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FEEDBACK TUTORIAL LETTER

1st SEMESTER 2017

ASSIGNMENT 2

RETAIL BUSINESS MANAGEMENT

RBM421S

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Dear Student for RBM711s,

Thank you for attempting Assignment 2 again. I wonder whether few of you have seen your

individuals’ comments and the feedback for assignment 1. I just would like to advice you that

even if you manage to copy 100% of your work from the study guide by avoiding going out and

interviewing the retail stores as requested, you need minimum of 40% from exam marks I order

for you to pass. The assignment marks that you accumulated by copying word by word without

understanding will paralyse your performance in exams. People managed to copy everything, for

example, “If you do not receive a confirmation, you should contact 519-575-4400”.

Alternatively, you may submit a detailed resume and cover letter to Human Resources before

4:30 p.m. on the closing date of the posting.

RBM711s and BRM421s Courses merged

I am addressing you as one group because you are going use the same course outline;

therefore, it means that you are going to sit for similar examination question paper.

Please try to check online test papers for you to familiarise yourself with the way

questions could be asked. Also make a collection of all tutorial letters for RBM711s and

RBM421s in order to extent your knowledge.

Answering of assignment questions

Although many people have been put effort in their work, some of you still did not

improve their habit of copying direct from the study guide, though, it was not

recommended that way. All the questions were requesting your extra effort to visit

specific retail shops and to give practical examples. In assignment, there are facts that

you can copy from the study guide which will guide you through conducting interviews.

Make sure when interviewing people, the questions must be related to what is being

asked, not any general question. Well-done!!

Exam preparation

Many people came from various regions to come attend vacation classes. Those

who did not make it don’t panic.

You can download the notes from e-learning and the course outline.

Register yourself to make “selfstudy” quizzes by using “RBM711s”, it does

matter if your Subject code is “BRM421s”, as you are going to sit for the same

paper.

Register with RBM711s and password is 45879

There are few study materials such as: http://wps.penhall or companion website

for retail.mgt

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NB: you are going to sit for the same paper, prepare for

Multiple choice questions

True and false

Structured questions (Part 2, 3 and 4)

Case studies

Below, find memo for RBM711s assignment

Question 1

Legal form

When you start a business, you must decide on a legal structure for it. Usually you'll choose a

sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Also,

some businesses choose to operate as cooperatives. There's no right or wrong choice that fits

everyone. Your job is to understand how each legal structure works and then pick the one that

best meets your needs. The best choice isn't always obvious.

Operational structures

Pep Stores are has broadened its operations worldwide as chain stores. Operations can refer to a

wide range of responsibilities within a retail company structure, such as store operations,

warehousing and shipping, security, logistics and facility maintenance. These functions are

responsible for the physical aspects of a retail store operation.

Range of merchandise

Merchandise range planning is part of the overall assortment planning process and involves

making decisions about the amount of merchandise choice - the variety (or breadth) and the

depth – that will be available to customers. Merchandising is often planned as part of a way to

gain exposure for an event or person. Common examples of merchandising will help you to

better understand how merchandising is used to generate revenue, such a retail store concentrate

on narrow ranges like health foods or greeting cards also known as specialty stores or niche

retailers.

Degree of service

The maximum degree of services being offered to customers such as delivery, credit, gift

wrapping and repairs.

Location

Where you choose to locate your retail business will have a major impact on everything your

shop does. The difference between selecting the wrong location and the right site could be the

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difference between business failure and success. Before choosing a retail store location, define

how you see your business, both now and in the future.

Size of outlet

The move is part of a global shift toward online commerce that experts say will have major

implications for retail investors and developers, not to mention cities that depend on retail traffic

for revenue.

Method of customer contact

Another problem is that customers may interact with organizations at different contact points. A

contact point is the method a customer uses to communicate with a company. For instance,

consider the different ways customers may interact with an organization:

In-Person – Customers seek in-person assistance for their needs by visiting retail stores and

other outlets, and also through discussion with company salespeople who visit customers at

their place of business or in their home.

Telephone – Customers seeking to make purchases or have a problem solved may find it

more convenient to do so through phone contact. In many companies a dedicated department

called a call center handles all incoming customer inquiries.

Internet – The fastest growing contact point is through the Internet. The use of the Internet

for purchasing (called electronic commerce) has exploded and is now the leading method for

purchasing certain types of products including music. The Internet is also a key area where

customers look for help with their purchases.

