Posted: September 13th, 2017

Applied Merchandising

Applied Merchandising

ASSIGNMENT OVERVIEW

This assignment is made up of four sections: Customer Observation; Idea Generation; a Business Case; and your Idea Pitch. The theory underpinning each of these sections is covered in the video lectures for Weeks 2, 3, 4 and 5.

You were allowed to work in groups for the Customer Observation and Idea Generation tasks; however you must write up your own version of how you went about those tasks (as outlined below). The Business Case you submit as the third part of this assignment must also be your own work. You will be pitching your idea individually during tutorials in week 6.

SECTION 1: CUSTOMER OBSERVATION

Length: Around 500 words
Contribution to total assignment mark: 20%

For your Week 2 task you were asked to use the Customer Anthropology framework to:

1) Observe the way customers select, purchase and pay for clothes
2) Identify needs that are being poorly met, or not at all

In this section of the assignment you first have to write about how you conducted your customer observation. Provide details on where you went, at what time etc.

Then write down all the interesting things you observed. I’m interested in content over format so you can display this information in any way you want – make a list, use pictures, do anything you like but just make sure you include heaps and heaps of observations (the more the better – you should be aiming for at least 20 observations).

Then, based on your observations, indentify three areas where customers have needs that aren’t being met. Finally, select one customer need that you think Stitched Up should try to solve and explain in detail why you have selected this need – the objective is to convince Stitched Up that it is a significant customer need that the company would benefit from solving.

SECTION 2: IDEA GENERATION

Length: At least 30 ideas
Contribution to total assignment mark: 15%

In Week 3 you were introduced to some creative thinking tools and asked to come up with great new ideas to solve a customer need.

In this section you should write down all the ideas you came up with. You need to list at least 30 ideas so include everything you came up with no matter how wacky it might seem at first. Like with the previous section we are interested in content over format so you can display this information however you want. If you used a whiteboard to come up with your ideas that’s fine, simply take a photo and insert it into your assignment (although make sure I can read the ideas).

The second task for this section is to select your best idea – the one that you think will enable Stitched Up to solve a customer need in a unique and valuable way. Explain why you have chosen this idea and also write down more thoughts about how you could make the idea even better.

SECTION 3: DEVELOP A BUSINESS CASE

Length: 1500 – 2000 words
Contribution to total assignment mark: 50%

Now…onto the serious part of the assignment. In this final section you need to write a Business Case that will convince the Stitched Up management team to invest in your idea and make it happen. Take your best idea from Section 2 and then complete each part of the following template.

You will be marked partially on the quality of your responses to the template and partially on the innovativeness and viability of the idea itself. Also, your business plan doesn’t have to be pages and pages of plain text. Use images and pictures where you think they will explain your concept better than words.

1) Executive Summary
This should be a brief summary of your whole business case. Highlight the most important points in a couple of short, compelling paragraphs. If the Executive Summary is all that someone reads they should still get a good understanding of what you want to do and why. If you’ve done a really good job they will want to read the rest of the business case!

Write after the full piece – pull the most important parts out of each section – if they read this, then they should have the high level overview of the full pitch.

2) The Need – Explain this to someone and try and convince them that it is a true need…
As we have talked about, the best ideas solve a customer need. In this section you should clearly explain the need or problem that you are trying to solve.

Try to provide concrete evidence of the need existing. Use examples from your customer observation task or provide quotes from potential customers saying how much they are looking forward to someone providing a solution to their problem. The more you can convince your audience that the need is genuine the better your solution will look.

Needs to be compelling – Common need / e.g. – you have observed this need across a range of different stores / it led to customers walking out of the store and not purchasing / etc… Why is this a true unmet customer need?? – should test the observations with research…

3) Your Solution – Should stand out immediately that it is a great solution
In this section describe your idea in detail. Make sure you frame it as the vehicle through Stitched Up will solve the customer need. This is one section in which you should definitely try to use images. If you are proposing a product make sure you include sketches or photos of how the product will look. If you are proposing a new service (like a website or style assistant) then mock up a couple of web pages or map out how you will interact with customers.

To address the customer need you are proposing XXX.
What is the idea – how does it solve the solution so it adds value?
New process – draw the process. New product? Sketch it. How exactly does it solve the customer need? What are the strengths of the solution? What are the weaknesses identified – and how have you solved them?

