Retail Management: Course Outline
Week Beginning Topic Chapter*
Sept 6 Course Introduction: Retail Strategy and Environment 1,(2),4
Part I. Strategic Positioning
Sept 11 Assortment and Merchandise Management 10, (11)
TURN IN: POSITIONING STATEMENT EXERCISE** Sept 15
Sept 18 Location and Site Planning 5
Group Presentations (Sept 22)
Sept 25 Layout and Shopping Experience 6
TURN IN: LOCATION AND LAYOUT EXERCISE** Sept 29
Oct 2 Service and Personnel Management 13, 14
Group Presentations (Oct 6) MIDTERM EXAM (Oct 4)
Part II. Managing Price and Profitability
Oct 9 Retail Pricing and Market Structure 12
NO CLASS: Oct 9 – Happy Thanksgiving!
Oct 16 Financial and Management Issues 8
Group Presentations: Most Profitable Retailers (Oct 20)
TURN IN: MARKET RESEARCH ASSIGNMENT (Oct 20)**
Oct 23 Channel Relationships and the Supply Chain 9
Guest visitor, group meeting, or optional assignment.
Part III. Selling and Communications
Oct 30 Retail Selling Handout
Group Presentations (Nov 3)
Nov 6 Advertising and Promotions 15
Group Presentations (Nov 10) Dress Rehearsals
Nov 13 READING WEEK
Nov 20 Retail Analytics Handout
Group Presentations (Nov 22) MIDTERM EXAM (Nov 24) Dress Rehearsals
Part IV. Presentations
Nov 27 Presentations***
Dec 4 Presentations*** (LAST CLASS: Wed Dec 8)
2 RETAIL MANAGEMENT
MWF 10:00 a.m. – 10:50 a.m. (BUS 1-6) [email protected]
Office: Faculty of Business Building, Room 320E (780-492-3954) Office Hours: Mon and Wed: 11:00 a.m. – noon
Course Description
The objective of this course is to give you both strategic and operational perspectives on retail design and management. The strategic perspective applies the basic paradigm of marketing to a retailing context. The operational perspective builds on this by studying aspects of store design, merchandising, and management that are specific to the retailing context.
The format of the class will be roughly half case discussion and half lecture-based discussion. Assigned work will consist of case analysis, outside readings, and experiential-based exercises.
Upon successful completion of the course, you will be able to:
1. Assess whether a retail outlet fits with the requirements of the marketplace. This involves determining whether a store appeals to a segment of the market better than competitors' offerings.
2. Design an internally consistent retail format.
3. Identify forms of market research that can aid in marketing decision making.
Course Material
Michael Levy, Barton Weitz, Dea Watson, Michael Madore (2017), Retail Management: Fifth Canadian Edition, (Toronto, McGraw-Hill Ryerson).
Evaluation:
Midterm 1 20%
Midterm 2 20%
Group Presentations 10%
Group Project 50%
Positioning Statement Exercise check
Retail Location and Layout Exercise 10%
Market Research Assignment 10%
Retail Design Report 20%
Retail Design Class Presentation 10%
Group Participation Factored into Retail Design Exercise Report Class participation will count in borderline cases.
Additional Feedback (Optional)
If you would like additional feedback, you may turn in write-ups of cases. Comments will be given, although no grade will be recorded. Such write-ups are not to exceed five pages of text and three pages of exhibits.
Class Participation
You are expected to prepare for and behave in class as you would in a work environment. Come prepared and always try to contribute to our group activity in a professional and cordial manner. Vigorous class participation can bring the room to life. You may be surprised at how much you learn from each other.
Class participation is an integral part of our planned activities, particularly for discussion of examples.
Many kinds of useful comments are possible: Tactfully presenting a differing opinion is perhaps the most common form, although not by any means the only useful form. Formulating a question, pointing out relevant parts of a case situation, describing a related business experience, and even introducing relevant humor are other forms of participation. Perhaps the simplest standard for class participation is to try to behave as you would want coworkers to behave. While each person must develop his or her own style of participating, you should avoid the extremes of never participating or of monopolizing the discussion, (particularly if the line of discussion is not particularly enlightening). After all, what employer would pay a worker either for never contributing or for wasting other people's time? Operationally, you should try to comment at least once every two or three class sessions. If you start to notice, after three or four comments in a given day, that your classmates or the instructor is becoming annoyed with you, that may be a signal that you are monopolizing the discussion.