Kiosks – A kiosk is a standalone, interactive computer, often equipped with a touch-screen,

that offers customers several service options including product information, ability to make a

purchase, and review of a customer’s account. Kiosks are now widely used for airline check-

in, retail job applications, and banking.

In-Person Product Support – Some in-person assistance is not principally intended to

assist with selling but is designed to offer support once a purchase is made. Such services are

handled by delivery people and service/repair technicians.

Financial Assistance – Customer contact may also occur through company personnel who

assist customers with financial issues. For instance, credit personnel help customers arrange

the necessary funds to make a purchase while personnel in accounts receivable work with

customers who are experiencing payment problems.

The challenge of insuring that customers are handled properly no matter the contact point they

use is daunting for many companies. For some organizations the customer contact points cited

above operate independently of others. For instance, retail stores may not be directly connected

to telephone customer service. The result is that for different contact points many companies

have developed different procedures and techniques for handling customers. And for some firms

there exists little integration between the contact points so customers communicating through

one point one day and another point the next day may receive conflicting information. In such

cases customers are likely to become frustrated and question the company’s ability to service its

customers.

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Question 2

The 5 stages which a consumer often goes through when they are considering a purchase:

problem or need recognition, information search, evaluation of alternatives, purchase, and post-

purchase behavior.

One model of consumer decision making involves several steps. The first one is Need/ problem

recognition—you realize that something is not as it should be. Perhaps, for example, your car is

getting more difficult to start and is not accelerating well. The second step is information

search—what are some alternative ways of solving the problem? You might buy a new car, buy

a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work. The

third step involves evaluation of alternatives. A skateboard is inexpensive, but may be ill-suited

for long distances and for rainy days. Finally, we have the purchase stage, and sometimes a

post-purchase stage (e.g., you return a product to the store because you did not find it

satisfactory). In reality, people may go back and forth between the stages. For example, a

person may resume alternative identification during while evaluating already known alternatives.

Question 3

These 10 elements describe the specific job requirements in terms of “compensable factors.”

You can use these factors to gauge whether the job description properly captures the job, and

you can use these factors to help gauge the level of compensation that is appropriate, as well as

the exempt/nonexempt status of the position. The wage payment is an important factor

influencing labour and management relations. Workers are very much concerned with the rates

of wages as their standard of living is connected with the amount of remuneration they get.

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Managements, generally, do not come forward to pay higher wages because cost of production

will go up and profits will decrease to the extent.

1. The job requirements

All jobs include performing certain tasks that may be considered requirements. A requirement,

qualification or factor that is neutral and non-discriminatory on its face, restrict or prefer some

persons because of a ground set out in the Code.

If a person is prevented from meeting job requirements for a reason that is related to a ground in

the Code, human rights law looks at whether these requirements are reasonable and bona

fide (bona fide means “good faith” or “genuine”). This assessment includes determining whether

the rule was designed inclusively and whether it would be possible to accommodate, without

causing undue hardship.

2. Prevailing wages

A wage determination issued for a project specifies the wage and fringe benefit rates for each

classification of worker, determined to prevailing in that locality for that type of construction.

Wage determinations are issued for each locality and are in effect for one year from the date on

which they become final. The law requires employees on a public works contract to be paid

overtime for hours in excess of 10 hours in a single day, and for work performed on a Sunday or

a legal holiday. No enterprise can ignore prevailing wage rates. The wage rates paid in the

industry or other concerns at the same place will form a base for fixing wage rates. If a unit or

concern pays low rates then workers leave their jobs whenever they get a job somewhere else. It

will not be possible to retain good workers for long periods.

3. Ability to pay

This is one of the most significant factors influencing employee compensation. Generally, a

firm, which is prosperous and successful, has the ability to pay more than the competitive rate.

This way it can attract a superior caliber of personnel. Often the labour unions also demand an

increase in compensation on the grounds that the organisation is prosperous and is able to pay

more. The ability of an industry to pay will influence wage rate to be paid, if the concern is

running into losses, then it may not be able to pay higher wage rates. A profitable enterprise may

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pay more to attract good workers. During the period of prosperity, workers are paid higher

wages because management wants to share the profits with labour.

4. Cost of living

The cost of living in a city can vary based on housing inventory, availability of jobs and many

other factors. In many industries wages are linked to enterprise cost of living which ensures a

fair wages to workers. The wage rates are directly influenced by cost of living of a place. The

workers will accept a wage which may ensure them a minimum standard of living.

