N\ G58 Retailing Managemmt GROWTH Srrarectes Cie oF the most profitable additions to the services provided by Men's Wearhouse isthe tuxedo rental business, Men's Formalwear has been offered since 1999 in the United States and represented $S1 million ig sales in 2003, This service offering has been so strong that it encouraged the company to expand she oor space in the stores, ‘move into the dry cleaning arena, and begin a test for women’s bridal weer Bevis tuxedos need to be dry cleaned between each prom and wedding party, Men's Wearhouse ‘quickly saw the importance of acquiring a dry cleaning chain and expanding into this businecs Currently, the $7 billion dry cleaning industry is comprised primarily of small single-facility,tumily-owned operations. To launch the women’s formalwear concept, Men's Weathouse is test marketing two locations of its new bridal shop, Bride an! Joy. in California, These stores will offer convenient shopping forthe women inh bridal party in. ‘ding the bride, bride maids andthe mother o th bride, The test stores will be located et door to Men’s Wear. houses in approxi nately 3,000 square foot stores, Discussion Questions 1. Men’s Wearhouse successfully added tuxedo rental to its merchandise offerings in 1999. Now this retailer plans {0 add women’s bridal wear anc the service of dry cleaning. List the pros and cons for each of Whew owth textes : 2. What ether merchandise and services could Men's Wearhouse a to reach a new segment of the market, benefit ‘customers, and grow its business? Source: This we Was written by Hone Bober Corrigan, Loyola Calle: in Marytand Case 20 Nolan’s Finest Foods: Category Management Nolan's Finest Foods is. full-service retailer that offers shoppers the convenience of one-stop shopping at its high- end. food-and-drug combo stores in the San Francisco Bay area The chain features 4 0 riety of high-quality prod. ucts at Competitive prices but uses promotional pricing as well. Historically, Nota has enjoyed great success in its markets and led the region for several years. However, on this winter morning, Roberto Ignacio. the director of strate- ie planning, had a more immediate concern. The wire services had reported afew weeks ago that the Valumart gro- ery chain had announced pans for the construction of 10 new food. nd-drug combo centers throughout Nolan's markets, ler poring over current research and financial results, Ignaciu had decided sy examine category manage- ‘ment asa defense against the encroachment of Valumart jo date, Nolan’ did not have any experience with category management, A decision was also made to pilot Shoe Bory Management in some categories before implementing a systemwide rollout, One of the categories chosen forthe test was shampoo, Ignacio's immediate assignment was to review the product category and report back to management with an initial recommendation. As Iunio looked out of hie Window at the scenic sunset over the San Francisco Bay. he reviewed the events of the past few weeks and the information that he had obtained on the shampoo category. He had several third-party reports (Exhibits 1-2, and 3) that provided background Exhibit 1 Total U8. Sipermaised Denamies: Sham Active SoNew —#SKUs SKU Dollar 52 Weeks SKUs SKUs Handled. Velocity 1,974 Brands 4714 Private labet 2a Generic 19Cases 659 Exhibit 2 Shampoo Dollar Share _——_——________.. ‘12 Months 12 Months Trade Channel Last Year Exhibit 3 Stampoo Growth Dollar Sales % Change versus a Year Ago Food 0.9% Drug 42 ‘Mass merchant Exhibit 4° Dullar Sales: Percent Change vesus a Year Ago MARKET MOLAN'S FINEST ‘13 Weeks §2Weoks 13 Weeks 52 Weeks Tolaldollarsales $444.2 10645 | MBA department = 44.5 4420-5 a3 Shampoo category + 196 © 9.7 information about national trends ifthe shampoo category and trends in supermarkets. Another report (Exhibit 4) Provided him with information on hiow Nolan's shampoo sales compared to the rest of the market However, these reports did not provide Ignacio with information about how Nolans stacked up against the com: Petition in terms of its assortment and pricing, After some checking around, Ignacio found that he could one ne Ports from third-party vendors that would provide him with an analysis of Nolan's and the competition in terms of Product mix and pricing, He placed an urgent order for these analyses, which arrived this moruing through courier (Exhibits 5, 6, and 7), Here are explanations of a few terms in the analyses SKU dollar velocity Revenue per SKU per store per week HBA Health and beauty aids Market All food stores Remaining market ‘All food stores excluding Nolan's As lgnacio headed for the water cooler, feeling upbeat in the thought that he had a handle on the shampoo cat- Gzory he ran into Hal Jeffreys, a tongtime veteran at Nolan’s and vice president of information systems Knowing that Jeffreys had at one time managed health and beauty aids at Nolan’, Ignacio mentioned his review of the