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Retail Management, Global Edition 13th Edition Solution Manual

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    RETAIL MANAGEMENT: A STRATEGIC APPROACH , 13 ed. ONLINE INSTRUCTOR'S MANUAL Barry Berman Joel R. Evans Patrali Cha t terjee Hofstra University Hofstra University Montclair State Universit y

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    Table of Contents I. Answers to End of Chapter Questions for Discussion II. Answers to Short Case Questions III. Answers to Comprehensive Case Questions IV. Answers to Online Retail Math Problems

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 1 An Introduction to Retailing 1 CHAPTER 1: ANSWERS TO QUESTIONS FOR DISCUSSION 1. What is your favorite consumer electronics retailer? Discuss the criteria you have used in making your selection. What can a competing firm do to lure you away from your favorite firm? This is a good stimulus - type question to use in an early lecture. There are a number of possible answers in a student’s choice of a favorite consumer electronics r etailer. Criteria that can be applied broadly include exclusive selection of merchandise, breadth and depth of merchandise, excellence in customer service, quality of atmospherics, high value, and special customer - service provider relationship. A competing firm can attempt to woo customers through very competitive pricing, an excellent Web site (with product reviews and product comparison information ), excellent customer service (including salesperson assistance and free software installation ) , and exclusive merchandise (including private labels ) . 2. What kinds of information do retailers communicate to customers? To suppliers? Information that retailers communicate to customers includes prices, store hours, special sales, the availability and characteristics of goods and services, warranty information, and exchange privileges. This information is communicated through ads, a Web site, sales personnel, and in - store displays. Information that retailers need to communicate to suppliers includes the sales performance of the supplier’s products, plans in terms of additional store openings, customer complaints, defective products, current inventory levels, inventory turnover, and so on. 3. What are the pros and cons of a firm such as Apple having its own retail stores and E - commerce Web site as well as selling through traditional retailers? The pros of Apple selling its products through its own retail stores, as well as its E - commerce Web site include increased overall sales through more intensive distribution. Apple can also use its Web site to promote its store locations and to serve as a sales outlet in areas that have few Apple stores. The Web site also enables shoppers to gather information about products that they can then purchase in the Apple store. Lastly, A pple can sell excess inventory and refurbished products through its Web site.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 1 An Introduction to Retailing 2 The cons of this dual channels strategy include the need to manage multi ple channels, possible channel conflict with retailers (that view the Web site as competition , such as outlets that would receive a style or color in short supply), and perhaps different levels of customer support in each channel. 4. Why would one retailer seek to be part of an exclusive distribution channel while another seeks to be part of an intensive distribution channel? With exclusive distribution, channel relations are generally smooth as suppliers enter into agreements with only one or a few retailers. This lessens price competition for a retailer, enables a retailer to provide full service to its customers, and increases the cooperation between a retailer and its supplier. With intensive distribution, suppliers sell through as many retailers as possible. This enables retailers to offer their customers many different brands and product versions, to increase total sales by carrying multiple brands, and to reduce their dependency on one or a few brands and suppliers. 5. Describe how the special characteristics of retailing offer unique opportunities and problems for local gift shops . Special Characteristics Opportunities and Problems of Retailing for Local Gift Shops Small average sale Costs must be tightly controlled; search for scrambled merchandising opportunities such as greeting cards, gift wrapping paper, chocolates and flowers. Unplanned or impulse purchases Use of point - of - purchase displays, attractive store layouts, and special promotions. In addition to traditional gift items, the store may seek to increase impulse sales by selling greeting cards, batteries, and so on. Retail customers normally visit L ocation, store hours, parking, and a store assortments of merchandise are important . 6. What is the purpose of developing a formal retail strategy? How could a strategic plan be used by a restaurant chain? A retail strategy is the overall plan that guides the firm. It has an influence on the retailer’s business activities and its response to market forces. A restaurant chain can use a retail strategy to define its type of business; set long - and short - run objectives (sales and profit); define the target market (breakfast, lunch, dinner,

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 1 An Introduction to Retailing 3 in - store and catering); develop an overall, long - run plan; implement an integrated strategy; and evaluate performance. 7. On the basis of the chapter description of t he Home Depot , present five suggestions that a new retailer should consider. Strategies used by Home Depot Corporation that should be considered by new retailers include the following : • Growth - oriented objectives • Appeal to multiple t arget market s • A distinctive company image • Focus on a discount store value - oriented niche • Strong customer service for its retail category • Multiple points of contact • Employee relations • Innovation • Commitment to technology • Community involvement • Constant monitoring of performance 8. Explain the retailing concept. Apply it to your school’s bookstore. The retailing concept has four elements: customer orientation, coordinated effort, value - driven, and goal orientation. A school bookstore can follow the retailing concept by understanding the multiple target market (students, faculty, staff, alumni, and the general public) and needs of its customers (speed of service requirements, books, logo apparel, computer repair), developing an integrated strategy (location, décor, selection, prices, hours, promotion), providing value - driven services (that are viewed as good value by its customers), and maintaining a goal orientation ( setting goals based on sales, profits, and image ). 9. Define the term total retail experience . Then describe a recent retail situation in which your expectations were surpassed and state why. The “total retail experience” comprises all elements in a retail offering that encourage or inhibit customers during their contact with a retailer. It includes the number of salespeople, displays, prices, brands, inventory levels, and parking facilities. Customer dissatisfaction can occur if any of these items are unsatisfactory to the consumer (for example, lack of sales help, inadequate parking, little brand selection, or low inventory levels). 10. Do you believe that customer service in retailing is improving or declining? Why?

