UNIVERSITY OF BRADFORD MAN0710M RETAIL MARKETING

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Paper 90minutes Answer 2 from 4 Each question is marked out of 100 marks

#ue$t%&n 1 Man un'app (u$t&mer$ &)ten *& n&t +&t'er t& (&mpla%n +ut %t (&ul* +e ar,ue* t'at Reta%ler$ -ant m&re (u$t&mer$ t& (&mpla%n . D%$(u$$/ 0100mar1$2 ANS"ER 012 3u$t&mer$ n&t (&mpla%n%n, 040526 . Customers usually i!e the followin three reasons for not complainin " . #hey don$t think it$s worth their time and%or effort . #hey don$t &elie!e the ser!ice pro!ider will &e concerned a&out their pro&lem and%or resol!e it . #hey don$t know where to o and what to do. Cultural and social norms may also affect complainin &eha!ior . 'n some European and Asian countries( customers feel awkward or em&arrassed a&out makin a complaint . )ocial norms may discoura e criticisms of professional ser!ice pro!iders( &ecause they are !iewed as e*perts in their fields Ver ,&&* $tu*ent$ -%ll (&7er 3&mpla%n%n, 3u$t&mer8$ e9pe(tat%&n$ . +nce a complaint is made( customers e*pect to &e adequately compensated in a fair manner . #he firm is e*pected to assume responsi&ility in ha!in responsi!e reco!ery process a con!enient and

. ,ot only must the employees of the firm &e a&le to e*plain and resol!e the failure( they ha!e to come across as enuine( honest( and polite throu hout . -astly( the compensation i!en has to co!er the losses incurred &y the customer &oth in terms of actually monetary loss and other potential cost incurred as a result of the failure .e. .( time( effort/ 0:2 ;re)err%n, (u$t&mer$ t& (&mpla%n 040526 . 't is impossi&le for a customer &ase to ha!e no complaints o!er an e*tended period of time . 't is known that unhappy customers who do not complain are more likely to defect . 'n addition( the impact of defection oes &eyond the loss of that customer$s future re!enue stream . ,ot only does it cost much more to attract new customers( &ut an ry customers often end up i!in the company &ad pu&licity 0 with the 'nternet( customers are a&le to reach millions all o!er the world in a fast and efficient manner . #hus it makes perfect sense for a company to prefer customers to complain to it( rather than to e!eryone else . 't has also &een o&ser!ed that customers who e*perience ser!ice failure and then ha!e it resol!ed to their full satisfaction are more likely to make future purchase than customers who did not e*perience a pro&lem in the first place 1 this is essence is the ser!ice reco!ery parado* #ue$t%&n : a2 D%$(u$$ -' tar,et%n, t'e <r%,'t (u$t&mer$= %$ $& %mp&rtant )&r $u((e$$)ul (u$t&mer relat%&n$'%p mana,ement/ 040mar1$2 +2 3r%t%(all *%$(u$$ t'e %mp&rtan(e &) (u$t&mer l& alt relat%n, t& reta%l%n, +u$%ne$$/ 040mar1$2 ANS"ER 0a2 Attra(t%n, t'e r%,'t (u$t&mer 040526 .100 #otal marks/

2ood students will define what 3ri ht customer$ meant first 4sin or identifyin the types criteria to &e used for decidin the ri ht se ment to tar et .wealth( location( or the &asis of se mentation such as &eha!ioural .usa e%purchase &eha!iour( psycho raphic .lifestyle/ or profile .demo raphic/ etc/. #hey may e!en o as far as to define what a se ment is ./and why an offerin would &e tar et at such a
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se ment 5ifferentiation of the offerin or pro!ider( tailorin of the offerin to ain reater satisfaction(/ and not .i.e undifferentiated( commodity market places 6 competin on price alone/ . Attractin the ri ht customers is important as they &rin in lon 1term re!enues throu h continued customer patrona e and continued rowth in customer referrals( as well enhanced satisfaction from employees whose daily 7o&s are impro!ed when they can deal with appreciati!e customers . Emphasis must also &e i!en to pre!ent attractin the wron customers that typically results in costly churn( a diminished company reputation and disillusioned employees . #ar etin the ri ht customers also helps to ensure that customer acquisition is consistent with the firm$s oals and capa&ilities Better $tu*ent$ -%ll e$ta+l%$' t'e (r%ter%a t& u$e t& *e(%*e t& tar,et (u$t&mer $e,ment$ . 8ana ers should choose a portfolio of tar et se ments that is consistent with the firm$s oals( capa&ilities( and positionin strate y . #hey must think carefully a&out how customer needs relate to such operational elements as speed and quality( when ser!ice is a!aila&le( the firm$s capacity to ser!e many customers simultaneously( and the physical features and appearance of ser!ice facilities . #hey also need to e!aluate how well their ser!ice personnel can meet the e*pectations of specific types of customers in terms of &oth personal style and technical competence . 9inally( they should consider whether the company can match or e*ceed competin ser!ices directed at the same customers 0+2 T'e %mp&rtan(e &) (u$t&mer l& alt 040526 . #he lon er a customer stays with a firm( the more profita&le that customer is to ser!e . #he sources of this reater profita&ility include" . 'ncreased purchases o!er time . :educed operatin costs as loyal customers &ecome more efficient to ser!e . Profits from referrals to other customers . ;illin ness( at least on occasion( to pay a price premium

