Management Report by Tanith Roberts

FTMG10353 Retail Management Scenario Report

! Lucy Burton, Jo Delaney, Naomi Jackson, Kamakshi Parakh & Tanith Roberts! ! Word Count (excluding quotes, appendices and contents page) : 2,727!

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Scenario: You have your Monday trading pack and you have been asked to update the Directorâ&#x20AC;&#x2122;s on how you are going to maximise your range based on the figures. Discuss and plan your product management strategy to achieve this.

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! ! ! Introduction! ! ! ! ! 1 Shirt Style 1 ! ! ! ! 2 Shirt Style 2! ! ! ! 3 Shirt Style 3! ! ! ! 4 Shirt Style 4 ! ! 5 Primary Research ! ! ! 6 Conclusion ! !

Contents

Page 3 - Tanith!

Page 4 - Kamakshi!

Page 5 - Naomi!

Page 6 - Jo!

Page 7 - Lucy!

Page 8 - Lucy!

Page 9 - Tanith!

7 Appendices ! ! ! ! 7.1 References! ! ! ! ! 7.2 Bibliography! ! ! ! ! 7.3 List of Figures ! ! ! ! ! 7.4 Group Meeting Minutes! ! ! 7.5 Survey Results! ! !

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Page 12! Page 13! Page 14! Page 15! Page 22!

Figure 2,3,4 + 5â&#x20AC;Š

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Introduction The Boston Matrix Theory is a chart designed by Bruce D. Henderson in the late 1960s to assist in the analysis of buisness units in product management. !

The model divides product lines into four categories; Stars - units with a high market share in a fast growing market, Cash Cows - stock with a high market share in a relatively slow growing market which can be counted on to consistently generate profit, Question Marks - lines with a low market share in a high growth market that if dealt with correctly have the potential to develop into Stars, and Dogs - poorly selling lines with a low market share in a slow-growing market which need to be dealt with effectively to minimise profit loss (The Economist, 2009).!

This report is an analysis of four styles of menâ&#x20AC;&#x2122;s shirts from a mid market retailer targeting young men, each fitting in to one of the above categories, with the aim of devising a strategic plan for these four lines to maximise the retailerâ&#x20AC;&#x2122;s profits. !

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Figure 6.

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1: Style 1

Shirt style number one, is a denim washed shirt which has been on sale for 12 weeks and is a staple shirt in every mans wardrobe. While analysing the sales figures of this style, it is observed that the shirt is a popular choice as 24,000 units have been sold in 12 weeks. The SWOT Analysis has been used to determine the performance of the shirt in comparison to the other shirt styles. The SWOT analysis is a business tool used by the merchandisers to identify the strengths, weaknesses, opportunities and threats of products. The strengths of shirt style one would be, it is a basic casual shirt that all men wear irrespective of their shape, size or the season’s current trends. Secondly, it is easy to maintain. Moreover it is available in four colourways, therefore offering a wide choice to consumers. An opportunity for the shirt would be if they could keep the same style and use different fabrics other than denim, possibly some printed button-down shirts. A potential threat to this shirt would be the cost, as it is a basic shirt, a similar style could be offered at lower price points at other brands. ! Another tool that could be used to analyse the performance of the shirt is the Boston Matrix. The Boston Matrix is an important tool for “product portfolio planning”, which helps determine the market share and growth of the product. (Marketing Teacher, 2016). Shirt style 1 can be identified as the cash cow. “Cash cows are the leaders in the marketplace and generate more cash than they consume. These are products that have a high market share, but low growth prospects.” (Brooks, 2015). Shirt style 1 is a basic item in mens wardrobe and therefore does not need to be replaced from season to season. Hence enough stock should always be available at the stores. The shirt can be changed slightly from season to season by introducing new colourways or prints however it is important for the merchandiser to ensure the standard best selling product is always available. The merchandiser should review the product after 4 weeks cover is over to see how much more needs to be produced.!

