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Ancillary Cases and Teaching Notes
101
Teaching Notes
Case A25: Dexter Brown, Star Salesperson
Synopsis: Manager in a hypothetical men's boutique must deal with a "tenured" salesperson who
gets upset with the "laid back" attitudes of fellow sales associates.
Use: Chapter 17 Illustrates principles of managing store employees especially sales associates.
Discussion Questions:
1. What are the positive and negative aspects of Brown's behaviors?
Brown is an outstanding salesperson and thus can serve as role model for other salespeople in terms
2. Should the boutique fire Brown?
While firing Brown will increase the harmony among the salespeople, the boutique loses the
3. How can Gould emphasize the positive aspects of Brown's behavior and reduce the negative
aspects?
Janet Gould needs to discuss the problem with Brown--starting out by emphasizing the positive
4. What specifically would you say to Brown during the six-month review meeting?
The instructor should use this question as an opportunity to role-play the meeting with Brown. The
Ancillary Cases and Teaching Notes
102
Case A26: The Tardy Trainee
The Metro-Day department store in downtown Seattle specializes in well-made clothing plus up-to-the-
minute kitchen items and home furnishings. Of the six Metro-Day stores around the country, it’s ranked
number 1 in terms of sales volume and store standards. It’s also the home of the company’s Executive
Training Program for future store managers.
Four people—twice the normal number—were going through the second training program. One of them,
Sue Baker, presented Max with concerns. Sue would often show up late or work on written homework
when she was supposed to be managing sections of the sales floor with the other trainees. Max knew he
needed to sit down and talk with Sue after two weeks of working with her, but whenever he had a chance
to talk with her, she was either absent—she was sick often—or somewhere other than the department.
With three other trainees plus Christmas preparations, Max was very busy.
Max was befuddled. He honestly didn’t believe that Sue had successfully completed the program and
couldn’t fairly evaluate her on the first half. But he felt partly responsible for her failure since he hadn’t
pushed her harder to get her work turned in—though it’s true that he had pushed her twice as hard as the
other trainees. To further complicate matters, the program was a “self-motivated” one and the trainees
knew from the start that Max wasn’t there to baby-sit them.
Ancillary Cases and Teaching Notes
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Discussion Question
What should Max do?
Source: This case was prepared by Laura Bliss, Stephens College.
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Teaching Notes
___________________________________________________________________________
Case A26: The Tardy Trainee
Synopsis: Manager in a hypothetical specialty store must decide what to do with a trainee who has
not performed well during her training program.
Use: Chapter 17 Illustrates principles of managing store employees.
Discussion Question:
1. What should Max do?
The first step in discussing the case might be to discuss the alternative courses of action that Max
might take. Such as giving Sue a poor evaluation which might lead to her dismissal, giving her an
average evaluation and pass the problem along to her next supervisor, or delay completing the
evaluation and give Sue a chance to improve her performance.
Case A27: River Valley Gourmet Shop
Professor Catherine Porter, University of Massachusetts, Amherst.
Background Information
Located in a popular New England resort town, the River Valley Gourmet Shop opened for business just
three months ago. Its customers come through on vacation trips, stopping to purchase locally produced
food items such as homemade breads and pastries, candy, jams and jellies, plus numerous other products
both fresh and preserved. Sales are well ahead of projections for the period.
Inventory was low on the Hawkins relish so the owners went to her home to reorder and bring back more
of the product. On her door they found an official notice: "This business has been closed due to
Department of Health violations." Upon questioning Ms. Hawkins, they found that some jars of relish
she'd sold to a local restaurant had been found to be contaminated with a strain of bacteria causing severe
stomach cramps in people who ate even a small portion of the relish.
Discussion Questions
1. What ethical standards would you recommend the River Valley Gourmet owners adopt before
opening their business? Should they maintain those same standards upon learning of the
contaminated relish?
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Teaching Notes
___________________________________________________________________________
Case A27: River Valley Gourmet Shop
Synopsis: Small gourmet store catering to tourists finds that some merchandise it has sold may be
contaminated.
Discussion Questions
1. What ethical standards would you recommend the owners of River Valley Gourmet adopt prior
to the opening of their business and would you have them maintain those standards upon
learning about the contaminated relish?
Clearly all retailers want to do the right thing and maintain high standards. The difficulty arises when
2. What appropriate business practices should any store selling food products consider which
would protect both the owners and the customers?
First, the retailer needs to test the food product. Then it should evaluate the supplier to make sure that
Case A28: Late Delivery
Professor David Ehrlich, Marymount University
Background Information
Joanna Stores is a 500-store women's apparel chain that emphasizes popular-prized goods. Its vendor
policies tend to be somewhat lax, and vendors have often been known to take advantage of the company,
shipping merchandise late and getting away with it.
