Chapter 13 Retailing and Omnichannel Marketing

Chapter 13 - Retailing and Omnichannel Marketing Chapter 13 Retailing and Omnichannel Marketing Multiple Choice Questions A company that uses store, kiosk, and Internet as a selling channel is using: A retailing strategy B direct channel strategy C omnichannel strategy D intensive distribution strategy E selective distribution strategy Omnichannel strategy refers to selling in more than one channel (e.g store, catalogue, kiosk, and Internet) Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners 13-1 Chapter 13 - Retailing and Omnichannel Marketing A set of business activities that add value to products and services sold to consumers for their personal use is called: A licensing B manufacturing C advertising D retailing E reselling Retailing is defined as the set of business activities that add value to products and services sold to consumers for their personal or family use It includes products bought at stores, through catalogues, and over the Internet, as well as services such as fast-food restaurants, airlines, and hotels Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners Which of the following adds value to products by selling them to consumers for their personal use? A Wholesaler B Manufacturer C Retailer D Reseller E Advertiser A retailer adds value to products by selling them to consumers for their personal use Some retailers claim they sell at "wholesale" prices, but if they sell to customers for their personal use, they are still retailers, regardless of how low their prices may be 13-2 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners Which of the following is positioned at the end of the supply chain? A Retailing B Manufacturing C Advertising D Licensing E Warehousing Retailing sits at the end of the supply chain, where marketing meets the consumer It is primarily the retailer's responsibility to make sure that customers' expectations are fulfilled Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners The key factor that distinguishes retailers from other members of the supply chain is that it sells products to: A wholesalers B manufacturers C businesses D consumers E resellers The key factor that distinguishes retailers from others members of the supply chain is that it sells products to consumers Some retailers claim they sell at "wholesale" prices, but if they sell to customers for their personal use, they are still retailers, regardless of how low their prices may be 13-3 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners Firms involved in buying, often storing, and physically handling goods in large quantities and then reselling goods to business users are called: A manufacturers B producers C institutions D retailers E wholesalers Wholesalers are those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, and then reselling the goods (usually in smaller quantities) to retailers or industrial or business users Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners Which of the following best determines the level of difficulty a manufacturer has in getting retailers to purchase its products? A The level of sophistication of the product B Customer expectations C The relative power of the manufacturer and retailer D Product line complexity E Advertising expenditure The level of difficulty a manufacturer has in getting retailers to purchase its products is determined by the degree to which the channel is vertically integrated; the degree to which the manufacturer has a strong brand or is otherwise desirable in the market; and the relative power of the manufacturer and retailer 13-4 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-02 Channel Structure Which of the following is true in meeting customer expectations? A Manufacturers need to know where their target market customers expect to find their products B Retailers must know from which manufacturers its customers want to buy C Wholesalers must understand consumers' expectations in terms of product selection D Manufacturers may distribute products to retailers selling products in different categories (e.g electronic and sporting goods stores) E Customers may change where they buy products Wholesalers not sell to end consumers By definition, they sell products to other business customers Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-03 Customer Expectations Which of the following offers limited sales of nonfood items and general merchandise in a self-service format? A Big-box food retailers B Conventional supermarkets C Hypermarkets D Supercentres E Warehouse clubs Conventional supermarkets offer groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format 13-5 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 10 A traditional grocery store continues to thrive in the competitive food market by: A offering a wide variety of products, including food and many nonfood items B specializing in a particular product category C increasing the spending on advertising D providing large discounts on perishable products E finding special products and services that are important to their customers Traditional grocery stores continue to thrive because they offer their target customers great value—they are conveniently located, make shopping easy, have fair prices, and find special products and services that are important to their customers Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 11 Red Den is a grocery retail chain that offers products such as dairy, frozen foods, meat, snacks, and a limited line of general merchandise Red Den is an example of a: A convenience store B specialty store C hypermarket D conventional supermarket E drugstore Conventional supermarket offers groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format 13-6 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 12 A hypermarket is a type of: A big-box food retailer B convenience store C general merchandise retailer D specialty store E category specialist Big-box food retailers come in three