Kotu Fashion Accessories Shop
Vietnam was positioned in 23rd among 30 countries for owning one of the most attractive retail markets globally.The total retail value for clothing and accessories sector in Vietnam was 7.% and held 72.
9% of share in 2009. From 2004 to 2009, there was a growth in the number of clothing and accessories retailers in Viet Name. As predicted in 2010, the number of goods and services would grow 18-19% in 2011.
Along with this growth, the rate of retailing goods in 2011 was quite slow compared to previous years due to a decrease in consumption and economic difficulties. However, retailing market like accessories and clothing markets still continued to be the most attractive market ever. According to the Global Retail Development Index (201 1), clothing and accessories retailing is a attention business in Vietnam and stands at a vital position in the market, which influences not only private retailer but also the government’s attention.
The government has tended to pay more attention to the local retail market. To be more specific, they have encouraged people to increase the use of local products, which urges the local market to improve. For instances, many campaigns were emerged by the government with the purpose of developing the industry potentially such as the recent campaign named Vietnamese people buy Vietnamese goods’. According to Ministry of Industry and Trade (2010), a report in September ‘Industry and Trade’ in 2011 showed that in the first 9 months of 2011, the total sale of goods and services rose more than 17%.
Nevertheless, this was still a low percentage compared to previous years, which tended to grow more than 20%. In 2010, the total retail grew to 24. 5% compared to previous year. This shows that Vietnamese demands for accessories have been rising and are more likely to be an upward trend. Hence, the opportunities for an accessories retailer to enter the market and increase the number of customers are very significant. RESEARCH QUESTION How can SOOT Shop attract more customers and increase the number of loyal customers?
METHODS In order to effectively respond to the team’s research question, the research team have examined both primary and secondary research. For primary research, in order to clearly understand the shop owner’s problems, on 6 March 2013, the research team visited and had an interview with the owner of SOOT Fashion Accessories Shop, Mrs.. Maim Then Then (See Appendix A). On 5 April 2013, the research team visited Qua Tang shop, one of the most popular accessories shop among the area to observe ND compare SOOT Shop with its neighboring competitors.
In addition, the research team visited a competitor’s accessories page named V;C on 5th April 2013. Furthermore, a survey was conducted randomly including 10 males and 10 females respondents on 10 April 2013 (see Appendix C). The data was clearly identified with a table of survey results, proportions, bar graphs and pie charts. Finally, on 14 April 2013, the team members had met with Ms. Unguent NCO Line, an online shop owner who has five years experience in doing Internet advertising (See Appendix B).
Then, he research team interviewed the expert Do Truing Tuna, an owner of a grocery shop on 15 April 2013 to find out more about special offer strategies (See Appendix B). And on 12 April 2013, the team interviewed Mrs.. Cacao HTH Hung, the owner of Gardenia Hotel in Dalai City about her specialize on membership program (See Appendix B). For secondary research, the research team have searched on REMIT Online Library, government documents, and Google Scholar to find out about the possible problems as well as solution regarding social networking sites, special offer and loyalty program.
Figure 1 . Gender of respondents FINDING Social Networking Sites (An) In the interview on 6th March 2013,the owner of Soot shop, Ms. Maim Then Then claimed that she would like to increase the number of customers by using Faceable which she has not had any experience in the previous time. Based on the survey that the research team conducted on 10 April 2013 on randomly adolescents a young adults (See), seven out of ten respondents research on Faceable before purchasing (See). On 14 April 2013, in a meeting with Ms.
Unguent NCO Line, an online shop owner has five years experience, emphasized that social networking sites are opportune for business to increase customers (See). After researched and visited on a competitor’s accessories page named V&C on 5th April 2013, the research team noticed that they often stay online to quickly answer customers’ question about the products and have separated albums for each kind of products. Bankcard (2011) indicates social networking sites help to connect nodes and branches.
The author states that social networking sites contribute to increase sales, services and brand the products as a major hub. According to the Thou Tree News (2012), there was a growth of approximately 200% from 2. Million to more than 8. 5 million in the number of Faceable users in Vietnam. Unguent (2012) adds that the majority users’ ages in 2011 are from 15 to 34 years old which is similar to the target ages of the business. Unguent also represents that Faceable has the highest rate of number users and a large gap comparing to Vietnamese social networking sites in 2011.
Special Offer (That) Ms. Then, owner of SOOT shop states during the interview on 6 March 2013 that she has considered using special offer to attract more customers to her shop (see Appendix A). A survey was conducted on 10 April 2013 (see Appendix C), in which 9 UT of 10 respondents would choose to buy goods from accessories shop, especially, which offers them several gifts or discounts. 50% of those like to make purchases on special days if this shop offers ‘5-10%’ discount and another 50% refers buying if the shop applies ‘buy 2 get 1 free’ (see Figure 1).