shen co eisctory and the category management initiative, Jeffreys responded that for years he had a simple approach For category management. He would begin by generating alist of slow sellers in the etegory and then try to replace these slow sellers with new products or increase the shelf space for existing products. With the new Information660 Retailing Management Exhibit 5 Competitive rice Comparison for Shampoo: Counts of lems Showing Differences from the Base Zone (Nolan's Finest Foods) Competition Is higher . Competition is same Competition is lower Competition does not carry Exhibit 6 Brand dmportance Report for Stampoo: Nolan's Foods vers Rensaining Market for 13. Week Chain fear emt. Ram. Mit. Chal Mit. hain Category Rem. Mkt Description Sales Rank Rank Sales Share pt. Cat, mgt: Clean & Son $108,826 1 1 $512,345 11.5% 45 ‘stimpressions 2 3 asi 13 103 Mane Tame 3 4 244,160 23 a6 Bargain Bubbles 4 2 433,300 16 18 Sky Style 5 5 147,713 58 Elegance 5 5 181.075, 46 a Exhibie7 Product Mic Stmmary Report: Shampoo Dollar Sales—13 Weeks Clean Soft Istimpressions Mane Tame Bargain Bubbles Siiky Style Elegance Private Labet 3 2% 18 a 8 5 7 25 3 2 a 2 6 a 6 6 2 4 1 4 7 10 " 3 5 4 6 Types caried Nolan's 6 7 6 9 4 5 6 [__ Rem. mit, 6 10 8 2 5 tt 2 Tomes that Nolan's had installed in the past year, generating a slow seller lst was very easy: To prove his point, Jeffieys walked back with Ignacio to his office and. using his PC. Benerated a slow seller report for the shampoo category (Exhibit 8), - _ See. technology has made this a teal cinch,” std Jeffreys and wondered aloud whether the expense and effort of category management would produce net improvements over and above this very simple “knock off the slow seller” approach, “I'l try to come to your presentation tomorrow." anid Jeffreys as he left Ienacio’s office.. Cases 661 Exhibit 8 Siow Seller Report: Shampoo for Nolan's Foods, 13. Weeks versus a Year Ago F * tom Sales Golden UB LgT Se gg ‘st impr. DF ND Lot. 11 or. 10 Gentle GLD Lg. #7 02. CRED 0) 2 ae 4 Crain Chain Mit. Chain Subcat Rem, Mkt, Cain Shr pt. Silky Style X-B Lg. 18 oz As Jeffrey left his office, Ignacio sank back into his chair with a knot in his stomach. He felt that he had jumped the gun in thinking that he had a handle on the shampoo vategory. Things seemed to be more complicated than they had appeared earlier in the day. Ignacio wondered whether the shampoo category seemed so difficult because it wae the first attempt at category management. In any case, his immediate concern was to prepare for his presentation tomorrow. Since Hal Jeffreys would be in the audience, he knew that he would have to address the “knock out the slow sellers” perspective. Discusston Questions 1, What are the national sales trends in the shampoo category? 2. What are the differences in shampoo sales trends at Nolan's compared with national trends? 3. What would be causing these differences? 4. Suggest a plan of action. . Source: This ease was writen by Professor Kirthi Kalyanam, Retail Management Institute, Santa Clara Universi. © Dr. Kitti Kalyanam, Case 21 Developing a Buying Plan for Hughe’s ping a Buying si A welkestablished, medium-size department store in the Midwest, Hughe’s reflects consumers" needs by featur- ing popular names in fashion for the individual consumer, family, and home. It tries to offer a distinctive, wide as. Sortment of quality merchandise with personalized customer service. The many customer services include per- sonal shoppers; credit through ix house charge, American Express, and Visa; and an interior design studio, Hughe’s pricing policy permits it to draw customers from several income brackets, Moderate-income consumer secking value and fashion-predictable soft goods are target customers, as are upscale customers witha special in. terest in fashion, The department store is implementing new marketing strategies to prepare for continuing growth and expansion, Hughe's merchandising philosophy is to attract the discerning middle-market customer whe comprises 70 percent of the population as well as sophisticated fashion-conscious consumers who expect to buy high-quality, brand-name ‘merchandise at competitive prices One portion of Hughe’s buying staff is responsible forthe Oriental rug department within home furnishings. The open-to-buy figure for this classification within the home furnishings division will be based on last year’s sales his- tory (Exhibit 1), - I has been projected thata 15 percent increase over last year sales volume can be attained due o Oriental rugs? continued popularity: This year's open-to-buy for fall/winter will be $66,200. The buying staf will be making its purchases for fall/winter in Amritsar, India, a city known for top-quality car- Pets. Ghuman Export Private, Lid., of Amritsar, Punjab, India, is the manufacturer the buyers will contact, Exhibit 2 shows information about Ghuman to use in the decision-making process