types: supercentre, hypermarket, and warehouse club A big-box food retailer is larger than a conventional supermarket and carries both food and nonfood items Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 13 Shannon has limited time for shopping and prefers to buy tissues, grooming products, and other household needs from the same stores where she buys her groceries at low prices Which of the following types of retailers is best suited for Shannon? A Off-price retailers B Services retailers C Discount stores D Specialty stores E Category specialists A discount store offers a broad variety of merchandise, limited service, and low prices Walmart and Target dominate the discount store industry in Canada and vie for similar target markets 13-7 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 14 Which of the following types of stores receives 55 percent of its annual sales from selling gasoline? A Conventional supermarkets B Convenience stores C Hypermarkets D Supercentres E Warehouse clubs Convenience stores provide a limited number of items at convenient locations in small stores with speedy checkout Most convenience stores also sell gasoline, which accounts for more than 55 percent of their annual sales Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 15 Provigo has about 300 stores in Quebec and offers groceries, meat, and some nonfood items Provido is an example of: A Conventional super market B Supercentre C Hypermarket D Big-box food retailer E Convenience store Conventional supermarkets offer groceries, meat, and product limited sales of nonfood items, such as health and beauty aids and general merchandise in a self-service format 13-8 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 16 Virgo Inc offers its products at relatively low prices to its customers Virgo's strategy of procuring goods for sale from different manufacturers or retailers has resulted in an inconsistent assortment of goods at its store Virgo is an example of a(n): A category killer B drugstore C hypermarket D off-price retailer E specialty store Off-price retailers, such as Winners, Designer Depot, and HomeSense, offer an inconsistent assortment of merchandise at relatively low prices They typically buy from manufacturers or other retailers with excess inventory or at the end of a season for one-fourth to one-fifth the original wholesale price Because of the way these retailers buy, customers can never be confident that the same type of merchandise will be in stock each time they visit the store Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 17 The Brick is a Canadian retail store funded in 1971 It carries a deep assortment of home furniture and appliances The Brick is an example of A Specialty store B Extreme value retailer C Off-price retailer D Category specialist E Hypermarket Category specialist offers a narrow variety but a deep assortment of merchandise 13-9 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 18 Ochre, a store situated in a low-income locality, offers its products at relatively low prices The goods for sale at Ochre vary frequently due to its low-budget procurement strategy Ochre is an example of a(n): A specialty store B extreme value retailer C warehouse club D convenience store E category specialist Extreme value retailers are a subset of off-price retailers and one of the fastest growing retailing segments Extreme value retailers, such as Dollarama, are general merchandise discount stores found in lower-income urban or rural areas They are much smaller than traditional discount stores, usually less than 840 square metres Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 19 Neil's Mart has several outlets across Ontario and sells a limited number of items at accessible locations in small stores with speedy checkouts It also typically charges higher prices than most other types of food stores Neil's Mart is an example of a: A specialty store B supermarket C hypermarket D discount store E convenience store Convenience stores provide a limited number of items at convenient locations in small stores with speedy checkout 13-10 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-06 Food Retailers 102 A hypermarket is a type of conventional supermarket that offers only groceries and meat FALSE Big-box food retailers come in three types: supercentre, hypermarket, and warehouse club; they are larger than a conventional supermarket and carry both food and nonfood items Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-06 Food Retailers 103 Home Depot is an example of a discount store that offers limited service and lower prices FALSE Stores such as Home Depot are known as category specialists because they offer a narrow variety but a deep assortment of merchandise Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 104 Category specialists offer a narrow variety but a deep assortment of merchandise TRUE A category specialist offers a narrow variety but a deep assortment of merchandise 13-53 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 105 Drugstores have high profit margins on pharmaceutical products FALSE Drugstores are specialty stores that concentrate on health and personal grooming merchandise, though pharmaceuticals often represent more than 60 percent of their sales The largest drugstore chains in Canada—Shoppers Drug Mart (Pharmaprix in Quebec), Jean Coutu, PharmaSave and London Drugs—face a major challenge because of the low margins they earn on prescription drugs Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 106 Off-price retailers provide an extensive assortment of merchandise in a particular category FALSE Off-price retailers, such as Winners, Designer Depot, and HomeSense, offer an inconsistent assortment of merchandise at relatively low prices They typically buy from manufacturers or other retailers with excess inventory or at the end of a season for one-fourth to one-fifth the original wholesale price Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 107 Banks