ESSAY QUESTION SOLUTIONS

CHAPTER 14 Retailing

1.

(text, p. 361)

2. Product: The product offering, or merchandising mix, must satisfy the target customers' desires. This level of satisfaction is often determined as a level of width and depth of the product assortment. Inventory management and physical distribution is also a key issue when dealing with products at the retail level.

Promotion: Retail promotional strategy includes advertising, public relations, publicity, and sales promotion. The objective of the promotional strategy is to help position the store relative to competitors in consumers' minds. Retail promotion is often done on a local basis.

Place: This involves selecting a proper site or location for the store. Managers must decide on a community, a specific site, and store type, including whether to be a freestanding store or part of a shopping centre or mall.

Price: The right price is a critical element in retailing strategy. Price is a key element in a retail store's positioning strategy and classification.

Presentation: The presentation of a retail store to its customers helps determine the store's image. The predominant aspect of this is atmosphere, which includes employee type and density, merchandise type and density, fixture type and density, sound, odours, and visual factors.

Personnel: People are a unique aspect of retailing because most retail sales involve a customer-salesperson relationship. Personal selling issues and setting the quality level of customer service are two important personnel issues.

(text, pp. 376-385)

3. You could compete by using the following three trends:

• Entertainment: Though providing entertainment is not new to gourmet coffee retailers, you could differentiate yourself by providing unique entertainment. These could include magicians, comedy poetry readings, stand-up comics, or unusual music.
  
  
• Convenience and efficiency: Most gourmet coffee shops do not have drive-through windows. By incorporating one, you could provide a fast-food approach to an otherwise upscale product. In addition, you could gain much business by opening the drive-through early for early morning commuters.
  
  
• Customer management: Most coffee shops already offer frequency cards (whereby a customer can get a free coffee after the purchase of a certain number). You could go one step beyond and take vital information about a customer (such as birthdays, typical orders, etc.) and sent direct mailings, offering the customer a special coupon for their favourite latte on their birthday or telling the customer about a favourite entertainer who will make an appearance. This one-on-one marketing approach will turn your customer into a loyal one, a strategy that will be hard to match by the large coffee chains.
  

(text, pp. 387-389)