outsourcing

(advantages)

• abundance of workers
• cheaper cost of labor
• working conditions = less stringent
• health care, social security, payroll taxes all cheaper or nonexistant

Outsourcing

(disadvantages)

• loss of local jobs -> ripple effect
• loss of brand image
• designers cant stop by factory=need good communication skills

product facilities:

wholly owned factory

retailer that is manufacturing ownsfactory in which they are produced

->vertical production: retailer owns store and all of production facilities to make clothing go into a store

• allows retailer to control
• retailers dont do this method bc of hastle

• more control of quality
• better timing of the goods

wholly owned factory

disadvantages

Production facilities:

Joint Venture

retailer or designer contracts w. factory and works w/ owners to produce product

-> factory owner also works w/ other retailers

1. estimate quantity required to meet needs of retail stores
   1. costing sheets & spec package used to estimate cost
2. factory makes pattern
   1. pattern grading: makes dif sizes by CAD or hand
3. factory  cust samples of fabric
4. designer agree produce #of garments requested
5. sewing trimmings/buttons
6. tag w. retailer tag, sku # and price

Market Intermediaries

or

Selling Agents

broker: brings buyers/sellers together

wholesaler: take possession of inv.

dropshipper: recieves order, selects manufactures, ensure arrival of goods -> used to save time

market intermediaries

(advantages)

• designer can work w. 1 person for needs
• helps w/ import laws

market intermediaries

(disadvantages)

• cost
• ex: wholesaler -> agent -> retailer -> customer (higher COG to increase profit)

• quotas: limit on amt. of goods brought into the country
• tariffs: tax charged on imported goods
• customs: inspections occur w/ every shipment into a country

1. used by us and others who use tariffs and quotas to carry out policies to protect own economies by making imported products more expensive
2. ->ex: embargo: country refused to trade w/ another country in order to get opposing country to change their govt

WTO: Coordinate trade btw countries

1. NAFTA: mexico, canada and US
2. CAFTA: Central American Free Trade agreement- costa rica, dominican repub, el salvador, guatamala, honduras, nicaragua and US
3. CBTPA: caribbean basintrade partnership agreement- haiti, belize and jamaica
4. EU: European Union- 25 countries
5. APEC: Asian Pacific Economic Corp- 21 countires + US

social structure: ex- social stratification in India (ppl in categories ie birth)

*collective custom vs indivisualism

• language: communication dif. ex: rude to say no in Japan say "i understand what your saying"
• non-verbal comm: body lang. puncutuality of country, eye contact, gestures
• religion: ex: appropriate roles for women
• valued + attitudes: related age, status + education

Contemporary Issues in Sourcing"

Social Responsibility 

businesses should not function immorally, but contribute to welfare of community

->factory overseas should neg. impact communities in which they operate

contemporary issues:

 in sourcing Child Labor

• child labor concerns heightened in 80s
  • ex: kids are 5-12 full time jobs
• child labor: refers to the direct use of children to produce goods made for resale thus unable to obtain an education = low par for rest of life w/o ed
• bonded/enslaved children: "agents" come to poverty areas buy children in promise for better life but becomes domestic servant to "pay $ used to care for kid" which cant be paid off

Contemporary Issues In Sourcing:

Wages + working conditions

• Living wage: compensation for work= enough to cover living expenses
• fair trade: promos responsible social standards in production of goods.. ex: starbucks coffee
  • no laws (internationally for wages)
• sweatshops: factory emploes for low wage work long hrs in poor conditions
• associations who help w/ int. laws: unite here, UNITE, AAMA, NRF

Contemporary issues in sourcing:

Dependence of factory

ex: sri lanka: 450,000 ppl in textile industry

also china India and Pakistan

• when jobs are removed support for local business is removed = 

Leasing

(advantages)

• retailer can invest in inv. not in building
• may lack capital to purchase building
• location in mall=provides, ads, customers and marketing
• can focus on running business

leasing

(disadvantages)

