RCS 584: Advanced Retail Analysis (3 credits)

Spring 2019Assignment #3 (80 pts)

Due: 03/24/2019

Chapter 12 Buying Merchandise(30 pts)

Ch12-1.(5 pts)
Go to the homepage for the Private Label Manufacturers Association (PLMA), and read the
“What are Store Brands?” page, which can be found at
http://plma.com/storebrands/facts13.html. What are store-brand products? Who purchases
store brands? Who makes store brands? What store brands are you purchasing on a regular
basis?
● Store brand products encompass all merchandise sold under a retail store's private
label. That label can be the chain's own name or a brand name created exclusively by
the retailer for their stores. In some cases, a store may belong to a wholesale buying
group that owns labels that are available to the members of the group. These

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wholesaler-owned labels are referred to as controlled labels.

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● For the consumer, store brands represent choice and the opportunity to regularly

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purchase high quality food and non-food products at considerable savings compared to

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national brands. With that being said consumers who are looking for a cheaper

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duplication/ alternative will be the ones to purchase store brand products.
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● Store brand manufacturers make store brands. They make it clear that high quality
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across the board is the number one requirement, from the ingredients to the supply
chain, from the packaging and labeling to the final product itself.
● When I go to Walmart I purchase their store brand Great Value if they offer it in what I
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am looking for. I prefer this option because it tends to be cheaper than the national
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brands that they also offer in their store.

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Ch12-2.(5 pts)
What are the advantages and disadvantages of manufacturer’s brands versus store brands?
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Consider both the retailer's and customer's perspectives.

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● National brands
○ Pros: Can be easier to find and these brands are more consistent. Customers
can develop a sense of loyalty.
○ Cons: Image of national brand can affect image of retailer. Retailers have to offer
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significant discounts on national brands to attract customers

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● Store brands
○ Pros: Can overall enhance and expand assortment in a store. Can be a lower
price.
○ Cons: Can be hard to find if they are exclusive to one store. Can be of a lower
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quality.

Ch12-3.(5 pts)

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 Why have retailers found exclusive store brands to be an appealing branding option? Choose a
department store, a discount store, and a grocery store. What exclusive store brands do they
offer? How are they positioned in relation to their national-brand counterparts?
● I feel as if retailers find exclusive store brands to be an appealing branding option
because store brands can help build a retailer's brand image.
● Department Store: Crown & Ivy is an exclusive store brand for Belk's and when it comes
to the position in relation to their national-brand counterparts, Crown & Ivy is usually
placed in a spot of their own and isn't in the midst of other brands.
● Discount Store: Dollar General has their DG Brand, Sweet Smiles and Closer Valley. In
Dollar General these products are positioned usually in the same section and right next
to their national brand counterparts.
● Grocery Store: Walmart has a few exclusive store brands including Great Value and
Sam's Choice. In Walmart these products are positioned usually in the same section and
right next to their national brand counterparts as well.

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Ch12-4. Read the Retailing View Article on Page 321.(5 pts)

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Retailing View 12.2: The Search for Cheaper Garment Factories Leads to Africa (page 321).

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Summarize the article and provide your thoughts/comments on the article. Your writing needs to

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be at least 120 words.
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● The article The Search for Cheaper Garment Factories Leads to Africa is about how
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global supply chains are in need or raw materials like cotton, in need of inexpensive
labor that can sew the clothing for a low price, and in need of a means of transportation
for their materials from the production site to the retail markets. With these demands,
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Africa has become a place where global supply chains look to being that Africa has been
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emerging as a location with a great interest for clothing companies. Areas in Africa are
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able to grow their own cotton, many of the manufacturers located their do not offer
minimum wages, and in Africa they have free trade agreements in place with Western
nations. I liked this article because it allowed me to learn about where the future of
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garment factories is leading to, because we all assume China is the main place to look
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at, but Africa is the up and coming location.

Ch12-5. Read the Retailing View Article on Page 329.(5 pts)

Retailing View 12.3: Zappos Values Relationships with Its Vendors, the Merchandise Experts
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(page 329). Summarize the article and provide your thoughts/comments on the article. Your
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writing needs to be at least 120 words.

● The article Zappos Values Relationships with Its Vendors, the Merchandise Experts is
about how Zappos has taken different strategies to be a top online retailer. The retailer
was founded in 1999 and later was acquired 10 years later, in 2009. The company is
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well known for their emphasis on customer service and the relationship they continue to
build with their vendors. The company has learned that in order to keep up their success
they must have a strong vendor relationship as well. When vendors go to visit a Zappos
representative they get a A-class treatment, including free meals, appreciation events,
tours of the facilities, and etc. Overall Zappos will continue to be a successful company

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 because they believe that strong relationships lead to better partnerships. I enjoyed this
article because I actually know little about Zappos and this allowed me some insight and
piqued my interest in the company.

