Discuss about the Claiming Health in Food Products.
Businesses operate in a dynamic environment which makes change inevitable. The change affects the performance of the retail business to some extent because the firm has to change how it carries out its operations. The performance due to the various factors contributing to the change can either improve or decline. Performance in businesses is measured using various metrics which include sales volume, profit, customer acquisition, market share, employee retention and employee satisfaction (Bai, & Sarkis, 2014). There is the need to identify the factors affecting the performance of the retail business in New Zealand and Fenton Quality produce was used to help identify the factors.
Fenton Quality Produce Ltd is a fruit and vegetable shop located in Rotorua in New Zealand. The company was started by Nick Patel after realizing that most the people in Rotorua had been buying fresh greens and that demand for fresh fruits and vegetables was very high because people had embraced healthy eating habits. The company buys the supplies from suppliers in Tauranga, Hamilton, and Auckland. The company engages in both wholesale and retail operations, and it has played a major role in satisfying the needs of the customers in terms of fresh fruits and vegetables in Rotorua and its neighboring locations.
Organizations make profits and losses, but they usually do not know the cause of the change in performance. The lack of the knowledge prevents the companies from sustaining their success (Anderson, et al.2014). This leads to loss of market share, customers shifting their loyalty to the products of the other organizations, increased employee turnover which disrupts the operations of the business due to the shortage of employees to perform various tasks in the organization. This leads to increased costs such as opportunity loss due to the shortage of produce in the market. Retail businesses play a critical role in the economy and also ensuring that customers receive the needed products of the right quality and quantity. In respect of the mentioned issues, the research will be aimed at identifying the factors affecting the performance of retail businesses in New Zealand.
Retail businesses especially those engaging in fresh fruits and vegetable play a critical role in the economy and improving the health of many consumers. Due to their importance in the society, their need to identify the factors that affect their performance. Identification of the factors will enable the businesses to operate effectively and efficiently as they will be aware of the measures they are supposed to take at different stages of the operations. Identification of the problem will also enable the business to come up with solutions that will prevent the organization from making losses and this will lead to improved profits and performance of the business. Therefore, I find the area relevant in carrying out the study of the factors affecting retail business performance.
The study focuses on the performance of retail businesses in New Zealand with the point of reference being Fenton Quality Produce limited. The scope will be limited to the factors affecting the performance of retail businesses and be able to come up with the main factor that affects the performance of Fenton Quality Produce.
Many types of research have been conducted by various authors and scholars to identify the factors that affect business entities in various countries. Each scholar usually has his/her opinion. The opinions sometimes are in agreement but also the opinions sometimes conflict especially where the authors use retail businesses in different industries (Pantano, 2014). This study is interested in exploring the work of authors who focused their studies on the factors affecting the retail businesses especially the fresh fruits and vegetables. The major concepts and studies under consideration in identifying the factors affecting the performance of retail businesses include the management theories, the marketing theories, the industry of the retail business, competition and health factors.
The management of the business plays a very critical role in the performance of the business. The management of the organization can propel the organization to a greater success or even cripple the business. Employing the right management style will motivate the staff and lead to greater performance. Right management will be able to come up with SMART organizational goals which will give the retail business a sense of direction (Huarng, & Ribeiro-Soriano, 2014). The goals of the business should also be communicated well to avoid conflicting goals which may prevent good performance. The performance of the retail business will be improved if the management clearly communicates the goals of the organization as the employees will be aware of the tasks they are supposed to accomplish and achieving the targets will motivate them.
The participative management style enables the manager to consider the output of the stakeholders before making decisions. The opinions of the employees are valued and this makes them feel satisfied and work hard to accomplish the goals of the organization which they helped to set (Dozier, Grunig, & Grunig, 2013). Affiliate management style enables the manager to create a harmonious environment which will make the employee have the conducive working environment needed to be productive. This kind of management style ensures that the organization is not faced with conflicts between the managers and the employees (Chen, et al.2012). This kind of style motivates and makes employees happy. This enables the organization to achieve its target goals because the employees are satisfied.
