internet?

3. Overall, compared to other brands in your retail category, how would you rate the level of awareness of your retail brand name on the Internet?

4. Overall, compared to other brands in your retail category, how would you rate the level of quality associated with your retail brand name on the Internet?

5. Overall, compared to other brands in your retail category, how would you rate the level of favourability associated with your retail brand name on the Internet?

6. Overall, rate the level to which your brand is recognised with its retail category on the Internet.

Distribution Operations:

7. Relative to the company’s competitors, products are consistently available in inventory.

8. Compared to the company’s competition, the time between receiving and shipping orders is shorter.

9. Our company relies on supplier drop shipments to consumers to satisfy online orders.

10. Our company's distribution system can handle the volume of online orders.


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11. Relative to the company’s competition, online orders are filled from the company’s existing inventory.

12. Compared to the company’s competition, the company’s relies heavily on backorders.

International Markets:

13. Before we started the company’s primary Web site, some people in the company had experience in international markets.

14. My company knows how to market products in other countries.

15. Few people in my company's primary Web site operations are knowledgeable about foreign markets.

16. Our e-commerce strategy considers differences between the home market and foreign markets.

Internal Organisational Culture:

17. In general, the company’s e-commerce top managers favour a strong emphasis on marketing tried and true products.

18. In the past year, my firm has marketed many new lines of products on the Web site.

19. In dealing with competitors, the company’s e-commerce approach is to respond to actions which competitors initiate.

20. In dealing with competitors, the company’s e-commerce approach is to pursue an aggressive, competitive posture.

21. In general, the company’s e-commerce top managers favour low-risk projects (i.e., projects with certain rates of return).

22. In general, the company’s e-commerce top managers believe that bold, wide-ranging acts are necessary to achieve the firm's objectives.

23. When confronted with decision-making situations involving uncertainty, the company’s e-commerce approach is to adopt a cautious, "wait-and-see" posture.

24. Satisfying the company’s customers is the company’s most important business objective.

25. We constantly communicate the company’s commitment to serving customer needs.

26. We share information about the company’s successful and unsuccessful experiences across all business functions.

27. Our strategy for competitive advantage is based on the company’s understanding of customers' needs.

28. We measure customer satisfaction infrequently.

29. We have regular performance measures of customer service.

30. Our competitors are more customer focused than we are.

31. I believe that the company’s business exists primarily to serve customers.

32. Data on customer satisfaction are disseminated at all levels in the company’s e-commerce unit on a regular basis.


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Channel Issues:

33. We find it difficult to change established procedures to cater to the needs of e-commerce customers.

34. We can easily change the manner in which we carry out tasks to fit the needs of e-commerce.

35. This firm will not aggressively pursue an e-commerce strategy that causes existing investments to lose value.

36. We are willing to sacrifice sales from existing channels in order to improve sales on the company’s primary Web site.

Supplier Relations:

37. There is open communication between the company’s e-commerce business and the company’s most important supplier.

38. Our e-commerce business and the company’s most important supplier share common objectives.

39. Our most important supplier makes it difficult for the company’s e-commerce business to do its job.

40. Our most important supplier does not like many of the things the company’s e-commerce business does.

41. The products we get from the company’s most important supplier can also be purchased by end-users on the company’s most important supplier's Web site.

42. Our most important supplier does not offer products to end-users on their Web site.

43. There is an overlap in products offered to end-users on the company’s Web site and the company’s most important supplier's Web site.

Market:

44. Customers' preferences change frequently.

45. Our customers rarely request new products.

46. Customer needs are becoming more predictable.

47. Customer loyalty is decreasing.

48. On the Internet, the rate of firm failure is high in this retail category.

For the most recent annual fiscal period for your primary Web site:

49. Approximate revenue growth (%)

50. Approximate total online sales (in US $)

51. Percentage of Web site customers that were repeat purchasers (%)

52. Advertising dollars as a percentage of sales dedicated to e-commerce (%)

53. Percentage of sales generated from affiliate program (%)

54. Approximate advertising budget (in US $)

55. Percentage of sales generated from outside the headquarters' country (%)

56. Indicate the extent to which your company's Web site has achieved the following outcomes

relative to its original objectives for the most recent annual fiscal period. a. objectives Met b. objectives Well above c. objectives Well below


269

57. Total sales

58. Profitability

59. Market share

60. Sales growth

61. Number of new customers

62. Customer service

General inquiries into your e-commerce operations, focussed on your company's primary e-commerce Web site.

63. Indicate when your company entered the online market, relative to the competition, in the online retail category you specified at the beginning of the survey.

64. Indicate your current job title.

65. How many Web sites does your company currently operate?

66. How many of the Web sites you specified in question #1 are e-commerce sites (i.e., allow online purchases)?

67. What is the main retail category that your Web site operates in?

For your company's primary e-commerce Web site:

68. How many people are employed for your Web site operations?

69. Where is your Web site headquartered?

Brick-and-Mortar Operations:

Regarding your brick-and-mortar operations (i.e., retail store(s) operating in the physical marketplace):

70. Does your company operate one or more brick-and-mortar retail stores?

Brick-and-Mortar Retail Brand:

71. Compared to your brick-and-mortar competitors, how would you rate the strength of your company's retail brand in the physical marketplace?

72. Overall, compared to other brands in your retail category, how would you rate the level of awareness of your retail brand name in the physical marketplace?

73. Overall, compared to other brands in your retail category, how would you rate the level of quality associated with your retail brand name in the physical marketplace?

74. Overall, compared to other brands in your retail category, how would you rate the level of favourability associated with your retail brand name in the physical marketplace?

75. Overall, rate the level to which your brand is recognised with its retail category in the physical marketplace?


270

Affiliate / Partner Program:

An affiliate or partner is defined as a Web site that is linked to the site and receives a commission, fee, or other benefit for sales generated from the link:

76. Does your primary Web site have an affiliate program?

77. How many affiliates are currently enrolled in your affiliate program?

78. How long has your affiliate program been in operation?

79. How many marketing agreements does your company have with search engines and portals for its primary e-commerce Web site?

a. 1-3 b. 4-9 c. 10-19 d. 20-49 e. 50 or more f. Do not know

80. On average, how many unique visitors does the primary e-commerce Web site receive each month?

81. Is your primary e-commerce Web site the result of a joint venture or partnership with another company?

82. Is your primary e-commerce Web site maintained by an outside firm?

Company Web Building Activities Corporate demographics and investigation of web building expenditures and activities.


1. Which of the following best describes the decision makers’ position within the company? a. Owner b. Chief Executive c. Partner d. Senior executive in charge of advertising, marketing, brand. e. Executive in charge of advertising, marketing, brand. f. Professional consultant g. Finance/accounting/purchasing h. Marketing i. Office manager j. Outlet / Site manager k. Administrative assistant l. Technical or IT professional m. Sales professional n. Other

2. In which City, State / Country is your office located?

3. How many employees work at this location?

a. 1 to 7 b. 8 to 19 c. 20 to 49 d. 50 to 99 e. 100 or more f. Don't know/Not sure


271

4. What are the main product categories sold by your company?

5. Select the range that is closest to the approximate annual sales for your company, at this location:

a. Less than 100,000 b. $100,000 to $499,999 c. $500,000 to $999,999 d. $1 million to $5 million e. $5 million or greater f. Don't know

6. What was your involvement is in the website development and maintenance process?

a. Determine need to purchase b. Evaluate various products/vendors c. Authorise/approve purchase d. Determine where to purchase e. Place orders f. Other

7. Establish the domain

a. Determine need to purchase b. Evaluate various products/vendors c. Authorise/approve purchase d. Determine where to purchase e. Place orders f. Other

8. Has your company purchased any of these service in the past 6 months:

a. We did not purchase b. Developing a Website c. Registering a domain name d. Web Hosting Services

9. How much would you estimate your company spent in the past 6 months on the following web

related activities (at this location)? a. Did not purchase b. Don't Know c. $1,500 to $5,000 d. $5,000 to $10,000 e. $10,000 to $25,000 f. $25,000 or more g. For Developing a Website h. For Web Hosting Services & Maintenance

10. Does your company plans to purchase this service in the next 6 months:

a. Developing a new Website b. Registering a new domain name c. Web Hosting Services

11. Which of the following best describes your company's website?

a. Informational/advertising site that describes the business or displays products b. E-commerce site that has credit card processing ability c. Fully integrated site with credit card and order processing capability d. No website but plan to have one e. No website and no plans in the near future to develop one. f. Other


272

12. How satisfied are you with the overall quality, look, feel, and functionality of your website? a. Very satisfied b. Somewhat satisfied c. Neutral d. Somewhat dissatisfied e. Very dissatisfied

13. Which one of the following business sectors best describes your core business?

a. Communications/transportation/utilities b. Banking/finance/insurance/real estate/legal c. Retail d. Value added information service provider e. Government f. Data processing/computer g. Education h. Business services i. Other

14. What best describes your role in your organisation?

a. Owner, partner, principal b. CFO / CIO / CTO c. Director/manager d. VP e. Professional f. Other corporate management g. Project manager h. Customer service i. Other

SECTION 2

Competitive Environment

Abercrombie & Fitch


274

Competitive Environment

Monthly Consumer Spending

Fo

od

& D

rin

k

Clo

thin

g

Du

rab

les

Ho

me

Fu

rnis

hin

gs

Healt

h &

Beau

ty

Med

ical

Fo

otw

ear

Leis

ure

Go

od

s

Lu

xu

ry G

oo

ds

Oth

er

sp

en

din

g &

Investm

en

ts

% % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Disposable Income and Discretionary Spending (together with the consumers’ own assessment of future trends) is measured during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

Whereas in developed countries the Value Proposition of many brands have suffered in recent years for a variety of reasons, in many developing country markets the Value Proposition of many branded products have survived intact. Many consumer durables have seen their perceived worth diminished during the last decade or so in North America and Europe. This is due to both the popularization of the brands which make them less exclusive, and because they are perceived to be less costly to manufacture and less durable. Some formerly high end brands have suffered for these reasons.


275

There are psychological reasons which currently make developing country markets more durable than, for example, the United Sates or the United Kingdom markets and that is the general neurotic

1

(and sometimes psychotic) psychology of fashion and luxury goods consumers in some countries. The increasingly neurotic nature of some of these customer bases is tending to divert expenditure away from fashion into other neurotic activities.

In, for example the United Sates and the United Kingdom, neurotic behaviour patterns have increasingly led sections of the population to succumb to eating disorders (which has led to obesity) and impulsive disorders like drinking alcohol to excess. This has caused a rapid rise in over-weight people (over 50% of the adult female population in the United Sates and the United Kingdom are over-weight) and clinical obesity (over 35% of the adult female population in the United Sates and over 25% of the adult female population in the United Kingdom are clinical obese). This means that these individuals find it increasingly difficult to interact and interface with fashion products and as a consequence they do not perceive themselves to be capable of engaging with much of the fashion industry.

Neuroses play an important part in the purchasing behaviours of consumers, especially with fashion and luxury goods, and these neuroses represent both opportunities and threats to fashion product manufacturers and retailers.

The good news for fashion product manufacturers and retailers is that a neurotic customer base makes it relatively easier for retailers to loosen the purses of buyers; the bad news is that a neurotic customer base has a short attention span and is prone to be irrationally diverted to other neurotic activity.

1 The terms neurosis and psychosis are used in their clinical context. The symptoms as described as follows:-

There are many forms of neurosis: obsessive-compulsive disorder, anxiety neurosis, hysteria, and a very wide variety of phobias as well as obsessions. Effects of neurosis can involve anxiety, sadness or depression, anger, irritability, mental confusion, low sense of self-worth, et cetera; behavioural symptoms such as phobic avoidance, vigilance, impulsive and compulsive acts, lethargy, et cetera; cognitive problems such as unpleasant or disturbing thoughts, repetition of thoughts and obsession, habitual fantasizing, negativity and cynicism, etc. Interpersonally, neurosis involves dependency, perfectionism, feelings of isolation, socio-culturally behaviours, et cetera.

Individuals who score high on neuroticism are more likely than the average to experience such feelings as anxiety, anger, envy, guilt, and depressed mood. They respond more poorly to environmental stress, and are more likely to interpret ordinary situations as threatening, and minor frustrations as hopelessly difficult. They are often self-conscious and shy, and they may have trouble controlling urges and delaying gratification. Neuroticism is a risk factor for the "internalizing" mental disorders such as phobia, depression, panic disorder, and other anxiety disorders (traditionally called neuroses). Research has found that a wide range of clinical mental disorders are associated with elevated levels of neuroticism compared to levels in the general population. Disorders associated with elevated neuroticism include mood disorders, such as depression and bipolar disorder, anxiety disorders, eating disorders, schizoaffective disorder, dissociative identity disorder, and hypochondriasis. Mood disorders tend to have a much larger association with neuroticism than these other disorders. The remaining personality disorders had either modest positive or non-significant (in the case of narcissistic and histrionic) associations with neuroticism.

Research has consistently found that on average, women score moderately higher than men on neuroticism. A study examining gender differences in big five personality traits in 55 nations found that across nations the most pronounced gender difference in personality was in neuroticism. In 49 of the 55 nations studied, women scored significantly higher in neuroticism than men. In no country did men report significantly higher neuroticism than women, although in Botswana and Indonesia, men were slightly higher than women. Gender differences in neuroticism within nations ranged from very small to quite large. The differences were moderate to large in 17 countries, and small to moderate in 29 countries. In only seven countries - Bangladesh, Tanzania, Ethiopia, Greece, Japan, Botswana, and Indonesia - were they negligible. African and Asian/South Asian world regions tended to have smaller sex differences in personality overall than did western world regions (Europe, and North and South America). Differences in the magnitude of sex differences between world regions were due to differences between men in these respective regions. That is, men in western world regions were lower on neuroticism compared to men in African and Asian/South Asian world regions. Women, on the other hand tended not to differ in neuroticism across regions. Gender differences were also positively associated with measures of human development, that is, a long and healthy life, access to knowledge and education, and decent standards of living. Sex differences became more pronounced in countries with higher levels of human development. It is speculated that resource poor environments (that is, countries with low levels of development) may inhibit the development of gender differences, whereas resource rich environments facilitate them. This may be because males require more resources than females in order to reach their full developmental potential. Evolutionary theories suggest that gender differences in neuroticism developed because men have evolved to be more risk taking whereas women have evolved to be more cautious and hence more anxious and avoidant when faced with danger.


276

Market Opportunity

Analysis of the development of the retail trade and its life cycle

The choice of route to the market has opportunities and pitfalls, product and brand superiority is an obvious competitive advantage which can be re-enforced through firm control of the retail channels. However products and brands superiority is a medium and long-term strategy which can be unstable and may be subject to short-term set-backs. Clearly strong brands with real product benefits have the best competitive advantage, and for this reason the long-lived brands have consistently invested in brand equity.

The low transaction cost routes to the market have clear benefits, but may suffer from sustainability problems as the concept adopted is easy and inexpensive to replicate by competitors. The majority of foreign brands operating in any one country tend to choose the Medium Added Value and Medium Transaction Costs routes to the market as these are tested and known. However the use of novel and innovative channels of distribution are being increasingly explored by the brand leaders. Newcomers are less inhibited (than the entrenched brands) in trying and testing new distribution channels and often new brands can achieve improved market penetration through imaginative distribution policies and tactics.

The task of any brand seeking to enter these markets is to achieve an alignment with the distribution and a synergy with consumer buying behaviours and expectations.

Analyse consumer buying behaviours

Evaluate consumer ‘Shopping Experience’ criteria

Identify consumer channel preferences

Correlate consumer channel usage with purchasing criteria

Provide flexible and adaptable retail channel options

Observer changes in consumer buying behaviours

Adapt and respond to consumer buying behaviours

The above considerations are of course an analogy of the life cycle of particular channels. Failure to respond and adapt in the above manner will inevitably result in the premature shortening of the life cycle of any particular channel.

The purchasing criteria of consumers will be recognisable, and have been specified in other sections of this study. The basic criteria are inevitably the same in most of the countries:-

Price

Availability

Brand

Quality

Shopping experience

Store Personnel

Store appeal

Promotional actions

Et cetera

How these criteria then interact with particular channels is the important issue; as is how these criteria and the individual channel can be correlated and manipulated to maximise Added Value and minimise Transaction Costs.


277

Added Value and Transaction Costs across the Supply Chain

O

wn

ed

Ex

clu

siv

e

Bra

nd

Sto

res

Na

tio

na

l B

ran

d

Lic

en

sin

g

Re

tail

Fra

nc

his

ing

Se

llin

g v

ia

Ex

clu

siv

e

Dis

trib

uto

rs

Mu

lti-

Bra

nd

Re

tail

Sto

res

Dir

ec

t S

ell

ing

to

Ind

ep

en

de

nt

Re

tail

ers

Co

ns

um

er

Pa

rty

Pla

n

Soci

al N

etw

ork

Sa

les

Tact

ics

Te

lem

ark

eti

ng

eC

om

me

rce

Markets AV TC AV TC AV TC AV TC AV TC AV TC AV TC AV TC AV TC AV TC

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

AV = Added Value : TC = Transaction Costs : H = High : M = Medium : L = Low


278

Retailers per 10,000 inhabitants

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Store Revenue per Square Meter per annum (US$)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15


279

Average Revenue per Store per annum (‘000)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Average Store Sales Area (Square Meters)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15


280

Existing Distribution Channels

Wh

ole

sale

- D

om

esti

c

ow

ned

& c

on

tro

lled

Wh

ole

sale

- F

ore

ign

co

ntr

olled

Wh

ole

sale

- J

oin

t

Ven

ture

s

Wh

ole

sale

- O

the

r

Reta

ile

r -

Do

me

sti

c

ow

ned

& c

on

tro

lled

Reta

ile

r -

Fo

reig

n

co

ntr

olled

Reta

ile

rs -

Jo

int

Ven

ture

s

Reta

il –

In

tern

et

&

Oth

ers

Markets % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15


281

New Distribution developments

Multiple-Channel Development

Developing a Multi-Channel approach to the consumer is often very effective and allows:-

Efficient access to each market segment

Increased market coverage

Lower channel cost

Opportunities for targeted and customised selling

More precise control of channels

The introduction of Complementary Channels, each of which targets different product or consumer segments.

Competitive Channels where more than one channels competes for the same consumer segment. This permits dynamic pricing tactics, promotional opportunities and better inventory management mechanisms.

Multi-Marketing & Social Networking

Developing a Multi-Marketing & Social Networking approach to the consumer can help access niche markets:-

Direct selling an Party Plan to access specific demographics (Married women, Older women, women in rural locations)

Telemarketing which can access Housewives and women at their work place.

Social Network integration with mobile applications to promote specific events and ‘shopping experiences’ for the younger demographics.

e-Commerce & M-Commerce

The effective application of e-Commerce and then Mobile Applications will increasing become very important in the marketing mix of all brands.


282

Online Shopping – Purchases per month

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


283

Distribution Policies & Strategies

Distribution Strategies for consideration

Exclu

siv

e D

istr

ibu

tor

No

n-E

xclu

siv

e D

istr

ibu

tor

Sele

cte

d W

ho

les

ale

Dis

trib

uti

on

Inte

nsiv

e D

istr

ibu

tio

n t

o p

rovid

e

co

nven

ien

ce t

o in

dep

en

den

t re

tail

ers

Dir

ect

su

pp

ly t

o S

ele

cte

d R

eta

ile

rs

Inte

nsiv

e D

istr

ibu

tio

n t

o i

nd

ep

en

den

t

reta

ilers

Mu

lti-

ch

an

nel D

istr

ibu

tio

n

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The above distribution strategies are used by the current players in each of the country markets. Each distribution method needs to be analysed in depth to understand the implications.

