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Chapter 13 - Retailing and Wholesaling
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BUILDING YOUR MARKETING PLAN
Does your marketing plan involve using retailers? If the answer is “no,” read no
further and do not include a retailing element in your plan. If the answer is “yes”:
2. Develop a positioning statement describing the breadth of the product line (broad
versus narrow) and value added (low versus high).
4. Confirm that the wholesalers needed to support your retailing strategy are consistent
with the channels and intermediaries you selected in Chapter 12.
Helping with Common Student Problems
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TEACHING NOTE FOR VIDEO CASE 13
Mall of America: America’s Biggest Mall Knows the Secret to Successful Retailing!
Synopsis
This case provides an exciting look into the reasons for the success of the largest mall
in the United States – Mall of America (MOA). The marketing team at Mall of America
explains that the secret to success at MOA is to provide a unique shopping experience each
time a customer visits. The marketing of MOA focuses on three key activities: attracting retail
and entertainment tenants, attracting shoppers, and increasing MOA’s presence in the
.
[Video 13-6: Mall of America Video Case (kerin.tv/cr8e/v13-5)]
Teaching Suggestions
Ask the class the following questions and related discussion points to introduce the case:
1. What do you think is the No.1 tourist destination in the United States? Disney
World? The Grand Canyon? The Statue of Liberty? The correct answer is Mall of
2. Have any of you ever visited Mall of America? If so, what were your impressions?
The discussion should bring out at least two key points: (a) the massive size of MOA (the
3. In your own purchase activities, do you combine shopping and entertainment on
your visits to local malls? How? You might emphasize that this combined shopping-
Answers to Questions
1. What is the key to success at Mall of America?
Answers:
Chapter 13 - Retailing and Wholesaling
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• Mall of America offers each customer a unique experience every time they visit.
To accomplish this MOA uses a combination of constantly changing retail offerings,
entertainment options, and special attractions. From new stores, to musical acts, to
• Income levels are high. The metropolitan area’s median household income was
$67,194 in 2013 (September 18, 2014, U.S. Census Bureau).
• MOA is an international attraction. About 6% of MOA’s visitors come from
outside the United States. Part of this is because of business travelers associated with
• The market was “under-stored.” The Minneapolis-St. Paul metro area had less
retail space per capita than other markets. The last regional mall had been built 15
• MOA has excellent access and parking. MOA is located on/next to two major
highways. Highway exits were designed to facilitate huge amounts of traffic as part of
2. What trends contributed to the idea for the Mall of America?
Answers:
The concept of a huge mall was the result of several trends:
Chapter 13 - Retailing and Wholesaling
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• Covered shopping centers began to replace downtown, main-street shopping areas in
3. What challenges does Mall of America face as it strives to continue its success?
Answers:
Mall of America faces several challenges as it strives to continue its success. First it must
attract and retain more than 500 retail and entertainment tenants; second it must attract
millions of visitors; and finally it must increase its presence in the marketplace.
4. What specific actions has Mall of America taken to address each challenge?
Answers:
Actions taken to attract tenants:
• To encourage entrepreneurs to come to MOA there is a specialty leasing program that
offers new retailers an affordable entry-level lease in exchange for flexibility related to
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Actions taken to attract visitors:
• To attract new visitors and improve return visits MOA develops offerings and
messages for the different audiences. One target audience includes young women.
Unmarried women have disposable income and like to travel, and married women are
Actions taken to increase MOA’s presence in the marketplace:
• A recent campaign called the “Scream Collector” started with a TV ad and then
followed up with progress reports on billboards.
Epilogue
Dan Jasper’s suggestion that Mall of America could double its size is becoming a reality.
MOA owners have submitted a plan to add a new $500 million expansion. The new additions
will include:
• The Collection at MOA, a one million square foot shopping district for high-
Chapter 13 - Retailing and Wholesaling
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Additional future construction plans include an indoor water park and an indoor skating rink.
Mall of America also recently launched a new brand identity campaign, which includes a
chain. Other new stores include David's Tea, Fjallraven, and The North Face. Bruegger’s
Bagels, which has 300 locations nationwide, recently opened its first indoor mall bakery-café
location at Mall of America. A variety of new stores, restaurants, and attractions will open soon.
They include:
• Crayola Experience, a one-of-a kind family attraction where children can create and
name their own crayon.
