Introduction to the problem
Even with the echo in his ears of the words of Alvin Toffler in his book “Cambio de Poder” predicting that they would win the tug of war against manufacturers, the distributors of mass consumption find that the disputed power is passing quickly - in front of their eyes - at the hands of its consumers.
how-to-attract-customer-point-of-sale-five-rings-commercial-attractionSuddenly, the challenge of serving them is daunting. They know the products, they know the possibilities, and - something that seems to further complicate the situation for marketers - they know themselves. They understand their needs and make the necessary efforts to buy, almost always, what is most convenient for them.
The phenomenon not only occurs in mass consumption, but it also affects commerce in practically all its forms: gastronomy, hotels, clothing and others. According to some studies, the cost of recruiting a new client is five times higher than that of retaining it in any of these industries.
There are multiple instances through which this consumer accesses a specific good in any of these industries. From the moment you want something until you have it in your hands and make it your own, there are as many barriers as facilitators that will allow - or not - the act of buying to be consummated. These instances represent aspects of human behavior that have already been extensively analyzed for the purposes of strategic planning of commercial ventures, generally as isolated phenomena. Traditional planning usually incorporates elements about people's basic needs, about their psychological desire, their economic possibilities, their geographical location, etc.
However, we find that among the material available for a comprehensive understanding of the phenomenon of purchase - from the moment someone leaves their home or work with the intention of acquiring a good or service, they specify the act of purchase and it returns to its starting point - there is no broad vision that helps to understand, conceptualize and articulate the physical environment that contains it.
The 5 rings model
To focus on this dimension and try a tool that would allow the physical environment to be included effectively in a strategic approach for commercial ventures, an integrative analysis of the physical variables surrounding the offer was carried out. Thus, we create a model, which we call the “5 rings of commercial attraction model” (Fig. 1).
The model offers a theoretical and integrating framework of the variables that operate from the buyer's own residence until the moment that the buyer takes a product at the point of sale. Group these variables into five rings: Population, Location, Construction, Circulation and Exhibition. The resulting rings compose a heuristic value system, where the general shape adds value to planning management ordinally, with variable transition limits according to each case that needs to be analyzed.
In order to achieve a considerable range of applications, the analysis was carried out taking into account various types of farms: small supermarkets, supermarkets and hypermarkets, pharmacies, hotels, health clinics, entertainment rooms, movie and art exhibition rooms, government offices, restaurants and shops with personalized attention from the public.
Likewise, we understand the points of sale / service as living spaces, in constant evolution. In this sense, the model presents the main concepts of attractiveness but does not limit its application to the tools, techniques or resources mentioned. In fact, those who achieve a level of innovation linked to added value to the public will benefit from transcending the borders of each ring.
The rings as a concept
The rings differ from each other in terms of the type and number of variables they contain, their economic significance (decisions about building a premises will be more investment than those made when producing signage, for example) and their scale (distances in the first rings they will be measured in hundreds or thousands of meters while in the last they will be in centimeters), but all represent an integral system of attraction. Without a comprehensive appreciation of the rings and their elements, the support of the purchase act suffers and the chances of failure of the venture grow.
In the need to deeply understand this act of purchase, each ring will be taken as its own unit of analysis and reflection. The methodologies and tools to be used with each differ from each other, sometimes considerably, sometimes subtly. Planning will incorporate them as it is necessary to define the objectives to be achieved in each instance.
The purchased product or service is located in the center of the matrix. In a supermarket it will be a box of detergent powder, in a service station it will possibly be the fuel load and in a hotel it will be the passenger's stay. On this unit we find much and very valuable information from other authors, which is why the model does not extend on it.
The clients' journey
Buyers walk the path to the product or service going through each of the rings according to their own preferences and customs. Each individual will act differently against each barrier and each facilitator. In order to integrate this dynamic, whoever plans the venture will need to understand their clients, perhaps group them according to certain profiles, and have the variables available to best meet their expectations.