Exclusive Distribution advantages include: Maximised control over service level

Control of costs

Enhanced brand equity

Enhanced margins

Control of tied retailers

Improved independent retailer loyalty

Improved ERP and inventory control

Improved merchandising controls

Improved forecasting and market reaction time

Market power and influence

Exclusive Distribution disadvantages: Risk in reliance on an exclusive

distribution system

Mainly geared to big brand, high price, high margin and low volume products

Intensive Distribution advantages include:- Potentially increased retailer sales

Wider consumer recognition

Enhanced product exposure

Intensive Distribution disadvantages:- Applicable to low price, low-margin

high street brands

Products require constant refreshing and high stock turn

Difficulty controlling brand image

Selective Distribution advantages: Better market coverage than exclusive

distribution

More control and less cost than intensive distribution

Concentration on productive outlets

Carry full product line

Provide superior services

Selective Distribution disadvantages: May not cover the market adequately

Potential errors in distributor selection


284

Adaption of Distribution

Strategies

Channel Control Strategies

Bett

er

kn

ow

led

ge o

f C

on

su

mer

bu

yin

g h

ab

its

Bett

er

att

en

tio

n t

o C

us

tom

er

exp

ecta

tio

ns

Mo

re a

tten

tio

n t

o C

om

pe

tito

r’s p

rod

uc

t o

fferi

ng

s

Bett

er

sele

cti

on

of

reta

il o

utl

ets

& l

oc

ati

on

s

Imp

rovem

en

t o

f ‘S

tore

Exp

eri

en

ce’

Mo

re a

tten

tio

n t

o B

ran

d E

qu

ity

Inc

rease v

olu

me l

evel

of

sale

s

Mo

re a

tten

tio

n t

o t

he

Ma

rketi

ng

Mix

Vert

ical M

ark

eti

ng

Syste

m (

VM

S)

ER

P m

eth

od

olo

gy

Fir

m c

en

tral co

ord

ina

tio

n

Pro

fessio

nal M

an

ag

em

en

t

Pro

gra

mm

ed

ne

two

rk s

yste

ms

Use o

f in

no

vati

ve m

ark

eti

ng

ch

an

ne

ls

Defi

nit

ion

s o

f co

rpo

rate

, ad

min

istr

ati

ve a

nd

co

ntr

actu

al

VM

S

Ho

rizo

nta

l M

ark

eti

ng

Syste

m

Sym

bio

tic m

ark

eti

ng

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The Trading Areas marked with an X indicate the need for the distribution strategies to be analysed in depth to understand the implications.


285

Purchasing power

Nati

on

al

Wh

ole

sale

rs

Reg

ion

al

Wh

ole

sale

rs

Ind

ep

en

den

t W

ho

lesale

rs

Ag

en

ts &

Jo

bb

ers

Nati

on

al R

eta

ile

rs

Reg

ion

al R

eta

ile

rs

Ind

ep

en

den

t R

eta

ilers

Mail O

rder

Cata

log

ue

On

lin

e

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

S = Substantial : M = Moderate : L = Limited : N = None

Purchasing power is defined by the relative discounts and terms of payment achieved that each level of the supply chain can achieve when negotiating with their suppliers. In general the distribution and retail buyers can usually negotiate more advantageous terms with suppliers from Asia than with suppliers from North America or Europe.


286

Retail Trade Life Cycle and Developments

Brand Development in the Retail Trade

Glo

bal B

ran

ds

Nati

on

al B

ran

ds

Nic

he B

ran

ds

Dis

co

un

t B

ran

ds

Reta

ile

rs’ O

wn

Bra

nd

s

Reg

ion

al B

ran

ds

Un

bra

nd

ed

& G

en

eri

c

Mail O

rder

Bra

nd

s

Cata

log

ue B

ran

ds

On

lin

e B

ran

ds

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

S = Substantial : M = Moderate : L = Limited : N = None


287

Future Prospects and Development of the Retail Trade

The future of the Retail Trade in shown in the market research data for Germany and the various markets covered.

City and Town analysis

The Research focuses on the Retailers in the Major Cities in the country (Germany). A full list of the cities and towns in the database can be found here:


The overall Market Data covers each of the Germany major towns and cities can be found here:

Market Data Major Towns

Detailed Market Data covers each of the Germany major towns and cities can be found here:

Detailed Market Data Major Towns

http://www.dg-di.eu/BASE_FOLDERS/xls/CTM.xls

http://www.dg-di.eu/-%20BASE_FOLDERS/MarketResearch/MR_TOWN_MARKET.htm


288

Wholesaler, Trade Buyer, Retailer and Store Performance Surveys

Products Product Group #1

Product Group #2

Product Group #3

Product Group #4

Product Group #5

Product Group #6

Product Group #7

Product Group #8

Product Group #9

Product Group #10

Product Group #11

Product Group #12

Product Group #13

Product Group #14

Product Group #15

Operations 1. Brand Management

2. Product Management

3. Marketing & Selling Activity

4. Store Presentation & Merchandising

5. Product Offering Specifications & Characteristics

6. Product Quality Control

7. Design Research & Development

8. Customer Handling

9. Product Sourcing & Control

10. Financial Controls

11. Staff Training / Control & Relations

12. Product Throughput Capacity & Control

13. Supply System Control & Development

14. Distribution Control

15. Product Handling Systems & IT


289

Buyers & Consumers

1. Wholesalers

2. Trade Buyers

3. Retailers

4. Consumers

5. Consumers Age: <19

6. Consumers Age: 19-24





11. Consumers Age: 65+

12. Consumers Social Group: AB

13. Consumers Social Group: C1


15. Consumers Social Group: DE

Trading Area

1 Germany 2 North Rhine-Westphalia

3 Bavaria


5 Lower Saxony

6 Hassia

7 Saxony


9 Berlin


11 Brandenburg

12 Sachsen-Anhalt

13 Thuringia

14 Hamburg

15 Mecklenburg-West Pommerania


290

Competitors

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

These surveys cover the Markets, Products, Competitors, Operations and Product Flows in terms of the Suppliers, Distributors, Retailers, and End Users. Please read the Definition & Notes first.

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_SURVEY_DEFI.htm

Distribution Channel Surveys

Surveys of Supply Chain & Distribution Channels Members:


Buyers & Consumers Distribution Channel Surveys Decision Makers

Competitors Distribution Channel Surveys on Competitors

Operations Distribution Channel Surveys on Operations

Products Distribution Channel Surveys on Products

Trading Area Distribution Channel Surveys for the Trading Area



http://www.dg-di.eu/BASE_FOLDERS/xls/SU5A.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/SU5C.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/SU5O.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/SU5P.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/SU5T.xls


291

Decision Makers Surveys

Surveys of Trade and Consumer Decision Makers:


Buyers & Consumers Decision Makers Surveys

Competitors Decision Makers Surveys for Competitors

Operations Decision Makers Surveys for Operations

Products Decision Makers Surveys for Products

Trading Area Decision Makers Surveys for Trading Area

Industry Performance

Surveys of Industry & Retailer Performance:


Buyers & Consumers Industry & Retailer Performance Surveys Decision Makers

Competitors Industry & Retailer Performance Surveys on Competitors

Operations Industry & Retailer Performance Surveys on Operations

Products Industry & Retailer Performance Surveys on Products

Trading Area Industry & Retailer Performance Surveys for the Trading Area

The surveys are best viewed as a graphic representation and users should use the normal facilities in Excel to render the Excel spreadsheets as a graphic.

To understand the format and structure of these Surveys please consult the following schematic and Survey Definitions













292

Value by Product Sectors

Germany Market Values in US$ - Historic from 1997. Forecast to 2028

Market Values at Producer Prices

Germany Market in US$ - Historic from 1997. Forecast to 2028

Market Sectors at Producer Prices

City / Town Market Value

The overall Market Data covers each of the Germany major towns and cities can be found here:

Market Data Major Towns

Detailed Market Data covers each of the Germany major towns and cities can be found here:

Detailed Market Data Major Towns

http://www.dg-di.eu/BASE_FOLDERS/xls/M0M.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/M0M.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/CTM.xls

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TOWN_MARKET.htm


293

Consumer Attitudes

Products Product Group #1

Product Group #2

Product Group #3

Product Group #4

Product Group #5

Product Group #6

Product Group #7

Product Group #8

Product Group #9

Product Group #10

Product Group #11

Product Group #12

Product Group #13

Product Group #14

Product Group #15

















294

Buyers & Consumers

1. Wholesalers

2. Trade Buyers

3. Retailers

4. Consumers












Trading Area


3 Bavaria


5 Lower Saxony

6 Hassia

7 Saxony


9 Berlin


11 Brandenburg

12 Sachsen-Anhalt

13 Thuringia

14 Hamburg



295

Competitors

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

These surveys cover the Markets, Products, Competitors, Operations and Product Flows in terms of the Suppliers, Distributors, Retailers, and End Users. Please read the Definition & Notes first.

Consumer Surveys

Surveys of Consumers and Buyers:

Consumer Surveys

Buyers & Consumers Consumer Surveys Decision Makers

Competitors Consumer Surveys on Competitors

Operations Consumer Surveys on Operations

Products Consumer Surveys on Products

Trading Area Consumer Surveys for the Trading Area








296


Surveys of Industry & Retailer Performance:







The surveys are best viewed as a graphic representation and users should use the normal facilities in Excel to render the Excel spreadsheets as a graphic.

To understand the format and structure of these Surveys please consult the following schematic and Survey Definitions








297

Competitive Factors

Retail Brands

The Survey results in this report cover the following Retail Brands in Germany:-

Typ

e

Bra

nd

Re

se

arc

h

Data

Av

ailab

le

Co

mp

eti

tive

Sta

nce

Sto

res

Reven

ue

s

Sellin

g S

pa

ce

Sq

M

% M

ark

et

Sh

are

Retailers

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

LB = National Brand : RB = Regional Brand : GHS = Global High Street : GLux = Global Luxury

G/DS = Generic brands


298

Brands Price Differentials

Tra

de A

rea #

1

Tra

de A

rea #

2

Tra

de A

rea #

3

Tra

de A

rea #

4

Tra

de A

rea #

5

Tra

de A

rea #

6

Tra

de A

rea #

7

Tra

de A

rea #

8

Tra

de A

rea #

9

Tra

de A

rea #

10

Tra

de A

rea #

11

Tra

de A

rea #

12

Tra

de A

rea #

13

Tra

de A

rea #

14

Tra

de A

rea #

15

Retailers % % % % % % % % % % % % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

The Price Differentials shown here are Purchasing Power Parity weighted.

How to interpret this data

Price differentials do not entirely depend on the actual monetary price of a product, but more on the Purchasing Power Parity. This means that the actual monetary cost of the product in any particular country has to be weighted with the average wage levels in that country to thereby produce the average purchasing power parity. The data shows that in order to purchase a particular product a consumer in low wage rate country will have to expend a greater proportion of his purchasing power than a consumer in a high wage rate country. Another way to interpret the data is to consider that there is a demographic shift whereby in lower wage rate countries the purchasing demographic of any particular product move further up the social scale when compared with high wage rate countries. In addition in lower wage rate countries the products will take longer to achieve the same level of market penetration as is found in high wage rate countries. As an extension of this one can see the relative price differential of the brands when sold in other countries.


299

Product Price Differentials

Product

Groups Tra

de

Are

a #

1

Tra

de

Are

a #

2

Tra

de

Are

a #

3

Tra

de

Are

a #

4

Tra

de

Are

a #

5

Tra

de

Are

a #

6

Tra

de

Are

a #

7

Tra

de

Are

a #

8

Tra

de

Are

a #

9

Tra

de

Are

a #

10

Tra

de

Are

a #

11

Tra

de

Are

a #

12

Tra

de

Are

a #

13

Tra

de

Are

a #

14

Tra

de

Are

a #

15

Product Group #1

Product Group #2

Product Group #3

Product Group #4

Product Group #5

Product Group #6

Product Group #7

Product Group #8

Product Group #9

Product Group #10

Product Group #11

Product Group #12

Product Group #13

Product Group #14

Product Group #15

The Price Differentials shown here are Purchasing Power Parity weighted.


300

Product Value Positioning

Product Groups

Pro

du

ct

Gro

up

#1

Pro

du

ct

Gro

up

#2

Pro

du

ct

Gro

up

#3

Pro

du

ct

Gro

up

#4

Pro

du

ct

Gro

up

#5

Pro

du

ct

Gro

up

#6

Pro

du

ct

Gro

up

#7

Pro

du

ct

Gro

up

#8

Pro

du

ct

Gro

up

#9

Pro

du

ct

Gro

up

#1

0

Pro

du

ct

Gro

up

#1

1

Pro

du

ct

Gro

up

#1

2

Pro

du

ct

Gro

up

#1

3

Pro

du

ct

Gro

up

#1

4

Pro

du

ct

Gro

up

#1

5

Retailers

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

The data above is derived from consumer surveys.

Ranking: Upscale 1-2 Mainstream 3-6 Economy 7-9


301

Product Pricing

Price Discounting

Low Price Market Median

Price High Price

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



302

Product Quality

Basic Quality Median Quality High Quality

Premium Quality

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



303

Product Specifications

Low Product Specification

Undifferentiated Product

Differentiated High

Specification

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



304

Product Target Audiences

No Target Audience

Some Targeting Highly Targeted Specific

Audience

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



305

Product Volumes

High Volume

Median Volumes

Low Volume Restricted

Volume

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



306

Product Utility

Necessity Product

Common Product

Discretionary Product

Luxury Product

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



307

Product Maintenance

Frequent Cleaning

Average Cleaning

Infrequent Cleaning

Specialist Cleaning

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



308

Product Merchandising

Simple Merchandising

Display Merchandising

Featured Complex Proposal

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



309

Product Advertising

Basic Advertising

Feature Advertising

Target Advertising

Complex Advertising

Retailers

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



310

Brand Positioning Tactics & Strategy

Current Tactical Brand Model

Price Product Place Promotion

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



311

Strategic Brand Objectives

Brand name Product Design

Shopping experience

Advertising

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



312

Functional Positioning - Symbolic Positioning - Experiential Positioning

Functional Symbolic Experiential Unknown

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

The data above is derived from consumer surveys..


313

Customer Value Propositioning

Benefits Differentiation Resonance Experience

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



314

Value Concept & Positioning

Average Value Good Value Excellent Value Unspecified

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



315

Brand Differentiation Propositions

Me Too

Some difference

Different Unique

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



316

Key Selling Messages

Value Product Brand Status

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15

The data above is derived from trade surveys.


317

Communications Tactics

Sales promotions

Public relations General

advertising Direct

marketing

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



318

Advertising Tactics

Price Product Inclusiveness Exclusivity

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



319

Media & PR Tactics

Brochures & print

Press releases Audio-Video Press Kits

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



320

Web & Online Tactics

Very visible Visible

Not really visible

Unspecified

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



321

Point of Sale Tactics

Average POS Good POS Excellent POS Unspecified

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



322

Merchandising

Average Merchandising

Good Merchandising

Excellent Merchandising

Unspecified

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



323

Product Display

Average Product Display

Good Product Display

Excellent Product Display

Unspecified

Retailers % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



324

Market Entry Management Factors

Distribution

Brands differentiate themselves in terms of price, quality and design. For the purposes of the rest of this section branded products will be categorised as:

High priced brands: These global brands are committed to luxury, style, and quality.

Middle range brands: These brands bring trends to the high street; they are design-led and

are sold at high street prices.

Low cost brands: Low cost brands offer contemporary designs and current trends at low

prices, especially distributed in department stores and supermarkets.

Retail Level

There are three types of retailers: Vertically-integrated Retailers; Independent Retailers; and Department Stores.

Vertically-integrated retailers operate wholly-owned retail outlets and sell only the brands

selected by that company. Vertically-integrated retailers tend to have an international

presence. Many high range designer brands, middle range high street brands and low cost

brands are vertically integrated. They are located on main streets and in shopping centres; in

addition high range brands and middle range high street brands sell their ranges in

department stores.

Independent retailers sell a selection of brands and are independent of the brands they sell.

Independent retailers can take many forms. Their stores tend to sell middle range high street

brands, however some may sell high range designer brands. Independent retailers tend to

specialise in one type of product category, and generally provide their customers with more

choice and variety for those categories. Independent retailers may own and operate a chain

of stores under a common fascia and are typically known as “branded resellers”. Other

independent retailers may be small local boutiques. Independent stores are mainly located on

the main shopping street in towns and cities and in shopping centres.

Department stores are quite different. They sell a wide variety of products from clothing to

home-wares, and electrical appliances to cosmetics. In terms of branded products,

department stores tend to sell high range brands and/or middle range high street brands; low

cost brands are rarely sold in department stores. Department stores are generally located in

central locations in cities and large towns.

A department store is a hybrid retailer. As detailed in subsequent paragraphs, branded products are available in their stores from vertically-integrated companies locating in the store through a “concession” arrangement and/or is “own-bought” and resold by the stores themselves. A few department stores also sell own-brand labels. Concession arrangements occur where vertically-integrated branded companies have an agreement to sell in a dedicated area of a department store. Many of these are the same brands sold in high street vertically-integrated stores. In effect, the department store is the


325

concessionaire’s landlord and earns a rent or commission from the concession. Therefore, the department store has less risk as it does not own the concessionaire’s stock, i.e., it is not a reseller. However, a department store’s commission is affected by fluctuations in sales. The actual stock and the profit from sales, excluding the commission, belong to the “concession”, i.e., the vertically-integrated brand. Own-bought products are branded items purchased by the department store from the manufacturer or its agent or distributor for resale. For own-bought products the department store bears the risk. Own-bought retailing is therefore similar to the arrangement described for independent stores, where a selection of brands is sold in the same store; the difference being that independent stores typically specialise in one type of product category, whereas department stores sell different types of product categories. Although products may be retailed through department stores under different arrangements, it is not obvious to the consumer which brands operate under each arrangement, i.e., whether the brand is sold under a concession or own-bought arrangement, as their presentation is seamless. The percentage of branded products that is own-bought versus concession varies across department stores.

Brand Competition

At the retail level brand competition tends to differ by type of retailer. Vertically-integrated international brands compete at a high level by promoting their branded product internationally.

Independent retailers and department stores compete through the range of brands and products they stock in their stores, and by building store image. In order to get the brands they want into their store, department stores further compete on the commission rate, location in store and merchandising. Branded reseller chains, for example, sports retailers, also compete on store reputation through store advertising and promotions etc. Department stores compete on store image by creating a “shopping experience” and through promotional activity to attract footfall.

The past decade has seen a big increase in the number of brands available, especially in terms of the location density of the global brands.

Value

Retailers within the same product categories compete on value, i.e., the combination of price, design and quality. Retail competition tends to start with competition among different brands within the same range, be it high range, middle range or low cost. Once a brand positions/markets itself within one of the product categories, it competes mostly with other brands within the same range by pricing at a level that reflects the quality, design and brand image that has been created.

In terms of pricing, vertically-integrated retailers operate a system of national pricing and thus at a retail level compete more on quality of service, shop fit etc. Vertically-integrated brands are increasingly also offering on-line shopping.

Low cost brands primarily compete on price by offering contemporary designs at low prices. The ultimate goal of these brands is to set their prices low. Consumers are looking for value for money when purchasing these brands.


326

Location

Location is of critical importance in retail. In most countries, despite the growing number of out of town shopping centres, the main street is still a major draw for retailers. Thus, there is demand and competition among all retailers for prime main street locations.

Vertically-integrated international brands sold throughout the world and the outlets of these brands are similar in design and layout. Independent retailers and department stores can differ somewhat in different areas.

