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9. According to the wheel of retailing and the retail life cycle, what will happen to
factory outlet stores?
10. The text discusses the development of online retailing in the United States. How does
the development of this retailing form agree with the implications of the retail life
cycle?
Answer: Online retailing really is slightly over a decade old. It began in earnest during the
mid-1990s when higher Internet speeds became wide spread, transactions became secure,
and consumers became more comfortable browsing and shopping for products. However,
the number of online retailers has recently declined. This may be due in part to the dot-
11. Comment on this statement: The only distinction among merchant wholesalers and
agents and brokers is that merchant wholesalers take title to the products they sell.
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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”:
1. Use Figure 16-8 to develop your retailing strategy by (a) selecting a position in the
retail positioning matrix and (b) specifying the details of the retailing mix.
2. Develop a positioning statement describing the breadth of the product line (broad
versus narrow) and value added (low versus high).
3. Describe an appropriate combination of retail pricing, store location, retail
communication, and merchandise assortment.
4. Confirm that the wholesalers needed to support your retailing strategy are consistent
with the channels and intermediaries you selected in Chapter 15.
Helping with Common Student Problems
The sample marketing plan in Appendix A is intended as a generic model that can apply
to all kinds of business and nonprofit organizations—from manufacturers producing physical
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TEACHING NOTE FOR VIDEO CASE 16
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
marketplace. The tenants consist of more than 500 stores that range from familiar names to
stores that are unique to the Mall, in addition to a variety of restaurant and entertainment
options. The customers consist of local residents and tourists of all ages from around the
globe. MOA’s marketplace presence is the result of its many communication programs.
Students learn about specific marketing actions, including a growing emphasis on social media,
related to these activities.
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?
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 16 – 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,
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 16 – Retailing and Wholesaling
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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
their location.
Chapter 16 – Retailing and Wholesaling
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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-
end and luxury stores.
• A 180-room luxury hotel with 120 residential units above the guest floors.
• An office building.
• Additional parking.
Chapter 16 – 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
new logo, a new tagline, renovations and upgrades, new staff uniforms, and Mall of America gift
shops with branded merchandise. The new logo will appear on billboards, business cards,
uniforms, and even garbage cans. The new tagline “Always New,” compliments the focus on
creating a unique experience every time someone visits the Mall.
There are many examples of new stores and experiences at MOA. Verizon Wireless, for
example, recently opened the Verizon Destination Store which features interactive mobile
lifestyle zones where guests can learn about and experience wireless technology. Similarly,
Build-A-Bear Workshop recently opened a store at MOA to showcase a new concept for its
chain. Other new stores include DavidsTea, 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.
• Flyover America, a ride similar to Epcot’s popular Soarin’
• Rainforest Café
• Jimmy Buffett’s Margaritaville
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
• Amount of trash recycled each year: 32 tons
• Number of events each year: 400+
• Number of rides ridden in the park since opening: 130+ million
• Number of employees: 11,000 year-round (13,000 during peak periods)
• Economic Impact: Mall of America generates more than $2 billion annually in economic
impact for Minnesota.
• Size of the Mall: 7 Yankee Stadiums could fit in the Mall
• Temperature: The temperature inside the Mall is 70 degrees year-round.
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
Build-A-Bear Workshop Shifting Chain’s Focus,” Providence Journal, September 27, 2015;
Amy Bertrand, “Mall of America: A Vacation Inside A Mall,” St Louis Post-Dispatch, August
9, 2015; Kavita Kumar, “21st Century Mall: MOA Will Add Mall-Wide Wi-Fi,” Star Tribune,
June 13, 2015; “Mall of America Launches Multilingual Website to Cater to International
Visitors,” India Retail News, May 14, 2015; Verizon Expands With Destination Store at Mall of
Chapter 16 – Retailing and Wholesaling
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America, Health & Beauty Close-Up, December 4, 2013; John Ewoldt, “Mall of America’s New
Tenants Appeal To Young Women,” Star Tribune, October 11, 2013; “Bruegger’s Bagels to
Open in Expanded Mall of America,” PR Newswire, October 7, 2013; and Mall of America
Revitalizes Brand With Launch of New, Dynamic Identity,” Mall of America Press Release,
May 15, 2013.
Chapter 16 – Retailing and Wholesaling
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TEACHING NOTE FOR APPENDIX D CASE D-16
Trader Joe’s: Upscale Value1
Synopsis
Trader Joe’s specialty grocery stores can be found in more than 20 states. They offer a
unique proposition—high value, unique gourmet products along with staples and low prices.
Teaching Suggestions
Introduce the case to students by asking them about where they grocery shop and why
they shop there (e.g., convenience, prices, produce quality). Further, probe students about
whether they consider going to the grocery store a fun or interesting experience or a chore. Are
they browsers or task-driven shoppers? What are some of the items that they consider a special
treat from the grocery store and how often do they indulge themselves in these items?
Since most students are on a limited budget, they probably can’t afford the time to
prepare or the money to purchase specialty items. Some may have actually visited a Trader Joe’s
and can describe the experience and some of the products. This leads nicely into the discussion
questions and how the approach Trader Joe’s uses for the grocery market gives it a unique
position.
Answers to Questions
1. How would Trader Joe’s be classified as a retail outlet in terms of ownership, level of
service, and merchandise line?
Answers:
1 Case and teaching note was prepared by Linda Rochford, Associate Professor of Marketing at the University of Minnesota
Duluth.
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2. What type of retail position does Trader Joe’s occupy? Who do you see as its primary
competitors, given this positioning?
