Homeplus †Marketing Essay

Background of HomeplusHomeplus was initially owned by Samsung Corporation1 in 1994. During the Asian financial crisis in 1997, Samsung was affect by the crisis and essay to strive its business in the retail industry. It eventually collaborated with Tesco, a major British retailer in 19992. The joint venture benefited both Samsung and Tesco. Samsung was saved from bankruptcy, in the same time, Tesco was able to enter the tough local retail business because of the partnership with Samsung3. Tesco took over 94.68% sh bes of the company in 20114.Vision big Stone flavorHomepluss vision is to be recognized as the most admired company in South Korea4568. The company concerns with two major assess creation, which are the market and neighborly value. reckon of Growth is based upon the market value creation. It involves in stimulating value for customers by clearly understanding customers needs, in turn, providing these value to them, which benefits the company in terms of market value m aximization468. Referring to customers satisfaction, Homeplus emphasizes on reliable shopping value. accord to figure 3, there are several(prenominal) factors that the company must consider i.e. low price, wide range, high flavour and great helpers or convergences. augur 3 Homeplus Great Stone Face6 framing 3 Homeplus Great Stone Face6Face of Contribution reflects the relationship between Homeplus and its stakeholders. It refers to the social value creation. That is, the company gives importance to its stakeholders and understands their expected value468.Figure 4 Stakeholder Viewpoint5Figure 4 Stakeholder Viewpoint5According to figure 4, it brush aside be seen that Homeplus is the leading company among its competitors measured by the involvement with its stakeholders especially the local community. The integration of these two faces gives the Great Stone Face, which is Homepluss vision of two values creation must be achieved in order to sustain its business long term. The s ustainable growth, together with social contribution is the key driven to gain higher market value and becoming the most admired and respected company in the world6.Mission Artience postHomeplus created its own management structure called Artience House. The houses structure logically explained the correlations between each of the elements being applied in its management framework.Figure 5 Homeplus Vision House5Core Purpose FoundationTo found a basis of house, Homeplus regards to create change magnitude value for customers to earn their lifetime loyalty as its core purpose explaining the reason why it exist. revalues PillingTo make the foundation firm, Homeplus focuses on values in its business execution, which are No one tries harder for customers and daintiness people how we would like to be treated.4 Generations Development of New Concept caudexsHomeplus has continuously developed its hypermarket thought as shown in the following figure.Figure 6 Homeplus 4 Generations of New Concept Stores6Homeplus has developed its store concepts up to the 4th Generation. The following explanation of each generation will be describe in details as follows.1st GenerationHomeplus (Samsung and Tesco) entered the retail industry in 199924. The 1st generations concept was known as oneness discipline Shopping Service. The company focused on offering low price point of intersections to customers. Like other retailers, Homeplus experienced many threats such as high competitiveness and the warehouse like style discount stores did not really attract customers etc.2nd GenerationA year later, the Value Store concept was introduced in the 2nd developing phase in 200067. The Value Store was created based upon the customer oriented Korean style6. It comprised with One Stop Shopping Service and One Stop support Service, offering optimal shopping services and other service facilities in a unused environment. One Stop Living Service delivers new floor layouts. The number one floor is equipped with food courts, childrens walkawayentourage and other service facilities where the second and one-third floors are the supermarket and products display467.3rd GenerationThe 3rd generation was first introduced in Jamsil 200767. Homeplus added Emotional Store to the 2nd generation, offering art and culture to customers. Moreover, the Emotional Store adopts four concepts of Art being, Well being, Touching and High Technology to the store467. In other words, it combines art with science, so called artience environment to customers. This include art galleries and function rooms located on the fourth floor expansion of the hypermarket16. Hence, the Emotional Store concept consisted of One Stop Shopping Service, One Stop Living Service and One Stop Touching Service.4th GenerationHomeplus recently introduced a new concept for the 4th generation in 201167. This bow shift differed from other development phases where it combined the services both online and offline sho pping and created a new innovative shopping concept. The Smart Virtual Store concept was developed and it became the first virtual shopping concept in the world18. The Smart Virtual Store provides a new way of shopping in subway arrangement stations. It aims to persuade customers to shop Anywhere, Anytime and Anyplace regardless time and space67. The concept was created inversely to traditional stores by bringing the stores to customers rather than waiting for them to visit the stores67. Homeplus launched applications that smart phones or tablets can recognize products barcodes by interfacing information embedded in the online store67.Homeplus installed shelves, displaying more than 500 products featured with QR codes are pictures plastered on the subway stations glass walls, which could be scanned, purchased through smart phones applications1. The products consists of 3 categories and 11 subdivisions i.e. Daily Takeouts, Tesco Direct Souring, most frequently selected items known as Best 100 and golden Range consisting of infant cares etc67. Moreover, purchased goods deliveries can be arranged and arrive in minutes or hours.This concept also pleasure commuters that are waiting for their train. The first virtual store is located in Sellong subway station, which is one of the busiest stations in South Koreas capital city, Seoul. Later on, the installment took place at Seomyeon, Busan and augmented to Kwanghwamoon bus station in Seoul67. It is believed that the virtual shopping is one of Homepluss creative innovations that helps expanding the online sales rather than investing on new stores that requires enormous amount of capital. The expansion of the smart virtual store is expected to be locating at busy pedestrian areas, offices, parks as well as universities and college campuses etc679. The figure below is a Smart Virtual Store in Sellong subway station.Figure 7 Homeplus Smart Virtual Store in Sellong resistance Station Figure 7 Homeplus Smart Virtual St