Factors Affecting the Performance of Retail Businesses in New Zealand

This report delves into the factors influencing the performance of retail businesses, with a specific focus on the New Zealand market and using Fenton Quality Produce as a case study. It explores various elements, including management theories, marketing strategies (particularly the marketing mix), industry dynamics, competition, and health-related factors. The research examines how management styles, such as participative and directive approaches, impact business outcomes. The report analyzes the significance of the marketing mix elements—price, product, place, and promotion—in driving sales and customer acquisition. It further investigates the influence of the retail industry, emphasizing the challenges faced by businesses dealing with perishable goods. Competition and the increasing consumer focus on health and wellness are also addressed as crucial factors. The conclusion highlights the relevance of these factors and their combined effect on the overall success of retail businesses, offering valuable insights for business development and strategy.

Running head: APPLIED BUSINESS RESEARCH 1
Applied business research.
Student Name
Institution

APPLIED BUSINESS RESEARCH 2
Table of Contents
Introduction......................................................................................................................................3
Background of the organization...................................................................................................3
Problem identification/opportunity..............................................................................................3
Rationale......................................................................................................................................4
The scope of the study.................................................................................................................4
Literature review..............................................................................................................................5
Management theories...................................................................................................................5
Marketing theory..........................................................................................................................6
The industry of the retail business...............................................................................................8
Competition..................................................................................................................................8
Health factors...............................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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FACTORS AFFECTING THE PERFORMANCE OF RETAIL BUSINESSES IN NEW
ZEALAND.
Introduction.
Businesses operate in a dynamic environment which makes change inevitable. The
change affects the performance of the retail business to some extent because the firm has to
change how it carries out its operations. The performance due to the various factors contributing
to the change can either improve or decline. Performance in businesses is measured using
various metrics which include sales volume, profit, customer acquisition, market share,
employee retention and employee satisfaction (Bai, & Sarkis, 2014). There is the need to identify
the factors affecting the performance of the retail business in New Zealand and Fenton Quality
produce was used to help identify the factors.
Background of the organization
Fenton Quality Produce Ltd is a fruit and vegetable shop located in Rotorua in New
Zealand. The company was started by Nick Patel after realizing that most the people in Rotorua
had been buying fresh greens and that demand for fresh fruits and vegetables was very high
because people had embraced healthy eating habits. The company buys the supplies from
suppliers in Tauranga, Hamilton, and Auckland. The company engages in both wholesale and
retail operations, and it has played a major role in satisfying the needs of the customers in terms
of fresh fruits and vegetables in Rotorua and its neighboring locations.
Problem identification/opportunity
Organizations make profits and losses, but they usually do not know the cause of the
change in performance. The lack of the knowledge prevents the companies from sustaining their
success (Anderson, et al.2014). This leads to loss of market share, customers shifting their
loyalty to the products of the other organizations, increased employee turnover which disrupts

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the operations of the business due to the shortage of employees to perform various tasks in the
organization. This leads to increased costs such as opportunity loss due to the shortage of
produce in the market. Retail businesses play a critical role in the economy and also ensuring
that customers receive the needed products of the right quality and quantity. In respect of the
mentioned issues, the research will be aimed at identifying the factors affecting the performance
of retail businesses in New Zealand.
Rationale
Retail businesses especially those engaging in fresh fruits and vegetable play a critical
role in the economy and improving the health of many consumers. Due to their importance in the
society, their need to identify the factors that affect their performance. Identification of the
factors will enable the businesses to operate effectively and efficiently as they will be aware of
the measures they are supposed to take at different stages of the operations. Identification of the
problem will also enable the business to come up with solutions that will prevent the
organization from making losses and this will lead to improved profits and performance of the
business. Therefore, I find the area relevant in carrying out the study of the factors affecting
retail business performance.
The scope of the study.
The study focuses on the performance of retail businesses in New Zealand with the point
of reference being Fenton Quality Produce limited. The scope will be limited to the factors
affecting the performance of retail businesses and be able to come up with the main factor that
affects the performance of Fenton Quality Produce.
Literature review.
Many types of research have been conducted by various authors and scholars to identify
the factors that affect business entities in various countries. Each scholar usually has his/her