5. Productivity

Productivity is the contribution of the workers in order to increase output. It also measures the

contribution of other factors of production like machines, materials, and management. Wage

increase is sometimes associated with increase in productivity. Workers may also be offered

additional bonus, etc., if productivity increases beyond a certain level. It is common practice to

issue productivity bonus in industrial units. Labor productivity is therefore the rate of output per

worker within a specified unit of time. Skills and qualifications of workers. If workers become

more skilled with relevant training, then this can increase labour productivity.

6. Bargaining power

The relative ability of parties in a situation to exert influence over each other. If both parties are

on an equal footing in a debate, then they will have equal bargaining power, such as in a

perfectly competitive market, or between an evenly matched monopoly and monopsony. The

wage rates are also influenced by the bargaining power of trade unions. Stronger the trade union,

higher will be the wage rates. The strength of a trade union is judged by its membership,

financial position and type of leadership.

7. Labour market condition

The labour market is a factor market it provides a means by which employers find the labour

they need, whilst millions of individuals offer their labour services in different jobs.

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8. The Demand for Labour

Many factors influence how many people a business is willing and able to take on. But we start

with the most obvious – the wage rate or salary. There is an inverse relationship between the

demand for labour and the wage rate that a business needs to pay as they take on more workers.

If the wage rate is high, it is more costly to hire extra employees. When wages are lower, labour

becomes relatively cheaper than for example using capital inputs. A fall in the wage rate might

create a substitution effect and lead to an expansion in labour demand.

Question 4

On average, the general population spends over four and a half hours a day in front of the tube,

making TV watching one of the most common modern leisure activities. Is it any wonder then

that television advertising is also the most powerful form of advertising?

Advertising on television allows you to show and tell a wide audience your business, product, or

service. It allows you to actually demonstrate the benefits of ownership. You can show how your

product or service works and how it’s packaged so prospective customers will know what to

look for at the point of sale. In advertising, it often takes multiple touch points to effectively

influence consumers’ purchasing behavior.

Television advertising has been a popular medium for large retailers ever since the TV first

began to appear in living rooms. With the arrival of cable television came lowered production

costs and the opportunity to reach smaller, more targeted markets, making it a viable option for

small to medium-size businesses as well.

Some of the advantages to advertising your small business on television include the following:

TV reaches a much larger audience than local newspapers and radio stations, and it does

so during a short period of time.

It reaches viewers when they’re the most attentive.

It allows you to convey your message with sight, sound, and motion, which can give your

business, product, or service instant credibility.

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It gives you an opportunity to be creative and attach a personality to your business, which

can be particularly effective for small businesses that rely on repeat customers.

Some Disadvantages to TV Advertising

For all its advantages, advertising your business on TV does have some disadvantages. Barring

late night spots on your local cable television network, no other advertising medium is as likely

to eat up your budget as quickly as TV will. Producing the ad, which can include hiring script

writers, actors, film editors, or an advertising agency, is only the first step. You must also pay for

air time, and because studies have shown that TV ads are most effective with repetition, you’ll

almost certainly want to run your piece a number of times. Because of this, most television

stations structure their pricing to make it more attractive for you to purchase advertising in

chunks.

Another disadvantage is how difficult it can be to make changes. Whereas with newspaper

advertising, updating sale pricing or a special offer is often as simple as swapping out a coupon,

with television advertising it means updating your script and reshooting the entire ad, which

costs additional money.

Good luck!!!

EXAMINATIONS PREPARATION:

SHORT CASES

CASE 1: BUILD IT STORE’S PLAN FOR GROWTH

BUILD IT STORE (https://www.buildit.co.za), the power retailer of domestic’s and home furnishings, has annual sales of N$7 billion and a net income of N$562 million. The firm’s profitability can be explained by its increasing gross profit margins at the same time it decreases selling, general, and administrative (SG & A) expenses as a percent of sales. BUILD IT STORE is able to increase its gross profit margins due to its excellent atmosphere, wide assortments, and deep variety within most

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merchandise lines. Its control over SG& A expenses is partly due to the outsourcing of its distribution centers to a BUILD IT STORE third party.