are just services retailers FALSE Banks sell their services to business as well as consumers; therefore, they are not just retailers 13-54 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 108 The fundamental activity of a retailer is to provide the right mix of merchandise and services that satisfies the needs of the target market TRUE Providing the right mix of merchandise and services that satisfies the needs of the target market is one of retailers' most fundamental activities Offering assortments gives customers choice and helps attract new and existing customers Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-08 Developing a Retail Strategy 109 Store brands are developed and marketed by retailers to distinguish themselves from their competitors TRUE It is difficult for retailers to distinguish themselves from their competitors through the merchandise they carry because competitors can purchase and sell many of the same popular brands So many retailers have developed private-label brands (also called store brands), which are products developed and marketed by a retailer and available only from that retailer Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-09 Product (Merchandise Assortment) 110 Today, most successful retailers try to treat all their customers the same FALSE Today, most successful retailers concentrate on providing more value to their best customers 13-55 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Difficult Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-13 Personnel 111 Cash payment and risk reduction are benefits offered by bricks-and-mortar retailers TRUE Traditional stores, or brick-and-mortar retailers as they often are called, offer several benefits to customers that they cannot get when they shop through catalogues or on the Internet Cash payment and risk reduction are benefits offered only by bricks-and-mortar retailers Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-16 Benefit of Stores for Consumers 112 The use of kiosks allows retailers to overcome resource constraints TRUE The use of kiosks allows retailers to overcome resource constraints by freeing up staff to provide sales assistance to other customers Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 113 The catalogue channel provides a unique opportunity for sellers to collect information about how consumers shop FALSE The Internet channel offers sellers the unique opportunity to collect information about consumer shopping behaviour—information that they can use to improve the shopping experience across all channels 13-56 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 114 Providing a multichannel offering helps retailers to build share of wallet TRUE Although offering an electronic channel may draw away some sales from other channels, using it with other channels can result in consumers making more total purchases from the seller Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 115 Store-based retailers can leverage their stores to lower the cost of fulfilling orders and processing returned merchandise if they use the stores as "warehouses" for gathering merchandise TRUE Store-based retailers can leverage their stores to lower the cost of fulfilling orders and processing returned merchandise if they use the stores as "warehouses" for gathering merchandise for delivery to customers Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 13-57 Chapter 13 - Retailing and Omnichannel Marketing 116 All retailers should adopt omnichannel to serve customers better FALSE Providing the seamless experience required in omnichannel strategy is not easy for retailers Therefore, retailers should decide the degree to which they should or are able to integrate the operations of the channels Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Difficult Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-18 Effective Omnichannel Retailing 13-58 Chapter 13 - Retailing and Omnichannel Marketing Short Answer Questions 117 Define the term "retailing." Retailing is defined as the set of business activities that add value to products and services sold to consumers for their personal or family use It includes products bought at stores, through catalogues, and over the Internet, as well as services such as fast-food restaurants, airlines, and hotels Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners 118 What are the factors that manufacturers must consider while choosing retail partners? Provide one example to support your answer When choosing retail partners, manufacturers must look at the basic channel structure, where their target customers expect to find the products, distribution intensity, and channel member characteristics 13-59 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Easy Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners 119 How customer expectations influence the choice of retailers? Support your answer by examples From a retailer's perspective, it is important to know from which manufacturers its customers want to buy Manufacturers, in contrast, need to know where their target market customers expect to find their products and those of their competitors Customers generally expect to find certain products at some stores but not at others Companies need to stay abreast of changes in where customers buy products and what products they request, and then change their distribution strategies accordingly Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-03 Customer Expectations 120 Describe the characteristics of a conventional supermarket Give an example Conventional supermarkets are food retailers that offer groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format An example of a conventional supermarket is Safeway Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-06 Food Retailers 121 What is a specialty store? Give an example Specialty stores concentrate on a limited number of complementary merchandise categories in relatively small stores These stores tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise An example is Payless ShoeSource, a family footwear retailer 13-60 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Remember Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 122 Why retailers develop private-label brands? Give an example It is difficult for retailers to distinguish themselves from their competitors through the merchandise they carry because competitors can purchase and sell many of the same popular brands So many retailers have developed private-label brands (also called store brands), which are products developed and marketed by a retailer and available only from that retailer For example, if you want House & Home bedding, you have to go to Hudson's Bay Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-09 Product (Merchandise Assortment) 123 Explain the Wheel of Retailing with an example Student answers will vary The Wheel of Retailing offers one view of how new forms of retail outlets compete in the market Generally, retailers enter with low prices, low margins, and low status Over time, they add more and more service and other improvements and thus, are able to raise prices, earn higher margins, and achieve higher status with consumers For example, the first menu at McDonald's offered only hamburgers, french fries, and milkshakes for takeout Today, McDonald's has a wide and varied menu, upscale coffee, indoor seating, WiFi access, and play areas for children 13-61 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-12 Presentation (Store Design and Display) 124 Explain the benefits of a store channel Provide one example for each Traditional stores, or brick-and-mortar retailers as they often are called, offer several benefits to customers that they cannot get when they shop through catalogues or on the Internet • Browsing: Shoppers often have only a general sense of what they want (e.g., a sweater, something for dinner, a gift) but don't know the specific item they want They go to a store to see what is available before they decide what to buy Although some consumers surf the Web and look through catalogues for ideas, many still prefer browsing in stores • Touching and feeling products: Perhaps the greatest benefit offered by stores is the opportunity for customers to use all five of their senses—touching, smelling, tasting, seeing, and hearing—when examining products • Personal service: Sales associates have the capability to provide meaningful, personalized information • Cash and credit payment: Stores are nearly the only channel that accepts cash payments Some customers prefer to pay with cash because it is easy, resolves the transaction immediately, and does not result in potential interest payments Some customers prefer to use their credit or debit card in person rather than send payment information electronically • Entertainment and social interaction: In-store shopping can be a stimulating experience for some people, providing a break in their daily routine and enabling them to interact with friends • Instant gratification: Stores have the advantage of allowing customers to get the merchandise immediately after they buy it • Risk reduction: When customers purchase merchandise in physical stores, it reduces their perceived risk of buying and increases their confidence that any problems with the merchandise will be corrected 13-62 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-16 Benefit of Stores for Consumers 125 What limitations store-based retailers face when marketing products? One of the main constraints faced by store-based retailers is the size of their stores They can display and offer only a limited amount of merchandise for sale Another limitation faced by these retailers is inconsistent execution The knowledge and availability of sales associates vary across stores and is problematic for retailers selling new, complex merchandise Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-16 Benefit of Stores for Consumers 126 How can multichannel retailers use the electronic channel to increase their share of wallet? Provide one example The retailer's electronic channel can be used to stimulate store visits by announcing special store events and promotions Store-based retailers can leverage their stores to lower the cost of fulfilling orders and processing returned merchandise if they use the stores as "warehouses" for gathering merchandise for delivery to customers 13-63 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 127 BioCare Corp is a new cosmetics manufacturer that produces a high-end line of natural, mineral-based skin care products What are the different factors that are likely to influence BioCare's choice of retail partners? Student answers will vary • Channel structure: Since Bioline is a new brand, it will be difficult to convince retailers to sell its products, as the brand is unknown to the customers Bioline will initially have to pay high listing fees to its retailers to place the products • Customer expectations: As Bioline's products are expensive and it is targeting high-end customers, the firm needs to know where its target customers shop The firm has to place its products with high-end specialty stores that offer only cosmetic products • Channel member characteristics: Since Bioline is a new manufacturer entering into the market, it has to depend on high-end retailers to sell its products It must also ensure that sales associates can provide product information to customers • Distribution strategy: Since Bioline is venturing into the market for the first time, the firm might use an exclusive distribution strategy by selecting only one high-end retailer This way the company need not cut prices as there are no competitors selling these products This also helps the firm to ensure that there will be enough inventory to satisfy customer demand 13-64 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Apply Difficulty: Difficult Learning Objective: 13-01 Outline the considerations associated with choosing retail