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Ancillary Cases and Teaching Notes
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Case A6: Men’s Wearhouse: Adding Complementary Merchandise and Services to
Bring Value to Customers
Men’s Wearhouse, Inc. is one of the largest discount men’s apparel companies in North America. The
first location of this men’s specialty store was opened in August 1973 in a strip shopping center near
Houston, Texas. Thirty years later, Men’s Wearhouse operates 693 stores in 44 states in America and 10
provinces in Canada under the Men’s Wearhouse, K&G and Moore’s brand names.
MERCHANDISE
Men’s Wearhouse sells high-quality men’s clothing at prices 20 to 30 percent lower than department
LOCATION
Men’s Wearhouse stores are located in strip shopping centers adjacent to residential areas. This
PROMOTION
Men’s Wearhouse uses a variety of media to inform and remind customers about its stores, merchandise,
tag line, “You’re going to like the way you look. I guarantee it.”
SERVICES
Men’s Wearhouse is known for having a well-trained sales staff that can assist customers with their
wardrobe selection. In addition to helpful sales associated, each tailored item can be brought back to the
Ancillary Cases and Teaching Notes
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GROWTH STRATEGIES
One of the most profitable additions to the services provided by Men’s Wearhouse is the tuxedo rental
DISCUSSION QUESTIONS
1. Men’s Wearhouse successfully added tuxedo rental to its merchandise offerings in 1999. Now
this retailer plans to add women’s bridal wear and the service of dry cleaning. List the pros and
cons for each of these growth strategies.
2. What other merchandise and services could Men’s Wearhouse add to reach a new segment of the
market, benefit customers, and grow its business?
Ancillary Cases and Teaching Notes
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Teaching Notes
Case A6: Men’s Wearhouse: Adding Complementary Merchandise and Services to Bring Value to
Customers
Synopsis: Men’s Wearhouse, Inc. is one of the largest discount men’s apparel companies in North
America. Men’s Wearhouse operates 693 stores in 44 states in America and 10 provinces
in Canada under the Men’s Wearhouse, K&G and Moore’s brand names. The retailer
sells high quality men’s clothing at prices 20% to 30% lower than department stores,
specializing in suits and other tailored business apparel.
Use: Chapter 5 Illustrates Men’s Wearhouse’s merchandising strategy.
Discussion Questions
1. Men’s Wearhouse successfully added tuxedo rental to its merchandise offerings in 1999. Now this
retailer plans to add women’s bridal wear and the service of dry cleaning. List the pros and cons for each
of these growth strategies.
Ancillary Cases and Teaching Notes
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Pros
Cons
Bridal Wear
Convenience, one stop shopping for the
entire wedding party
New brand name of Bride and Joy,
no brand equity or recognition, will
2. What other merchandise and services could Men’s Wearhouse add to reach new segments of the
market, benefit customers, and grow its business?
Add tuxedo rental in Canada
Business and casual clothes for women
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Case A7: Borders Bookstore: A Merchandise Display Problem
Michael Chaim, general manager of the Borders Bookstore in Madison, Wisconsin, was proud of
his store. Located in a city that has one of the highest levels of book purchases per capita, Chaim
felt Borders’ selection; services and location near the 40,000-student university served the
community well. Even with competitive pressure from the newly opened Barnes & Noble on the
west side of town, his bookstore/café was often a busy place.
Chaim was taken aback when an article in a widely read alternative newspaper criticized the bookstore’s
merchandise arrangement as being prejudiced. The store carries a large selection of literature and poetry,
Discussion Questions
1. Although Chaim has several options, one is to duplicate the titles that could be shelved in either the
general literature collection or a specialty collection. What are the advantages and disadvantages of this
tactic?
Ancillary Cases and Teaching Notes
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Teaching Notes
Case A7: Borders Bookstore: A Merchandise Display Problem
Synopsis: Manager of a Borders’ bookstore in a college town is confronted by customers criticizing
the arrangement of books as “ghetto-izing” authors who were not white males.
Use: Chapter 17 Illustrates the problems that can confront store managers.
Discussion Questions
1. Although Chaim has several options, one is to duplicate the titles that could be shelved in either
the general literature section or in a specialty collection. What are the advantages and
disadvantages of this tactic?
Stocking duplicate books in a few locations throughout the store may aid customers who misjudge
2. The Borders store described in this case is in a college town. How should the merchandise be
arranged in a different location, such as a suburban residential location or a more urban
setting?
Stocking decisions may be made on the basis of the individual stores’ target markets. Book display
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Case A8: The Gap and Old Navy
DONALD FISHER AND WIFE launched The Gap in 1969. Initially, The Gap stores were unique in offering
every size and style of Levi’s, arranged by size for convenience. When the teen-jean craze slowed in the
mid-1970s, stores were repositioned for people interested in a fashionable, causal lifestyle. Donald Fisher,
then CEO, and Mickey Drexler, then president, added other chains to The Gap portfolio of specialty
apparel stores: Banana Republic and Old Navy. Banana Republic is positioned at the high end of the
quality/price spectrum that includes the moderately priced Gap and the company’s newest chain, Old
Navy, featuring the least expensive clothing.
