Give an example of a market penetration, a retail format development, a market expansion, and a diversification growth strategy that a store called Performance Bicycle might use.
> Why do retailers want to determine the lifetime value of their customers? How does past customer behavior help retailers anticipate future customer retention?
> Think of one of your favorite places to shop. How does this retailer create customer loyalty and satisfaction, encourage repeat visits, establish an emotional bond between the customer and the retailer, know the customer’s preferences, and provide person
> What is a customer relationship management (CRM) program? Describe one CRM program that you have participated in as a customer.
> What is a universal product code (UPC)? How does this code enable manufacturers, distributors and retailers to track merchandise throughout the supply chain?
> An entrepreneur approaches you about how to sell her new writing pens to consumers. The pens have a unique benefit-they are more comfortable to use than traditional pens. The entrepreneur is concerned the retailers she has approached want to buy the p
> Abandoned purchases as a result of stockouts can mean millions of dollars a year in lost sales. How are retailers and manufacturers using technology to reduce stockouts and improve sales?
> Consumers have five key reactions to stakeouts: buy the item at another store, substitute a different brand, substitute the same brand, delay the purchase, or do not purchase the item. Consider your own purchasing behavior, and describe how various categ
> Explain the differences between pull and push supply chains.
> Why haven't more fashion retailers adopted an integrated supply chain system similar to Zara's?
> What type of merchandise is most likely to be cross-docked at retailers’ DCs? Why is this often the case?
> This chapter presents some trends in supply chain and information systems that benefit retailers. How do vendors benefit from these trends?
> Explain how an efficient supply chain system can increase a retailer's level of product availability and decrease its inventory investment.
> Why are some retailers switching from UPC codes to RFID?
> Retail system acronyms include DSD, VMI, EDI, CPFR and RFID. What do these terms means and how are they related to one another?
> If you were considering the ownership of a Taco Bell franchise, what would you want to know about the location in terms of traffic, population, income, employment, and competition? What else would need to be researched about a potential location?
> Compare and contrast the retail mixes of department stores and full-line discount stores. Use bullet points or a table to list the similarities and differences.
> What kind of lease should a new retail enterprise, opening its first store in an urban location that is experiencing gentrification and growth, seek to negotiate with the building owner?
> Retailers have a choice of locating on a mall’s main floor or second or third level. Typically, the main floor offers the best, but most expensive, locations. Why would specialty stores such as The Body Shop or Foot Locker choose the second or third fl
> Under what circumstances might a retailer use the analog approach for estimating demand for a new store? What about regression analysis?
> Trade areas are often described as concentric circles emanating from the store or shopping center. Why is this practice used? Suggest an alternative method. Which would you use if you owned a store in need of a trade area analysis?
> At Del Frisco's Steakhouse, steaks run from about $42 to $89 whereas at Outback Steakhouse they run from about $12 to $27. What characteristics would Del Frisco's look for in a trade area for a new location? How would those characteristics change for Out
> True Value Hardware plans to open a new store. Two sites are available, both in middle-income neighborhood centers. One neighborhood is 20 years old and has been well maintained. The other was recently built in a newly planned community. Which site i
> Which factors do retailers consider when evaluating an area of the country to locate stores? How do retailers determine the trade area for a store?
> How does the mall near you home or university combine the shopping and entertainment experience?
> Why would a Payless Shoe Source store locate in a neighborhood shopping center instead of a regional shopping mall?
> In many malls, quick-service food retailers are located together in an area known as a food court. What are the advantages and disadvantages of this location for the food retailers?
> The same brand and style of men’s suits are sold at different prices at a department store like Macy’s and at a specialty store like Men’s Warehouse. Why would a customer choose to buy the suit from one store rather than the other?
> Staples and Office Depot/OfficeMax all have strong multichannel strategies. How do competition and the Internet affect their strategies for locating stores?
> Retailers are locating in urban areas that have suffered decay. As a result, these areas are rejuvenating, a process known as gentrification. Some people have questioned the ethical and social ramifications of this process. Discuss the benefits and detri
> As a consultant to 7-Eleven convenience stores, American Eagle Outfitters, and Porsche of America, what would you say is the single most important factor in choosing a site for these three very different types of stores?
> Pick your favorite store. Describe the advantages and disadvantages of its current location, given its store type and target market.
> Consider a big city that has invested in an urban renaissance. What components of the gentrification project attract both local residents and visiting tourists to spend time shopping, eating, and sightseeing in this location?
> Why is store location such an important decision for retailers?
> A friend of yours is considering buying some stock in retail companies. Your friend knows that you are taking a course in retailing and asks for your opinion about Costco. Your friend is concerned that Costco is not a good firm to invest in because it
> Using the following information taken from the 2016 balance sheet and income statement for Urban Outfitters, develop a strategic profit model. (Figures are in millions of dollars.) Net sales $2,734.8 Cost of goods sold $1,316.2 Operating expenses $57
> Blue Nile is a jewelry retailer that only uses an Internet channel for interacting with its customers. What differences would you expect in the strategic profit model and key productivity ratios for Blue Nile and Zales, a multichannel jewelry retailer?
