978-1259709074 Chapter 17 Solutions Manual

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Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

Answers to End of Chapter Learning Aids

Marketing Digitally

1 How do JCrew.com and Gap.com provide value to their customers beyond the physical

products that they sell? Why would a customer purchase online instead of going to the store?

Under what circumstances would the customer prefer a store-based experience?

Multichannel retailers sell merchandise in more than one retail channel (i.e. store, catalog, and Internet);

the question asks students to consider why.

1 Select a familiar omnichannel retailer. Evaluate its website in terms of how well it provides

value to its customers. Do you believe that offering multiple selling channels to customers

enhances their shopping experience? How does it help the retailer? Explain your answer.

This question allows the student to evaluate omnichannel retailers as well as customer service.

Marketing Applications

1 Does Reebok pursue an intensive, an exclusive, or a selective distribution intensity strategy?

Would you suggest any changes to this strategy?

Reebok likely uses a selective distribution strategy. A selective distribution lies between the intensive and

2 Assume that AG, the designer jeans company, has decided to sell expensive wristwatches for

men and women. What factors should it consider when developing its strategy for choosing

retail partners?

This question challenges the student to consider aspect of the retail store that may impact the brand’s

3 Some argue that retailers can be eliminated from the distribution channel because they only

add costs to the final product without creating any value-added services in the process. Do

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Chapter 17 – Retailing and Omnichannel Marketing Marketing 6th

you agree with this perspective? Are consumers likely to make most purchases directly from

manufacturers in the near future? Provide justification for your answers.

Students must offer an opinion of the future of retailers and therefore should think about the ways in

which retailers add value and whether manufacturers could provide such value. Students also might

address the relative power of retailers in the value chain currently as compared with the past. Retailers

could not be eliminated from the distribution channel, because they provide value-added services that

4 Assume you have been given some money but told that it must be invested in a retailer’s

stock. In which type of retailer would you choose to invest? Which specific retailer? Provide a

rationale for your answers.

This question leads the student to think of the successful aspects of retail outlet and potential growth

opportunities.

5 Provide examples of how manufacturers work with retailers to jointly plan and implement the

four Ps.

Manufacturers and retailers do work jointly to develop the four Ps. The manufacturer is concerned with

how the brand and product is presented in the marketplace and the retailer is concerned with driving

sales and building a product assortment that is favorable to the customer. The two should work together

to effectively implement a marketing mix that meets the needs of both parties.

6 Why have so many brick-and-mortar retailers adopted a omnichannel strategy?

This allows the student to evaluate online stores and the importance of an omnichannel strategy.

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7 You can purchase apparel at a discount store, specialty store, category specialist, off-price

retailer, department store, or Internet-only store. From which of these types of stores do you

shop? Explain why you prefer one type of store over another.

A discount store offers a broad variety of merchandise, limited service, and low prices. A specialty store

concentrates on a limited number of complementary merchandise categories and a high level of service in

relatively small stores.

8 Should Tana, a young entrepreneur who is launching a new line of environmentally friendly

(green) cosmetics, sell through a physical store, catalog, or Internet? Explain two key benefits

of each channel for her business.

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

9 Name a retailer from which you have received personalized service, product, or promotion

offerings online. What form of personalization did you receive? Did the personalization

influence your purchase decision? Explain why or why not.

Student answers will vary.

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

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10 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?

11 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

18 and 35 years. The basement level is newly designated “One Below,” and it offers a notably

different shopping experience.

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

13 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.

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

However, Eva would have a difficult time convincing Macy’s to buy and sell her green cosmetics line

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

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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 Convenienc

e 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

Connect Activities

Activity Type Learning Objectives 17-

01 02 03 04 05 06

Types of Retailers Click & Drag X

Retailing: Staples, Inc. Case Analysis X

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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

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

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.

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

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

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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

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

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

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

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.

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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

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

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

Follow-Up Activity

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

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

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.

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

Making Macy’s Meaningful

Activity Type: Case Analysis

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

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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

Follow-Up Activity

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

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,

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

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

embedded on the page, after which questions are presented.

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Follow-Up Activity

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

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

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

embedded on the page, after which questions are presented.

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