partners Topic: 13-01 Choosing Retail Partners 128 Explain off-price retailers with an example Student answers will vary Off-price retailers, such as Winners, Designer Depot, and HomeSense, offer an inconsistent assortment of merchandise at relatively low prices They typically buy from manufacturers or other retailers with excess inventory or at the end of a season for one-fourth to one-fifth the original wholesale price Because of the way these retailers buy, customers can never be confident that the same type of merchandise will be in stock each time they visit the store Different bargains also will be available on each visit To improve their offerings' consistency, some off-price retailers complement their opportunistically bought merchandise with merchandise purchased at regular wholesale prices In addition to their low prices, the key to off-price retailers' success is the treasure hunt environment they create Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-02 Identify what types of retailers are available to distribute products Topic: 13-07 General Merchandise Retailers 129 How can retailers differentiate themselves from other retailers in the competitive market? Retailers can differentiate themselves from other competitors by developing effective retailing strategies To develop these strategies, the retailers must first obtain a deep understanding of the consumers in their markets—their attitudes, behaviours, and preferences Then they must use this knowledge of their consumers to develop market segments and select those segments they want to serve Retailers that try to be all things to all people often end up not being able to serve any particular segment appropriately and soon find themselves in serious trouble Once the target market is selected, retailers must develop product merchandising, pricing, promotion, and place strategies to reach and serve these consumers These elements must be closely coordinated so that they portray a consistent and clear positioning so consumers know what type of customers the retailer is targeting and how they want to serve them 13-65 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-08 Developing a Retail Strategy 130 Explain briefly how the retail landscape has metamorphized into a value-driven world Student answers will vary Students should explain that value doesn't just mean low price: it means getting maximized benefit for the money Consumers of all ages, nearly all income groups, and practically all segments have undertaken the "shift to value." Consumers have fundamentally changed their reference points for both price and quality, such that they have been trained to expect significantly lower prices from many retailers Many people's lifestyles have become more casual, and consumers have begun to redefine quality from "good" to just "good enough" for particular items and occasions, such as their casual weekend wardrobe As their definition of quality changes, so does their definition of value Retailers that provide great value, such as Costco, were once known largely as a destination for monthly stock-up trips But today, they have penetrated the weekly shopping routine Value retailers continue to improve their "shopability," providing more convenient store layouts and shopping experiences that make the task faster and easier 13-66 Chapter 13 - Retailing and Omnichannel Marketing Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Difficult Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-08 Developing a Retail Strategy 131 Describe personalized customer service in the context of the Internet channel Provide examples to support your answer Traditional Internet channel approaches for responding to customer questions—such as frequently asked questions (FAQ) pages and offering a toll-free number or email address to ask questions—often not provide the timely information customers are seeking To improve customer service from an electronic channel, many firms offer live online chats The online chat feature provides customers with the opportunity to click a button at any time and have an instant messaging email or voice conversation with a customer service representative This technology also enables firms to send a proactive chat invitation automatically to customers on the site The timing of these invitations can be based on the time the visitor has spent on the site, the specific page the customer is viewing, or a product on which the customer has clicked At Bluefly.com, for example, if a visitor searches for more than three items in five minutes, thereby demonstrating more than a passing interest, Bluefly will display a pop-up window with a friendly face offering help Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-04 Identify the benefits and challenges of omnichannel retailing Topic: 13-17 Benefits of Internet and Omnichannel Retailing 132 Compare and contrast the retail mix of Starbucks and Tim Hortons Student answers will vary, they need to discuss the elements of the retail mix for both coffee shops: product, pricing, promotion, place, personnel, and presentation It should be discussed the Starbucks invest more on presentation and personnel and offer higher quality coffee and charge more Tim Hotron's on the other hand focus on service speed and price Accessibility: Keyboard Navigation Blooms: Understand Difficulty: Moderate Learning Objective: 13-03 Describe the components of a retail strategy building on the four Ps to create value for consumers Topic: 13-08 Developing a Retail Strategy 13-67 ... groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format 13- 5 Chapter 13 - Retailing and Omnichannel Marketing. .. groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise, in a self-service format 13- 6 Chapter 13 - Retailing and Omnichannel Marketing. .. merchandise, limited service, and low prices Walmart and Target dominate the discount store industry in Canada and vie for similar target markets 13- 7 Chapter 13 - Retailing and Omnichannel Marketing