Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

Conor Cunningham

Task 1 – Understanding Retail
Task 1
a) Your article should begin with a number of definitions of retailing from a number of
perspectives and then go on to describe the structure and organisation of the retail
sector
...
You
should categorise the industry using the various frameworks outlined in the unit
specification
...
You can use the government report 'A Strategy for Future Retail',
October 2013, (pages 6-16 Appendix 1) as material for your article
...

The changes in retail and how it has developed over time will be looked at
...

The structure and organisation of the Retail Sector
Retail is the selling of goods to the public, typically in small quantities
...

“Retail is the process of selling consumer goods and/or services to customers through
multiple channels of distribution to earn a profit
...
wikipedia
...

Since it began in the 1500-1700s, retail has become a huge part of modern day evolution
and as time changes, so does the characteristics of retail
...


Conor Cunningham

In most retail scenarios, the products have come from a manufacturer, passed to the
wholesaler, to the retailer and onto the consumer
...


Retail in the UK
The retail sector in the UK involves
spending by consumers both in
shop and online
...
In March 2015, UK consumers spent around £34 billion
...
The remainder was spent in food stores, on things like fuel
and in market stores
...

GBP generated as a result of retail
Retail generates billions of pounds ever year
...
This was approximately 11% of the total UK economic output
...
However, due
to the recession which hit in late 2007/early 2008, the retail sector declined significantly
quicker than the whole economy
...
It can be seen that the trend in economic output
of the UK, and the economic output of the retail sector in the UK are related
...
This can be seen in the graph below
...
3 million people
...
It is the largest industry in the
UK in terms of the number and proportion of employees
...

Retail is an increasingly competitive market so companies have to compete to provide a
better quality of service in store and online, and employees are expected to provide this
high quality service
...
This is a massive figure
when we take into consideration that
it accounts for over 10% of UK
businesses
...
However, with stiff
competition it can be difficult to
succeed in the retail sector
...
Internet sales as a proportion of retail sales went
from 2
...
8% in Jan 2014
...
1 billion was spent
in online shops
...
This increase in internet sales is due internet only stores, who
only offer their product and services online
...
Internet sales are convenient for the consumer
...

Retailers and the types of products they sell
When we visit a shop, we never think about the type of store we are actually in
...
Different types of retailers,
as well as the different products they typically sell are highlighted below
...
A grocer sells food in bulk
...
However, some
sell fresh produce such as milk, eggs and chicken
...

Non-specialist stores; Non specialist stores are the stores that do not specialise in a specific
retail market
...
Examples of a non-specialist store would be Debenhams and
Walmart
...
They have become
extremely popular as fashion is always changing
...
Examples would be Nike, River Island and Fabric
Warehouse
...
However, they typically have a large range of goods
...
Examples of household
goods stores would be Walgreens, B&Q and Home Bargains
...
It
is retailing outside of shops and stores
...

Two of the biggest ways now is E-Commerce which is the selling of goods and services
online, and direct selling which is like a mobile service
...
It means people can
buy and sell items from the comfort of their own home
...
e
...
Examples of non-store retailing include Ebay, Amazon and a local business Paws
and Claws (a mobile pet grooming business)
...
There are so many different types of
retail
...
Some of the different types of
ownership in retailing are explained below
...
An independent retailer does everything; from planning their
business to the opening of the business, to the growth of the business
...
A huge advantage of being an
independent retailer is that you are your own boss
...
This has its advantages and disadvantages
...

Multiple retailing

Conor Cunningham

Multiple retailing is also known as multi-channel retailing
...
Stores,
catalogues and the internet are three examples of channels
...
This is because the good or service is available to people in more than
one way
...
Whereas, in-store has set opening times
...
Voluntary
retailing involves people working for nothing in return, the business does not pay out wages
to its staff nor is its main aim to make a profit
...
People in voluntary retailing may work for their own personal happiness or
satisfaction
...
It is a retailer
increasingly central to the health and well-being of society
...

Franchises
A franchise is where a business (the franchisor) sells another
business (the franchisee) the rights to set up a business using
their name/brand
...

As the franchisee is purchasing the franchise and they’re buying
an-already established business, they have to pay a proportion
of their profits to the franchisor
...
Buying a franchise is a
good way for anyone wanting to set up a business because
1
...
They will always have support and backup from the franchisor
There is always less risk setting up as a franchisee than a sole trader as the customers
already know about your business and the products you have to offer
...
Some
of the functions a retailer must take into consideration are those explained below
...
The business
location is key to success and growth
...
The location of the business should be easy to get to and
customers should feel comfortable/safe when they arrive
...