ore in Sellong Subway StationLeading Innovation and DevelopmentLeading IT SystemsDue to Tescos leading role of Information Technology, Homeplus employed some of Tescos current technologies to its operation. Examples of effective analytical ashess deployed by Homeplus are Product Management System (premenstrual syndrome) and radiocommunication absolute frequency Identification Pilot Project (RFID)67.Self-Checkout SystemHomeplus runs the first self-checkout arrangement in Korea. This system is currently being operated at 58 stores and provides customers with more handy and reliable shopping environment6. It can not only reduce waiting time, but also enable customers to arrange their goods by themselves. By using this system, customers can keep private of the goods they purchased, and avoid making their credit card selective information to be disclosed.Automatic Queuing SystemIn Yeongdeungpo store and Jamsil store, Homeplus introduced the automatic customer queuing system to optim ize their customers shopping experience. Instead of lining up in front of the cashiers, customers are automatically queued with queue numbers. It has maximized the efficiency of both customers and cashiers. With this system being utilized in retail market, the operation of check out has become more flexible6.New systems and the customers parliamentHomeplus decided to adopt the lotus system for retailing, which had achieved the global standard and was flexible enough to manage a rapid expansion 21. Meanwhile, in terms of Development of alternative technologies 10, Homeplus introduced a self-checkout system and a smart card system, which can automatically count products in a shopping cart. Automatic queue counting technology is another introduced method, which is aiming to eliminate waiting in checkout lines. Also, the self-order and self-pay system has also been introduced to apply in their food courts.Additionally, Homeplus has its own philosophy that all of its stores are the custo mers parliament and places great importance on seven types of customer surveys conducted 200 times annually 17.PMS (Product Management System)Homeplus initially set up the Product Management System (PMS) in 200467. The PMS is an Oracle developed system, which is used to analyze and predict consider, stock ordering and promotion tools. The system is considerably accurate in terms of profitability management. Moreover, the data storage can be stored more than two years. The PMS helps supporting functions that in weak areas of existing domestic systems such as researching on demand analysis and stock inventories etc. The objectives of PMS is to reduce operating costs in all areas from product ordering, merchandise management, price inventory planning to increasing productivity6.Radio Frequency Identification Pilot Project (RFID)Occurring in the same year as the PMS, Homeplus adopted the Korean governments Radio Frequency Indentification Pilot Project (RFID)67. The RFID is an innovativ e technology that enables product tracking utilizing embedded semiconductor chips. The product tracking process can be applied crosswise the entire cycle since the production stage to ware house phase and distribution process. Additionally, Homeplus was the first company in South Korea that developed RFID card to superintend customers buying characteristics67.The data can be collected via electronic tags that are embedded in shopping trolleys. The collected information helps the company to improve product displays to be more convenient for customers. The Smart Pallet was Homepluss 1st RFID pilot project that tracks pallets movement in and out among three suppliers distribution centres, stores and KPP6. The development of the 2nd pilot project enhanced the revision of business model creation and operation of individual product.Leading Innovation in DistributionIn 2003, Homeplus established its very own distribution service centre called Mokcheon Distribution Service Centre. Two yea rs later, the company create the Haman Fresh nourishment Distribution Service Centre, which is currently the biggest agricultural and fishery products distribution in Asia6. The distribution centres are built to support the rapidly increase in sales due to the opening of new hypermarkets. The following figure indicates Mokcheon and Haman distribution service centres capacities.Figure 8 Mokcheon and Haman Distribution Service Centres Capacities6Suppliers Shared Growth & unclouded TradeFor balancing the two wings of itself and suppliers, Homeplus found the Shared Growth Division to implement the shared growth policies on six areas (Fair trade, Funding, Cooperation and Technology Support, export Support, Education Support, Management Support)by collected opinions and comments from suppliers, and to build up sustainable partnership with suppliers.To specific, Homeplus strive to provide the fair trade and free competition with customers and suppliers and it operates the Vendor finan cing system to gain more funding support for the sake of efficiency of distribution, Homeplus supplies cooperative measures and technical support for suppliers and Develop PB products with suppliers and help excellent SMEs expand into overseas markets Due to The learning ability of one enterprise which decides their future, Homeplus built up an academy, it give staff an opportunity to pursue lifelong education. To improve product competitiveness, Homeplus contributes to strengthen quality control system of suppliers by cooperating with external and internal experts67.Customer Value* We understand customers and do our best to satisfy them.Generally, customers always play a significant role in a successful company. Sometimes, the opinions of customers might impact the operation direction of a firm. Consequently, customer value can be used as a catalyst in creating a new advanced strategy in an organization. As the second generation store of Homeplus, they built a new construct named V alue Store which was focusing on the convenient living conditions. Home Plus provided one stop living service and one stop shopping service, especially the one stop shopping service included cosy shopping, full range of goods, lower price, better quality and extensive customer service. The top managers of Home Plus trained their stuff to understand customers, satisfy the requirements of customers first and act the responsibilities of the company 6.Figure 10 community Centre Store Concept5Homeplus also does several kinds of customer surveys to hear customer ideas, in order to serve them better. They built a customer plan including several elements which are low price, wide range of product, high quality and great service. Each of the elements contained several items to examine the emotional data from the responders. The data have about related to the transformational leadership which could decision the strategy of the company to covert the learning organization to innovative compan y6.