Although the international brands enjoy economies of scale, local conditions in each country are often quite different, and local retailers can often profit by being more orientated to local markets. Retailers operating in some countries tend to have larger selling areas and therefore can offer a broader product range.

Supply Chain

The supply chain and, in particular, distribution for each type of retailer and supplier, tends to vary. Vertically-integrated branded companies supply products internally to retailers, while other brand companies supply products through wholly-owned wholesalers, agencies or third party distributors.

Products are typically designed by the brands themselves and manufactured mostly in the Far East, and sometimes in Europe or South America. In certain instances, the manufacturer is owned and operated by the brand and in other instances it is outsourced by the brand. Some brands use buying teams or groups to source their products around the world and are not aligned to, or contracted, with any manufacturer; they may also have different buying teams for different markets. Occasionally, brands outsource part of their manufacturing operations to distributors.

Vertically-integrated branded retailers and concessions in department stores source their product from their parent company. Vertically integrated brands internalise the supply, wholesale and retail aspects of their supply chains. The retailers and wholesalers are part of the branded company and operate under the instruction of the parent company. The brand supplies its products to its stores and concessions in department stores. There is no intermediary or third party involved in the supply chain.

Own-bought product suppliers to independent stores and department stores, use wholly-owned distributors, agencies and/or third party distributors in each country. Which avenue a supplier takes ultimately depends on how the branded company wishes to operate its distribution and the benefits or service each distribution type can offer.

Large multinational brands tend to have wholly-owned wholesalers based in the larger countries. Some brands have two separate wholly-owned wholesalers for each Trading Area; others have one wholly-owned wholesaler for the two jurisdictions. In some cases, rather than an office, the brand has a country representative, an employee of the brand, to manage the supply. Most wholly-owned wholesalers use selective distribution arrangements, i.e., supply to a number of different independent stores and department stores. For example, a wholly-owned wholesaler may supply that brand’s retail chain plus to other distribution chains. In the case of some brands, there may be an exclusive distribution arrangement whereby one retailer and its stores, or a chain, receives exclusivity for the product in the country.

Some brands distribute through independent agents. The agent places the order to the brand on behalf of the retailer and receives a commission in return for placing the order. The agent does not buy the product and, therefore, in some sense the agent is an arm of the brand. Retailers may negotiate terms and prices either with the agent or the branded supplier; at what level the retailer negotiates terms varies depending on retailer size. Most agents distribute more than one brand. Branded companies and retailers tend to prefer not to deal with a “middle man”, therefore, these types of agency agreements are rarely found in the market.

Some brands distribute their product through third party distributors. Third party distributors buy products from the brand and resell it to retailers in the country, i.e., they are the customers of the brand and have an account with them. Therefore, third party distributors take on a business risk. For


327

example, Distribution downstream to the retail level can be either an exclusive or selective arrangement. However, given the preference of not dealing with a “middle man” distributors are rarely found in the market. Most of the brands sold through third party distributors are lesser known brands.

Nature of Competition

Ultimately suppliers compete for consumer demand by building brand awareness and through interactions with retailers. However, some suppliers compete mostly at the brand level. Brand competition is a critical feature of competition at supply level. Brands compete by establishing a brand that reflects the image and category in which they wish to operate; high range, middle range or low cost. They will also price their product in a way that reflects the category and brand image they have created. Where they sell through independent retailers and department stores, they generally choose retailers whose own image is aligned to that of the brand’s image.

High range brands compete with each other by establishing a desirable brand through expensive image building mechanisms.

Middle range brands compete with each other through advertising.

Suppliers to low cost retailers (i.e. manufacturers in the Far East and South America etc.) compete on price.

Agencies compete by providing competitive commissions to the brands. Third party distributors also compete with each other, by the services they offer, guaranteed sales volume and other commercial activities.

Suppliers also compete in their interactions with retailers, in terms of space, commission, and location in the store. For example, concessions in department stores will compete for the best location in the store, i.e., where there is the most footfall. Suppliers also compete to have their products sold in the signature stores in a city.

Supplier Price Differentials

There are some supplier price differentials in each county and these are usually in the range 1-10%.

This suggests that, despite the rising cost of doing business, the level of competition in most countries (as well as the expansion in the volumes sold) kept prices from rising relative to other countries except when the exchange rates changed significantly.

The 2008 recession and the depreciation of some currencies, coupled together, have significantly impacted upon the retail business. Retail sales declined in many countries. Increasing numbers of retail chains have gone into administration in some areas, due largely to the global economic crisis.

The effect of the price gap between some countries has been that footfall and same brand sales in some countries have reduced significantly due to consumers changing their behaviour, where the effect is not so significant in other countries.

Consumers’ shopping behaviour has changed in a number of ways: Consumers are reducing the volume of purchases they are making. Consumers are increasingly buying from discount suppliers.

Consumers are switching. Low cost branded stores do not appear to have been as negatively affected as other stores; what they have lost in terms of consumers reducing purchases overall, they have gained from consumers switching from mid-range to their low price/high value stores. In addition, Retailers contend that consumers are switching to retailers that source their product in currencies less impacted by the exchange rate.


328

Retailer Reaction

The exchange rate fluctuations and the global recession have occurred simultaneously and it is therefore not clear how much of the decline in sales is attributable to the recession and how much to the exchange rates.

In response, retailers have tried to cut costs by reducing the cost of doing business and the cost of product. They have reduced the cost of doing business by reducing opening hours, working hours and pay.

With respect to cost of product, retailers can either try to renegotiate a price with their supplier, switch supply by switching brands, or by-pass the current branded supplier and source product from an alternative supplier.

The extent of exchange rate pressure and reduced footfall has driven retailers to go back to their suppliers, be it the manufacturer, wholly owned wholesalers, third party distributors or an agency, requesting price reductions. Renegotiating prices with suppliers may be difficult due to the seasonality of retailing and limited buyer power of stores in some countries.

Generally, retailers organise their stock for at least the following two seasons, or perhaps even for the coming year. Thus retailers decide on their stock and volume of purchases between six months to a year in advance; simultaneously price for the product is agreed typically in US$. In addition, in order to minimise currency risk, some retailers may hedge their currency at that time. Thus, due to these agreed prices and volumes, retailers are finding it difficult to renegotiate price with their suppliers. Retailers will, at the time of agreeing price with their supplier, set their retail prices. Given that this may be done a number of months in advance, by the time product appears on the shelf, exchange rates may have changed. This effect should diminish as retailers purchase the next round of stock which will be based on more recent exchange rates.

The ability of a retailer to negotiate price reductions will depend also on its importance to the supplier, i.e., the extent of its buyer power. National retailers are often small in international terms.

Switching brands may not be a possible option if the brand is a “must have” brand for the retailer, for example, consumers expect all sports stores to have certain international sports brands. It will negatively affect the retailer’s image if it does not have the must have brands for certain categories of products.

Retailers, independent stores and department stores contend that sourcing product by by-passing the current source of supply, i.e., the wholly-owned wholesaler, third party distributor or agency, is difficult. They state that the head office or equivalent regional distributor will direct the retailer back to the designated national distributor. Most international brands use wholly-owned wholesalers, thus the alternative source of supply is simply a different arm of the same company. In some cases retailers have been successful in renegotiating the currency in which they pay, but in most cases this has been refused.

Retailers’ attempts to get better prices following currency depreciation may be more difficult in some countries. Some retailers that operate in several countries may be able to benefit from sourcing product for their stores in one country through their supply chain in another country. Thus, any potential benefits arising from the changes in one currency may be spread across that retailer’ outlets.

For department stores and independent retailers, alternative sources of supply, such as the grey market, may be an option. However, products from the grey market are seldom the latest design and may be limited in the range and options it comes in. It also has limitations in terms of consistency of supply, and thus may not be an adequate option.

The individual stores of vertically-integrated middle range retailers do not have any alternative option to source product, as they must source their product internally. Prices in these stores are not set by the retailer but the head office of the brand and therefore they are constrained by the controlled supply channel in which they operate. These vertically-integrated brands are large international brands that operate on a large scale. Any national market is likely represents only a small portion of their overall business.


329

Some low cost retailers are not experiencing as much difficulty in switching sources of supply as independent stores or department stores. This is due to the fact that they tend to be vertically-integrated and are not aligned with any one supplier but instead they source manufactured product from the Far East based on the best price, design, quality and range. These low cost retailers market themselves on price.

Despite the constraints faced by some retailers, they are reacting by re-pricing products, increasing sales/discounts and promotions, and trying to source new products that have more attractive price and quality characteristics.

Supplier Reaction

Suppliers’ responses to increased pressures from retailers to reduce prices will depend on their ability and willingness to reduce prices.

Distributors of brands under pressure from retailers to reduce prices will themselves be limited in their ability to reduce prices to the extent that they can renegotiate a price reduction with their upstream supplier. Brands source product directly from their own, or contracted, manufacturers. This is often done in the Far East or other countries and therefore they operate in a number of currencies. Supplier costs are therefore largely in various exchange rate susceptible currencies. In reality, national suppliers may have a small portion of costs in their own currency and may not be able to pass on the current “expectation” that exists in the market.

In addition, brand companies tend to be vertically integrated upstream through contracted manufacturers and downstream through wholly-owned retailers and/or distributors; due to this tight distribution arrangement, the seasonality, and likely hedging aspects of suppliers’ operation, the extent to which they can quickly react to changes in currency fluctuations will be limited.

Overall, suppliers are being negatively affected by falling sales and the depreciation of operating currencies and therefore they do not want to lose revenue in the market as well. Some retailers stated that the currency depreciation warranted a price increase in their country but that branded companies would find it difficult to increase prices in that country because of recessionary pressures.

The bigger the market, the riskier it is to increase prices. In addition, branded companies tend to operate across a number of countries.

Conclusion

Differences in price level between different national markets have to some extent always been present, and changes in the differences in price level arise, amongst other reasons, due to currency movements. Since 2008 branded goods prices in one country have fluctuated in comparison with other countries. The effect of the pricing changes is driving consumers to change their shopping behaviour to the detriment of the majority of retailers. Low cost retailers however have not been as negatively affected; what they may have lost in terms of reduction in consumer spending they have gained from price conscious consumers switching to them. Among other things, retailers have responded by increasing sales/discounts and promotions, and in some instances re-ticketing items to bring down in price.

However, the extent of the response of retailers is limited by the extent to which they can reduce their costs of doing business, for example, reducing opening hours, and their cost of product. The ability to reduce cost of product is constrained by three elements; the seasonality of the market, limited buyer power and the ability to switch sources of supply.

Stocks and prices are determined six to 12 months before they appear in store. In most countries retailers are relatively small internationally.


330

Low cost retailers can easily switch sources of supply, though with a time lag. They are not aligned with any particular manufacturer and source product based on a mixture of quality and low price. If they are not happy with supply they will source it from elsewhere.

At the other end, vertically-integrated retailers operating in some overseas countries cannot switch supply and are constrained by the parent company’s distribution arrangements. The stock available to these stores is purchased centrally; their ability to switch will depend on how quickly they can renegotiate price with their manufacturer or find another source of supply elsewhere.

Retailers who resell a range of brands (independent retailers and department stores) also have limited ability to switch supply and find identical product elsewhere. They have long term relationships with brands which they need to maintain. They are thus seeking price reductions from suppliers.

The extent to which these retailers can negotiate lower prices is dependent on their buyer power. Department stores and branded resellers may be able to source supply in favourable currencies through their international operations. In some instances locally-operated retailers have been able to switch to paying in a different currency but in the main they have not. Thus locally operated retailers may be temporarily disadvantaged compared to international retailers.

The instability of the exchange rates has had a significant impact on retailing in many countries. International brands which manufacture outside the country will likely adjust their forthcoming seasons’ prices in line with the currency fluctuations.

Brands differentiate themselves in terms of price, quality and design. The products are generally manufactured in lower cost areas. The depreciation in the value of some currencies and the recession have led to a fall off in demand for branded products generally, though low cost retailers appear to be benefiting from consumers switching to them from more expensive brands.

Retailers have responded by increasing sales/discounts and promotions, and in some instances by re-ticketing items to bring down the price. The extent to which retailers may reduce prices is dependent upon the extent to which they can reduce their costs.

Their ability to reduce the amount they pay for the products they sell is constrained by three elements; the seasonality of the market, limited buyer power and the ability to switch sources of supply.

Seasonality in the Market: The prices paid by retailers to suppliers were set six to twelve

months ago and renegotiating those prices is difficult, though retailers have indicated that

they have had some limited success.

Limited Buyer Power: The extent to which retailers can negotiate lower prices is dependent

on their buyer power. Stores that have access to stock through related overseas stores have

slightly more scope to access products at lower prices. In some instances retailers have been

able to switch to paying in other currencies but in the main they have not.

Switching Sources of Supply: The ease with which retailers may switch to alternative better-

value sources of supply depends upon the type of product that they retail. Low cost retailers

can most easily switch sources of supply, though with a time lag (due to seasonality). Such

retailers are not so aligned with any particular manufacturer. The supply chains of the mid-

range retailers who operate wholly-owned retail outlets and sell a single product brand are far

less flexible. These retailers tend to have an international presence; purchasing and

distribution arrangements for the outlets in any particular country are typically determined

centrally. Retailers who resell a range of brands (e.g. supermarkets and department stores)

also have limited ability to switch sources of supply. Such retailers argue that they have long-

term relationships with branded product suppliers which they need to maintain. Alternative

sources for a particular brand cannot be relied on to come in the full range of products or to

be from the current season. A notable feature of retailing is the apparent low level of

alternatives for many retailers. With the exception of low cost products, competition is largely

about branding and image, within a particular price/quality range. Thus, it is difficult for stores

with on-going relationships with brands to switch to alternative brands. As the seasons roll on


331

and the seasonal pattern of sales continues, all brands have the opportunity to set national

prices in a way that reflects more recent exchange rates.


332

Distributors – Market Entry choices

Distributor – Domestic

owned

Distributor – Direct

investment

Distributor – Joint Ventures

Distributor –other

Market % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



333

Retail Presence – Market Entry choices

Retail – Domestic

owned

Retail – Joint venture

Retail – Direct investment

Retail – other

Market % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



334

Distribution Channel: Advantages – Disadvantages

Disadvantages Advantages

Do

me

stic –

No

Dis

trib

utio

n c

on

tro

l

Do

me

stic –

Little

Bra

nd

co

ntr

ol

Dir

ect in

ve

stm

ent

–

Ris

k

of

loss o

f in

vestm

en

t

Dir

ect in

ve

stm

ent

–

Hig

h

sta

rt-u

p c

osts

Jo

int

Ve

ntu

re –

Lo

ng

term

ris

k

Do

me

stic –

no

dir

ect

investm

en

t

Do

me

stic –

lo

we

r sta

rt-

up

co

sts

Dir

ect in

ve

stm

ent

–

Co

ntr

ol o

f C

osts

, B

ran

d,

Dis

trib

utio

n

Jo

int

Ve

ntu

re –

L

ow

er

sta

rt-u

p c

osts

Jo

int

Ve

ntu

re –

L

oca

l

Kn

ow

ledg

e

% % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



335

Market Entry options for Domestic Brands

Do

mesti

c D

istr

ibu

tors

-

No

n-e

xclu

siv

e

Do

mesti

c D

istr

ibu

tors

-

Exclu

siv

e

Do

mesti

c D

istr

ibu

tors

– J

oin

t V

en

ture

s

Dir

ect

Reta

il

Investm

en

t

Reta

il J

oin

t V

en

ture

Fra

nch

isees

Un

sp

ecif

ied

% % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



336

Market Entry options for Established or Global Brands

Do

mesti

c D

istr

ibu

tors

-

No

n-e

xclu

siv

e

Do

mesti

c D

istr

ibu

tors

-

Exclu

siv

e

Do

mesti

c D

istr

ibu

tors

– J

oin

t V

en

ture

s

Dir

ect

Reta

il

Investm

en

t

Reta

il J

oin

t V

en

ture

Fra

nch

isees

Un

sp

ecif

ied

% % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



337

Market Entry Features

D

yn

am

ism

Co

mp

eti

tiven

ess

Op

po

rtu

nit

ies

Su

rviv

ab

ilit

y

Vu

lnera

bilit

ies

% % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



338

Start-up Costs

Start-up Costs, Initial Investment and Product Launch Balance sheet

Direct and Indirect Market Entry

There are three scenarios examined in the data below, A Brand / Franchise Store launch, and Independent Store launch (probably carrying Branded product lines) and the use of a Distributor or Exclusive Wholesaler to introduce a new Brand to the country concerned.

The data provides the following matrices:-

1) Time from Start to Store Opening

2) Start-up Investment Cost (excluding Inventory)

3) Market Entry Investment, by type of Market Entry, with Economies of Scale:

A Cost comparison given for 1, 3, 5, and 10 stores on the grounds that there may be some cost advantages associated with the economies of scale of opening multiple outlets.

Inventory Costs

The Start-up costs data excludes the initial Inventory investment. This is because there are a large number of ways in which Franchised Brands, Independent Retailers, In-Store Departments and sales via Distributors are financed.

Some Franchised Brands offer Consignment deals, or Sale-or-Return deals, or inventory financing. Similarly there are inventory financing deals available for In-Store Departments.


