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ABOUT RETAILING MANAGEMENT, 7e

GUIDED TOUR

For six editions, Levy & Weitz’s Retailing Management has been known for its
strategic focus, decision-making emphasis, applications orientation, and readability. The

authors and McGraw-Hill/Irwin are proud to introduce the seventh edition and invite you to

see how this edition captures the exciting, dynamic nature of retailing.

MULTI-CHANNEL RETAILING Lev81047_ch03_070-095.indd Page 85 2/23/08 12:15:54 PM user /Volumes/110/MHHE030/mhsch1/ch12%0

Retailers are using the internet and other technologies to provide more value to their customers,Lev81047_ch03_070-095.indd Page 91 2/23/08 12:16:07 PM user /Volumes/110/MHHE030/mhsch1/ch12%0

increase customer service, and improve operating efficiencies. Some of examples of these Internet
applications examined in this edition are:
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Store
EXHIBIT 3–4
Percentage of Cross-
The role of the Internet to complement Channel Shoppers

store offerings by multi-channel retailers.

Stores Catalogs Internet

• Browsing
• Touching and feeling merchandise
• Cash payment
• Instant gratification
• Personal service
• Entertainment and social interaction
• Risk reduction
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Use of virtual models and other technologies to
overcome the limitation of an electronic channel.
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EXHIBIT 3–2
Benefits Provided by
Different Channels Catalog 11% Web site
Catalog
REFACT
The luxury retailer Neiman
6% Marcus claims that its multi-
channel customers spend
• Convenience • Convenience SOURCE: Statistical Fact Book 2004 (Washington, DC: Direct Marketing Association, 2004), p. 131. 3.6 times more than single-
• Safety • Safety Used by permission.
channel customers do.30
• Portability and easy access • Personalization Percentage indicates proportion of customers browsing in one channel and purchasing in another.
• Broad and deep assortments
Shopping experience in
SHOPPING IN THE FUTURE
The following hypothetical scenario illustrates the seamless interface across chan-
the future, from collect-
nels that customers in the future may experience.
/Users/abdulhkidwai/Desktop/TempWork/FEBRUARY/29:02:08/MHBR021_Levy:MHBR
ing information on the
Shopping Experience
Internet to automated
It’s Tuesday morning, and Judy Jamison is eating breakfast thinking about buying
a new dress for the party she’ll be attending this Friday night at the new club
downtown. She logs onto her laptop, accesses her personal shopper program called checkout though RFID.
FRED, and has the following interactive dialog:
Fred: Do you wish to browse, go to a specific store, or buy a specific item?
/Users/epg1/Desktop/MHBR021-16
Judy: Specific item.
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Instant chat for per-

sonal communication
with customers visiting
a retailer’s Web site.
Many retailers, like H&M,
use virtual models on their
Web site to let customers
“try on” apparel before they
buy it.

M-Commerce As technology and customers together become more sophis-

ticated, more retailers are augmenting their e-mail communications with m-
commerce (mobile commerce), which involves communicating with and even
selling to customers through wireless handheld devices, such as cellular telephones
and personal digital assistants (PDAs).20 Tech-savvy customers use their cellphones
and PDAs to obtain sports scores, weather, music videos, and text messages in real
time. It thus is a natural evolution for retailers to tap into this trend. Consider
some of these innovative m-commerce applications:
• Grand Rapids, Michigan–based hypermarket Meijer offers consumers the
opportunity to learn in advance when the retailer’s gasoline prices are going to go
230 million up, before the hikes actually hit the pump.21
h l h h l h h h

Communicating with customers through

mobile devices.
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SOCIAL RESPONSIBILITY AND ETHICAL