The expert Do Truing Tuna, a owner off grocery shop states in the interview on 15 April 2013 that special offer is a sales promotion tool which is extremely important for any small business, as it can help the business gains its reputation, prestige and therefore, attracts more customers to grow the profits (See Appendix B).According to David K and John M (2000), special offer is a tool to keep loyal customers and satisfy new customers. The authors claim that a retailer can apply special offers for different customers by recognizing loyal or new customers digitally via Kiosks, Internet and mobile devices.
By using it, business can conceive different offers for different customers based upon their historical purchases and preferences. On 5 April 2013, the research team visited Qua Tang shop, one of the most popular accessories shop among the area, which also is a strong competitor of SOOT shop (see figure 2). The team found out that Qua Tang hop offers discounts and other sales promotion strategies frequently. For instance, the shop offered ‘buy 2 get 1 free in the woman day last month and it was high appreciated within new and loyal customers (see Appendix C).
According to Wend (2012), some small businesses are now considered special offer through email marketing promotion as an effective way to get more attention of the customers. Special offer can be a way to motivate customers to buy products, it can be occurred with many forms as well, for instances, ‘buy and get discount on the second product’, ‘buy one get one free’ and free shipping. In order to create an efficient email advertised offer, Wend mentions four advices.
Firstly, a business should understand the need of the customers and offers them products with perceived value. Secondly, business has to be well defined their goals, why they do an offer. The reason they make the offer should not be because their competitors do. Thirdly, firms should be clear about their ability, which meaner that they have to make sure they can afford the offer. Finally, a successful business should think about partnering with a non-profit making organization in order to position the business’s name in the mind of customers.
According to Jim (201 1), some businesses have mistaken the true meaning of special offers, which caused irreparable damages to a company’s reputation. He expresses some main ideas help firms to understand more about special offer. One of the most common mistakes that most of small business makes is training the marketplace to wait’. For example, a seminar business applies an early-bird discount to persuade customer to book promptly although customers still buy tickets with the actual price. Then, when the seminar’ s date gets close, he offers X% to sell his tickets quickly.
Eventually, the business loses it reliability. Secondly, Jim found that famous brand companies are often successful with their special offer strategies. The reason is that big companies often spend quite a long time for their wide research and receives advices from their professionals. Membership Card (HTH) Ms. Maim Then Then, the owner of SOOT Shop stated in an interview on 6 March 2013 that she wants to apply sale promotion strategies, which can effectively attract more customers and improve the shop’s loyal customers (See Appendix A).
The research team’s survey on 10 April 2013 shows that 9 out of 10 respondents are attracted to the idea of having a membership card for an accessories shop (See Figure 3) and they would like to make more purchases if the shop provides promotions (See Appendix C). In an interview on 12 April 2013, Mrs.. Cacao HTH Hung, the owner of Gardenia Hotel in Dalai City, implies that membership card is one of the most important promotion tools to keep the loyal customers on track (See Appendix B). However, there are many firms failed to run the customer loyalty programs effectively.
She also states that in order to run the customer loyalty programs efficiently, businesses should do surveys and market researches on customer urchin’s behaviors and then create an adequate reward for loyalty. According to Dowling and Uncles (1997), a European investigators researching business-to- business marketing in the sass stated that a firm is mostly profitable from their loyal customers. This is because of seeking more profits by lower servicing costs, less price sensitivity and suggestions passed on to other potential customers by loyal purchasers.
On 5 April 2013, the research team visited Qua Tang shop, one of the strongest competitors of SOOT Shop and noticed that Qua Tang Shop has paid special attention to improve their customer loyalty programs such as patronage rewards and membership cards. They offered membership cards with different colors and designs aiming to different valued cards. According to Little&King integrated marketing group (n. D), businesses should be aware of the mentality “one product fits all” because not all of the customers’ needs and wants are always the same.
Therefore, a hierarchy of valued consumers should be released such as diamond, premium and gold membership cards. Furthermore, ‘lapsed’ members, who signed for a membership card, but only use it for one time and never use it again, are also problems dealing with membership cards and challenging almost all genuineness. If the shop provides membership cards for those who will probably ‘lapsed’, the shop will not only waste their efforts to maintain the customers, but also suffer from loss of resources such as the cost to make the membership card.
