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RETAIL SERVICE OUTPUT AUDIT ASSIGNMENT

PROF. AHMED TIMOUMI

Step 1)
Pick one specific product to shop for. You will shop for this same product at two
different retail outlets; do not vary the product across the two retail outlets. The
product has to be consumed in the outlet.

Step 2)
List all of the marketing channel Service Outputs associated with this product for
you personally, and the weights you associate with each (i.e. how relatively
important each Service Output is to you) (use Template A). See below in this tab for
a discussion of Service Outputs. Do not list "price" as a service output; you will
record purchase prices later in the exercise.

Step 3) For each of your desired Service Outputs, identify a retail shopping "outlet"
characteristic, attribute or activity that could be measured to assess a retailer's
relative strengths or weaknesses in meeting that specific Service Output (use
Template B).

Step 4) Visit two different types of retailers for the product you are using for this exercise
and assess each one's relative strengths and/or weaknesses against each of the
criteria you identified in Step 3. (Templates C-1 and C-2)

Step 5) For one of the retailers you visited, summarize your findings into a set of
recommendations on one page on the following issues:
a) If this retailer were targeting a large segment of consumers who shared your
own service output demands, how well positioned are they relative to their
own retail competitors?
b) What is the price difference between the two retailers? Is the price difference
justified, in your mind, by differences in valued service outputs? That is, does
the higher-priced retail outlet offer a sufficiently higher level of service
outputs to justify the higher price?
c) What new retail approaches might emerge and threaten this retailer’s
competitive advantage?
d) What steps might this retailer take to protect its marketplace position going
forward?

Observation: Input cells in these templates are colored light blue:

What Are Service Outputs?

Service outputs are the elements of how a consumer buys, over which the consumer has
some value. Thus, the consumer buys (i) a product , (ii) at a price , (iii) bundled with service
outputs . The main categories of service outputs are:

* Bulk breaking: the service of providing a small volume of product rather than having to
buy a large amount in one purchase;
* Quick delivery: the service of getting the product without having to wait a long time (poor
performance on this dimension can occur because of out-of-stocks, because of long delivery
times for products bought online, or because of long check-out lines in a store);
* Assortment: the service of being able to see many varieties of the product in order to pick
the right one; or, the service of "one-stop shopping" for many desired products in one place;
* Spatial convenience: the service of shopping for the product without having to travel far; and
* Customer service and information provision: a variety of services such as personal shopper
help, free delivery, gift wrapping, maintaining a database of the consumer's prior purchases
for future reference, providing in-store or online pre-purchase information and help, etc.

Not all consumers demand all service outputs equally intensively. In this exercise, you will
allocate 100 points among service outputs for your purchase; this will force you to think about
which service outputs matter the most to you and which matter less.
 Distribution Channels
Retail Service Output Audit Assignment

Template A: Service Outputs Desired

Your Name:

Product Selected:
Pick one specific product to shop for. You will shop for this same product at two different retail outlets; do not
vary the product across the two retail outlets.

Take a minute to imagine your ideal shopping experience for this product. What Service Outputs
would ideally be met as you think about your ideal shopping experience? Think about the Service
Output categories described in the previous tab of this workbook (Bulk Breaking, Quick Delivery,
Assortment, Spatial Convenience, and Customer Service/Information Provision) and represent them in
your list of service output demands. Describe what each service output means to you in this shopping
occasion and why it is important. You should allocate 100 points among these Service Outputs,
according to the relative importance of each to you.

Weight You Attach to this

Service Output Demands Reasons Why This Service Output is Important to Service Output (weights must
You Have for this Product You add up to 100 points total)
 Distribution Channels
Retail Service Output Audit Assignment

Template B: Tying Service Outputs to Retailer Characteristics

Now think about what attributes, activities or characteristics of a retailer you might
measure to determine how successful they are at meeting each Service Output need you
have. (e.g., If a Service Output demand was “Customer Service/Pre-Sales Education and
Information ”, then you might measure how knowledgeable and helpful the sales people were at
the retailer, etc.). Be sure that the measurement criteria are ones that can be observed and/or
measured.

Retailer Characteristics, Activities, or Attributes to

Service Output Demands You Have Measure to Determine Ability to Deliver on
for this product Service Output Need
 Distribution Channels
Retail Service Output Audit Assignment

Template C: Retail Audit Worksheet (Part One)

Retailer One Audited: Price of Product at this Retailer:

Location:

"Retailer Performance Score" is a rating from 1 to 5 where 1 represents extremely poor performance and 5 represents extremely strong performance against
Service Output expectations.
"Overall Retailer Performance" is calculated as a weighted average: the sum of {Service Output Weight * Retailer Performance Score} over all Service Outputs.

Service Output Demands Service Output Attribute to Measure at Retailer Retailer Performance Observations Retailer
Weight Performance
Score*

OVERALL RETAILER PERFORMANCE:

 Distribution Channels
Retail Service Output Audit Assignment

Template C: Retail Audit Worksheet (Part Two)

Retailer Two Audited: Price of Product at this Retailer:

Location:

"Retailer Performance Score" is a rating from 1 to 5 where 1 represents extremely poor performance and 5 represents extremely strong performance against
Service Output expectations.
"Overall Retailer Performance" is calculated as a weighted average: the sum of {Service Output Weight * Retailer Performance Score} over all Service Outputs.

Service Output Demands Service Output Attribute to Measure at Retailer Retailer Performance Observations Retailer
Weight Performance
Score*

OVERALL RETAILER PERFORMANCE:

 One Page Memo

<< For one of the retailers you visited, summarize your

findings into a set of recommendations on one page on the
following issues:

a) If this retailer were targeting a large segment of consumers who shared

your own service output demands, how well positioned are they relative to
their own retail competitors?

b) What is the price difference between the two retailers? Is the price
difference justified, in your mind, by differences in valued service outputs?
That is, does the higher-priced retail outlet offer a sufficiently higher level of
service outputs to justify the higher price?

c) What new retail approaches might emerge and threaten this retailer’s
competitive advantage?

d) What steps might this retailer take to protect its marketplace position
going forward?

>>