Retail Review sheet Spring 2005

1. Our midterm is Tuesday, May 10th, 6:00 to 9:00 pm
 

2. Exam Overview:
Part 1 has 25 questions that are worth 3 points each:            75 points
Part 2 has three short essays that are worth 5 points each:   15 points
Part 3 is a comprehensive essay worth 10 points:                  10 points
 

3. How to study for the exam:
a. Current retail buzzwords - what is the vocabulary that we use in industry? e.g. strategic profit model, open to buy, site selection, retail atmospherics, changing role for store brands, category management, stockturn rate, inventory turn

b. "Classic" theoretical terms - retail atmospherics, Reilly’s law, width and depth of assortment

c. Case examples used in class: Kmart and Wal Mart, Sears, Wendy's, Kohl's, Dollar General,  IKEA target pricing

d. Handouts: retail layouts, planned purchase problems, Walmart locations, Federated, etc.

e. Videos - McDonalds' Employee Training Video,  Sears Americans with Disabilities Training Video, condiments supermarket shelf placement video (Ketchup and mustard)

f. Assignments:  location analysis, best practices in e-commerce, problem sets

g. Problem sets:  be able to calcuate and EXPLAIN what your answers mean
 

4. What to bring:
a. calculator if needed. Cell phones must be off and put away.
b. Readings
 

5. Focusing your work:
a. The best guide is to review all that we have done IN CLASS.
b. Use the online class notes as a guide. The notes provide many examples to help you think through the concepts
c. The key concepts are posted as part of the notes.
d. Concepts brought into class discussion throughout the semester are also relevant - e.g. "consideration set"
 

6. Topics:
Location
Site selection analysis
Trading areas, primary, secondary, fringe; shapes
Destination and parasite stores
Demographics - use and interpretation
Overstoring and understoring
Reilly's law calcuation and interpretation
Retail overlap
Types of sites:  isolated store, CBD, NBD, string, types of shopping centers

Human resource training
Equal store, separate store, mother hen (main, flagship store)
Training your workforce
Case study:  Americans with Disabilities Act
Motivating your workforce
Case study:  McDonald's ongoing Olympic Crew program

Strategic profit model
Industry benchmarks
WalMart's leadership through strict attention to inventory control
Tracking aggregate level-problems through P&L analysis
Importance of buyer training
Analysis of retail benchmarks
What can be changed to improve the financial picture?
Measures of productivity:  sales per square foot, sales per employee, sales per category

Category Management and merchandising
Width and depth of assortment
Staple merchandise (Starbucks coffee) versus fashion or short-term fads, scrambled merchandise (CDs)
How to find trends - e.g. ICSC study, NRF forecasts and tracking
Retail consistency
Types of products - eg. convenience goods
Use of product life cycle in retailing to develop merchandise strategies
Condiments case - how can a simple category like condiments be analyzed for productivity increases
Shelf placement strategy contrasted with online food buying

Promotion:  pioneering, competitive, reminder, institutional
Hierarchy of effects, what point is the retailer at in this hierarchy in determining promotional strategy
Types of promotional objectives - Wendy's "finger food" case
Renaming a firm through takeover and merger - Federated - May case
CVS and Eckerd's
Encoding must be meaningful - bluelight plan
Difference in types of promotion:  Public relations, personal selling, publicity, etc.

Financial Planning in Retailing - how much should be buy, how much should we keep in stock?
Contrast:  RU bookstore, Starbucks, grocery store, GAP
RFID - what is it and why do retailers feel that it will make a difference?
How much selection and comparison does the customer want?
Basic stock method - based on open to buy planning
Historical sales methods
Forecasting methods
Planned reductions:  shrinkage, breakage, reductions in selling price
Planned purchases, open to buy, EOM, BOM, stock to sales ratio
Stockouts

Pricing in Retail Analysis
Increase in consumer information via Internet
Price elasticity, inelasticity
Contrasting Examples:  IKEA, Forman Mills, EDLP at WalMart
Convenience goods, emergency goods, impulse goods, unsought goods
Heterogenous and homogeneous shopping goods
Specialty goods
Pricing: customary, multiple-unit, loss leader, price-lining, odd-even, skimming, penetration

Integrating retail strategy
Go back to strategy diagram and analyze consistency - Forman Mills (price, location, target market)
Kohl's - merchandise, target market, location