Chapter 6

Question 1

destination retailers

Answer 1

draw customers by selling unusual items, having a friendly atmosphere, special pricing, and other desirable characteristics

Question 2

examples of destination retailers

Answer 2

trader joes, bass pro shop

Question 3

the wheel of retailing

Answer 3

a theory that explains institutional changes that happen when new retailers enter the retail market

Question 4

the wheel of retailing in detail

Answer 4

come in with low price and services -> medium strategy (moderate prices, more services and products introduced) -> high end strategy (high prices, upscale customers, excellent service and facilities)

Question 5

4 principles of retail wheel

Answer 5

1. there are many price sensitive shoppers who will trade service, location, selection for price
2. price sensitive shoppers are not loyal and switch for lower prices
3. new retailers have lower operating costs than existing ones
4. retailers move up the wheel to increase sales, broaden target market, and improve image

Question 6

lessons learned from principles of retail wheel

Answer 6

• don’t trick yourself into thinking consumer is loyal to you and not to the price
• beware of dangers in upgrading target market
• employ customer benefit cost analysis when thinking of service upgrade
• use unbundling pricing

Question 7

scrambled merchandising

Answer 7

a retail strategy where retailers broaden their products to include things generally not related to them and is outside of their focus

Question 8

retail life cycle

Answer 8

• introduction (low sales, negative profits, no competition)
• growth (rapid increase in sales/profits, competition starts coming in)
• maturity (leveling off sales, declining profit)
• decline (dropping sales, low profits)

Question 9

retail strategy mix

Answer 9

a business’s combo of store location, pricing tactics, good/services offered, customer service, and more

Question 10

merchandise product mix

Answer 10

total number of product lines offered to customers

Question 11

merchandise product lines

Answer 11

groups of products that are closely related (like different flavored kit kats)