Finals Studying Flashcards
1
Q
Guest speaker Kate Merriwether talked about her shop, what was its name type?
A
The Dreaming Comic Book Shop
2
Q
Bronies
A
Male fans of “My Little Pony”
3
Q
Kate Merriwether’s favorite superhero?
A
Green Lantern
4
Q
Kate’s key to nailing a job interview…
A
Mention Batman
5
Q
Supply chain management
A
- Efficient and effectively manage the flow of merchandise from the vendors to the retailer’s customers.
- Integration of suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain.
- Merchandise is produced and distributed in the right quantities, to the right locations and at the right time
- Minimization of system wide costs, while satisfying the service levels their customers require.
6
Q
Why is efficient supply chain management so important to retailers?
A
- Strategic advantage-difficult to duplicate
- Improved product availability
- Higher return on investment
7
Q
Channel Captains
A
A channel captain is the individual or organization responsible for managing a particular distribution channel and overseeing channel partnerships. A distribution channel is the chain of individuals and organizations involved in getting a product or service from the producer to the consumer.
8
Q
Before Walmart the supply chain…
A
Was seen as a fixed cost
9
Q
Strategic importance of supply chain management
A
- Opportunity to increase sales (right merchandise, right place, right time)
- – Fewer stock-outs
- – Greater assortment with less inventory
- Opportunity to reduce costs
- – Transportation costs
- – Inventory holding costs
- Improved ROA
10
Q
Zara’s Strategic Advantage
A
- Timely information from store managers
- Shorter cycle time (design-production-delivery)
- Shorter lead time (supply chain ownership, small qty., efficient logistics, premium transportation, frequent delivery)
11
Q
Strategic Advantage : Walmart
A
- Information
- Supply chain mgmt.
12
Q
Protecting Walmart’s strategic advantage
A
- Substantial investment in developing its systems and has the scale economies
- Through experience and learning, changes are always made to improve the system
13
Q
Benefits of Efficient Supply Chain Management to Customers
A
- Reduced stock outs
- Tailoring assortments (right merchandise, right store)
14
Q
Supply chain effect on ROA
A
Increased ROA
15
Q
ROA =
A
ROA = Net Profit Margin x Asset Turnover
16
Q
(Net Profit)/(Total Assets) =
A
(Net Profit)/(Net Sales) x (Net Sales)/(Total Assets)
17
Q
Efficient Supply Chain Mgmt. Results in…
A
- Increased Sales
- Improved Net Profit Margins (increased gm, lower expenses)
- Lowered inventory (Same sales using less inventory)
18
Q
Data Warehousing
A
The coordinated and periodic copying of data from various sources, both inside and outside the enterprise
19
Q
EDI
A
Electornic Data Interchange: Computer-to-computer exchange of business documents between retailers and vendors
20
Q
Logistics
A
The aspects of supply chain that refers tot the planning, implementation, and control of the efficient flow and storage of physical goods, services, and related information from the point of origin to the point of consumption to meet customers’ requirements
21
Q
Activities Performed by Distribution Centers
A
- Managing inbound transportation
- Receiving and checking merchandise
- Storing or cross docking merchandise
- Getting merchandise floor ready
- Preparing to ship merchandise to a store (ticketing & marketing)
- Managing outbound transportation
22
Q
Advantages of using a distribution center
A
- More accurate sales forecasts possible at greater volumes
- Enables retailers to carry less inventory
- Easier to avoid stock-outs
- Lower space costs
23
Q
The more intensively a product is distributed….
A
the more likely it is to have one (or more) distribution centers.
Distribution centers should only be used if they cut costs.
24
Q
Outsourcing Logistics
A
Retailers consider outsourcing logistical function if those function can be performed better or less expensively by third-party logistics companies.
25
Examples of outsourcing
Transportation
Warehousing
Freight forwarders
Integrated third-party logistics services
26
Push Supply Chain
Merchandise is allocated to stores on the basis of forecasted demand.
27
Advantages of a push supply chain
Less costly
Less sophisticated IS system
Efficient for merchandise that has steady predictable demand
28
Pull Supply Chain
Orders for merchandise are generated at the store level on the basis of POS sales data
29
Advantages of pull supply chain
- Less likely to be overstocked
- Increases inventory turnover
- Responsive to changes in customer demand
- Efficient when demand is uncertain/hard to forecast
30
Reverse Logistics
The process of moving returned goods from their customer destination for the purpose of capturing value or proper disposal
31
Challenges of reverse logistics
- Damaged goods or require special handling
| - Transportation costs are high
32
Drop Shipping (aka consumer direct fulfillment)
A system in which retailers receive orders from customers and relay these orders to vendors and then the vendors ship the merchandise ordered directly to the customer. (Pull supply chain)
- Esp. bulky products that are expensive to transport and hold in inventory
33
Bullwhip Effect
The built up inventory in a uncoordinated channel where retailers and vendors do not coordinate their supply chain activities.
34
Causes of the bullwhip effect...
- Delays in transmitting orders and receiving merchandise
- Over reacting to shortages
Ordering in batches rather than generating a number of small orders
35
VMI
Vendor Managed Inventory
- Manufacturer access to POS information
- Replenishment automatically triggered
- Enables demand-based view of replenishment and production planning reduces bull whip effect
Rarely recommended (only specialist with lots of data)
36
RFID
Radio Frequency Identification
| Allows an object or a person to be identified at a distance using radio waves.
37
Advantages of RFID
- Reduces warehouse and distribution labor costs
- Reduces point of sale labor costs
- Inventory savings by reducing errors
- Reduces theft - products can be tracked
- Reduces out of stock conditions
38
Impediments of RFID
- Expensive (low ROI)
- More data than can be processed
- Consumers worry about privacy
39
Value formula
Value = (Perceived Benefits)/(Price)
40
Keystoning
Double the wholesale price. Cost of receiving the goods.