RESPONSIBILITIES OF RETAILERS
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Given the importance of retailers’ societal role, both consumers and retailers
are becoming more concerned about important legal, social, and ethical issues
facing the world such as global warming, immigration, health care, and working
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condition in less-developed economies. Some of these issues, identified with an
icon, discussed in this edition are:
Illustrations of socially
1.1 RETAILING VIEW Socially Responsible Retailers responsible activities under-
Many retailers are buying and designing biodegradable or environ-
mentally sensitive merchandise, taking positive ecological actions,
taken by retailers.
and giving to charities—all actions viewed by customers and
shareholders as socially responsible stratgies. Bono, the lead
singer of U2 and global activist, has introduced Edun, a fair-trade
fashion brand that offers high-priced goods through stores such
as Saks, Nordstrom, and FairIndigo.com. A fair-trade designation
means that the items were produced in factories that pay workers
far more than the prevailing minimum wage and offer other ben-
efits, like onsite medical treatment. Not to be outdone, Starbucks
pays its farmers 42 percent more than the going commodity
price of Arabica coffee beans.
Gap, Emporio Armani, Apple,
REFACT and other high-end brands have
Retail companies give away launched their own Product Red
1.7 percent of their profits lines in Europe, selling red t-shirts,
each year before taxes, com- cellphones, sunglasses, and other
pared with
Lev81047_ch11_304-325.indd Page 311 3/6/08 approximately
2:52:24 AM epg1 items and then donating a portion /Users/epg1/Desktop/MHBR021:Levy
Framework of making ethical
0.9 percent by companies in Ethical
of the profits to the Global Fund to and Legal Considerations
other industries.10 When making the strategic and tactical decisions discussed previously, manag-
fight AIDS, tuberculosis, and malaria decisions.
in Africa. But they are not theers
only
need to consider the ethical and legal implications of their decisions, in ad-
retailers giving to charities. Saks Fifth Avenue donated a percent-
dition to the effects that those decisions have on the profitability of their firms
age of sales from a particular leather jacket to Help USA, and athe satisfaction of their customers. Ethics are the principles governing the
group that fights homelessness. Bloomingdale’s gives to many
behavior of individuals and companies to establish appropriate behavior and in-
charities annually, including the National Colorectal Cancer Re-
search Alliance, the Juvenile Diabetes Research Foundation, and
dicate what is right and wrong. Defining the term is easy, but determining what
Autism Speaks. Wal-Mart helps the Salvation Army raise money the principles are is difficult. What one person thinks is right, another may
and recently gave the charity a $245 million donation. consider MAC wrong.
Edun is a fair-trade brand of apparel introduced by Bono
Cosmetics’ special line of lipsticks and greeting cards raised What the
is ethical
lead singercanof vary
U2 andfrom
globalcountry
activist. to country and from industry to in-
dustry. For example, offering bribes to overcome bureaucratic roadblocks is an
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accepted practice in Middle Eastern countries but considered unethical, and
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even 10:39:21
illegal,PM
inepg1 /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-09
the United States. An ethical principle also can change over
time. For example, some years ago, doctors and lawyers who advertised their
services were considered unethical. Today such advertising is accepted as com-
mon practice.

Selling fair trade

Retailers Buy Socially Responsible Products RETAILING VIEW 14.5 merchandise.
Corporate social re- that a 5 percent reduction
sponsibility describes in packaging will prevent
the voluntary actions 667,000 metric tons of
taken by a company to ad- carbon dioxide from enter-
dress the ethical, social, ing the atmosphere while
and environmental impacts also resulting in $3.4 billion
of its business operations. in cost savings.
Retailers act socially re- Other retailers are de-
sponsible in many ways, manding smaller, eco-
from giving to charity to friendly packages from
donating time to philan- their suppliers. Smaller
thropic community activi- packages save in not only
ties. Recently, however, materials but also energy. Legal and ethical issues in hu-
retailers are increasing ISSUES IN RETAIL HUMAN RESOURCE MANAGEMENT
Because more packages
man resource management.
their efforts to buy mer- can be transported on a
chandise in a socially re- In this final section, we discuss three trends
truck,inthe
HR management: (1) the increasing
transportation
sponsible way. importance of a diverse workforce, (2) thepergrowth
cost unit goesin down.
legal restrictions on HR
U2 lead singer and activist, Bono, has developed a fair trade line of apparel
Whole Foods is in- called Edun that is sold in upscale practices, and (3) the use of technology
stores like Saks and Nordstrom.
to increase
Wal-Mart plansemployee
to reduce productivity.
creasing its efforts to pro- packaging by 5 percent by
vide locally grown produce to support the local economy and 2013, aDiversity
Managing move that could save $3.4 billion.
save carbon emissions involved in transporting produce from Another packaging option is to favor paper bags, which are
distant producers. It requires all its stores to buy from Managing
at least more diversity is a human
environmentally friendlyresource
than plastic.management
The U.K. groceryactivity
chain designed to realize
the benefits
four local farmers It gives $10 million a year in low interest Tescoofis asaving
diverse
moreworkforce. Today,
than 10 million plastic diversity
bags a weekmeans
by offermore than differences
in race nationality, or gender, but managing a diverse workforce isn’t a new issue
for retailers. In the late 1800s and early 1900s, waves of immigrants entering
America went to work in retail stores. The traditional approach for dealing with
s pp g o at o , t e eta e cou d co ect t e c ed t ca d pu c ases w t t e
these diverse groups was to blend them
customer. Imagine a customer purchases a computer at www.staples.com using a
the store
into three times as pot.” Minority employ-
the “melting Privacy is becoming an
ees were encouraged to adopt the valuesoftenofas the
regular customers.
majority, white, male-oriented cul-
credit card and then uses the same credit card to purchase supplies at a Staples store. Saks First shoppers spend
ture. To keep their jobs and get promoted, employees abandoned their ethnic or increasing important issue as
Then, the store’s database can capture the customer’s name and shipping address five to ten times as much as
racial distinctiveness. retailers collect data about
from the Web site transaction and update the customer’s purchase record with the non-Saks First card users.19
B i h h d Mi i b h i diff d
supplies obtained in the store.
their customers to support
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Although detailed information about individual customers helps retailers pro-