The path to the product or service is a two-way path. Each client who goes through the rings and accesses the product or service will make their purchase and return to their point of origin, making the journey in reverse, going through each of the instances again, but with a different attitude. It will be necessary to understand this withdrawal dynamic and be prepared to give adequate responses in each instance so that this client decides to return once their need is renewed.
It is necessary to look at the rings from the inside and understand aspects such as the time of payment, the exit of the premises, the handling of complaints and returns, instances that add complexity to the operation.
Implementation of the model
This work describes the objectives to be achieved in each ring, proposes a solution, presents the tools available on the market and lists its main components. The implementation of the model is not far from the use of an exhaustive list of the points that the responsible person should not neglect when undertaking the planning process.
First ring - Population
- Population size and general characteristics Economic characteristics Potential markets Own industry and future trends Government provisions
The term population refers to the physical existence of a populated geographic environment - a city, a country - that surround the commercial premises. The main factors in the first ring are population and its relevance as a market, the current and future situation of the industry directly and indirectly linked to entrepreneurship, and the Government's attitude and policy towards it.
The main objective of the analysis is the detection and understanding of all these factors, and their concrete and efficient incorporation into planning. The detection and analysis of populations as markets are processes closely linked to the main strategic definition of the business, directly related to the cultural, social and economic profiles of people.
Cultural dimensions
For the businessman who analyzes the possibility of making investments in a country other than his own, the cultural dimension of his analysis becomes highly relevant. There are different ways of dealing with this aspect and we find the approach of the Fons Trompenaars model of the Seven Dimensions of Culture particularly interesting, where three cultural layers are proposed: that of the explicit manifestation of culture (clothing, food, language, type of housing), that of norms and values (good, evil, law, social norms) and the implicit layer, where the deepest rules and methods of operation of people reside. It is at this deep level where the success of a commercial venture is built, where buyers will feel, consciously or not,that their needs are being met by the employer's proposal. The model breaks this level down into seven dimensions and facilitates its incorporation into strategic planning.
This population contains the potential clients of the venture in a broad way: in this country or city the entrepreneur decides to venture into his proposal. But detailed analysis of leads is in the second ring, where the odds of one or more retail locations appealing to the public become tangible and frame the business opportunity.
Secondary information as a basis for analysis
The information used in the process is frequently of a secondary nature, collected and published by third parties: Chambers of commerce and industry, government organizations, educational sources, the media, market research consultants, etc.
Conceptual synthesis of Ring 1 objectives
| objective | Solution | Tools | Components |
| Size and
general characteristics of the population |
Population Census Analysis
Comparative analysis of populations |
Survey of secondary information owned by public and government agencies
Mapping of sociodemographic variables |
Demographic density
Social context Family composition Age segments Education levels Lifestyles Consumption profiles |
| Economic characteristics | Macroeconomic analysis | Survey of the main supports of the economy Economic trends | Main industries
Income levels Composition of expenditure |
| Potential markets | Detailed analysis by population of socio-economic and cultural variables | Analysis of population information on secondary expenses available for each locality | Income levels
Expense Levels Composition of the Family Basket |
| Own industry and future trends | Analysis of quantity, projection and weighting of businesses
Analysis and projection of |
Commercial censuses
Government records |
News in the media
Expert opinion |
| Possible scenarios | Media
Interviews with industry leaders |
Trend analysis | |
| Government regulations | Analysis of current regulations | Consultation with competent municipal bodies | Urban planning code
Construction Permits Commercial Code Others |
Second ring - Location
- Area of influence Local population Transport means Commercial environment Competitive setting Physical location Crime prevention
The second ring, which we call location and axis in the physical location of the project, expands from the outside of the building to where its power of attraction weakens. Its inner edge is intermingled with the outside of the third ring, where the presence of the premises becomes apparent to those who circulate in its vicinity. The outer edge responds to the limit of what we know as the area of influence, attraction or capture 1. The limits of the area of influence will be conditioned by cultural, physical and commercial issues. Among the cultural ones we can mention the valuation that the residents assign to the area around the location and their shopping habits. The physical ones will be basically those referred to the availability of transportation and physical barriers such as rivers or channels, railways, highways, avenues, large extensions of uninhabited land and others. The commercial ones will be given by the existence of other points of sale that can favor or harm the attraction, both complementary and competitive.