Other new elements of Mall of America offering include multilingual webpages for speakers of
Spanish, French, German, Portuguese, Japanese, and Chinese, and mall-wide Wi-Fi.
Current facts about Mall of America include:
• Total store front footage: 4.3 miles
Sources: Kelsey Ketchum, “Mall of America Plans Next Phase of Northern Expansion,” St Paul
Pioneer Press, October 1, 2015; Jaime Delage, “New Mall of America Hotel to Open By Mid-
November,” St. Paul Pioneer Press, October 5, 2015; Kavita Kumar, “Executives At Flagging
Chapter 13 - Retailing and Wholesaling
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ICA 13-1: IN-CLASS ACTIVITY
Retail Shopping Online: Comparing Prices for 3M’s Ultrathon™ Insect Repellent1
Learning Objectives. To have students shop for a digital camera online from a manufacturer,
selected retailers, and “bots” to compare their respective prices.
Definition. The following marketing term is referred to in this in-class activity (ICA):
Nature of the Activity. To have students access the websites of 3M, the manufacturer of the
Ultrathon™ Insect Repellent, selected retailers that may carry this particular brand, and a
shopping agent (or “bot”) to experience online retail comparative shopping for this particular
product.
Estimated Class Time and Teaching Suggestions. Students will spend 15 to 20 minutes
outside of class to complete the assignment. This ICA takes 10-15 minutes in class. Students
Steps to Teach this ICA.
1. OPTIONAL: Bookmark the following websites on your classroom computer:
2. Pass out copies of the Online Retail Shopping Handout to each student.
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3. Form students into 4-person teams.
4. Click on the Internet icon “Ultrathon Video” to view a short video clip about the 3M
Ultrathon Insect Repellent. [TRT = 2:08]
5. Give the following mini-lecture about the 3M Ultrathon Insect Repellent:
“3M’s Ultrathon Insect Repellent was first sold to the U.S. military in 55-gallon
drums for use in tropical environments where biting insects are prevalent. Because
of its success in this environment, 3M’s Sports and Leisure Products division was
6. Explain the nature of this ICA:
“Between now and the next class period, each team will go to the websites listed in
the Online Retail Shopping Handout to shop for 3M’s Ultrathon Insect Repellent
Lotion. Do not add any sales taxes or shipping charges. For each website, attempt to
locate 3M’s Ultrathon Insect Repellent by whatever means you choose. For the
a. Comment on each website with respect to its ease of navigation, visual layout,
time to find the product, variety of product categories offered, and the price
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b. If you were in the market, would you actually purchase 3M’s Ultrathon Insect
Chapter 13 - Retailing and Wholesaling
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ONLINE RETAIL SHOPPING ANSWERS HANDOUT
1. For each website, local retailer (if any), and shopping “bot,” write down both the name of the
retailer (if different from the website) and the price of 3M’s Ultrathon Insect Repellent.
Only write down the price of the lotion (not the aerosol, pump spray, etc.). If a website does
not carry 3M’s Ultrathon Insect Repellent lotion, leave the price blank. [NOTE:
RETAILERS AND PRICES AS OF JANUARY 2014; RESULTS MAY CHANGE.]
Price of 3M’s
Ultrathon Insect Repellent
Website (Single Lotion Packaging Only)
Manufacturer
3M Store (www.Ultrathon.com) .................................................. 3M does not have an online store
Retailers
Amazon.com itself (www.amazon.com) ................................................................................ $10.65
“Featured Merchants” Retailer Partners:
– Lowest price “Merchant” retailer: ................. Sam’s Online .............................................. $6.00
– Highest price retailer: ...................... eBay ....................................................................... $16.99
2. Write a 1-page brief that responds to the following questions:
a. Comment on each website with respect to its ease of navigation, visual layout, time to
find the product, variety of product categories offered, and the price offered for the
product. Also, was the shopping “bot” helpful? Why or why not? [¾ page]
3. Hand in your briefs and be prepared to discuss them during the next class period.
Chapter 13 - Retailing and Wholesaling
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ONLINE RETAIL SHOPPING HANDOUT
1. For each website, local retailer (if any), and shopping “bot,” write down both the
name of the retailer (if different from the website) and the price of 3M’s Ultrathon
Insect Repellent. Only write down the price of the lotion (not the aerosol, pump
spray, etc.). If a website does not carry 3M’s Ultrathon Insect Repellent lotion,
leave the price blank.