vide more benefits to their better customers, consumers also are concerned
about retailers violating their privacy when they collect this information. If cus-
tomers’ data are not secure and susceptible to identity theft, customers would be
reluctant to participate in loyalty programs. The data broker ChoicePoint was
fined $15 million by the Federal Trade Commission (FTC) because 163,000
consumers’ data were accessed. The FBI and the Secret Service also are signal- Privacy Concerns The degree to which consumers feel their privacy has been
ing to retailers that consumer privacy is a muchREFACT
more serious issue than it ever depends on:
violated
The FTC says that data theft
is now more profitable than • Their control over their personal information when engaging in marketplace
illegal drug trafficking.20 transactions. Do they feel they can decide the amount and type of information
collected by the retailer?
• Their knowledge about the collection and use of personal information. Do
REFACT they know what information is being collected and how the retailer will be
There are an estimated using it? Will the retailer be sharing the information with other parties?22
25 million victims of identity
theft each year. 21 These concerns are particularly acute for customers using an electronic chan-
nel because many of them do not realize the extensive amount of information
that can be collected without their knowledge. This information is easily
REFACT collected when the user visits a Web site that installs a cookie on the visitor’s
Seventy-one percent of con- computer. Cookies are text files that identify visitors when they return to a Web
sumers believe that protect- site and track their navigation at the Web site. Due to the data in the cookies, cus-
ing personal information and tomers do not have to identify themselves or use passwords every time they visit
privacy is more of a concern
23
a site. However, the cookies also collect information about other sites the person
now than a few years ago.
has visited and what pages they have downloaded.

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GLOBALIZATION OF THE RETAIL INDUSTRY

Retailing is a global industry. With a greater emphasis being placed on private-
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label merchandise, retailers are working with manufacturers located throughout
the world to acquire merchandise. In addition, retailers are increasingly looking
to international markets for growth opportunities. Some of the global retailing
issues and illustrations, identified with an icon in the margin, examined in this
edition are:
Global sourcing of
merchandise. Datang, China, Is Sock City RETAILING VIEW 14.3
Datang, China, is called needed to move prod-
Sock City because ucts quickly to market.
nine billion pairs of It has created net-
socks, more than one works of support busi-
set for every person nesses located near
in the world, and 2.6 one another, such as
pairs for each Ameri- the button capital that
can, are produced furnishes most of the
there each year. Its an- buttons on the world’s
nual trade fair attracts shirts, pants, and jack-
100,000 buyers from ets. Private companies,
around the world. with the support of
Southeast of Datang the government, have
is Shenzhou, which is built huge textile fac-
the world’s necktie tory complexes, com-
capital; to the west is plete with dormitories
Sweater City and Kids’ and hospitals, that pro-
Clothing City; and to vide food, shelter, and
the south is Under- As a result of government and private investment, China has become the health care, along with
wear City. leading manufacturer of private-label and national brand merchandise. close supervision.
This specialization creates the economies of scale that have Huafang Group, one of China’s largest textile companies,
made Chinese businesses the world’s leading garment manufac- has over 100 factory buildings, 30,000 employees, and round-
turers. Buyers from New York to Tokyo can place orders for the-clock operations. More than
500,000 pairs of socks all at once—or 300,000 neckties, 20,000 workers live free of
100,000 children’s jackets, or 50,000 size 36B bras—in China’s charge in Huafang’s dormitories.
REFACT
Twelve percent of China’s
i i l il i i C di i ’ b h

Evaluation of non-domestic E l ti fI t ti
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lM k t EXHIBIT 5–10 /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-05
1,00
markets for potential entry. Market Attractiveness/
Competitive Position
UK
Matrix
80
Japan
Market Attractiveness

Germanyy
60 China France
limitations, India restricts foreign invest-
Mexico
ment, so the majority of ownership still
40
must reside with Indian nationals.
Brazil Although Russia and the United King-
20 dom are highly ranked, other European
countries have slipped in the rankings
due to their relatively slow growth. Russia
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sumer demand, coupled with falling infla-

Competitive Position 44
tion. Like India though, except in big
ressive Cautious mal cities like Moscow and St. Petersburg,
stment stment stment smaller, family-owned retailers still ac-
count for about 86 percent of retail sales.
Doing business in Russia can be challeng-
ing due to its poor transportation infra-
structure, bureaucracy, and corruption.
The rankings for Latin and South For a country to be a viable option for a new market entry, firms must assess
its transportation, distribution channels, communications, and commercial
America and Africa are mixed. Brazil, infrastructure.
Argentina, and Mexico have the highest
rankings in South and Latin America, whereas South Africa shows the strongest
opportunity for retailers in Africa. Yet business risk remains high in many coun-