. #he economic &enefits of customer loyalty often e*plains why one firm is more profita&le than another . <owe!er( loyal customers may not always &e more !alua&le than those makin a one1time transaction . #he profit impact of a customer may also !ary dramatically dependin on the sta e of the product life cycle the ser!ice is in . 8ana ers must thus analy=e the situation and look within their customer se ments and determine the profita&ility le!els for the different roups of customers #ue$t%&n > U$%n, appr&pr%ate e9ample$? (r%t%(all *%$(u$$ t'e "'eel &) Reta%l%n, an* t'e Reta%l L%)e 3 (le t'e&r%e$@ 0100mar1$2 ANS"ER 012 Reta%l%n, 010526 . Any &usiness that directs its marketin efforts towards satisfyin the final consumer &ased upon the or anisation of sellin oods and ser!ices as a means of distri&ution . Consists of the final acti!ity and steps needed to place a product in the hands of the consumer or to pro!ide ser!ices to the consumer 0:2 T'e "'eel &) Reta%l%n, an* t'e Reta%l L%)e 3 (le t'e&r%e$/ 0A052 I) n& e9ample$ t'en mar1$ t& +e (appe* at 405 &) a7a%la+le mar1$/ Ea(' $e(t%&n re(e%7e$ eBual mar1$ T'e "'eel &) Reta%l%n, t'e&r " . #he theory looks at chan e as part of a cyclical pattern" . Entry phase 6 the inno!ati!e retailer" . -ow status . -ow price . 8inimal ser!ice . Poor facilities . -imited product offerin s . #radin 1up phase 6 traditional retailer"

. Ela&orate facilities . E*pected( essential and e*otic ser!ices . <i her rent locations . 9ashion orientations and in1store entertainment . <i her prices . E*tended product offerin s . >ulnera&ility phase 6 mature retailer" . #op hea!iness . Conser!atism . 5eclinin :+' . As the retailer mo!es around the wheel( a ap is left at the &ottom that allows entry from other retailers . :etailers who want to sur!i!e the final phase need to try to earliest entry phase o &ack to the

. #here are o&!ious dan ers in enerali=in the wheel as some retailers can turn &ack the wheel . 8c5onald( or any other retailer( can &e used as an e*ample T'e Reta%l L%)e 3 (le6 . #he idea is that the retail institutions themsel!es( like the product that they sell( ha!e a life cycle . #he life cycle is di!ided into four &road phases" . 'ntroduction .inno!ation/ phase" . 9ew competitors . :apid sales rowth . -ow to moderate profita&ility . -imited resources and e*perience . 2rowth phase" . 'ncreased competition . )ales rowth fast &ut e!entually slowin down . 8oderate to hi h profita&ility . 8ore resources and e*perience . <i her promotional costs

. 8aturity phase" . 8any competitors( &oth direct and indirect . )lower sales rowth and then decline . 8oderatin profita&ility . 'ncreased costs and reduction of efficiencies . 5ecline phase" . -ess competiti!e retailers forced out . Consolidation throu h 8?A . Profits fall and sales rowth &ecome ne ati!e . 'nno!ations to slow down the decline . )tudents can use a num&er of <on @on retailers as e*amples #ue$t%&n C D%$(u$$? u$%n, appr&pr%ate e9ample$? '&- mar1et%n, mana,er$ (an u$e +ran* p&$%t%&n%n, an* +ran* per$&nal%t t& +u%l* reta%l +ran*$/ 010052 ANS"ER Arand definition 10B Bran* p&$%t%&n%n, an* +ran* per$&nal%t 6 0A052 I) n& e9ample$ t'en mar1$ t& +e (appe* at 405 &) a7a%la+le mar1$/ Ea(' $e(t%&n re(e%7e$ eBual mar1$ Bran* ;&$%t%&n%n,6 0C452 . Position what the &rand stands for in the minds of the tar et audience . #his may &e difficult i!en the competition and media costs . 'dentify a &ase from which the &rand can de!elop a defensi!e position and ain a competiti!e ad!anta e . Emphasis on intan i&le elements 6 difficult for competitors to replicate . 9or successful positionin certain criteria need to &e adopted"

. Apparent to consumer . Auild on real &rand stren ths . 5ifferentiate the product . A&le to communicate to stakeholder roups Bran* per$&nal%t 6 0C452 . )aatchi and )aatchi Arands descri&ed the same way as people . 'ncorporates numerous factors 1 &rand persona( ima e( reputation( aura( ethos . Arand personality creates differentiation%competiti!e ad!anta e throu h psycholo ical !alues . <ea!y use of ad!ertisement and personal endorsement . Effects consumer &eha!iour who may &uy a &rand with a personality they want to &e associated with . Enhance self concept 6 use of &rands with personality traits we want to portray