According to a survey of professor Worthington (2009), although membership cards often attract widespread customers’ interests, they are still likely that it has a large amount of ‘lapsed’ members. There is no accessible information that could show the percentage of membership cards that are ‘lapsed’ or ‘active’. Nevertheless, professor Worthington survey outcomes indicate that the most frequent reason for not participating in membership programs are not attracted by the prizes and a slight rate of people who cited ‘privacy’ reasons.
RECOMMENDATION Social Networking Site (An) On the survey conducted by the research team, nine out of ten respondents like purchasing accessories on Faceable. The expert, Ms. Unguent, said that having an efficient controlled Faceable page could help to increase the number of customers. Noticed by the research team, the competitor, V&C shop, also had a Faceable page, which had well decorated picture albums and quick service.
Bankcard (2011) asserts that by directly using a social networking site and connecting with the customers could collect positive reviews and high reputation as return since customers feel that their feedbacks are important and they are cared. The Thou Tree News (2012) reports that the number of Vietnamese Faceable users increased of around 2 times within one year. Unguent (2012) adds that the significant Faceable users’ age are from 15 to 34. Therefore, Soot shop should create a Faceable page, which is easy and inexpensive, to increase the potential customers.
The expert, Ms. Unguent, advised that the shop should have 2 Faceable pages, which are a personal page and a fan page. The shop can update the information and pictures related to their products, notes, and feedbacks from customers and use the personal page to share this information and add friend. In this way, the shop can be active in increasing the number of users they want to transfer information because users do not randomly like the page unless the shop has a big brand name or high products’ prestige. Ms.
Unguent also recommended not tagging the customers in the pictures to avoid disturbing them, except the owner’s friends if they do not mind. Ms. Unguent added that the pictures should have clear descriptions and be similar to the products because if the products and picture are not matched, the shop could lose their prestige. The most impressive aspect on the competitor’s Faceable page is they have separated albums for each kind of products; this could help customers to save their time for searching purposes. Soot shop should consider this aspect.
The most important thing that V&C shop cannot efficiently manage is that there are many other shops’ advertising on the page and the host also updates personal statuses and emotions. This could get bad reputation in return and the customer could click on the other’s pages, as a consequence, they might lose their customers. Hence, Soot shop should not post any personal activities onto their business pages. On the survey administered by the research team, service is the most importance to the female customers and the second importance to the male customers.
In addition, the competitor shop also has the order service for the products that they do not have. Therefore, Soot shop should try often stay online to quickly response to customers. Their strength is to make handmade accessories hence producing stuffs that customers order is also possible. Special offer (That) The research team administered a survey and pointed out that there are 9 out of 10 respondents would like to buy products from accessories shop where offers them gifts or discounts (See Appendix C).
Half of the respondents like to make purchases on special days if this shop offers ‘5-10%’ discount and another 5 respondents refers buying if the shop applies ‘buy 2 get 1 free’ (See Appendix C). The research team observed a well-know accessories shop named Qua Tang, which is one of a SOOT shop’s competitor. Qua Tang implements sales promotions strategy frequently to acquire more customers. The latest is ‘buy 2 get 1 free’ offers on woman days and it is widely popular among the area. According to Wend (2012), special offer through email marketing promotion is now extremely important to small business.
She informs that special offer indeed can be an effective way to prompt customers to buy products. In order to attract customers by special offer, Wend argues that a firm has to understand the need of customers and offers them products with appropriate value. Moreover, business needs to know their specific goals and abilities to make a healthy offer. Jim (2011) states that not every business understands clearly the true meaning of special offers, which leads them to several inevitable losses. He mentions an example regarding to his one customer that losses its reputation due to misunderstanding of special offer.
According to David K and John M (2000), special offer is an efficient strategy to fulfill loyal customers’ and new customers’ expectation. The authors infer that a retailer can know more about customer’s buying powers and preferences using modern tools such as Kiosks, Internet and mobile devices in order to manage different offers for each group of customers. The positive aspects of special offer are obvious; every customer refers to receive discounts and gifts when they make purchases. Thus, if SOOT shop wants to increase the number of first-time customers and preserve the number of membership, sales promotion as special offer is essential.
However, special offer is quite popular among other accessories shop, many competitors also apply special offer to attract more customers such as Qua Tang shop. Therefore, SOOT shop also has to make sure the reason for offering, who to offer, what and when to offer. For example, shop can offer ‘5% discount’ for new customers and ‘10%’ discount for loyal customers on special days such as Valentine and Mother days. In addition, in order to prevent unnecessary losses, Ms. Then needs to know clearly the ability to offer.