339

Brand Store Start-up Costs

100 SqM

selling space

cost (‘000)

Re

nta

l M

on

th 1

Pro

pe

rty

De

po

sit

Sto

re f

itti

ng

Uti

liti

es

& D

ep

os

it

Sto

re E

qu

ipm

en

t &

Su

pp

lie

s

Bu

sin

ess

Ex

pen

se

s

IT E

qu

ipm

en

t &

Se

rvic

es

Ba

nk

ing

& P

ay

men

ts

Sy

ste

m

Le

ga

l &

Acc

ou

nti

ng

Ma

rke

tin

g

Sto

re O

pe

nin

g &

PR

Ca

sh

-in

-Ha

nd

To

tal

Bra

nd

Sto

re S

tart

-

up

Co

st

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



340

Independent Store Start-up Costs

100 SqM

selling space

cost (‘000)

Re

nta

l M

on

th 1

Pro

pe

rty

De

po

sit

Sto

re f

itti

ng

Uti

liti

es

& D

ep

os

it

Sto

re E

qu

ipm

en

t &

Su

pp

lie

s

Bu

sin

ess

Ex

pen

se

s

IT E

qu

ipm

en

t &

Se

rvic

es

Ba

nk

ing

& P

ay

men

ts

Sy

ste

m

Le

ga

l &

Acc

ou

nti

ng

Ma

rke

tin

g

Sto

re O

pe

nin

g &

PR

Ca

sh

-in

-Ha

nd

To

tal

Ind

ep

en

de

nt

Sto

re S

tart

-up

Co

st

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



341

Brand In-Store Start-up Costs

25 SqM

selling space

cost (‘000)

Re

nta

l M

on

th 1

De

po

sit

Sto

re f

itti

ng

Uti

liti

es

& D

ep

os

it

Sto

re E

qu

ipm

en

t &

Su

pp

lie

s

Bu

sin

ess

Ex

pen

se

s

IT E

qu

ipm

en

t &

Se

rvic

es

Ba

nk

ing

& P

ay

men

ts

Sy

ste

m

Le

ga

l &

Acc

ou

nti

ng

Ma

rke

tin

g

Sto

re O

pe

nin

g &

PR

Ca

sh

-in

-Ha

nd

To

tal

Bra

nd

In

-sto

re

Sta

rt-u

p C

os

t

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



342

Distributor / Exclusive Wholesaler Sign-up Costs

Cost (‘000)

Su

pp

ort

Eq

uip

me

nt

&

Su

pp

lie

s

Bu

sin

ess

Ex

pen

se

s

IT S

erv

ice

s

Ba

nk

ing

Le

ga

l &

Acc

ou

nti

ng

Ma

rke

tin

g S

up

po

rt

Pu

bli

c R

ela

tio

ns

Mis

ce

lla

ne

ou

s

Dis

trib

uto

r /

Exc

lus

ive

Wh

ole

sa

ler

Sig

n-u

p

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



343

Start Times Weeks: Brand Store

Init

ial C

on

tra

ctu

al

Neg

oti

ati

on

s

Pre

mis

es A

cq

uis

itio

n

Reg

ula

tory

Req

uir

em

en

ts

Sto

re f

itti

ng

Syste

ms In

sta

llati

on

& S

taff

tra

inin

g

Lau

nch

Dela

y

To

tal T

ime

Weeks

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



344

Start Times Weeks: Independent Store

Init

ial C

on

tra

ctu

al

Neg

oti

ati

on

s

Pre

mis

es A

cq

uis

itio

n

Reg

ula

tory

Req

uir

em

en

ts

Sto

re f

itti

ng

Syste

ms In

sta

llati

on

& S

taff

tra

inin

g

Lau

nch

Dela

y

To

tal T

ime

Weeks

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



345

Start Times Weeks: Distributor / Exclusive Wholesaler

Init

ial C

on

tra

ctu

al

Neg

oti

ati

on

s

Fin

an

cia

l

Arr

an

gem

en

ts

Reg

ula

tory

Req

uir

em

en

ts

Mark

eti

ng

Su

pp

ort

Syste

ms In

sta

llati

on

& S

taff

tra

inin

g

Deliv

ery

Lag

&

Lau

nch

Dela

y

To

tal T

ime

Weeks

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15



346

Economies of Scale with multiple Stores

Brand Store

100SqM

Independent Store

100SqM

Brand In-store

Start-up 25SqM

Per outlet

‘000

Sin

gle

Sto

re

3 O

utl

ets

5 O

utl

ets

10

Ou

tlet

s

Sin

gle

Sto

re

3 O

utl

ets

5 O

utl

ets

10

Ou

tlet

s

Sin

gle

Sto

re

3 O

utl

ets

5 O

utl

ets

10

Ou

tlet

s

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15


The data indicates that the cost savings from economies of scale are somewhat variable. This is undoubtedly due to the fact that the practice of the opening of multiple outlets is not consistent because the companies undertaking these enterprises are very variable in their methods.

It is the case that the major companies do enjoy significant economies of scale, but these are based on multiples of several hundred locations. Furthermore, whereas the brand owned outlets may enjoy such economies of scale the brand owner may not always pass on the entire volume saving to any franchisee. Thus the unit cost of shop fittings and furnishings for a 3 store franchisee may only be reduced fractionally if that franchisee were to open 5 stores.

There are some cost savings evident in respect of the shop fitting costs where more than one store is involved, and also in the budget for ‘cash-in-hand’; however the cost savings for the other components are not significant and will depend on the negotiation ability of the entrepreneur more than on any actual reductions for volume.


347

Cash Flow, Profit & Loss, Balance Sheet, Project Financial Analysis

The DataGroup Toolkits contains the following spreadsheets to enable users to produce:-

Start-up financial data is shown above and this forms both the Fixed Capital and Working Capital for the start-up.

The format of this balance sheet is based on U.S. accounting standards.

See: http://www.dg-di.eu/PureData/Base_PureData/Ch_Chapters/Ch_FIN_DEFI.htm

12 Months Cash Flow Analysis

http://www.dg-di.eu/BASE_FOLDERS/xls/CASH_FLOW.xls

Fr = Forecast : Ac = Actual Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac Fr Ac

'000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000

1 Revenues 0

2 Orders 0

3 TOTAL SALES 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

RECEIPTS

4 Sales receipts

5 Sales debtors

6 Loans / Grants received

7 Miscellaneous income

8 CASH ACCOUNT TOTAL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

9 Capital

10 Asset & other disposals

11 TOTAL RECEIPTS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

PAYMENTS

12 Finished Materials Cost

13 Fuel Cost

14 Electricity Cost

15

Total Input Materials + Energy

Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

16 Payroll Costs

17 Wages

18 Directors' Remunerations

19 Employee Benefits

20 Employee Commissions

21

Total Employees

Remunerations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

22 Total Rental & Leasing Costs

23 Total Maintenance Costs

24 Services Purchased

25 Communications Costs

26 Miscellaneous Expenses

27 Sub Contractors

28

Total Miscellaneous

Operational Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

29 Total Sales Costs

30

Total Distribution and Handling

Costs

31 Total Advertising Costs

32 Total After-Sales Costs

33

Total Research and

Development Expenditure

34 Interest

35

Net Taxes & Duties (Value

Added, Import, etc.)

36

Tax (Income, Social Security,

etc.)

37 Total Payments 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

38 Net Cash Flow 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

39 Opening Bank Balance 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

40 Cash in Bank 0

Month 11 Month 12

CASH FLOW FORECASTMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10

http://www.dg-di.eu/PureData/Base_PureData/Ch_Chapters/Ch_FIN_DEFI.htm



348

First 12 months and First 3 years Profit & loss Account

http://www.dg-di.eu/BASE_FOLDERS/xls/PROFIT_LOSS.xls

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10Month 11Month 12 Year 1 Year 2 Year 3

'000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000

1 Domestic Revenues 0

2 Overseas Revenues 0

3 Total Revenues 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

4 Raw Materials Cost 0

5 Finished Materials Cost 0

6 Fuel Cost 0

7 Electricity Cost 0

8 Total Input Materials + Energy Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

9 Payroll Costs 0

10 Wages 0

11 Directors' Remunerations 0

12 Employee Benefits 0

13 Employee Commissions 0

14 Total Employees Remunerations 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

15 Rental & Leasing: Structures 0

16 Rental & Leasing: Plant + Equipment 0

17 Total Rental & Leasing Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

18 Maintenance: Structures 0

19 Maintenance: Plant and Equipment 0

20 Total Maintenance Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

21 Services Purchased 0

22 Communications Costs 0

23 Miscellaneous Expenses 0

24 Sub Contractors 0

25 Total Miscellaneous Operational Costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

26 Sales Personnel Variable & Commission Costs 0

27 Sales Expenses and Costs 0

28 Sales Materials Costs 0

29 Total Sales Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

30 Distribution Fixed Costs 0

31 Distribution Variable Costs 0

32 Warehousing Fixed Costs 0

33 Warehousing Variable Costs 0

34 Physical Handling Fixed Costs 0

35 Physical Handling Variable Costs 0

36 Physical Process Fixed Costs 0

37 Physical Process Variable Costs 0

38 Total Distribution and Handling Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

39 Mailing & Correspondence Costs 0

40 Media Advertising Costs 0

41 Advertising Materials & Print Costs 0

42 POS & Display Costs 0

43 Exhibition & Events Costs 0

44 Total Advertising Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

45 Product Returns & Rejection Costs 0

46 Product Installation & Re-Installation Costs 0

47 Product Breakdown & Post Installation Costs 0

48 Product Systems & Configuration Costs 0

49 Product Service & Maintenance Costs 0

50 Customer Problem Solving & Complaint Costs 0

51 Total After-Sales Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

52 Total Marketing Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

53 New Technology Expenditure 0

54 New Production Technology Expenditure 0

55 Total Research and Development Expenditure 0 0 0 0 0 0 0 0 0 0 0 0 0

56 Total Operational & Process Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

57 Operating Profit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

58 Depreciation: Structures 0

59 Depreciation: Plant and Equipment 0

60 Depreciation: Miscellaneous Items 0

61 Total Depreciation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

62 Trading Profit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

63 Interest Paid

64 Non-trading Income

65 Pre-tax Profit 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

PROFIT & LOSS ACCOUNT

http://www.dg-di.eu/BASE_FOLDERS/xls/PROFIT_LOSS.xls


349

1-7 Years Balance Sheet

http://www.dg-di.eu/BASE_FOLDERS/xls/BALANCE_SHEET.xls

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

'000 '000 '000 '000 '000 '000 '000

1 Fixed Assets: Structures

2 Fixed Assets: Plant and Equipment

3 Fixed Assets: Miscellaneous Items

4 Fixed Assets 0 0 0 0 0 0 0

5 Capital Expenditure on Structures

6 Capital Expenditure on Plant and Equipment

7 Capital Expenditure on Vehicles

8 Cap. Expend. on Data Processing Equipment

9 Capital Expenditure on Miscellaneous Items

10 Total Capital Expenditure 0 0 0 0 0 0 0

11 Retirements: Structures

12 Retirements: Plant and Equipment

13 Retirements: Miscellaneous Items

14 Total Retirements 0 0 0 0 0 0 0

15 Total Fixed Assets 0 0 0 0 0 0 0

16 Finished Product Stocks

17 Work in Progress as Stocks

18 Materials as Stocks

19 Total Stocks / Inventory 0 0 0 0 0 0 0

20 Debtors

21 Miscellaneous Current Assets

22 Total Current Assets 0 0 0 0 0 0 0

23 Total Assets 0 0 0 0 0 0 0

24 Creditors

25 Short Term Loans

26 Miscellaneous Current Liabilities

27 Total Current Liabilities 0 0 0 0 0 0 0

28 Net Assets / Capital Employed 0 0 0 0 0 0 0

29 Long Term Loans

30 Miscellaneous Long Term Liabilities

31 Shareholders Funds 0 0 0 0 0 0 0

Persons Persons Persons Persons Persons Persons Persons

32 Workers

33 Total Employees

BALANCE SHEET

http://www.dg-di.eu/BASE_FOLDERS/xls/BALANCE_SHEET.xls


350

10 Years Project Financial Analysis

http://www.dg-di.eu/BASE_FOLDERS/xls/Project_Financial_Analysis.xls

Project Financial Analysis

INPUT SHEET: USER ENTERS ALL BOLD NUMBERS

INITIAL INVESTMENT CASHFLOW DETAILS DISCOUNT RATE

Initial Investment= $150,000 Revenues in year 1= $240,000 Approach(1:Direct;2:CAPM)= 2

Opportunity cost (if any)= $7,484 Var. Expenses as % of Rev= 50% 1. Discount rate = 10%

Lifetime of the investment 10 Fixed expenses in year 1= 0 2a. Beta 0.9

Residual Value at end of project= $100,000 Tax rate on net income= 40% b. Riskless rate= 8.00%

Deprec. method(1:St.line;2:DDB)= 2 If you do not have the breakdown of fixed and variable c. Market risk premium = 5.50%

Tax Credit (if any )= 10% expenses, input the entire expense as a % of revenues. d. Debt Ratio = 30.00%

Other invest.(non-depreciable)= 0 e. Cost of Borrowing = 9.00%

Discount rate used= 10.69%

WORKING CAPITAL

Initial Investment in Work. Cap= $15,000

Working Capital as % of Rev= 25%

Salvageable fraction at end= 100%

GROWTH RATES

1 2 3 4 5 6 7 8 9 10

Revenues Do not enter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Fixed Expenses Do not enter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Default: The fixed expense growth rate is set equal to the growth rate in revenues by default.

YEAR

0 1 2 3 4 5 6 7 8 9 10

INITIAL INVESTMENT

Investment $150,000

- Tax Credit $15,000

Net Investment $135,000

+ Working Cap $15,000

+ Opp. Cost $7,484

+ Other invest. $0

Initial Investment $157,484

RESIDUAL VALUE

Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $100,000

Working Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $87,846

OPERATING CASHFLOWS

Lifetime Index 1 1 1 1 1 1 1 1 1 1

Revenues $240,000 $264,000 $290,400 $319,440 $351,384 $351,384 $351,384 $351,384 $351,384 $351,384

-Var. Expenses $120,000 $132,000 $145,200 $159,720 $175,692 $175,692 $175,692 $175,692 $175,692 $175,692

- Fixed Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

EBITDA $120,000 $132,000 $145,200 $159,720 $175,692 $175,692 $175,692 $175,692 $175,692 $175,692

- Depreciation $30,000 $0 ($4,000) $0 $0 $0 $0 $0 $0 $0

EBIT $90,000 $132,000 $149,200 $159,720 $175,692 $175,692 $175,692 $175,692 $175,692 $175,692

-Tax $36,000 $52,800 $59,680 $63,888 $70,277 $70,277 $70,277 $70,277 $70,277 $70,277

EBIT(1-t) $54,000 $79,200 $89,520 $95,832 $105,415 $105,415 $105,415 $105,415 $105,415 $105,415

+ Depreciation $30,000 $0 ($4,000) $0 $0 $0 $0 $0 $0 $0

- ∂ Work. Cap $45,000 $51,000 ($38,400) $7,260 $7,986 $0 $0 $0 $0 $0

NATCF ($157,484) $39,000 $28,200 $123,920 $88,572 $97,429 $105,415 $105,415 $105,415 $105,415 $105,415

Discount Factor 1 1.10685 1.225116923 1.356020666 1.500911474 1.661283865 1.838792046 2.035266976 2.252735252 2.493440014 2.759864079

Discounted CF ($157,484) $35,235 $23,018 $91,385 $59,012 $58,647 $57,329 $51,794 $46,794 $42,277 $106,259

Investment Measures

NPV = $414,267

IRR = 42.43%

ROC = 75.60%

BOOK VALUE & DEPRECIATION

Book Value (beginning) $150,000 $120,000 $120,000 $124,000 $124,000 $124,000 $124,000 $124,000 $124,000 $124,000

Depreciation $30,000 $0 ($4,000) $0 $0 $0 $0 $0 $0 $0

BV(ending) $150,000 $120,000 $120,000 $124,000 $124,000 $124,000 $124,000 $124,000 $124,000 $124,000 $124,000

http://www.dg-di.eu/BASE_FOLDERS/xls/Project_Financial_Analysis.xls


351

SWOT Analysis

SWOT analysis by type of Market Entry

Entry via Company Owned Retail Stores Strength Weaknesses

Control of Brand

Control of Costs

Control of Profitability

Difficult Learning Curve

High Direct Investment Costs

High Risk of Failure

Opportunities Threats

Direct Contact with Customer Base

Ability to Adapt Products

Ability to Directly Influence Investment Decisions

Inexperience with local conditions

Local competitors

Potential fragility of local management

Entry via Domestic Retail Joint Venture Strength Weaknesses

Partner’s knowledge of the country

Reduced Direct Investment Costs

Reduced Risk of Failure

Difficult in Finding Partner

Loss of Cost Controls

Reduced Margins & Profit Potential


Joint Development of Customer Base

Ability to Adapt Products


Partner’s business policies

Market Power of major competitors

Potential fragility of partnership



352

Entry via National Franchise Licensee Strength Weaknesses

Licensee’s knowledge of the country

Reduced Direct Costs

Reduced Risk of Direct Losses

Difficult in finding suitable Licensee

Loss of Geographic Controls

Reduced Margins & Profits


Effective Development of Franchisees

Potential to achieve better market penetration

Ability to Extend Brands and Products

Competitors’ business policies

Market Power of major competitors

Potential fragility of Licensee

Entry via Intensive Individual Franchising Strength Weaknesses

Control of Brand



Difficult Marketing process

Difficult in finding suitable Franchisees

High Risk of Failure of Franchisees


Better Contact with Customer Base

Ability to Extend Brands and Products


Franchisees targeted by competitor

Local brand competition

Potential fragility of Franchisees



353

Entry via Exclusive National Distributor Strength Weaknesses

Distributor’s knowledge of the trade



Difficult in finding suitable Distributor




Ability to reach smaller and more remote retailers

Potential to achieve better market penetration

Ability to use Distributor’s local expertise


Possible loss of Brand Equity

Potential fragility of Distributor

Entry via Intensive National Distribution / Wholesaling Strength Weaknesses

Distributors’ knowledge of the trade



Difficult in controlling Distributors




Ability to reach smaller and more remote retailers

Potential to achieve better geographic coverage

Ability to use Distributors’ local knowledge


Loss of Brand Equity

Potential fragility of Distributors



354

Competitive Analysis

Retail Brands

Locations

Bra

nd

str

ength

s

Opera

tiona

l str

en

gth

s

Sale

s

Pro

duct

Lin

es

Bra

nd

qu

alit

y

Pro

duct

desig

n

Pro

duct crite

ria

Pricin

g s

tructu

re

Mark

eting a

ctivitie

s

Pro

duct su

pp

ly s

ourc

es

Expansio

n p

lans

Custo

mer

serv

ice

Retailers % % % % % % % % % % % % %

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



355

Market Penetration Prospects

Advancing into the target markets

Relative difficulty

Low Moderate High

Markets % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The data above is derived from country surveys.


356

Brand Concept

A brand is defined as: “A name, term, sign, symbol, or design, or combination of them, intended to identify the goods and services of one seller or group sellers and to differentiate them from those of competitors.”

Branding thus is a means to distinguish one product from another and these differences may be functional, rational, or tangible and fundamentally related to product performance of the brand.

In the developing countries a ‘Brand’ is frequently no more than a European sounding name on a copy of some European design. This use of facsimiles by developing country producers has shown the limitations of their business models.

It is necessary to distinguish a Brand from a Label. Labels or Own-Brand Labels tend to be generic or standard products which simply bear the label or identification of a supermarket or some other retailer. In general labels do not have the same status as brands in the mind of consumers, albeit the quality and designs may have little differentiation; however consumers expect labels to have lower price as than brands.

Brand Equity

Brand equity is intangible added value endowed to products and services. This value may be reflected in how consumers think, feel, and act with respect to the brand, as well as the prices and price premiums demanded by a brand, market share, and ultimately the profitability that the brand commands for the firm. Brand equity is an important intangible asset that has image and financial value to the firm. In the regional markets there is no extended history of brand image creation and it is for this reason that developing country companies have to be particularly attentive to the enhancement the brand equity of their products.


357

Customer Based Brand Equity Customer based brand equity can be defined as the differential effect that brand knowledge has on the consumer response to the marketing of that brand. Positive customer based brand equity is when consumer react more favourably towards a branded product than to competitive products. Regional brands can use the attitudes and perceptions of the customer base to increase customer based brand equity. These perceptions may be, for example, the tendency for older demographics to be more conservative or chauvinistic.

Brand Knowledge Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs, and so forth, that becomes associated with the brand. In particular, brands must create strong, favourable, and unique brand associations with the target customer base. Brand knowledge is low in many developing country markets and this presents opportunities to new brands entering those markets.

Substantial Brand Knowledge & Awareness – All Brands

% Social Group Awareness

% Age Group Awareness

AB C1 C2 DE < 19 19-24 25-34 35-44 45-54 55-64 65+

Market % % % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Brand knowledge and awareness is assessed during Consumer Surveys when consumers were asked specific questions to test the strength of their awareness of named brands. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


358

Brand Equity Model

Brand Equity can be seen as a group of five categories of the assets and liabilities of a brand that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.

In the regional markets consumer in many markets are relatively unfamiliar with these brand assets and therefore marketing strategies can be employed by companies to enforce these assets in the mind of consumers.

These categories of brand assets are:

1. Brand loyalty

2. Brand awareness

3. Perceptions of quality

4. Brand associations

5. Proprietary assets, patents, trademarks, and distribution channel relationships.

In the regional markets insufficient attention has been paid to these issues and this has generally led to the lack of global competitiveness of regional brands.


