...Running Head: MANAGEMENT Distribution Channels Introduction Nordstorm a promising and upcoming departmental store in U.S has shown phenomenal growth in the business of retail chain business. The credit for this would go to the founder and promoter’s philosophy of inverting the pyramid and putting the customer on the top, followed by employees and it was the share holders who were accorded the last place in the priority list of company. It was rationalized by the promoter that if customers are satisfied by the services and the best service could only be offered by highly motivated employee (sales force), the share holders ,promoters are bound to get their share in terms of high profit and revenue. 1. Since Nordstorm’s (p. 402) competes in the U.S., give an example of each of the marketing environment forces (Political, Legal, and Regulatory; Technological; Social; and Competitive and Economic Forces. Ans. Nordstorm working as departmental store in the retail industry would be effected by all the forces in the marketing environment. Political environment in U.S is very conducive for the growth of any industry because U.S provides a very stable government, which has a consistent track record of providing one of the most industry- friendly atmospheres in the entire world. The political interference in the free display of market forces is minimum compared to other countries. American laws have been very tough for countries hostile to U.S and such firms from these countries...
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...CREATING LONG-TERM LOYALTY RELATIONSHIPS | CHAPTER 5 147 Summary 1. Customers are value maximizers. They form an expectation of value and act on it. Buyers will buy from the firm that they perceive to offer the highest customerdelivered value, defined as the difference between total customer benefits and total customer cost. 2. A buyer’s satisfaction is a function of the product’s perceived performance and the buyer’s expectations. Recognizing that high satisfaction leads to high customer loyalty, companies must ensure that they meet and exceed customer expectations. 3. Losing profitable customers can dramatically affect a firm’s profits. The cost of attracting a new customer is estimated to be five times the cost of keeping a current customer happy. The key to retaining customers is relationship marketing. 4. Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Marketers play a key role in achieving high levels of total quality so that firms remain solvent and profitable. 5. Marketing managers must calculate customer lifetime values of their customer base to understand their profit implications. They must also determine ways to increase the value of the customer base. 6. Companies are also becoming skilled in customer relationship management (CRM), which focuses on developing programs to attract and retain the right customers and meeting the individual needs of those valued customers....
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...Nordstrom was founded in 1901 and became a leading specialty retailer of apparel, shoes and accessories. It went public in 1971 and has always been run by the members of the Nordstrom family who still own about half of the company. Superior customer service was Nordstrom’s strongest competitive advantage, which resulted in its financial success and as a result it had sales approaching $3 billion by the end of 1989. Throughout the 1980’s, Nordstrom’s salespeople were the envy of the industry in terms of their quality and productivity. Nordstrom grew from 5,000 employees in 1980 to 30,000 in 1989. The sales clerks exceptional customer service efforts helped build the stores alluring image, and thus had a very strong customer loyalty and a lofty sales per square foot. In an effort to support its high service strategy, and motivate salespeople by providing them opportunities for independence, recognition, responsibility and competitiveness, Nordstrom introduced a innovative commission system. The top management combined the incentive compensation system, which was driven by sales per hour (SPH), along with other policies to motivate and measure the performance of its sales staff. The SPH ratio was a critical policy at Nordstrom, based on this policy Nordstrom carefully evaluated salespeople. If the actual SPH is higher than the target SPH, the employee was paid a 7.75% to 10% commission on the net sales, depending on the department. Failure to meet target SHP often results in...
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...[pic] Guidelines on Generic Assessment Criteria Foundation Degree Undergraduate Postgraduate Generic Assessment Criteria – Foundation Degree QAB/07-08/5/5.5 These should be interpreted according to the level at which you are working and related to the assessment criteria for the module | |Categories | | |Grade |Relevance | | |76-85% |The work examined is outstanding and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the | | | |learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level it is expected that the work will be outstanding in the majority of the categories cited above or by | | | |demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse. | | |...