Range of goods; A larger range of goods will mean the products and services will appeal to a
larger audience
...
Many businesses start off selling one product then
branch out to sell more ranges of goods to grow and increase the sales and profitability of
the business
...
They will then
break these products down into smaller groups and
will sell them on to separately to different
businesses
...
They can then sell
these products to businesses at a higher price
resulting in huge profit margins if it is done correctly
...
The costs of holding stock include both the
money you have to spend buying the stock and the costs of storage
...
It will lead to
increased sales, improved cash flow and new investors
...
Having the wrong levels of stock could lead to a loss of income from lost
sales
...
If you are updating their knowledge on the products and services you
have to offer, they will be more informed about your business and will be more inclined to
buy from you
...

Information to suppliers; retailers must have good relationships with their suppliers and the
activities of each business should be fully understood by both parties
...
The suppliers
need to have regular contact with the retailer and any changes made such as a change of
delivery times needs to be addressed immediately
...


Conor Cunningham

After sales service; after sales service is the activities
carried out which make sure customers are fully
satisfied and happy with the products and services
they receive from a business
...
Word of mouth plays a very
important role in the promotion of brands and
products
...
After sales service generates loyal customers
...
After sales service plays a significant role in
building a better relationship between the business and its customers
...

Dealing with complaints; the way in which a business deals with its complaints can
influence the retention of its customers and is very important in building a good reputation
for the business
...
If a customer
has a complaint, it does not mean that you have automatically lost that customer
...
The retailer must always
deal with customer complaints effectively and professionally
...
For example, if they are unhappy with the time it is taking for the retailer to
pay them
...

Credit sales; credit sales are products or services sold on the
agreement that they will be paid for later
...
For example, if you go to a furniture store you could
buy the items on credit
...
A sofa
could be £500
...
Credit
sales do not involve cash
...

However, in more recent times there has been a massive increase in credit sales
...

Retail Outlets in the UK
In retail, there are different types of retail outlets
...
Some of the different types of retail
outlets are explained below
...
An independent retailer does everything; from planning their
business to the opening of the business, to the growth of the business
...
A huge advantage of being an
independent retailer is that you are your own boss
...
This has its advantages and disadvantages
...
An
example of an independent retailer would be The Candy Box, a small sweet shop in Newry
...
It’s about operating a retail
business where you sell goods to customers through multiple retail channels
...
If a business offers products
and services through more retail channels, there is a higher likelihood of making sales which
means higher profits
...
The internet is a fantastic channel to use in multiple retailing as it is open to
customers 24 hours a day
...
An example of a
multiple chain retailer would be Next clothing
...
The goods are
typically inexpensive, making them extremely popular for people to shop in
...
It is becoming more common for variety stores to sell a large
range of goods at the same price
...

Department Stores
Department stores are retail stores which offer a wide range of consumer goods
...
In the 19th and 20th
century, department stores became extremely popular
...
Some department stores are owned by
independent retailers and are also part of multiple chain stores
...
This can be seen on Amazon
...

Discount Stores

Conor Cunningham

A discount store is a retail store that sells products and services at
prices which are lower than the typical market price
...
There can be general discount stores which sell a variety of
products at discounted prices
...

“Next” has stores around the world
...
Another example of a discount store, which is one of the biggest
in the world would be Aldi
...
They are sometimes called “corner
shops” or “CTNs”, which is a confectionary, tobacco and news retailer
...
In some places, convenience stores have long opening
hours, some even being 24 hours
...
However, they make up for this with long
opening hours, being in more rural locations and having shorter cashier lines
...

Franchises
A franchise is where a business (the franchisor) sells another business (the franchisee) the
rights to set up a business using their name/brand
...

As the franchisee is purchasing the franchise and they’re buying an-already established
business, they have to pay a proportion of their profits to the franchisor
...
Buying a franchise is a good way for anyone wanting to set up a
business because
3
...
They will always have support and backup from the franchisor
There is always less risk setting up as a franchisee than a sole trader as the customers
already know about your business and the products you have to offer
...
At factory outlets, the products
sold are from one brand only
...
Traditionally, a factory outlet was a store
attached to a factory, sometimes allowing customers
to actually watch the production process of their
product
...