The choice of place depends on the availability of spaces and the decision of the employer to take advantage of the most convenient. In the process, factors such as the size and characteristics of the surrounding population, the level of existing competition, the means of transportation available, the availability of parking space, the characteristics of the commercial environment, the cost and the conditions of exploitation of the place, legal restrictions, consumption trends and other important factors.
This is the ring where advertising investments exercise their power. It is where the importance of knowing in detail is evident in order to meet the needs of the widest possible portion of consumers. For many of today's successful retail businesses, knowing their customers and being able to interpret their needs was the cornerstone of their survival. The tools encompassed by customer relationship management (CRM 2) allowed them to understand, segment, attract and retain, over time, their most important buyers.
The location selection process involves the detection of one or more potential spaces and a comparative analysis that analyzes them individually, taking into account the multiple factors that will facilitate the call for clients: the type of commercial environment - neighborhood mall, shopping center, thematic axis, etc. - pedestrian and vehicular traffic, visibility and adjacent accesses that allow the best possible conversion of passers-by to visitors entering the premises.
Primary information
The analysis methodology in the second ring needs, in addition to the previously available information, primary information. In this instance, unlike the one that arises in the first ring, it is highly recommended to carry out your own in-depth analyzes that cushion the risk implicit in all commercial bets. A solid knowledge base will allow all the physical or non-physical variables of the venture to be aligned to the expectations of the target population and the demands of the commercial environment.
This implies knowing to a greater degree than the first ring the nearby inhabitants, it will be necessary to use a data collection methodology that adjusts and delves into the strategic and tactical needs of the venture.
We can cite three basic forms of primary information: (1) Motivational groups, where people with similar profiles that are intended to serve are brought together, (2) consumer surveys (existing or potential) and (3) analysis of competition (solutions, services, technologies).
Conceptual synthesis of Ring 2 objectives
| objective | Solution | Tools | Components |
| Area of influence | Definition of areas of influence and analysis of the economic potential of the preselected locations | Application of models of prediction of concurrence and purchase | Entrepreneurship attraction power
Natural barriers Transit generators Access routes |
| Local population | Segmentation of the local population adjacent to the point of sale
Analysis of habits and attitudes of purchase and consumption directed by geographic segment |
Secondary information of
Indec census at fraction level Mapping Interviews Observation groups Area surveys |
Demographic density
Family composition Age segments Education levels Income levels Lifestyles Consumption profiles Preferred shops and services Purchase frequency Others |
| Means of transfer | Analysis of transportation habits and availability of own vehicles and public transport | Interviews
Observation groups Vehicle patent payroll Area surveys |
Public means of transportation - buses, trains, subways, taxis and others.
Private means of transport - pedestrian, cars, motorcycles, bicycles. |
| Commercial environment | Knowledge of the commercial areas closest to the target segments of the population | Survey in zone
Mapping |
Commercial areas
Malls Main arteries Main competitors Anchor stores Others |
| Competitive scenario | Detailed analysis of competition | Survey of direct and indirect competitors
Elaboration of saturation indices Positioning matrix Evaluation and future projection |
Shops of the same heading
Similar businesses Complementary trade Secondary information on competitors |
| future | direct | ||
| Physical location | Identification of various spaces with conditions to house the
entrepreneurship and selection of the most suitable |
Real estate survey of premises and / or available land
- Application of qualifying indicators - Classification according to potential - Final selection |
Preferential areas
Real estate consulting Survey of sites Parking lot Visibility, size, age of the building Type of exploitation contract Others |
| Crime prevention | Analysis of marginality in relation to crime | population characteristics
Accesses - dangerous areas Criminal types in the area Crime map Dependencies of security: police and firefighters |
Third ring - Construction
- Exterior appearance of the premises Amplitude of hours Pedestrian income Vehicle income and parking Accessibility for the disabled Treatment of waste Supply of goods Security measures
The third ring is the perception of the building itself, the construction that passers-by can see when approaching the premises. This ring is no longer foreign to the entrepreneur's actions, as in principle the previous ones could be. Although the strategic planning of the commercial project begins with the elements integrated in the first, it is in the third where the decisions begin to materialize and become apparent to the public.