> How does Walmart contribute to and/or detract from the communities in which it operates stores?
> Why do investors place more weight on comparable-store sales than growth in sales?
> Macy's and Costco have targeted different customer segments. Which retailer would you expect to have a higher gross margin? Higher operating expenses as a percentage of sales? Higher operating profit margin percentage? Higher inventory turnover and asset
> A buyer can impact the gross margin percentage because he/she can, to some extent, control the sales and cost of goods sold. Expenses, which do not play a part in determining the gross margin percentage, are often out of the control of the buyer and the
> Buyers' performance is often measured by their gross margin percentage. Why is this figure more appropriate than the operating or net profit percentage?
> What are examples of the types of objectives that entrepreneurs might have for a retail business they are launching?
> What are the key productivity ratios for measuring the retailer as a whole, its merchandise management activities, and its store operation activities? Why are these ratios appropriate for one area of the retailer’s operation and inappropriate for others
> Identify a store or service provider that you believe has an effective loyalty program. Explain how the program works and why it is effective.
> The Gap owns several chains, including Old Navy, banana republic, INTERMIX, and Athlete. What type of growth opportunity was the Gap pursuing when it opened each of these retail concepts? Which is most synergistic with the original Gap chain?
> Assume you are interested in opening a restaurant in your town. Go through the steps in the strategic planning process shown in Exhibit 5–7. Focus on conducting a SWOT analysis of the local restaurant market, identifying and evaluating alternatives, and
> What are Neiman Marcus’s and Pet Smart’s bases for sustainable competitive advantage? Are they really sustainable, or are they easily copied?
> Compare and contrast the retail mixes of convenience stores, traditional supermarkets, superstores, and warehouse stores. Can all of these food retail institutions be successful over the long run? How? Why?
> Do a SWOT analysis for McDonald’s. What is its mission? What are its strengths and weaknesses? What opportunities and environmental threats might it face over the next 10 years? How could it prepare for these threats?
> Choose a retailer and describe how it has developed a competitive strategic advantage.
> Amazon.com started as an Internet retailer selling books. Then it pursued a variety of growth opportunities, including expanding to groceries, DVDs, apparel, software, and travel services; introducing e-readers (Kindle); operating the Internet channel fo
> Choose a retailer that you believe could be, but is not yet, successful in other countries. Explain why you think it could be successful.
> For each of the four retailers discussed at the beginning of the chapter (Sephora, Lululemon, and Save-A-Lot)), describe its strategy and the basis of its competitive advantage.
> Think of a recent purchase that you made and describe how economic and social environmental factors (e.g., reference group, family, and culture) influenced your buying decision. How are retailers using social media to impact your buying decisions?
> Using the multiattribute attitude model, identify the probable choice of a local care dealer for a young, single woman and for a retired couple with limited income. What can the national retail chain do to increase the chances of the retired couple patr
> How does the buying decision process differ when consumers are shopping on the Internet or mobile device compared with shopping in a store in terms of locations or sites visited, time spent, and brands examined?
> A family-owned used-book store across the street from a major university campus wants to identify the various segments in its market. What approaches might the store owner use to segment its market? List two potential target market segments based on this
> What are the benefits and limitations of purchasing a home entertainment system directly from a number of component manufacturers rather than from a retailer?
> Any retailer's goal is to get customers in its store so that they can find the merchandise that they are looking for and make a purchase at this location. How could a sporting goods retailer ensure that the customer buys athletic equipment at its outlet?
> In Exhibit 4-6, The Inner City Tenant is described. How should banks, restaurants, drugstores, and car dealers alter their retail mixes to meet the needs of this segment compared to the Top Rung segment?
> Considering the steps in the consumer buying process (Exhibit 4-1), describe how you (and your family) used this process to select your college or university. How many schools did you consider? How much time did you invest in this purchase decision? When
> Describe how service retailers, such as hotels, are using Twitter to provide information and answer questions about rates, services offered, and other amenities. How is this form of communication changing their expectations?
> Think about the merchandise sold at Office Depot/OfficeMax and Staples, and list three to four types of merchandise that fall into extended problem solving, limited problem solving, and habitual decision making for college students. Explain how the categ
> Does the customer buying process end when a customer buys some merchandise? Explain your answer.
> Which of the following categories of merchandise do you think could be sold most successfully through an Internet channel: jewelry; TV sets; computer software; high-fashion apparel; pharmaceuticals; health care products such as toothpaste, shampoo, and c
> From a customer's perspective, what are the benefits and limitations of stores? Internet? Mobile? Social? Catalogs and other nonstore channels?