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2: Style 2

Shirt style number two is the cheapest of the four shirts and is also the newest being on sale for just one week. When analysing the sales figures of the check shirt the merchandiser will be able to see that it is selling very quickly with 2,000 units already sold. A SWOT analysis has been used to determine how well the shirt is doing compared to the other shirts. A strength of shirt number 2 is the amount of units sold in a short period of time. This shows that the shirt is very popular with the customers and can also demonstrate that the shirt may be an item that is currently on trend. A weakness of the shirt is that it only comes in 2 colourways. However this can also be an opportunity as due to it being of high demand, offering a wider range of colours may attract more customers to buy it. A possible threat is the longevity as trends are forever changing the shirt may not always be a good seller which means money may be lost. A further strategy that can be used to analyse the performance of the check shirt is the Boston matrix strategy. Due to the shirt being on trend and popular at this current time it would take the role of the question mark. The question mark entails having a low market share with a high market growth. The results gathered are very useful â&#x20AC;&#x153;Information raised and presented by analysis of these factors is then developed, researched or investigated furtherâ&#x20AC;? (Pettinger, R 2002). The designer and buyer would analyse the shirt against others of a similar style arranging them from best and worst sellers. This will then give them an insight as to how the shirt could be developed further for example changing the colour, pattern and style. A further possibility would be for the visual merchandiser to change the positioning of the shirt in store. Bringing the shirt closer to the entrance will allow it to be seen as the customers enter the store, therefore potentially increasing sales. The marketer may also help to maximise sales of the shirt by promoting them more, both in store and online.

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3: Style 3 Out of the four shirts style three was the worst seller, with sales to date of 450 units after 14 weeks. When undertaking a SWOT analysis for this garment it is hard to see any strengths other than that it is available in 2 different colours. This would mean it may be more likely to appeal to a wider variety of customers, however this has clearly not benefitted the sales of the line. One weakness which could have contributed to the poor performance of the shirt is that it is the highest priced item out of the products we reviewed. This may have put customers off of buying this particular shirt as there are similar styles available for a lower price. The high level of excess stock, at 17 weeks cover, provides an opportunity to increase sales for this line through a markdown or promotional activity. Reducing the price of the shirt would encourage more customers to buy and so the company could gain the maximum profits possible before the end of the season. However, before deciding on a new price, the cost of materials and manufacturing must be taken into account to ensure that they do not end up losing money. The threat of having leftover stock at the end of the season is a concern for this style, simply because there is such a high amount of stock already in stores, as well as the possibility that is more of this shirt already on order from suppliers. To avoid wasting money as much as possible, it will be necessary to look at the commitment of orders coming in and to, where possible, cancel these orders before they arrive in store. If it is not possible to cancel orders they will need to look at overdoing or restyling options to see if anything can be done to make the garment more appealing to consumers in order to sell through.

In terms of the Boston Matrix this product would be classed as a dog because of its poor sales performance and high amount of excess stock. â&#x20AC;&#x153;Dogs are confronted with low market share and low market growth problems. They tend to absorb cash rather than generate it and are developing in a slow growing industryâ&#x20AC;?.(Oxford Learning Lab, No date) Therefore the company should not put anymore investment into this garment if possible and must try to get rid of the leftover stock as quickly as possible. It will also be necessary to look at the styling and price points of further styles which are currently in the design and sourcing stage and to adapt them when necessary in order to ensure that there are no more product failures next season.

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4: Style 4 Out of the four shirts, shirt two is the best seller, selling 8000 units in three weeks. Using the SWOT analysis model we can see how well the shirt is doing in comparison to the other shirts. SWOT analysis considers both internal and external factors about the either the whole company or a particular fashion product line or range in relation to customers, competitors and trends in the marketing environment (Easey, 2008, p.241). One of the main strengths of this shirt is how fast it has been selling, this is proving the retailer has a good understanding of their target market and the current trends. But a weakness shown is it only has one colourway, this could mean some are reluctant to buy into the product as they see everyone else has it reducing the appeal to buy into the product reducing future profits. Therefore an opportunity for this shirt could be to add more colourways, this would maximise profits as people may decide to repurchase or it may encourage new customer to purchase. The threats to this shirt are itâ&#x20AC;&#x2122;s is very seasonal, meaning itâ&#x20AC;&#x2122;s not going to be sold all year round due to the patterns and colours leaning towards spring summer trends. Secondly due to them selling so fast they may run out of stock sooner than expected, therefore they should start liaising with their suppliers to see how long it will take to restock to be able to maximise profits.