Drexler was well aware of this fact and brought with him new and innovative ideas that the company
desperately needed. Drexler, the Gap’s president since 1983, became the CEO in October 1999 when
Robert Fisher, the president and son of the Gap founders, retired. The company’s stock immediately rose
10 percent on the news of Drexler taking over.
Mickey Drexler developed the concept for the Old Navy chain to cater to the new lifestyle of teens and
young adults who want fashion but do not have much to spend on clothing. He selected the name for the
chain after seeing it on a building during a walk around Paris. Old Navy is consistent with the growing
strength of discount stores in apparel retailing. Consumers were predicted to spend $40 billion—nearly a
third of their apparel dollars—at discount department stores, off-pricers, and factory outlets in 1999. It is
Ancillary Cases and Teaching Notes
In April 1999, Jenny Ming was appointed president of Old Navy. Ming started her career at The
Gap in 1986 as a buyer. Ming has a knack for predicting what hip-looking clothing will appeal to
the masses and making big bets on producing large quantities to ensure that these items will be in
Discussion Questions
1. How do you think the growth of Old Navy will affect the sales in The Gap chain?
2. In the next five years, where should Gap, Inc., place the greatest resources: Old Navy, Gap, or
Banana Republic? Why?
3. In what ways could the Gap chain enhance customer appeal and loyalty?
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Teaching Notes
Case A8: The Gap and Old Navy
Synopsis: The Gap is a multinational apparel manufacturing and retailing conglomerate. In an
effort to expand and diversify its appeal, the company has in recent years opened up Old
Navy, and Banana Republic. All of the company’s stores have customers of their own,
but they all compete with one another to some extent.
Use: Chapter 1 Provides a general overview of what retailers need to do to be successful.
Chapter 2 Identifies the strategy and operations of a retail conglomerate.
Discussion Questions
1. How do you think the growth of Old Navy will affect the sales in The Gap chain?
One could make a reasonable argument to suggest that the growth of Old Navy will decrease sales in
The Gap chain, but it could be just as reasonable to suggest the opposite. When Gap, Inc. developed
the concepts for both Old Navy and Banana Republic, one of the types of growth strategy they were
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2. In the next five years, where should Gap, Inc., place the greatest resources: Old Navy, Gap, or
Banana Republic.
Once again, there is no absolute right or wrong approach to this situation. If the economy takes a
downturn, it might seem logical to focus most on the growth of Old Navy. If the trend of economic
3. In what ways could the Gap chain enhance customer appeal and loyalty?
Generally speaking, to Gap Chain could do many of the same types of things that any retailer might
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Case A9: Blue Sky Surf Shop —Twenty-One Years of Surfing and Still Going Strong
Blue Sky Surf Shop in St. Augustine, Florida, is owned and operated by husband and wife Dave and
Nancy Macri. After surfing in St. Augustine for several years, the Macri's, who are originally from the
gulf side of Florida, decided to start their business in 1979 in what was then a small, low-key surfer’s
town. Located on Anastasia Blvd. (the main route through Anastasia Island and a direct road to the
beach), the shop is not out of sight but is easily missed if one is not looking for it. This is not a
disadvantage to the store because (unlike most businesses in tourist-dependent St. Augustine) Blue Sky
relies on local surfers and word of mouth for 90 percent of its business. Surfers from Jacksonville,
Gainesville, Daytona Beach, and the west coast of Florida flock to St. Augustine for the consistent waves,
clean water, and wide open beaches, and all rely on Blue Sky for surf accessories.
Customers entering Blue Sky, see surf videos constantly playing on a television monitor, over 200 brand
new surfboards neatly displayed on floor racks, and the best brand name clothing. This quickly tells them
they are in the best possible place to suit their needs. Just as back in 1979, when the store was a mere 600
square feet, it’s dedicated to maximizing every inch for surfers needs. The store is now 1,800 square feet
and Blue Sky consistently carries roughly 250 new and 60 used surfboards, more than any other shop in
northeast Florida. Going into its 21st year of business, Blue Sky has perfected the concept of quality
products and service while staying true to its original clientele, no matter what the rate of expansion.
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Discussion Questions
1. What is the target market of Blue Sky Surf Shop?
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Teaching Notes
Case A9: Blue Sky Surf Shop – Twenty-One Years of Surfing and Still Going Strong
Synopsis: Blue Sky Surf Shop is a highly successful specialty store that caters to surfing
enthusiasts. The store, which has been in business for over two decades, draws most of
its business from its loyal customers and word of mouth referrals.
Use: Chapter 1 Provides a general overview of what retailers need to do to be successful.
Chapter 2 Illustrates the strategy and operations of a specialty retailer.
Chapter 4 Identifies the demographic and consumer behavior characteristics of Blue Sky's
target market(s). Illustrates what consumers think about when they compare
retailers and products to buy, and what retailers can do to maximize repeat business.
