1. Background and mission of The Salvation Army:
The Singapore’s Salvation Army, a Christian non-profit organization, was established during 1935. It was first founded by William Booth; a London minister in 1865 and later spread itself around the world.
Salvation Army main motive is to help the mankind without racism. Its mission is “to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination” with a slogan of “Heart to god, hand to men”.
Red Shield Industries Family Thrift Store:
They launched the Red shield Industries (RSI) Family Thrift Store, a social enterprise in 1996, reaching out to many different people in the society that are struggling to make ends meet.
RSI helps to re-sell the donations item that are donated by the public through the 5 Salvation Army family thrift store. The amount that is generated will be given out to help Salvation Army social service and community programmed. For every dollar spent, 90 cents will go the needy people.
Other than this, RSI is also actively involved in fundraising, helping disaster reliefs and receiving donations or sponsorship from supportive organization. According to Salvation Army 2011 annual report, RSI received 10 tonnes of donated items daily and that The Salvation Army had spent over $16.2 million to operate its social service and community programmed. (The Salvation Army, 2011)
2. SWOT Analysis
Strengths * Affordable price (low price). * Selling variety products. * Have a biggest store space among the other thrift store. * Money raised given to charity.| Weakness * Disorganization of the store display. * Products weren’t that attractive. * Inconvenient store that hardly to be reached by people. * Lack of management, marketing, and retailing. * There’s no attractive visual merchandising.| Opportunities * New employee being trained well before become a permanent employee. * Have an online shopping system. * Money and aid from other organization help.| Threats * High expectation of donations from donator. * Put a high hope on the products quality from the donator. * Amount of the donations will be depends on every season. * Mostly of the products weren’t able to use it in modern era like; now. * Other local Charity Thrift store competition. * Lack of loyal customers.|
Observation method is a very useful method for in-depth research, this Primary Research may help to clarify the information that gathered from Secondary Research.
Purpose of Observation:
The main purpose of this research:
* To understand and determine the current marketing mix of Salvation Army.
* Identified the problems.
* Give a recommendation what and how should Salvation Army do to increase the traffic sell in the Singapore’s market.
The group’s researchers went to the retail store to observe by taking notes and picture as the proofment information.
* Date and Time:
The observation was conducted on the 24th February 2012, 11am.
Bukit Merah Family Thrift Store to conduct the observation.
Salvation Army receives any kind of products as the donation from people. The products donated weren’t in a good, satisfactory and resell able condition but some may be in a good condition to sell and brand new stuff with the original pack. There’re many variety of products, such as;
* Apparel; some are brand new and been worn. They carry few categories of apparel, such as;
* Bottoms and Tops
* Home Furnishing such as;
* Bowl, plates, spoon, cup, forks, chair
* Dolls and Toys for kids
* Salvation Army gets a instruments donation, the instrument products were in a good condition and can be use but some may broken or some key tone weren’t working anymore. Instrumental such as;
Salvation Army stores weren’t located in a strategic place and far from the city, Upper Bukit Timah. The store’s exterior itself wasn’t designed well to represent and attract people to come in.
Salvation Army has an in-store promotion. Promotions are one form of marketing purpose to attract people to buy. There’re variety promotions:
* Buy 1 Get 1 FREE for Toys and CD/DVD.
* Renovation Sale 50% OFF for electronic usage.
* Loyal Membership card called ‘Friend of Salvation Army’, this membership card can be use when you’re purchasing $40 and above to get 40% OFF from the retail price.
Salvation Army doesn’t have a specific pricing rate for the products selling. Some products’ prices weren’t labeled or stated in the products. * For apparel mostly cost for $3-$10 (casual wear) but for the gown it cost $50 and above. * For the home furnishing:
* Decoration: $3 – $5
* Bowl, plates, spoon, cup, forks, chair : $3 – $5
* Books $5 – $8
* Dolls and Toys for kids: for the dolls cost $5 for each and $8 – $10 for the toys.
* For Instrumental;
* Piano, the new brand and with a good condition they put a price $1200 and for the old time piano they sell for $888.
* Normal guitar cost $100++ and the electric guitar cost $200++. The prices weren’t stated clear in the products.
* The Organ instrument cost $300 – $400.
4.2 Problem identified
1. Poor Quality Products.
Salvation Army’s products were donated from people which some are still brand new and been used. The quality of the product was poor. This fact may impact the selling performance.
2. No Product Filtering.
Salvation Army accepts whatever been donated from society or public. They never really went through and select the donations before to put it up on store for sales.
3. Lack of Product Organizing.
Salvation Army locates the product randomly. Salvation Army never organizes the products accordingly to the specific category. It makes the customers hardly to look for what they want.
1. Price tag.
Salvation Army carries too much products in the store but some of the products don’t have the price tag and some products have 2 price tag with a different prices. It may drive confusion and difficulties to the customers.
