978-1259709074 Chapter 17 Part 2

Unlock access to all the studying documents.

View Full Document

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

Quiz Yourself

1 __________ reduce costs and maintain low prices by buying opportunistically from manufacturers

with excess inventory, offering limited assortments of household goods and groceries, as well as

health and beauty aids.

a. Category killers

b. Specialty stores

c. Factory outlets

d. Extreme-value retailers

e. Convenience stores

2 Jordan directs her salespeople to increase the company’s share of wallet. Jordan is directing her

salespeople to

a. focus on increasing sales to their best customers.

b. focus on male consumers, and not female consumers.

c. sell more store brands and fewer private-label products.

d. become omnichannel salespeople.

e. expand retailing elasticity.

Chapter Case Study: Making Macy’s Meaningful: Moves by the Retail Chain to

Maintain Its Competitiveness

1 In which channels is Macy’s attempting to appeal to consumers?

2 What is Macy’s plan to attract Millennials?

• Macy’s has implemented a $400 million renovation effort for its flagship New York City store,

testing out various options that might attract more of the market of shoppers between the ages of

3 Do you shop at Macy’s? Why or why not?

Student answers will vary.

4 Using the factors for choosing retail partners outlined in the chapter, do you believe that Eva’s line of

green cosmetics should attempt to get placement in Macy’s?

Department stores like Macy’s would be an excellent retail channel for Eva’s line of environmentally

friendly cosmetics.

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

Since Eva is just starting out, providing an exclusive territory to Macy’s helps ensure enough inventory to

provide the buying public an adequate selection. By granting exclusive territories, Eva guarantees Macy’s

5 Develop a strategy for Macy’s to promote Eva’s line of green cosmetics

Each Macy’s store will feature a “store within a store” concept called Eva’s. Each mini store will be in a

prominent location in the center core of Macy’s. It will have the signature look designed by Eva and the

Additional Teaching Tips

This chapter explores the issues manufacturers consider when choosing retail partners. Students

evaluate the types of retailers available for distributing products and learn how manufacturers and

retailers work together to develop strategies.

The core component of this chapter is distribution intensity: exclusive, selective, and intensive. It is

important to point out that the type of distribution is ALSO dependent upon the retail outlets or

omnichannels that agree to stock the product. Products with high involvement of decision making such as

cars, HD TVs, and appliances take up space in the showroom, and retailers do have a choice on whether

they want to give up that space to your brand or another manufacturer’s. Good channel relationships

are key especially when it comes to the retailer who will make decisions on how the product is presented

to the target market.

The benefit to the manufacturer provided by using different channels is key and the application questions

in the chapter also give students an opportunity to apply these concepts.

Stores

Catalogs

Internet

Browsing

Convenience

Broader selection

Touching and feeling

Information

More information

Personal service

Safety

Personalization

Cash and credit

Touch and feel attributes

Entertainment and social interaction

Instant gratification

Risk reduction

This chapter is a good opportunity to stress CRM and the importance of retaining existing customers. It is

also a good chapter to mention customization of the product and the importance of an integrated

marketing effort.

Online Tip: Have students compare Internet retailer sets and evaluate the benefits. Have them repeat

this process for the same retailer’s store and catalogs.

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

Connect Activities

Activity

Type

Learning Objectives 17–

Types of Retailers

Click & Drag

Retailing: Staples, Inc.

Case Analysis

M&M’s: Multichannel Marketing

Video Case

Nordstrom Rack: Retail Strategy

Video Case

Making Macy’s Meaningful

Case Analysis

Is Big-Box Retailing Right for your Product?

Video Case

ISeeIt Video Case: Retail Strategy

Video Case

Types of Retailers

▪ Activity Type: Click & Drag

▪ Learning Objectives: 17–04

▪ Difficulty: Medium

▪ Activity Summary: The student is asked to categorize different retail chains according to the type of

retailers they represent.

Activity

▪ Introduction: Manufacturers need to understand the general characteristics of retailers to determine

the best channels for their product. There are many types of retailers and each type has its own

unique characteristics and set of challenges. The following activity reviews examples and

characteristics of food retailers and general merchandise retailers.