Clark immediately sent off a cancellation notice, insisting on August 30. Craft responded by saying, "I'm
still a few pieces short, and I'm shipping what I've got, cancellation or no cancellation." And sure enough,
18,000 dresses from Marie arrived at Joanna's door on September 2. And just as sure, Joanna refused the
entire delivery. The dresses remained on the truck.
Discussion Questions
1. As an observer of this situation, what do you think should have been done?
2. What would you advise the two principals to do to resolve the situation?
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Teaching Notes
___________________________________________________________________________
Case A28: Late Delivery
Professor David Ehrlich, Marymount University
Synopsis: Buyer for a specialty store chain is facing increases in inventory due to overforecasted
sales. To control inventory she cancels a vendor order because it will be shipped several
days late.
Use: Chapter 14: Illustrate negotiations between retailers and suppliers and need to develop good
working relationships.
Discussion Questions
1. As an observer of this situation, what do you think should have been done?
This is a very common situation in retailing. Karen Clark, the buyer for Joanna Stores, needs to
2. What would you advise the two principals to do to resolve the situation?
The current situation is as follows: Maria Modes has about 18,000 dresses custom-made for Joanna
Stores, which has refused acceptance of the delivery. The consequences for Maria Modes in the near-
Ancillary Cases and Teaching Notes
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For the long-term, the retailer and the vendor should engage in further discussions and deliberations
to understand each other's perspectives and issues. The demands of each could be more crafted into a
more realistic agreement and there should be resolution of the issues that each party considers to be
important. For Joanna Stores, timely delivery and fulfillment of agreed-upon terms appears very
important. At the same time, they want to be kept informed of the status of their orders and do want
any surprises closer to the delivery date. For Maria Modes, their own production and operations
Ancillary Cases and Teaching Notes
Case A29: Whom To Pay?
Professor David Ehrlich, Marymount University
Background Information
Linda Howard, the bookkeeper of Earl’s, a small, stylish accessory boutique, was looking at her stack of
bills on January 10, and attempting to determine which of them she should pay. Normally, she would pay
all of them on time, but she was short of cash after Christmas, and had to make choices. She had $15,000
in the bank, had to meet one payroll on January 15 for $2,000, and another one on January 30, for the
same amount. (Store payroll was always paid biweekly.)
The second-largest amount was owed to Maria, a belt supplier. Maria’s line had been strong for the last
several years, but had produced no good items this past season. Earl’s owed Maria $4,000 of the
approximately $10,000 she had purchased during the previous year.
Earl’s owed the Kramer Company, a supplier of Christmas ornaments, $2,000 of the original $5000
shipment. Earl’s did not expect to place another order with Kramer until May, when it shopped for
Christmas goods.
Discussion Questions
1. Develop a projection of Earl’s cash flow for the next two months assuming that the realized gross
margin is 50 percent.
2. As Linda, whom would you pay, and how much to each? Why?
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Teaching Notes
Case A29: Whom To Pay?
Professor David Ehrlich, Marymount University
Synopsis: Accountant for a small specialty store has a tight cash flow problem and must decide
which vendors to pay.
Use: Chapter 13 Illustrate the importance of cash flow and financial considerations.
Discussion Questions:
1. Develop a projection of Earl's cash flow for the next two months assuming that the realized gross margin
is 50 percent.
Cash Available and Generated
Present
Cash from
Cash from
2. As Linda, whom would you pay, and how much to each? Why?
The present bills facing Linda are as follows:
Sherman
$20,000
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Ancillary Cases and Teaching Notes
Case A30: Negotiating with a Vendor
Professor Barton Weitz, University of Florida
Background Information
Laura Foote is the men's tie buyer for Hatfields, a regional department store chain. John Leary, the sales
representative for Antonelli's, has just completed a presentation of the new fall line. He would really like
to sell ties to Hatfields. Hatfields is well-respected in the industry. An order from Hatfields will help him
sell to other regional department chains.
Discussion Questions
1. Prices—The ties will be sold at a retail price of S30.00. Laura would like to buy the ties at as low a
price as possible. The lowest price at which John would sell would be $13.00 and the highest price
Laura would pay would be S21.00.
Ancillary Cases and Teaching Notes
Teaching Notes
Case A30: Negotiating with a Vendor
Professor Barton Weitz, University of Florida
Synopsis: Experiential exercise in which students assume the role of a vendor sales representative
and a buyer. Negotiation involves wholesale price, featured promotion, purchasing terms,
and return privileges.
Use: Chapter 14 Illustrate the trade-offs that need to be made in reaching a mutually rewarding
agreement between a vendor and a retailer.