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 1 An Introduction to Retailing 4 Arguments for improved customer service are the increased attention to this area in the business literature, the recognition of the need for customer service to increase customer loyalty, and to reduce price - based competition. Customer service can also be used by bricks - and - mortar retailers to combat Web - based com petitors that often compete based on price. An argument for a decline in customer service in retailing could be justified by references to the trend away from personalized service (such as where Web sites and E - mails replac ing traditional face - to - face retailing ) . Another argument can state that customer service has taken a back seat to price competition. This translates into fewer store personnel, and more self - service merchandising. 11. How could a small Web - only retailer engage in relationship retailing? Relationship retailing occurs when retailers seek to establish long - term bonds with customers. Small Web - based retailers can engage in relationship marketing by greeting customers by name when they access the retailer’s Web site, reminding customers of their past purchases, suggesting special sales on items a customer generally purchases via E - mail, maintaining a n effective loyalty membership club, and surveying customers to monitor satisfaction levels via E - mail. 12. What checklist item(s) in Figure 1 - 1 1 do you think would be most difficult for Ho me Depot , the global home improvement retailer , to address? Why? The most difficult item for Home Depot to address would be that of valuing customer time. It is difficult for retailers to assess customer perceptions. Although Home Depot may believe that it offers its customers shopping convenience and minimizes customer waiting , its patrons may feel otherwise. The size of the store, the huge selection, the need for assembly for many items , and the lack of delivery service all may contribute to this perception. Another difficult items to address for Home Depot is the need to av oid being confrontational with customers who complain , particularly those who seek to return used items or who are partially responsible for a product’s poor performance (due to poor assembly), and those who broke an item while installing it (this is particularly difficult if Home Depot has no recourse against its supplier).

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 2 Building and Sustaining Relationships in Retailing 1 CHAPTER 2: ANSWERS TO QUESTIONS FOR DISCUSSION 1. When a consumer shops at an upscale apparel store , what factors determine whether the consumer feels that he or she got a fair value? How does the perception of value differ when that same consumer shops at a low - end apparel store ? At an upscale apparel store, price would be de - emphasized compared with the level of personal service, but fair value would also be based on the selection, brands carried, quality of sales support, and availability of free alterations ). At a low - end apparel store, the consumer would evaluate fair value based mostly on price , brands carried, selection, return pol icy, and quality of the product s stocked . 2. What are the expected and augmented value chain elements for each of these retailers? a. Home Depot . b. Ikea. c. Local fruit - and - vegetable store . a. Home Depot Expected: Ample parking, well - lit location at night, goods available in ample quantities, clean environment, fast service due to speedy staff, and short waiting lines Augmented: Music throughout the store, expert advice from knowledgeable staff on product selection and installation , ability to determine location of goods and in - stock positions on its Web site b. Ikea Expected: Ample parking, effective display s that provide decorating tips Augmented: Staff who provide decorating assistance, help in laying out rooms , and assistance in loading car (especially important for pregnant shoppers, shoppers with young children, and senior citizens) c. Local fruit - and vegetable store Expected: Ample parking, fair prices, availability of shopping carts A ugmented: Special assistance on determining product ripeness, assisting shoppers with heavy packages, home delivery, availa bility of ethnic and organic foods

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 2 Building and Sustaining Relationships in Retailing 2 3. Why should a retailer devote special attention to its core customers? How should it do so? A retailer should devote special attention to its core customers because loyal, long - term customers may spend more money, use less company time, may be less price sensitive, and engage in positive word - of - mouth communication . It is generally much more costly for a firm to attract new customers than for it to keep its core customers content. A retailer can devote special attention to its core customers by first identifying these customers. A firm should know which customers are its most profitable and loyal and which customers highly value the firm’s offerings . Special attention may consist of advance notice of all sales, access to special sales consultants and events, a loyalty club with extra discounts, special advice on product selection, and so on. 4. What is the connection between customer service and employee empowerment? Is employee empowerment always a good idea? Why or why not? Retailers have found that customer service can be improved if they empower retail personnel. Through empowerment, employees are given the discretion to do what they believe is necessary, within reason, to satisfy the customer, even if this means bending some rules. This strategy can be effective if this extra attention is not overdone. Examples of overdone empowerment are employees not being able to complete their normal responsibilities, employees abusing empowerment to avoid unpleasant job - related tasks, and consumers complaining to get additional consideration. 5. How would you measure the level of customer satisfaction with your favorite restaurant ? Objective criteria include adherence to reservations, fast service, providing information about product ingredients for patrons on special diets (low salt, low cholesterol, low calories, and so on ) . Subjective criteria are based on consumer perceptions of a store’s cleanliness, adequacy of selection, friendliness/knowledge of wait staff, and so on . 6. Devise a consumer loyalty program for Barnes & Noble . A consumer loyalty program for Barnes &Noble would reward the chain’s best customers in an attempt to create long - term relationships with them. Barnes & Noble could offer special discounts based on purchases in a certain period ( past month , per three months, or past year) . One model for a loyalty program could be an extra 5 percent discount for new purchases based on the purchase activity in the preceding six months. Another model would be providing discounts on related items purchased by a customer. For example,

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 2 Building and Sustaining Relationships in Retailing 3 p urchasers of a number of books in a given period could receive a special discount on books by the same author . Frequent customers could also be given special privileges , such as advance notice of sales, access to a special restricted Web site for frequently asked questions, or special access to an author’s book signing session. 7. What are the unique aspects of service retailing? Give an example of each. The unique features of service retailing are the intangible nature of many services, such as the quality of a landscaper’s design; the inseparability of some service providers and their services, such as individual tutoring services; the perishability of many services, such as the sale of tickets to a live performance; and the variability in quality of many services due to the high labor content. 8. What are the pros and cons of ATMs? As a retailer, would you want an ATM in your store? Why or why not? ATMs are a fast, convenient, and efficient way to perform financial transactions. Unlike traditional banks that have limited hours, ATMs enable 24/7 service. Some critics may argue that ATMs pose a safety risk and may perform a transaction incorrectly (such as occasionally swallowing a credit card). Another problem for some customers is the absence of personal contact. Having an ATM located in a retail store may increase sales by increasing transaction size (customers can easily get more money to pay their bills) and increasing store traffic (a customer may enter the store to use the ATM and then make an impulse purchase in the store). Possible detriments involve potential safety risks, as well as concern that store personnel will be involved with ATM customer complaints. 9. Will the time come when most consumer purchases are made with self - scanners? Explain your answer. Students who argue “ yes ” could base their response on consumer convenience, cost savings to retailers , time savings to customers , and customer honesty. By using self - scanners, customer transactions are quicker, and retailer costs are lower . Those students who argue “ no ” to this question c ould base their response on the difficulty in getting all consumers to use the self - scanners properly or consumers having difficulty using loyalty cards or manufacturer coupons with the scanners . 10. Describe three unethical, but legal, acts on the part of retailers that you have encountered. How have you reacted in each case? Unethical, but legal, acts by retailers include the following :