▪ Concept Review: Food retailing has changed dramatically in the past 20 years. The conventional

supermarket no longer dominates the food retailing landscape. The fastest growing sectors of the

food retail market are supercenters, warehouse clubs, convenience stores, and extreme value food

retailers.

General merchandise retailers focus on the distribution of household and lifestyle items. The major

types of general merchandise retailers are department stores, full-line discount stores, category

specialists, specialty stores, home improvement centers, off-price retailers, and extreme value

retailers.

Retailing: Staples, Inc.

▪ Activity Type: Case Analysis

▪ Learning Objectives: 17–06

▪ Difficulty: Medium

▪ Activity Summary: This case describes multichannel retailing initiatives undertaken by Staples.

Students answer questions relating chapter concepts to the case.

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: Originally opened in 1986 by executive-turned-entrepreneur Tom Stemberg, Staples

has reached sales of greater than $23 billion. By evolving its original mission of slashing the costs

and reducing the hassle of running an office, Staples has become the world’s largest office products

company. Review the discussion of Staples and its multichannel integration strategy and answer the

questions that follow.

▪ Concept Review: Retailing sits at the end of the supply chain, where marketing meets the consumer.

Regardless of how good a firm’s strategy is or how great the product or service is, if it is not available

when and where the customer wants it, it will not sell. To function in multiple channels, retailers must

organize their operations carefully to ensure an integrated customer experience.

Follow-Up Activity

For some historical perspective, share this article with the class. It is a New York Times article from 1988

describing the new (at the time) trend of office supply superstores. Note all the names of superstore

chains that no longer exist; also note that the small office supply/stationery stores they mention have also

mostly vanished, unable to compete on price.

http://www.nytimes.com/1988/06/18/business/big-discount-stores-shake-up-retailers-of-office-

supplies.html

Staples wasn’t the first category specialist—for example, Home Depot was founded in 1978—but the

article makes it clear that, at the time, the concept wasn’t familiar to everyone.

Also, note that this was written six years before the start of the commercial Internet.

M&M’s: Multichannel Marketing

▪ Activity Type: Video Case

▪ Learning Objectives: 17-04, 17-06

▪ Difficulty: Medium

▪ Activity Summary: This case describes multichannel marketing initiatives undertaken by M&M’s.

After the video ends, students are asked questions about the video and related course concepts.

Activity

▪ Introduction: The traditional method for Mars, Inc., to get its merchandise to the final consumer is

through retailers. However, there are other options for delivery that have relative advantages from not

only the retailer’s perspective, but from the manufacturer’s and customer’s perspective as well. Mars,

Inc. wants to take advantage of synergies that come from providing products through multiple

channels. As the video plays, answer the questions that appear on the screen.

▪ Concept Review: Retailing is the final touch point in the supply chain that acts as the primary

interface with the consumer. Regardless of how strong a firm’s marketing strategy is, if the product or

service is not available when and where the customer wants it, the product or service will not sell. To

have better control over their interactions with consumers, many manufacturers have evolved their

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

placement strategies to include multiple channels as distribution outlets to reach their customers. This

includes using stores, catalogs, and the Internet to sell merchandise and reach customers.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

Visit the personalized M&M’s website in class (http://www.mymms.com/) and start creating an order. For

example, you might create one in your school colors, with the course number inscribed, or something

similar. Note the pricing, and also the limitations, and use this to talk about mass customization.

Nordstrom Rack: Retail Strategy

▪ Activity Type: Video Case

▪ Learning Objectives: 17-03, 17-04, 17-05, 17-07

▪ Difficulty: Medium

▪ Activity Summary: This case reviews the retail strategy followed by Nordstrom Rack. After the video

ends, students are asked questions about the video and related course concepts.

Activity

▪ Introduction: Since 1973, Nordstrom Rack has been the off-price division of fashion retailer

Nordstrom. Nordstrom Rack has been successful in applying the four Ps to its retail strategy. The

stores stock high-quality merchandise from well-known brands at discounted prices, creating the

“treasure hunt”: the search through ever–changing merchandise for “things customers didn’t know

they had to have when they walked in.” Nordstrom Rack also sells its products on its website

nordstromrack.com, and on a flash sale site called HauteLook.

▪ Concept Review: Retailing is the final touch point in the supply chain that acts as the primary

interface with the consumer. Regardless of how strong a firm’s marketing strategy is, if the product or

service is not available when and where the customer wants it, the product or service will not sell.