If she offers a product value 10,000 vend and sells it 12,000 vend after discount, she would be suffered because she still has to pay money for employers, electricity, and many other fees. Membership card (HTH) A survey released by the research team on April 2013 indicated that 90% of respondents are interested in having a loyalty card for a fashion accessories shop (See Appendix C). Mrs.. Cacao HTH Hung, the owner of Gardenia Hotel in Dalai City, mentions in an interview on 12 April 2013 that one of the most significant promotion tools to maintain the loyal customers is offering membership cards (See Appendix B).
Nonetheless, there are not many companies can succeed in implementing the loyalty programs. She goes on to suggest that considering the evaluation of customer purchasing behaviors and then generate the accurate rewards of loyalty are the most important factors to maintain loyalty customers. Dowling and Uncles (1997) refer to a research, which was found by European researchers studying business-to- easiness marketing in the sass. The research claimed that loyal customers are the main contribution to a company’s profit.
It is due to its lower expenses by lower servicing costs, lower advertising costs and advices passed on to other potential buyers by loyal purchasers. It will cost much more to persuade a new buyer to make a purchase in the shop than to make a current shopper to purchase again. Hence, SOOT shop should focus more on their current customers and often remind them about the shop through providing promotions and running membership programs. The research team visited one of the competitors, Qua Tang shop, on 5 April 2013 ND noticed that Qua Tang Shop has fully concentrated on improving their membership programs.
They provided different colors and designs cards, which distinguished between levels of card members. Little;King integrated marketing group (n. D) states that companies should notice the mentality “one product fits all”, because there are always differences between every customer’s needs and wants. Therefore, a hierarchy of valued consumers should be released such as diamond, premium and gold memberships. Thus, SOOT shop should apply membership cards to its customers (See Figure 3). The differences between membership cards allow the hop to serve a certain type of persons based on their standard of membership.
To illustrate, the system can automatically find the names of customers, their mobile phone numbers, email addresses and save their previous purchases when they use their membership cards to make a purchase. Through that process, the shop can easily classify the customers’ interested items and clothes in order to introduce different kinds of items, clothes to different types of customers. In addition, the shop can efficiently inform different types promotion information to different types of buyers through their mobile phones or email addresses. One of the difficulties of providing membership cards is ‘lapsed’ membership card. Lapsed’ member meaner customer who applied a membership card and only use it for one time. According to a survey of professor Steve Worthington (2009), it always has a large amount of ‘lapsed’ members in every business. There is still lack of available information that could show the percentage of membership cards that are ‘active’ or ‘lapsed’. Yet, professor Worthington examinations results imply that the most common reason for not taking part in membership programs are because they are not attracted by the rewards and a small proportion of respondents who cited ‘privacy’ reasons.
Thus, SOOT Shop must be aware of their responsibilities to its consumers in satisfying the redeemable prizes and customers’ information to remain customers’ beliefs. In order to do so, firstly, SOOT Shop should pay more attentions to members who ‘lapsed’ through classifying members’ last purchases. And then try to find out the customers’ reasons of not taking part in the membership programs. Finally, inform different types of promotions to different customers. For example, a shop finds out that a small umber of their customers quit being the shop’s loyalty customers because of the low membership cards’ benefits.
The shop may apply different type of promotions to those particular members. The shop may send a message to those customers that they fortunately won a randomly contest of the shop and they will receive double points in every purchase by membership card. CONCLUSION In conclusion, SOOT accessories shop should apply the use of social networking sites such as Faceable in order to attract more customers. It should consider launching a Faceable page, which has well decorated products’ albums and information because Faceable takes no cost to create and advertise.
It also should strike up friendship with Passbooks users to advertise products widely. Moreover, it should stay online over time to answer customer’s questions and feedbacks. By that way, customers will probably feel that they are respected and it helps the shop to improve its reputation. The shop also has to make sure that the quality of products is similar to the pictures that it has on Faceable to earn customer’s belief. However, SOOT shop should manage to avoid irritating people by tagging them every hour with pictures.
In addition, most of people like to make purchases when there is a discount or gift offer. Thus, SOOT shop should apply special offer to get new customers as well as to preserve loyal customers. Nevertheless, other accessories shop also apply special offer, so SOOT shop should be considered when applies this sales promotion tool. To be more specific, SOOT Shop should clearly understand the reason for making the offer, who to offer, what and when it should offer. SOOT shop should not forget their ability to make an offer because if it gives customers more than what it can afford, the shop will face difficulties.
Furthermore, SOOT shop should be concentrated on keeping loyal customers by reminding them via membership programs because it will save the services and advertising costs. Providing membership cards have different colors and designs can help SOOT shop to easily classify each type of customer through their names, phone numbers email addresses and purchasing powers. Therefore, the shop would be able to know more about customer’s wants, interests and preferences. One of the difficulties of membership program is that there could be many ‘lapsed’ membership cards.