Architecture and urban planning
The decisions of the third ring are manifested in the field of architecture, urban planning and maintenance of what is built. The graphic, visual and functional level of the shell of the building includes variables that these disciplines handle on a daily basis. At this stage of planning, the synergy between research and architecture begins to become evident and enhances success in achieving the objectives.
As consumers make daily contact with better packaging or better stained glass or better presentation of dishes in a restaurant, the facades of the store have a greater need to act as sales tools. The selection of graphics, posters, textures, materials and design concept can tell the target segment more about what they will find in that space than many paragraphs of text (Pegler, 1996).
Third Ring Range
The attractive power of this ring is manifested from the point where the premises are exposed to public view and ends at the entrance threshold. The accessibility and exposure achieved in the previous stage provide the framework for the construction itself to invite passers-by to cross this threshold and enter it. The entrance is the face with which the local greets and welcomes those who approach him. Faced with the hustle and bustle of information on the street, a well-designed entrance works like a hook that catches and attracts the customer to the premises. In store design, where momentum plays a major role in attracting customers, the facade is perhaps the only opportunity to catch them. (Currimbhoy, 1999).
It is also in this instance where the entrepreneurship's ability to harmonize with its environment - or to positively break with what is expected - will contribute to its acceptance and consolidation as a member of the community and the geography of the place. It is necessary to understand and bring together the aesthetic preferences of the population with the functional demands of construction, within the framework established by the legal, building and operational provisions that the Government proposes.
We include in the third ring the accesses to the commercial premises. Both pedestrians and vehicles will define the comfort with which visitors enter and will be offering one of the first courtesy signs. In the same way, the space that is destined to parking will fulfill functions in the satisfaction of those who come by car.
Conceptual synthesis of Ring 3 objectives
| objective | Solution | Tools | Components |
| Exterior appearance of the premises | Harmonization of the visual characteristics of the building with target customer profiles and its own corporate definition.
Adaptation to the urban environment |
Survey of habits and attitudes
Observation groups - preferences Architectural design Poster design Cleaning and maintenance program Current urban legislation Others |
Facade
Marquee Stained glass windows Sidewalks Outdoor signage Outdoor lighting Landscaping the environment Others |
| Amplitude of hours | Analysis of the customs and preferences of the target audience, correlation analysis with the commercial proposal and analysis of the operational capacity of the point of sale. | Survey of habits and attitudes
Observation groups - preferences Operational analysis |
Schedule schedule
Publicity communication Static communication in PDV |
| Pedestrian income | Design of pedestrian accesses | Survey of habits and attitudes
Prediction model of concurrence of people on foot and other media |
Pedestrian access
Ramps / door width suitable for people with disabilities |
| Vehicle income and parking | Design of vehicular accesses and definition of parking spaces | Auto Concurrence Prediction Model
Space availability analysis |
Vehicle accesses,
Vehicle circulation, Parking Disabled vehicle parking Space for motorcycles and bicycles |
| Waste treatment | Design of adequate waste treatment with minimal environmental impact | Comprehensive analysis of waste generation
Knowledge of current safety regulations |
Solid waste deposition
Effluent treatment |
| environmental
Contact with zonal environmental organizations |
Refrigerant gas discharge
Others |
||
| Supply of merchandise | Design of goods reception and dispatch dynamics adapted to the needs of the trade and the restrictions and zonal schedules | Supplier agreement
Municipal permits Coordination with headquarters Design of suitable reception space |
Doors, gates and access ramps Security
Schedule schedule |
| Security measures | Consideration and provision of physical security measures | Integration of physical security measures Electronic Security
Parking Safety Consideration Access for ambulances, firefighters. Complement the building structure with emergency planning. |
Physical security measures (doors, lighting, access controls, sentry boxes, guard posts, etc.)