Cash & Carry
Cash and carry is a type of operation within the wholesale sector
...
It involves goods sold from a wholesale warehouse, where customers
(retailers) come in and buy products in bulk
...
This means
when the retailer goes to sell their products to their consumers, they get a higher profit as
they bought the product in cheap
...

Not for Profit Organisations
Non-profit organisations are organisations that do not
operate with the aim to make a profit
...
Non-profit organisations are affiliated and have
taxation implications such as income tax exemption and
charitable status
...
An example of a Non-profit organisation would be The Dream
Giver organisation
...

Typically, it is the sale of goods to anyone other than the usual consumer
...
Wholesaling can take place in warehouses and wholesaler markets
...
An
example of a wholesaler would be Heartlands Furniture
...
A
hypermarket is a huge retail facility which has a wife range or products under one roof,
including massive grocery lines and general merchandise
...
A hypermarket is seen as having all
grocery needs under one roof
...


Conor Cunningham

Mobile shops
Mobile shops are retails shops which are not confined to existing in one area
...
Mobile shops are
particularly useful for visiting things like fairs and shows
...

An example of a mobile shop would be The Fashion Truck, a mobile boutique
...
It is a selfservice shop offering a wide range of food and household products
organised into different aisles
...

A supermarket or superstore typically offers meat, fresh produce and
dairy along with shelves containing packed and canned products
...
They
occupy a large floor space and are usually situated near a residential
area so that they remain convenient to customers
...
Examples
of superstore/supermarkets include ASDA, Sainsbury’s and Tesco
...
Many people have
tried their hand at market trading and some have made vast fortunes
...
The life is tough and the hours can
be very long but there are certain families who have been involved with the industry, for
many generations and usually linked to the same trade or line
...

For example, the Christmas Market in Belfast is a huge success and attracts thousands every
year as stalls which have thousands of items are on sale
...
It has become a
sensation in the last number of years as it’s so convenient for
customers
...
It saves them going to the shop and waiting in queues
in-store
...
E-Retailing is becoming a massive hit and is set to be the future of
retail
...

Cooperatives

Conor Cunningham

Cooperatives are associations of people who voluntarily cooperate for their mutual, social,
economic and cultural benefit
...
Coperatives frequently have social goals which they aim to accomplish by
investing a proportion of trading profits back into their communities
...

Task 1 Understanding Retail
b) Compare the function of formats and locations used by one organisation in retailing
for example Tesco
...
(M1)
Introduction
In this task I have been asked to compare the function of formats and locations used by an
organisation
...
I will identify why different retailers
prefer different locations and I will look at the different
retail functions they perform
...
The product must be placed in a location where it is going to be seen
by people and in a place where the intended audience are present
...

Picking the right location can be the difference between success and failure
...
The amount of products you have will
influence the size of the location a business will choose
...
Tesco
would need to consider the size of the aisles in the store, as well as car parking and
other customer needs
...
This includes
both the target shopper and the geographic area which surrounds the location of the
retail outlet
...
Tesco would not build a store in an area where there is no money
to sustain the business
...

Competition; this is an extremely important factor to consider when securing the
correct location of a retail outlet
...
Bad competitors are those who will ultimately have a negative

Conor Cunningham

effect on the product you sell
...
Good
competitors are retail stores that compliment your business
...
It would be rare to see Tesco
next door to ASDA as they are huge competitors
...

 Traffic; when choosing a location for a retail outlet the traffic patterns of the area
should be considered
...
Is there easy access to
the store? Is there public transport nearby? The number of cars passing the location
and the number of pedestrians passing will need to be looked at carefully before a
location is chosen
...
However,
Tesco do try their best to prevent
this – even though it may be
difficult
...
The
business owner should ensure that
the location of the retail outlet attributes to the viability of the business
...
Tesco stores are
extremely viable and this can be seen with the growth of the company in recent
years
...

Choosing a location for a retail outlet is one of the most important decisions a business
owner can make
...

How has the location of retail outlets changed within the last 50 years?
Over the past 50 years there have been dramatic changes in the location of retail outlets
...
These retailers were
situated in middle of towns usually on one street, known as the high street or more
commonly known as the main street
...
The location of these stores stayed the same for many years
...
Many shops opened in the one area
...
These
outlets were preferred over the stores on the high street as there would be more variety in
one are
...

