HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS Essays

HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS Essays HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS Essay HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS Essay RESEARCH PROPOSAL FORMName:RICHARD BRYERNerve pathway:ACCESS TO NursingProposed Undertaking Subject:DISPLAY SPACE FOR PRODUCTSProposed Undertaking Thesis:HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS ITS SALESCoach:Dr Hazel Mitford Area of involvement and possible attackI can non read the authorship that is in this box on the sheet that was sent to me as portion of further information to follow Reason for pickI can non read the authorship that is in this box on the sheet that was sent to me as portion of further information to follow Anticipated jobs / disadvantagesIn any nutrient shop there are 1,000s of merchandises. Clearly given the restraint on clip to finish the undertaking, the primary research procedure will merely be to cover with 3 merchandises. Besides the figure of clients that will be asked to take portion in the study will be restricted to 150. Tutor Remark: HOW THE DISPLAY SPACE OF A FOOD PRODUCT AFFECTS ITS SALESRICHARD BRYERFRIDAY 12ThursdayMAY 2006Nursing Nerve pathwayAbstractionGrocery retailing is dominated by four major operators, which are invariably engaged in selling, advertisement and gross revenues publicity activities to increase gross revenues and hike profitableness. A major restraint on the gross revenues of any nutrient point is the sum of show infinite that is allocated to it. This undertaking investigates the relationship between show infinite and gross revenues. It begins by researching the factors which have an influence on people on make up ones minding where they are traveling to purchase their nutrient. The undertaking draws decisions from the secondary and primary informations that has been collected and makes recommendations on how grocery retail merchants can maximize the gross revenues and net income potency of the show infinite in their shops.RecognitionsI would wish to thank my coach and the directors and st aff of my local Asda shop for assisting me to construction this undertaking and garner the primary informations that was necessary to ease the declared aim of the research.Contentss1. INTRODUCTIONPage 42. SECONDARY RESEARCH – WHAT DO PEOLE WANT FROM THEIR GROCERY STORE? Page 53. PRIMARY RESEARCH – DOES INCREASING THE AMOUNT OF DISPLAY SPACE INCREASE SALES OF GROCERY ITEMS? Page 94. CONCLUSIONS AND RECOMMEDNSATIONSPage 13REFERENCESPage 151.IntroductionIn nutrient retailing the major restraint on how much gross revenues and net income any given shop can bring forth is the sum of show infinite that is available. Food retailing is really competitory on monetary value footings and the gross net income borders that are available on most grocery points is really little compared to other signifiers of retailing ( i.e. furniture, electrical, apparels etc ) . Therefore, in order to do optimal usage of the available show, nutrient retail merchants must offer a scope of merchandis es and services that satisfies the demands of its clients, and which maximises the gross revenues and net income potency of each shop. The Objective Of The Undertaking The aim of this undertaking is to find whether there is a causal relationship between the hebdomadal gross revenues degree of a food market point and the sum of show infinite that is allocated to it.For illustration, if there were 5 facings of point X and 1,000 units were sold each, would the gross revenues of Ten addition to 1,200, if the figure of facings were increased to 6? However, with each food market point, there will be an upper bound to the maximal figure that can be sold within one hebdomad. Therefore, merely increasing the figure of facings for X will at some point generate diminishing returns.For illustration, the maximal hebdomadal gross revenues for Ten could be 1,400. Therefore, increasing the figure of facings of X to 10 would non bring forth gross revenues of 2,000 units. The other of import factor of class, is that if you increase the figure of facings for X, so you must by default cut down the show for some other grocery point.Besides it needs to be recognised tha t at that place many grounds ( e.g. convenient location, opening times, quality of client service etc ) why people decide to shop at a peculiar shop. Obviously if possible clients are non enticed into your shop in the first topographic point, so it does non count of how facings of point X are on show, as these people will be shopping elsewhere. The Structure and Content of the Undertaking It is of import to set up a robust research model, within which to carry on the