Electronic security (sensors, alarms), CCTV (Closed Circuit TV). Parking, access for ambulances and firefighters. Emergency planning Income and expenses of contractors, suppliers, transport of flows, etc. |
Fourth ring - Circulation
- Atmosphere Presentation of merchandise Signage Accessibility for the disabled Circulation Additional amenities Security - Loss prevention
In the early 1990s, Swedish consultant Henrik Salen laid out his vision for the point of sale, anticipating an intense cocktail of design, planning, ergonomics, architecture, promotion, entertainment and well-disposed humans. He said: "the store is a theater, the products are the actors, the consumers are the spectators."
Once inside the premises, the visitor is exposed to a universe of sensations that - immediately - will define their behavior as a buyer. "There is no second chance for a first impression."
Scope of the fourth ring
The fourth ring has as an external edge that threshold of perceptions and, as an internal edge, the space - seldom identified and individualized - that is determined by the same buyer once he or she looks at the product or is approached by the service personnel.
According to published studies, there is a natural tendency for people, once inside the premises, to drift to their right, and go through the project in a counterclockwise direction. The same sources assure that only 10% of them reach two thirds of the place, 20% cross only half and the majority, the remaining 70%, do not get to make contact with a first third. This implies the need to actively participate in the design of the space to overcome such meager trends.
When analyzing large-scale commercial ventures such as shopping malls, multiplex cinemas or entertainment centers, the circulation will include the dynamics with which the public travels through the so-called common spaces, between commerce and commerce, or between attraction and attraction.
The tools used in this dimension range from common sense and the five human senses to sophisticated space diagramming tools. The different types of lighting, the levels of visual saturation determined by the colors and the signage used, the ambient temperature and the aromas comprise the spectrum of sensations that surround the visitor and affect them positively or negatively.
The arrangement of the interior furniture of the premises - also called layout design - is the process by which the merchandise exhibition sectors, the customer service sectors are housed, the circulation of the public is planned and the necessary furniture is calculated. The process, performed first on a blueprint and then in the final space, presupposes an exchange of experience between architects and designers and operations and sales staff.
Ambient
The ease with which the visitor circulates within the premises and the conglomeration of perceptions that accompany him on his tour will be decisive in aspects such as appreciation of the place, the time spent shopping, his feeling of well-being or discomfort and his qualification of the total experience of your visit. Numerous studies have shown that consumers evaluate practically everything more positively when they are in a good mood (Schwarz, 1998). There are two explanations for this: the first is that it is more likely, being in a good mood, that they will bring positive memories from their memory (Isen, 1978), the second is that people use their sensations as sources of information and, being happy, they perceive external stimuli as positive (Schwarz and Clore, 1983).
The variables are interrelated and affect each other. The lighting in a hotel, for example, will simultaneously perform setting and circulation functions. A hotel is an economic agent that operates around the clock, where each guest determines her own schedule. While one sleeps, another eats, a third works, a fourth arrives and a fifth leaves. However, the sum of these activities presents an unreal world, where an artificial air reigns. So that customers do not perceive this monotony, lighting is the factor that gives it an atmosphere. On the other hand, large spaces such as the lobby also fulfill different functions: reception, concierge, elevator lobby, seating area, perhaps a store, a bar and so on. Here the lighting adds value to the circulation,defining limits where the walls do not exist (Entwistle, 2001).
Sophistication in restaurants and bars.
