Price Factors in Retail Business

When the products offered to consumers are similar to those offered by your business competitors, and no differentiation is offered by you to the consumer, then the price is a factor to win the competition.

Strategy of using price as a competitive tool is usually done by a retailer who is already very big and very well established. As for small-scale retailers this strategy is less well to wear. This strategy requires a large capital that enables retailers plays with a lower margin for the product they have.

When a competitor sells a product at a price equal to the product you have, then you will be losing consumer. Especially if you have a store that does not have the uniqueness. So this is time to start the price war between your store with your competitors store.

If a retail store has a strong capital and act as a market leader, easiest and usually does is lower the profit margin on product sales they have. The principle is to retain existing customers, although now profit margins is reduced.

While for competitors who does not have big capital, then the thing he does is by the aggressive promotion, whether about the price and the store brands. The principle is to grab as many customers from market leader.

Actually doing the price war is something less good. Why? Because it would ruin the market itself. Competition becomes unhealthy because margins are obtained becomes less and less, and it usually causes hostility among the perpetrators.

In order for this price war does not undermine the existing market, then you should sit down with business people to determine agreement on the minimum margin. Competition changed into something healthier and more intelligent, by competing through quality of service. Business people are competing for each other achieve and maintain customer loyalty. Anyone who can maintain a loyal customer and achieve as much as possible so they can survive.

That is why "every business is a service business", because the service will create customer loyalty, and customer loyalty will make your store survive.

Using Your House Backyard for Starting Business

Everyone says that business need big capital to start a. Well, for me it a bit wrong. Because thinking about the need of big capital for business is the perception that we will do large-scale business. When in fact it does not have to do large scale business. Better business starts from a small scale. Why? For business directly on a large scale is relatively risky, especially if as a beginner. We do not yet have enough knowledge to do business, then directly invest in large scale it might succeed would be very small. And if it fails, obviously we will feel the stress.

To start a business we should learn from the small scale and certainly with a small capital. Gradually, our ability to do business will be honed, and eventually the business will lead to a larger scale.

You can start small business from your home backyard. Suppose if you are interested in the fish world, then the backyard of your house can be used to make a fish rearing ponds. What about the capital required? No need to spend a lot of money. Enough to hire one or two people to make pond, buy a few hundred fish, and a sack of fish feed. Work diligently, observe every action performed, and wait a few months later to harvest the results, and you will be surprised that you get money from the sale of your fish. And you have started doing business.

Thought about business requires a lot of capital must be changed, because it is thought when we normally think and pay attention to entrepreneurs who have been successful. They have a lot of money, national and international companies. What should be considered is the beginning when they start doing business. And you will be surprised that almost all successful entrepreneurs started the business with little capital, even though no capital. There are businesses starts from garage house, rented house, or a small kiosk on the roadside. With perseverance and confidence, they managed to become successful entrepreneurs. Then why can not we? Sure you can. And it can be initiated by utilizing your home backyard.

Critical Factors In Store Retail Sales

Retail store business was going to die or grow depends on several factors. These factors are:

1. Inventory

Inventory in your store is the main reason customers come to visit your store. Inventory is the product or merchandise contained in the store. Availability is closely related to the velocity of money earned by a store. If the inventory on hand is less than consumer demand, then the store will have a sales loss, which where the store lost sales due to stock unavailability. On the other hand, if the store has a lot of inventory compared to the demand of consumer, the goods can not be quickly converted into cash because there is no sale. As a result, the store will incur a loss because of buying the unsold goods. Ideal conditions for an inventory is "just enough", which is products meet all consumer demand.

In the language of retail stores, inventory is divided in several terms, namely:

a. Dead stock: Which is products that never sold and hidden for so long on display or in storage so it can not be converted into money.

b. Slow moving: the products sold is less . In other words this product is still sought but not many. Conversion of this product into cash is very slow. such example in the Blu-ray movie retail stores, which are slow-moving products is a movie collection.

c. Fast moving: it is very salable product. This product is the most quickly converted into cash. The products of this are also called best-selling products, most store earning money is from the sale of this product. such example in the movie retail stores, which are fast moving products is the New Release movies or Box Office.

2. Price

When your store are not sell unique items, meaning that lot of other stores that sell the same goods, then the price becomes the dominant factor in influencing sales. In such cases, the goods must be sold cheaper than the competitor's price in a store, of course, with consideration of profitability.

3. Variety of goods sold (assortments)

Ability in answering the needs of consumers represented by the full assortments are available in stores. The ideal assortments where store visited by many consumers is :

a. complete.
The point is that your store is able to meet all the needs of customers who shop at your stores. If you are selling Blu-ray movies instance, it is said complete assortments if your store can provide all the movies that consumers want.

b. Up to date.
The point is to always keep abreast of current trends. If your store is a store that sells the movie, then your store says up to date if latest film is always available at your store.

