978-0134292663 Chapter 12 Solution Manual Part 1

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

IV. END-OF-CHAPTER ANSWER GUIDE

CHAPTER QUESTIONS AND ACTIVITIES

 QUESTIONS: TEST YOUR KNOWLEDGE

12.1 Define retailing. What is the role of retailing in today’s world?

12.2 How does the wheel-of-retailing theory explain the evolution of retailing? How do the

economic environment, demographics, technology, and globalization affect the future of

retailing?

The wheel-of-retailing hypothesis is a theory that explains how retail firms change, becoming more

“upscale” as they go through their life cycle. The suggestion is that retailers compete on price and

then move “upscale,” leaving room for other new, low-price entrants.

12-3 Describe experiential merchandising, destination retailing and omnichannel marketing.

1 Experiential merchandising is a tactic whose intent is to convert shopping from a passive

7

1 Destination retailing refers to a store that consumers view as distinctive enough to go out

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

12-4 What is beacon marketing? What are digital wallets?

12-5 Explain retail store shrinkage and the ways shrinkage normally occurs. What is

“sweethearting”? What is retail borrowing? What are some of the ethical issues in retailers’

treatment of consumers?

Shrinkage is the term retailers use to describe losses due to shoplifting, employee theft, and damage

to merchandise. Analysts estimate that shrinkage during 2005–2006 was 2.76 percent of overall retail

sales.

12-6 How do marketers classify retail stores? Explain merchandise breadth and depth.

Retail stores are classified by: (1) what they sell—the merchandise mix. In retailing, a product line is

the set of related products offered by the retailer; and (2) by level of service.

Self-service retailers do not assist customers in making selections.

12-7 Describe the differences in merchandise assortments for convenience stores, supermarkets,

box stores, specialty stores, category killers, leased departments, variety stores, general

merchandise discount stores, off-price retailers, warehouse clubs, factory outlet stores,

department stores, hypermarkets, and pop-up stores.

Differences in merchandise assortments for the following types of retailers include:

a. Convenience stores: neighborhood retailers that carry a limited number of frequently

b. Supermarkets: food stores that carry a wide selection of edibles and related products.

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

c. Box stores: food stores that have a limited selection of items, few brands per item and few

12-8 Explain the different types of direct selling. What is the difference between a multilevel

network and a pyramid scheme?

Direct selling includes door-to-door sales, parties, and networks. Door-to-door selling is one of the

oldest forms of retailing. However, the method is declining in the United States because of the high

Home shopping parties are popular in neighborhoods and useful if the product needs intimacy and

demonstration to execute a sale. Many times, party participants buy out of obligation to the host and

Multilevel network, also known as network marketing, is a system with master distributor recruits

12-9 What is B2C e-commerce? What are some benefits of B2C e-commerce for consumers and

for marketers? What are the limitations of B2C e-commerce?

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

Business-to-consumer (B2C) e-commerce is the online exchange between companies and individual

consumers.

Benefits of B2C e-commerce include:

a. E-commerce allows consumers and marketers to easily find and make exchanges in a global

marketplace.

b. From a consumer’s perspective, electronic marketing has increased convenience by breaking

down the barriers caused by time and location.

Limitations of B2C e-commerce include:

a. Consumers still may have to wait several days before receiving merchandise.

b. Some websites are poorly designed, confusing, and irritating.

12-10 What are some possible effects of B2C e-commerce on traditional retailing?

Areas to begin a discussion with include:

12-11 What are intangibles? How do basic marketing concepts apply to the marketing of

intangibles?

12-12 What is a service? What are the important characteristics of services that make them

different from goods?

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

12-13 What dimensions do consumers and business customers use to evaluate service quality? How

should marketers respond to failures in service quality?

Because services are inseparable in that they are not produced until they are consumed, consumers

and business customers find it difficult to estimate how good service will be until it is purchased.

Therefore, marketers come up with ways for to illustrate the benefits their services will provide.

12-14 What do we mean by marketing people? Marketing places? Marketing ideas?

People are products and are marketed as such. A number of people hire personal image consultants to

devise a marketing strategy for them, others undergo plastic surgery, physical conditioning, or

cosmetic makeovers to improve their “market position” or “sell” themselves.

ACTIVITIES: APPLY WHAT YOU’VE LEARNED

12-15 Creative Homework/Short Project Assume you are an entrepreneur who is seeking

funding to start up your new retail business specializing in handcrafted artisan goods from

developing and least developed countries. Customers would be able to acquire a unique

product and at the same time receive a good feeling knowing that a portion of the price paid

for the product would go back to the individuals who produced the product. Using the

wheel of retailing as a guide, map out how you expect your business to grow and change

over time while remaining profitable.

MyMarketingLab for answers to Assisted Graded Questions.

12-16 Creative Homework/Short Project Assume that you are the director of marketing for a

national chain of convenience stores. Your firm has about 200 stores located in 43 states.

The stores are fairly traditional both in design and in the merchandise they carry. Because

you want to be proactive in your marketing planning, you are concerned that your firm may

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

need to consider making significant changes because of the current economic, demographic,

technological, and global trends in the marketplace. You think it is important to discuss

these things with the other executives at your firm. Develop a presentation that includes the

following:

Students should begin to develop their presentation by reviewing the material on demographic,

technological, and global changes found in the chapter. They will notice that demographic changes

such as an aging population will affect how retailers implement strategies in the future (for instance,

12-17 In Class, 10–25 Minutes for Teams Retailers are faced with the problem of shrinkage and

what to do about it. Shrinkage comes, of course, from shoplifting and employee theft. More

subtle, however, is shrinkage that involves customers, such as “sweethearting” and “retail

borrowing.” Many consumers feel that such practices are okay. Conduct a short survey of

students in your group to study these two sources of shrinkage. You might want to include

questions about the following:

This activity is sure to provide controversial opinions from students. The book provides the

following on “sweethearting” and “retail borrowing.”

“Sweethearting” is an employee practice in which a cashier consciously undercharges,

gives a cash refund, or allows a friend to walk away without paying for items. Sometimes

a dishonest employee simply carries merchandise out the backdoor to a friend’s waiting

12-18 Creative Homework/Short Project You just started working for a firm that sells baseball

caps. Currently, the firm sells its products only in specialty stores, like Lids. You think

Chapter 12: Deliver the Customer Experience: Bricks and Clicks

you can improve sales by branching out to other types of retailers. Prepare a presentation

that identifies the additional types of retailers your firm could sell to and what the

advantages of selling to those types of retailers would be. Also, how would you change

your retail strategy for these different retailers?

MyMarketingLab for answers to Assisted Graded Questions.

12-19 For Further Research (Individual) One problem that traditional retailers face when they

open online stores is cannibalization. Select a traditional retailer where you and your

fellow students might normally shop that also sells products online. You might, for

example, select Best Buy, Banana Republic, Gap, or Target. Visit the retailer’s online

store and make notes on the site’s product offering, pricing, customer service policies, and

so on. (If the store you have chosen offers many different product lines, you might wish to

limit your research to one or two different product lines.) Then visit the store and compare

what is offered there with the online offerings. Develop a report that summarizes your

findings and discusses the potential for cannibalization and its implications for the retailer.

Also, discuss any changes in either the online or store strategies that you would

recommend.

store?