Executive Summary

For the distribution chain of Fashion Wholesalers, conflict is inevitable. This is because the stakeholders involved have different motives. All of them will work to fulfill their objectives and goals. Fashion Wholesalers might experience three types of conflicts in their distribution chain. They include the horizontal, vertical and multi-channel level conflict. Conflict may arise for Fashion Wholesalers when the producers tend to supply low quality products to the warehouses. Occurrence of this event is a likely one since the company is dealing with 30 producers that have different goals and objectives. Another conflict aspect may arise if Fashion Wholesalers decided to sell directly to some end consumers. The whole aspect might not go well with the retailers based on the nature of the distribution chain. The consumers changing their preferences and tastes can also result to conflict in the distribution chain. They are the ultimate target.

For the retail start-up, the retailer should take adequate time before arriving at a conclusion. A favorable retail mix helps in attaining maximum profits in any venture. Operating a specialty store is more favorable compared to operating a department store. Based on the fact that it is a new entrant, the retailer must first take the initiative of understanding the business before diversifying. A favorable retail mix for such a retailer would entail the following elements; Merchandise/product, promotion, price, location, personnel and presentation. When it comes to the product, the retailer should enhance quality at all times. For pricing purposes, the retailer should institute market segmentation. The segmentation aspect will be determined by the income levels of customers. When it comes to personnel, the retailer should employ individuals that have stint knowledge regarding the business and the location of the retail store should be strategic.

Question 1

Introduction

Conflict in any distribution channel in inevitable based on the people involved in it. All the stakeholders have different perceptions and are in desire of fulfilling their objectives. There are three types of conflicts that are experienced in the relevant distribution chains. They include the horizontal, vertical and multi-channel level conflict (Ayers, 2006). In the case of Fashion Wholesalers, vertical conflict may arise between the wholesaler and manufacturers. It may also arise between retailers and Fashion wholesalers. Multi-channel level conflict on its part may arise when the retailers tend to use both indirect and direct means of distribution. This may contradict the wholesaler’s expectations. Horizontal conflict on the other hand is likely to emerge between the retailers. Solving these conflicts will require a good understanding of the type, nature and magnitude of the conflicts. Fashion wholesalers should understand that the conflict cannot be eliminated completely, but it can be minimized (Hugos, 2011).

One way that conflict may arise for Fashion Wholesalers is when the producers tend to supply low quality products to the warehouses. This is a likely event since the company is dealing with 30 producers that have different goals and objectives. Initially, Fashion Wholesalers have the responsibility of visiting these producers and making orders that are to be supplied on different intervals. During the visits, the company comes along with samples of the clothes they will be offering to their consumers once they land into the warehouse situated at Peterborough. The samples are displayed at the company’s showroom for suppliers to inspect them.  Through the samples, suppliers take the initiative of making orders. It is the expectation of Fashion Wholesalers that the producers with deliver products of similar quality and at the appropriate time. Delivering low quality products will prompt Fashion Wholesalers to return the products or offer to pay a reduced price. Reducing the price might not come well with the producers since there was an agreement before the deliveries were made. If the wholesaler decided to carry on with the delivered products, this may not go well with the retailers. Based on the samples they had seen at the showroom, they might turn down the clothes being delivered to them. This is likely to jeopardize their operations since their consumers have been waiting for the clothes. There is an assumption that most of them depend on Fashion Wholesalers for about 50% of their stock.  At the list, the aspect creates a very bad relationship between Fashion Wholesalers and its retailers.

Another conflict aspect may arise if Fashion Wholesalers decided to sell directly to some end consumers. These are the housewives who are the company’s target group. Katie the managing director is aware most of her customers depend on her for about 50% of their stock. When it comes to end consumers, she can find some housewives that depend almost 100% on the clothes. If these consumers usually by in bulk, they will help increase the profit levels. This is because she will sell to them at a price slightly higher compared to the retailers. On the side of the end consumers, the prices being charged will also be lower compared to what they are getting from the retailers. The whole aspect might not go well with the retailers. At this point, Fashion Wholesalers would be acting as a competitor to its retailers. The retailers might threaten to boycott purchasing of its clothes all together. They might also take the stance of discouraging consumers from purchasing the company’s products due to the betrayal. The suppliers might succeed in their quest based on their direct interaction aspect with the end consumers.

The consumers changing their preferences and tastes can also result to conflict in the distribution chain. The ultimate targets are housewives between the ages of 35-60. At this age, women are very sensitive on the trends being offered in the market. They desire to be at par with what other segments are being offered. Based on the fact that they are housewives, they have a lot of time to spare. This means that they have time to check what other females counterparts are embracing. This tends to change their tastes and preferences within very short time frames. The aspect is likely to create an essence of conflict between them and the retailers. Retailers usually attend sample showrooms that are organized by Fashion Wholesalers. They are staged in the month of September, February, April and November. From here, they choose in advance the type of clothes they desire and make orders. Clothes to be dispatched in the following moths to the stores are based on the orders that they made at the showroom. If the housewives have changed their preferences during this period, they might be reluctant to purchase the clothes from the retailers.  As a result, retailers end up having huge unsold stock hence not realizing the desired profit margins (Flapper, Nunen & Wassenhove, 2005). The relationship between the retailers and the end the users might also deteriorate. This is because the retailers are not offering them what they desire as at that time.

