1.Increased consumer spending indicates that the economy is stable and growing.´ Do you agree? Why or why not?
2.Why do you think retailing should be studied? How does it affect the economy?
3.Why do you think should a retailer devote special attention to its core customers? Discuss the methods for doing so.
5.Research about RFID technology and discuss in a report why is it significant in the retail industry?
8.Dicuss some differences between traditional warehouses and distribution centres. Give examples.
Nestlé’s Merchandising Location Strategy Wins With Retailers
Ice Cream as a Snack?
Nestlé, the world’s largest food company whose portfolio includes well known ice cream brands such as Edy’s/Dreyer’s, Haagen-Dazs and Skinny Cow, wanted to revitalize the slow growth ice cream category. However, how does one revitalize a long-established category that already has nearly universal penetration? Nestlé chose to frame the business differently by looking at it in the context of snacking. At $100 billion, the snacks category dwarfs the $10 billion ice cream category, and it is growing. In fact, nearly two in three people snack four or more times a day. This could lead to new usage occasions for ice cream and grow the buy rate for the category.
Nestlé began the exploration by creating a “roadmap” that identifies broad consumer trends and key retailer needs that could lead to growth strategies. According to Russ Onish, Director of Category Leadership & Shopper Insights for Dreyer’s Grand Ice Cream, Nestlé USA, “We decided to focus on three consumer needs: wellness, convenience, and variety seeking. This naturally led us to ice cream cups.” Unlike packaged ice cream, single-serve cups offer portion control (wellness), they can be eaten from the cup (convenience), and it is easy to buy a combination of flavors for the household (variety seeking). Not surprisingly, the concept generated strong consumer feedback. At a higher price per serving versus packaged ice cream, there was a great retailer story to trade consumers up to increase profitability. Business Issue
Where to Locate Cups?
Nestlé was getting ready to launch a new line of cups for the 2010 season, planning to make a big impact to the cups category by introducing 15 SKUs. The flavors were identified, formulations were finalized, packaging was created, and production plans were made. But an important retailer question surfaced: now that the cups category will have critical mass, should the cups be shelved together in dedicated doors or should they be part of their respective brand families? The Nestlé brand teams predictably wanted to maintain brand blocking, while the innovation team saw the opportunity to create a new destination with a new eating occasion and different consumer benefits. One way to answer the question would be to test each configuration in a handful of stores in market. However, there was not time: important retailer meetings were coming up.
Testing Location and Promoted Pricing
Nestlé turned to Decision Insight to answer the merchandising location question as well as a secondary question on pricing –whether the promoted price should be 99¢ each or 10 for $10. Nestlé chose to use Decision Insight’s proprietary online virtual shopping platform called SimuShop®. The platform has been validated in the marketplace and is much quicker, more affordable and more controlled than an in-market test.
The alternative arrangements were tested in two virtual retail environments: Safeway and Kroger. Category shoppers were recruited online to participate in the study. Video fly-through moved shoppers from the parking lot into the store and to the ice cream section. Once in the aisle, they shopped the category as they normally would. The shoppers could buy as much of any product as they wished, or even walk away from the aisle without purchasing anything. It was a large study with 20 freezer doors and over 400 SKUs, but one that SimuShopis designed to execute. Key Learning
Skinny Cow is a Different Animal
Initially the project was designed to test two merchandising location scenarios, dedicated cups doors and cups with the parent brand. Nevertheless, as with many business decisions, it became apparent it was not that black and white. Skinny Cow is different from the other cup brands. Being a better for you product, the brand has a very loyal following who knows exactly where to find it. In addition, once she finds it, she tends not to shop the rest of the aisle. Skinny Cow does not have packaged ice cream offerings; it is in the ice cream snacks section. Moreover, it is higher priced. Skinny Cow cup promoted pricing is $1.25, so it could not be promoted with the other cups at 99¢ or 10 for $10.
With these considerations in mind, the team decided to have respondents shop: totally dedicated cups doors, dedicated cups doors sans Skinny Cow, and cups with the parent brand –all with and without promotion.
Results Give Clear Direction
Thinking of Skinny Cow as a different animal paid off: the strongest location strategy is to merchandise the cups together, except for Skinny Cow. This scenario created the strongest category revenue, as well as the strongest sales for the Nestlé portfolio. Importantly, it motivated shoppers to variety seek which is a fundamental part of the business plan. The promoted pricing results point to the 10 for $10 strategy. Slightly more shoppers are attracted to the multiples price point, and they buy more cups at a time resulting in stronger revenue.
Speedy and Successful Implementation
Within weeks of receiving Decision Insight’s virtual shopping results, the Nestlé Shopper Marketing team presented the merchandising story to key retailers. Feedback was positive and plans were made to create the dedicated doors for the 2010 season.
The in-market results are impressive: as of Q2 2010, 90% of stores now stock cups together, and cup revenue is up 53% in those stores. Nearly as many stores (85%) followed the recommendation to keep Skinny Cow as a separate brand block, and as a result, Skinny Cow sales have more than doubled in those stores.