Answers:
Answers:
3. How do you reconcile Trader Joe’s success with the fact that grocery stores as a
category are in the maturity stage of the retail life cycle? What are the key factors
behind Trader Joe’s success and what steps should it take beyond its current
marketing activities to continue to prosper?
Answers:
a. Trader Joe’s success factors. Key factors in Trader Joe’s success include its ability to
combine lower prices with unique, high quality products that cannot be found anywhere
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ICA 16-1: IN-CLASS ACTIVITY
Retail Shopping Online: Comparing Prices for 3M’s Ultrathon™ Insect Repellent2
Learning Objectives. To have students shop for insect repellent 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):
• Bot: An electronic shopping agent or robot that combs websites to compare prices
and product or service features (see Chapter 21, p. 570).
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
can be asked to work individually on the assignment and bring their work to class for discussion
in 4-person teams or can work on the assignment in groups outside of class.
Materials Needed. Copies for each student of the “Online Retail Shopping” handout.
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.
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
2 The authors wish to thank Dave M. Peterson, Global Business Manager—3M Business Ventures, who assisted in the development of this ICA.
Chapter 16 – Retailing and Wholesaling
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of its success in this environment, 3M’s Sports and Leisure Products division was
charged with marketing this product to consumers in the U.S. and other countries.
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
shopping ‘bot,’ write down the prices of the retailers with the lowest and highest
prices. If a website does not carry the product, leave the price blank. Finally, call or
visit a local outdoor retailer (Bass Pro Shops, Cabella’s, Gander Mountain, REI, etc.)
that sells 3M’s Ultrathon Insect Repellent Lotion to obtain a price—if it carries the
item.”
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]
b. If you were in the market, would you actually purchase 3M’s Ultrathon Insect
Repellent from one of these online websites? If “Yes,” which ones and why? If
“No,” why not? [¼ page]
Chapter 16 – 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
– 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]
Chapter 16 – 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
– 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?
3. Hand in your briefs and be prepared to discuss them during the next class period.
Chapter 16 – Retailing and Wholesaling
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Connect Application Exercises
Application 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
shopping, online retailing, telemarketing, and direct selling). Students then classify twelve
examples of nonstore retailing into the correct category (Coke machine, Zappos, Redbox Kiosk,
amazon.com, cruise-line mailing, credit card company call, Jos A. Banks catalog, political
campaign, QVC, Mary Kay, Home Shopping Network, and ADVO care). When students mouse
over the nonstore retailing examples, they receive a description of the retailing activity.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Nonstore Retailing
Learning Objectives: LO 16-03 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
Application 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
of retailing figure are provided to student as the drop areas and four restaurant configurations are
the dragable items (Taco Stand, Mexican Restaurant, High End Restaurant, and Burrito Box).
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: The Wheel of Retailing
Learning Objectives: LO 16-05 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
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Application Exercise 3: Mall of America: The Secret to Successful Retailing
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 16-04 Classify retailers in terms of the retail positioning matrix, and
specify retailing mix actions.
AACSB: Analytical Thinking
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
Application 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 draggable items are retailers
(barteritonline.com, NikeWoman, DollarTree, BJ’s Warehouse Club, Wawa, Lord & Taylor,
Sears catalog, and Smith’s Gully General Store) which provide students with description of the
retail format as they mouse over the retailer’s name. Students match the retail format with the
proper stage of the retail life cycle.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Retailing Strategy
Learning Objective: LO 16-05 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 compare and contrast the differences in
retail use between the generations. Have students interview a baby boomer, a gen x, and a
Chapter 16 – Retailing and Wholesaling
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Application Exercise 5: iSeeit! Video Case: Retail Strategy
Activity Summary: In this straightforward whiteboard animation video, students learn about
retail strategy decisions at the Coffee Collective. After watching the 3-minute video, students are
asked five follow-up questions covering utility, retail strategy, and the retail mix.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Retailing Strategy
Learning Objectives: LO 16-01 Identify retailers in terms of the utilities they provide.
LO 16-02 Explain the alternative ways to classify retail outlets.
LO 16-04 Classify retailers in terms of the retail positioning matrix, and
specify retailing mix actions.
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
activity. Ask students to visit a favorite retailer and record their observations on the firm’s
Analytics Exercise 6: Marketing Analytics: 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
locations has a unique target market and product mix. Students perform their analysis using key
metrics such as sales, profit, sales per square foot, revenue per guest, and same store sales
growth. The interactive spreadsheet allows students to manipulate the sales, expense, and guest
traffic data to complete if-then scenario analysis.
Tagging (Topic, Learning Objectives, AACSB, Bloom’s, Difficulty)
Topic: Marketing Analytics
Learning Objectives: LO 16-04 Classify retailers in terms of the retail positioning matrix, and
specify retailing mix actions.
AACSB: Analytical Thinking
Blooms: Analyze
Difficulty Level: 2 Medium
Follow-Up Activity: Instructors could ask students to consider how marketing metrics differ
across industries. Instructors could break students into small groups and ask each group to
identify four metrics that would be valuable in the industry. Instructors should allow students to
Chapter 16 – Retailing and Wholesaling
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Metric
Definition
Load Factor
Revenue Passenger Miles/Available Seat Miles
Revenue Passenger Miles (Traffic)
# Passenger Miles X Distance Passengers Traveled
Average Seat Mile (Capacity) (ASM)
# Seats Available X Distance Traveled
Cost per Available Seat Mile
Operating cost per Available Seat Mile
Inventory Turnover
Cost of Goods Sold/Average Inventory
Gross Profit Margin by Item
Footfalls
Number of visitors per store
Average Basket Size
Number of items in a single purchase