An example of a local out of town outlet would be The Outlet Banbridge
...
However, in the past
decade there has been a boom in online retail
...
With the increase use of technology and the internet, online shopping has
never been easier
...
In 2013,
online sales reached over £1trillion which goes to show how fast
this market is growing
...

Tesco as a major retail operator
Tesco is a multinational grocery and general merchandise retailer founded in 1919 by Jack
Cohen, a market trader in London
...

Tesco is the UKs largest retailer
...
Tesco has now went global and has stores in 12
countries and is growing more and more everyday
...
In 2014, Tesco had sales of around £1
...

Tesco have around 100 million customers per week which helps them possess a market
share of around 30%
...
A 30% share in
the retail market is huge especially for a business in retail which is a massive industry
...
As Tesco grew, they started to sell more and more goods
and offer more and more services
...
It has to have a purpose
...
Tesco’s main purpose is to make a profit and using some of
these profits, grow and grow
...
As well as
the purpose to make a profit, Tesco also aims to provide an excellent service to all of its
customers
...
Apart from opening more stores
across the globe, Tesco has branched into
E-Commerce
...
This
branch out to online sales proved to be
extremely successful
...
In
February 2006, Tesco announced that it
planned to move its brand into America
...
A contributing factor as to how Tesco grows so fast is due to
the massive profits it makes
...

The public love the products because they are getting their money’s worth and because
Tesco is getting bigger, they are benefitting more from economies of scale
...
These behind the scene methods of saving
Tesco money ultimately lead to huge turnover
...
These
include;
 Increase in revenue
...
This is
called greater revenue streams
...
Becoming larger and growing helps dominate a particular
market
...

 Customer growth
...
But, looking into it more: If a business grows to the point where they
start benefitting from economies of scale (production costs going down), they can
sell the products for less which means cheaper goods and happier customers
...
However, because Tesco has grown to be such a large company, a large
source of finance comes from the shareholders
...
These shares are available on The Stock Market and as of September 30 th
2015, one share in Tesco would cost 178
...
Owning shares in Tesco enables you to receive
a share of profits in the form of a dividend
...
Being a shareholder does not mean you have control over how the
business is run
...

Tesco is a public limited company (PLC) operating in the private sector
...
It is not in the public sector as it
not owned or controlled by the government
...
So, Tesco remains in the private sector
as it aims to make profit
...
There is no limit to the amount of shares
available to be owned by the public but there does have to be at least two shareholders at
one time
...

However, there are many shareholders in Tesco, each having limited liability
...
Also, the business has separate legal entity
...

However, with Tesco being a PLC, it has its
disadvantages
...
To any
business, this is both costly and time consuming
...

With being a PLC and shares being available to the
public, the owner may actually lose control of the
business if a majority of the shares are purchased by
an individual
...
With Tesco being so huge, making decisions can be a slow process which
involves lots of meetings
...
Tesco has private
ownership and control so only the owners dictate the way in which it operates
...
There are
also more opportunities for the business to grow as profits will be used according to what
the owners decide to do with them and not what the government want to do with them
...
Businesses are competing with
each other to become the most favourable, dominant and have the highest profit margins
...
It is found in both because;


Secondary sector; Tesco create their own brand of food or products
...




Tertiary sector; Tesco also sell their products such as food, fuel and clothing
...


Tesco has different types of stores to suit the different shopping patterns of its customers
...


Conor Cunningham



Tesco Compact; Compact stores are designed to offer the range of Tesco superstore
products and services on a smaller scale
Tesco Superstore; the superstore format is the most common, supplying weekly
food and grocery shopping
...


Tesco has become such a profitable business today as not only does it fulfil its purpose in
making high profits, it also meets and exceeds customer expectations so that the service
they receive is better than anywhere else
...

Factors that influence the owner/manager of Tesco
For any retail outlet – such as Tesco – to operate efficiently, effectively and profitably, the
owner/manager of the store must consider many factors which are going to affect the
running of the business
...
Factors which may influence the owner/manager of
a retail outlet such as Tesco include;
Location; The location of a new business is one of the first things a business owner will
consider
...
This will
ensure that high amount of sales is met which will help with the profitability of the business
...