The Boston Matrix model can also be used to evaluate this shirt. Being on sale for only 3 weeks with 8000 units sold it is clear this item is strong, showing that this product has a high market share; due to this we suggest this shirt is a star. Stars represent the ideal combination for a company: high market share in a fast growing industry, two elements which generate cash and further opportunities (Oxford Learning Lab, No Date). This shirt only comes in one colour way demonstrating that there is room for market growth, people who have bought this item in one colourway may want to repurchase in another. This item has 4 weeks cover left and being on sale for only 3 weeks shows they could sell out, due to this they may decided to start liaising with their supplier to see how long it will take for them to be able to restock to maximise their profits. As a business they may want to expand where they stock this product e.g. by increasing the number of stores that they have this product in so it can reach more of their target audience. When a business notices a product receiving a lot of attention they may decided to pull forward similar lines that they have to offer which their audience may be interested in. These lines do not have to be exactly the same, they may have similar shapes or colours included in the garment that they feel their customers would like. For future ranges the designer and buyer may decide to bring out similar products or re-brand this existing item as they are aware that they will be able to make a profit from it.

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5: Primary Research Surveys are a beneficial for companies as they help to understand their customers in order to reach their target audiences desires. This will help them to get repeat customers, earning their loyalty all whilst increasing profit margins. Surveyâ&#x20AC;&#x2122;s collect information from a representative sample of the survey population on such topics as consumer behaviour, attitudes and beliefs, as well as buying intentions (Easey, 2008, p.111) We designed a survey asking a series of questions correlating with the four different styles of shirts, we received 100 responses.!

One of the things we found stood out most was how the responses matched the shirts success in terms of sales and how this related to our evaluation of the Boston Matrix. When asked which of these shirts are you most likely to buy style 1 received the most votes which links to our Boston Matrix where we named it our Cash Cow as being on sale only 12 weeks it had already generated 24,000 sales to date proving it to be very successful. Style 4 got the second highest amount of votes which we named as our star as it had only been on sale for 3 weeks yet sold 8000 units, but we felt it still had room for improvement e.g. by adding more colourways. !

Additionally, we found it interesting that there was varying responses in what retailers the shirts came from and where the respondents prefer to shop. Asos and Next were the most popular responses in terms of where people prefer to shop yet Topman and Asos were the two most popular responses in where people predicted the shirts to be sold from. As a option for these questions Boohoo received the lowest votes on both questions yet this is the retailer that sells these shirts, it may be due to only having an online presence as opposed to bricks and water stores people donâ&#x20AC;&#x2122;t expect it of them. But it appears Boohoo have met their target audiences needs of the company on most of their stock as we can see from the amount of stock sold on styles 1 and 4. !

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6: Conclusion

! To refer back to the Boston Matrix model (Academy, 2016), Style 4 would be our Star. The retailer only has 4 weeks cover if sales continue at the current rate of 2,666 p/ week, and so it would be the responsibility of the Buying team to bring forward any orders for this style or order repeats if this hasnâ&#x20AC;&#x2122;t been done already. ! Currently this style only comes in 1 colour way, so the Buying team should look at sourcing new fabrics or prints using their open-to-buy budget to develop this line. The Design team should also look at ways to move this item on for the next season, perhaps a long sleeve version for Autumn, to continue generating such high sales. !

The Merchandiser should continue to review figures for Style 2, our Question Mark, closely until the next trading pack to see how best to deal with this style. Style 2 has only been on sale for 1 week and the retailer has 8 weeks cover, so no immediate action is needed for this line. ! Although this report concentrates on stock management, in order to maximise sales, it is important to also manage the consumer. The Visual Merchandiser could look at developing point of sale promotional materials to attract potential customers, kick starting the first phase of the AIDA model (Smart Insights, 2013), Awareness, hopefully creating Interest and Desire, leading to Action - meaning sales.!

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Figure 7.!

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Our Cash Cow, Style 1, is selling an average of 2000 units p/week and comes in 4 colour ways already. As a basic item which is not particularly trend driven, in order to maintain itâ&#x20AC;&#x2122;s high market share the Buying team should look at ordering repeats when cover gets low to ensure retailers donâ&#x20AC;&#x2122;t run out of stock. If its not already, Merchandisers should ensure this item is available in every store and online so as to be available to potential customers. !