359

Substantial Brand Loyalty – All Brands

Social Group Loyalty Age Group Brand Loyalty

AB C1 C2 DE < 19 19-24 25-34 35-44 45-54 55-64 65+

Market % % % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Brand loyalty is assessed during Consumer Surveys when consumers were asked specifically for the brands they purchased and then specifically if they would purchase the same brand(s) again. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


360

Substantial Brand Quality –v Price Perceptions – All Brands

Social Group Age Group Brand Quality -v- Price

AB C1 C2 DE < 19 19-24 25-34 35-44 45-54 55-64 65+

Market % % % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Perceptions of Brand Quality is assessed during Consumer Surveys when consumers were asked specifically if they believed that the brands they purchased were of a better product quality than other or cheaper brands and if in general they believed that expensive brands were of a better product quality. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


361

Brand Knowledge Components Price

Brand Recall Packaging

Brand Awareness

Brand

Recognition

User imagery

Brand Knowledge

Non-product Related

Usage Imagery

Brand Image Brand

Associations Attributes

Product Related

Favourable Associations

Benefits

Strength of Associations

Attitudes

Uniqueness of

Associations

Brand Resonance Components


362

Brand Resonance

The brand resonance model also views brand building as an ascending, sequential series from bottom to top.

The Brand Resonance model:

1. Brand Salience relates to how often and

easily the brand is evoked under various purchase or consumption situations.

2. Brand Performance relates to how the product or service meets the customers’ functional needs.

3. Brand Imagery deals with the extrinsic

properties of the product or service, including the ways in the brand attempts to meet the customers’ psychological or social needs.

4. Brand Judgments focus on the

customers’ own personal opinions and evaluations.

5. Brand Feelings are the customers’

emotional responses and reactions with respect to the brand.

Brand resonance refers to the nature of the relationship that customers have with the brand and the extent to which customers feel that they are “in sync” or empathetic with the brand.

Producers in the regional markets have to decide with which brand concept they wish to align. They can seek to produce a Global brand or they can seek to produce a Market Segmented brand. What corporate history has suggested is that companies wishing to engage both concepts often fall between both stools.


363


364

Qualitative Brand Research

It is necessary to assess the strength as well as understand the nature of the brand’s equity, relative to competitive brands, and to monitor that over time.

Assessing the strength of brand equity can be done by finding Brand Awareness, Salience, Brand Preference and Brand Users.

Qualitative Brand Identifiers

Sali

en

ce

Perf

orm

an

ce

Imag

ery

Ju

dg

men

ts

Feelin

gs

Sty

le

Accep

tan

ce

Sty

lin

g

Att

racte

d t

o G

lob

al

Bra

nd

s

Att

racte

d t

o L

ocal

Bra

nd

s

Market % % % % % % % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

Brand Resonance is assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


365

Brand Awareness according reflects the extent to which people can either remember or

recognize a brand. When people think about brands in a product category, those come to

mind represent recall brand awareness; they are recalled based only upon a category cue. If

someone is shown a list of brand names or pictures of packages, those that can be identified

represents recognition brand awareness.

Brand Salience depends upon awareness, but reflects the relative strength of that awareness

in relation to the target market’s awareness of other brands in the category. This relationship

will be reflected in the relative relationship between what is known as “top -of- mind”

awareness and all the other brands in the category of which someone is aware.

Brand Preference, like brand salience, can be an indicator of the strength of brand equity.

Brands that are preferred are likely to enjoy greater equity than those that are not. Preference

for a niche brand may be high in its market segment, but relatively low in the global market as

a whole.

Brand Users or category understanding is one of the primary functions of quantitative

research and specifically relates to Users of a particular brand vs. users of competitive

brands. Based upon this, one is able to “profile” various user segments.

Marketing communication applied to branded products

The market for branded products in developed countries is a highly competitive market whose main characteristics is the similar positioning of a large number of competitive brands and, in this respect, the brand’s image developed by marketing communications can influence the adoption process of the products. In the regional markets, especially in the less developed countries, there is not the same level of competition and this represents an opportunity for new brand entries.

The marketing stimuli used to influence the purchase decisions, must transmit a coherent message in all advertising and communication activities. The co-ordination of this process must consider such aspects as the brand awareness and the brand image, as determined by the nature of the consumers’ perception.

The image is a mental representation of the brand and the product’s attributes and benefits. It is a multi-dimensional phenomenon that depends on the consumer’s perception of those attributes and benefits. In branded products, both mental representation and its perception are built in a continuous way, and developed through the image of fashion transmitted by each seasonal collection and by all activities of marketing communication.

The overall effect of product branding depends on the integration of all the components of the marketing communication plan, including visual merchandizing, with the product design. All these three elements have an impact over the product adoption process and a similar final goal: to influence the purchase option of branded products through the satisfaction of a certain product image demand.

Whereas the European and US fashion retailers have very long experience of these issues, the new regional brands have a very steep learning curve.


366

The Brand Image in the marketing communication process

Brand managers need to develop systems to regularly reinforce the brands’ image in relation to the overall brand identity and consumer awareness of the importance criteria for that product brand. Brand management is less of a developed art in the regional markets than it is in the US or Europe.

The brand may benefit from an enhanced reputation and closer proximity to its buyers if the design of each collection takes into consideration the following aspects:

In order to keep or develop the value of the symbolic message of the brand, the brands’

image management should be focused on a small number of distinct styles;

The consumer buys or uses branded products of different types and styles;

An effective brand image developed through constant re-designs, allows the brand to achieve

image coherence and to capitalize on it in the market by building a global presence.

The adoption process of product brands reflects the significant impact of the popular and

cultural image that a brand transmits as well as its inherent identification potential (social,

cultural and economic).

Recognizing this, consumers search for brands that approximates with their own aspirations, needs and wants; rather than that of the stereotypical people who may have appeared in advertisements and the media. This is especially the case in markets which have traditionally been less exposed to global culture. Whereas the upper middle classes in the developing countries are increasingly exposed to global stereotypes, nonetheless the traditional aspects of these markets frequently outweigh the global imagery.

The Store Image in the marketing communication process

The store image development is established through its geographical location, the retail space which it occupies and its external design. In addition it is defined by the products that it offers and their representation in the internal space of the store. The combination of these factors defines the store atmosphere, or look, or personality. This should at all times conform to, and confirm, the target customer base’s expectations of the store.

In many developing countries the store locations and the store space represents a major contributing factor to mitigate the relatively high cost of global brands. The consumer is not only buying the brand, but is also buying into the ‘shopping experience’ in a way that is more profound than experienced in Europe or the USA.


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Consumer confidence and consumer markets

Consumer Confidence Index

2003

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Consumer confidence is assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

Consumer Confidence

Consumer Confidence relates to Spending Attitudes in relation to the general Economic situation; the definitive gauge of consumer sentiment around economic and social concerns across countries.

After periods of speculation and uncertainty around the economic conditions, at some stage consumers reach a state of resignation to the economic realities and the majority will then usually adopt rational spending levels for various product groups.

Consumer confidence worldwide often fluctuates wildly as relatively uninformed consumers attempt to make sense of media coverage of economic circumstances, the propaganda of their political masters, and their own empirical experience of the situation.


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In terms of the consumption of consumer products, the net effect is the changes in the propensity for consumers to save rather than spend.

In the regional markets, as in the rest of the world, consumer confidence has fallen to its lowest level in many years. The regional markets, and more particularly China and India are not forecast to survive the current economic recession any better than the USA or Europe.

Over 50% of global consumers’ state they put their spare cash into savings; this is an increase of over 6% since 2010, and up 12% since 2008. The world’s most determined savers have always been in the Asia-Pacific region, where an average of 61% of consumers chooses to save rather than spend.

Holidays and vacations continue to be a popular choice; with 26% of developing consumers planning to spend on their annual holidays, by contrast 24% of consumers currently choose to buy new clothes on a regular basis.

Consumer markets in developing countries have changed rapidly, and with strong growth in disposable incomes, plus the development of modern urban lifestyles, developing country consumers are becoming increasingly sophisticated and knowledgeable about branded products. Advertising and the media allow companies to communicate with consumers in many different ways and therefore brand propositions are now a part of daily life.

Foreign brands remain relatively powerful in the regional markets, especially in clothing and personal care products; but increasingly brands have to be associated with value and suggest a clear and evident Value Proposition. Developing country consumers are turning as suspicious and discriminating as their US and European counterparts; and indeed the learning curve and product awareness amongst developing country consumers is evolving much more rapidly than it did with US and European consumers in the past.

Developing country markets are difficult to forecast because of the variability of the numbers of people living in reduced financial circumstances and the more rural aspects of population distribution. Literacy rates are variable in many developing country countries. Income is frequently less well distributed across the whole population than in other regions. The market also tend to be highly regional for geographic or infrastructure reasons. A mosaic of cultures and languages in some countries contribute to the difficulties of companies seeking to establish homogeneous brand images.

Understanding buying pattern of consumers in the regional markets is a challenging endeavour. The developing country consumers’ lifestyle and profile is evolving rapidly for a number of fundamental reasons:

1. Population Age Distribution, especially the population below the age of 25.

2. The rise in the self-employed and financially self-sustaining segments of the working population.

3. The rise of the AB, C1 and C2 segments of the social groups.

4. Levels of discretionary spending amongst the urban middle classes.

5. The increase in the number of higher income households.

6. The increased consumption of technology and convenience products.

7. The rise in the use of credit and payment cards and other financial instruments.

8. The availability and cost of credit.

9. The increasing shift from price consideration to design and quality.

10. The adoption of aesthetic values and awareness of the projection of a personal image.

11. The increasingly critical evaluation of the Value Proposition of products and the Price – Value – Functionality considerations which are in the minds of consumers.

12. The acceptance of enjoyment of luxury items and an increased willingness to experiment with branded products.

13. The acceptable of product obsolescence and the dictates of what is, and what is not, perceived as being fashionable.


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By contrast there are factors which tend to differentiate, and often limit, many developing markets:

1. The relatively high portion of disposable income spent on Food and Housing.

2. The relative pricing of branded products.

3. The effectiveness and physical distribution of retailers, especially in large countries with limited infrastructure.

4. The pressure on the gross margins and therefore the profitability of the entire supply and distribution chain.

5. The difficulty for large scale retail operations and multiples to realise a good level of profitability.

6. The national shopping habits of consumers which sometime inhibit the impulse buying of products.

7. The influence of family and cultural imperatives on the younger consumer age groups whom tend to represent the major segment of the brand market.

8. Consumer attitudes and influences when shopping as a family group as opposed to shopping individually or with peer group.

Consumer Attitudes and Perceptions which impact Brands

In most developing markets there are certain events, attitudes and preferences which impact on the purchase of branded products.

1. Shopping habits and the method of shopping.

2. The role of matriarchal and patriarchal societies.

3. Special event purchases. The purchase of products for cultural, family and special events is

more important in certain markets.

4. The relative trust in local brands. There is a substantial degree of trust and confidence in local brands.

5. The relative perception that foreign brands are of a higher quality than local brands is largely

age based. After the age of 24 this perception of the superiority of foreign brands rapidly diminishes.

6. The relative effect of socio-economic groups and educational levels on brand perceptions.

7. The relative average spending during shopping trips. Younger demographics spend more per

trip than older demographics.

8. The relative average frequency of shopping trips. Younger demographics shop more frequently than older demographics. Up to 24 years of age the shopping frequency is likely to be once every 4 weeks, whereas this reduces after 25 years to once every 6 weeks, and reduces further as age increases.

9. The age group of consumers. Whereas the younger demographics believe that local brands can compete effectively with foreign brands they nonetheless feel that foreign brands offer other benefits.


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10. The use of the products:-

% Usage & Purpose of purchases

< 19 & 19-24 Years old 25 + Years old

So

cia

l &

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ily

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Eve

ryd

ay

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me &

Casu

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ecia

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cia

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Fam

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Market % % % % % % % % % %

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Usage & Purpose of purchases is assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

11. Perception of Designer –v- Standard / High Street Brands. In developing markets there are

growing perceptions that Designer Brands do not offer any particular quality benefit over Standard / High Street Brands.

12. There is a general dislike of Internet shopping in developing countries.


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13. In urban areas, amongst the middle classes, 40% of consumers were aware of brands from newspapers, 25% of consumers were aware of brands from magazines, and 23% of consumers were aware of brands from Television and Films.

14. Celebrity endorsement

Celebrity endorsements in certain countries are usually limited to local brands or certain types of international brands, namely, sportswear, denim, and youth casual wear.

Celebrity endorsement

Celebrity endorsement (Actors / Sports stars / Models / Movies Stars) importance is assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

Celebrity

Endorsements

irrelevant

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Endorsements

important

Market % %

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Celebrity endorsements were assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


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Relative Ranking Criteria and Consumer Habits for Product Purchases

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Purchasing Criteria and Habits are assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

Brand Selection Consumers who purchase products from Exclusive brand outlets tend to visit the store specifically because they are attracted to that brand, not for reasons of brand comparison.

In multi-brand outlets the majority of women select and purchase a particular brand because of the ‘shopping experience’. Overall preference for one brand over another is based on the ‘shopping experience’ generated by the chosen brand.


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Price over Brand Loyalty amongst Buyers

When shopping, price is the main consideration for young buyers and this extends to other generations. Young buyers are not as brand loyal as their parents, with generally less than 50% indicating brand loyalty as a major factor. There is an opportunity for more in-store marketing and promotions as 25-40% of young buyers indicating that in-store promotions do drive purchases. In addition a significant percentage of younger buyers are influenced by store merchandising and displays.

Purchase Drivers for Buyers

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Purchase Drivers are assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


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Domestic Brands -v- Foreign Brands

Brand Perceptions are assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.

< 19 & 19-24 Years old 25 + Years old

Tru

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Fo

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a H

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Dep

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he B

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Markets % % % % % % % % % %

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What do consumers want in a branded product? In developing countries there is rapidly growing youth population with a high level of education and exposure to global imagery. This demographic is particularly susceptible to brand propositions. Thus it is interesting to analyse the consumer needs of this demographic, as this will be the prime target for any new brand.

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Oth

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Markets % % % % % % %

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Branded products are assessed during Consumer Surveys when consumers were asked specific psychometric questions which tested and cross-checked the issues mentioned here. The data above is derived from statistically accurate social / income group, and full age spectrum, surveys.


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What Do Consumers Want?

This is the perennial question with no ready answers. For many people the answer may simply be to purchase brands which can be afforded on their budget. That mean a convenient and comfortable location to spend their money where they believe they will get value.

Why do retail brands attract consumers?

Which brand attributes were the most important to the customers?

The survey data shows the most important factors in determining store preference, i.e. which retail brand consumers patronise when shopping). As can be seen the main factor was price, followed by design (i.e. style and trends). What this means for the store is clear product displays, pricing, and merchandising; together with a sufficient inventory.

Whilst is may be considered that media advertisements would influence consumers, in fact this was not the case as some retailers use substantially less media advertising than others. What was evident was that in-store promotions frequently play an important role. Survey data suggests the following:-

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377

What can National brands do to counter the established Global brands?

There is little that any regional brands can do to counter the European and US brands. The reasons for this the brand equity of the established brands and the fact that these brands are so entrenched in the global market that it would be both expensive and ultimately counter-productive for any newcomer to attempt to overturn the apple cart.

To counter the global brands a newcomer will have to succeed in each of the following areas:-

Product Price

Product Design

Store Atmosphere

Store Location

Store Service

Product Promotions

The global players have spent decades working on these areas, and many of the global players have had only marginal success. The marginality of their success is measured in their Return on Investment, which has been only moderate in the past, and had indeed shown decline since 2008.

For regional brands to succeed they will need to re-think the traditional brand retail model.


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How can National brands do better than the Global brands?

It is not possible to speculate how companies may produce better designs. The experience is that many national designers are greatly influenced by US and European design concepts. Of course the only reason that such designers are successful is because there is consumer demand for their designs; ergo they have to produce US and European styles in order to succeed. The global brand managers use designers to create the consumers’ perception of what is, and what is not, desirable. In this respect the consumer is very malleable and is sufficiently neurotic to believe that this year ‘green is the new black’ or ‘brown is the new chique’. One can never under-estimate the style sense of the consumer, or over-estimate the ability to ability brand managers have in manipulating a gullible customer base.

The question then is what regional brands can do to be better than the global brands. Once again one returns to the consumer.

Product Price. The major high street brands have firm control of product pricing levels.

Product Design. The major high street brands decide themselves on what is desirable at any

particular moment in time.

Store Location. The major high street brands have the market power to command the prime

locations.

Product Promotions. The major high street brands have the market power to beat any

competitor in promotional activity.

Store Atmosphere. New brands can compete here by catering to specific consumer

demographic and market segments.

Store Service. New brands can compete here by catering to specific consumer demographic

and market segments.


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Novel marketing methods to distinguish oneself from the competition

Brand designers in the same industry generally use similar marketing methods to reach customers. How can brands and designers get creative and use unconventional marketing methods to distinguish their business from the competition?

This is specifically an area where new brands can start to compete with the tired marketing tactics used by the major high street brands. There are a number of ways in which new entrants to the market can change the interface between brand and buyer; and these will inevitable depend on the segmentation of the customer base to achieve a more friendly interaction with the customer.

The most cost-effective way of improving interaction with customers is to use new technology to build databases on customers, to better interact with customer in-store, and as a means of communications with customer to encourage them to visit stores.

RFID chips in Store Loyalty Cards

Most women carry a purse full of store loyalty cards, and these may or may not encourage the consumer to return to a particular store. However the inclusion if a RFID chip in the card will allow store to use a range of customer interface procedures when customer return to the store.

For example, an RFID chip will allow the customer to be identified as she enters the store and then a series of screen displays using an interactive Avatar could engage the customer in conversation using voice recognition software.

This conversation would use that customer previous purchases and choices as point of conversation. Screens would be placed at various locations in the store and the dialogue could continue and also direct the customer to particular products and promotional offers.

“Hallo Jane, welcome back. If you would prefer me not to help you please say -Yes- now.”

“OK. Can I show you some of our special offers in your size?”

“How did you like the skirt you bought the last time you were here?”

When two customers are within the same range of the same Avatar, the Avatar could introduce one customer to the other.

“Jane, can I introduce you to Betty? She has been a customer here for over two years.”

“Ladies, did you know that we have a special offer this week on jeans. You will find them in the next section beside the changing cubicles.”

The use of automated systems based on customer identification would potentially enhance the ‘shopping experience’ for the buyer and at the same time allow the collection of valuable market intelligence.

Special Occasions

Small brands are more flexible in their operations and they are more able to interact with specific customer segments. By matching specific customer segments with specific product offering and special promotions a retailer can attract customers in a much more effective way than any major high street retailer.

By building up consumer contact lists, categorised by demographic and social groupings, products could be promoted to these customer segments through special occasions (during weekends or evenings) where specific product ranges could be presented. The product ranges could then be maintained through online marketing.

Spontaneous Eventing

The most profitable and dynamic customer segment tends to be the under 24 year group. This demographic could be attracted to spontaneous events held in the retail premises or in local clubs or other locations. These events would combine a social occasion with the promotion of particular product offerings. Such events would be announced by mobile telephone messaging at the last moment and would be intended to divert young people from their usual social haunts to the event.


380

One would build into the system ‘exclusive’ events for high spending customers and these would involve musicians, local celebrities or special guests. There would be amongst the general customer base a desire for inclusion into this ‘inner circle’.

There are many similar ways in which a small brand can outmanoeuvre the larger, more bureaucratic, brands.

Unique Brand Offerings

“A unique brand offering attracts more attention and results in more sales” is a reasonable assumption; however there is nothing unique in the industry.

One might imagine that the use of novel textiles or build-in electronics may be possible; however the fact is that if there was any viable possibility for such innovations they would already have been seized upon by the major brands.

Gimmicks and gadgets tend to devalue the long-term image of brands and they should be avoided.