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opinion. The opinions sometimes are in agreement but also the opinions sometimes conflict
especially where the authors use retail businesses in different industries (Pantano, 2014). This
study is interested in exploring the work of authors who focused their studies on the factors
affecting the retail businesses especially the fresh fruits and vegetables. The major concepts and
studies under consideration in identifying the factors affecting the performance of retail
businesses include the management theories, the marketing theories, the industry of the retail
business, competition and health factors.
Management theories.
The management of the business plays a very critical role in the performance of the
business. The management of the organization can propel the organization to a greater success or
even cripple the business. Employing the right management style will motivate the staff and lead
to greater performance. Right management will be able to come up with SMART organizational
goals which will give the retail business a sense of direction (Huarng, & Ribeiro-Soriano, 2014).
The goals of the business should also be communicated well to avoid conflicting goals which
may prevent good performance. The performance of the retail business will be improved if the
management clearly communicates the goals of the organization as the employees will be aware
of the tasks they are supposed to accomplish and achieving the targets will motivate them.
The participative management style enables the manager to consider the output of the
stakeholders before making decisions. The opinions of the employees are valued and this makes
them feel satisfied and work hard to accomplish the goals of the organization which they helped
to set (Dozier, Grunig, & Grunig, 2013). Affiliate management style enables the manager to
create a harmonious environment which will make the employee have the conducive working
environment needed to be productive. This kind of management style ensures that the

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organization is not faced with conflicts between the managers and the employees (Chen, et
al.2012). This kind of style motivates and makes employees happy. This enables the organization
to achieve its target goals because the employees are satisfied.
Directive management style ensures the employees comply with the set rules and
regulations. This gives employees no time to put their creativity and innovative abilities to use
because the management does not allow so. The employees feel threatened, and they are
punished when they make a mistake or fail to meet their targets (Hashim, 2013). This kind of
management style can be very effective in situations where deviations from the set plan are risky.
The directive style can also be effective in situations of crisis in the organization. The policies
made by the leader should be followed. However, the style does not create a conducive
environment for employees to be productive and this will cause the business not to be efficient
and effective in its performance.
Marketing theory.
Marketing refers to the company’s activities of buying and selling products. Marketing
mix refers to the factors used by a firm to influence consumers to purchase a certain product
(Gordon, 2012). Most organizations use the popularly known 4P's of the marketing mix. This
comprises of the price of the product, promotion, place and the product itself.
Price refers to the set consideration the company is willing to accept in exchange for its
products. The price should be set by considering various aspects which include the income of the
target market and the behavior of the consumers (Singh, 2012). The retail business tends to lower
their selling prices to sell more and I completely agree with this statement. The retail business
sells more if the product has a high price elasticity and lowering the price will attract more
customers. The business should also offer their customers price discounts to attract more

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customers. The price should reflect the value of the product being sold by the business and this
will attract more customers leading to the success of the retail business. Setting high prices will
scare consumers unless the business is selling Veblen goods.
The product refers to the goods and services offered by the business. The business should
ensure that its products are of high quality to attract more customers. The business should also
sell products that satisfy the needs and preferences of the customers (Singh, 2013). Like in our
case, the Fenton Quality Produce limited sells fresh fruits and vegetables which are needed by
the consumers, and this enables it to sell more and be successful. Offering consumers inferior
goods will result to low sells as customers prefer high quality products.
Place in the marketing mix refers to where the goods and services can be purchased. The
business should ensure that the business is strategically placed to create convenience to the
consumers willing to buy the products (Gordon, 2012).The products of the business should be
easily accessible, and this is ensured by having effective supply chain management in the
organization which will ensure that the goods are readily available when needed by the
customers. If the goods are not accessible, few goods will be purchased, and the business
performance will decline.
The last P is for promotion. This refers to the activities the organization engages in to
ensure that the buyers recognize the products of the business. The business should engage in
sales promotion, public relations, and advertisements. The promotion enables the business to
highlight the strengths of the business and why consumers should purchase the products. The
advertisements include television advertisements, print media, and radio commercials. The
business can also engage in social media advertising which has been very effective for many
businesses (Chaffey, Smith, & Smith, 2013). Word of mouth also helps the business products to