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...Nordstrom Case Analysis The main issue identified by the case study is the harsh treatment of the employees by the management at Nordstrom. This included the usage of unfair SPH (sells per hour) metric and “off the clock” work encouragement to keep that metric high. The case provides polar view points among the employees - Pati, Lori & Cindy (-ve) vs. Bob, Doris and Tim (+ve). This polar view points to the difference in deriving motivation from the same situation. Lets take a look at the view points and see how different theories of motivation could have been applied to solve the dissension that employees felt. In analyzing the root of the problem we need to acknowledge that the concept of evaluating performance of sales personnel on the basis of SPH isn’t inherently evil. As a matter of fact, SPH metric implementation at Nordstrom had proven effective since its introduction, its high profit margins and customer satisfaction ratings speaks to that. As stated by Tim Snow in the study, it was a matter of pride to be working for a company where people loved to shop. But the SPH metric shouldn’t have been the only metric. Other KPI’s such as punctuality and customer satisfaction (CSAT’s) should also be weighted into the equation as performance standards. The lack of distinction between “sell” and “non-sell” hours also proved to be an issue. The employees “off the clock” hours were routinely treated as “sales” hours, thus effectively reducing their SPH ratio. This practice...
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...MGMT E-4000: Organizational Behavior WK 5: Case Analysis Anirudh Udayashankar Nordstrom “An unerring eye for what's next in fashion. A relentless drive to exceed expectations. For more than 100 years, Nordstrom has worked to deliver the best possible shopping experience, helping customers possess style - not just buy fashion. Nordstrom, Inc. is a leading fashion specialty retailer offering compelling clothing, shoes and accessories for men, women and children. Since 1901, we've been committed to providing our customers with the best possible service - and to improving it every day” is the introduction that the Nordstrom website offers to the passing visitor. Nordstrom is an upscale fashion retailer, founded by John W. Nordstrom, a Swedish immigrant, and headquartered in Seattle, Washington. The company began as a shoe retailer, and has since expanded their inventory to include clothing, accessories, handbags, jewellery, cosmetics etc. The company was family owned for over nine decades, and went public just before the turn of the century. Nordstrom has been in the public eye (as in the case) for their high service quotient, and it is often listed as one of the best places to shop in. This is made possible by the simple rules that all employees follow as opposed toeing a bulky customer service manual. The employees are referred to as Nordies, and they go to great lengths to keep their customers happy – walking the extra mile to ensure that all their requirements are met...
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...For the exclusive use of Z. YUAN Harvard Business School 9-191-002 Rev. October 15, 1999 Nordstrom: Dissension in the Ranks? (A) The first time Nordstrom sales clerk Lori Lucas came to one of the many “mandatory” Saturday morning department meetings and saw the sign—”Do Not Punch the Clock”—she assumed the managers were telling the truth when they said the clock was temporarily out of order. But as weeks went by, she discovered that on subsequent Saturdays the clock was always “broken” or the time cards were not accessible. When she and several colleagues hand-wrote the hours on their time cards, they discovered that their manager whited-out the hours and accused them of not being “team players.” Commenting on the variety of tasks that implicitly had to be performed after hours, Ms. Lucas said, “You couldn’t complain, because then your manager would schedule you for the bad hours, your sales per hour would fall, and next thing you know, you’re out the door.”1 Patty Bemis, who joined Nordstrom as a sales clerk in 1981 and quit eight years later, told a similar story: Nordstrom recruiters came to me. I was working at The Broadway as Estee Lauder’s counter manager and they said they had heard I had wonderful sales figures. We’d all heard Nordstrom was the place to work. They told me how I would double my wages. They painted a great picture and I fell right into it. . . The managers were these little tin gods, always grilling you about your sales. . . . You felt like your job...
