Posts Tagged ‘Term’

What Is an Assortment Strategy in Retail, and How Does It Work?

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What Is an Assortment Strategy in Retail, and How Does It Work?

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What Is an Assortment Strategy?

An assortment strategy in retailing involves the number and type of products that stores display for purchase by consumers. Also called a “product assortment strategy,” it is a strategic tool that retailers use to manage and increase sales. The strategy is made up of two major components:

  1. The depth of products offered, or how many variations of a particular product a store carries (e.g. how many sizes or flavors of the same product).
  2. The width (breadth) of the product variety, or how many different types of products a store carries.

Key Takeaways

  • An assortment strategy is a strategic retail industry sales tool that optimizes the variety of goods offered for sale.
  • This strategy is centered around the concepts of “a deep assortment” and “a wide variety.”
  • Product assortment strategies got their start in the context of brick-and-mortar stores, but have since been carried over successfully to e-commerce platforms.

How Assortment Strategies Work

Essentially, a product assortment strategy is a retail industry sales tool with the concepts of depth and breadth at its core. However, not all retailers will be able to use both components of this strategy at the same time.

An assortment strategy can have many layers of sub- and related strategies, as each store will need to tailor the strategy to address its own particular needs and goals.

A deep assortment—the opposite of a narrow assortment—of products means that a retailer carries a number of variations of a single product. A wide variety—the opposite of a narrow variety—of products means that a retailer carries a large number of different kinds of products.

An assortment strategy is not one-size-fits-all; it needs to be customized to respond to a business’s parameters.

A Challenge for Small Stores

Retailers face a trade-off when determining an assortment strategy. Choosing both a wide variety and a deep assortment of products simultaneously requires a large amount of space, and is typically reserved for big-box retailers.

Stores with smaller spaces may choose to specialize in a certain type of product and offer customers a variety of colors and styles; other stores may offer a deep assortment of products but a narrow variety—one reason why a 7-Eleven (private since 2005) might carry just one brand of canned cat food, for example, while a Kroger (NYSE: KR) likely would have the space to stock 12 brands of canned cat food, if it chose to.

A Brick-and-Mortar Term

Originally, assortment strategy referred only to brick-and-mortar stores because the strategy’s components of depth and breadth had a lot to do with physical space and the visual and tactile interaction between consumer and product. Recently, though, all sales venues—brick-and-mortar, click and mortar, and e-tailing—have used varieties of the strategy to gain competitive advantage.

Adjusting for Demographics

By grouping together items that they believe will appeal to certain types of customers, retailers may fine-tune their assortment strategies to target consumers’ demographic profiles. If a retailer wants to attract customers who are new parents, for example, it might fill the shelves with infant apparel from trendy brands, along with toys, bedding, and other products new parents need.

A Strategic Selling Tool

A strategically arranged product assortment can upsell customers on supplemental items as they search for the item that brought them to the store.

Grouping related items together strategically, whether or not they are necessities, is a common way to stimulate impulse buying:

  • By placing garden hoses near sprinklers and other lawn-care products, a retailer might drive more into a customer’s basket. Likewise, installing a luxurious patio dining set—complete with attractive outdoor dishware and bar accessories—in the middle of the more prosaic yard-care products could even send some customers scurrying to the housewares section of the store.
  • A presentation of flashlights—or any battery-driven product—could include a nearby display of the batteries needed to use the product. Or a manager could locate the batteries near the check-out counter to remind customers before they leave the store that the flashlight won’t work without batteries.

Potential Disadvantages of Assortment Strategies

Although the depth of product assortment may help attract customers, there are certain caveats to relying only on an assortment strategy. If items in an assortment are placed incorrectly, the demand for these products may vary drastically.

If less-popular items are mixed in with popular items, for example, they could detract from the more-popular items’ appeal. Or, if the assortment is too vast, customers may have difficulty finding the item they are seeking. Overwhelming shoppers with too many buying options can be counterproductive and discourage customer engagement.

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Affirmative Action: What Is Affirmative Action? Definition, How It Works, and Example

Written by admin. Posted in A, Financial Terms Dictionary

What Is Affirmative Action? Definition, How It Works, and Example

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What Is Affirmative Action?

The term affirmative action refers to a policy aimed at increasing workplace and educational opportunities for people who are underrepresented in various areas of our society.

Affirmative action focuses on demographics with historically low representation in leadership, professional, and academic roles. It is often considered a means of countering discrimination against particular groups.

Affirmative action programs are commonly implemented by businesses and governments by taking individuals’ race, sex, religion, or national origin into account when hiring.

Key Takeaways

  • Affirmative action seeks to reverse historical trends of discrimination against individuals with certain identities.
  • It provides financial assistance to groups that historically have been and continue to be subjected to forms of discrimination.
  • Policies often implement hiring quotas, provide grants and scholarships, and may also deny government funding and contracts to institutions that fail to follow policy guidelines.
  • Affirmative action now includes assistance for gender representation, people with disabilities, and covered veterans.
  • Criticism of affirmative action emphasizes high program costs, the hiring of fewer qualified candidates, and a lack of historical progress in equal representation.

