Micro Operation Of Hogsmeadow Garden Centre Marketing Essay

The micro-operations of Hogsmeadow Garden Centre are the Indoor Sales Area, Outdoor Sales Area and the Honeydukes Restaurant. Each micro-operation has input-transformation-output processes. (Slack et al, 2007)

The transforming resources for the indoor sales area categorised under facilities and staff. Facilities are like the payment counters, shelves to place the products for customer viewing, and the nursery to grow and upkeep the plants. As for staff, there are cashier, managers and stock keepers.

The transformed resources are categorised under materials, information and customers. Materials are goods which customers can buy. Figure 1.1 shows three of the many goods which customers can buy from the centre. Other goods are like seeds, fertilisers, garden lighting and wine. Information given is the price of the goods, a description of the goods and a map of the indoor sales area so that customers can head directly to the department that they want.

The predominant transformed resources or the transformation process for the indoor sales area are stock keeping, watering of plants, and selling of goods. Stock keeping is where the staff of the garden centre makes sure that there is sufficient amount of goods. The plants need to be watered in order for it to be fresh and presentable when customers buy/view them. The next transformation process is selling of the goods to customers.

The outputs for the indoor sales area are delivery, after sales service and stock checking. Delivery could be done when there are weddings, funerals or any event. Instead of having the customer carry the plants, the garden centre can provide delivery services. After sales service is for when a customer wants to return/exchange a bought product due to a problem with the product. As for stock checking, staff at the garden centre to continuously check their stock for future ordering purposes.

The indoor sales area has a wide range of customers like families, gardeners, teenagers, working people and many more. Families go to the indoor sales area as there are many products filling different needs, for example, a child would want to buy toys.

Outside Sales Area

Transformed Resources

Materials:

Garden sheds

Garden machinery

Fencing

Information:

Price tags

Product brand

Option for delivery

Customers:

Gardeners

Elderly

Hobbyists

Transforming Resources

Facilities:

Sales area

Counter

Testing area

Staff:

Sales assistant

Cashier

Stock checker

Output

Delivery

Customer feedback

After sales service

Transformation Process

Selling products

Tending the plants

Stock keeping

Transformed Resources

Materials:

Garden sheds

Garden machinery

Fencing

Information:

Price tags

Product brand

Option for delivery

Customers:

Gardeners

Elderly

Hobbyists

Transforming Resources

Facilities:

Sales area

Counter

Testing area

Staff:

Sales assistant

Cashier

Stock checker

INPUT

OUTPUT

INPUT

Figure 1.2

The outdoor sales area accommodates for heavy duty products.

The materials are like garden sheds, garden machinery, fencing, water features, playhouses and many more. Information for the products are like price tags, product brand and an option whether the customers want the goods to be delivered.

The predominant transformed resources for the outside sales area are the selling of products, tending the plants and stock keeping. The staffs need to tend the plants to keep it fresh. As for stock keeping, the garden centre needs to ensure that there is available stock at all times.

The output for the outside sales area are delivery, customer feedback and after sales service. Since most of the goods are heavy duty, customers need a delivery service. Customer can give their feedback on the goods as well as the delivery system. Good after sales service is needed during customer feedback.

The outside sales centre too will have a wide range of customers. Examples of customers are gardeners, the elderly, hobbyists, children, and families.

Honeydukes Restaurant

Output

Payments

Customer feedback

Prepared food

OUTPUT

Transformation Process

Serving food and drinks

Cooking

Washing dishes

INPUT

Transformed Resources

Materials:

Trays

Food

Drinks

Information:

Menus

Prices

Nutrition value

Customers:

Families

Couples

Working people

Transforming Resources

Facilities:

Tables and chairs

Wash area

Kitchen

Staff:

Waiters

Cashiers

Promoters

Figure 1.3

Materials for the restaurant are trays, food and drinks. In order to carry the food and drinks, customer need to use trays, so trays are one of the essential materials needed in the restaurant. Information are food menus, prices and nutrition value of the food and drinks.

Facilities in the restaurant include tables and chairs, wash area and kitchen. As for the staff, there are waiters, cashiers and promoters.

Transformation process are serving of food and drinks, cooking the food and washing the dishes after customer has eaten. As for the output, it includes payment of the meals, customer feedback on the quality of food items and prepared food ready to be served.

Volume, Variety, Variation and Visibility (4Vs)

Volume is the level or rate of output from a process, a key characteristic that determines process behaviour. Variety is the range of different products and services produced by a process, a key characteristic that determines process behaviour. Variation is the degree to which the rate or level of output varies from a process over time, a key characteristic in determining process behaviour. As for visibility, it is the amount of value added activity that takes place in the presence of the customer, also called customer contact. (Slack et al, 2007)

Indoor sales area

Outside sales area

Honeydukes restaurant

Low

High

High

Low

High

High

Low

VOLUME

VARIETY

VARIATION

VISIBILITY

Low

Figure 2.1

Indoor Sales Area

As shown in Figure 2.1, the volume, variety and visibility is high whereas the variation is low. The volume is high as most of the products serve as a necessity to customers. As for variety, it is high because there are many ranges of products that customers can choose from. Variation is low because most of the items are used by customers throughout the year so predicting when the demand would be high/low is easier. As for the high visibility, this is because the products are readily there for customers to purchase.