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...Intro: Nordstrom, one of the nation’s top specialty retailers of clothing and accessories, was historically known for its superior, best-in-class customer service. The Nordstrom sales clerks, or “Nordies”, were famous for routinely going above and beyond what was considered common industry practice to ensure that customers received the best shopping experience imaginable. On the surface, this key competitive advantage was what set Nordstrom apart from other department store chains. But upon digging deeper into the incentive commission system that was in place, coupled with unclear guidance for mid-level managers on how to manage their sales teams, it soon became apparent that Nordstrom unintentionally created a hostile work environment that contributed to a huge drop in employee morale and led to a publically humiliating and costly class action lawsuit filed by the local union in Washington. This paper will attempt to explain the intended benefits and unintended consequences of Nordstorm’s incentive compensation system, how it motivated or demotivated its employees to behave in certain ways, and provide two possible solutions that could help foster a higher level of intrinsic motivation while retaining the spirit of the company’s key competitive advantage: its superior customer service. 3rd question (Unintended consequences of compensation system): The way in which the compensation system was structured by the sales-per-hour (SPH) ratio measurement, coupled with a lack...
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...only differ in their application part. This research paper will emphasize on the optimistic marketing especially eliminating the use of word “NO” in business and its implications, with some examples from case studies in order to strengthen my argument. The research methodology adopted is observational research. Marketing is all about keeping all your senses open and then ‘sense and satisfy’ the needs of customers. So the examples explained in the research paper is based on the common observations done across some industries and finding out how ignorance has led to the use of negativity in the business and how the use of optimistic marketing can help change the situation. Some supporting examples from successful companies like Disneyland, Nordstorm and Lacoste is also discussed. These case studies and other facts presented in the paper obtained through the observational research throws light on, how creating a positive atmosphere in your business can create wonders. One of the simplest example is of any restaurant you have visited, it carries a signage saying “Outside eatables are NOT allowed” either on their wall or if it is a sophisticated one then in he menu card. Now hardly anybody would have questioned or deeply thought of this signage and it had became a practice to have it written inside your...
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...1.)(a) Nonstore retailing- it is alternatives such as online retailing are growing as a convenient way for two income households to shop. Television home shopping, direct mail, and catalogs also provide convenient retailing alternatives to these households. (b) The retailing mix- retailers will have to adjust their mix in terms of store hour and locations. Working couples may need to shop at less traditional times and in locations convenient form their work location. Also, credit cards and online ordering may become more important because of the time pressure on these types of households. 2.) Maintained markup differs from original markup in an important way. Maintained markup is the final selling price less retailer’s cost. Original markup refers to the difference between the retailer cost and the initial selling price. Initial markup is what the retailer hopes to get for the product; maintained markup is what the retailer can actually sell an item for to consumers. It must cover costs for a retailer to show a profit. 3.) The retail and product life cycles are similar in that they consist of four stages over which market share and profit (from sales) are matched. In the first stage of each life cycle, new retail forms or products enter the market. Competition emerges in the second stage, and by the maturity stage, the major fighting between competitors has occurred. In decline stage, both curves show falls in market share and profit). Differences relate to nomenclature. The...
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...area. Local Preferences/Communication As a communication strategy, Mavi relized the need to address its customers personally in order to increase its market share. Mavi introduced its model with human names such as Molly, Maggie, Kate, Max, Matt, and Kevin, instead of using numbers as their competitors did. Their market position expending through innovation such as ‘’Mavi Organic” and special collection such as ``Rifat Ozbek for Mavi” and their special and their special product group as the ‘’Istanbul” t-shirt. Pricing Strategy Due to its expensive pricing strategy, Mavi grew its customer`s trust in the long run and found its place in well-known department stores in the U. S. such as Macy`s, Bloomingdale`s, Urban Outfitters, and Nordstorm...
