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Discmart’s service standard should therefore be, never be out of stock on advertised
merchandise. Since they were out of stock, the Standards gap occurred.
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CASE 31 – Customer Service and Relationship Management at Nordstrom
Synopsis: Nordstrom is an upscale department store known for its superior customer service. The
case details several aspects of Nordstrom’s philosophy and strategy of providing superior
customer service and demonstrates how customer service is the cornerstone as well as
the primary source of Nordstrom’s competitive advantage.
Use:
Chapter 5 Describes the retail market strategy of an upscale department store, including its sources
of competitive advantage.
Chapter 9 Illustrates how Nordstrom’s dedication to customer service is instilled through its
treatment of its own employees.
Chapter 18 Examines the various service issues that could arise that could impact customer service
at a department store.
Discussion Questions
1. What steps does Nordstrom take to implement its strategy of providing outstanding
customer service?
Nordstrom’s emphasis on customer service springs from its core business philosophy of taking
care of people, and profit will take care of itself. Its emphasis on customer service is well
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2. How do these activities enable Nordstrom to reduce the gaps between perceived service
and customer expectations, as described in Chapter 19?
The various gaps that could exist between perceived service and customer expectations and how
Nordstrom attempts to reduce these are detailed below:
Standards gap: The difference between the retailer’s perceptions of customers’ expectations
and the customer service standards it sets. Nordstrom attempts to close the standards gap
by setting for itself the highest standards of customer service and ensuring its
implementation. It helps employees develop innovative solutions to service problems,
including returned merchandise, and has clearly defined the role of the salespeople as one
who are given the tools and authority to do whatever is necessary to satisfy customers. In
addition, the management always backs up the decisions of subordinates.
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3. What are the pros and cons of Nordstrom’s approach to developing a competitive
advantage through customer service?
Nordstrom’s approach to competitive advantage through customer service is one of the
most sustainable approaches to competitive advantage. While other retailers may match
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CASE 32- Zipcar: Delivering Only as Much Driving as You Want
1. Using the building blocks (five dimensions) of service quality (see Exhibit 13.4), evaluate Zipcar.
Reliability- Is the ability to perform the service dependably and accurately. For Zipcar, reliability
would involve having cars that are reliable and safe for the drivers to rent. In order to do this,
Zipcar should perform regular maintenance on its cars and keep an updated fleet.
2. Compare Zipcar’s service quality performance with that of the most recent car rental service (e.g.,
Avis, Hertz) that you may have used.
This may apply only to students who have rented a car through both Zipcar and a competing car
3. How well has Zipcar handled service failure situations? What could it do to improve recovery
efforts?
The case provides an example of a customer who was trying to use Zipcar, but the car he rented was
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CASE 33- Building the Apple Store
Synopsis: Apple has opened over 200 stores that are very highly trafficked. 20% of the firm’s
revenue is generated through its stores.
Use:
Comprehensive. Identifies several issues in growth, merchandising and retail strategy
Discussion Questions:
1. Have you ever visited an Apple store? If yes, did you make a purchase? Why or why
not?
2. Why is Apple’s store layout and atmosphere important?
The design of the stores is critical to maintaining Apple’s brand image as a company offering
3. Do you agree with the way Apple addressed the challenges it faced from competition?
Apple has become the Nordstrom of technology. Its sales staff pays outstanding personal
attention to its customers. Smiling, high energy employees roam the floor, carrying hand-held
4. Is Apple America’s best retailer?
Retailing involves a number of activities incusing finding locations of stores, managing
employees, developing assortments, buying merchandise, pricing products, managing inventory,
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CASE 34 Generating Advertising Revenue from a Digital Screen Network at Harrods of
London
Discussion Questions:
1. What are the reasons that Harrods has been successful at selling advertising on its
digital signage network and other retailers have not?
Harrods has a unique group of customers, the audience for the digital advertising, going through
2. Why would consumer product manufacturers be interested in advertising on Harrods’
network?
The upscale audience is difficult to reach. The audience is in a shopping mode and probably
3. What are the pluses and minus for a retailer offering a digital network in their stores?
plus
minus
• Extra advertising revenues
• Create an atmosphere inconsistent
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CASE 35 – Innovation in Retailing Strategy at Yankee Candle Company
Synopsis: Yankee Candle (YCC) is a leading manufacturer, wholesaler and retailer of premium
scented candles and accessories in the $70 billion giftware industry. YCC grew steadily
since its beginning in 1969. This case highlights innovative retailing strategies as the
company has gone from a publically traded firm back to privately owned through
turbulent economic times. The case can be used to examine strategic issues via SWOT
analysis (which may include ratio analysis) or more tactical market segmentation
definition from secondary data (Mediamark 2009 ).