How Affirmative Action Works

The main purpose of affirmative action is to diversify various parts of society. It is a government-backed policy that was developed to provide inadequately represented groups of people with access to opportunities in academia, the private workforce, and government jobs.

These opportunities include admission to schools and jobs in professional positions, as well as access to housing and financing.

History and Implementation

The affirmative action policy rose to prominence in the United States in the 1960s as a way to promote equal opportunity for various segments of society. The policy was developed to enforce the Civil Rights Act of 1964, which sought to eliminate discrimination.

Early implementations of affirmative action largely focused on halting the continued social segregation of minorities and other disadvantaged individuals from institutions and opportunities.

Despite legislation that outlawed discrimination practices in the U.S., tangible change in the status quo was not immediate.

In more recent years, campaigns have expanded to make organizations and institutions even more inclusive by pushing for greater gender diversity. Newer policies are also aimed at providing more access to opportunities for covered veterans and people with disabilities.

Covered veterans are veterans who are disabled, who served on active duty in a war or other campaign and have a campaign badge or a service medal, or who are recently separated from the Armed Forces.

Elements of Affirmative Action

Efforts to stimulate change can take the form of financial assistance such as grants, scholarships, and other support earmarked to help with access to higher education opportunities.

In addition, hiring practices may be structured to require the inclusion of diverse candidates for consideration for job openings. Government agencies may mandate that companies and institutions populate their ranks with a minimum percentage of qualified professionals from varying ethnicities, genders, and cultures.

Failure to meet such requirements could disqualify institutions from receiving government funding or being able to compete for public contracts.

People confuse employment equity with affirmative action. There’s a distinct difference between the two. Employment equity attempts to ensure that all individuals are treated equally while affirmative action actually supports those people in particular who historically have been denied opportunities.

Examples of Affirmative Action

Affirmative action has been put to work since the 1960s, despite lack of progress at times and rulings by legal authorities such as the Supreme Court that have hindered it. Here are some examples of the policy in action.

  • In 1965, President Lyndon B. Johnson issued Executive Order 11246. It required that all government contractors and subcontractors expand job opportunities for minorities. It also established the Office of Federal Contract Compliance (OFCC) to enforce the order.
  • In 1970, the Labor Department ordered and authorized flexible goals and timetables to address the underutilization of minorities by federal contractors. In 1971, women were included in the order.
  • In 1973, President Richard M. Nixon signed the Rehabilitation Act of 1973. It required agencies to submit an affirmative action plan to the EEOC that detailed the hiring, placement, and advancement of individuals with disabilities.
  • In 1983, President Ronald Reagan issued Executive Order 12432. It required every federal agency with substantial procurement or grant-making authority to develop a Minority Business Enterprise development plan.
  • In 1990, President George H.W. Bush signed the Americans with Disabilities Act. A year later, he signed the Civil Rights Act of 1991.
  • In 1998, the U. S. House of Representatives and the U. S. Senate stopped attempts to eliminate specific affirmative action programs. Both houses of Congress prohibited the abolishment of the Disadvantaged Business Enterprise program. In addition, the House refused to allow the elimination of affirmative action in admissions in higher education programs funded through the Higher Education Act.
  • In 2022, the Wall Street Journal reported that dozens of major U.S. companies including Apple, Alphabet, American Airlines, and General Motors were urging the Supreme Court to uphold the continued use affirmative action policies in college admissions. They asserted that greater diversity on college campuses contributed to ongoing innovation in commerce and successful business endeavors.

Advantages and Disadvantages of Affirmative Action

The implementation and continued use of affirmative action policies have drawn strong support as well as staunch criticism.

Advantages

An obvious benefit of affirmative action is the opportunities they provide to people who otherwise might not have them. These opportunities include access to education for students who may be disadvantaged and career advancement for employees who may be blocked from rising up the corporate ladder.

Proponents of affirmative action say that the effort must continue because of the low percentages of diversity in positions of authority and in the media, as well as limited acknowledgment of the achievements of marginalized or unrepresented groups.

Disadvantages

Opponents of affirmative action frequently call these efforts a collective failure. They cite as evidence the tiny changes to the status quo after decades of effort. The cost of such programs, coupled with a belief that affirmative action forces the populace to make unwarranted accommodations, drives a significant part of the opposition.

Certain individuals believe that there is little to no bias in society. They argue that affirmative action results in reverse discrimination, which can often lead to qualified candidates being overlooked in academics and the workplace in favor of less qualified candidates who meet policy standards.

Affirmative Action Statistics

Affirmative action is a very controversial topic and often leads to heated debates between those who support it and people who feel it doesn’t benefit society. Is there a way to quantify how people feel and how it’s working?