Footfall; Footfall must be carefully thought of when an owner/manager of a store like Tesco
decide to open the store
...
This will include both the amount of
pedestrians passing the store, as well as the traffic which passed by the store
...

Pricing; the manager of a Tesco store could be influenced to change the price of some
products if they are cheaper with a competitor such as ASDA
...

The owner must be very much aware of the price of products
...

Accessibility; The owner of a store like Tesco would design there store to be accessed easy
by all staff and customers
...

There should be sufficient space for things like lorries to come in for deliveries
...

Parking; Store owners want a store that customers can come to and park without difficulty
...
A lack of space can cause
trouble and congestion to the store so the owner would ensure the parking space is
appropriate to the size of the store
...
Furthermore, a store such as Tesco which typically involves a
high spending shopping trip would need to be built in an area with high affluence
...


Conor Cunningham

Employability; Owners and managers must decide if the location of the store is an area of
high or low employability
...

A typical Tesco store has around 50-100 staff
...
So, owners and
managers need to look at the rate of unemployment in the area and see if the store could
bring jobs to the area
...
Customers can be influenced by
many things which a retail outlet does
...
These include;
 Competitive price; From my research, I
have discovered that one of the main
reasons a customer goes to a store like Tesco
is due to the competitive prices
...
Tesco often compares its prices
to other competitors like ASDA and
Sainsbury’s and if customers think Tesco is
the cheapest, they will be sure to shop with
them
...
They want to buy
from a retailer which has a good reputation and corporate image
...
This almost had detrimental effects to Tesco as they
lost thousands of customers
...

 Convenience; the retail outlet must be convenient
...
They want a store which is close by and easy to
get to
...

 Quality of products; the quality of products is very important in the eyes of the
customer
...
My research has taught me that high quality products help with
the brand/reputation of Tesco and this ensures the return and keeping of millions of
customers
...
To facilitate those customers, Tesco has branched out into many different
types of stores such as Tesco Express, Metro, Superstore and Extra
...

 Customer service; Customer service is very important to customers and to
businesses
...
They want to be
respected and feel valued
...


Conor Cunningham


Parking; some large stores attract thousands
of people every day
...
Customers want to
arrive to a store such as Tesco and find it easy
to park which keeps the shopping experience
quick and easy
...
Stores are opening
longer hours to facilitate customers who can’t
shop at particular times throughout the day
...
This suits their customers who work all
day and can only shop at night
...

 Quick checkout; Customers don’t like to visit a store like Tesco and stand in queues
for hours
...

Tesco has several tills in each store and has not introduced self-service checkouts to
speed up the checkout time for its customers
...
Customers want value for their money and will get discount when
they can
...

Customers will shop in a store which suits them
...
Tesco has been extremely successful in keeping
customers over the years and growing as satisfied customers return again and again
...
They all work together for the smooth-running of the business
...

Finance; The financial department would carry out this function by preparing accounts,
paying wages and salaries, obtaining capital and resources and allocating budgets to other
departments within Tesco
...
It involves
the marketing mix, carrying out market research and sales promotion
...

Distribution; There are many things for Tesco to decide with regards to distribution
...

Sales; Different people within Tesco are responsible for carrying out this function
...
However, within that
the sales manager is responsible for the sales staff and so on
...


Conor Cunningham

Production; Tesco need to obtain resources to produce goods or services and organise these
resources so that the goods and services are delivered appropriately
...

Human resources; Tesco is known for having a huge human resources team
...

Administration; The administration department in Tesco
make sure the operations run smoothly
...

As well as the functions highlighted above, Tesco also
carry out the following functions which are seen more
clearly from the eye of its customers rather than from
the staff running the business;
 Deals/Promotions
 Online Shopping
 Free Delivery
 Alcohol
 Electrical
 Banking
 Self-Service
 Clothes
 Club Cards
 Insurance
Conclusion
Retail has changed significantly over the years, from the very first supermarket to online
retailing
...
Retailers
have many functions which help them work more efficiently and effectively
...

It can be seen that Tesco has grown to become one of the largest retailers in the world
...
It opens stores in the correct locations and changes its operations
as trends across the market change
...
As Tesco keeps up with modern day retail, extends its
functions and gathers more and more customers, it has become one of the most successful
and fastest growing businesses in the history of retail
...
shopperdoodledoo
...
uk/research/retail-origins
http://researchbriefings
...
parliament
...
pdf



---