• lease=expensive
• landlords may charge payment and % of sales on monthly basis
• restrictions in lease must be followed

Buying

(advantages)

• property could increase in value
• retailer can alter visual look of store
• no lease expiration or terms
• some space can be leased to other retailers

Buying

(disadvantages)

• cost is expensive
• must pay taxes and all maintenance
• may want to focus on running business not being landlord

Contemporary Issues in Sourcing:

Natural Disaster

• tsunamis and earthquakes in developing regions
  • detrimental consequences for ppl who live there for industry
  • delayed shipments, stopping of production
    • ex. struggle to rebuild factory

the process of selling goods directly to customers through various retail channels

•  
  • research and marketing through store sales

retailers location

ex. online or bricks and mortar

actual production in store

various colors, sizes, features available

ease of ownership of a product

ex. transferring possession from seller to buyer

(wal-mart uses all four types)

-most important decision retailer will make

*central business district: downtown commercial area= high visibility, high cost

*Freestanding store: self contatined building usually on outskirts or suburbs or city

->variety of free standing stores could be located in one area called Power Node

• pedestrain traffic
• vehicular traffic
• parking, distance from store, cost, lighting and security
• infrastructure: facilities and transportation systerm in area that promote commerce
• placement and visibility: actual location street vs shopping center - rent concerns - type of stores near location- category kills -> depth of merch

-geographic area which retailer draw its customer

1. primary trading areas: 50-80% of customers live
2. secondary trading areas: 20-25% of customers live
3. tertiarty trading area: 5-25% of customers llive
4. wide area outside others... ex:outlet malls

Tangible/intanglibe

attributes of visual merchandising

intangible: those aspects that cant be seen or touched

ex. smell or organization

Tangible: physical elements

ex: types of fixtures, dressing rooms, signage

*ambiance: mood evoked by use of elements

-includes all elements of retail store (store atmosphere)

*need distinct identity, matching good sold

-employee attitude/appearance impressions made by sales associates & managers reflect store image

*way employees dress

Floor Plans: creates image retailer wants 

-grid: maximize space, smaller items, aisties

*freeform: racks/shelves strategically placed w/ pathways to lead customer to certain merch.

*racerback: spanentire store w/ aisle ways

• precise placement of goods signages window displays and mannequins in store
• goal = to create story

1. color
2. balance
3. texture
4. line
5. rythym
6. fixtures, lighting, window displays

Retail Management / HR

Hiring

-want customer-service oriented person who is dependable and flexible

-process: resume app. interview, testing, red checks

-interviews: obtain feel for person w/ open ended Qs

Role Play: ask what they would so in hypotheticals

-situational interview: candidate gives ex of how he/she has dealt with situations in past

-cant ask: age, marital status, race or religion

important for new employee to gain sales knowledge

-product knowledge (imported, how to wash, sizing etc)

1. greet customer
2. start a converstation
3. be helpful
4. use suggestive selling
5. thank the customer

competition based, short-term motivational tools for employees

EX: rewarded w/ $ or merch. for winning contest selling most in 1 day

should receive formal, written performance review at least once a year (discuss issues/goals)

manager should give constant feedback

criteria: usually echo items that appear injob description, only be relevent to job

rating systerm: how employer rate the performance

#scale (1-10)

word-based rating (good, excellent, satisfactory)

retailing on internet in last 10 years= popular and lucrative way to expand retail sales

e-commerce: internet facilitated commerce

-use of electraince means for promotion, selling disturbing and servicing products

e-tailing: actual process of retailing online through use of 'virtual storefronts serving as catalog of products"

-includes shopping cart systerm + enable purchases w/ credit cards

1- pure-play retailer:business online

2-channel-retailer: operates bricks and mortar and online

3-multichannel retailer: goods in more than two pieces

4- Electronic Spinoffs: includes retailers that sold good in other ways than bricks and mortar

5- nontransactional sites: for info purposes only; not used to actually sell goods online

usability

design

personalization

content