Ch12-6. Read theRetailing View Article on Page 330.(5 pts)

Retailing View 12.4: It Isn’t Easy to Sell to Walmart (page 330). Summarize the article and
provide your thoughts/comments on the article. Your writing needs to be at least 120 words.
● The article It Isn’t Easy to Sell to Walmart is about how the supercenter Walmart is
pressuring the vendors they purchase from to supply them with environmentally friendly
merchandise that also has labels as proof. The company has three goals that they have
laid out that they want to achieve. The first goal is that they want to use 100 percent
renewable energy. The second goal is to reduce their waste production to zero. Lastly,
the third goal is to market products that will sustain both customers and the environment.
The company is also requiring their top 200 factories to become 20 percent more energy
efficient, which many say is not a reachable goal and will be impossible for Walmart. I

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enjoyed reading this article because as a frequent shopper of Walmart I barely hear the

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initiatives they are working on, so this article gave me some insight of what is in store for

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the company.

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Chapter 13 Retail Pricing (15pts)
Ch13-1.(5 pts)
What types of retailers often use a high/low pricing strategy? What types of retailers generally
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use an everyday low-pricing strategy? How would customers likely react if a retailer switched its
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pricing strategy from one to the other? Explain your response.

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● Retailers such as department stores that use a high/low strategy that frequently discount
the initial prices of merchandise through sales promotions. Customers would probably
buy their products as soon as possible if department stores switched to the everyday
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low-pricing strategy.
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● Retailers such as supermarkets, home improvement centers, and discount stores

generally use everyday low pricing strategy. If these retailers switched to a strategy like
the high/low strategy, more customers would probably wait for the merchandise to get
marked down instead of buying them right away instead of if the price was already
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marked down low.

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Ch13-2.Read the Retailing View Article on Page 357(5 pts)

Retailing View 13.3: Changing Once, Changing Twice, Changing 3 Million Times: How Amazon
Prices to Win? (page 357). Summarize the article and provide your thoughts/comments on the

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 article. Your writing needs to be at least 120 words.
● The article Changing Once, Changing Twice, Changing 3 Million Times: How Amazon
Prices to Win? is about how Amazon recently had actively changed the prices of about
one-third of their products in the large range of merchandise they supply. What's so
funny about these price changes were that the company initiated them on one of the
busiest shopping days of the year, Black Friday. The company is able to change 15 to 18
percent of their products every single day due to their famous algorithms and their data
warehouse. But during the holidays Amazon changed more than 3 million prices every
single day in November. I enjoyed this article because Amazon is a company that is
always ahead in innovation and I enjoyed hearing how they did this.

Ch13-3. Read the Retailing View Article on Page 361(5 pts)

Retailing View 13.4: What Makes a Price Regular? (page 361). Summarize the article and
provide your thoughts/comments on the article. Your writing needs to be at least 120 words.

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● The article What Makes a Price Regular? discusses the thought process behind some

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retailers and their pricing. The practice of setting a deceptive reference price can be

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questionable because it can mislead consumers into believing that they are getting a

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deal when they are really not. JCpenney had a lawsuit when claims were brought

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against them arguing that the store promoted sale prices that were actually the regular
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prices of the merchandise. Retailers frequently end up marking the price higher than
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they ever intend to be and they then immediately discount those products to fool
consumers that they are getting a good deal. Other retailers such as Kohl's, Sears,
Macy's, and Men's Wearhouse have been accused for participating in this deceptive act
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towards consumers. This article was interesting to me because even though this practice
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is quite deceiving and not necessarily legal, it is smart because it tricks the consumers to
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think that the regular price is the sale price.

Chapter 14 Retail Communication Mix (35 pts)

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Ch14-1. Internet Exercise (5 pts)

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Go to the home page for Interbrand (https://www.interbrand.com/best-brands/best-global-

brands/2018/ranking/) and select the Top 100 Global Brands. On the basis of this ranking,
choose 5 brands that you are familiar with and that are your most favorite brands.
•For each brand, describe what makes it a strong retail brand.
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•How were brand equity and financial performance used to measure brand value for these
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retailers?
● Apple is a strong retail brand because they have established a strong sense of loyalty
between them and their consumers
● Amazon is a strong retailer because they're constantly innovating.
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● Google is a strong retailer because of their responsiveness, relevance, and presence.