Overall, ice cream cups are showing explosive growth. Cup category revenue is up 35% in the first six months of 2010 versus the same time period in 2009. Creating the right “on-trend” consumer offering, providing the retailer the right reasons to carry it, and merchandising in the optimal location is clearly a recipe for success.
1. Why did Nestlé contact Decision Insight?
2. How was Skinny Cow different from the other cup brands?
3. How did Decision Insight help in reviving Nestlé ice cream category?
1. The business of buying fashion merchandise from a variety of resources and reselling it to ultimate consumers is called:
- Fashion retailing
2. Who has the responsibility for merchandise content and assortment?
- Store line
- Market line
- Buying line
- Shopping line
3. Which of these is a collection of various styles, quantities and prices related merchandise, usually grouped under one classification within a department?
4. Crabrielle coco chanel, is internationally known as:
- Charel coco
5. What discount is provided when merchandise is purchased in bundles or multiple units?
- Cost price
6. Visual presentation of merchandise is called:
7. French word for a small shop with unusual clothing and atmosphere:
8. Which of these is the group of consumers to whom a producer, manufactures or retailer aims products, services and advertising?
- Target market
9. Under what agreement, popular designers and brand name manufactures give other manufactures permission to use their names?
10. Which of these is calculated at the range selection stage before order qualities are finalised.
- Average selling price
- Market price
- Cost price
- Margin price
11. Which of these are general merchandise stores, including apparel, household goods and furniture?
- Regional store
- Speciality store
- Department store
12. Which of these is the term offer used by the industry to describe online retailing vis the internet?
- Whole sale
- E- Commerce
- Tele- Shopping
13. The retailers charge a small membership fee, offer consumers deep discounts on general merchandise:
- Warehouse club
- Mass- merchants
- Retail store
14. Which of these carry just one category of merchandise?
- Singe trend
- Limited line
- Multiple line
15. Which of these are places for buying and selling?
- Margin free
16. A retailer´s commitment to a type of business and to a distinctive role in the marketplace is its:
- organizational mission
- retailing concept
17. Stockholders, consumers, suppliers, employees, and government are examples of:
- the uncontrollable variables facing a retailer
- a retailer´s publics
- target markets
- market segments
18. A department store attempting to sell its goods and services to a broad spectrum of consumers is employing a strategy of:
- multiple segmentation
- market segmentation
- mass marketing
- target marketing
19. Identify the retail function that is the "heart" of retailing.
- Sales promotion
- Store operations
- Finance control
20. Which one of the following is not an activity of merchandising?
- Estimating customers’ needs and wants
- Planning purchases
- Buying goods for resale to the ultimate consumer
- Controlling the store’s spending activities and paying the b
21. This store division supervises the budget, maintains accounting records, and keeps merchandising statistics
- Financial control
- Human resources
22. Which division would be responsible for producing a fashion show?
- Financial control
- Sales promotion
23. The five "rights" of merchandising do not include:
- Right time
- Right merchandise
- Right place
- Right markup
24. Which of the following is not one of the four major decisions that must be made with regard to market logistics?
- How should stock be financed?
- How should goods be shipped?
- How much stock should be held?
- Where should stock be located?
25. An electronic store carries a broad line of home entertainment systems. They also provide personal financing, free delivery, and free interior decorating services when you make a purchase. This is an example of
- standard service
- Full service
26. What quantity can be determined by observing how order-processing costs and inventory carrying costs sum up at different order levels?
- near-zero order
- optimal carrying
- near-zero order
- optimal order
27. During each stage in the development of a retail strategy, retail managers should:
- consider only controllable variables
- refrain from "fine tuning" the strategy
- look for both positive and negative feedback
- consider no problems with the government to be a form of negative feedback
28. This retail executive serves as the liaison between upper management and the buyer in interpreting the store’s merchandising policies. The buyer reports directly to him/her.
- Store president
- General merchandise manager
- Divisional merchandise manager
- Store manager
29. The merchandising sector companies includes
- food processing companies
- automotive companies
- distribution companies
- advertising agencies
30. Prediction of fashion trend
- Fashion forecasting
- Sale test
31. What does MIS stand for?
- Merchandising Information System
- Market Information System
- Management Information System
- Merchandise Introducing System
32. Which of these is any particular characteristic as look in apparel as accessories?
33. Which of these is a classification of consumers based on activites, interst and opinions?
34. What occurs when pricing is used as the basis to make consumers “feel more favourable” about a product?
- Value based pricing
- Discount pricing
- Membership pricing
- Psychological pricing
35. An industry buzz word signifying electronic retailing:
- B – tailing
- E- tailing
36. What is the difference in value between a country’s exports and emports?
- Balance of trade
- Quota allocation
37. Which of these is the term offer used by the industry to describe online retailing vis the internet?
- Whole sale
- E- Commerce
- Tele- Shopping
38. French word for designer workship
- Prêt – a porter
39. Which of these is the group of consumers to whom a producer, manufactures or retailer aims products, services and advertising?
- Target market
40. Which of these is information given to the public regarding products, policies, personnel, activities or services?