probe, analyse the findings, draw decisions and do recommendations on how retail merchants should continue in the hereafter. Therefore, the undertaking is structured as follows: Secondary research – What do people want from their food market shop? Primary research – Does increasing the sum of show infinite addition gross revenues of food market points? Decisions Recommendations for future action SECONDARY RESEARCH – WHAT DO PEOPLE WANT FROM THEIR GROCERY STORE? What is Secondary Data? Secondary informations beginnings can come from within the administration, internal secondary informations, or from outside the administration i.e. external secondary informations. Secondary information may besides be called thebyproductstatistics, for illustration, the aggregation of the figure of unemployed is a byproduct of paying out benefits and entering the sum. There are many beginnings of secondary informations e.g.Monthly Digest of Statistics, Regional Trendsetc.There are two advantages of utilizing these informations beginnings: One, they provide the chance to develop our apprehension and cognition of the hypothesis we are look intoing. Two, frequently they are easy to entree and are cheaper to get so the aggregation of primary informations. Facilitating The Requirements Of This Undertaking To ease the demands of this undertaking – the undermentioned web site ( www.igd.com ) was accessed. The intent ofImmunoglobulin dis to animate people through cognition and leading. It is a cardinal research administration for the nutrient and food market industry. It provides a assortment of services – notably, which suited the demands of this undertaking, free fact sheets. When carry oning an probe, it is necessary to get down by garnering relevant background information.With respect to this undertaking, we need to understand what factors influence people when make up ones minding upon where they are traveling to purchase their food markets.Immunoglobulin dhold compiled a fact sheet, entitledValue versus Price –which, examines the issues involved. As stated earlier, the value a retail merchant offers is judged on more than merely monetary value. For illustration, convenience, client service, shop environment, freshness, safety, pick, easiness of usage and handi ness are recognised as adding value to the shopping experience and the merchandises shoppers buy.The graph below shows that the most of import three things shoppers want from retail merchants are: high quality merchandises ; lowest monetary value ; and high criterion of client service.Factors Affecting Customers’ Choice Of Food Outlet1 – High quality merchandises2 – Lowest monetary value3 – High criterion of client service4 – Lots of pick5 – Buy one – acquire one free6 – Nice shopping environment7 – Brands I know8 – Good auto parking installations9 – Guarantee that what I want will ever be available10 – Long gap hours11 – Extra services12 – Lots of invention13 – None of theseBeginning: IGD Consumer Research 2004The above information Tells us that there are 12 factors that have an influence on the retail mercantile establishment, nutrient shoppers decide to utilize. Factors 2 ( Lo west monetary value ) and 5 ( Buy one – acquire one free ) are concerned with monetary value. This means that monetary value has a major influence on pick of retail mercantile establishment. However, monetary value must be weighted within all of the other factors. That is, whilst low monetary values remain a top precedence, it does non needfully intend that consumers will continuously trade food market retail merchants in chase of the cheapest monetary values available.It is likely for the huge bulk of consumers that the weighting of the other 10 factors will be more of import than a little per centum addition in monetary values across a scope of goods. It is merely when the monetary value derived function between their current preferred retail merchant and a major rival becomes perceptibly bigger across a scope of points that an bing client will see exchanging to the challenger. Further research byImmunoglobulin dhas revealed that in recent old ages, monetary value has emerg ed as a cardinal competitory border for UK food market retail merchants.However, when inventing pricing schemes, food market retail merchants can non afford to disregard the weighting of the other 10 factors. Therefore two common pricing schemes have emerged – EDLP ( Every Day Low Pricing ) and Hi-Lo ( High background – low publicity ) . The research has shown that few retail merchants operate a individual pure pricing scheme, with most uniting EDLP and Hi-Lo to organize a intercrossed placement although by and large be givening towards one type.Shoppers’ PreferenceWhilst there was a general credence