Average Brands Good Brands

Excellent Brands

Unspecified

Retailers % % % %

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New and Untapped Market Demand

In the developing regions the new and untapped markets tend to be in the less affluent and rural parts of the developing countries. Unfortunately this population has little disposable income to spend on branded products.

There is no new or untapped market demand available to overseas brands in developing regions. What local and segmented demand for products which exists in each country is catered for by local entrepreneurs offering discount products. Each market has its own domestic brands which cater for the middle price range products. Overseas brands have high overheads and cannot compete in the lower end of the market and are therefore limited to a relatively small part of the overall product market.

Niche Markets

There are niche markets, niche re-vitalisation and niche development; and there is always some opportunities in each area.

Geographic Niches

Districts with limited competition often provide strong retail niches where it is very easy for shoppers to find a retail brand locations isolated from competitors. Downtowns areas are often available for strong niche locations. Niche locations can also provide cost advantages because retail space is usually affordable and staff wage expectations are lower.

Customer Segment & Demographic Niches

The identification of customer segment niches requires local knowledge. The possibilities include:-

Ethnic demographics

Office workers

Older customers segments

Sports enthusiasts

Students

Tourists

Product or Service Niches

Product or service niches are usually concerned with the special needs or aspirations of particular consumer groups. Some examples would be:-

Add-ons like jewellery products or cosmetics

Exclusives & Limited editions of products

Factory outlets or value retailing

Product customisation

Joint promotions with other retailers or service providers

Special product types

Special Services like home visits and personal shoppers


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Brand Superiority

Brands have to offer potential buyers as many benefits as possible; especially, product superiority, product differentiation, or a very strong brand image or heritage.

New brands and newcomers are limited in the benefits they can offer. The democratisation of the luxury brands and their general availability (if not financial accessibility) means that the bar has been raised for all the middle ground players. Thus Product Superiority and Product Differentiation are now perceived by consumer as being the preserve of the luxury brands. In general this also applies to Brand Image and Brand Heritage.

Thus is it increasingly difficult for High Street brands to offer their customers anything other than the things being sought by the average retail customer. Those brand benefits are generally regarded as being:-

Product Price

Product Design

Store Atmosphere

Store Location

Store Service

Product Promotions

The High Street brands are thus limited to offering a lower product price, a better store atmosphere, better store service, and a more convenient store location. The benefits of design and promotions are transitory and very variable.

Building Heritage Brands

The cost of doing a good job in Brand Building and Design is not necessary any more than the cost of producing mediocre brands and designs.

The building of a heritage brand always starts with a brand name which has a sufficient resonance to be able to persuade consumers that it has sufficient weight to carry such a brand image.

For developing country companies it will be necessary to buy an existing name and convert that into a brand image. To be a heritage name it must have resonance in Europe and the USA and this means that the name must be widely known in Europe and the USA.

Once a suitable name has been purchased then a developing country company can use the normal brand creation tools to build the name into a brand.


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Brand Resonance

Building a strong brand uses a sequence of steps, in which each step is dependent on the success of the previous step such as. These are as follows:-

1. Brand identity. This needs to be specific and clear. 2. Brand meaning. What does the brand do for the consumer? 3. Brand responses. How do consumers perceive and react to the brand? 4. Brand relationships. What connections does the brand have and how does it connect with the

consumer?

The implementation of these steps, essential in the creation of the best brand identity, brand meaning, brand responses, and brand relationship, is a complicated and difficult process. The components of the process involve the following concepts:-

Brand Salience relates to aspects of the awareness of the brand, for example, how often and easily the brand is evoked under various situations or circumstances.

Brand Meaning is made up of two major categories of ‘brand associations’ that exist in customers’ minds related to performance and imagery, with a set of specific subcategories within each. These brand associations can be formed directly (from a customer’s own experiences and contact with the brand) or indirectly (through the depiction of the brand in advertising or by some other source of information, such as word of mouth). These associations serve as the basis for the positioning of the brand and its points-of-parity and points-of-difference. Creating strong, favourable, and unique associations and the desired points-of-parity and points-of-difference can be difficult for marketers, but essential in terms of building brand resonance. Strong brands typically have firmly established favourable and unique brand associations with consumers.

Brand Responses refers to how customers respond to the brand and all its marketing activity and other sources of information that is what customers think or feel about the brand. Brand responses can be distinguished according to brand judgments and brand feelings, that is, in terms of whether they arise from the “head” or from the “heart.”

Brand Judgments focus on customers’ personal opinions and evaluations with regard to the brand. Brand judgments involve how customers put together all the different performance and imagery associations of the brand to form different kinds of opinions.

Brand Feelings are customers’ emotional responses and reactions with respect to the brand. Brand feelings also relate to the feelings that are evoked by the marketing program for the brand or by other promotional means.

Brand Resonance refers to the nature of this relationship and the extent to which customers feel that they connect with a brand and feel “in synchronization” with it. With true brand resonance, customers have a high degree of loyalty marked by a close relationship with the brand such that customers actively seek means to interact with the brand and share their experiences with others.

The importance of the brand resonance model is in the checklist it provides for brand building. It provides a basis by which brands can assess their progress in their brand building efforts as well as a guide for marketing research initiatives. Brands must have a Duality. That Duality is the brand’s connection with the Consumer’s Head and Heart. One important point reinforced by the model is that a strong brand has such a duality. A strong brand appeals to both the head and the heart. Strong brands blend product performance and imagery to create a rich, varied, but complementary set of consumer responses to the brand.


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Brand Persistence

Brand Persistence or Success is a basic matter of capturing a sufficient customer base or brand following to sustain the brand over a period of time. Each year there are hundreds of brands introduced to the market; only a limited number survive 3-5 years, and only a fraction survive for more than 5 years. The lifecycle of a brand depends on the professionalism and determination of the brand managers.

Capturing a customer base

Capturing a customer base requires a very efficient and co-ordinated marketing effort to address the expectations of existing customers. Essentially this is a marketing task to offer the customer base a greater number of relevant purchase opportunities as opposed to ineffective purchase opportunities, and greater number of competitive product offers as opposed to undifferentiated product offers. The target customer base needs to be assured that they will get the product and services they expect from the brands they value the most.

a. Defining the target audience.

Who: Segment the target audience as precisely as possible Where: The marketing mix has to be fined tuned to each segment How: Audience management through multiple communications channels Push: Prioritize and Filter product and promotional management tactics Pull: Product Design, Buying Experience, Store Design, Point of Sale, Inventory management

b. Engaging the target audience

Value Proposition Product Pricing Product Design Store Experience

c. Converting the target audience

Predatory Pricing Tactical Marketing Tactical Advertising Tactical Offers & Promotions

d. Strategy

Strategic analysis of customer expectations Strategic blueprint to meet the customer expectations Strategic Business Plan Strategic marketing objectives

e. Focus

Focus on the customer base segments which meet the profit objectives of the brand Focus on realistic marketing goals Focus on the medium and long term development of the brand

f. Monitor

Seek and automate customer base feedback Formalise data collection and collation Monitor customer attitude and perceptions Automate the systems

g. Communicate

h. Create value

i. Database management and systems automation


385

Expand the customer base

In order to optimize the value of the customer base, brands are required to constantly be in a process of re-attracting, re-engaging and re-converting their current customer base to leverage latent value. Re-acquisition processes (acquiring them in another segment, acquiring them in a new channel, broader share of wallet) drive cross-sell and up-sell.

It may be a basic concept that companies need to have single view of the customer across the enterprise—the reality is that today, it is not enough. One needs a broader view. Not just across one’s own systems but with supply partners and marketing partners. Offers need to be consistent across channels and retail vehicles, even ones outside the brand’s usual sphere.

To drive cross-sell and up-sell one needs to understand customer characteristics and propensities—insights to customer segments. Expectations may be high because of the brand’s pre-existing relationship with them.

Once one has the marketing mix aligned with the ability to listen and respond to the customer base, one then has to apply the right insights to create the best and most relevant product offerings. Optimized engagement with the customer base and the combination of the right offer with the right marketing provides consistency with one’s customers and this helps create an on-going dialogue across channels.

One needs to respond in real time however the consumer come to the brand—whether at a point of sale, entering the store, online, promotion, etc. Whether one’s primary metrics are RFM, Share of Wallet or lifetime value, effective feedback can help one track and optimize performance on the segment level.

Addressable Advertising: Brands cannot chase everyone, one needs to focus on those consumers who are most relevant to one’s business, and one needs to stop wasting money on those consumers who are not relevant.

Preserve the customer base

Valuable customers are the lifeblood of the brand with whom they choose to do business. Savvy consumers sense that companies generally treat their potential customers better than their current customers. They feel like they deserve to be recognized and rewarded for their loyalty. There are specific ways leading companies consistently treat and engage their customers in the way they expect.

Customer loyalty is born when companies fulfil their brand promise or value to their customers. Additionally, companies that are ranked highest in customer satisfaction employ additional initiatives that specifically cultivate loyalty and customer advocacy, whether it’s a point or reward system or special access to exclusive events or benefits, or just something as basic as having their preferences acknowledged and honoured.

The lifecycle is entirely interdependent. Retention efforts first start with strong acquisition. One needs to attract the right people in the first place. Once one has captured a customer, the proper maintenance is essential. One starts building their loyalty habit in the very first interactions with the brand. A strong cross-enterprise single view of the customer (recognizing, learning and remembering) can ensure that in their next interaction, whatever channel they chose to engage the brand through, the brand is aware of the previous interaction.

Brands need to be both reactive and proactive in their efforts to reduce attrition.


386

Brand Development Opportunities

The question of whether brand managers should produce innovative new brands and designs or tap into the potential of existing or little used brands is asked by managers in every major supplier. The answer is that neither option is easy or affordable for the average established brand producers, let alone a newcomer.

The global brands have thousands of brand managers seeking just these answers; however the reality of the situation is that there is little innovation to be achieved and few brands to be re-vitalised. Thus brand managers are left with the same tired mantra of what is ‘the new black’ and what is ‘in this season’.

Average Opportunities

Good Opportunities

Excellent Opportunities

Unspecified

Retailers

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15



387

Industry Checklist

Any checklist used by producers and brand managers will include some fundamental topics. These include: product fundamentals, principles and elements of design; product options and preparation; product selection and continuity; and consumer strategies.

Product Design and Merchandising

Market specific

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15

How effective are the existing products and designs in demonstrating the potential for greater market penetration in the market?

How well do the existing products and design evoke the fundamentals of product design and merchandising?

How well do the brands adhere to the recognised principles of the products?

How well do the existing products cover all the available options within the product design and merchandising?

How well developed are consumer strategies in respect of the selection, development, and assortment of products?

How developed are the merchandising strategies?

How skilled are the management and leadership in the market?

How well do the retail management perform in respect of leadership strategy?

How well do the retail management perform in respect of product strategy?

The data above is derived from trade commentary.


388

Performance Indicators

Market specific

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How well do the domestic brands interpret influences on product design?

How well do the domestic brands identify and analyse characteristics of products and designs?

How well do the domestic brands perform in determining product trends?

How well do the international brand images affect the industry in the market?

How much significance do the global brands have in the market?

How well do the existing brands perform in organizational and operational factors?

How do the domestic brands use technology in product design?

How well do the domestic brands identify and utilize product design concepts?



389

Application of Design – Performance Factors

Market specific

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How well do the domestic brands use elements of design in the market?

How well do the domestic brands use the principles of design in the market?

How well do the domestic brands use product presentation effectively in the market?

How well do the domestic brands use the principles of design to enhance the appearance of products?

Industry Performance Indicators

Market specific

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How well do local entrepreneurs recognise brands opportunities in the market?

How good is the local knowledge and skills of retailers in the market?

How well do local entrepreneurs use planning and systems for brand management in the market?



390

Performance Indicators for brand selection, development, and distribution

Market specific

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15

Decision-making processes to selecting, purchasing, and development brands.

Evaluating the impact of trends and forecasting on consumer choices.

Determining the criteria for products that meet the needs of consumers.

Ability in planning product mixes and coordinating existing product ranges.

Analysis of the quality of product crafting, materials, and design.

Analysis of the selection and use of products.

Evaluating apparel care procedures.

Analysis of the sources for purchasing products.



391

Performance Indicators for merchandising strategies

Market specific

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15

Planning the impact of visual merchandising.

Planning the role and effectiveness of advertising on consumer choices.

Identifying strategies for promoting products and services.

Planning the functions of the operational and marketing processes.

Product displays using the elements and principles of design.

Analysis of viable merchandising techniques.

Determine the impact of technology on the marketing and merchandising of products.

Identify viable markets for products.



392

Market Strategy Insight

Market Entry Possibilities and Criteria

The data provided by the market difficulties, market, financial and consumer analyses indicate a road map for market entry into the countries. It is necessary not only to evaluate the short-term prospects (1-7 years), but more importantly the medium term (7-14 years), and the long term (14+ years). More important than the size of the market potential is the potential for the return on investment. Therefore this section will attempt to provide a concise appraisal of the market entry possibilities and the rationale behind those choices.

Market Entry Difficulties

S = 1-7 years

M = 7-14 years

L = 14-21 years

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Markets S M L S M L S M L S M L S M L S M L S M L

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

= Easy = Neutral = Difficult

Market Entry Difficulties refer to the ease of entry to the market, the potential for direct investment and the regulatory environment for the products and the operation of a business.


393

Market Potential

S = 1-7 years

M = 7-14 years

L = 14-21 years

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#7


Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

= Growth = Static = Decline

The market potential is a function of market size, disposable income and propensity to consume. In some countries, notable China, there is demographic dysfunction due to the one child policy and this has created a serious problem with standard distribution of the population. Essentially in China there are fewer females and there is an aging population. Both these factors in China will impact women’s fashion products.


394

Financial Potential

S = 1-7 years

M = 7-14 years

L = 14-21 years

Pro

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Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

= Growth = Industry Averages = Decline


395

Consumer Potential & Attitudes

S = 1-7 years

M = 7-14 years

L = 14-21 years

Pro

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6

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Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

= Growth = Industry Averages = Decline


396

Relative Return on Investment by Market Area : 1-14 years The data provided by the market situation, overall market forecasts, financial and consumer analyses plotted against the likely investment costs in each area in the short-term (1-7 years), the medium term (7-14 years).

Markets

Year

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The data above is derived from relative product, market and financial analysis.


397

Relative Return on Investment by Product Category

The data provided by the above analyses is used to provide a breakdown of the potential of Return on Investment for each product category for each market in the short-term (1-7 years), the medium term (7-14 years).

Relative Return on Investment by market for Product Groups

Pro

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Pro

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Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The data above is derived from relative product, market and financial analysis.


398

Opinions of the trade and retail experts on introducing new brands

Pro

mo

te b

ran

d

thro

ug

h

wh

ole

sale

rs

Bra

nd

ow

ned

reta

il

ch

ain

Fra

nch

isin

g v

ia

ind

ivid

ual

fran

ch

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Fra

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isin

g v

ia

So

le In

vesto

r

Fra

nch

isin

g v

ia

Nati

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istr

ibu

tor

% % % % %

Trade Area #1

Trade Area #2

Trade Area #3

Trade Area #4

Trade Area #5

Trade Area #6

Trade Area #7

Trade Area #8

Trade Area #9

Trade Area #10

Trade Area #11

Trade Area #12

Trade Area #13

Trade Area #14

Trade Area #15

The data above is derived from the opinions of the trade and retail experts in each market.


399

SECTION 3

Market Research for

Abercrombie & Fitch

Markets

in Germany


401

MARKET RESEARCH COVERAGE

Markets & Products covered

The report will give market data for each of the below Product and Market Sectors, by year. Historic data from 1997 and Forecast data to 2028. Data is given for the Germany National Market plus market data for each major City in Germany.

Product Sectors This database scans all the Retail Sectors, and certain Service Industry Sectors to identify all those product areas which represent the markets for Abercrombie & Fitch. These are existing markets and potential markets for future development.

Motor vehicle & parts dealers

Furniture & home furnishings stores

Electronics & appliance stores

Building material & garden equipment & supplies dealers

Food & beverage stores

Health & personal care stores

Gasoline stations

Clothing & clothing accessories stores

Sporting goods, hobby, book & music stores

General merchandise stores

Miscellaneous store retailers

Non-store retailers

http://www.dg-di.eu/BASE_FOLDERS/NAICS/con_441.htm













402

Survey Data

The investigation consisted of field surveys and consumer interviews.

Discussions with the local experts covered the following issues based on the interviewees’ personal or corporate experiences. Interviews were conducted with various industry experts.

Retail experts at Trade Magazines or other Media were interviewed regarding the existing market conditions for the brands, the existing penetration of retail brands, and the future prospects.

Trade Wholesalers, Brand Managers, Trade Buyers, Retailers, In-store Retail Negotiators were interviewed.

The surveys of Consumers and Retail Customers were done to analyze overall retail issues, Brand awareness and attitudes towards brands and imports, criticisms of existing retailers, methods for retailers to improve service, et cetera. The Surveys covered Retail Store Customers and Consumers of products and services.

Consumer Surveys Surveys of Consumers and Buyers:

Consumer Surveys

Buyers & Consumers Consumer Surveys Decision Makers

Competitors Consumer Surveys on Competitors

Operations Consumer Surveys on Operations

Products Consumer Surveys on Products

Trading Area Consumer Surveys for the Trading Area







403

Distribution Channel Surveys Surveys of Supply Chain & Distribution Channels Members:


Buyers & Consumers Distribution Channel Surveys Decision Makers

Competitors Distribution Channel Surveys on Competitors

Operations Distribution Channel Surveys on Operations

Products Distribution Channel Surveys on Products

Trading Area Distribution Channel Surveys for the Trading Area

Decision Makers Surveys Surveys of Trade and Consumer Decision Makers:


Buyers & Consumers Decision Makers Surveys

Competitors Decision Makers Surveys for Competitors

Operations Decision Makers Surveys for Operations

Products Decision Makers Surveys for Products

Trading Area Decision Makers Surveys for Trading Area

Industry Performance Surveys of Industry & Retailer Performance:























404

Products

Product Group #1

Product Group #2

Product Group #3

Product Group #4

Product Group #5

Product Group #6

Product Group #7

Product Group #8

Product Group #9

Product Group #10

Product Group #11

Product Group #12

Product Group #13

Product Group #14

Product Group #15

















405

Buyers & Consumers

1. Wholesalers

2. Trade Buyers

3. Retailers

4. Consumers












Trading Area


3 Bavaria


5 Lower Saxony

6 Hassia

7 Saxony


9 Berlin


11 Brandenburg

12 Sachsen-Anhalt

13 Thuringia

14 Hamburg



406

Retail Competitors

Competitor #1

Competitor #2

Competitor #3

Competitor #4

Competitor #5

Competitor #6

Competitor #7

Competitor #8

Competitor #9

Competitor #10

Competitor #11

Competitor #12

Competitor #13

Competitor #14

Competitor #15


407

Geographic Coverage

The report will provide data for Germany National market, plus market data for the largest City and Town in Germany.

See: http://www.dg-di.eu/BASE_FOLDERS/World_Cities/GM.html

Financial data

The databases give Financial data and Margins by year Historic: 1997 to Current, and Forecast to 2028.

Financial Data Scenarios

There are a large number of Financial Scenarios available, for example, the Median Scenario:-

Median Financial Scenarios

Financial Margins & Ratios Data Scenarios

There are a large number of Financial Margins & Ratios available, for example, the Median Scenario:-

Median Financial Margins & Ratios

http://www.dg-di.eu/BASE_FOLDERS/xls/F0M.xls

http://www.dg-di.eu/BASE_FOLDERS/xls/G0M.xls


408

Germany

Market Research

General Contents

This report provides users with commercial intelligence on the markets and industry in the national market, product sectors, financial and industry data on each of the Towns and Cities. There are a large number of towns covered in this report for which overall market data is provided. Detailed market and product data is given for End User significant towns and for End User significant Product Launch towns. Detailed financial data is given for commercially significant towns and for commercially significant Product Launch towns.