Profiles of successful global

retailers. IKEA: Bringing Its Philosophy to a World Market RETAILING VIEW 5.3
Many consumers need to
buy furniture and have so-
phisticated taste but either
cannot or do not want to
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spend lots of money. These
consumers don’t necessar-
ily want or need furniture
that will last forever. Oper-
ating 254 stores in 35 coun-
tries, IKEA offers unique,
well-designed, functional
furniture at low prices dis-
played in realistic room
settings. Zara Delivers Fast Fashion RETAILING VIEW 10.1
At IKEA, customers are
Fast fashion is a retail business strategy that
encouraged to get actively
involves using supply chain management pro-
involved in the shopping
experience by sitting cesson to introduce fashionable merchandise
the sofas and opening rapidly
and and respond to customer demand for
closing drawers. Pricetheand
merchandise quickly. This business strat-
product information egy was
is pioneered by Zara, a global specialty
clearly marked onapparellarge, chain located in La Coruña, Spain, and
adopted
easy-to-read tags, making it by other retailers such as H&M
easier for customers to IKEA has
(headquartered in adjusted
Sweden),itsTopShop
unique furniture
(U.K.) retail offering to satisfy the needs of U.S. consumers.
and Forever 21 (U.S.).
The fast fashion process starts with re-
ceiving timely information from store manag-
ers. At Zara, its store managers are equipped
with handheld devices linked directly to the
company’s corporate office in Spain. They re-
port daily on what customers are buying and
not buying and what they are asking for but
not finding. For instance, when buyers find
that customers are requesting a purple shirt There is nothing more fashionable these days than an efficient supply chain.
that is similar to one they are selling in pink, Just ask Zara.
h hi i f i h d i

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INNOVATIVE RETAILING APPROACHES

Retailers use advanced technologies and analytical tools to improve their
operating efficiencies. Some of these technologies and tools, identified with a
technology icon, examined in this edition are:
its assortment of long
Merchandise optimiza-
Timing of Merchandise Allocations to Stores
In addition to the need to allocate different inventory levels and types of merchan-
dresses in New Orleans at
Mardi Gras time. Sears sells
tion. Methods of optimize
dise across stores, differences in the timing of category purchases across stores need
to be considered. Exhibit 13–8 illustrates these differences by plotting sales data
diving watches in coastal
communities but watches
merchandise decisions such as
over time for capri pants in different regions of the United States. Comparing re-
gions, capri sales peak in late July in the Midwest and at the beginning of Septem-
with easy-to-read numbers
in Miami and Phoenix, where
taking markdowns and allo-
ber in the West, due to seasonality differences and differences in consumer demand. there are a lot of retirees.
Sears sells suede vests and
cating merchandise to stores.
Buyers need to recognize these regional differencesPage
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skirts during rodeo season
be shipped to the appropriate regions when customers are ready to buy to increase
in a few of its Texas stores.
inventory turnover in the category.

45 EXHIBIT 13–7
M Chain's Average
40 Apparel Size Differences
% of Total Allocated to Each Size

Store X for Store X and the

35 Chain Average
30
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S 10:39:08 PM epg1 /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-09
25
20
L RFID used by retailers to
15 increase inventory turnover,
10
5
reduce stockouts, and im-
XS
0
XS S M L
prove supply chain efficiency.
Apparel Size

Geographic information
EXHIBIT 8–6
GIS Map for Bank systems for store location.
Areas in an MSA

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Customer relationship
EXHIBIT 11–1 Collecting Analyzing Customer
The CRM Process Cycle management for identifying
Customer Data
the best customers and
targeting promotion toward
them.

CARD
CREDIT

Employment branding. As
the sophistication in decision
making by retailers increases,
the demand for managers
with analytical thinking skills
is increasing. Retailers are
undertaking employment
branding programs to attract
the best and brightest.

To build its employment brand, JCPenney uses the tagline “A Perfect Fit” on all correspondence and advertising directed toward
potential employees.