● Nike is a strong retailer because of their responsiveness, authenticity, and engagement.
● Zara does so well because it has an amazing operating supply chain and manages its
inventory well, creating great value for customers and shareholders alike.
Being that brand equity is the commercial value that derives from consumer perception of the

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 brand name of a particular product or service, rather than from the product or service itself,
many perceive these brands as extremely great brands that offer great products and services.
Also being that their financial performance has continuously done well this shows that
consumers are enjoying the product/service hence why they have continued to purchase from
the brand.

Ch14-2. Internet Exercise (5 pts)

Retailers and manufacturers deliver coupons through the Internet in addition to delivering them
by mail or as inserts. Go to retailmenot.com for coupons offered over the Internet. How does
this coupon distribution system compared with the other two distribution systems?
● This coupon distribution compares to the other two because it makes coupons easily
accessible to all. A customer wouldn't have to sign up for emails or go to the store to
receive an insert instead they could easily pull up retailmenot.com and access the

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coupon right then and there.

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Ch14-3. (10pts)

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Outline some elements in a communication program that can be used to achieve the following

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objectives:(a) Increase store loyalty by 20 percent.(b) Build awareness of the store by 10
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percent.(c) Develop an image as a low-price retailer. How would you determine whether the
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communication program met each of these objectives?
A. Frequent shopper programs where customers can earn points for making more
purchases. You could also introduce private label merchandise only available at the
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store. Telephone or mail survey can be taken before and after the new program is put in
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place and the survey can ask customers their degree of loyalty, percent of expenses in
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category bought from store can help determine if the objective has been met.
B. Install a large sign in front of store and hold an event that generates publicity. You can
also use the radio or a billboard advertising emphasizing the name and location of the
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store. You can use a telephone or mail survey taken before and after new program
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asking customers to name of the store they would consider and then indicate whether or
not they know of these stores.
C. Take on image advertising on TV or in magazines. You can use telephone or mail
surveys once again before and after the new program asking customers to describe the
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stores and other stores on a set of characteristics

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Ch14-4. (5 pts)
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Why do some online retailers include editorials and customer reviews along with product
information on their websites? Explain how this may influence the consumer’s buying behavior.
● To make the consumer feel like there is less of a risk if they go through with a purchase.
If a consumer sees an editorial or review that is either good or bad this takes away the
thought of bias the company might have towards their own merchandise. Overall a

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 consumer will probably be more willing to buy due to these aspects, because not only
can editorials and reviews provide the consumer with more insight, they also allow some
of the risk to be taken away and also allows consumers to be heard and share their
opinions.

Ch14-5. Read the Retailing View Article on Page 371. (5 pts)

Retailing View 14.2: Analyzing the Unmeasured: A Snapchat Experiment by Domino’s to Test
the Channel’s Effectiveness(page 371). Summarize the article and provide your
thoughts/comments on the article. Your writing needs to be at least 120 words.
● The article Analyzing the Unmeasured: A Snapchat Experiment by Domino’s to Test the
Channel’s Effectiveness is about how the company Domino's wanted to test an
experiment using the social media outlet Snapchat. The pizza company decided to this

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channel because they viewed it as creative channel instead of an informative channel.

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Snapchat does not provide its users with measurement to know its reach or consumer

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responses, but it does allow companies to reach young, tech savvy consumers.

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Domino's created a 24 hour experiment where they posted a series of videos. Each

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entry in the series gave the viewers a portion of a code that they code use to receive a
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voucher. The number of vouchers used help Domino's determine their reach because it
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told them how many people were willing to watch the whole video series. I enjoyed
reading this article because I actually remember one of my friends participating in this,
and to now know the thought process behind the experiment makes it more interesting
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to look back on.

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Ch14-6. Read the Retailing View Article on Page 378 (5 pts)

Retailing View 14.4: Does the Future of CouponingLook Different Than Its Past? (page 378).
Summarize the article and provide your thoughts/comments on the article. Your writing needs to
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be at least 120 words.

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● The article Does the Future of Couponing Look Different Than Its Past? is about what
the title says, the future of couponing. Today coupon has become a bigger activity than it
has been in the past. Especially with the millennial generation being that so many in this
generation have student debt and a relatively low income couponing is definitely one
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way in order for them to save money. The way coupons look like now is way different
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from the paper cut outs you would find in the Sunday newspaper. Coupons now take on
many different forms. Coupons can now be loyalty cards from a store, cash back
shopping programs, discount codes on retail sites, discounts from referencing a friend,
and the list can go on. I think this was an interesting article because as someone who
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enjoys different forms of saving money, this gave me insight to other forms of coupons.

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