amongst shoppers that low monetary values and publicities offer nest eggs on their shopping, there was assorted sentiments amongst shoppers as to which was considered to offer them the greatest benefit. EDLP Promotions Beginning: IGD Consumer Research 2003These penchants can be farther divided, as shown below.Reasons for Preference of Low Prices or Promotions60 % Low Monetary values34 % Low monetary values and limited or no publicity because they shop to a budget15 % Low monetary values and limited or no publicity because publicities are non for people like me and / or I do non hold the infinite11 % Low monetary values and limited or no publicity because I think supermarkets with tonss of publicities charge more for other points40 % Promotions23 % Lots of different publicities because I like to stock up9 % Lots of different publicities because I think I save more money than I would with low monetary values8 % Lots of different publicities because it gives me a opportunity to seek new merchandisesBeginning: IGD Consumer Research 2003 Drumhead The findings from the secondary research may be summarised as follows: 12 factors influence customers’ pick of nutrient mercantile establishment High quality merchandises, lowest monetary value and high criterion of client service are the most of import factors act uponing customers’ pick of nutrient mercantile establishment Customers do non seek to wholly fulfill a individual factor in their pick of nutrient mercantile establishment – instead they will use a weighting to each of the factors This implies that trade name trueness is of import – i.e. a client will merely exchange to a rival when their current preferred retail merchant no longer satisfies their overall weighting of the factors Monetary value has become much more of import as a competitory factor in recent old ages – 2 cardinal pricing schemes have emerged – EDLP and Hi-Lo Retailers have tended to develop intercrossed pricing schemes to fulfill their selling and gross revenues aims and to keep their fight within the market Preferences among consumers for low monetary values or publicities can each be divided into 3 sub-categories PRIMARY RESEARCH – DOES INCREASING THE AMOUNT OF DISPLAY SPACE INCREASE SALES OF GROCERY ITEMS? What is Primary Data? Primary informations is the aggregation of information which is non available from secondary informations beginnings. There a figure of ways in which primary informations can be collected – personal interviews, telephone interviews, postal questionnaires, online questionnaires etc. Secondary informations beginnings should ever be consulted before transporting out primary research. This is because secondary beginnings can foreground the key factors which need to be considered when planing primary informations aggregation methods.As stated earlier, when carry oning an probe, background / secondary informations, informs the research procedure. The subdivision 2 drumhead high spots the importance of monetary value in finding customers’ pick of nutrient mercantile establishment. Therefore, it can be concluded that it is non merely the figure of facings that is dedicated to a peculiar food market point that affects its gross revenues. The monetary value of an point besides ha s a major impact on its demand. Charging lower monetary values will intend higher gross revenues but proportionally less net income.There are valid commercial grounds for well take downing monetary values and increasing gross revenues. Notably to accomplish an addition in market portion or to set up a bridgehead in a new market. However, to be sustainable in the longer term, lower monetary values must bring forth higher net incomes, through a significant addition in volume gross revenues. This can be achieved by a uniting the undermentioned factors – reduced monetary values, increased show infinite and extremely effectual selling. The Questionnaire To carry through the demands of the undertaking, the undermentioned questionnaire was complied.Question 1Which class best describes you?1. Low Monetary values1.1 Low monetary values and limited or no publicity because they shop to a budget1.2 Low monetary values and limited or no publicity because publicities are non for people like me and / or I do non hold the infinite1.3 Low monetary values and limited or no publicity because I think supermarkets with tonss of publicities charge more for other points2. Promotions2.1 Tonss of different publicities because I like to stock up2.2 Tonss of different publicities because I think I save more money than I would with low monetary values2.3 Tonss of different publicities because it gives me a opportunity to seek new merchandisesQuestion 2For each of the undermentioned merchandises, would