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CAREERS IN RETAILING
The challenges and rewards of retail careers are emphsized. In addition to discuss-
ing careers with national chains, entrepreneurial opportunites are also discussed.
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Some of issues relating to careers are:

Myths about retail careers.

training, placement, advancement, and welfare of em- Entry-level positions for college and university graduates
ployees. Because there are seasonal peaks in retailing are typically management trainees in the buying or store
(such as Christmas, when many extra people must be organization, not sales associates.
hired), human resource personnel must be flexible and Management trainees in retailing are given more re-
highly efficient. sponsibility more quickly than in other industries. Buyers
Lev81047_ch01_002-033.indd Page 14 2/21/08 responsible
are 10:19:04for AMchoosing,
elhi promoting, pricing, distrib- /Users/elhi/Desktop/MHBR021:Levy/MHBR021-01
uting, and selling millions of dollars worth of merchandise
MYTHS ABOUT RETAILING each season. The department manager, generally the first
Sales Clerk Is the Entry-Level position after a training program, is often responsible for
Job in Retailing merchandising one or more departments, as well as man-
Most students and their parents think that people working aging 10 or more full- and part-time sales associates.
in retailing have jobs as sales clerks and cashiers. They
hold this view because, as customers in retail stores, they College and University Degrees Are Not
Example of retail typically only interact with sales associates, not their man- Needed to Succeed in Retailing
While
agers. But as we have discussed in this chapter, retail firms Anita some employees
Roddick (Theare promoted
Body Shop) on theAnita
basis ofRoddick,
their who passed away in 2007,
entrepreneurs. are large, sophisticated corporations that employ manag- retail experience, a college degree is needed for most retail
ers with a wide variety of knowledge, skills, and abilities. opened the first
management Body Shop
positions, ranginginfrom
Brighton, England,
store manager to to make some extra income
for her family. She did not have any business background but was widely
traveled and understood the body rituals of women. The small store that
initially sold 15 product lines now sells more than 300 products in over 2,000
outlets throughout the world. From the start, Roddick recycled bottles to
save money, but such actions also became the foundation for The Body Shop’s
core values. Today it endorses only environmentally friendly products and
stands against animal testing. Roddick used her business as a means to commu-
nicate about human rights and environmental issues. Many of the products
in the Body Shop contain materials bought from farming communities in

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New Appendices

APPENDIX A

Starting Your Own

Retail Business

Starting a retail business can be an enticing and daunting prospect. On the one hand, you
can be your own boss, enjoy complete creative control, and reap the full rewards of your
hard work. On the other hand, retail business owners must assume large amounts of re-
sponsibility, bear the consequences of poor decisions, and ultimately shoulder the blame
for the success or failure of the business. Owning your own business involves a great deal
of effort, sacrifice, and patience. It is inherently risky, and consequently, fewer than 20 per-
cent of new retail businesses survive to the five-year mark. Yet the rewards of successfully
navigating the unpredictable landscape of business ownership can be enormous, both per-
sonally and financially. You might grow your business and become the next Sam Walton
(Wal-Mart), Maxine Clark (Build-A-Bear Workshop), or John Mackey (Whole Food
Markets).

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APPENDIX B

Starting a Franchise
Business

Like hot dogs, baseball, and apple pie, franchising in an American institution. A proven
means to realize the entrepreneurial dream, franchising also is taking over much of the re-
tail trade in the United States. This appendix explores franchising options in terms of their
merits and drawbacks. With more than 2,300 franchises to choose from, finding the best
one can be almost as hard as starting a business.
Franchises are popular largely because of their historical success. A 1999 study by the
U.S. Chamber of Commerce found that 91 percent of new franchises remained in business
after seven years, compared with only 20 percent of new, individual start-up businesses.1
But not all franchises are secure investments. Arthur Treacher’s Fish and Chips, Jerry Lewis
Theaters, and Chicken Delight all have one thing in common: They failed. As a result,
thousands of dreams were shattered, and millions of dollars were lost. Buying a franchise
can be a dream come true or it can be a nightmare The key is buying smart which re-

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INTERESTING AND READABLE

This edition continues the emphasis placed on creating interest and involv-
ing students in the course and the industry. Refacts, Retailing Views, and retail
manager profiles at the beginning of each chapter make the textbook a “good
read” for students.
around half their current t capital to launch the first Refacts (retailing fac-
reased competition faced by REFACT Lev81047_ch02_034-069.indd Page 64 named
2/27/08 after the
2:47:52 PM river
teama that REFACT toids) are interesting facts
/Volumes/MHBR/MH-BURR/MHBR021/MHBR021-02

es of supercenters. Full-line os’s objective of achieving Jeff Bezos chose the domain
Hudson’s Bay Company, the
iscount specialty stores that oldest retailer in North
he few dot.com leaders to name Amazon.com because about retailing, related to the
ck’s Sporting Goods, Office cess. Under his leadership, at the time, Yahoo.com
America, conquered the
the Internet faster, easier, listed its search results in textual material, that are
ority, and Lowe’s. Canadian wilderness by retail chains are TJX Com
rget is becoming one of the REFACT
trading furs more than 300 personalized
Winners, recommenda-
HomeGoods, T
alphabetical order; there- placed in the margins.
fore, Amazon would be at
Lev81047_ch04_096-129.indd Page 109 2/23/08
profitability. Target succeeds 2:21:38 PM Today,
years ago. itSelling
abdulhkidwai
is one close-outs out of her
e than Burlington
a bookstore. It now
/Volumes/MHBR/MH-BURR/MHBR021/MHBR021-04/MHBR021-0
Coat Factory, L
Brooklyn or near the top of the
w prices in a pleasant shop- of the largest retailers in home in 1920, ers, inprice addition to hosting
retailers sell brand n results.15
search
p chic” by teaming with de- Canada, operatingFrieda
chains Loehmann started the
percent lower than depart Customers lined up for “Squ
first off-price retail business.48
r, and Patrick Robinson to of discount, department,
and home stores.36
REFACT
merchandising practices 47
Slurpees. Others snapped u
The Christmas story about Employees even wore brig
Rudolph the Red-Nosed convenience store proprieto
Reindeer was developed by
a Montgomery Ward copy-
In-Store Demonstrations
writer in 1939 for a store
free samples of merchandise
promotion.12
chases. In department store

