Thursday, May 7, 1998
Computer store at ASUCLA faces financial shortcomings
ASUCLA: Anderson School offers suggestions for marketing,
pricing
By Michael Weiner
Daily Bruin Staff
Coming in $1,232,000 below budget for the fiscal year1997-1998
so far — more than 50 percent below expectations – ASUCLA’s
computer store woes continue. The association has sought the help
of the Anderson School at UCLA to fix the problem.
With dismal monetary returns of $261,000 below budget in
February and $161,000 below budget in March, the students’
association has come up with a plan attempting to remedy the
computer store’s lagging profits.
Last fall, ASUCLA asked the Anderson School to help determine
the areas in which the computer store could improve. The Anderson
School has a program in which a few students, led by a faculty
adviser, act as consultants to corporations for a nominal fee.
"We wanted them to do a strategic analysis of the computer store
business," said Terence Hsiao, ASUCLA business development
director.
The Anderson School study determined three short-term goals for
the computer store in order to increase profits and better serve
students. First, the store needs to improve its marketing to UCLA’s
academic departments. Second, the store must change its product mix
by including lower-priced brands. Third, the store needs to reduce
its inventory levels.
"We’re implementing a number of these right now," Hsiao
said.
ASUCLA board members do not want to close down the computer
store because they feel it provides an important service to
students.
According to UCLA Store manager Carol Anne Smart, ASUCLA needs
to do a better job making academic departments aware of what she
feels is the UCLA Store’s superior service.
"We are not communicating clearly enough with the academic
departments," she said.
However, ASUCLA graduate student board member Jim Friedman said
that the store needs to work on service because employees are being
trained not to pressure customers into buying computers from the
UCLA Store.
"(The philosophy is) we don’t want them pushing products on
people," he said."(But) we need to reach the people who are buying
computers."
Smart also said that the computer store has several ongoing
strategies to attract new buyers. These include maintaining a
larger inventory of PCs; increasing the visibility of the store’s
custom computer program, in which people can buy computers made to
their exact specifications; and adding electronic commerce to the
computer store’s arsenal.
By July, people will be able to buy computers on-line from the
UCLA Store. Smart hopes to help facilitate Internet orders by
installing an Internet access station in the computer store.
The computer store originally grew out of Apple’s educational
pricing program, and thus Apple is its main product line. But with
that company’s declining market share, the computer store needs to
start selling more PC products, especially those with prices under
$1,000, according to Hsiao.
The computer store accounts for about 26 percent of ASUCLA’s
total retail operations budget.
Another problem for the store is the declining profit margin
which is plaguing the entire industry. For example, in the past a
computer sold for $2,000 would have cost the store $1,600; now, it
costs $1,800 in the store.
"In order to maintain your profit level, you need to sell more
and more units," Hsiao said.
But according to Friedman, profit levels should not be that
important.
"If we increase our sales 10 percent, we’re not going to make a
lot more, but we are going to become more valuable to this campus,"
Friedman said.