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 2 Building and Sustaining Relationships in Retailing 4 • Marketing unsafe products (like cigarettes) to specific segments of the population. • Restaurants and supermarkets throwing away excess food rather than giving it to the poor or homeless • Advertising items with low stock levels • Raising prices of needed supplies in short supply (such as flashlights and bottled water) during hurricane s or severe s torms • Promoting the sale of goods with “promotional” items (with poor features, low quality, and short and limited warranties) to generate store traffic • Defaming competitors • Selling or trading a listing of customers to other retailers • Giving consumers who return gifts without a receipt the markdown value of the gift (when the store personnel know the gift was purchased at full price) 11. Differentiate between social responsibility and consumerism from the perspective of a retailer. A retailer exhibiting social responsibility acts in the best interests of society as well as in its own. Examples include recycling and conservation programs, sponsoring community activities such as a softball team, and hiring handicapped personnel. Consumerism, from the perspective of the retailer, entails implementing programs to protect a consumer’s right to safety, to be informed, to be heard, and to make choices. These policies may include product - testing programs, policies for handling customer complaints, reviewing the clarity of advertising messages, training retail personnel to be honest in suggesting products , and sponsoring consumer education programs. 12. How would you deal with consumer concerns about privacy in their relationships with retailers? Retailers should be extremely considerate when providing information about consumers to other organizations or individuals. The advantage of providing marketing information about a consumer base may not outweigh the risk of violating customer privacy, especially when it involves private or sensitive information. Students may elect to “put themselves in the shoes of their customers” when asked to make decisions about what information about their customers could be revealed or sold. One way of handling the issue of privacy is to ask customers for permission to give their name and general purchase history information to a select group of retailers who would provide appropriate goods and services.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans/Chatterjee) Chapter 3 Strategic Planning in Retailing 1 CHAPTER 3: ANSWERS TO QUESTIONS FOR DISCUSSION 1. Why is it necessary for a small retailer to develop a thorough, well - integrated retail strategy? What could happen if a firm does not develop such a strategy? Without a predefined and well - integrated strategy, a small retailer cannot succeed in a competitive environment. Small retailers have fewer resources (managerial as well as financial) compared to large firms and can less afford to make a mistake. A well - integrated retail strategy better enables a small retailer to explore the environmental opportunities that are available, seek a differential advantage, develop an appealing offering, coordinate activities, and anticipate and overcome crises. 2. How would situation analysis differ for a shoe store chain and an online shoe retailer? Situation analysis is the candid evaluation of the opportunities and potential problems facing a prospective or existing retailer. A shoe store chain may evaluate opportunities and problems such as increased competition from department stores, new developments affecting a large number of store units (such as increased sales of shoes to tourists in certain markets ), and may explore such overall competitive advantages as free delivery, and the like . An online shoe retailer should devote more attention to global influences, other Web - based competitors, delivery arrangements over longer distances, the quality and ease of use of its Web site, and pricing comparisons with other Web - based shoe retailers. The online shoe retailer may also need to explore the possibility of free return shipping due to issues with fit and color accuracy. 3. What are the pros and cons of starting a new hair salon versus buying an existing one? Starting a new hair salon offers a greater flexibility in location, atmosphere, and choice of consumer market. It allows a strategy to be tailored fully to the new owner’s desires and strengths. However, starting a new hair salon entails construction or renovation costs, a time lag until the store is ready to open (and then until planned sales levels and profits are earned), an unknown name and image, and the need to establish new supplier relationships Buying an existing hair salon allows a retailer to acquire an established name, customer following, location, trained personnel, and facilities; to open faster; to generate ongoing sales and profits; and to possibly obtain good lease terms or financing from the seller. On the other hand, store fixtures may also be older; there is less flexibility in developing and

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    Retail Management: A Strategic Approach, 13e (Berman/Evans/Chatterjee) Chapter 3 Strategic Planning in Retailing 2 enacting a strategy tailored to the new owner’s desires and strengths; the seller’s inventory of shampoos, hair conditioners, and nail polish may have to be purchased; and contractual obligations for alarm and other services may have to be continued. Last, the value of goodwill will also have to be determined. 4. Develop a checklist to help a prospective service retailer choose the proper service category in which to operate. Include personal abilities, financial resources, and time demands. A checklist should include the following components: Personal Abilities Financial Resources Aptitudes Initial investment required Education Drawing account needs Experience Renovations/construction needs Professional skills Width/depth of assortment Credit capability Time Demands Automation capability Delegation of work Degree of involvement desired Off - hours activities Stability versus seasonality in sales 5. Why do retailers frequently underestimate the financial and time requirements of a business? Retailers often underestimate capital investments, operating expenses, merchandise costs, and, most importantly, living expenses. In addition, retailers sometimes expect immediate success and do not have the financial resources to continue in business during the period when the firm is unprofitable. Time requirements are often underestimated because some retailers have difficulties delegating duties to employees, automation may not be possible or have limited applications , and retailers are required to work during off - hours to make purchases, keep records, etc. Many retailers do not have sufficient funds to hire additional personnel. 6. Draw and explain a positioning map showing the kinds of retailers selling tablets such as the iPad and Kindle Fire. M ultiple types of retailers sell tablets , including big box stores ( such as Best Buy ) , high - end electronics stores, traditional electronics retailers, phone - based outlets , and Web - based outlets (such as Amazon.com) .