Retailing Views are

2.4 RETAILING VIEW Want to Sell on eBay? Leave It to iSold It
vignettes in each chapter that
eBay, the largest online marketplace, is visited by over 9 million
people annually. Responding to this demand, a new category,
eBay drop-off stores, was born. iSold It was founded in Pasadena,
relate concepts developed
California, in December 2003 by Elise Wetsel, a mother who
was trying to raise money for her children’s school. She wanted
in the text to issues and
to sell items on eBay that the family no longer needed. In doing
Lev81047_ch04_096-129.indd Page 115 3/4/08 7:54:33 AM abdulhkidwai
so, she found that it was much harder to sell on eBay than it /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-04
problems confronting
was to buy items on the auction site. It was then that she real-
ized the opportunity of selling other people’s items. retailers.
This business idea turned into a retail store and then be-
came a rapidly growing franchise throughout the country. iSold
Lev81047_ch16_440-471.indd Page 450 3/12/08 10:25:27 PM
It isepg1
a brick-and-mortar interface to the Internet. iSold It stores /Users/epg1/Desktop/MHBR021-16
are found in convenient strip mall locations, normally in a Wal-
Mart or supermarket shopping center.
Do It Herself RETAILING VIEW
Customers drop off the
at Lowe’s
items that they want sold, and the staff at iSold It take care of
4.2
the entire selling process, including researching the item, pro-
You might think that home improve-
fessionally photographing it, listing it for sale on eBay, storing it
ment centers are a retail recreation while it is for sale, answering all questions pertaining to the
destination mostly for men. Men visit item from potential buyers, shipping the item, and finally send-
the stores on the weekends to check ing the seller a check for the item.
out the new tools and buy material for The retailer takes a fee as a percentage of the selling price, as
do-it-yourself (DIY) projects. But more well as being reimbursed for the auction fees.The sales commis-
than 50 percent of the sales at home im- sion is 30 percent on sales up to $500 and 20 percent on sales
provement centers actually are made to of more than $500. The average product that iSold It sells on
women. Women not only make the eBay goes for about $100, netting the seller approximately $63
ft th i i d lli f Th h h ld
decisions about what materials to use
for home improvement projects but
also end up doing much of the work
themselves.
Lowe’s was early to recognize the
importance of female customers. It rede-
signed its stores to be brighter, lose the
warehouse look, and feature departments
more appealing to women. Aisles were
widened to help eliminate “butt brush,”
the uncomfortable contact that can occur
Retailing to Tweens RETAILING VIEW 4.3
as customers navigate narrow, crowded
Tween shoppers, between the ages of 5
aisles—and something that women par-
and 13
ticularly years, are the fastest growing
dislike. agehas Lowe’s done to make its stores and services more appealing to women?
What
segment in the United States. The 10
million tweens spend $11 billion annu-
ally using their own money and influence
the $175 billion their parents spend on
them. The tween girl may want to emu-
late her older sister, but sex and ro-
mance are not part of her life yet. She is
still a little girl at heart. She likes fun,
frilly, glittery, sensory environments that
tap into the kid in her. She wants to be
treated as young, but not babyish.
Tweens Brands Inc., operating over
700 Limited Too and Justice stores, is a
market leader in the tween segment. It
16.3 RETAILING VIEW
realizes that the tween girl mightThe
to look like her 16-year-old sister but
wantCat’s Meow

that apparelMeowassortments need to

Mix Co. had planned to be
keep its Fifth Av-
fine-tuned enueto storefront
her younger body York
in New type City
and open for only
be morea modestweek, butand
thesensible. Itsmedia
traffic and Everything
storesattention were Club LibbyLu does is designed to appeal to Tweens.
so great that it quickly decided to add a second
week.The pop-up store, named “the Meow Mix
Café,” welcomed cats and their owners in for a
bit of pampering. The idea was to use the café
to introduce consumers to a new “wet” food
line, as well as a new cat toy product line.
Meow Mix, the top dry cat food brand,
hoped to transition cat owners to wet food
through a campaign that generated both pub-
licity and brand trials. The café idea accom-
plished both beautifully. Cat owners brought
their cats to what the Meow Mix team termed
an “ESPN Zone for cats,” with lots of interac-
tive games, fun, and food. The café’s rousing
success garnered it 100 million press mentions
and enabled the company to distribute 14,000 The Meow Mix Café is a pop-up store—it temporarily pops-up, and then
sample pouches of cat food. A side benefit of disappears.
h h ll f lf