Please observe emerging academic standards regarding digital media. This includes turning your cell phone off before class. This also includes not browsing the web during or doing unrelated work on a laptop during class. Laptops, of course, are suitable for taking notes and actively adding facts to the class discussion. The difference between desired uses, which enhance class discussion and “transporting oneself virtually elsewhere” is obvious and distracting to those nearby. This will be noted in the class participation mark.
Again, a general standard of behavior is to think of the class time as an active work meeting.
Study Teams
After the second day of class, you are asked to form study teams of four members. These are the people with whom you will be performing several of the exercises. The learning experience may be enhanced if the teams have one or two quantitatively oriented people and one or two non-quantitatively oriented people. In order to "spread the wealth," I suggest that no study team have more than two people that have worked in marketing, and that each study team have at least one and no more than two people who come from countries other than the Canada. At the end of the course, you will be asked to evaluate your other study team members, to account for the possibility that some members are contributing less work than others (most groups give equal weight to all members).
4 Exams
If you have a conflict for one of the Midterms, please discuss this with me before the exam to try to reschedule for a time earlier than the scheduled time (we cannot reschedule an exam for a date later than the scheduled time). If a student has not rescheduled and does not show up for the exam, a non-passing grade will be recorded, except in documented emergencies.
Office Hours Policy
Please feel free to drop by my office during office hours with or without an appointment. If you are unable to meet with me during office hours, please call for an appointment.
Attendance Policy
In class we will cover some critical material that is not in your assigned readings. For this reason and in order to benefit from the case discussion process, attendance is important. Some of you with outside commitments may have to miss a class session or two. Plan for this contingency by getting the phone number of a class member to fill you in on what happened during a class you are unable to attend, tell you the assignment, and describe what to emphasize for next class. That person can also give you a copy of his or her notes from the class. If any materials are passed out in a class you miss, copy the materials of this class member or ask him or her to take two copies and hold on to one for you. Most handouts in class will also be available on the University Blackboard system. (Because of logistical difficulties, I usually do not keep inventories of materials passed out in previous sessions to subsequent sessions.) Although you are responsible for every class and for any materials passed out in class, proper attention and work on everyone's part usually avoids problems.
Leaving Early/Arriving Late
If you have to leave early from class, please sit near the door so as to minimize class distraction when exiting. Make an effort to shut the door quietly. If you come late to class, come in as quietly and unobtrusively as possible. Avoid standing in the front of the class looking for a place to sit. If you do not immediately see an accessible chair, go to the back of the class and survey the seating accessibility from there (our classroom layout makes this easy).
Retail Design and Related Exercises
The following pages describe the exercises for this course. These exercises build up to the retail design project and are intended to give you experience developing a plan for a new retail business. You will also be exposed to two forms market research which are used in the process.
All of these exercises are to be done with your study group. If possible, you should conduct these exercises with reference to a single retail concept you wish to develop into a business plan. The final exercise will be graded in the standard fashion and all members of your study group will receive the same grade for the project. In the event that some members of your group are contributing less than an equal share, you will have a chance to so indicate to me in a group evaluation form at the end of the course. When the final project is turned in, all the earlier written exercises should be attached.
Since these exercise are interrelated and cumulative, I recommend, before completing the first exercise, that you read through all of the attached exercises. Doing this will help you collect information in the earlier exercises that will be useful in the later exercises.
Strive for disciplined creativity rooted in market analysis, and, above all, have fun!
6 Positioning Statement Exercise
Each study team is asked to write a positioning statement for the product they have selected and to briefly describe the reasoning behind this statement. This statement will be the basis for your retail design exercise. Articulating such a statement is also valuable for coordinating the activities of many people in a company behind a single strategy.
1. Give a one-sentence description of the value offer that indicates the attributes/benefits attractive to the target consumers. In a second sentence, indicate how these attributes/benefits are distinguished from competitors' offerings. Then provide a three to five word phrase which could be characterized as a "tag line" or "verbal logo" which evokes and sums up the product's positioning.
Use nontechnical vocabulary--the language of your target consumer. Avoid starting the statement with "The value offer is . . . ." or "The position of product X is . . . ."; instead begin with the name of the retail outlet, for example, "Leather Ranch provides . . . ." A possible formula you may base your positioning statement on is as follows:
[Product A] provides [phrase descriptive of target consumers] with [phrase descriptive of the one or two most salient product attributes]. This is distinct from [phrase descriptive of one or two groups of competing product offerings] which instead offer [phrase descriptive of attributes/benefits of the competing products]. [Tag line, such as "Charmin: Squeezably Soft"].