Price of 3M’s
Ultrathon Insect Repellent
Website (Single Lotion Packaging Only)
Manufacturer
“Featured Merchants” Retailer Partners:
– Lowest price “Merchant” retailer: ....... _________________ _________________
– Highest price “Merchant” retailer: ...... _________________ _________________
– Lowest price retailer: ......................... _________________ _________________
– Highest price retailer: ........................ _________________ _________________
2. Write a 1-page brief that responds to the following questions:
a. Comment on each website with respect to its ease of navigation, visual layout,
time to find the product, variety of product categories offered, and the price
offered for the product. Also, was the shopping “bot” helpful? Why or why not?
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Exercise 1: Nonstore Retailing
Activity Summary: In this click and drag activity, students learn about six types of nonstore
retailing which are given as drop areas (automatic vending, direct mail/catalog, television home
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Nonstore Retailing
Learning Objectives: LO 13-03 Describe the many methods of nonstore retailing.
AACSB: Knowledge Application
Blooms: Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could have students collect their own examples of nonstore
retailing and create a photo collage to share their creations with the class. The photo collage
Exercise 2: Wheel of Retailing
Activity Summary: In this click and drag activity, students are exposed to the changing nature
of retailing by applying a restaurant example to the wheel of retailing. The four stages of wheel
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: The Wheel of Retailing
Learning Objectives: LO 13-05 Explain changes in retailing with the wheel of retailing and the
retail life-cycle concepts.
AACSB: Knowledge Application
Blooms: Apply
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to identify additional examples of the
changing nature of retail by reviewing the retail life cycle. Ask students to evaluate the
Exercise 3: Mall of America: The Secret to Successful Retailing
Chapter 13 - Retailing and Wholesaling
Activity Summary: In this video case, students learn how the Mall of America makes shopping
into an experience for its customers. After watching the video, students answer six questions
about the retailing mix including retail pricing, store location, retail communication, and
merchandise.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Retailing Strategy
Learning Objective: LO 13-04 Specify the retailing mix actions used to implement a retailing
strategy.
Blooms: Analyze
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to perform some research on the store
location retailing mix element for the local market. Students could visit different settings; central
Exercise 4: Retail Life Cycle
Activity Summary: In this click and drag activity, students are introduced to the retail life cycle
concept. Students are given the four stages of the retail life cycle as drop areas (early growth,
accelerated development, maturity and decline). The dragable items are retailers
(barteritonline.com, NikeWoman, DollarTree, BJ’s Warehouse Club, Wawa, Lord & Taylor,
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Exercise 5: iSeeit! Video Case: Retail Strategy
Activity Summary: In this straightforward whiteboard animation video, students learn about
LO 13-02 Explain the alternative ways to classify retail outlets.
LO 13-04 Specify the retailing mix actions used to implement a retailing
strategy.
AACSB: Knowledge Application
Blooms: Apply
Difficulty Level: 1 Easy, 2 Medium
Follow-Up Activity: Instructors could ask students to perform a short retail audit as a follow up
Marketing Analytics Exercise: Restaurant Performance
Activity Summary: In this analytics activity, students read a mini-case about an upscale
restaurant owner who is evaluating his three locations’ financial viability. Each of the three
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Marketing Analytics
Learning Objectives: LO 13-04 Specify the retailing mix actions used to implement a retailing
Chapter 13 - Retailing and Wholesaling
Industry
Metric
Definition
Airline
Load Factor
Revenue Passenger Miles/Available Seat Miles
Airline
Revenue Passenger Miles (Traffic)
# Passenger Miles X Distance Passengers Traveled
Airline
Average Seat Mile (Capacity) (ASM)
# Seats Available X Distance Traveled
Airline
Cost per Available Seat Mile
Operating cost per Available Seat Mile
Grocery
Inventory Turnover
Cost of Goods Sold/Average Inventory
Grocery
Gross Profit Margin by Item
(Total Sales Revenue for Item - Cost of Goods Sold
for Item)/Total Revenue for Item
Grocery
Footfalls
Number of visitors per store
Grocery
Average Basket Size
Number of items in a single purchase