Tip – Tell your parents the true unmet customer need and then your solution – what questions do they ask about it? These are questions that you should be able to answer…

4) Why it’s Innovative
In this section discuss why your idea is innovative and how it will help Stitched Up stand out from the crowd. Put some effort in and really think about what makes your idea unique. Even if you’ve borrowed the idea from another industry try to highlight what makes is different in this context. If you believe your idea is a world first then say so. A word of warning though…make sure you do your homework before making such claims!

5) Customer Research – How do we know that it is going to be accepted?
Your innovation will only be successful if customers are willing to accept or use what you offer. First you should provide a detailed description of who your customers will be. Then get out there and conduct some research to determine the willingness of potential customers to purchase/use your product or service. The more evidence you can provide of customer acceptance the better.

Target market – who exactly is the idea pitched at? (demographics etc)
Ask them what they think – would this make them purchase more – get out there?
Show proof that customers like the idea – and it would influence them to buy more / buy / buy stitched up over other customers
e.g. Spoke with 20 customers and got a XX percent rate (note – I want to see real customer research you have conducted)
Note – this will also help uncover how to improve the idea – if you can show that you have modified your solution based on customer research it is a positive…

6) Design & Development Plans
What stage of development is your idea in? Is it purely conceptual or have you developed some mock-ups or even a prototype? More importantly, what needs to be done to make your idea a reality? In this section you should discuss in detail the sorts of development activities Stitched Up would need to do to make your idea happen.

If it is just a concept – what do you need to do? – investigate the solution further?
How long is it going to take to roll it out to prototype or completion?
What needs to be done to roll the idea out to the stores?
How will you let the customers know about the new solution and it’s values?

7) Investment Requirements – What is it going to cost to implement your idea?
Obviously ideas don’t turn themselves into innovations on their own. Stitched Up will have to invest both time and money into your idea to get it off the ground. In this section you need to quantify how much investment will be required. A good starting point would be to put a cost on your Design and Development Plans. Then also think about how much things like Project Management, Software Development, Training, Equipment and Promotional Activities will cost.

Investment requirement – based on the design and development plans.
How much of your time will it take?
How many people will you need to help? – what do they cost?
What outside costs will you need? Website development? Social marketing?
How much will marketing cost? How will you do it?

8) Expected Benefits
This section is where you get to the up-side of your innovation. You need to convince the management team of Stitched Up that your idea will deliver benefits to the company greater than the cost of investment. The different types of benefits are:

1.    Financial Benefits – these are the most important. If your idea will increase sales and profits for Stitched Up (over and above the investment) then chances are it will get the green light. Explain clearly why your idea will produce financial benefits for the company and give these benefits a financial value.

Clear statement of what the benefit of the idea will be – Must convince them that the value to the company is greater than the risk of implementing and the cost of implementing.

How will it add value?

What assumptions are your value on?
•    Savings of the innovation (process improvement) – explain how…
•    Revenue uplift of the innovation (new purchases?)
•    Bring more foot traffic into the store
•    Time saved for the staff (hours saved / therefore $ saved?)
•    Less mistakes? Therefore more $?
•    Require less staff required because of XXX?
•    Less complaints from staff leading to less returns which saves xxx time?
•    Customers know more therefore more likely to buy – what assumptions are you basing this on?
•    …..

Note: Just saying “Saves employee time” is not going to provide enough information. As discussed in class “saves employee time” needs to be calculated. E.g.

•    It will save employee time because it means there are less questions being asked of staff…
•    You will need to dig into this and flesh it out into actual $ value..

•    How much time will it save? – We did a survey of staff and found that on average questions take 3minutes each. They get asked on average 5 questions an hour. That is 15 minutes per hour per staff member.
•    There are on average 100 employees at the department store at all times (assumption) and 8 hour shifts 7 days a week.
•    Therefore questions cost XXXmintues in total
•    That equates to 2 full time employees
•    Average wages are $50,000 (assumption)
•    Therefore implementing the scanner will save you $xx,xxx per year in wages.

PLEASE NOTE: DON”T ONLY USE THIS EXAMPLE IN YOUR ASSIGNMENT! This is the example used in class I will want to see another type of example of a benefit to your idea. If it is core to your idea, please find another benefit as well.

This process can be followed for a number of different types of benefits – increased satisfaction, increased returning customers, increased foot traffic, increased XXX decreased YYY.

Define your benefits and then try and figure out a way to quantify it into $ (increased revenue or decreased costs)

If you don’t have all the information available to make your calculation – make an assumption and tell me what the assumption is.

2.    Social Benefits – generally not as important as financial benefits but should be captured none the less. Sometimes a business will invest in an innovation that doesn’t make money but will enhance the company image in the eyes of its customers, employees and the local community.