1. In-Store Promotion.
Salvation Army does give an in-store promotion, but some of the promotion sign and info weren’t stated clearly. It makes the customer wondering what and how does the promotion work on.
1. Lack of Visual Merchandising.
Salvation Army’s store was unorganized. They don’t even have a proper visual merchandising that may attract more people to make a purchase.
2. Lack of Store design.
From an Interior and Exterior perception, Salvation Army’s store wasn’t attractive enough to let people know their store and to shop within. The most important thing for a store is the visual representative that will bring out their brand image.
This method research has come to the end. We have find in-depth of the marketing mix and identified the problem of Salvation Army. We conclude this research by giving some recommendation to Salvation Army how to improve the traffic selling product.
* Product Selection.
Since Salvation Army receives anything from donation whether it’s still can be use and resell or it’s in the poor quality condition. To able sell a good quality product, Salvation Army needs to check the product condition, then select and decide which need to be sell in the store and which need to be recycle. By selling a good quality product, it can affect the drive sales performance.
* Product Organizing.
The products were placed here and there, in a messy condition or unorganized. To make it easier for customers search on what they looking, Salvation Army should organize the products in the own category and sub-category. Example; Women’s Top organize it in 1 rack accordingly to the sub-categories (Tank top, t-shirt, shirt), sizes and colors. It’ll be easier for the customers to look through the products without confusing themselves.
* Price Tag.
Product pricing wasn’t stated clearly on some product. Salvation Army should put a price tag correctly on every single product. It’ll be easier for the customers to know the prices without asking for the staff’s help.
* In-store promotion.
It’s a good thing that Salvation Army give a promotion. But there’s a lack on the promotion, instead of putting a sign ‘BUY 1 GET 1 FREE’ nearby the product, it should be done in a better way like; adding more info to the sign on how does the promotion works.
* In term of store design. * Salvation Army should really re-design their store’s exterior by painting the wall to looks new put some props and logo to represent the Salvation Army Family Thrift Store. Besides that, Salvation Army need to do a visual merchandising to drive the attention. * Salvation Army need to renovate the store layout and relocate everything in order to make it looks nicer. * The floor, wall, and lighting should be changed in a white color to make the store brighter. These 3 structures bring an impact to the product sales. A brighter lighting, the product will looks much nicer. When the product looks nice, it became a desire to customers to purchase it.
Benchmarking – IKEA
IKEA is a well known home furnishing retailer. IKEA recognized globally by the consumer. IKEA was successful a brand in driving a sell through products. IKEA’s retail can be a good example of their strength and sell volume. Low prices are one of the IKEA’s concept to attract the customers want to buy their house furniture from IKEA. Their low price strategy covered up with the wide range and design products. IKEA’s selling point has hit and reached 21.2 Billion Euros in a year which really affected their selling point. IKEA’s strength:
* A strong and well-known global furnishing brand which attract different age of consumers.
* IKEA giving a lowest price with a promise that the product will be in the high quality. * IKEA offering a wide range of products and designs for customers to choose. * IKEA reached the balance point between the quality, design, variety of products and prices. * IKEA also known as the global brand that re-using the source material. Example; the OGLA chairs, this chair is made using wasted wood, by re-using the wasted wood it may help to reduce the amount of solid wood needed for producing a chair. Volume commitments; IKEA creating a long term partnership with their local suppliers in order to achieve a better deal; prices and quality. IKEA is committing to buy larger volumes products in order to be able negotiate for a lower prices from the suppliers.
Delivery commitments; to save the transport cost, IKEA using source material that was close enough to their supplier. Delivering the products directly from the local supplier to local IKEA store, it may help to reduce the handling costs, road miles, and keep the products price same as before or lower the price if that possible.
* Strong Brand Image or Personality and well-know.
IKEA was very well known worldwide for the home furnishing. Whenever people bought new furniture, they’ll spontaneously remember IKEA and purchase it there. * Strategic Store Location. To be able drive sales, the store location itself bring an impact to the brand. People nowadays prefer a convenient and strategic place which located in the town or city.
* Recycle or Re-using Product.
To save the cost of production, the material that left over could be use to make another type of products and the products that never been sold should recycle and transform to another products.
* Create a strong Brand Image.
Salvation Army should have their own brand image that can easily recognized by society. Salvation Army could use their most sellable product to represent their image.
* Improvement of the Location.
Salvation Army’s store was far away from the city, that makes people who live in the city or other location lazy to come all the way to the store for shop. So, Salvation Army should open a branch store at city. If there’s a store at the city, it’ll be able get a higher selling point because everyday people always pass by the city area.
* Recycle the product.
Salvation Army never focus on the selection of the product after people donating. Whether it still can be sold or not, they’ll put it up at the store. Salvation Army should get rid of this problem by selecting and filtering the products. The products which aren’t in a good condition should be recycle to create a better product.
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