Directive management style ensures the employees comply with the set rules and regulations. This gives employees no time to put their creativity and innovative abilities to use because the management does not allow so. The employees feel threatened, and they are punished when they make a mistake or fail to meet their targets (Hashim, 2013). This kind of management style can be very effective in situations where deviations from the set plan are risky. The directive style can also be effective in situations of crisis in the organization. The policies made by the leader should be followed. However, the style does not create a conducive environment for employees to be productive and this will cause the business not to be efficient and effective in its performance.
Marketing refers to the company’s activities of buying and selling products. Marketing mix refers to the factors used by a firm to influence consumers to purchase a certain product (Gordon, 2012). Most organizations use the popularly known 4P’s of the marketing mix. This comprises of the price of the product, promotion, place and the product itself.
Price refers to the set consideration the company is willing to accept in exchange for its products. The price should be set by considering various aspects which include the income of the target market and the behavior of the consumers (Singh, 2012). The retail business tends to lower their selling prices to sell more and I completely agree with this statement. The retail business sells more if the product has a high price elasticity and lowering the price will attract more customers. The business should also offer their customers price discounts to attract more customers. The price should reflect the value of the product being sold by the business and this will attract more customers leading to the success of the retail business. Setting high prices will scare consumers unless the business is selling Veblen goods.
The product refers to the goods and services offered by the business. The business should ensure that its products are of high quality to attract more customers. The business should also sell products that satisfy the needs and preferences of the customers (Singh, 2013). Like in our case, the Fenton Quality Produce limited sells fresh fruits and vegetables which are needed by the consumers, and this enables it to sell more and be successful. Offering consumers inferior goods will result to low sells as customers prefer high quality products.
Place in the marketing mix refers to where the goods and services can be purchased. The business should ensure that the business is strategically placed to create convenience to the consumers willing to buy the products (Gordon, 2012).The products of the business should be easily accessible, and this is ensured by having effective supply chain management in the organization which will ensure that the goods are readily available when needed by the customers. If the goods are not accessible, few goods will be purchased, and the business performance will decline.
The last P is for promotion. This refers to the activities the organization engages in to ensure that the buyers recognize the products of the business. The business should engage in sales promotion, public relations, and advertisements. The promotion enables the business to highlight the strengths of the business and why consumers should purchase the products. The advertisements include television advertisements, print media, and radio commercials. The business can also engage in social media advertising which has been very effective for many businesses (Chaffey, Smith, & Smith, 2013). Word of mouth also helps the business products to be recognized as satisfied buyers will refer other buyers to the products of the organization, and this enables the firm to perform better. Poor advertisement can damage the reputation of the business and lead to poor performance.
The industry of the retail business also plays a critical role in the success of the retail business (Christensen, 2013). Businesses related to agricultural industry are more affected by this factor. For instance, Fenton Quality Produce sells fresh fruits and vegetables. This will force the business to invest a lot in storage facilities to store the perishable products so that they can be in the condition needed by the customers. Failure to provide fresh products will force the customers to seek products from other firms. If the industry is seasonal, the business should determine when to lower their prices because the supply of the products exceed demand. This knowledge will enable the business to prosper. Failure to offer discounts and lower prices will lead the business to perform poorly.
This refers to the rivalries between two or more entities. Businesses compete for market share, consumers, profits and even suppliers. The business should ensure that it creates a competitive advantage that will enable it to position its products in a better position than those of the competitors (Bennett, et al.2013). If it does so, it will perform better. If the business does not create competitive advantage, it will be eliminated from the business operations because it will not be able to compete.
Businesses selling products which have health benefits tend to sell more than businesses offering products which are said to be hazardous. Nowadays, people have embraced healthy living, and a business selling products which satisfy the needs of the customers tend to perform better as they attract more customers than other firms (Lähteenmäki, 2013). Businesses should, therefore, ensure that they offer products with nutritional value so that they can perform better
Among several factors discussed in the literature, the industry of the retail business factors is more appropriate to the Fenton Quality Produce Ltd. This is because the company sells perishable products which need a lot of care so that they can be fresh always. Participative management style is more appropriate for the firm because there is need to consult the stakeholders on the best ways to maximize the sales of the company than other management styles.