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    Retail Management: A Strategic Approach, 13e (Berman/Evans/Chatterjee) Chapter 3 Strategic Planning in Retailing 3 The positioning map could be based on attributes such as low - price versus high - price, specialty versus larger stores, and limited service versus full service retailers . 7. Discuss local examples of a retailer applying mass marketing, concentrated marketing, and differentiated marketing. Mass marketing — Sears, JC Penney, 7 - Eleven, Safeway Concentrated marketing — Mercedes Benz car dealer, French restaurant, specialty boutique Differentiated marketing — Macy’s and Bloomingdale’s divisions of Macy’s Inc. and multiscreen movie theaters 8. Marsha Hill is the store manager at a n apparel store located three miles from a large university . She has saved $100,000 and wants to open her own store. Devise an overall strategy for Marsha, including each of the controllable factors listed in Figure 3 - 9 in your answer. Marsha Hill’s overall strategy needs to coordinate the controllable and uncontrollable variables in order to achieve the objectives of the business. Marsha has to determine her objectives, philosophy of business, and ownership alternatives before a strategy can be developed. Store location choices should consider adjacent stores, nearby competitors, cost of rent or ownership, size of the selling area, building and fixtures, storage, store hours, and others. In managing the business, Marsha will have to consider the retail organization and human resource management, as well as operations management. Merchandising will vary relative to the width and depth of assortment Marsha desires . Inventory levels need to be determined. Measurements for success and failure need to be used. Pricing will vary according to Marsha’s target market(s) and the image desired. She should plan special events appropriate for major holidays in advance. In communicating with the customer, Marsha must consider image and promotion techniques, which will vary. Students should utilize an integrated strategy, which can be either low end, middle - of - the - road, or high end. 9. A competing bicycle store has a better location than yours. It is in a modern shopping center with a lot of customer traffic. Your store is in an older neighborhood and requires customers to travel further to reach you. How could you use a merchandising, pricing, and communications strategy to overcome your disadvantageous location? Merchandising decisions should be made that increase the width and depth of the goods/services assortment. A better selection of goods/services or concentration on

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    Retail Management: A Strategic Approach, 13e (Berman/Evans/Chatterjee) Chapter 3 Strategic Planning in Retailing 4 special segments (such as mountain bicycles, bicycles for enthusiasts, three - wheel bicycles for seniors, and folding bicycles for apartment dwellers ) may attract more customers. Staff should also include bicycle enthusiasts who are especially knowledgeable. The store can also offer to double the manufacturer's warranty at a low cost and to provide a free bicycle tune - up within one year of the bicycle's purchase. Prices should be lower than those of the competitor but s till allow a reasonable profit. The bicycle retailer should also match all local competitor price levels. Communications with customers can focus on the low prices , product selection, exclusive merchandise , and personal service that may not be available from the competing retailer. Advertising can use slogans such as “We may be out of the way, but it’s worth the drive .” 10. Describe how a retailer can use fine - tuning in strategic planning. Fine - tuning is used to make adjustments in a retail strategy. Strategy and tactics need to be constantly reviewed and modifications made when necessary, such as meeting the low price of a new competitor, opening for longer hours in the pre - Christmas rush season, seeking part - time personnel for a busy time period, having sidewalk sales of closeout merchandise, and so on. 11. How are the control and feedback phases of retail strategy planning interrelated? Give an example. The control phase involves a systematic review of the strategy. The strengths and weaknesses are analyzed and revisions are made where required. These revisions are conducted based on feedback. Feedback consists of signals and cues that determine the strengths and weaknesses. If an automobile dealer’s sales follow - up calls indicate that customers were dissatisfied with the cleanliness of their new car upon delivery, better control of the dealer preparation process could be implemented. 12. Should a catalog - based men ’ s wear retailer use the strategic planning process differently from an Internet retailer? Why or why not? The fundamental process of strategic planning is transparent to the type of retailing to which it is applied. The catalog retailer may look more carefully at printing costs, mailing costs, and the timing between designing a catalog and its actual mailing (especially when price levels and style preferences are changing rapidly). The Internet retailer may be more concerned with obtaining traffic to its Web site, graphics, hot links with related sites , and the greater transparency of Web - based pricing .