Unguent NCO Line, who has a successful online cosmetic shop named Rim Catnap Skincare, to ask for comment on my recommendation for the business that my research team currently working on. An: Hello Line. Thank for spending time to meet me. I’m An from research and report writing class. As I told u before that today I want to interview you for advice on my project. Ms. Line: Hi An. So how far have you been doing? And which problem that you want me to give advice on? An: Ah. The business that I’m working on is a clothing accessories store. The owner wants to increase the amount of customers.
The subtopic I’m doing is social networking sites. However it seems totally new to the owner, her shop doesn’t even have a Faceable page which is now quite familiar to the teenagers and young adults. Ah one more thing, teenagers and young adults are her target customers. That’s why I suggest her to have one. Ms. Line: Oh I see, you are right that Faceable is now getting more popular and it can help to increase sales. But let me ask u this, have u ever been tagged by an online shop in its pictures. An: Yeah, a lot. Ms. Line: How do u feel about that? An: A little bit annoying.
At First, I Just ignored them, but there were many notifications and that disturb me. Therefore, if any shop tags me, I will block them or report as spam.. Ms. Line: So why do you suggest the owner to have a Faceable page? An: Ah I’m going to ask her create a fan page. Can you tell me how to increase the “like”? Ms. Line: k, because she and I work on different kinds of business so you may apply in some ways but not exactly the same k? I suggest having 2 pages, one is a personal page and one is a fan page, because the customers do not randomly like your page unless you have a big brand name or prestige of your product.
An: can you please explain in more details? Ms. Line: for the fan page, you update all the product’ details there such as pictures, notes, feedback from customers, etc. For the personal page, all you have to do are adding friends and share what you have updated on the fan page. Because the customers are afraid to be annoyed therefore we have to be active by adding friends with them and remember not to tag them, I think you already know why, huh? Maybe you could tag some of your friends if they don’t mind. And sharing the stuffs that you updated on fan page that mean the information is transferred to the users twice.
An: Ah I got it. Ah I also want to recommend on the pictures that she is going to post on Faceable, it must be clear, close enough to see what the product made from. What else do you think I should suggest her? Ms. Line: ah it’s good to do that but you should put the description for the pictures, because pictures sometimes are not clear and that could cause misunderstanding about raw materials. Ah it reminds me that the real products and pictures have to be the same because you may lose prestige if the products look different.
You could describe in the pictures that the products may slightly different because of the light. And you could also create an album of customers wearing your products on Faceable, which could help to increase the loyal customers and increase sale from your customers’ relatives since the products is ore reliable when it is introduced by friends. If you are lucky, your customers could be some hot girls or models etc. , you know, stuffs are worn by beautiful girls maybe look more beautiful (laugh) and their fans could come to buy as well.
An: k, it sounds good to me. Thank you very much for meeting me again. I would go back to work on the recommendation. If there is any problem, don’t you mind if I call you to ask? Ms. Line: Call me as soon as you have questions. I’m very glad that I can help you. k see way. An: Thank you. Audio script of the interview on 11 April 2013 with Mr.. Do Truing Tuna, owner off rockery shop for over 20 years to ask for some advices for the business That: I m working on a small accessories shop and I intend to ask you some advices for my sub topic which is special offer.
Tuna: so its about loyalty program? That: yes and also attract first-time customers Actually, I plan to recommend this shop to apply discount on special days like Valentine and Woman days, specifically, ‘20% discount’, what do you think? Tuna: well, on special days? Mum… I think that it s not a good idea. Firstly, every shop especially small shop should not apply more than 5 to 10% on special days because they can ell more of their products within those days; some shops don’t even have enough stuff to sell, so why then they apply discount?
Why do you choose special days to offer? That: I think that special offer will attract more customers, maybe new customers. Many people don’t usually buy products unless it is special days. Those days, they are encouraged to buy something for their friends and family right? Then I think I can focus on new customers Tuna: I think that you should balance between loyal and new customers, I mean it s more about services. If you offer discount for ewe customers the same amount you offer for the old one, they must be upset. Why don’t you separate the offer?
I mean decide different offer for different customers? For example, offer 5% for first time customers and 10% for old customers. That: but how can we realize who is the new and who is old customer? Tuna: I think the shop should have been applied some of the other sale promotion tools which can help you to recognize customers such as membership card. There are many way to recognize them, I suggest you to research more about how to realize customers digitally through the internet since the internet is necessary for all the business.