4. Customer Service

The next critical factor in sales is customer service. Customer service is not merely friendliness, or alertness clerk in serving customers. Customer service even further is to make how customer be comfortable when they shop in stores and are willing to come back again at a later time. This is the most important factor, because it is not only determines the sales, but also determine the image of your store. Why? Because every business is a "service" business and the best customer service is "service beyond service excellence".

The Importance of Measuring Customer Satisfaction

How many customers can we satisfy? Is the level of customer satisfaction rise or fall? Whether our customer satisfaction is higher than competitors' customer satisfaction? What is the target of customer satisfaction in the future? Without measuring customer satisfaction levels, it is impossible to the four questions above can be answered. Therefore, a business that believes that customer satisfaction is important, it must make customer satisfaction measurement program periodically. The main result of this satisfaction measurement is resulting a customer satisfaction index that can provide answers to that four questions.

Talk about the index, which we often see is a very complicated series of formulas. Actually, this is not always the case. Develop a customer satisfaction index, can use the simplest method through very complicated.
The simple method to construct an index is to use direct measurement based on the answers to the question of customer satisfaction. In this case, to produce the index, it is not necessary to use complicated formulas or advanced statistical analysis. The number of questions can be only one question like "how is your overall satisfaction of product X or service Y or company Z".

It also can be use more than one question. For example, asked satisfaction with the product, ask the value or price is given by the company. After that, the results are then averaged with respect to the weight of each customer satisfaction question.

Scale used to generate customer service satisfaction index usually is 4, 5,6,7 or scale 10. The first criteria of a good scale is sensitivity. Therefore, the scale of less than 4 is rarely used because it is less sensitive or less able to differentiate levels of customer satisfaction. For example, the use of the binomial scale where respondents gave an answer that is "satisfied" or "not satisfied", felt less subtle in distinguishing between respondents who somewhat satisfied, satisfied and very satisfied.

The second criteria is the level of reliability. In this regard, many studies show that the scale of 5 and 7, often have a fairly high level of reliability. With a scale of 5, then customer satisfaction is divided into 5 groups of respondents are very dissatisfied, dissatisfied, neutral, satisfied and very satisfied. Not surprisingly, the scale of 5 and 7, is a favorite relative scale in the measurement of customer satisfaction.

Scale 4 and 6, are usually preferred for customer satisfaction researchers who use the "mailing" as a way to collect data. With this scale, there is no score value of the middle or neutral point. This is intended to avoid the tendency of respondents to the origin of the content and selecting the middle score of the scale used.

Several models of customer satisfaction measurement using a scale of 1-10. With this scale, not given a name to each scale, but both ends are the only score of 1 is very dissatisfied and 10 is very satisfied. The advantages of this scale is a high level of sensitivity. The disadvantage, of respondents especially the level of education is not high, will have difficulty in choosing and often require a longer time scale than the other.

Then how the index is generated? When a scale of 1-5 is used, researchers can generate an index in the form of the mean or average. Use the index with the average value of this simple but less communicative in practice. How entrepreneurs can give an interpretation that the level of satisfaction of the company is 3.6 of a scale of 1-5? What does it mean? Employees will be very difficult to understand. In fact, one way to make this index value is to communicate to all employees so they know their company's position in terms of customer satisfaction levels.

Therefore, the index is often used in the form of top two boxes index is the number of respondents who gave answers satisfied or very satisfied. So, when the index top two boxes stating the 80% it can be interpreted that the number of satisfied customers is as much as 80% and that has not been satisfied is 20%. Such an index more easily communicated. When the scale used is 1-7, refractive index of top three boxes used is the sum of the number of respondents who answered the score of 4, 5 and 6.

In this highly competitive situation, business owners are often interested in seeing the number of respondents who only really satisfied or delighted customers. Why? Because this consumer group was truly loyal. They are who only satisfied, the level of loyalty was only moderate.

Every Business Is A "Service" Business

If you have a store, say cell phones store , blu-ray store, computer store, or any store, or any other business, then in fact you are not selling a product that is available in your store. Your product is only the output of the production only, whereas that determines your income is service, benefits, and advantages provided your store to the consumers.

Do not believe it? Ok, let's look at an example the following case.

In a shopping center, there are two film store side by side, namely Store A and Store B. Both stores are sell and has a collection of the same product, which is DVD movies and the latest Blu-ray. The difference is that if in Store A the storekeepers are provide just a common service, while Store B provide “service beyond the service excellent”. And what happened? Apparently a lot of visitors who come to shop B rather than Store A, and of course the Store B sales is greater than Store A. Why? Because the service performed by the Store B make the visitors feel comfortable to linger and shop at this store. Then eventually they become loyal customers, and customer loyalty is giving high income for the store.