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 4 Retail Institutions by Ownership 1 CHAPTER 4: ANSWERS TO QUESTIONS FOR DISCUSSION 1. What are the characteristics of each of the ownership forms discussed in this chapter? Retail institutions can be classified by ownership: independent, chain, franchising, leased department, vertical marketing system, or consumer cooperative. An independent owns only one retail unit. Because only one store location is involved, a detailed list of specifications can be derived for the best location and a thorough search can be undertaken. The one store location also lowers investment costs for leases, fixtures, employees, and merchandise. An independent often has the image of a friendly, personalized retailer . Chains are multiple retail units under common ownership, which utilize centralized purchasing and decision making. Competitive advantages for chain stores include bargaining power, wholesale function efficiencies, multiple - store efficiencies, computerization, access to media, well - defined management, and long - run planning. Chains have a number of disadvantages: inflexibility, high investments, reduced control, and limited independence. Franchising is defined as a contractual arrangement between a franchisor and a retail franchisee, which allows the franchisee to conduct a given form of business under an established name and according to a given pattern of business. A franchisor benefits because control is acquired and growth is increased. A franchisee benefits because a well - known name and shared costs are achieved at a reasonable price. A leased department is a department in a retail store that is rented to an outside party. The proprietor of a leased department is usually responsible for all aspects of its operations (including fixtures) and normally pays the store a percent of sales as rent. The store imposes various requirements on the leased department to ensure overall consistency and coordination. Vertical marketing systems occur when successive stages of production and distribution are owned by a manufacturer, wholesaler, or retailer or two of these categories. A vertically integrated firm can achieve many objectives such as self - sufficiency, lower costs through elimination of middlemen, direct contact with the consumer, greater bargaining power when dealing with outside suppliers or retailers, a sense of achievement, and time efficiencies in orders and deliveries.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 4 Retail Institutions by Ownership 2 A consumer cooperative is a retail firm that is owned by its customers. A group of consumers invest, receive stock certificates, elect officers, manage the operations, and share the profits or savings that accrue. 2. Do you believe that independent retailers will soon disappear from the retail landscape? Explain your answer. No. While the relative number of independents is diminishing in favor of chains, independents will still continue to be strong in such areas as restaurants, dry cleaners, specialty clothing stores, appliance repair. Independents also have some major competitive advantages compared to chains: flexibility in strategy, lower investment costs, specialist strategy, control over strategy, independence, consistency, and a strong entrepreneurial drive. 3. Why does the concept of ease of entry usually have less impact on chain retailers than on independent retailers? Independents can emerge due to low capital requirements, no licensing requirements, and no zoning concerns. Large chain retailers are generally much better capitalized and often compete with multiple formats in multiple markets. 4. How can an independent retailer overcome the problem of little computerization? The independent retail er can outsource common computerization areas , such as accounting, taxes, inventory management, and sales analysis (by customer and product) to specialists. Increasingly, software firms have also targeted independent retailers and smaller chains with software appropriate for these retailers. Many of these firms offer training sessions for store owners and managers. 5. What difficulties might an independent encounter if it tries to expand into a chain? Independents may encounter overdependence on the owner, limited financial and time resources, limited flexibility, and increased expenses (such as personnel and operating costs). Some consumers may desire to interact only with the owner due to social issues or concerns over employee versus owner expertise. 6. What competitive advantages and disadvantages do regional chains have in comparison with national chains? Advantages of regional chains over national chains include better managerial control and better ability to adapt to local needs (such as differences in demographics, lifestyles , climate, and other factors ). Disadvantages of a regional chain (versus a national chain) are less name recognition outside the region’s geographic area, lower bargaining power with vendors, and less access to national media.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 4 Retail Institutions by Ownership 3 7. What are the similarities and differences between chains and franchising? Similarities between chains and franchising include the existence of more than one outlet, access to media , long - range planning, existence of specialists, and economies of scale. Both chains and franchisees desire some degree of similarity in strategy across store units. Differences between chains and franchising include ownership, control, lower financial requirements of franchises for expansion, and potential c onflicts between franchisor and franchisee. A chain has much greater control over store managers than a franchise has over franchisees. 8. From the franchis ee ’s perspective, under what circumstances would product/trademark franchising be advantageous? When would business format franchising be better? In product/trademark franchising, franchised dealers acquire the identity of their suppliers by agreeing to sell the latter’s products and/or operate under suppliers’ names; yet, the dealers operate relatively autonomously. This would be better for franchisees that wish to operate with greater freedom and autonomy. It is also more appropriate for those franchisees that have greater experience and skills. Product/trademark franchising reduces the involvement of the franchisor in site selection, training, and troubleshooting. In business format franchising, the relationship between franchisor and franchisee is more interactive. In addition to the right to sell goods and services, assistance is provided on site location, quality control, accounting, startup practices, training, and responding to problems. This would be better for a franchis e e seeking greater training and troubleshooting support and for franchis ee s with less knowledge and experience in retail ing. 9. Why would a supermarket want to lease space to an outside operator rather than run a business, such as dry cleaning , itself? What would be its risks in this approach? Supermarkets stores may want to lease space to a dry cleaner to broaden their offerings, have access to specialized skills, avoid training their own employees, minimize time expenditures by management , and reduce their own expenses. A supermarket may lease space if it feels that a dry cleaner would be an excellent traffic draw to the overall store. The dry cleaner could also effectively use dead areas in the supermarket. The supermarket’s senior management may also recognize that it lacks the specialized skill s to perform dry cleaning. Potential risks include conflicting operating procedures, adverse effects on store image, and association of the lessee with the store by consumers. 10. What are the pros and cons of Sherwin - Williams using dual marketing?

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 4 Retail Institutions by Ownership 4 Pros • Increased size of target markets, new customers • Increased sales volume and profits • Additional outlets • Ability to reach multiple market segments • Shared costs • Control over strategy • Access to a f ully integrated system Cons • Division of efforts between two market segments possibly diluting strength of marketing • Possible blurring of image to consumers • Increased difficulty in managing multiple operations • Price competition from other outlets 11. How could a small independent restaurant increase its channel power? A small independent restaurant could increase its channel power by purchasing a large proportion of its needs from one supplier, by joining a cooperative buying group with noncompeting restaurants, by purchasing large orders at one time, by purchasing supplies from small vendors, and by using private brands of water and wines. 12. Would REI be as successful if it operates as a traditional chain? Explain your answer. Many of REI’s customers are attracted to the retailer because it is a consumer cooperative. They feel it is important to vote for the board of directors, to share in profits, and to receive a rebate based on their purchases. Others are attracted to REI because of its selection and customer support and are not concerned about the voice in management or the rebate. Some would even prefer the cost savings to be accrued at the time of purchase as opposed to the end of the year REI could keep both groups happy by increasing consumer awareness of cooperatives, by having two levels of cooperative membership and two levels of prices for active versus nonactive members, and by organizing cooperatives among segments of the population (college students and faculty, retired individuals, workers at a given company, union members).

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 5 Retail Institutions by Store - Based Strategy Mix 1 CHAPTER 5: ANSWERS TO QUESTIONS FOR DISCUSSION 1. Describe how a small shoe store could be a destination retailer. A small shoe store can be a destination retailer when it is distinctive enough to cause consumers to go out of their way to shop there. It can become a destination retailer by selling premium lines of s hoes, selling special sizes (size 5 and smaller and size 1 2 and larger), appealing to consumers with orthotics, and having specially trained personnel experienced with fitting consumers with special needs. 2. Explain the wheel of retailing. Is this theory applicable today? Why or why not? The wheel of retailing explains the evolution of retail institutions on the premise that new types of retailers first appear as low margin/low price operations offering minimum service. As they become successful, the innovators upgrade facilities and become vulnerable to new innovators with lower cost structures. The rise of the off - price chain, factory outlets, factory outlet malls, and flea markets as retail institutions can be explained, in part, by the wheel of retailing. 3. Develop a high - end retail strategy mix for a toy store. Include location, operating procedures, goods/services offered, pricing tactics, and promotion methods. Location — high rental shopping center or central business district location Product — full assortment of name brand, quality European - made toys Service — technicians especially trained in assembling bicycles, and other items that require assembly Promotion — extensive advertising, and use of highly trained sales personnel Price — sale at list price 4. How could these retailers best apply scrambled merchandising? Explain your answers. a. Kay Jewelers b. 1 - 800 Flowers c. A local delicatessen d. Dunkin' Donuts a. Kay Jewelers could sell fine watches, college rings, watch bands, watch batteries, designer costume jewelry, and graduation gifts like fine pen sets .

