Chapter 2 ChatGPT

Question 1

Value in Retailing

What are the three levels of a value-oriented retail strategy?

Answer 1

Expected Value – Basic elements like cleanliness and fair pricing (e.g., Walmart offering low prices).

Augmented Value – Additional services like loyalty programs (e.g., Nordstrom’s personal stylists).

Potential Value – Innovative offerings (e.g., Amazon’s cashier-less stores).

Question 2

Customer Loyalty

What are the two types of customer loyalty?

Answer 2

Attitudinal Loyalty – Emotional connection, customers advocate for the brand (e.g., Apple users recommending products).

Behavioral Loyalty – Repeat purchases based on habit or convenience (e.g., Starbucks Rewards members buying frequently).

Question 3

Customer Service Levels

What is the difference between expected and augmented customer service?

Answer 3

Expected Service – Basic services like return policies and courteous staff (e.g., Target’s self-checkout).
Augmented Service – Additional perks like free shipping (e.g., Amazon Prime’s free 2-day shipping).

Question 4

Retail Value Chain

What elements make up a retail value chain?

Answer 4

Shopping location, store ambiance, product selection, pricing, customer service, and brand image.

Example: Nordstrom provides an upscale ambiance, premium brands, and excellent service to create high perceived value.

Question 5

Relationship Retailing

Why is relationship retailing important?

Answer 5

It helps retailers build long-term customer bonds rather than focusing on single transactions.

Example: Sephora’s Beauty Insider program offers personalized recommendations, exclusive discounts, and rewards.

Question 6

Loyalty Programs

What are the five types of loyalty rewards?

Answer 6

Economic Rewards – Discounts, coupons (e.g., Kohl’s Cash).
Hedonistic Rewards – Fun experiences (e.g., airline miles for vacation trips).
Social-Relational Rewards – VIP access (e.g., Amex Platinum Lounge access).
Informational Rewards – Personalized recommendations (e.g., Spotify’s curated playlists).
Functional Rewards – Convenience perks (e.g., TSA PreCheck for frequent flyers).

Question 7

Channel Relationships

What is category management in retail?

Answer 7

A strategy where retailers manage product categories as a whole rather than individual items.

Example: Walmart works with suppliers to optimize its grocery and home goods selection based on customer demand.

Question 8

Technology in Retail

How does technology enhance retail relationships?

Answer 8

AI-powered recommendations (e.g., Netflix suggesting shows based on viewing history).
Mobile checkout & payment (e.g., Apple Pay at Whole Foods).
Personalized marketing (e.g., targeted ads on Instagram).

Question 9

Goods vs. Service Retailing

What are the three types of service retailing?

Answer 9

Rented-Goods Services – Leasing items (e.g., Rent the Runway for designer dresses).
Owned-Goods Services – Repairs and maintenance (e.g., Best Buy’s Geek Squad for tech support).
Nongoods Services – Expert-based services (e.g., personal training at Equinox).

Question 10

Omnichannel Retailing

What is omnichannel retailing?

Answer 10

A seamless shopping experience across multiple platforms—online, in-store, mobile, and social media.

Example: Nike allows customers to buy online and pick up in-store, return items via an app, and get personalized workout recommendations.