> Do you participate in show rooming? Why or why not?
> What aspects of omnichannel retailing would benefit you as a consumer?
> What is your favorite retailer? Why do you like this retailer? What would a competitive retailer have to do to get your patronage?
> What are the differences between a multichannel, cross-channel, and omnichannel retailer? Provide an example of each.
> Why are store-based retailers aggressively pursuing sales through Internet channels?
> Choose a product category that both you and your parents purchase (e.g., business clothing, casual clothing, music, electronic equipment, shampoo). In which type of store do you typically purchase this merchandise? What about your parents? Explain why
> The same brand and model of tablet is sold by specialty computer stores, discount stores, category specialists, online retailers, and warehouse stores. Why would a customer choose one retail format over the others?
> Why are retailers in the limited-assortment supermarket and extreme-value discount store sectors growing so rapidly? From which retailers are they getting these additional sales?
> What is the difference between bundled pricing and multiple-unit pricing?
> Calculate the GMROI and inventory turnover given annual sales of $20,000, average inventory (at cost) of $4,000 and a gross margin of 45 percent.
> The cost of a product is $150, markup is 50 percent, and markdown is 30 percent. What’s the final selling price?
> Why is Walmart, the largest retailer in the world, facing slower growth than in the past? What can it do to accelerate its growth?
> A department store’s maintained markup is 38 percent, reductions are $560, and net sales are $28,000. What’s the initial markup percentage?
> Why do some customers have a low or negative CLV value? What approach can retailers take with these customers to minimize their impact on the bottom line?
> Consider a recent retail service experience you have had, such as a haircut, doctor’s appointment, dinner in a restaurant, bank transaction, or product repair (not an exhaustive list), and answer the following questions: a) Describe an excellent service
> How can retailers provide high-quality personalized service? Use an optometrist’s office that also sells eyeglass frames and fills prescriptions for contact lenses as your example. How does this retailer’s service compare with the service provided by 1-8
> What do off-price retailers need to do to compete against other formats in the future?
> Gaps analysis provides a systematic method for examining a customer service program's effectiveness. Top management has told an information systems manager that customers are complaining about the long wait to pay for merchandise at the checkout station
> Consider a situation in which you received poor customer service in a retail store or from a service provider. Did you make the store’s management aware of your experience? To whom did you relay this experience to? Have you returned to this retailer or
> Assume you're the department manager for menswear in a local department store that emphasizes empowering its managers. A customer returns a dress shirt that's no longer in the package in which it was sold. The customer has no receipt, says that when he o
> Consider customer service at IKEA. How does this retailer utilize a self-service model to gain a competitive advantage over traditional furniture stores?
> Both Nordstrom and McDonald's are noted for their high-quality customer service, but their approaches to providing quality service are different. Describe this difference. Why has each of these retailers elected to use its particular approach?
> How can signage and graphics help both customers and retailers? Consider the following types of retail formats that you likely have visited in the past: discount store, department store, office superstore, and card and gift store. Describe which retail f
> What are the advantages and disadvantages of offering virtual dressing rooms from the retailers’ perspective?
> As an architect for retail space, you are responsible for Americans with Disabilities Act compliance. How would you make sure that a store’s retail layout meets both accessibility requirements and enables the company to reach profitability objectives?
> A department store is building an addition. The merchandise manager for furniture is trying to convince the vice president to allot this new space to the furniture department. The merchandise manager for men’s clothing is also trying to gain the space. W
> What are the different types of design that can be used in a store layout? How does this impact the types of fixtures used to display merchandise? Describe why some stores are more suited for a particular type of layout than others.
> What sorts of competitive pressures are confronting traditional grocery stores? What options do these stores have to ease these pressures?
> Assume you have been hired as a consultant to measure a local discount store’s floor plan and space productivity. Look back at Chapter 6 and decide which analytical tools and ratios you would use to assess the situation.
> One of the fastest-growing sectors of the population is the over-60 age group. Customers in this age group may have limitations in their vision, hearing, and movement. How can retailers develop store designs with this population’s needs in mind?
> Some staff pharmacists working for retail chains refuse to dispense the Plan B “morning after” contraceptive pill because of their religious beliefs. In another situation, Muslims and Jewish checkout clerks working for supermarket chains refused to touc
> When evaluating retail employees, some stores use a quantitative approach that relies on checklists and numerical scores similar to the form in Exhibit 15-5. Other stores use a more qualitative approach similar to the form in Exhibit 15-4, whereby less t
> What are the advantages and disadvantages of the different forms of compensation programs described in this chapter? Considering the disadvantages only, how can department managers ameliorate lessen the effects of the disadvantages?
> What's the difference between extrinsic and intrinsic rewards? What are the effects of these rewards on the behavior of retail employees? Under what conditions, would you recommend that a retailer emphasize intrinsic rewards over extrinsic rewards?