This report is formatted to give both a narrative description of the various matters covered as well as provide readers with the ability to directly use the Chapters (via Microsoft Word or compatible word processors) to produce their own reports and documentation. Experienced users will be able to use the spreadsheet and databases to generate highly detailed narrative reports, charts and graphics - as well as sophisticated business and commercial forecasts and models. The databases are provided in both Excel spreadsheets and an Access database. Explanatory notes are provided as word processor documents or in PDF formats.

The narrative in this report is necessarily illustrative in its terminology and seeks to provide a basic degree of business logic and theory which indicates the rational applied in the forecasting and modelling methodology.

The databases provided are specifically designed to provide users with a uniform and consistent numeric measure of both (normally) quantifiable values as well as conceptual factors which are (usually) only capable of qualification. Experienced users will know how to apply forecasting and modelling software to the numeric data provided to generate highly detailed and discrete business planning models. The databases provided in this report can be used directly with databases on other product, markets and industries in other countries. The databases are specifically designed to be transnational, currency neutral, inflation and purchasing parity adjusted, product parity and product equivalent adjusted, opportunity cost adjusted, and numerically compatible; they all can be linked or merged programmatically in business planning models to provide multi-national and multi-level analysis.


409

Market Research Report Table of Contents

Germany For a detailed Table of Contents for each chapter, database or spreadsheet: click on the Blue headings shown below. This will open a page in your browser which fully specifies the contents of

that heading. These are links to the web site and they open the section or chapter in question.

Please also see the Notes to the contents: Notes

Within each heading there are links with detailed descriptions and explanation of the contents; these can be opened when the link is clicked.

Core National Database Open the Core Database here

Chapters Pages Volumes Diagrams, Maps

& Illustrations

Spreadsheets

& Databases

63 c. 1150-3225 DVDs c. 260 c. 6440-9660

Contents depends on the number of significant (Germany) Towns and Cities

Sections

Preface

Chapters

Databases

Financials

Industry

Markets

Products

Grids

Reference

Contents

Legend

Cities

Countries

http://www.dg-di.eu/PureData/Base_PureData/mr_notes.htm

http://www.dg-di.eu/Client_Webs/Login.html

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_INTRO.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_CHAPTERS.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_SPREADSHEET.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_FINANCIAL.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_INDUSTRY.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_MARKET.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_RR_PRODUCTS.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FRAME_GRIDSX.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_REFERENCE_DATA.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_CONTENTS_TYPE.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_LEGEND.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_Cities.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MAP_TYPE.htm


410

Chapters

Chapter 1 ADMINISTRATION

Chapter 2 ADVERTISING

Chapter 3 BUYERS – COMMERCIAL OPERATIONS

Chapter 4 BUYERS – COMPETITORS

Chapter 5 BUYERS – MAJOR CITY

Chapter 6 BUYERS – PRODUCTS

Chapter 7 BUYERS – TRADE CELL

Chapter 8 COMPETITIVE INDUSTRY ANALYSIS

Chapter 9 COMPETITOR ANALYSIS

Chapter 10 COUNTRY FOCUS

Chapter 11 DISTRIBUTION

Chapter 12 FINANCIAL - BUSINESS DECISION SCENARIOS

Chapter 13 FINANCIAL - CAPITAL COSTS FINANCIAL SCENARIOS

Chapter 14 FINANCIAL - CASHFLOW OPTION SCENARIOS

Chapter 15 FINANCIAL - COST STRUCTURE SCENARIOS

Chapter 16 FINANCIAL - HISTORIC INDUSTRY BALANCE SHEET

Chapter 17 FINANCIAL - HISTORIC MARKETING COSTS & MARGINS

Chapter 18 FINANCIAL - INVESTMENT + COST REDUCTION SCENARIOS

Chapter 19 FINANCIAL - MARKET CLIMATE SCENARIOS

Chapter 20 FINANCIAL – MARKETING COSTS

Chapter 21 FINANCIAL - MARKETING EXPENDITURE SCENARIOS

Chapter 22 FINANCIAL – MARKETING MARGINS

Chapter 23 FINANCIAL - STRATEGIC OPTIONS SCENARIOS

Chapter 24 FINANCIAL - SURVIVAL SCENARIOS

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_ADMINIST.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_ADVERTIS.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_BUYER_CO.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_BUYER_CC.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_BUYER_B.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_BUYER_CP.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_BUYER_CT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_IVE.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_CC.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_CTRY_FOC.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_DISTRIBU.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_BASE.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_CAPT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_CASH.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_COST.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_HIST.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_MKTG.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_INVS.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_MARK.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FINAMKTG_F0M.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_MEXP.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FINBMKTG_I0M.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_STGY.htm

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Chapter 25 FINANCIAL - TACTICAL OPTIONS SCENARIOS

Chapter 26 GEOGRAPHIC DATA

Chapter 27 INDUSTRY - NORMS

Chapter 28 MAJOR CITY MARKET ANALYSIS

Chapter 29 MARKET CAPITAL ACCESS SCENARIOS

Chapter 30 MARKET CASHFLOW SCENARIOS

Chapter 31 MARKET ECONOMIC CLIMATE SCENARIOS

Chapter 32 MARKET INVESTMENT + COSTS SCENARIOS

Chapter 33 MARKET MARKETING EXPENDITURE SCENARIOS

Chapter 34 MARKET RISK SCENARIOS

Chapter 35 MARKET STRATEGIC OPTION SCENARIOS

Chapter 36 MARKET SURVIVAL OPTION SCENARIOS

Chapter 37 MARKET TACTICAL OPTION SCENARIOS

Chapter 38 MARKETING EXPENDITURE -v- MARKET SHARE

Chapter 39 MARKETING STRATEGY DEVELOPMENT

Chapter 40 MARKETS

Chapter 41 OPERATIONAL ANALYSIS

Chapter 42 OVERSEAS DEVELOPMENT

Chapter 43 PERSONNEL MANAGEMENT

Chapter 44 PHYSICAL DISTRIBUTION + CUSTOMER HANDLING

Chapter 45 PRICING

Chapter 46 PROCESS + ORDER HANDLING

Chapter 47 PRODUCT ANALYSIS

Chapter 48 PRODUCT DEVELOPMENT

Chapter 49 PRODUCT MARKETING FACTORS

Chapter 50 PRODUCT MIX

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_FIN_TACT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_GEOG_CTY.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_IN_IND_N.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_MKT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_CPT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_CSH.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_CLI.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_INV.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_MEX.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_RSK.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_STG.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_SRV.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARK_TAC.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MKTSHARE.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MKTG_STG.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_MARKETS_.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_CO.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_OVERSEAS.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PERSONEL.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PHYSICAL.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PRICING_.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PROCESS_.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_CP.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PROD_DEV.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PRODMKTG.htm

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Chapter 51 PRODUCT SUMMARY

Chapter 52 PROFIT RISK SCENARIOS

Chapter 53 PROMOTIONAL MIX

Chapter 54 SALESFORCE DECISIONS

Chapter 55 SALES PROMOTION

Chapter 56 SURVEYS

Chapter 57 TARGETS - PRODUCT + MARKET

Chapter 58 TECHNOLOGY

Chapter 59 TRADE CELL ANALYSIS

Chapter 60 URBAN COMPETITION

Chapter 61 TOWNS - FINANCIAL

Chapter 62 TOWNS - INDUSTRY

Chapter 63 TOWNS - MARKET

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http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PROF_RSK.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PROM_MIX.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_SALEFORC.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_PROMOTIO.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_SURVEY.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TARGETS_.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TECHNOLO.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_COMP_CT.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_URBANCOMP_TYPE.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TOWN_FINANCIAL.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TOWN_INDUSTRY.htm

http://www.dg-di.eu/BASE_FOLDERS/MarketResearch/MR_TOWN_MARKET.htm

SECTION 4

Business Planning

Abercrombie & Fitch


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BUSINESS PLANNING

Checklist

Before one can develop a realistic business plan one needs to establish the business objects and then to produce a database with the following parameters:-

1. Business start-up

a. Company Law

b. Capital Requirements

2. Credit

a. Availability of trade credit

b. Banking policies

c. Foreign Exchange regulations

d. Remittance of Profits

e. Credit data considerations

3. Employment

a. Employment contracts

b. Employment laws

4. Import of Goods

a. Quotas & Licensing

b. Prohibitions & Restrictions

c. Free imports

d. Tariff-rate quotas

e. Approvals & Inspections

5. Import Duties

a. General Rates

b. Most-Favoured Nation Rates

c. Agreement Rates

d. Preferential Rates

e. Tariff-rate Quota Rates

f. Provisional Rates

g. Preferential Duty Reductions

6. Taxes

a. Value Added Taxes, Reduced Rates, Exemptions, Rebates

b. Business Taxes, Tax Conventions, Specific Product/Trade Taxes

c. Miscellaneous Taxes

7. Product Labelling & Certification

a. Language of labels

b. Safety Certifications

c. Mark Lists

d. Labelling requirements

8. Authorities


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a. Customs

b. Financial

c. Commerce

d. National, State, Regional, City administrations

9. Compliance

a. Tax compliance

b. Enforcement of regulations

c. Treatment of foreign enterprises

d. Corruption

10. Retailing

a. Regulations

b. Domestic Retail Development

c. Foreign Retail Investments

d. Economic & Political policies

e. Establishment of enterprises

f. Methods for Market Entry (M&A, Sole Distributor, Franchise, Local presence, etc.)

g. Consumer Markets

h. Logistics & Supply Chains

i. Retail Location & Property

j. Infrastructure difficulties

k. Transaction Costs

l. Bureaucracy

m. Distribution Channels

n. Personnel

o. Financial management

p. Availability of premises

q. Availability of services

11. Retail Demand

a. Emergence of urban middle class

b. Demand stimulation & Disposable Incomes

c. Cultural Factors and Cultural change

d. Retail outlet distribution

e. Infrastructure development

f. Fragmentation of Markets

g. Economic & Socio-cultural demarcations

h. Consumer Segments

i. Consumer Lifestyles

j. Consumer Prejudices

k. Strength of Domestic companies

l. Aggressiveness of Domestic companies

12. Retail Values

a. Growth

b. Real –v- Forecast

13. Demand Drivers

a. Supply Chain Cost reduction

b. Store Format

c. Information dissemination and reception

d. Shopping Habits


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e. Service provision

f. Customer Demand / Expectation satisfaction

g. Product Pricing

h. Retail Channel Development

i. Product Mix

j. Marketing Mix

k. Family size and composition

l. Geographic location

m. Regional diversity

14. Competition

a. Domestic Competition

b. International Competition

c. New Entrants

d. Retail Consolidation

e. Aggressiveness of Players

f. Bargaining Power of Suppliers

g. Bargaining Power of Buyers

h. Cost Reduction

i. Location & store siting

j. Internet

k. Payment systems

15. Market Entry Strategies & Control of Operations

a. Own Local Manufacture & Distribution & Retail Outlets

b. Own Stores

c. Joint Ventures & Mergers

d. Licensing

e. Franchising

f. Stocking Distributors

g. Sales Representation to Wholesalers

h. Direct Sales to Consumers

16. Tactics

a. Control and Define Supply Chain and Distribution policies and finances

b. Enter smaller cities

c. Concentrate of younger demographics

d. Entrench & strengthen brand recognition

e. Develop Sales Channels / Internet / TV / Malls / Shopping experiences

f. Offer intangible benefits

g. Reduce Costs and Reduce Prices


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Checklist implementation

Business Planners should input their business objectives and parameters using a database format, for example, the ‘Business_Planning_Checklist_Retailing.xlsx’ file which is found in the Toolkit.

Basic data on Customs Tariff, Duty & Taxation levels, Import restrictions & Regulations, Shipping & Packaging Requirements, Customs Clearance Procedures and time delays, Port of Entry data: Name, Location, Description, Customs Handling, Storage, Transport facilities, et cetera, can be found in the supporting documentation.

The Toolkit contains PDF files for each national market.

Advancing your Project

Once the business planner has defined the business objectives and the necessary parameters attention can then be turned to the practical isolation of locations for retail outlets. This is necessary irrespective of whether a decision has been made to open brand owner stores or to franchise the brand.

Next one needs to select the target geographic areas within Germany; and this is done with reference to the City and Town data in the core database. The data accessed should include:-

The City or Town

Sub-divisions of the Retail Districts

Features and Characteristics of the Retail Districts

Major Malls, Shopping Centres, Retail Streets

Advertising and Marketing activities of Retailers

Demographic and Social Customer Base served

Spending Levels of consumers

Brand Preferences of consumers


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Cashflow

The client can order Cashflow projections (as part of the After-Sales Service) once operational parameters have been set. The operational parameters are the initial retail capital investments, store location, overheads, staff levels, et cetera.

Cashflow projections are done using a monthly interval and will depend on which month the retail store will open. It is not possible to produce Cashflow projections without knowledge of the Start month and other market criteria. The first few months of sales revenue in the retailer’s business will depend on which month a store first opens. Other items, like before start-up expenses, opening balances, et cetera, must be known before a Cashflow projection can be made.

Cashflow Calculator



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The Business Plan Programme Users can produce a basic printed Business Plan if that is all that is needed. For a more detailed Business Plan, the software will take users through a series of forms and utilities which will allow one to specify the commercial plan objectives and the project events; one then produces a Project database. Users can then generate an advanced Project Dialogue database which provides detailed guidelines and a project management action plan for the country covered by the project. In addition, if needed, users can obtain additional human resources and support services to produce an assisted Business Plan. The software then generates a Business Plan Web which incorporates the business plan objectives and the underlying market research findings. Finally, if needed, a modelling level Business Plan is available, and this incorporates highly sophisticated business forecasting components. Business Plan: Basic

With only the market research data, users can produce a Basic Business Plan using the Word document template which is provided.

This is the quickest and simplest Business Plan users can write; and it is useful when one is producing a printed business plan for a local business or trade. This type of business plan would suit a small business start-up where users have to submit a simple business plan to their bankers or investors.

Business Plan: Detailed

The second level of Business Plan, which is used as a commercial blueprint for the project, produces a Detailed Web site. The web based plan is better suited if users wish to run a number of scenarios and then distribute those finding to a project team and/or to several recipients. The web can be on a single computer, on an intranet site, or (if the participants are not in one location) a password protected internet site.

This web based business plan is useful when one is producing a commercialised business plan which needs the precise elements of the business plan quantified in a series of formal documents. This type of business plan would suit a business start-up which is run by a project team that needs the project elements coordination.

Business Plan: Advanced

The third level extends and develops the above Business Plan Web to produce an Advanced project management blueprint which includes both the commercial business plan as well as a project management schedule (for the country) which allows the project designers to specify and coordinate the commercial elements with the activities of the project team.

This business plan web will orchestrate the project managers and project team, human resources, the commercial participants, the physical resources, and the purchased products and services.


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Business Plan: Assisted

In addition to the above Business Plan webs, users can also augment the project operation with the additional human resources and support services provided by us. These services are entirely flexible and can be used to either develop the project methodology and planning structure, or as elements which form part of the physical project.

These services are injected into the overall Business Plan and become an integral part of the business planning activities. In this way the project managers and project team can use our human resources and services seamlessly as part of the project elements.

Business Plan: Modelling Level

The modelling level business planning resources use a battery of macro and micro economic, industry and market level, product and buyer, forecasting models to produce medium and long-term business plans.

These are bespoke business planning resources which are tailored to the user's individual circumstances and needs.

Installing the Business Plan Programme

The business plan programme is installed by running Business Plan Program Installation & Setup.

The installation puts this shortcut on your desktop to open the database.

When you install the Business Plan software it creates a Business Plan directory folder on your computer. So that you can easily find the folder, it is put on your root directory. The structure of this folder is shown here. From this folder you can generate any number of Business Plan projects, and these individual projects are then saved to the Project folder you specify in the project generation process. See the structure of this directory here.

http://www.dg-di.eu/BASE_FOLDERS/PLAN/BP_Installation.htm

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How it works...

First, review the Market Research to gain an understanding of the market and the industry. This is a simple process which allows users to browse the Market Research Web and quickly pick those areas of interest and potential business opportunity. Second, install and run the Business Plan software to generate the detailed commercial and project management databases. Each Business Plan is a single project and the user can run as many projects, or business plan scenarios, as required.


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The Business Plan software takes the user through a series of database forms and spreadsheets which will result in the production of a comprehensive and cohesive Business Plan:-

One can modify the business plan, or run as many different scenarios as necessary, to refine a particular business plan or to explore alternatives.

Third, run the Project Dialogue software to generate the advanced Project Action Plan databases for the country covered by the project.


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The Project Dialogue software takes the user through a series of database forms and spreadsheets which will result in the generation of the detailed Project Action Plan databases and timetables for the country that the project will cover:-

Fourth, users can obtain further services as part of the After-Sales Service, including a Service Team, Consultants, Resources, Support Services, and Corporate Research; and this allows users to access additional project resources and/or produce more detailed analyses and blueprints for project management.

There are many ad hoc services through which users can obtain the help they need to assist them to reach their business goals. These ad hoc services can range from a full Service Team which can produce a fully implemented turnkey project, to the simple provision of a consultant on the other end of a telephone line to immediately answer a technical or commercial question, or the loan of a programmer or systems engineer for a few hours. In addition to the human resources, users can also access a wide range of commercial and physical resources, support services, and corporate intelligence.


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These resources and services become an integral and operational part of the project and are managed by the project managers.

Fifth, users generate the Project Web which will allow users to view the project in its entirety.

Users do not need to complete all the forms; however the ones which users do not complete will result in incomplete project web pages. Users can edit out these unwanted web pages. Users can of course return to these forms later and complete any missing data and then re-generate the project web.


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Users can update the project data as often as users require and then re-generate the Project Web (if users specify the same Project Name then the new project web will over-write the existing web). Users can also generate as many separate Projects designs or scenarios as users wish (each with a unique Project Name) and these will generate separate Project Webs for viewing and discussion.

Finally, users can obtain software and databases to generate highly detailed medium and long-term business planning analyses and forecasts for company management and investors.

There are diverse utilities, forecasting and modelling tools available for advanced business modelling and forecasting; and one can use these to produce highly detailed analyses, or specialized business planning forecasts and documentation, reports, spreadsheets, and other items to assist company management in their medium and long-term planning activities.

This is especially useful where users are involved in technical/industrial processes, or a complicated distribution system, or intricate financial operations, or a technologically evolving product, where one has to coordinate and manage the project elements over an extended geographic space and/or over a medium or long-term timescale.

Retailer Analysis Report Abercrombie & Fitch

Methodology For a general description of the methodology used to prepare this database see: Methodology

Presentation The report is delivered as follows:

1. Retailer Report downloaded Online as a PDF file.

2. Report and report Database on DVD or Hard Disk Drive.

3. Toolkits. 5 Toolkits containing Tools, Utilities, Software and Resources.

4. 1 hour Teleconference / Teamviewer discussion of the report findings.