What are the effects of management style on the performance of retail businesses?
Does marketing mix affect the performance of retail businesses?
Conclusion
From the findings of the literature review, management styles play a very critical role in the performance of the retail businesses. The choice of the management style will affect the motivation and the satisfaction of the employees. If the management style motivates the employees like in the case of affiliate and participative management styles, the employees feel valued and motivated and they will help the business achieve its goals as they will perform their tasks effectively. Directive management style will cause the employee to feel uncomfortable as they fear to be punished if they do not achieve their targets. This creates a poor working environment and the employee will not perform their duties well. The business should, therefore, use participative and affiliate management styles to solve management problems that affect the performance of the retail business.
The other notable finding is that the management should employ the marketing strategies that will enable its products to be recognized. The firm should know the best times to reduce the prices to attract more customers, the time to offer customers discounts to encourage repeat and bulk purchases. The company should always set the most appropriate selling price to attract more customers and also make a profit. This will help the organization to solve the problems associated with setting the selling price of the products which have a direct influence on the performance of the retail business.
The study findings will be useful to all the retail businesses in New Zealand and to potential entrepreneurs who wish to venture into the business of selling fresh fruits and vegetables like Fenton Quality Produce Ltd. The investors will be able to know that their business is affected by weather conditions and it is seasonal so they will have all the knowledge needed so that they can make the right decisions that will help them to prosper. The investors will also know that they should invest more resources in storage facilities because the products of the business are perishable and they require proper storage facilities so that they can be fresh always.
References
Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Cochran, J. J. (2014). Statistics for business & economics, revised. Cengage Learning.
Bai, C., & Sarkis, J. (2014). Determining and applying sustainable supplier key performance indicators. Supply Chain Management: An International Journal, 19(3), 275-291.
Bennett, V. M., Pierce, L., Snyder, J. A., & Toffel, M. W. (2013). Customer-driven misconduct: How competition corrupts business practices. Management Science, 59(8), 1725-1742.
Chaffey, D., Smith, P. R., & Smith, P. R. (2013). eMarketing eXcellence: Planning and optimizing your digital marketing. Routledge.
Chen, X. H., Zhao, K., Liu, X., & Dash Wu, D. (2012). Improving employees’ job satisfaction and innovation performance using conflict management. International Journal of Conflict Management, 23(2), 151-172.
Christensen, C. M. (2013). The innovator’s dilemma: when new technologies cause great firms to fail. Harvard Business Review Press.
Dozier, D. M., Grunig, L. A., & Grunig, J. E. (2013). Manager’s guide to excellence in public relations and communication management. Routledge.
Gordon, R. (2012). Re-thinking and re-tooling the social marketing mix. Australasian Marketing Journal (AMJ), 20(2), 122-126.
Hashim, M. (2013). Change management. International Journal of Academic Research in Business and Social Sciences, 3(7), 685.
Huarng, K. H., & Ribeiro-Soriano, D. E. (2014). Developmental management: Theories, methods, and applications in entrepreneurship, innovation, and sensemaking. Journal of Business Research, 67(5), 657-662.
Lähteenmäki, L. (2013). Claiming health in food products. Food Quality and Preference, 27(2), 196-201.
Pantano, E. (2014). Innovation drivers in retail industry. International Journal of Information Management, 34(3), 344-350.
Produce, F. Q. (2017, October 4). facebook.com. Retrieved from https://web.facebook.com/Fenton-Quality-Produce-364598750548964/?_rdc=1&_rdr
Singh, D. (2013). The brand personality component of brand goodwill: some antecedents and consequences. Brand equity & advertising: Advertising’s role in building strong brands, 83.
Singh, M. (2012). Marketing mix of 4P’s for competitive advantage. Journal of Business and Management, 3(6), 40-45.
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