41
Types of pricing strategies
High/low
| EDLP
42
High Low Pricing
- Discount the initial prices through frequent sales promotions
- Drives excitement & sales
- Trains people to buy on deal and wait
- Can be detrimental to profits
- Works well for items which are not necessities
43
EDLP: Everyday Low Pricing
- Emphasizes continuity of retail prices at a level somewhere between the regular non-sale price and the deep-discount sale price of high/low retailers
- Doesn't mean lowest price (sometimes price guarantees)
- Assures customers of low prices
- Reduces advertising & operating expenses
- Reduces stockouts and improves inventory mgmt
44
Price Elasticity
Elasticity = (% change in qty. sold)/(% change in price)
Brand image decreases the elasticity
Premium brands tend to be inelastic with their target consumers
45
Price Optimization Software
Utilizes a set of algoritms that analyzes past and current merchandise sales prices
46
Markdown Decision: Traditional
Set of arbitrary rules
47
Markdown Decision: Sell-Through
Identifies markdown items when its weekly sell-through percentages fall below a certain level.
48
Markdown Decision: Rule Based
Cuts prices on the basis of how long the merchandise has been in the store
49
Markdown optimization
Software
50
Liquidating Markdown Merchandise
- Sell to another retailer
- Consolidate unsold merchandise
- place merchandise on internet auction site
- Donate to charity
- Carry over to next season
51
Individualized Variable Pricing
* 1st degree price discrimination
- Set unique price for each customer equal to customer's willingness to pay
- Auctions, Personalized Internet Prices
52
Self-Selected Variable Pricing
```
*2nd Degree Price Discrimination
Offer the same price schedule to all customer
- qty discounts
- early bird special
- coupons etc.
```
53
Variable pricing by Mkt Segment
3rd Degree Price Discrimination
54
Zone Pricing
3rd Degree Price Discrimination
55
Pricing Techniques for Increasing Sales
- Leader Pricing (Loss pricing)
- Price Lining (Different quality for different price points)
- Odd Pricing ($19.99, $17.99)
56
Legal & Ethical Pricing Issues
- Predatory Pricing
- Resale Price Maintenance
- Horizontal Price Fixing
- Bait and switch tactics
57
Nordstroms Guest Speaker
Geevy Thomas, President of Nordstrom Rack
58
What was Nordstrom Rack's most successful social media?
Facebook
59
What does Nordstrom want to be known for?
Service & Fashion (in rack also price). Overlap is on price
60
Nordstrom helps customers feel good by making them feel?
Smart
61
Sales per square foot of Nordstrom Rack?
$552
62
Biggest disruptor to the Nordstrom Rack?
Amazon
63
Goal is to keep consumers
in the system
64
Nordstrom Rack has lower margins, but higher
turnover
65
If you are a small retailer, what has been the best thing to happen?
Instagram
66
Wheel of Retailing
At the bottom is completely specialized, at the top is adding tons of things, e.g. Walgreens Flagship store
67
Second most watched tv event of the year
Academy awards
68
TV ads are still important why?
Because they are great for emotional attachment etc. and are brand building
69
Integrated Marketing Communication
Integrate a variety of communication elements to deliver a comprehensive, consistent message to all customers over time, across all elements of a retail mix and across all media channels.
70
Magazines are being killed by...
Magazines
71
Direct Marketing
All media which is 2-way (e.g. way to buy)
72
Benefits of High Brand Awareness
- Aided recall (Top of mind awareness)
| - Stimulates visits to retailer
73
Store managers are responsible for managing
Employees and real estate
- Ability
- Effort
- Leadership
74
Employee performance improves when...
- Their efforts will enable them to reach their goals
| - When they reach a goal, they rewarded with something they care about
75
Job Enrichment
The redesign of a job o include a greater range of tasks and responsibilities
76
Sources of Inventory Shrinkage
1. Employee theft
2. Shoplifting
3. Mistakes & inaccurate records
4. Vendor errors
5. Unaccounted
77
Utilitarian Benefits
Store provides utilitarian benefits when it enables customers to locate and purchase products in an efficient and timely manner with minimum hassle.
- Grocery stores
78
Hedonic Benefits
Store design provides hedonic benefits by offering customers an entertaining and enjoyable shopping experience.
79
Most people walk into a store in the US and turn...
Right
80
The first area when walking into a store is the...
Decompression zone
81
After the decompression zone, is the...
Strike zone
82
Paco Underhill
Studied consumers, placed baskets in the back
83
Store design is important because...
- Substantial effect on which customers buy
- How long they stay in the store
- How much they spend
84
Store design influences
- Shopping experience, therefore sales
- Labor costs
- Inventory shrinkage
85
ADA
Americans with Disabilities Act
| Stores built after 1993, much be fully accessible
86
Store Design Elements
Layouts
Signage and Graphics
Feature Area
87
Electronic signage _____ sales
Increases
88
Types of store layout
```
Grid
- Most cost efficient
Racetrack
- Encourages exploration and impulse buying
Freeform/Boutiques
- Least cost effective
```
89
Anthropologie store style
Boutiques within a racetrack
90
Prime Locations for Merchandise
Highly trafficked areas
| Highly visible areas
91
Virtual store software
Heatmap and software to figure out product placement
92
"Butt Brush Factor"
Women hate it
93
Visual Merchandising Fixtures
a) Straight rack
- Lots of apparel
b) Rounder
- Hod max amt of merchandise, easy to move
c) Four-way fixture
- Allows view of entire garment, hard to maintain, fashion focus
d) Gondolas
- Versatile, grocery, some dept. stores