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To illustrate the opportuni-

ties and rewards from a ca-
reer in retailing, each chapter
begins with a profile of a re-
Lev81047_ch08_216-245.indd Page 216 3/3/08 9:56:38 PM epg1 /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-08
tail manager—either a senior Lev81047_ch01_002-033.indd Page 27 2/21/08 10:19:14 AM elhi /Users/elhi/Desktop/MHBR021:Levy/MHBR021-01
executive or recent college
graduate—discussing their
area of decision-making and
their career path.

employees or “Team Members”

that allows us to provide excel-
lent customer or “Guest” ser-
EXECUTIVE BRIEFING
vice at peak periods while
Derek Jenkins, Senior Vice President–Northeast
Region, Target controlling our labor costs. I also
was involved with creating best
I attended Appalachian State University on a football schol- practices and selecting equipment that helps our store
arship, majoring in Information Systems/Management. teams work more efficiently.
When I graduated, I recognized that a career with the NFL After having this broadening experience, I was pro-
was likely not in my future. Looking for my first job, I knew moted to my present position as Senior Vice President of

EXECUTIVE BRIEFING
Juan C. del Valle, Market Development Manager,
Brinker International

site location analysis for Blockbuster Inc., for nine years,

then several years ago joined Brinker International as the
manager for the market development department.
Brinker International is a leader in providing casual
dining restaurant experiences. We develop, own, operate,
and franchise an attractive portfolio of restaurant brands
including Chili’s Bar & Grill, Romano’s Macaroni Grill, On
Lev81047_ch13_356-381.indd Page 356 3/10/08 4:26:51 PM user
The Border Mexican Grill & Cantina, and Maggiano’s Little
/Volumes/MHBR/MH-BURR/MHBR021/MHBR021-13
Italy.
Joyce Founded
Rivas,inStore
1975, we have grown
Manager, RETAILING VIEW
to over 1,600 res-
Walgreens
taurants worldwide with 100,000 employees and system-
1.3
When I was a student at Florida International Universitywide salesinof over $4 billion annually.
Miami, I majored in Health Administration because I wanted Finding
toprofitable locations and managing our portfolio
pursue a career that involved helping people. I planned aretocritical
work to the success of our restaurants.The company
for a hospital when I graduated.While I was in college, I worked
devotes significant efforts to the investigation of new loca-
part-time at a Walgreens store as a pharmacist technician
tions andandreexamining existing locations. Our research
When I was discovered that working
an undergraduate for Walgreens
student offered an opportunity
at the University group undertakes a wide range of location analysis studies.
of Florida,toI mostly
both help peoplephysical
studied with their health care
geography, problemsAt
learning and be in- strategic level, we use geodemographic data to
a broad
volved in a dynamic and exciting business environment.
Walgreens has a strong set of corporate values that empha-
sizes providing outstanding customer service. Our pharmacists
don’t just fill prescriptions. They talk with customers about the
medications that they are taking, answer questions, and try to
address concerns customers might have.
I really like working in a store. I would be bored if I had to
sit behind a desk all day. I need to walk around and talk with
people. As a store manager, I interact with a wide variety of Joyce Rivas (right) discusses the sales report with two
people including customers, store employees, and people in assistant managers.
our district office. Every day at Walgreens is different. In a sin- working with and helping people. Walgreens is a great place to
gle day, I will handle some personnel issues, help customers work because it is a company that cares about its customers
find what they need, decide on how to display new merchan- and employees just like I do.
dise, and review reports summarizing the financial perfor- As the manager of this business, I try to create an environ-
mance of my store ment in which my store employees feel that they are all part of
Lev81047_ch01_002-033.indd Page 4 2/21/08 10:18:52 AM elhi /Users/elhi/Desktop/MHBR021:Levy/MHBR021-01

We learn what our customers

like by analyzing the sales num-
bers and reviewing the suc-
EXECUTIVE BRIEFING
cess, or lack of success, of the
Latoya Parker, Buyer, Macy’s East
product’s sell through. Trade
publications are also helpful in
After graduating from Florida A&M University, I began my determining future trends. At Macy’s, we put our custom-
career with Macy’s East in New York City as an Assistant ers first. Buying is more than having a sense of fashion and