you purchase more of the point if the figure of facings was addition from 4 to 8 and the monetary value remained the same?Galaxy Chocolate 150gYes / N oPek Chop Pork 170gYes / NoApple and Blackcurrant JuiceYes / NoQuestion 3For each of the undermentioned merchandises, would you purchase more of the point if the figure of facings remained at 4 but the monetary value was reduced by 20 % ?Galaxy Chocolate 150gYes / NoPek Chop Pork 170gYes / NoApple and Blackcurrant JuiceYes / NoQuestion 4For each of the undermentioned merchandises, would you purchase more of the point if the figure of facings increased from 4 to 8, the monetary value was reduced by 20 % , and extra promotional stuff was used to foreground the show?Galaxy Chocolate 150gYes / NoPek Chop Pork 170gYes / NoApple and Blackcurrant JuiceYes / No The Design and Purpose Of The Questionnaire The design of the questionnaire is linked to the findings in subdivision 2. The first inquiry trades with the classification of each respondent. The principle being that those respondents who place themselves in any of the undermentioned classs i.e. 2.1 to 2.3 – should be more tempted by promotional trades than any respondents in classs 1.1 to 1.3. The respondents are so presented with three different scenarios for three food market points to find whether they would increase their hebdomadal ingestion.The consequences of this questionnaire will assist the shop direction to do more informed determinations about the sum of show infinite to apportion to specific food market points. It will besides let them to measure the effectivity of in-store promotional runs in footings of increasing gross revenues and profitableness. Sampling Techniques In order to do effectual concern determinations sing their merchandises, services, monetary values etc, nutrient retail merchants need to roll up informations about consumers’ penchants, future purposes etc. Designation of the relevantpopulationis indispensable since informations aggregation is a dearly-won exercising. Since everyone in the UK needs to travel nutrient shopping the relevantpopulationcould be 40 million. If a nutrient retail merchant was merely concerned if the people who presently buy its merchandise and services, the relevantpopulationmight be 3 million. In either state of affairs, it is evidently impossible to include everyone in a study.When the relevant identified population is excessively big for a cost-efficient nose count to be conducted asampleof that population must be selected, and single responses generalised to stand for the facts about, or the positions, penchants etc of, the full population. Sampling processs can be divided into two wide classs â €“ those where persons are selected by some anteriorrandom methodprior to the aggregation phase, and those where the persons arenon-randomlyselected at the aggregation phase.To guarantee that the sample is representative of the population the most usual non-random sampling is the choice of aquota sample.In this instance assorted features of the population are noted, for illustration, the divisions on sex, age, income etc, and the sample aims to include similar proportions of people with these features. The study conducted byImmunoglobulin dwhich showed that 60 % of shoppers preferred low monetary values and 40 % , is an illustration of aquota sampleand can be considered to be representative of thepopulationi.e. UK nutrient shoppers. 3.5 The Results Of The Questionnaire Q1 No of respondents % of respondents Q2 No of respondents % of respondents 1.1 29 28 % a. Yes 11 11 % 1.2 13 13 % a. No 93 89 % 1.3 11 11 % B. Yes 2 2 % 2.1 23 22 % B. No 102 98 % 2.2 15 14 % c. Yes 3 3 % 2.3 13 13 % c. No 101 97 % Entire 104 100 % Q3 No of respondents % of respondents Q4 No of respondents % of respondents a. Yes 13 13 % a. Yes 30 29 % a. No 91 88 % a. No 74 71 % B. Yes 4 4 % B. Yes 18 17 % B. No 100 96 % B. No 96 92 % c. Yes 4 4 % c. Yes 13 13 % c. No 100 96 % c. No 91 88 % Due to clip restraints, random sampling was used to roll up the questionnaire consequences. Out of 143 people that were asked, 104 agreed to take portion in the study. The study consequences can non be considered to be representative of the population i.e. UK nutrient shoppers. In order to accomplish a representative sample – quota trying would hold been used. However, such an attack was merely excessively clip devouring for this undertaking.The farther restriction of the study is that the consequences to oppugn 1 bash non match to proportions of people in theImmunoglobulin dstudy that prefer low monetary values or publicities. The replies collected for inquiries for 2 to 4, have non been subdivided in conformity with the classification of shoppers in inquiry 1. It would hold been