BUILD IT STORE has opened hundreds of stores over the last few years,

ranging in size from 30 000 to 80 000 square feet. Because it uses a

flexible real-estate strategy, BUILD IT Stores is able to situate in a variety

of locations. BUILD IT STORE is now also being allowed into large

shopping centre. In the past, department store anchor tenants blocked

BUILD IT STORE. In 2004, had about 630 stores with a total of 20.5 million

square feet of stores with a total of 20.5 million square feet of store space.

By the end of 2008, these numbers had expanded to nearly 1000 stores

with 31 million square feet of store space. Its long-term goal is to operate

1300 stores. In addition, BUILD IT STORE plans to remodel and expand

many existing stores.

In 2003, BUILD IT STORE purchased Christmas Tree Shops

(www.christmastreeshop.com), a chain of stores specializing in giftware

and household items. Although the Christmas Tree Shop’s name suggests

that it concentrates on Christmas merchandise, the chain is positioned

against Pier 1 (www.pier1.com). In March 2007, BUILD IT STORE

acquired Baby Company (www.babycompany.com.ph), a retailer

specialising in infant and toddler merchandise. In December 2007, BUILD

IT STORE opened its first foreign BUILD IT STORE in Lubango, Angola. In

May 2008, BUILD IT STORE purchased a 50 percent equity interest in

Home and Furniture in UK a home goods retailer that operated two stores

in Great Britain.

BUILD IT STORE management (as well as many retail analysts) attributes

the chain’s strong sales performance to its superior customer servant.

BUILD IT STORE is obsessive about is customers receiving a consistently

high level of customer service. For example, one recent hopper at a

suburban Long Island store reported that sales clerk was highly attentive:

When the shopper asked the clerk where she could find a set of dishes

listed on a bridal registry, the clerk immediately dropped what she was

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doing. The clerk then located the dishes and stood by the shopper as she

decided whether to purchase the set of even had the dishes brought to a

nearby checkout so that the shopper could continue buying at the store.

The sales clerk then met the shopper at the checkout to facilitate the

transaction.

In 2008, BUILD IT STORE was tied for second place in an annual study of

the top “20 Most Competitive Retailers’ in the South Africa. The study,

conducted by Capgemini consulting services (https://www.capgemini.com)

and Clicks (https://clicks.co.za), measured the ability of retailers to beat

consumer expectations and deliver superior profitability. Each firm’s

rankings were based on its profits over the prior five years and responses

from a sample of 6000 consumers.

Questions

1. Explain how BUILD IT STORE practices the retailing concept.

2. Evaluate BUILD IT STORE’s growth plans.

3. How can BUILD IT STORE further increase the overall quality of its

customer service?

4. Explain the concept of value from the perspective of a BUILD IT STORE

customer.

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Barry Berman, Joel R. Evans

Publisher: PH Professional Business

ISBN-13: 978-0-13-272082-3

ISBN-10: 0-13-272082-5

Published on: 07/10/2012

Copyright © 2013

Textbook: Retail Management: A Strategic Approach, Twelfth Edition

28 Premium Item(s)

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Part 1 An Overview of Strategic Retail Management

Chapter 1 An Introduction to Retailing

Chapter 2 Building and Sustaining Relationships in Retailing

Chapter 3 Strategic Planning in Retailing

Part 2 Situation Analysis

Chapter 4 Retail Institutions by Ownership

Chapter 5 Retail Institutions by Store-Based Strategy Mix

Chapter 6 Web, Nonstore-Based, and Other Forms of Nontraditional Retailing

Part 3 Targeting Customers and Gathering Information

Chapter 7 Identifying and Understanding Consumers

Chapter 8 Information Gathering and Processing in Retailing

Part 4 Choosing a Store Location

Chapter 9 Trading-Area Analysis

Chapter 10 Site Selection

Part 5 Managing a Retail Business

Chapter 11 Retail Organization and Human Resource Management

Chapter 12 Operations Management: Financial Dimensions

Chapter 13 Operations Management: Operational Dimensions

Part 6 Merchandise Management and Pricing

Chapter 14 Developing Merchandise Plans

Chapter 15 Implementing Merchandise Plans

Chapter 16 Financial Merchandise Management

Chapter 17 Pricing in Retailing

Part 7 Communicating with the Customer

Chapter 18 Establishing and Maintaining a Retail Image

Chapter 19 Promotional Strategy

Part 8 Putting It All Together

Chapter 20 Integrating and Controlling the Retail Strategy

Endnotes

A Brief Guide to Using Retail Management, 12th Edition