However, Fashion Wholesalers have the ability of managing these conflicts. To some extent, the company cannot eradicate them wholly but can devise mechanisms of mitigating their magnitude. One way is by signing contracts with the producers of enhancing quality assurance. The contracts to be signed between Fashion Wholesalers and its producers should have several stipulations.  Among the stipulations would be that the producers undertake to supply the company with the desired quality levels at all times. This means that they must be very careful with the raw materials that they use in the production process. Breaching the contract should be accompanied with heavy penalties on the side of producers. For them, they do not have anything to lose since they are not directly connected with the retailers. The entire burden is left to the wholesaler that acquires the products from them. Having biding contracts with legal liabilities might prompt their effectiveness in quality assurance. This will eliminate the conflict between them and Fashion Wholesalers. It will also eliminate the conflict between the wholesalers and its retailers. Fashion Wholesalers may also use another approach of enhancing quality assurance through its selection criteria. When the company is selecting its suppliers, it should go for producers that have already built a name for themselves. On most occasions, a good reputation comes from favorable operations. It is an indication that consumers are satisfied with the offerings and hence keep on coming back (Kuruppu, 2006). The aspect will ensure that Fashion Wholesalers obtain high quality clothes hence eliminating the conflict brought about by this aspect.

Fashion Wholesalers should also have a clear definition of its distribution chain. This will mean that the duty of every stakeholder in the distribution chain is clearly defined. This would serve to eliminate the conflict between the company and its retailers based on end user interaction. A clear definition would be arrived at by having a concise meeting with all the relevant stakeholders. During the meeting, there should be a discussion on the role to be played by each of the stakeholders. Final decision should be arrived at through mutual consent. Everyone involved should accept the scope allocated to them. If everyone accepts to undertake their scope, several measures should be instituted to see the process through. Failure to adhere to the laid down regulations should be curtailed with strict penalties. This should act to discourage intervention in another person’s territory by any other stakeholder. It would mean that Fashion Wholesalers does not have the mandate to sell to end consumers. The task is solely left to retailers. In the long-run this will help to mitigate conflicts arising from territory infringement.

The company should also develop an effective communication platform. The communication platform should strive to accommodate all the relevant stakeholders in the distribution chain. Lack of effective communication is always a barrier to running an effective and efficient distribution chain. When the communication channel is ardent, end consumers will have the ability of communicating with Fashion Wholesalers based on the preferences and tastes. This will ensure that the company delivers retailers with the type of clothes that end consumers want. It will help improve the relationship between the retailers and end consumers since their desires are being taken into consideration. Any chance of conflict occurring is mitigated.

In conclusion, existence of conflict in this distribution chain is inevitable. This is because the stakeholders involved have different interests and objectives. Producers supplying inferior clothes so that they can make extra profits will result to conflict between them and Fashion Wholesalers. It will also not go well with retailers because they had already received samples that were of high quality before. Fashion retailers enforce contract between them and the producers for quality assurance purposes. It is also the duty of the company to define the scope of every stakeholder. This will prevent the conflicts that come as a result of territory infringement. Establishing effective communication channels would also work to ensure that consumer needs are taken into account. The aspect improves the relationship between end consumers and retailers.

Question 2

Introduction

When devising a retail mix, a retailer should take adequate time before arriving at a conclusion. A favorable retail mix helps in attaining maximum profits in any venture. Profits arise from repeat transactions that are initiated by favorable consumer relationships (Madaan, 2009). Retail mix encompasses those elements used by retailers in satisfying consumer wants and needs. The more the effort in satisfying consumer needs is exerted, the more the profits are likely to accumulate. For this to be attained, a retailer needs to study the relevant market with a critical view. This helps in identifying various aspects that needs to be undertaken. Failure to understand the market results in implementation of a retail mix that is not effective on any level of production.  A retailer must have a clear understanding of the environmental and consumer issues. Understanding what competitors in the market are doing is also highly recommended. It forms a platform of attaining a competitive advantage (Sivakumar, 2007). There are several aspects that need to be considered before a retail mix is developed. They include the type of Merchandise, customer service level, price of product and variety available. Having this understanding will help in formulation of a retail mix for a start up retailer that is dealing with men’s clothes that are over 40 years.