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 5 Retail Institutions by Store - Based Strategy Mix 2 b. 1 - 800 Flowers might sell any gift items (such as chocolates, fruit baskets, balloons, inexpensive watches and jewelry). c. A local delicatessen may feature special offers that can be combined with a theater - going experience such as an outdoor café with evening hours on weekends . It could also sell pizza made in a wood burning oven , served with imported or craft beers. d. Dunkin’ Donuts may expand into soups, sandwiches, specialty teas, and a selective line of pastries. I t could also offer catering services with an expanded menu. 5. What strategic emphasis should be used by institutions in the growth stage of the retail life cycle compared with the emphasis by institutions in the maturity stage? In the growth stage, a retailer needs to expand rapidly and get ready for increased competition from newer formats. A retailer also needs sufficient capital due to high expansion . It also needs to respond to cost pressures due to a l arger staff, as well as a more complex inventory system. In the maturity stage, retailers need to consider repositioning of the institution by preparing for increased competition as well as market saturation. The goal in maturity is to sustain this stage and forestall decline. 6. Contrast the strategy mixes of convenience stores, conventional supermarkets, food - based superstores, and warehouse stores. Is there room for each? Explain your answer. Retailer Strategy Convenience stores Neighborhood location; medium width and low depth of assortment; average quality; limited service; limited promotion; average to above average prices Conventional supermarkets Neighborhood location; extensive width and depth of assortment; average quality; national, private, and generic brands; little service; heavy use of newspapers, flyers, and coupons; self - service; competitive prices Food - based superstores Community shopping center or isolated site location; full assortment of supermarket items plus health and beauty aids and general merchandise; limited service; heavy use of newspapers and flyers; self - service; competitive prices

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 5 Retail Institutions by Store - Based Strategy Mix 3 Warehouse stores Secondary site location, often in industrial area; moderate width and low depth of products; emphasis on national brands purchased at discounts; very few services; little or no promotion; very low prices Yes, there is room for each, as long as each maintains its distinctive strategy and retains a loyal customer following. The most vulnerable store is the conventional supermarket because its strategy overlaps substantially with that of the superstore. Because it is also an older format, many conventional supermarkets are dated and in need of substantial renovation. 7. Do you think U.S. combination stores (supercenters) will dominate grocery retailing? Why or why not? Supercenters are a form of combination store and should be able to succeed in the same way that combination stores have, through benefits including cost efficiencies, large selection, and one - stop shopping. On the other hand, the hypermarket (the European version of a supercenter concept) did not succeed in the United States. Supercenters should investigate why consumers did not like the hypermarket and should adjust their strategies accordingly. One explanation is that the hypermarket was too massive for U.S. consumers. 8. What are the pros and cons of Sephora carrying more than 200 brands of personal care products? P ros of Sephora’s 200 - brand strategy include Sephora’s becoming a destination store and related - item selling opportunities. Co ns include possible overload in customer choice, low inventory turnover, less bargaining power with individual suppliers, the need for large r stores, difficulties in training store personnel , and a larger required overall investment. 9. Contrast the strategy mixes of specialty stores, traditional department stores, and full - line discount stores. Retailer Strategy Specialty stores Concentrate on one good/service line; narrow, but deep assortment; knowledgeable sales personnel; intimate store size and atmosphere Traditional dept. stores Large store size; extensive assortment of goods and services; separate departments for buying, promotion, customer service, and control; employs at least 50 people; merchandise must include dry goods and household items;

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 5 Retail Institutions by Store - Based Strategy Mix 4 family wearing apparel and furniture, home furnishings, appliances, and TV sets; average to good quality; moderate to above - average prices; customer services are available; return and exchange privileges are provided Full - line discount stores Broad merchandise assortment; centralized checkout; self - service emphasized; catalog generally not available; private - brand nondurable goods and well - known manufacturer - brand durable goods; greater emphasis on auto accessories, gardening equipment, and housewares; inexpensive buildings, equipment, and fixtures; few credit sales; low prices 10. What must the off - price chain do to succeed in the future? The most important part of the strategy of off - price chains involves buying merchandise via opportunistic buying and establishing long - term relationships with suppliers. To succeed, the chains must secure large quantities of current fashion merchandise at drastically reduced prices and have a regular flow of these goods into the stores. They must continue to employ an opportunistic buying strategy. Off - price chains must be careful not to “ride up” the wheel of retailing through having more costly locations, or to get away from their traditional buying strategy. 11. Do you expect factory outlet stores to keep growing? Explain your answer. Factory outlets are manufacturer - owned stores where manufacturers sell merchandise that is discontinued, irregular, off - season, or not in full lots. In some cases , items sold at factory outlets are goods that were returned from department and specialty stores. Factory outlets have become popular because they enable a manufacturer to retain control over merchandise and it can be quite profitable. Factory outlet malls also make outlet shopping more convenient for consumers. These malls have also increased the overall trading area of many outlets. It is likely that factory outlet stores will continue to grow due to these benefits. However, there are some drawbacks. Outlets could negatively impact the sale of the manufacturer’s products at regular retail stores , and they may alienate the manufacturer’s traditional re sellers (such as specialty and departm ent stores ) . There are also limited quantities of discontinued, irregular, and off - season merchandise. To have full inventories throughout the year, some manufacturers stock their factory outlet stores with merchandise especially made for these outlets. 12. Comment on the decision of many membership clubs to begin selling gasoline.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 5 Retail Institutions by Store - Based Strategy Mix 5 Advantages of this strategy are the increased customer traffic generated by members visiting the club to purchase gasoline. This strategy only works if (a) membership clubs are able to undercut traditional gas station prices sufficiently , and (b) if a sufficient number of members purchase other items on the same shopping trip. Disadvantages of this strategy are that the normal trading area of a membership club is much larger than a typical gas station. It is possible that lower prices for gasoline may not encourage shoppers to travel large distances for one item. A second potential drawback is that unlike many of the goods at a membership club, a member cannot stock up on gasoline. A typical car’s gas tank is less than 20 gallons.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 6 Web, Nonstore - Based, and Other Forms of Nontraditional Retailing 1 CHAPTER 6: ANSWERS TO QUESTIONS FOR DISCUSSION 1. Contrast omni channel and multi - channel retailing. What do you think are the advantages of each? A multi - channel retailer sells to consumers through multiple retail formats. To optimize efficiency and enhance customer experiences, the best retailers turn to omnichannel retailing, and deliver a consistent, uninterrupted, and seamless experience regar d less of channel or device. Omnichannel retailing assumes that shoppers channel hop. They may use a laptop to determine which product they desire, a smartphone to compare in - store price levels, and buy online but return in - store. The advantages of a multichannel retailer include a simplified management structure, a clear image, and specific goals for each channel. The advantages of a n omnichannel retailer include possible synergies among the multiple channels, being able to appeal to consumers through multiple channels and devices, shared customer databases across channels, and appealing to different groups (based on their customer purchase journey maps). 2. Do you think that nonstore retailing will continue to grow faster than store - based retailing? Explain your answer. Some types of nonstore retailing will continue to grow, while others will not. Web - base d sales will show the most growth as a result of its diversity, r a ising consumer confidence in it, overcrowding at stores, increases in working women, technological breakthroughs, and so on . Vending machines and direct selling will show little growth as a result of rising costs, limited applications, and consumer distrust. 3. How would you increase a direct marketer’s response rate from less than 1 percent of those receiving E - mail sales offers by the firm to 3 percent? To increase a direct marketer’s response rate from less than 1 percent of those receiving E - mail sales offers to 3 percent, direct marketing efforts should be directed at consumers who have responded in the past. Basically, direct marketers may want to avoid unresponsive consumers as it may be too costly to continue to market to them. The response rate can also be increased by having specialized offerings to consumers based on their past buying pattern. A $10 or 10 - percent - off coupon to first purchasers would also increase the response rate. Appealing to collectors of specific items , such as