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be recognized as satisfied buyers will refer other buyers to the products of the organization, and
this enables the firm to perform better. Poor advertisement can damage the reputation of the
business and lead to poor performance.
The industry of the retail business.
The industry of the retail business also plays a critical role in the success of the retail
business (Christensen, 2013). Businesses related to agricultural industry are more affected by this
factor. For instance, Fenton Quality Produce sells fresh fruits and vegetables. This will force the
business to invest a lot in storage facilities to store the perishable products so that they can be in
the condition needed by the customers. Failure to provide fresh products will force the customers
to seek products from other firms. If the industry is seasonal, the business should determine
when to lower their prices because the supply of the products exceed demand. This knowledge
will enable the business to prosper. Failure to offer discounts and lower prices will lead the
business to perform poorly.
Competition.
This refers to the rivalries between two or more entities. Businesses compete for market
share, consumers, profits and even suppliers. The business should ensure that it creates a
competitive advantage that will enable it to position its products in a better position than those of
the competitors (Bennett, et al.2013). If it does so, it will perform better. If the business does not
create competitive advantage, it will be eliminated from the business operations because it will
not be able to compete.
Health factors
Businesses selling products which have health benefits tend to sell more than businesses
offering products which are said to be hazardous. Nowadays, people have embraced healthy
living, and a business selling products which satisfy the needs of the customers tend to perform

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better as they attract more customers than other firms (Lähteenmäki, 2013). Businesses should,
therefore, ensure that they offer products with nutritional value so that they can perform better
Among several factors discussed in the literature, the industry of the retail business factors is
more appropriate to the Fenton Quality Produce Ltd. This is because the company sells
perishable products which need a lot of care so that they can be fresh always. Participative
management style is more appropriate for the firm because there is need to consult the
stakeholders on the best ways to maximize the sales of the company than other management
styles.
What are the effects of management style on the performance of retail businesses?
Does marketing mix affect the performance of retail businesses?
Conclusion.
From the findings of the literature review, management styles play a very critical role in
the performance of the retail businesses. The choice of the management style will affect the
motivation and the satisfaction of the employees. If the management style motivates the
employees like in the case of affiliate and participative management styles, the employees feel
valued and motivated and they will help the business achieve its goals as they will perform their
tasks effectively. Directive management style will cause the employee to feel uncomfortable as
they fear to be punished if they do not achieve their targets. This creates a poor working
environment and the employee will not perform their duties well. The business should, therefore,
use participative and affiliate management styles to solve management problems that affect the
performance of the retail business.

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The other notable finding is that the management should employ the marketing strategies
that will enable its products to be recognized. The firm should know the best times to reduce the
prices to attract more customers, the time to offer customers discounts to encourage repeat and
bulk purchases. The company should always set the most appropriate selling price to attract more
customers and also make a profit. This will help the organization to solve the problems
associated with setting the selling price of the products which have a direct influence on the
performance of the retail business.
The study findings will be useful to all the retail businesses in New Zealand and to
potential entrepreneurs who wish to venture into the business of selling fresh fruits and
vegetables like Fenton Quality Produce Ltd. The investors will be able to know that their
business is affected by weather conditions and it is seasonal so they will have all the knowledge
needed so that they can make the right decisions that will help them to prosper. The investors
will also know that they should invest more resources in storage facilities because the products
of the business are perishable and they require proper storage facilities so that they can be fresh
always.
References

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