Discussion Questions
1. What is the target market of Blue Sky Surf Shop?
It should come as no surprise that Blue Sky’s target market is surfers. Other surf shops and general
sporting goods retailers that have more diversified merchandise offerings than Blue Sky typically
2. What role has location played in the long-term success of Blue Sky?
Generally speaking, Blue Sky is ideally situated. It is located in St. Augustine, FL, a town where
many people travel relatively long distances to surf. Generally speaking, Blue Sky is ideally situated.
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3. How has Blue Sky achieved long-term success with minimal advertising?
In short, Blue Sky is located in a surfing town, where it has been for decades, and their customers are
Ancillary Cases and Teaching Notes
Case A10: Cleveland Clinic
For years, Ohio’s Cleveland Clinic has ranked with the top world-class providers of medical care. It pioneered
coronary bypass surgery and developed the first kidney dialysis machine. King Hussein of Jordan used the
clinic, as does the royal family of Saudi Arabia.
Big-name health care institutions like the Cleveland Clinic are after new markets for their state-of-the-art
medical care, and are posing a new threat to local physicians. The expansions are also disrupting
traditional relationships between physicians and their patients, physicians and their hospitals, and
physicians and their fellow physicians.
When the Cleveland Clinic opened an outpatient clinic in South Florida, a war broke out. In a full-page
advertisement in the Miami Herald, Dr. Seropian, a local physician, pulled out the stops. He likened the
clinic to dingoes (wild Australian dogs) that roam the bush, eating every kind of prey. The clinic filed suit
in federal district court in Fort Lauderdale, charging, among other things, that some physicians had
conspired to hamper its entry into Broward County.
Famous medical institutions like the Cleveland Clinic and Mayo are victims of their own success. Many
of the once-exotic procedures that they invented are now routinely available across the country, reducing
patients’ need to travel to the medical meccas. For instance, the Cleveland Clinic might once have had a
hold on coronary bypass surgery, but no more. In 2000, more than 350,000 patients had the operation at
hospitals throughout the United States.
Discussion Questions
1. Compare the Cleveland Clinic to traditional retailers.
2. What was its retail mix?
3. What factors in its environment resulted in it changing its retail mix?
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Teaching Notes
Case A10: Cleveland Clinic
Synopsis: The Cleveland Clinic is a well-respected health care provider facing a changing
competitive environment. In response to this changing environment, the Cleveland
Clinic is opening facilities in South Florida.
Discussion Questions
1. Compare the Cleveland Clinic to traditional retailers.
The Cleveland Clinic is very similar to traditional store-based retailers. The two major differences are
that Cleveland Clinic offers services rather than merchandise and that the customer decision-making
process is different for selecting a health care provider than retail merchandise. Information from
2. What was its retail mix?
The present strategy of the Cleveland Clinic is to target the Midwestern market by offering high
quality medical services that are not available by local hospitals.
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3. What factors in its environment resulted in it changing its retail mix?
The declining market in the Midwest and difficulty in differentiating the uniqueness of its services led
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Case A11: Niketown
Some things don’t need much explanation. When you see the Golden Arches, you think of McDonald’s.
When you see a swirling a swirling red, white, and blue sphere, you think of Pepsi. And when you see
the curvy little swoosh, “Just do it” comes to mind.
With so many nontraditional shopping alternatives competing for the customer’s attention, a key to
survival in the 90s is retailers’ ability to maximize their in-store environments. Customers are bored with
ordinary shopping experiences. Convenience and price aren’t enough. They want to be entertained.
The majority of the pavilions feature the sounds associated with that sport. If you enter one basketball
pavilion (The Flight Pavilion), you’ll hear the distant sound of basketballs bouncing on hardwood floors.
If you enter the tennis pavilion, you’ll hear the sounds of the racket smashing against the little yellow ball.
In the Land of Barkley, named after basketball player Charles Barkley, basketball hoops hold up display
shelves, and basketballs support benches. The sounds being played are shoes squeaking on hardwood.
The actual floor is hardwood so “wannabe” Barkleys can pull on a pair of shoes and squeak them on the
floors like the big guys. The tennis pavilion features a sunken, miniature tennis court; its most popular
piece is John McEnroe’s broken racket. There’s even a kid’s pavilion, with bootie-sized air Jordan
lookalikes and a measure on a wall that shows the height of Jordan’s leap. At 40 inches, it’s higher than
some of his small fans’ heads.
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Discussion Questions
1. Why are manufacturers like Nike opening their own retail outlets?
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Teaching Notes
Case A11: Niketown
Synopsis: Nike, the manufacturer of the leading brand of athletic shoes, has opened retail outlets to
showcase their products. These outlets have a unique and highly entertaining store
environment.
Use: Chapters 1,2 Illustrates an innovative retailing approach that emphasizes store design and layout
to entertain customers while they buy merchandise.
Discussion Questions
1. Why are manufacturers like Nike opening their own retail outlets?
While these showcase stores opened by Warner Brothers, Disney, Reebok, and Nike generate
2. What will be the reaction of consumers and retailers who sell Nike merchandise to these new
stores?
These stores typically do not compete with local retailers. They are typically directed toward tourists.