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 6 Web, Nonstore - Based, and Other Forms of Nontraditional Retailing 2 die - cast autos or hand - tooled leather classic books, would also aid in achieving this ob j e ctive. A formal loyalty program may also be helpful. Last, coupons and special offers could be transmitted to a customer ’ s mobile phone using tracking software. This would indicate a customer ’ s location using geofencing technology. 4. Explain the “30 - day rule” for direct marketers. According to the “30 - day rule,” direct marketers are obligated by a federal regulation to ship customer orders within 30 days of receiving an order . If this cannot be accomplished, customers are to be notified of delays. When an order is not shipped within 60 days, the customer is provided with a delivery date but has the option to cancel the order and receive a full refund. This rule covers mail, phone, fax, and computer orders. 5. What are the two main decisions to be made in the business definition stage of planning a direct marketing strategy? When planning a direct marketing strategy, two key decisions must be made in the business definition stage. A company must decide if it will be a direct marketer exclusively or if it will have store - based locations as well. Secondly, a company must develop a merchandising approach based on whether it is going to be a general direct marketer with a large assortment of products, or a specialty direct marketer that carries a single category of goods/services. 6. How should Walgreens ph armacy ( www.walgreens.com ) handle consumer concerns about their privacy? To handle consumer concerns about privacy, Walgreens pharmacy should assure all consumers that their name s and other personal information will positively not be sold or traded to any mailing list broker or other marketer. Walgreens pharmacy should understand that information concerning a person's health status and medications taken needs to be handled in the strict est confidence. Store records as well as Web site ordering and delivery information need to be especially safeguarded. 7. Differentiate between direct selling and direct marketing. What are the strengths and weaknesses of each? Direct selling involves personal contact and phone contact with consumers initiated by a retailer in the consumer’s home or office. The strengths of direct selling include shopping

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 6 Web, Nonstore - Based, and Other Forms of Nontraditional Retailing 3 convenience, consumers receiving a lot of attention (so individual questions and concerns can be addressed), full demonstrations and explanations being made, consumers being more confident in their own surroundings, no competing brands as a distraction, and lower overhead costs. Weaknesses of direct selling include fewer female consumers at home during daytime hours, fewer salespeople being attracted to direct selling jobs, the sales force size determines the firm’s market coverage ( as many potential customers are never contacted), low sales productivity, consumers who are skeptical of direct selling, high employee turnover, high compensation, many legal restrictions, and the existence of a poor image. Direct marketing is a type of retailing where a customer is made aware of a good or service through a nonpersonal medium and then proceeds to place an order by the mail, phone, fax, or using a computer , smartphone or tablet. Strengths of direct marketing include the appeal it has to those who need a flexible shopping alternative to store - based retailing, increased sales, reduced costs, lower prices, and easier targeting of customers. Weaknesses of direct marketing include it often being misunderstood by consumers, purchases cannot be viewed prior to purchase, a limited line is sold, costs due to printing and mailing may be high and unstable, staffing costs are usually higher than anticipated, a cluttered marketplace, a poor image due to some unethical practices, difficult y planning prices because catalogs are prepared months prior to mailing, and a low response rate. 8. Select a product not heavily sold through vending machines and present a brief plan for doing so. A n example of a product not heavily sold through vending machines is single portions of medications for headaches, heartburn, etc. Vending machines should be placed in convenience stores, airports, movie theaters and hotel lobbies. These machines should be equipped to take coins as well as dollars. To discourage theft, the machines should be placed in highly visible spots. In locations where shops are selling comparable items, these stores should be encouraged to place these machines in front of their stores when the store is closed. 9. From a consumer’s perspective, what are the advantages and disadvantages of the Web? From a consumer’s perspective, the Web provides a means to access a wider variety of products at a retail level (at even a global level) without leaving the home. It is especially useful for consumers in remote locations or for those who have difficulty leaving home to do their retail shopping. The Web also provides an opportunity for the consumer to comparison shop (both product and price - based) with relative ease; consumers on the Web have easy access to competitive analysis and product and price comparisons ( using shopping bots). Web purchases offer the added bonus of increased privacy and anonymity over traditional storefront transactions and are currently free of sales taxes in many instances.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 6 Web, Nonstore - Based, and Other Forms of Nontraditional Retailing 4 The Web may fall short for consumers who prefer to see products in person as they purchase them. The sense of the buying experience is changed when purchases are done over the Web. Consumers may easily adjust to buying items such as contact lens solution from a Web - based outlet but may resist buying clothing from a Web - based retailer because they consider shopping for clothes an event that requires leaving the home. They may prefer to be physically at the retail outlet for the full experience. It may be for the simple reason that they always try on clothing before they buy or just because they prefer to be in a mall setting to establish the mood for clothes shopping. 10. From a retailer’s perspective, what are the advantages and disadvantages of having the World Wide Web ? For a retailer, the Web offers the advantages of the potential access to a larger customer base and operating on a 24/7 basis. The Web shortens the distance between the retail storefront and the customer. Also, a Web site is advantageous to a retailer in that it is inexpensive, builds image, provides data on store locations and products, promotes and explains a company’s offerings, enables consumers to choose what they want to view, and allows firms to gather feedback. In addition, specials can be promoted, employment opportunities are featured, and sales are generated. The disadvantages of having a Web site from the retailer’s perspective include the difficulty some consumers may have in using a company’s Web site . Consumers may be concerned about privacy and security, clutter exists, and Web sites must be continually maintained and updated to attract visitors. Credit card security and shipping costs are also issues for many consumers. Also, some retailers which are new to the Web may have difficulty in gauging the effect of Web - based sales on their overall business. Web - based retailing often requires a change in the company’s fulfillment operation, whereby warehousing and distribution strategies have to change to follow suit. In addition, the precedent for time to fulfillment on the Web is very short; the big players such as Amazon.com have made next - day or two - day delivery part of the expectation of Web - based retailing. Some companies may have difficulty competing in this environment. 11. What must retailers do to improve customer service on the ir online stores ? To stimulate greater customer service on the Web, retailers should assure consumers that purchases will be private and secure. Once consumer fears about shopping online are acknowledged, addressed, and overcome, more purchases will be made online . Another important point is that Web - based retailers could improve the ease of transactions to prevent potential customers from backing out of online sales. Web sites should have as few forms as possible to fill out and have ways to make repeat shopping