Teaching Suggestions
This case can be used as an experimental exercise in which two students, one representing the buyer and
one the vendor, negotiate the terms of a contract. The negotiation payoffs are set so that one factor—
Discussion Questions
Role for Laura Foote, Hatfields' tie buyer:
Assume the role of Laura Foote in a negotiation. Your objective is to get the highest gross margin based
on wholesale price, return privileges, feature promotion, and payment terms. If you cannot negotiate a
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2. Return Privilege—Since Hatfields has never sold Antonelli's ties before, you are somewhat
uncertain about the customer demand. You would like to be able to return all ties unsold at the end of
the fall season for a cash refund. You feel this privilege is worth the following amount of money:
3. Feature promotion—During the presentation, John indicated that he would like to have Hatfields
4. Payment Terms—You would like to delay paying for merchandise. Billing terms are worth the
following to you:
Role for John Leary, Sales Representative for Antonelli's:
Assume the role of John Leary in a negotiation. Your objective is to get the highest gross margin
based on the wholesale price, return privileges, feature promotion, and payment terms. If you cannot
negotiate a contract with Laura Foote, you will sell to a smaller chain in Hatfields, geographic region.
You would expect to realize a gross margin from this chain of $8,000. Thus you will agree to deal
worth less than $8,000.
Ancillary Cases and Teaching Notes
1. Price—Based on a cost of $10.00, the gross margin generated by 100 dozen ties at the wholesale
price will be:
2. Return Privilege—You have a lot of confidence in this year's line. You know that Laura is
concerned about the line selling, but you are as concerned. If Laura asks for return privilege, you feel
these privileges will cost you the following amount of money:
3. Feature Promotion—Hatfields is a well-respected department store. It means a lot to Antonelli's to
have Hatfields feature its ties in their annual promotion.
4. Payment Terms—You would like to get paid as soon as possible. Billing terms are worth the
following to you:
Case A31: Stockwork -- Ugh!
Professor David Ehrlich, Maryrnount University
Background Information
A difficult personnel situation has arisen in the junior dress department of a major urban store. A bright
young buyer named Christine Newman, who is considered a real comer by store management, manages
this department. Her assistant, Jean Cisco, is the same age—25, and has recently earned a degree in
human relations.
The salespeople in the department respect their two executives, but are inclined to resent their youth,
attractiveness, and apparent success. Both Newman and Cisco are sensitive to their employees' feelings,
and try constantly to treat them well. Day-off requests are always honored fairly, raises have been
recommended and received, and Newman has occasionally marked down a dress very low to enable one
of the department's employees to buy it.
On busy Saturday, Cisco invariably bakes cookies for the staff, and tries to be on the selling floor at all
times to help direct. Both have often petitioned management for increases in the departmental budget, but
have been told that the store is on an "austerity budget" and cannot authorize an increase in staff.
Discussion Question
1. Do you have any suggestions to offer the beleaguered Newman?
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Teaching Notes
Case A31: Stockwork—Ugh!
Synopsis: Salespeople in a department are not willing to do stockwork and maintain the visual
merchandise standards.
Use: Chapter 17 Illustrate the problems in motivating salespeople to do merchandising as well as
selling activities.
Discussion Questions
1. Do you have any suggestions to offer the beleaguered Newman?
Salespeople, particularly salespeople on a commission, are often reluctant to do stockwork. They feel
that the stockwork reduces the time they can sell. However, the stockwork is important for the store
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Case A32: Check this System Out
Professor David Ehrlich, Marymount University
Background Information
Six months ago, when he reviewed the year-end statements of his company, Action Jackson, the
president, David Jackson, had not been pleased. Although the prior year’s sales showed a sizable gain
over the previous year, the net income did not increase.
Jackson had long practiced the philosophy that he was running a true service business. “Sailors,” he felt,
“are thorough shoppers. They don’t come ashore that often, and want to make their purchasing trips as
quick and efficient as possible. They have thousands of dollars tied up in their boats, and want to spend
every spare moment on them, not messing around in a landlubber’s store.” So he always insisted that his
salespeople accompany customers through every step of their visits to the stores.
But he began to wonder whether too much of his salespeople’s time was being spent on proving too much
service for inexpensive items for which customers really did not need help. If he could streamline his
service operation by removing at least the final process, that of ringing up the sale and packaging the
merchandise, from the salespeople, it might free them to spend more time doing what really counted—
selling higher-priced merchandise that truly required selling expertise.
Ancillary Cases and Teaching Notes
Such a system was not without risks, though. In the first place, some items were small enough to be
slipped into thieves’ pockets, and would not be spotted by the checkout clerk. Second, some customers,
operating unassisted, might take the wrong item and later blame the store for not having given them better
information. And third, removing the constant attention of individual salespeople would introduce a note
of impersonality to what had always been a highly personal business.
At this point, Jackson is uncertain about how to proceed. The drop in sales, he feels, is temporary, and
will be reversed in time. However, he has clearly found the key to higher profitability, and wants to
pursue it, even though that might be at the expense of the store’s ambience.
Discussion Questions
1. Evaluate the advantages and disadvantages of Mr. Jackson’s new plan for organizing his store.