The setting probably acquires its most critical expression at the level of restaurants and bars. In our times and in our society, these have become points where the desire to meet, converse, see and be seen and meet publicly in public converge. Although these functions are not exclusive to him - other places also serve them - it is during meals that most of the rites and traditions of all cultures take place. This function and its accessories have been transferred from the private sphere of the home to the public where, in addition to the meeting, a pleasant environment, seductive food and the comfort of good service are sought. The fact of moving with these intentions reinforces the leading role of these spaces and environments.Professionals play an essential role in the planning and design of these interiors, since the environment they create depends on them. In this sense, its ability will manifest itself in the distribution of spaces, in the proportions, in the lighting and in the selection of materials and furniture.
Security measures
Inside the fourth ring, the provision of security measures coexists with the rest of the visitor's feelings. The security policy will aim to provide a perception of control and harmony in order to bring peace of mind to the consumer and also contribute to making the shopping experience more pleasant. For this it is important to train the security force, who will interact with the visitor, guiding and helping him when necessary. In this instance, the buyer will not always know how to clearly differentiate the functions of security personnel from those of attention personnel and it will be necessary for security personnel to know how to interact and participate in a minimally necessary way in this role.
Conceptual synthesis of Ring 4 objectives
| objective | Solution | Tools | Elements |
| Setting | Analysis of public preferences, testing of the environmental and decorative proposal and adaptation to corporate standards | Survey of habits and attitudes
Observation groups Others |
Decorative elements
Posters Signage Music Scents illumination Corporate Design Manual Ventilation |
| Presentation of the goods | Grouping of merchandise offered in a manner consistent with the defined business strategy
Analysis of purchasing patterns and ergonomic and spatial adaptation of furniture |
Analysis and grouping of goods into related categories
Analysis of the assortment of categories and products Category Management - Defining Roles Layout design at the category level - Implementation Previous studies on customer attitudes |
Master Product Listing
Category master listing Local layout Merchandise Furniture Others |
| Signaling | Development of signage according to the expected aesthetics and functionality of the premises | Poster design | Design Manual
Local layout Others |
| Accessibility | Adaptation to needs
customers with disabilities |
Survey of spaces with specialized ergonomic focus
Conditioning |
Space between exhibits
Button height in elevators Space in bathrooms Others |
| Circulation | Circulation design with balancing and boosting between sections of higher and lower attraction | Circulation observation and preference analysis
Detection of hot, cold and dead spots Definition of spaces and circulations |
Survey of habits and attitudes
Local layout Usual routes Hot zones, cold zones Others |
| Additional amenities | Analysis of the composition of the purchasing groups and incorporation of rest elements for the different segments | Previous studies on customer attitudes
Observation at point of sale Detection of areas that generate fatigue Definition of special spaces for rest Availability of public toilets |
Coffee shop
Rest area Day care center Pet sitting Banks TVs Mechanic stairs Others |
| Security -
Prevention of |
Analysis of circulation and arrangement of elements of | Controls on
customer behavior and |
Properly trained security personnel |
| losses | security | the employee
Procedures to prevent and minimize ant theft and unfair employee behavior. Survey of risk situations Safety signage, in case of emergency, evacuation, etc. |
Fixed and mobile surveillance posts
Security cameras Mirrors Labels Others |
| Payment delay times | Provision of an effective means of payment system, and speed according to the type of business and customer interest. | Market supply study
Staff training Payment habits analysis Incorporation of payment and credit tools Delays forecast |
Cash registers
Electronic means of payment training |
Fifth Ring - Exhibition
- Merchandise managementAccessibilityPromotionCustomer servicePresence of staffIntroduction of new products and categoriesContinuous replenishmentDelivery times dedicated to payment
A good trade is, by definition, one that exhibits the largest portion of its products to the largest number of buyers for the longest period of time (Underhill, 1999).