Finally, Style 3, our Dog, has sold a disappointing 450 units over 14 weeks. Unfortunately, the retailer still has 17 weeks covers across stores and the Distribution Centre, and so in order to free up this room for more sellable lines the Merchandiser should review costings for this item and workout a mark-down which would potentially increase sales of this product line. With a fast paced fashion retailer, it is important to be aware of the elasticity of demand. A price reduction would increase the demand elasticity and generate higher sales. However, a price reduction of 10% will require a 15% increase in sales to compensate (Jackson and Shaw, 2001). If this item is marked down, effectively the value of the stock held by the retail decreases. In order to restore this, the Buyer and Merchandiser should pull forward existing orders of more successful lines, such as Style 4. Merchandisers will plan a seasonal markdown budget to accommodate lines which do not meet sales targets, and in the next trading pack the Buying and Merchandising team will review figures and decide whether to further markdown this line.! The Buying team should at this point get out of any future commitments for repeats of this style, and discuss with the Garment Technologist and Designer ways to re-style the item in a more commercially viable way, for example dying over in a colour which has proved popular this season, or removing the scoop hem and re-working into a more basic style which may sell better. In our survey, 76% of respondents said that removing the scoop hem would make them more likely to purchase this item, and so the Buyer and Designer would need to weigh up the cost of re-working the shirt in comparison to potential losses by mark-downs. !

To conclude, the Designer, Merchandiser, Garment Technologist and Buyer need to work consistently through the trading period to efficiently manage stock and yield maximum profits from the range. !

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7 Appendices

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References! ! ! Bibliography! ! ! List of Figures! ! Group Meeting Minutes!

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Page 12! Page13! Page 14! Page 15!

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7.1 References

! Academy, P. (2016) Marketing Theories - BCG Matrix (online) professionalacademy.com Available at: http://www.professionalacademy.com/blogs-andadvice/marketing-theories---boston-consulting-group-matrix (Accessed 22 Feb. 2016)!

! Brooks, C. (2015) What Is a BCG Matrix? (online) Business News Daily. Available at: http://www.businessnewsdaily.com/5693-bcg-matrix.html (Accessed 20 Feb. 2016)!

Easey, M. (ed.) (2008) Fashion Marketing. Third Edition edn. John Wiley and Sons Ltd.!

The Economist, (2009) Growth share matrix (online) Available at: http:// www.economist.com/node/14299055 (Accessed 14/02/2016)!

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Jackson, T and Shaw, D (2001) Mastering fashion buying and merchandising management Basingstoke, Macmillan, pp.61, 108 - 109, 155.!

! Marketing Teacher (2016)Â Boston Matrix | Marketing Teacher (online) Available at: http://www.marketingteacher.com/boston-matrix/ (Accessed 20 Feb. 2016)!

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! Oxford Learning Lab (no date) Boston matrix Available at: http://www.oxlearn.com/ arg_Marketing-Resources-The-Boston-Matrix_11_35 (Accessed: 23 February 2016)!

Smart Insights, (2013) The AIDA Model - Smart Insights Digital Marketing Advice (online) Available at: http://www.smartinsights.com/traffic-building-strategy/offer-andmessage-development/aida-model/ (Accessed 22 Feb. 2016)!

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7.2 Bibliography

! Easey, M - Fashion Marketing, 2008! ! Jackson, Tim & Shaw, David - Fashion Buying and Merchandising Management, 2001! ! Posner, H -.Marketing Fashion, 2011! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! RETAIL MANAGEMENT REPORT

7.3 List of Figures

Figure 1. Roberts, T. (2016) Shirt Styles (image)! Figure 2. Management Assessment Briefing (2016) Style 1 (image)! Figure 3. Management Assessment Briefing (2016) Style 2 (image)! Figure 4. Management Assessment Briefing (2016) Style 3 (image)! Figure 5. Management Assessment Briefing (2016) Style 4 (image)! Figure 6. Roberts, T. (2016) Boston Matrix Model (image)! Figure 7. Roberts, T. (2016) Visual Merchandising Mockup (image)!

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7.4 Group Meeting Minutes Title:

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Minutes of the first meeting for group management ! report!

Wednesday 20th January, 2016! !

Nottingham Trent Student Union! !

Present:!

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Jo Delaney! Tanith Roberts! Kamakshi Parakh! Naomi Jackson! Lucy Burton!

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! Date: ! ! Venue:! ! ! ! ! !

! Absent, with apologies: ! N/A! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the assessment briefing. ! ! 2.

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Items for discussion: The team discussed ideas for what should be included in the final report including retail roles, management theories and key performance indicators.! Each member was then allocated a topic to further research before the next meeting.!

! 3. Date and venue for the next meeting agreed.! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Minutes prepared by Jo Delaney!

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Minutes of the second meeting for group management report!

Tuesday 26th January, 2016!

Nottingham Trent Student Union! !

Present:!