EXECUTIVE BRIEFING
Maxine Clark, Chief Executive Bear,
Build-A-Bear Workshop

became President of Payless Shoe Stores, then a division

of May Department Store with over 4,500 stores and $2
billion plus in annual sales at the time.
In early 1997, I decided to launch a retail concept I had
been thinking about—Build-A-Bear Workshop®. While

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 Lev81047_fm_i-xxxii,1.indd Page xxi
SUPPORT FOR STUDENT LEARNING
The end-of-chapter Get Out and Do It exercises and the Online Learning
Center involve students in the course and the material covered in the text.
GET OUT AND DO IT!
8:36:06 AM abdulhkidwai
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3/20/08 8:58:19 PM user
1. CONTINUING CASE ASSIGN-
MENT: Visit the retail store operated
by the target firm for your continuing
assignment. Pretend that you are looking to buy
something sold at the store. Write down all of the
4.
things that the store does to try to stimulate you to
buy merchandise.
2. Go to a supermarket and watch people /Volumes/MHBR/MH-BURR/MHBR021/MHBR021-06
selecting products to put in their shop-
ping carts. How much time do they spend
selecting products? Do some people spend more time
than others?
3. Web OLC EXERCISE Go to the stu-
dent side of the book’s Web site to de-
velop a multiattribute attitude model
describing your evaluation of and decision about
some relatively expensive product you bought re-
cently, such as a car or a consumer electronics prod-
uct. Open the multiattribute model exercise. List the 5.
attributes you considered in the left-hand column.
List the alternatives you considered in the top row.
Fill i h i i h f h ib i b i
Lev81047_ch03_070-095.indd Page 80 2/23/08 6:01:15 PM user
Get Out and Do It! Exer-
cises Found at the end of
mance, 1 5 poor performance). Based on your impor-
each chapter, these exercises
tance weights and performance beliefs, the evaluation
of each product appears in the bottom row. Did you
suggest projects that stu-
buy the product with the highest evaluation? dents can undertake by
To better understand the segmentation
classification of consumers, SRI Business either visiting local retail
Consulting Intelligence has developed
the VALS tool, which uses psychology to segment stores, surfing the Internet,
people according to their distinct personality traits.
Go to the firm’s homepage at www.sric-bi.com/ or using the student Web
VALS/presurvey.shtml and take the survey to iden-
tify your VALS profile according to your values, at- site. The exercises are de-
titudes, and lifestyle. According to the results, what
is your VALS profile type? Do you agree with your signed to provide a hands-on
consumer profile? Why or why not? How can retail-
ers effectively use the results of this survey when learning experience for stu-
planning and implementing their business
strategies? dents. A continuing exercise
Retailers segment the market on the basis
of the geographic classification of cus- is included in each chapter so
tomers to select the best site for their
G h ESRI B i I f i that students can be involved
in an experiential exercise in-
volving the same retailer
throughout the course.
The Online Learning Cen-
ter provides students with
/Volumes/110/MHHE030/mhsch1/ch12%0
exercises to evaluate interna-
/Volumes/MHBR/MH-BURR/MHBR021/MHBR021-09
tional expansion opportuni-
ties, examine financial
performance of retailers, ana-
lyze potential store locations,
develop a merchandise bud-
get plan, edit the assortment
for a category, make pricing
and markdown decisions, and
determine break-even sales
levels. Sample test questions
and flash cards are provided
for each chapter.
To stimulate class discus-
sion about issues confronting
retail managers, the text con-
tains 38 cases. Cases include
Tractor Supply, Retailing in
India, Retail Pet Market,
Macy’s National Brand Strategy,
Wal-Mart and social respon-
sibility activities, Starbucks,
Build-a-Bear Workshop,
Financial Comparisons of
Blue Nile and Tiffany’s,
Nordstrom’s loyalty program,
Retailing to Teens, and
Sav-A-Lot.
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Thirty-five video
segments are available to
illustrate issues addressed in
the text. Topics addressed in
the video include Rainforest
Café’s and Build-A-Bear’s
retail strategy, Domino Pizzas
entry into Mexico, Starbuck’s
fair trade policy with its cof-
fee growers, Staples’ growth
strategy in the copying busi-
ness, Costco, Container
Store’s organizational culture,
Netflix’s distribution strategy,
Wal-Mart’s campaign to
change its image, internet
shopping behavior, supply
chain management, pricing,
management information
systems, and suburban and
lifestyle shopping centers.
A number of the videos
complement the cases.

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The online teaching center

for instructors includes the
instructor’s manual, PageOut
course management system,
PowerPoint slides, Power-
Web (an excellent research
source), and archived retail
newsletters.

Each month, the authors

prepare and distribute
through email a Retailing
Newsletter. The newsletters
contain ten to twelve
abstracts of articles appear-
ing in the business or trade
press about current issues
facing retailers specifically
and the industry in general.

xxiii