All of that is due to service. Service was the one which determines the sales turnover and the age of your store, not a product that you sell. However the full collection of items in your store, you will be vulnerable to attack by competitors if you do not have a great service to your customers.

This service and this applies not just for business alone. Institutions, organizations, public service, even though the school will be influenced by the service provided. If they can provide satisfaction and comfort to its customers, then the power of word of mouth will make the institution, organization, or school more familiar. Many people want to use their services. But if the service is bad, then the institution, organization or school would be abandoned, and eventually disbanded. Just like a store A that went bankrupt and closed because of competition from Shop B in terms of service.

So whatever you are selling, or even whatever your field of business, know that the service determine the life and death of your business, because essentially all business is "service" business.

“Service Beyond Service Excellent”

In business, you may heard about service, but you probably just heard about the "Service Beyond Excellent Service". In a retail business, this is actually very familiar and may have become a necessity in order to increase sales, even though the name may vary. In theory it may be difficult to explain, but let us refer to the following examples so you understand more about the service beyond the service excellent.

Ok, if you've been visit to a diner or fast food restaurants, have you ever asked or even brusquely ignored by his servant? Yes of course you have, and this is a bad service.

Then if you come to the other diner, then your arrival was greeted with a smile and the servant asks "Good afternoon, please come in, what would you eat?" And you answered: "I want a hamburger." And the servant replied: "Well, one hamburger come soon."Then five minutes later a hamburger is coming. Well, that's called a good service. Sales just simply end there. One hamburger only.

On the next day you come to another diner. Just like in the previous diner, the waiter greeted with a smile: "Good afternoon, please come in. What would you like to have? "And you answered:" I want a hamburger." Then the waiter replied, but this time a bit differently:"Well, one hamburger come soon. What would you like to drink, coffee or soda? "Then with a slight frown you say:"Yes, let me have a cola." Well, actually you only need one hamburger, and you do not need drink a cola because you've taken a drink from the house. But because the waiter asked, giving a choice, then you may be a bit forced to buy one of these options. You feel shame if you answered "I do not need a drink."For this particular case, the sale is not only limited to a single hamburger, but coupled with one glass of cola that actually you do not intend to buy before. Customers ego is involve here. This called excellent service.

Then on the other day you try to visit another diner. You and servants makes dialog such as the following :

The waiter (with a smile): "Good afternoon, welcome to the diner X. What would you like to eat ?"

You: "I want a hamburger."

Waiter: "Good. One hamburger come soon. What would you like to drink, coffee or cola?"

You: "I want a glass of cola."

Waiter: "One hamburger plus one glass of cola."

A few moments later the waitress returned to ask: "Excuse me sir, this afternoon we had apple pie that had just lifted from the pan. Maybe you want to try it ?"

Then you thought for a moment, and then said: "Well ok, I want to try the apple pie."

Finally the waiter closed the conversation: "Good. One hamburger, one glass of cola plus one apple pie are coming soon. Thank you."

Try to note the waiter dialogue. Actually you only intend to buy a hamburger only, but the waiter trying to offer another product to you, and you end up buying 3 types of products, which is hamburger, cola and apple pie. Well, the sales of the store increases as the servant ingenuity in making a sale.

Sales increased through a variety of ways and take advantage of all opportunities. And from the forth diner example above, the waiter took advantage of opportunities to increase the sales. Was quite up there? Not yet! In the fourth stall you feel you have served well, and felt that the diner is as if they know exactly your needs. That diner has been pampering you. The next day you return to this diner, as well as the following days. In other words you have become a loyal customer to this diner. And this is what is called the service beyond excellent service.

So in essence, the service beyond excellent service is a service that exceeds expectations of people served. In the service beyond excellent, your business is "buying" the heart of your customers so they become loyal customers. If you already have loyal customers, then you do not need hard to find sales income, and no need to bother or fear of competition with the competitors, because your brand are already embedded in the hearts of your loyal customers. With service beyond service excellence, it is difficult for loyal customers to migrate shopping to your competitors, because they already feel comfortable with your store.

Have a Dream In Developing Your Business

Do you believe that successful people started the success from a dream? Yes, you should believe it! So many evidence proves that a person's success starts from a dream. Wright Brothers dreamed that man could fly, and today we know airplane. Alexander Graham Bell had a dream that people can speak from a distance, it creates a phone. Mark Zuckerberg had a dream that all people around the world to greet each other and become friends, then comes up Facebook that is now being a global business network. All of it starts from a dream!

So if you intend to succeed, then have a dream. Make dreams as high as possible. There are people who argue that “Don't dream too high because if it is not achieved then you will be stressed and crazy." Believe me, that is incorrect! Because people are stressed and crazy is because they are desperate, disillusioned at the state and give up on the go. But if you work hard, persevere, and never give up, you will not be stressful. Quite the opposite the success will come to you.