Outside Sales Area

Based on Figure 2.1, it is opposite of the indoor sales area. Volume is low because most of the products are a ‘buy once’ product in where customers only change/upgrade it after a long period of time. Variety is low as well because most of the products are standardised. Variation is high because most of the products are based on demands of the customers. For example, customers would only to purchase water features during seasons like spring, autumn or summer as the water feature would not be usable during winter. Visibility is low because the products, with the same reason as volume, are only a ‘buy once’ product.

Honeydukes Restaurant

Volume for the restaurant is high because the staff cannot predict how much customers will buy. As for the variety, it is also high as there are many different food and drinks choices. Variation is low because the operation of the restaurant would be same throughout the year. As for visibility, it is high because the food items are prepared for the customers to order.

Inventory Control

Why is it an issue?

As mentioned in the case study, inventory control is an issue to Hogsmeadow Garden Centre because they are having a hard time deciding how much of each product they want to order at the beginning of the year.

Importance of inventory control.

There are five main reasons for inventory control:

To cope with random or unexpected interruptions in supply or demand.

To cope with an operation’s inability to make all products simultaneously.

To allow different stages of processing to operate at different speeds and with different schedules.

To cope with planned fluctuations in supply or demand.

To cope with transportation delays in the supply network.

(Slack et al, 2007)

How to improve inventory control?

ABC Inventory System

The ABC Inventory System is where goods/products are classified based on its importance. Goods/products are divided into three categories:

A – Very important, products that has high demand.

B – Average importance.

C – Products with low demand, but might still are able to fulfil customer needs.

(Arsham, 2010)

From the case, goods that are in the category A are goods like seeds and fertilisers because it is needed by customers all year round to maintain their garden/plants. Goods in category B are like barbeque pits, gifts; goods which are seasonal. Goods in category C are like furniture, gardening equipments and kitchen equipment in where the period of each customer buying it is far apart as these goods are long lasting.

By applying the ABC Inventory System, Hogsmeadow Garden Centre will be able to establish which product should be ordered in a higher quantity and which should be not.

Inventory Information Systems

In order to apply the ABC Inventory System, managers at Hogsmeadow Garden Centre can refer to the Inventory Information System to determine the classification of each product. The Inventory Information System has a few functions:

Updating stock records

Whenever a transaction takes place, be it from a sale or when goods are received from the suppliers, the value of the stock will change. Therefore, the information must be updated in order to keep track of the good.

Generating orders

When deciding how much of goods to order, managers can refer to the stock records. Demand of each product will be recorded by the system, so managers can determine how much they would order.

Generating inventory reports

Inventory information systems can generate regular reports of stock value for the different items stored, which can help management monitor its inventory control performance.

Forecasting

Inventory replenishment decisions should ideally be made with a clear understanding of forecast future demand. The inventory information system can compare actual demand against forecast and adjust the forecast in the light of actual levels of demand.

(Stack et al, 2007)

Order Winners and Order Qualifiers

Order Winners

Order winners are products which sets one company from the rest. Products which are regarded by customers as the key reason for purchasing them (Slack et al, 2007). One of the order winners for the garden centre is the excellent service, as mentioned in the case, ‘…it is also because we have developed a reputation for excellent service…’ The next order winner is location as it is conveniently located. The plants, shrubs and trees sold at the outside sales area are also order winners as the quality of it is high.

Order Qualifiers

Order qualifiers are products which are not as important as the order winners, but do have its value (Slack et al, 2007). One of the order qualifiers is the restaurant. The restaurant can serve as a place customers can go to recoup after doing their shopping. The next order qualifiers are the products sold at the centre. Most supermarkets and shopping centres would be selling the same products as Hogsmeadow Garden Centre; therefore Hogsmeadow Garden Centre needs to make sure that the goods they sell are of competitive level. The third order qualifiers are the staff. In any business, staff is needed to run the operations of the business.

Recommendations

In order to make Hogsmeadow Garden Centre a market leader, Don Dursley must first do a performance measurement. Performance measurement is a process of quantifying action, where measurement means the process of quantification and the performance is assumed to derive from actions taken by its management (Slack et al, 2007). To measure performance, a polar diagram is used. Polar diagram is a diagram that uses axes, all of which originate from the same central point, to represent different aspects of operations performance.

Figure 5.1

Figure 5.1 shows the current performance of Hogsmeadow Garden Centre. It is noticeable that the cost of products is rather high; this is due to the high quality of the products. Speed and dependability are average whereas flexibility is close to low. As for the market requirements, most customers would prefer good quality with low price. As for customer service, they would always expect good customer service which is why the requirement of dependability, flexibility, quality and speed are high.

Figure 5.2

Figure 5.2 shows the expected performance for the future. Hogsmeadow Garden Centre should try to lower the cost of their goods in order to match the market requirement. The market requirement for speed, dependability, flexibility and quality are expected to increase due to increase in customer needs. Hogsmeadow Garden Centre should try to increase their performance in terms of speed, dependability, flexibility and quality, as shown in Figure 5.2.

Conclusion

In order for Hogsmeadow Garden Centre to be market leader, they need to lower their cost and at the same time, improve their service quality.

(1990 words)