As we said when referring to the potential of the geographical location of the premises, potential energy is the ability to do work. The same principle applies when the entrepreneur needs to designate spaces and locations for the products he intends to market. Usually, the exhibition is the suspension point between the moment a good is put up for sale and the moment a client withdraws it. There are multiple techniques to keep that lethargy as short as possible and to keep collateral inventory costs to a minimum.
Scope of the fifth ring
The fifth and last ring wraps the product and is what we call exhibition or merchandising. Its scope is determined by the buyer himself at each moment that he stops in front of the opportunity to purchase a product and service. The ring is what the buyer goes through with his sight, with his consultation, and constitutes the final instance of this analysis. Once you choose and pick up a dress in a store, once you ask the waiter for your chosen dish or once you confirm to the hotel receptionist that you will be spending the night there, you have gone through the ring. There are several observable phases of this last act: the client looks at the product or listens to the seller, perceives its usefulness and is motivated to take it temporarily, calibrates its ability to satisfy, compares it physically or with the help of his memory, accepts it or rejects, acquires it.This set of activities is influenced, practically simultaneously, by various factors: price, quality, desirable quantity, presentation, advertising and promotion.
Personalized attention
The reality of personalized attention shops is no different, except for the weight that the human factor charges in the reception, attention and advice of each of its employees. Clothing stores, hotels, restaurants carry a very important job of training and maintaining personnel.
Of the three elements that make a restaurant successful, for example, service is the most ephemeral. Once the location is selected (Ring 2) the physical body of the restaurant is practically constant. The food (Product) should also remain more or less stable once the chef defines the menu, assembles the kitchen and establishes relationships with suppliers. But the staff - from the meter to the waiters - are practically free agents. Every day they leave the premises, and unless they decide to return, the restaurant will not survive (Conran, 2000).
Display for mass consumption
This ring is the one that offers the most opportunities for action to manufacturers of consumer products, as it is where the retailers will accept their collaboration. What has become trade marketing in recent years is the terrain where manufacturers and distributors gather a good part of their efforts to improve the scene where brands compete. The most limited of the rings does not cover a single product but several that, composing the variety of the offer, compete with each other in the last instance - the purchase decision.
In mass consumer goods stores, such as kiosks, large pharmacies or supermarkets, it is common to observe the visual conflict that two or more suppliers generate when they try to highlight their own products from those of the competition.
Efficient consumer response
The discipline known as Efficient Consumer Response (ECR 3), developed in the United States since 1992, proposes for this ring a scientific base of tools that, adapted to the field of entrepreneurship and its analytical and operational capacity, will result in substantial improvements in the treatment of the variables. Despite this, the amount of information that can be used to carry out this type of initiative is overwhelming. An increasing number of sources and consultants provide an exponentially increasing number of data: market share at the brand, product and size level, exhibition analysis, distribution and coverage, population and preferences, trends, prices and others.
The challenge of planning is to understand the value of this data and transform it into a form of knowledge that allows its real use with the least possible waste of time and energy. Always, a portion of the information collected will be irrelevant but, amid the tide of data, lies the solution to the questions that the exhibition ring raises.
At the moment when the enterprise needs to define the variety of products to offer, various forces come into play and the decisions that are made will have a significant impact in the short, medium and long term. Different buyer profiles expect different types of products and the assortment plays a fundamental role in both the general perception of the premises and the sale. Customers will favor a store that offers the variety and quality of merchandise they need and, once inside, the possibilities of acquiring products will be greater with a greater variety of assortment (Shannon, 1948).
Operations experience
The experience at the local level, the management that those responsible for product replacement and customer service have is invaluable. At this point in the analysis, your contribution, through formal, informal or daily contact interviews, is key to inverting the traditional decision pyramid and creating a feedback loop that favors the exploitation of trade (AT Kearney, 2003).
Promotional techniques at the point of sale
The promotional material participates at this level, constituting itself as a sales force, especially in the premises with a self-service system or with free movement by the public. There is a considerable variety of opportunities to communicate and incentivize that the entrepreneur must adequately manage according to the type of farm they manage: free samples, discount coupons, refund offers, prizes, contests, demonstrations, etc.