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 6 Web, Nonstore - Based, and Other Forms of Nontraditional Retailing 5 easier (such as retention of credit card numbers and retention of preferred shipping information). Amazon ’s one click purchase mode illustrates an easy to implement Web - based transaction. 12. What future role do you see for video kiosks? Why? Kiosks can be used to supplement store - based sales for goods that are out - of - stock , that are only available on the Web , or as a means of contacting customer service personnel. An electronics retailer, for example, can use a video kiosk to enable customers to surf the retailer’s Web site. This provides Web - based services in a retailer’s store environment. Kiosks can also be effectively used to purchase concert and airline tickets.

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 7 Identifying and Understanding Consumers 1 CHAPTER 7: ANSWERS TO QUESTIONS FOR DISCUSSION 1. Comment on this statement: “A competitive retail sector, facing an uncertain economic future, is being challenged by consumers to compete for their business. In this environment, only the fittest and those really listening to what their customers really want are likely to survive.” In hard times, marginal retailers will have a very difficult time surviving. Reduced customer spending, high unemployment, falling values of retirement plans, and lowering real estate values pose special challenges to retailer s . Successful strategies need to be based on low overall costs, a focus on a highly targeted audience, distinctive merchandise , and on high levels of customer service. 2. Analyze the global population data in Table 7 - 1 from a retailing perspective . Table 7 - 1 provides a wealth of information that is very useful for retailer s . M any uses of the data are as follows: The age distribution data allow retailers to gauge their approach to a consumer base of a particular country. A retailer that sells products geared for the elderly may not want to enter a country where a low percentage of the population is 65 and older. A retailer selling children’s clothing may wish to invest in business in a country with a rapidly growing population and a high population distribution of newborns to 14 - year - olds. The literacy rate data are useful in determining how a retailer’s promotional messages are conveyed to the market. For example, in countries with low literacy rates, consumers may be better reached through using symbolic language rather than written words. P opulation growth rate can also give a retailer insight into growth prospects. 3. How could a self - service frozen yogurt chain use the U.S. population data presented in Table 7 - 2? A self - service frozen yogurt chain can use the U.S. population demographics to help determine its potential market in each region. Important data include each area’s percent of U.S. household income, percent of U.S. population, population by broad age groupings and p opulation density, and areas with greater population density . The frozen yogurt chain can focus on areas with h igh population density (this may attract more customers per store) and areas with younger populations (these may include more do - it - yourselfers ) .

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    Retail Management: A Strategic Approach, 13e (Berman/Evans /Chatterjee ) Chapter 7 Identifying and Understanding Consumers 2 4. Explain how a retailer selling expensive bicycles c ould reduce the six types of perceived risk. Functional — P rovide a three - year, “no excuses” warranty against breakage , and rust. Physical — A ll attached rear view mirrors are backed using superior fastening devices. Financial — C ompare competitors’ prices and products, meet competitors’ prices, and offer refund/exchange privileges. Social — E mphasize the store ’s name, the reputation of brand s sold , and product endorsements. Psychological — F ocus on customers’ need for new full - featured bicycles as an extension of one’s personality. Time — O ffer fast delivery, provide broad selection, and one - stop shopping appeals ; provide free assembl y on all bicycle s old . 5. Why is it important for retailers to know the difference between needs and desires? In marketing products to customers, retailers must know in which category their product falls so that they may understand the connection between the attributes of their product and the expectations of their buyers. Retailers must understand that consumers who perceive they need certain products will likely purchase them. They must understand that products that are desired but not needed might be promoted in such a manner that consumers are coaxed into buying them anyway. Retailers must understand that the behavior at the point of sale of a “need” may be tied to attributes such as price or value. However, consumer behavior at the point of sale of a “desired” product might be a function of the “trendy” attributes of a product rather than the price. Retailers need to learn what motivates consumers to buy or not buy their product and react to this by positioning the product appropriately. 6. Why do some consumers engage in outshopping? What could be done to encourage them to shop closer to home? Outshopping involves patronizing out - of - town shopping areas. Retailers should encourage customers to shop closer to home by maintaining wide selections (including special sizes), exclusive merchandise, attractive prices (even matching prices by out - of - town retailers) , and free delivery, installation, and alterations. 7. Is cross - shopping good or bad for a retailer? Explain your answer. Cross - shopping has some advantages to retailers who carry items that other types of retailers specialize in. Cross - shoppers may elect to always buy milk at the closest possible store that is convenient at the time of need. This means that the 7 - Eleven may get the sale on days between full grocery shopping trips, but the grocery store may get the sale on shopping days.

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