According to a Gallup poll, more than half of Americans (61%) believe in affirmative action policies. This level of support has increased since the last poll, where only 47% to 50% of individuals thought affirmative action was necessary. This increase in support is especially important, given the active issues surrounding race and identity in the U.S. and elsewhere.

Many Americans feel positive about diversity. They are comfortable with the makeup of their communities, saying diversity positively impacts society as a whole.

There is some divide when it comes to identifying race and ethnicity for purposes of hiring. In fact, about 74% of individuals feel that a candidate’s racial or ethnic background shouldn’t be considered when hiring or promoting them. These activities should only be based on someone’s merit and qualifications.

What Is the Goal of Affirmative Action?

The goal of affirmative action is to increase opportunities for individuals and groups that historically have been underrepresented or, in some cases, barred, from certain areas of academia, the government, and the private sector workforce. Affirmative action policies provide funding in the form of grants and scholarships to these communities.

Policies were adopted to help those from different racial backgrounds and national origins. They have expanded to address gender, sexual orientation, and various disabilities.

What Has Been the Result of Affirmative Action Policies in Higher Education?

Affirmative action policies have helped diversify higher education. When first adopted, the student body at most higher education institutions was primarily white. That has changed, leading to more diverse and vibrant student populations across the country.

How Did Regents v. Bakke Change Affirmative Action Policies?

The Regents v. Bakke case changed affirmative action policies by striking down the use of racial quotas. The case was presented by Allan Bakke, who claimed he was denied admission to medical school at the University of California on two separate occasions because he was white. The Supreme Court ruled in Bakke’s favor, saying racial quotas were unconstitutional.

Which U.S. President First Defined and Used the Term Affirmative Action?

That was President John F. Kennedy. He did so in 1961, telling federal contractors to take “affirmative action to ensure that applicants are treated equally without regard to race, color, religion, sex, or national origin.”

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3-6-3 Rule: Slang Term For How Banks Used to Operate

Written by admin. Posted in #, Financial Terms Dictionary

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What Is the 3-6-3 Rule?

The 3-6-3 rule is a slang term that refers to an unofficial practice in the banking industry in the 1950s, 1960s, and 1970s that was the result of non-competitive and simplistic conditions in the industry.

The 3-6-3 rule describes how bankers would supposedly give 3% interest on their depositors’ accounts, lend the depositors money at 6% interest, and then be playing golf by 3 p.m. In the 1950s, 1960s, and 1970s, a huge part of a bank’s business was lending out money at a higher interest rate than what it was paying out to its depositors (as a result of tighter regulations during this time period).

Key Takeaways

  • The 3-6-3 rule is a slang term that refers to an unofficial practice in the banking industry, specifically in the 1950s, 1960s, and 1970s, which was the result of non-competitive and simplistic conditions in the industry.
  • The 3-6-3 rule describes how bankers would supposedly give 3% interest on their depositors’ accounts, lend the depositors money at 6% interest, and then be playing golf by 3 p.m.
  • After the Great Depression, the government implemented tighter banking regulations, which made it more difficult for banks to compete with each other and limited the scope of the services they could provide clients; as a whole, the banking industry became stagnant.

Understanding the 3-6-3 Rule

After the Great Depression, the government implemented tighter banking regulations. This was partially due to the problems–namely corruption and a lack of regulation–that the banking industry faced leading up the economic downturn that precipitated the Great Depression. One result of these regulations is that it controlled the rates at which banks could lend and borrow money. This made it difficult for banks to compete with each other and limited the scope of the services they could provide clients. As a whole, the banking industry became more stagnant.

With the loosening of banking regulations and the widespread adoption of information technology in the decades after the 1970s, banks now operate in a much more competitive and complex manner. For example, banks may now provide a greater range of services, including retail and commercial banking services, investment management, and wealth management.

For banks that provide retail banking services, individual customers often use local branches of much larger commercial banks. Retail banks will generally offer savings and checking accounts, mortgages, personal loans, debit/credit cards, and certificates of deposit (CDs) to their clients. In retail banking, the focus is on the individual consumer (as opposed to any larger-sized clients, such as an endowment).

Banks that provide investment management for their clientele typically manage collective investments (such as pension funds) as well as overseeing the assets of individual customers. Banks that work with collective assets may also offer a wide range of traditional and alternative products that may not be available to the average retail investor, such as IPO opportunities and hedge funds.

For banks that offer wealth management services, they may cater to both high net worth and ultra-high net worth individuals. Financial advisors at these banks typically work with clients to develop tailored financial solutions to meet their needs. Financial advisors may also provide specialized services, such as investment management, income tax preparation, and estate planning. Most financial advisors aim to attain the Chartered Financial Analyst (CFA) designation, which measures their competency and integrity in the field of investment management.

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