Until recently, borders and posters were a mere accessory of advertising campaigns, which gave a final touch to a coordinated image. But recently they have acquired their own autonomy, becoming in several cases the favorite medium of various experiments in which they acquire an existence independent of that of the product offered (Cantadori, Manfredini, 1998).
Conceptual synthesis of Ring 5 objectives
| objective | Solution | Tools | Elements |
| Variety of the offer | In-depth analysis of buyer preferences and adaptation of the variety of products / service portfolio | Category Management 4
Assortment analysis at category level Product rotation analysis High and Low Analysis |
Local habits, preferences and attitudes
Software Category Management Market offer vs. own offer |
| Accessibility | Disposition of the goods according to the convenience of the public and the profitability of the business | Observation of conduct at the point of sale
Space management Category management Profitability analysis by product |
Total purchase time, by category, by product, by service
Delay time for each product / service First product chosen |
| Promotion | Maximizing the sale of profitable products and categories | Category role analysis
Efficient use of signage and merchandising Promotion of cross merchandising between related categories / products Impact measurement of materials |
Category management
Cross merchandising POP material |
| Staff presence | Definition of a policy of image and presence of people | Definition of uniforms
Definition of aesthetic guidelines Training |
Uniforms
Attitude Presence |
| Customer service | Definition of a personnel structure that actively collaborates with clients in the selection and acquisition of merchandise | Defining service policies
Allocation of human resources Sales training Safety training Motivation programs |
Selection and training of personnel
Crime management Collection fraud management |
| Introduction of new products and categories | Definition of a policy of innovation of the offer and incorporation of new products that improves the image of the premises and increases profitability | Definition of new product incorporation policy
Analysis of rentability Regular agreements with suppliers |
Sampling Promotion
Display |
| Continuous replenishment | Permanent replacement of products sold | Coordination and agreement with Suppliers
Daily sales tracking Maintenance of safety stocks |
Efficient Consumer Response
Category Administration Supply chain management |
The product / service
We call product / service a spectrum of entities that, according to the type of enterprise analyzed, will be embodied in a different way. As we said before, in a supermarket the experience will be made up of each of the products it offers, for a hotel it will be the stay in one of its rooms, for an art exhibition it will be the act of appreciating the works through the senses. There are, yes, multiple models of proven experience analysis. For this reason, it has been incorporated into the model in a central position, as the main actor, but it is not broken down in its own and multiple facets.
Conclusions
The Five Rings Model, as we stated at the beginning of the work, aims to be a framework through which to understand the value of the dynamics generated between the physical support offered by the business as a framework for the act of purchase and visitors, they will become buyers.
Its utility lies in the integral representation of the observable variables involved in this interrelation. Its application transcends the responsibility of those who distribute merchandise and emerges as a solution for those who produce them, manufacturers. These, with the help of the model, will better understand the distribution channels and will make better decisions when selecting geographic regions, formats, companies, exhibitions and / or promotions.
For both cases, distributors and manufacturers, the rings share variables and problems, allowing joint work to better understand the complex process of commercial attraction.
Bibliography
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- Area of influence, attraction or capture: Geographical area that contains the clients of a firm or a group of firms in particular for specific products or services (Bennet, 1988). Customer Relationship Management: A marketing discipline that combines databases and technology with customer service and marketing communications. CRM seeks to create one-to-one relationships with the customer through the use of demographic information and purchase history for each communication vehicle. (American Marketing Association). Efficient Consumer Response: Design of a simple, fast and efficient (merchandise distribution) system oriented to the best customer service,in which all the links in the logistics chain work together to meet their needs at the lowest possible cost (Efficient Consumer Response Board, 1995). Category Administration: A joint process between distributors and manufacturers for the management of categories as business units, producing better sales results and profitability through focus on customer needs and value creation ECR Best Practices Report, 1995).