5. Dedicated web site access for the report & databases.

6. All DataGroup / Data Institute products are generated for each client order to ensure that the

client receives the most up-to-date information. This also produces a unique database for the

client; for this reason we archive a copy of the unique database for use if the client needs any

future work from the database. http://www.dg-di.eu/about-delivery.html

7. However, in addition to the report there is a vast amount of data and services which a client

can access. This is done as part of the After-Sales Service.

http://www.dg-di.eu/about-method.html

http://www.dg-di.eu/about-delivery.html


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After-Sales Service & Client Support

There is a 12 months After-Sales Service from date of delivery. See After-Sales Service

When you want the database updated then you can simply order an update. When you want more detailed information on any part of the database then you can order the information you need.

This database has been uniquely generated for each order and includes a 1 year After-Sales Service. A DataGroup / Data Institute service representative is assigned to each client (see the covering letter which accompanied your order delivery).

After-Sales Support: [email protected]

All reports, studies and consultancy assignments must inevitably mean that the publishers or consultants are trying to interpret the needs and expectations of their clients. Unfortunately in most cases, with most publishers, the clients will not receive all the data they need. This is not the case with a DataGroup report.

The main problem that DataGroup has to resolve is that the database for each report would, if printed, be about 20 volumes of 600 pages for each volume. Clearly this amount of information (12,000 pages) would be unusable and unwanted by the majority of clients - and indeed the cost would be twenty times greater.

Thus with After-Sales Services clients have 12 months Support whereby clients can obtain more information and data on markets, industries, competitors, distribution channels, end users, et al.

These After-Sales Services are supplied Data Institute and DataGroup.

See: http://www.data-institute.org/about-publishers.html and

http://www.data-institute.org/about-faq-datagroup.html

All DataGroup / Data Institute products have a 12 month After-Sales Service and what this means is that from 12 months after the data of purchase a client can obtain more data or services at a greatly reduced cost. After-Sales Services are usually provided at 35%-55% of the normal retail costs. This is because this work is done during off-peak hours.

http://www.dg-di.eu/about-after-sales.html

Costs: The current cost is £75 per hour; this includes all researcher, computer & database access.

The cost of this After-Sales Service is low and provides a highly cost conscious method of acquiring a vast amount of additional and more detailed information at a relatively low cost. No other Publisher provides such a service to their clients

Delivery of the results produced is 7-14 days. For more urgent After-Sales Service work the costs depend on the client’s time frame and the availability of our researchers.

Quotations: We quote client in advance for After-Sales Service work and this quotation states the total cost of the job, plus the anticipated delivery time.

After-Sales Services are usually provides on DVD, Memory Stick, USB Hard Drive or online.


mailto:[email protected]

http://www.data-institute.org/about-publishers.html

http://www.data-institute.org/about-faq-datagroup.html



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Real Time Support The After-Sales Service can offer client Real-Time Support. This usually involves using a software utility called TeamViewer (an installation program can be found in the Toolkit on your DVD or Hard Disk Drive) which allows the After-Sales Service support staff to directly link to the client’s computer and work with the users in real time.

Resource Webs -v- Dedicated sites This report includes a dedicated web site which is effectively a dedicated password protected folder which contains your database. Sometimes however clients also want the data loaded onto a Resource Webs which will contain more than one database and which will be for the use of their staff and/or any other persons they may authorise. This is a Resource Web.

http://www.dg-di.eu/about-resource-webs.html

The main benefit of these Resource Webs is that the data is available to all the client’s staff and professional advisors wherever they may be, and also when data is updated or new data is added then there is a common and know point of access for that data.

Resource Webs are maintained for the use of the client for a period of 12 months from the data of the last data addition or update to that site.

These dedicated web sites are provided as part of the After-Sales Service. We try to make the web site as visually attractive as possible and for this we simply need the client’s permission to use their company logo and their own website's colour themes.

Product Level

This is an Entry Level product

This is an entry level product which provides users with corporate, market and commercial intelligence on the company specified and the markets and industries in the countries listed. The report analyses the industry and markets with a basic point of reference, namely the Base Reference Country. The report is formatted to give both a narrative description of the various matters covered as well as provide readers with the ability to directly use the Chapters (via Microsoft Word or compatible word processors) to produce their own reports and documentation. Experienced users will be able to use the spreadsheet and databases to generate highly detailed narrative reports, charts and graphics - as well as sophisticated business and commercial forecasts and models. The databases are provided in both Excel spreadsheets and an Access database. Explanatory notes are provided as word processor documents or in PDF formats.

The Base Reference Country is usually the country of the client; however client can order a database with another Base Reference Country. If a different Base Reference Country that that provided in this database is needed, then client can order that as part of the After-Sales Service.

As an entry level product the narrative is necessarily illustrative in its terminology and seeks to provide a basic degree of business logic and theory which indicates the rational applied in the forecasting and modelling methodology.

The databases provided are specifically designed to provide users with a uniform and consistent numeric measure of both (normally) quantifiable values as well as conceptual factors which are (usually) only capable of qualification. Experienced users will know how to apply forecasting and modelling software to the numeric data provided to generate highly detailed and discrete business planning models. The databases provided in this report can be used directly with databases on other product, markets and industries in other countries. The databases are specifically designed to be trans-national, currency neutral, inflation and purchasing parity adjusted, product parity and product equivalent adjusted, opportunity cost adjusted, and numerically compatible; they all can be linked or

http://www.dg-di.eu/about-resource-webs.html


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merged programmatically in business planning models to provide multi-national and multi-level analysis.

CURRENCY DATA: The currency figures given in this report are in U.S. Dollars. If the Windows Regional Settings on your computer is set to a non-U.S. setting then the currency symbol ($) may appear in the local currency (€, £, ¥, etc.). Either reset your Regional settings, or alternatively read all currency figures in this report as being U.S. Dollars (US$). There are separate spreadsheets and database tables in the report which specifically give the data in various currencies, namely, Euros, Yen and Yuan, and these files are clearly marked.

Before using the data provided please read the Database Introduction as well as the Notes and Definitions links found in each Chapter. There are subtle statistical nuances to some of the spreadsheets and databases which will help the user to fine-tune their models and forecasts to obtain maximum effect and greater accuracy. The database flow chart and database description should be consulted when applying statistical and modelling software.

To assist first time users, there is a Toolkit provided which will enable users to use various software options to enable the user to gain the maximum benefit from the databases.

Data Product levels Because of the sheer volume of data potentially available from DataGroup it has been necessary to create a number of product levels which can provide clients with as little or as much data as they need.

Entry level

Entry level products provide the most basic degree of information supplied by DataGroup. This product can be used to build upon for various business forecasting and planning application. Typically for a World Report this level will produce a database and spreadsheet count of over 13,000 record sets. Each recordset, if converted into a graphical representation, will itself produce between 1 to 300 individual graphs.

Corporate Modelling level

The Corporate level modelling products provide the tools and information for medium and long term corporate forecasting and planning. These products are bespoke and are specific to the client company in question. Typically for a World Report this level will produce a database and spreadsheet count of over 24,000 record sets. Each recordset, if converted into a graphical representation, will itself produce between 1 to 450 individual graphs.

Econometric Modelling level

The Econometric level modelling products provide the tools and information for industry level, national, and international medium and long term forecasting and planning. These products are bespoke and are specific to the industry and/or geographic reach of the client company in question. Typically for a World Report this level will produce a database and spreadsheet count of over 39,000 record sets. Each recordset, if converted into a graphical representation, will itself produce between 1 to 550 individual graphs.

Presentation level

The Presentation level products provide the information sought by a client company is a graphical or audio-visual format which is bespoke for the particular needs and applications of the client company in question.


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Getting Started with the Core Database The database you have is extremely large and in order to orientate yourself it is best to first begin by navigating through the report to familiarise yourself with the general layout.

Go to the Chapters section and click on the Site Map link to see the overall layout of the document. Click on the Legend link to see the pictorial representations of the types of data.

When you are ready to extract data it is best to begin with the Chapters section as this will give you a general overview of the data and also it will explain the data and the reasoning behind the document.

Once you are familiar with the type of data involved you can look at the database part of the document which is contained in the sections: Databases, Financial, Industry, Markets and Products.

The database part of the document is provided as both Excel spreadsheets and Access databases.

The Analysis Grids are planning tools and the Planning modules are to enable Business Planning work at various levels of sophistication. Also in the Planning section you will see how to get additional data and resources when you need them.

Using the data If you need to obtain general information or analysis then you can use the Chapters section. You can also use the Word documents to produce your own reports by editing out what you do not need and adding your own comments or notations where necessary.

If you intend to use the databases for basic corporate planning purposes then it is best to download the Excel files and the Access databases onto your local computer for manipulation. The data will run faster if it is on a local hard disk drive. It is usually easier to use the Excel spreadsheets or Access tables as a visual representation by charting the data and producing a graphical representation.

In you intend to use the data for intensive corporate planning purposes then download the data onto your local hard disk drive. This is where the various Scenarios become useful as you can use this data for modelling your corporate plans.

Toolkits To assist users there is a Toolkit to be found on the 5 DVDs, online downloads, or Hard Disk Drive-

DVD 1

1. Data Manuals 2. Document Templates 3. Help files 4. Manuals Templates 5. Microsoft Utilities 6. OpenOffice 7. Business Plan Images 8. Reference files 9. US Census Data Tools

Because all DataGroup and Data Institute database are directly compatible with U.S. Government databases (especially the Department of Commerce, US census, NIST, Treasury, et al) it is sometimes useful for users to use US Government data handling tools to manage not only US Government data, but also the data provided by DataGroup and Data Institute. Alternatively, if you are already using this US Government software you can simply access the DataGroup and Data Institute databases with the same software. In generate DataGroup and Data Institute databases we use the same database parameters, structures and field names as those found in US Government databases, and thus uses can correlate and query databases without undue difficulty.

10. Utilities & Tools


432

DVD 2

1. Database Utilities 2. Enterprise Resource Planning 3. Integrated Development Environment

If you intend to implement DataGroup and Data Institute databases online (internet or intranet) then an Integrated Development Environment is often the easiest route to data dissemination and data manipulation.

DVD 3

There are about 40 Statistical packages provided in this Toolkit. These are Open-Source packages which are generally free to use. The following packages are available:-

acslX, ADaMSoft, ADMB, AMPL, Analyse-it, Analytica, Angoss, APMonitor, ASReml, Automlab, Baudline, Bayesian Filtering Library, BMDP, BV4.1, CalEst, Ch, Chronux, COMSOL Script, CSPro, DADiSP, DAP, Data Applied, Dataplot, Demetra+, EJS, ELKI, Epi Info, Euler Mathematical Toolbox, EViews, FAME, FEniCS Project, Fityk, FlexPro, GAUSS, Genedata Analyst, GenStat, GeoDA, GLIM, GNU Data Language, GraphPad InStat, GraphPad Prism, gretl, Hermes, IBM SPSS Modeler, IBM SPSS Statistics, IDAMS/WinIDAMS, IDL, IGOR Pro, IMSL Numerical Libraries, Izenda, JAGS, JHepWork, JMP, JMulTi, Julia, KPP, LabPlot, LISREL, Macsyma, Madagascar, MadArtSoft, Madeline, Maple, Mathcad, Mathemagix,, Mathematica, MATLAB, MCSim, MedCalc, Minitab, MINUIT, MLwiN, Mondrian, NCAR Command Language, NCSS, NMath Stats, numberGo Publisher, NumXL, Octave, O-Matrix, OpenBUGS, OpenEpi, OpenMx, OptimJ, Orange, Origin, OriginPro, PARI/GP, Partek, PAW, Perl Data Language, Ploticus, Primer-E Primer, PSPP, PV-WAVE, Q research software, QtiPlot, Quantum, R, R Commander, R Rattle GUI, RapidMiner, RATS, Revolution Analytics, ROOT, Sage, SALOME, Salstat, SAS, scikit-learn, Scilab, SciPy, SHAZAM, Shogun, SigmaStat, SigmaXL, Simfit, Simul, SOCR, SOFA Statistics, SPC XL, Speakeasy, S-PLUS, SPSS, Stata, Statgraphics, STATISTICA, Statistical Lab, Stat-JR, Stats Helper, StatXact, SUDAAN, Systat, The Unscrambler, Trilinos, Unistat, VisSim, Waffles, Weka, WinBUGS, Winpepi, X-12-ARIMA, XLfit, Xlisp-stat, XploRe, Yorick.

DVD 4

Microsoft Server 2003 utilities and resources. These are for clients implementing databases on Microsoft Server 2003 systems.

DVD 5

Microsoft Server 2008 utilities and resources. These are for clients implementing databases on Microsoft Server 2008 systems. Microsoft Server 2012 migration utilities are also provided in this Toolkit.


433

Proprietary Software packages

If you use proprietary corporate planning software then it is easy to use these DataGroup databases as they are compatible with the following packages:-

Some Compatible Software products (See the Database Support site for a full list)

Project Management Software: 24SevenOffice, Assembla, AtTask, Basecamp, Central Desktop, Cerebro, Clarizen, codeBeamer, Collabtive, Concerto, Contactizer, CredAbility.info, dotProject, Easy Projects .NET, eGroupWare, FastTrack Schedule, Feng Office Community Edition, FogBugz, GanttProject, Gemini, Genius Inside, Glasscubes, Huddle, Hyperoffice, InLoox, JIRA, Journyx, Kayako, KForge, KPlato, Launchpad, LiquidPlanner, LisaProject, MacProject, MantisBT, MatchWare MindView 3 Business, Merlin, MicroPlanner X-Pert, Microsoft Office Project Server, Microsoft Project, Mingle, O3spaces, OmniPlan, Open Workbench, OpenProj, Oracle Project Portfolio Management, Planisware 5, Planner Suite, Pmplus+, Primavera Project Planner, Project KickStart, Project.net, Project-Open, Projectplace, ProjectSpaces, Projektron BCS, PSNext, QdPM, QuickBase, Redmine, Rachota, SAP RPM, Smartsheet, TaskJuggler, Teamcenter, Teamwork, Tenrox, Trac, TrackerSuite.Net, Ubidesk, VPMi, WorkLenz, WorkPLAN Enterprise, workspace.com, WebSPOC, Wrike, Zoho Projects

ERP Packages: Adempiere, BlueErp, Compiere, Dolibarr, Fedena, GNU Enterprise, JFire, Kuali Foundation, LedgerSMB, OFBiz, Openbravo, OpenERP, Opentaps, Postbooks, SQL-Ledger, Tryton, WebERP, 1C:Enterprise, 24SevenOffice Start / Premium / Professional, abas ERP, Accpac, Agresso Business World, AMS Advantage, BatchMaster ERP, Bowen & Groves, CGram Enterprise, Clear Enterprise, Comarch Altum, Compass ERP, Compiere, Comprehensive Patient Administrator, COA Solutions Ltd - Smart Business Suite, Consona Corporation – Intuitive / Made2manage / AXIS / Cimnet / Encompix / DTR, Epicor Enterprise, Global Shop Solutions One-System ERP Solutions, HansaWorld, ERP Adage (Adage), ERP LN (Baan), ERP LX (BPCS) ,ERP SL (SyteLine), ERP Swan (Swan), ERP SX.Enterprise (SX.Enterprise), ERP VE (Visual Enterprise), ERP XA (MAPICS), IFS Applications, JD Edwards EnterpriseOne & JD Edwards World, JustFoodERP.com, kVASy4, Kingdee, Lawson M3 / Movex, Lawson S3, Log-net, Maximo (MRO), Microsoft Dynamics AX, Microsoft Dynamics GP, Microsoft Dynamics NAV, Microsoft Dynamics SL, Momentum, MyWorkPLAN, NetSuite, Openda QX, OpenMFG, Oracle e-Business Suite, Paradigm, PeopleSoft, Plex Online, QAD Enterprise Applications, Ramco Enterprise Series 4.x, Ramco e.Applications, Ramco On Demand ERP, MAS 90, MAS 200, MAS 500, Technology One, SAGE ACCPPAC, SAGE Pro ERP, SAGE ERP X3, SAP Business Suite, SAP Business ByDesign, SAP Business One, SAP Business All-in-One, TaskHub, SYSPRO, SYS-APPS, mySAP, Visibility.net, WorkPLAN Enterprise

Enterprise Feedback Management Systems: SynGro, Perseus (Vovici), Clicktools, DatStat, Inquisite, SPSS, FIRM (Confirmit), NetReflector, Allegiance, Enetrix, Satmetrix, RightNow Technologies, Mindshare Technologies, Data Illusion, KeySurvey (WorldAPP), Kinetic Data, CustomerSat (MarketTools), Medallia, Interview SA, Surveynomics, Invoke Solutions, Qualtrics, Fizzback, Grimmersoft, QuestManager, QuestBack, Globalpark, DataCycles, Dub Studios, eLustro, Kinesis Survey Technologies, Knowledge Wave, myK (myKnowledge), mySurveyLab.com, QuickSearch, Ransys, ResponseTek Networks Corp., TalkFreely, XTCO, Zarca


434

Report Cost

Retailer Report


Report Pricing SECTION PART CONTENTS Euros €

1 A Base Data on Abercrombie & Fitch 280

B.1 Financial: Management Figures 160

B.2 Financial: Full Balance Sheet (purchased with Part B.1) 90

C Product Data is provided with all the Parts below.

D Retail Locations data (Corporate) 750

E Advertising, Marketing & Events (Corporate) 750

F Store Experience (Corporate) 750

G In-Store Customer Purchasing Behaviours (Corporate) 750

H Customer Handling (Corporate) 750

I Selling Strategies (Corporate) 750

J Pricing & Price Points (Corporate) 750

K Performance Analysis (Corporate) 750

L Strategies (Corporate) 990

M Retailing (Corporate) 990

N Supplemental Survey Data 990

2 CE Competitive Environment (Corporate) 1250

3 & 4 MR Market Research: Germany 950

Total cost if parts purchased separately: 11700

Total cost if ALL parts are purchased together: 5850

Discount Structure

Part A plus any 2 Parts: Discount 15%



All 17 Parts: Discount 50%


435

About DataGroup DataGroup was formed in 1974 by a group of management consultants and information technology specialists whom had previous worked with, amongst other organisations, the U.S. Department of Commerce, Bank of America, Chase Econometrics, The Marketing Strategies Institute, the OECD in Paris, and MITI in Tokyo. DataGroup was established in order to develop a systemised, computerised, and uniform methodology to facilitate real world forecasting models for macro-economic, micro-economic, market, product, and industry purposes.

For full details of DataGroup’s history please see: About DataGroup

DataGroup Clients DataGroup do not publish a list of current client list due to client confidentiality; however a partial list of client in the period 1975 to 2000 is shown here: DataGroup Client 1975-2000

Abercrombie & Fitch

Germany Ref: 7699899607802

was established in 1986, and has been a brand since 1995.

Published by The DataGroup Stiftung, Vaduz, Liechtenstein. Copyright © by DataGroup Stiftung. All rights reserved. No part of the contents of this document may be reproduced for third party distribution or transmitted to third parties in any form or by any means without the written permission of the publisher. DataGroup publications are available worldwide only through authorized distributors. © DataGroup 1974 – 2015

All trademarks are recognized and are used as only an identifier and as Fair Comment as allowed in United States copyright law and the decisions of the European Court. Microsoft, Word, Excel, Access, Windows, and associated logos and identifiers are trademarks of Microsoft Corporation. The copyright and trademarks of the U.S. Government Printing Office, Bureau of the Census, U.S. Department of Commerce, U.S. Office of Management and Budget, U.S. General Accounting Office, National Technical Information Service and other U.S. Government Departments and Agencies are recognized. The copyright and trademarks of all publishers and producers of ancillary documentation and software are recognized.

This report is available from selected DataGroup distributors and booksellers.

For retail trade and corporate sales contact: [email protected]

http://www.dg-di.eu/about-faq-datagroup.html

http://www.dg-di.eu/about-clients.html

mailto:[email protected]



abercrombie & fitch germany

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