If you notice, a dream creates the motivation for you. Since you have a dream then you will have a purpose. You will exert every effort to achieve that goal. Failure need not to be sad, failure is a valuable lesson for the more achieving in business and fix errors. Thomas Alfa Edison needs many times of failure to produce a perfect lamp.

Similarly in business, you should have dream to be a world-class entrepreneur. You can be the people like Bill Gates, Steve Jobs, Rupert Murdoch, or other great people. That's fine, having a spirit like that then you will be more motivated in developing your business. Even if till the end you do not being like those successful people, at least you'll have the satisfaction in work, and satisfaction will be paid that you do not think. It's not as much of their remarkable success, but this is much better if you do not have a dream and not motivated.

Therefore, have a dreams for your success, and never laugh at someone else's dream.

Leading By Example

You must have grumbled when ordered by your leader. In your heart says "This person usually always ask, can not be done alone !" Well, have not you? Admit it! Actually it is a natural thing from a subordinate who feels employed and ruled continuously. He was irritated, bored, and tired as if he think that the leader is only ask without the slightest to do technical work. And when there is a subordinate think like that, then in fact the possibility of leader is that he actually did not get anything, so to cover his weakness, he used the power he has to always ask his men. And this is a very poor leadership.

Actually there is one way that can make subordinates do not think like that, even so subordinate do more hard-working and loyal to the leader. The way is called leading by example. Many things are included in leading by example, that when a leader into the field to work together, showing good attitude and example to his men, comply with regulations issued by an institution or organization, etc..

In principle, leading by example is a way to spread the influence of a leader to his subordinates. And the way is to show the ability and expertise to his subordinates. From the performance capability of this, the leader expects a credibility and charisma in front of his men.

Is this called arrogant? Not really, because in a situation where a leader must be able to control others, then they need charisma. And leading by example is one way to obtain such charisma.

Leading by example also shows that the leader is indeed capable of doing a job. So when he ordered the others, then he is not regarded as someone who can ask only , and not yet tested the ability of the field.

Leading by example is an effective and easy way to gain sympathy and loyalty of subordinates. Of course they will be loyal because they feel confident that their leaders have the technical ability better than them. And they will be sympathetic because they were convinced that their leaders appreciate and respect them.

Called the easy way because it does not require specific expertise. It takes just a willingness to plunge into the field at every opportunity. And when the opportunity came, then the leaders will demonstrate his abilities in public. And sooner or later, he would obtain a positive credibility and charisma. Leading by example could contribute in making a good team work.

4 Elements That Can Be Used Leader To Influence Others

Hersey said that leadership is an attempt to influence another individual or group. A leader must integrate four elements had to be able to influence the behavior of others. The four elements are: the power of self, Authority owned , personality traits and social skills.

Power of Self

This means that the strengths of all forms of the advantages possessed by a leader personally. For example good at communicating, thorough, agile, expert in a technical field, and so on. The power itself is very supportive in the smooth him to lead his subordinates. Strengths possessed by a leader is supposed to be shown to any subordinate, and intended to enhance the credibility of him as a leader in the eyes of his men. In addition, the strengths are shown to help smooth and speed the work of an organization he leads.

Authority Owned

It's automatic, every leader must have certain powers that are not owned by his men. Examples for sure is the authority in decision making, and give orders. Every leader has the right and may even be in a certain condition required to take a decision or action of a thing in his organization. This authority will have to be harnessed and used as appropriate. In the case to influence others, the authority will sometimes be used for things that are forced to subordinates. Examples of just such an employee that feel reluctant to do a job, then to make the job is done, the leader uses his authority to command that employee to do its job. And this is coercive, which sometimes men not voluntarily and wholeheartedly for doing the work that was ordered.

Personality traits

Personality trait of them are arrogant, patient, grumpy, thorough, and so on. These personality traits can influence not only others, but also affects the soul of the organization he leads. And indeed the personality of an organization is a reflection of the personality of its leader. Therefore, if an organization changes leaders, then it is usually also changes the character of the organization.

Social Skills

Leaders who are good along with the people and his men would be more easy in finishing a job in the organization compared to a leader who more quiet or keeping distance with others. Why? Due to the versatility the leader indirectly opened himself and introduced his personal character to be accepted by others. And when they already knew him, the wily leader will issue his mind ideas to influence others. Not to bad influences of course, but it is the influence that can facilitate him in completing his work.

That's four things that can be used by a leader to influence others. No best of them, all have their advantages and disadvantages of each. But the ideal is when a leader can use the four points in influencing others, and all this is true both for business or non business organizations. So, what is more fit you are using to influence others? One of them, all, or a combination of these?