Use:
Chapter 5: Target market identification (Mediamark data, 2009*), Strengths and Weaknesses analysis
as part of strategic retail planning process
Chapter 4: Market segmentation
Chapter 6: Ratio analysis (Morningstar 10K report, 2010)
Discussion Questions
1. What is next for Yankee Holding Company, in general? Consider the three distinct
brands under the ownership of Yankee Holding Company – YCC, Illuminations, and
Comments for Instructors: Students may offer suggestions for additional complementary
2. It is helpful for a company to periodically assess its core target market in terms of
demographics and lifestyles. The investor owners of YCC, Madison Dearborn Partners
LLC, don’t want to do an expensive market research study. Using the business and
management databases in your University library, research this question – who is the
scented candle customer?
a. What are the advantages and disadvantages of secondary data to answer this research
question?
b. Describe the target market that buys premium scented candles based on secondary data
findings.
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Comments for Instructors: Have students conduct their own search of secondary data resources
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CASE 36 – PETSMART: WHERE PETS ARE FAMILY
Discussion Questions
1. What else could PetSmart do to increase its store traffic, revenues, and profitability?
– PetSmart can standardize its veterinarian service offerings throughout all of its stores.
2. Consider other retailers that might begin to sell a larger assortment of pet products and
services. How will this competition affect PetSmart?
– Grocery stores presently have 37% market share of pet food sales. These businesses sell pet
food at lower prices with lower profit margins.
3. Should PetSmart expand its operations internationally? Why or why not?
– Yes, there is a large population of pets throughout the world that require pet food, supplies,
and services.
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CASE 37 – Lindy’s Bridal Shoppe
Synopsis: Owner of a specialty shop (hypothetical company) must decide whether she wants the
business to grow and how to achieve growth. This case can generate a discussion of
organizational and personnel issues associated with running a small specialty store. It can
also illustrate strategic and implementation decisions made by a retail entrepreneur.
Use:
Chapter 6 Helps understand the financial issues for a small specialty retailer.
Comprehensive: Identifies several issues in growth, merchandising and retail strategy for a small
retailer.
Discussion Questions
1. Could Lindy change the emphasis of her merchandise mix to increase her sales?
In order to change her product mix successfully, Lindy will have to implement personnel
2. Which products should have more emphasis? Which should have less?
Possible expansion could be in the men’s formal wear line. This is a complementary line of
products. For every bride, there is a groom. For every female attending the prom, there is a male
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3. What personnel decisions must Lindy face to improve her business?
Lindy’s first personnel decisions involve her. She has indicated a desire to spend more time with
her family and disengage somewhat from the business. She must decide what amount of time
and energy she is willing and able to devote to her business. She must also determine what
aspects of the business she is most interested in developing herself?
4. How could someone like Lindy Armstrong balance the demands of her family and her
business?
It is very difficult to balance the demands of family and business. It is not possible for Lindy to
run the business as she has and maintain a satisfactory family involvement. She feels torn and
fragmented. Although Lindy does have a high energy level, she cannot manage the store, make
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5. If one of Lindy’s competitors were to offer her $150,000 for her business, should she sell?
Lindy currently receives a 7.4 percent return on her business investment of $78,000 over and
above her salary of $24,000. Were she to sell her business for $150,000, she could reinvest the
money in some type of secure investment for around 10 percent. This would yield a return of
approximately $15,000.
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CASE 38 – Interviewing for a Management Trainee Position
Synopsis: This case asks students to participate in a variety of professional development steps in
the context of a retail management trainee position, including evaluating resumes,
preparing his or her own resume and roleplaying an interview.
Use:
Chapters 1, 9, 16 Illustrates important elements of the interview process for retail management
trainees
Teaching note
It is unreasonable to expect a college student to have a resume loaded with jobs and experiences, but
it is perfectly reasonable to expect a college graduate to have a succinct resume that highlights
education, job experiences, significant accomplishments and honors.
Martin Cox has a poor resume. His objective is vague. He seeks a position in product planning, but
has no experience to uphold this ambition. The student does not offer any related courses or jobs
to support his career objectives. His job experiences list no responsibilities or tasks. Martin Cox
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Richard Kates has a better resume. He lists a more specific objective than Martin Cox and offers
reasonable experience for a college student. He has a good amount of experiences to share, but
Richard forgot that the resume should be brief, succinct and uncluttered. Despite a more
professional introduction, his resume is muddled and difficult to follow. He could improve it by
bulleting the responsibilities he had in his positions and in his leadership experiences. By
reorganizing the resume, it could be reduced to one page making an evaluation simpler for a
recruiter.