The Gross Domestic Product is the key indicator, which is used by different experts to gauge the stability of the economy. It measures the total dollar value of final services and goods, which are produced in the state in a particular period. Investors evaluate it using graphs and other statistical tools to determine whether there is a growth or decrease. Pricing mechanisms and demand and supply forces are some of the fundamental factors that shape the GDP of a country. Therefore, this research will evaluate the Ross Dress for Less stores, which are located in Pleasanton, California, in the United States of America.
Ross Dress for Less retail outlets deal with clothes/dress apparels. According to Ross Stores Inc. (2015), the application of microeconomic principles to manage these stores has helped them cope with different external forces in the market. The ceteris paribus (the law of demand) states that when prices decrease, the demand for products increases as many customers have the purchasing power to buy goods. On the other hand, when the prices increase, the demand for goods decreases and brings tremendous change in the GDP of the country.
As evidenced from the GDP curve of 2009, a significant decrease caused alarm about the economic growth of the United States and compelled the government to put the necessary measures in place to correct this trend. In this study, the priority is to increase the sales levels of Ross Dress for Less. The retailer should conduct vigorous marketing in its target areas. As the Institute of Chartered Accountants of India (n.d.) notes, marketing entails creating awareness about the existence of a product. Greater publicity can be achieved by advertising on traditional media and social media sites, which attract high traffic of people and promoting customers by giving them discounts. Quantity discounts motivate customers to buy more goods. For instance, they should receive huge discounts when they buy in batches compared to when they purchase single clothes. The retailer should consider using a promotional strategy like “buy ten clothes and get one free.”
Substitutes and complementary goods have a dramatic impact on the sales level of Ross Dress for Less. Customers may be enticed to purchase dresses from other local vendors who have reduced their commodity prices. As the Ross Stores Inc. (2015) observes, since customers are always right, it is the duty of the sales team to formulate strategies to lower the prices while ensuring that the stores make profits. It is advisable to source for suppliers offering the lowest price and buy the dresses in large quantities to create economies of scale and boost the level of sales.
In the real sense, the demand for dresses varies with seasons and occasions. Warm dresses are bought during the cold season while light dresses are purchased the most during hot seasons. Managers should be speculative about these changes to know what type of dress they will stock in greater quantities depending on the occasion. When executives fill the stores with the wrong dresses, for instance, light dresses during the cold season, they will tie up capital and experience a lower GDP due to a decrease in demand.
Finally, the changes in prices of dresses will affect the level of GDP. Few customers will afford pricey dresses. Conversely, many customers will buy clothes at low prices. Consequently, the managers of Ross Dress for Less should lower the prices to a reasonable level to attract the customers to buy more. Doing so will increase the level of sales and demand and later raise the GDP.
Institute of Chartered Accountants of India. (n.d). Law of demand and elasticity of demand. Retrieved from Knowledge Gateway organization http://www.icaiknowledgegateway.org/littledms/folder1/chapter-2-theory-of-demand-and-supply-part-1.pdf
Ross Stores, Inc. (2015). It’s all about the bargains. Retrieved from 2015 Annual Report http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzMxMjgwfENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=635954716969631365.f