Retailers focus on the four Ps to create their strategy. In addition, retailers may use multiple channels

to reach their customers. This often includes online approaches, such as websites, mobile apps, and

social media presence.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

▪ Discuss the “treasure hunt” idea introduced in the video in more detail. Which benefits of in-store

shopping are related to the appeal of the “treasure hunt”?

▪ In small groups, ask the students to use the situational factors influencing consumer behavior (from

Chapter 6) to compare and contrast consumer experiences in Nordstrom and Nordstrom Rack. In

what situations might a consumer choose one store or the other, given that both stores sell the same

brands?

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

▪ Explore the idea of “flash sale” stores like HauteLook. The following article discusses why flash sale

sites were initially popular, and why the business model does not look as robust today.

o http://www.businessoffashion.com/articles/intelligence/trouble-flash-sales

Making Macy’s Meaningful

▪ Activity Type: Case Analysis

▪ Learning Objectives: 17-02, 17-04, 17-05

▪ Difficulty: Medium

▪ Activity Summary: This case discusses strategies undertaken by Macy’s to build sales in an

increasingly challenging retail category. Students read the case and then apply chapter concepts to

the case information.

Activity

▪ Introduction: Macy’s, long a leading department store in the U.S., is trying a variety of new tactics to

attract shoppers to its stores in the face of a sales decline. The goal of this exercise is to test your

understanding of retail strategy by analyzing these initiatives, applying retail strategy frameworks from

the text. This activity is important because managers must understand how to serve customers in the

competitive retail environment, especially given increasing competition from online retailers.

Follow-Up Activity

Ask students to research how Macy’s is doing. Since this case was written, Macy’s has closed several

stores and is facing continuing problems. Here are two articles that were current at the time of this writing:

• http://money.cnn.com/2017/01/04/news/companies/macys-job-cuts-stock/

• http://nypost.com/2017/02/01/macys-sale-rumored-as-long-time-ceo-steps-down/

Is Big-Box Retailing Right for Your Product?

▪ Activity Type: Video Case

▪ Learning Objectives: 17-02, 17-03, 17-04, 17-06

▪ Difficulty: Medium

▪ Activity Summary: In an unusual business case study investigating a failure instead of a success,

this video discusses unsuccessful attempts by Vosges Haut-Chocolat to work with two large retail

chains. After the video ends, students are asked questions about the video and related course

concepts.

Activity

▪ Introduction: Vosges Haut-Chocolat, a luxury chocolate brand, introduced a mid-market brand called

Wild Ophelia to appeal to a different customer segment. Unfortunately, dealings with two large

Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

McGraw-Hill Education.

retailers interested in selling the product did not go well. The video explains what went wrong. This

activity is important because marketers often underestimate the challenges of selling a product

through a mass market retailer. While the opportunities can be huge, marketers must remember the

importance of choosing appropriate retailers to sell a product. The goal of this exercise is to test your

understanding of the issues involved in selecting retail partners.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activity

Discuss the types of channel relationships exemplified in the video, and Vosges’ lack of power with these

large channel partners. Visit Vosges’ website and find out where it currently distributes Wild Ophelia

chocolates.

ISeeIt Video Case: Retail Strategy

▪ Activity Type: Video Case

▪ Learning Objectives: 17-03, 17-04, 17-05

▪ Difficulty: Medium

▪ Activity Summary: This video case explores retail strategy for a coffee shop.

Activity

▪ Introduction: Retailing is an important marketing activity that helps match products and services that

are created by businesses to the consumers who desire them. To create value (and charge a higher

price), retailers add value by offering products that consumers desire and are willing to pay for,,

providing access at the right time and place, making the purchase process easier, or having the

ability to customize products and services. The same holds true for the Coffee Collective. When

Martha was establishing her college-crowd focused atmosphere, she needed to identify retail items

that her customers wanted and expected to see. This includes the constant evaluation and

adjustment of retail offerings—such as the addition of single-serve organic dog biscuits—to make

sure that she is meeting the needs and expectations of her customers. She knows that she must

have an effective retail strategy that fits her business model and partner with suppliers that carry

products that fit with her target market.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.