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...| Canadian Apparel Federation | Exploratory Research Assignment | Owner June 2, 2012 | Introduction The Canadian Apparel Federation is facing numerous challenges as the apparel industry is very competitive and consumer tastes and preferences are constantly changing. Our study will present some of the major trends developing in the apparel industry and what companies can do to capitalize on the market and distinguish themselves from the competitors. Research Objectives The purpose of study is to identify what a company must do to separate themselves from their competition and how to best retain and attract customers. We will examine what actions are required by companies to become successful in the market. We will compare what qualities and traits successful companies possessed which provided them with a competitive advantage in the marketplace and kept their customers satisfied. We will compare three companies; Lululemon, American Apparel, and Roots Canada and report on what separates them from their competition and mistakes they have made in the past. Research Method Our research consisted primarily of exploratory research which will focus on the industry’s background to help us determine key industry trends, customer preferences and keys for success. We will collect background information from articles, industry data, companies internal data, competitors data and consumers opinions which will be gathered from online social media. Secondary data will...
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...Introduction Nowadays, children’s clothing profession’s development is becoming much more powerful than before. In 1990, this kind of profession could not satisfy customers’ demands. Due to the lack of fashionable children’s clothing, Pumpkin Patch was found by Sally Synnott, who was the head children’s wear buyer in New Zealand. Although Pumpkin Patch was handled by other investors after two years, the brand expanded to a broader influence. Today Pumpkin Patch has its own market in several countries, such as New Zealand, Australia, the United Kingdom and United States. It is not easy for Pumpkin Patch to operate well in such areas, but the company still decides to look for new territories. So it should fully understand its position and create fitting strategic plans. Analysing the external environment The general environment Demographic----high Speaking of the clothing products, population immediate influences customers’ real and potential demands to the brand. In fact, demands always far exceed supply and products are sold out very early in such countries, especially in New Zealand. It can be noticed that the population between newborn and 14-year old are the major customers of its market. Economic----high In terms of each area’s economic, the consumption level should be mentioned. Taking the United States as an example, the whole cloth market earned US$172.8 billion in 2004 which occupied 22 percent of the total sale of global apparel. Because of the growth...
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...Introduction Nowadays, children’s clothing profession’s development is becoming much more powerful than before. In 1990, this kind of profession could not satisfy customers’ demands. Due to the lack of fashionable children’s clothing, Pumpkin Patch was found by Sally Synnott, who was the head children’s wear buyer in New Zealand. Although Pumpkin Patch was handled by other investors after two years, the brand expanded to a broader influence. Today Pumpkin Patch has its own market in several countries, such as New Zealand, Australia, the United Kingdom and United States. It is not easy for Pumpkin Patch to operate well in such areas, but the company still decides to look for new territories. So it should fully understand its position and create fitting strategic plans. Analysing the external environment The general environment Demographic----high Speaking of the clothing products, population immediate influences customers’ real and potential demands to the brand. In fact, demands always far exceed supply and products are sold out very early in such countries, especially in New Zealand. It can be noticed that the population between newborn and 14-year old are the major customers of its market. Economic----high In terms of each area’s economic, the consumption level should be mentioned. Taking the United States as an example, the whole cloth market earned US$172.8 billion in 2004 which occupied 22 percent of the total sale of global apparel. Because of the growth of each...
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...Critical Factors The major players in this case are George, Paul, and the company management. The case reveals three critical issues, two of them are organizational issues and the third one is related to human character and integrity. The critical issues are as follows: a) the company had lack of quality control system, b) the company had lack of inventory control and management system, and c) Paul showed unethical behavior and influenced George to follow the same. Detailed analyses of each of the critical issues are discussed below with appropriate references. Quality Control The company did not seem to have an effective quality control system in place. The night shift employees were asked to complete the job without putting any emphasis on the quality of the product. The management was happy as long as the assigned job was completed within the period of night shift. The company provided no training to the employees (as evidenced by the instant hiring and putting George at work immediately with no training) on how to establish, monitor, and assure the quality of the product that they produced. The night-shift employees had no idea about the harmful effects of the polluted product on the consumers and the possible consequences the company would have to face for it. Not to mention that if the consumers get sick due to their poor milk product, the company could be sued and might even go bankrupt. The night shift employees could not see the big picture and were...
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