Based on the case provided for a start up retailer, operating a specialty store is more favorable compared to operating a department store.  This is because the retailer has not yet analyzed how the market is doing on real terms. This can only be established after the venture has commenced. The retailer should concentrate on offering clothing to men above 40 years. It would be the best way of creating a brand for long-term sustenance. A favorable retail mix for such a retailer would entail the following elements; Merchandise/product, promotion, price, location, personnel, presentation.  When it comes to the product, the retailer should enhance quality at all times. Most men at this age are not more concerned with shopping for their clothing. Men tend to have few clothes that have the ability of lasting for a long period of time. For this reason, the new retailer should aim at delivering quality as opposed to quantity. In order to ensure to ensure the he delivers clothes of high quality, the retailer should be very careful in his selection of the suppliers of relevant products. Any form of compromise from the suppliers would result to losses on his side. He should go for those suppliers that are highly recognized for their quality levels. This will create an assurance of being delivered with quality products (Dunne, Lusch & Carver, 2011). It will also help in building trust with the end consumers since they are aware of where the products are being derived from. Dealing with inferior suppliers might leave question marks on the side of consumers. They might trust the retailer, but have no trust with the suppliers.  Some consumers try to dig dip before they can establish loyalty towards the consumer.

On certain time intervals, the retailer should bring limited edition clothing into the store. This would help in increasing the market share once the operations have already commenced. Limited edition clothing would be targeting those consumers that have the desire of being unique. These clothing usually come once in the market. When their stock is over, the retailer will not bring them again. This aspect tends to prompt consumers that are interested to make their purchases before the stock is over. Before the introduction of these clothes, the retailer should have informed the consumers regarding the offering. As a result, they will be waiting for the products even before they are availed into the market. Once the clothes are out, consumers will be queuing for them. This will mean that the retailer will not have to incur the holding cost of the inventory. Profits will tend to increase, as a result. Consumer loyalty also tends to be created in the process. There are those customers that will always wait for such occurrences. For this reason, they will keep in touch so as to learn more about such offerings in the future. It is a very effective way of creating competitive advantage in such a market niche.

When it comes to promotion, the retailer should focus on advertising, public relations and personal selling. Advertisement becomes critical based on the nature of the market. Some of the competitors like bespoke tailors have invested a lot on advertisements. They do this on commercials, search engines and other favorable media outlets (Krafft & Mantrala, 2010). For this reason, the retailer should use advertising to help contain the competitors. On issues of personal selling, before and after establishing the venture, the retailer should go out and give out business cards and brochures. The brochures should posses captivating offerings that might tempt the target consumers. As he presents the brochures to the target consumers, the retailer should be more appealing and convincing. He should take the initiative of doing some practice and reading broadly so as to perfect in this undertaking. During the process of personal selling, it is not advisable that he only targets men. In some cases, women are responsible for their husbands’ clothing. Leaving them out during the process might lead to inefficiency. On public relations, this would come with the quality being offered at the store. If the retailer is offering quality clothes, the consumers involved would recommend them to their acquaintances and friends. After sales services offered would also act favorably at this point.

For pricing purposes, the retailer should institute market segmentation. The segmentation aspect will be determined by the income levels of customers. The retailer should be able to classify his consumers well. Going with ideology of providing high quality products should not mean that the retailer should segregate the low income earners. It such a market it is difficult to initiate the strategy of cost leadership for a new entrant. This is because the retailer is not the leader in this market. Anything he does for cost leadership aspects at the moment can be matched by the competitors. This is because they have the necessary resources and knowledge regarding the market. For this reason, the retailer should aim at segmenting the market so that he can serve all the consumers. Through segmentation, the retailer will affix different prices to the merchandise based on the class that the product falls in. This will help in obtaining a huge market share hence increasing profitability prospects.

When it comes to personnel, the retailer should employ individuals that have stint knowledge regarding the business. This is because they will have a direct contact with consumers. Consumers feel satisfied when they are served by individuals that understand what they want. It is easy to tell when an employee is not aware of what he or she is doing. Failure to understand the business operations is a complete turn-off since the consumers are in need of knowing more about this new venture. Building of trust might be a problem as a result. Presentation on the other hand, ensures that the business has some important tools for executing the desired tasks. Under this scope the retailer needs to have a business website. As levels of technology change, so does the consumer antics. The website should be monetized in such a way that it can enhance B2C e-commerce operations.   This helps in increasing the market share and acts as a form of advertising too. Availability of a large warehouse should be enhanced too. This will create convenience in holding of inventories.

The location of the retail store should be strategic. Opening the specialty store anywhere would be a grave mistake. Before putting up the store, the retailer should have a great insight into the demographics of the location. The population of men should be reasonable based on the nature of business that is being put up by the retailer. They spending habits should be easily identifiable. This would help the retailer in ascertaining whether they are in accordance to the other elements involved in the retail mix (Housel, 2007). An area that does not match the laid down specifics should be avoided. Holding operations in such an area mind hinder productive operations.

In conclusion, when devising a retail mix, several things need to be put under consideration. This includes the nature of the market and competition available at the moment among others. The retailer will succeed more if he operated a specialty store. It would enable him to gain more knowledge regarding the operations that he is required to undertake based on the idea that it is a start-up.  The best retail mix for the retailer should include the merchandise, promotion, price, location, personnel and presentation. When these elements are combined in the most appropriate proportions success is likely to come along the way. However, if there is any shortcoming in the management of the elements, the retailer might not achieve the desired goal.

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