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Jo Delaney! Tanith Roberts! Naomi Jackson! Lucy Burton!

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! Date: ! ! Venue:! ! ! ! !

! Absent, with apologies: ! Kamakshi Parakh! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2.

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Items for discussion: Each person shared the research they had undertaken since last meeting and we discussed how it links to our particular assessment scenario.! The team then discussed a possible layout for the report and how to split the work evenly between all team members when writing it. ! We planned to split the report into five sections of roughly 500 words each.! Date and venue for the next meeting agreed.!

Minutes prepared by Jo Delaney!

RETAIL MANAGEMENT REPORT

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Minutes of the third meeting for group management ! report!

Thursday 4th February, 2016!

Nottingham Trent Student Union! !

Present:!

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Jo Delaney! Kamakshi Parakh! Naomi Jackson! Lucy Burton!

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! Date: ! ! Venue:! ! ! ! !

! Absent, with apologies: ! Tanith Roberts! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2.

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Items for discussion: The team looked over and discussed product management lecture, which relates to our scenario.! The Boston matrix was then applied to the 4 products given, and other relevant theories/models which we plan to include in the report were chosen.! Each present member of the team at the meeting then chose a shirt to further ! research and produce a paragraph about for the next meeting of about 400 words. Tanith will put the work together and produce a conclusion so that each team ! member is contributing the same amount of work. ! Date and venue for the next meeting agreed.!

Minutes prepared by Jo Delaney!

RETAIL MANAGEMENT REPORT

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Minutes of the fourth meeting for group management ! report!

Friday 12th February, 2016!!

Nottingham Trent Student Union! !

Present:!

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Jo Delaney! Kamakshi Parakh! Naomi Jackson! Lucy Burton! Tanith Roberts!

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! Date: ! ! Venue:! ! ! ! ! !

! Absent, with apologies: ! N/A! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2.

Items for discussion: The team reviewed the work done since the last meeting and discussed what each member had written about there specific shirt style.!

We then discussed and planned potential questions to put into our survey and decided which ones needed to be included and how they would be laid out. We then planned out what needed to be included in our report conclusion, including theories/models that would be used, and how it would be laid out.!

! 3. ! Date and venue for the next meeting agreed.! ! ! ! ! ! ! ! ! ! ! ! ! Minutes prepared by Jo Delaney! ! RETAIL MANAGEMENT REPORT

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Minutes of the fifth meeting for group management ! report!

Tuesday 23rd February, 2016!

Boots Library Group Study Room 1!

Present:!

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Jo Delaney! Kamakshi Parakh! Naomi Jackson! Lucy Burton! Tanith Roberts!

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! Date: ! ! Venue:! ! ! ! ! !

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! Absent, with apologies: ! N/A! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2.

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Items for discussion: Reviewed survey results and report layout. Also checked that everything has been included in the conclusion and that report flows well. ! The team then created the powerpoint presentation, including the Belbin model, … minutes from each meeting and how we worked together as a team throughout the assessment.! Date and venue for the next meeting agreed.!

Minutes prepared by Jo Delaney!

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Minutes of the sixth meeting for group management ! report!

Thursday 25th February, 2016!

Boots Library Group Study Room 4!

Present:!

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Jo Delaney! Naomi Jackson! Lucy Burton! Tanith Roberts!

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! Date: ! ! Venue:! ! ! ! !

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! Absent, with apologies: ! N/A! ! Absent!! ! ! ! Kamakshi Parakh! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2.

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Items for discussion: Run throughs of powerpoint presentation to ensure everything is included and all team members know which parts they are presenting.! Final report, including all appendices, was taken to be ring bound.!

Minutes prepared by Jo Delaney!

RETAIL MANAGEMENT REPORT

Title:

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Minutes of the seventh meeting for group management report!

Monday 29th February, 2016!

Boots Library Group Study Room 4!

Present:!

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Jo Delaney! Naomi Jackson! Lucy Burton! Kamakshi Parakh! Tanith Roberts!

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! Date: ! ! Venue:! ! ! ! ! !

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! Absent, with apologies: ! N/A! ! Absent!! ! ! ! N/A! ! ! ! ! ! Agenda ! 1. Review of the minutes from previous meeting. ! ! 2. Run throughs of powerpoint presentation.! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Minutes prepared by Jo Delaney! ! RETAIL MANAGEMENT REPORT

7.5 Survey Results

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RETAIL MANAGEMENT REPORT