possible to accomplish this classification nevertheless, clip and resource restraints have limited the processing of the consequences.What Do The Results Tell Us?The consequences for the first food market point in the study, i.e. Galaxy cocoa, are much more positive than for the other two merchandises. For these points increasing the figure of facings and cut downing the monetary value do non actuate shoppers to purchase more of these merchandises. It is merely when the figure of facings are increased ; the monetary values are reduced and extra promotional is used, that there is any type of positive displacement by consumers to purchase more of these points.1 = Yes2 = NoAs the chart shows, for Galaxy Chocolate the response to inquiries 2 – 4 is much more positive than for the other two points. Increasing the figure of facings and cut downing the monetary value has a much more important impact on shoppers’ purchasing purposes, than for the other two points. When these two factors are combined with increased promotional stuff, 30 % of the respondents said that they would increase their hebdomadal purchase of this point as a consequence of this package . CONCLUSIONS AND RECOMMENDATIONS 4.1Decisions The information generated by the secondary and primary research indicates that there is a direct relationship between the sum of show infinite allocated to a nutrient merchandise and its degree of gross revenues. However, there is merely a important motion in shoppers’ purposes to purchase more of a nutrient point, when extra factors are added ( i.e. the monetary value is reduced by a significant sum and in-store promotional activity is increased ) . Then it merely works for certain nutrient points. UK consumers have grown in edification and are influenced by 12 factors, when it comes to choosing a nutrient retail merchant. Lower monetary values have become more of import but in themselves will non promote big Numberss of consumers to for good exchange nutrient retail merchants. 4.2RecommendationsAs stated in the debut, the major restraint on nutrient retail merchants is the sum of show infinite that can be allocated to each point in the scope of merchandises they offer to their clients. To maximize the gross revenues and net income potency of their show a nutrient retail merchant must see all of the factors listed below:Traffic flow: In order to get down doing alterations to the merchandise arrangement in a shop, retail merchants need to map out an overall program. To make this, retail merchants need to recognize the current traffic flow of the shop and develop a program to direct traffic flow so that clients will shop the full shop and with their attending focused where the retail merchant would wish it to be. By strategically puting demand / finish merchandises and impulse points throughout the inside of the shop, it is possible to equilibrate the traffic flow and increase the overall gross revenues by doing best usage of every square pes. Fixturing: This is the furniture that holds and displays the bulk of a store’s ware. The most successful fixture systems are installed to be flexible and offer retail merchants the chance to do major show reconfigurations with small or no investing. Retailers need to utilize the flexibleness of these fixtures on a frequent footing to add involvement and exhilaration to the shop. Artworks and Signage: These points communicate a store’s image. They can be used to educate clients about ware for sale, denote particular publicities or to direct traffic flow through the shop. Artworks and signage should show a unvarying degree of quality. Similar Product Selling Trading similar merchandises together can make a dramatic impact and educate the client to the deepness of merchandise a retail merchant is transporting within a given class. Cross-Mix Selling This involves exposing a assortment of apparently unrelated merchandises to make a comprehensive ocular narrative. This type of trading communicates breadth of merchandise and educates the client about ware they may be incognizant that the retail merchant is transporting. Planogram The arrangement of selling that is geting to the shop can be planned out on paper by utilizing a planogram. A planogram is a retailer’s design which visually communicates how ware and props fit onto a shop fixture. MentionsFact Sheet – Every Day Low Pricing versus Promotions –IGD, 10/09/2004 (www.igd.com/CIR.asp)Fact Sheet – Value versus Price– IGD, 10/09/2004 (www.igd.com/CIR.asp)Display and Merchandising Guide – (www.glmshows.com/press/DisplayHandbook)Retail Vision – Retail Management Consultants (www.retail-vision.co.uk)Quantitative Methods for Business Decisions –Jon Curwin and Roger Slater – 1991 ( Chapman A ; Hall )Page 1 of 15