2. Briefly describe the target market segment. This should summarize the defining characteristics of the segment (e.g., demographic, psychographic, geographic, or behavioral). If possible give some indication of the size of target segment, both in absolute terms and in relative terms as compared to other important market segments. Some of this information may be available from secondary sources.
3. Briefly explain your reasoning for believing that the attributes/benefits of your positioning statement are important for your target segment. Cite any evidence in the market research conducted in your earlier exercises. Then draw a perceptual map which summarizes your understanding of the market and shows the relative positions of the most important competing products.
4. (Optional) Indicate why your firm's distinctive competencies make your firm particularly suited to providing this value offer.
Retail Location and Layout Exercise
Pick a competing store in the same retail sector as your proposed new retail concept and assess the following items:
1. Assortment. What mix of products is offered? To which segment of customers does it appeal? (You may wish to draw a perceptual map showing how this store is perceived relative to other stores in this sector.) How dependent is the store on its suppliers?
2. Location. How desirable is the location for the target customers? The answer depends on the demographics of the nearby neighborhoods, consumer traffic patterns, and rent or real estate costs.
Provide a map as an exhibit to show the store location and to represent the demographics of the nearby neighborhoods. You may need to use the facilities of the university libraries to ascertain the demographics of the neighborhoods.
3. Store Layout. Draw a rough map of the layout of the store. This should indicate doors, merchandise placement, shelf orientation, check-out counters, toilets, and a guess of the storage and location of the loading facilities. Also describe the essentials of the interior decorating, including materials, color palate, and lighting. Describe how this layout facilitates the company's desired value offer and shopping experience.
4. Pricing and service. Describe the general level of prices at this store, relative to the competition, and the amount and types of ancillary service offered. Also indicate whether the store offers frequent deals or is an everyday low pricing store.
This exercise should consist of two pages of text and no more than three pages of exhibits.
8 Market Research Exercise
Each study group will be asked to conduct one of two forms of market research to study the retail sector they are entering and to assess the viability of their proposed retail positioning. The two options below describe the three forms of market research from which you can choose.
OPTION 1: Focus Group
Conduct a focus group to assess the retail concept for your retail design exercise. The actual group interview should last at least 30 minutes.
At the beginning of the focus group, set the stage by explaining which retailing or market research firm you represent and the role that the interviewees are supposed to assume. Although some role playing is required, do not ask the interviewees to assume roles very different from what their roles are in "real life."
This is important so they will be able to answer your questions realistically.
Prior to the focus group, prepare a one-page sheet, intended to constitute the basis of your focus group exercise, containing the following information:
1. The retail sector under study. Also indicate briefly your group's proposed retail concept.
2. What information about the customer would be important to know for the purpose of constructing a marketing program that can be obtained from a focus group. This include information about segmentation, the decision making unit and process, consumer preferences, and consumer perceptions about the competition.
3. The "optimal" composition, and sampling procedure, for the focus group. (For convenience, you may interview other students in this class.)
4. A sequence of 5 to 10 questions or discussion topics you will lead the focus group through.
5. A brief rationale for the questions.
6. A plan of logistics (visual/audio aids, who will talk, etc.).
This sheet should be turned in, together with a second sheet containing the following information:
7. A summary of the substantive facts about the consumer you learned.
8. A summary of what you learned about the process of conducting focus groups and of what you would do differently.
OPTION 2: Consumer Survey
Write a brief survey to help you learn how to gather data to assess demographics and consumer attitudes about a product. Refer to your marketing principles and a marketing research textbook as you construct this survey.
The survey should contain the following items.
1. A one or two paragraph introduction that states the purpose of the survey and who you are.
2. About ten relevant qualitative questions for the survey, which may cover such issues as purchasing behavior, usage occasions, consumption patterns, and demographics. These questions should be designed to learn about segmentation, the DMU (decision making unit), and the DMP (decision making
process). These questions may be multiple choice (in which case, include an "other" category when appropriate) or, in some cases, open-ended.
3. An open-ended question at the end to give the respondent a chance to pass on any salient thoughts concerning the survey which have not already been captured in answers to the more structured questions.
Take care to construct clear and unbiased wording. Begin with the least controversial issues and save the most controversial questions for the end of the survey.
Conduct a small "pilot" study, asking two classmates to complete the survey. Because of logistical constraints, you will not be asked to collect and analyze data for a large sample size.
Turn in your survey, the two completed forms, and a brief description (less than one page) of how you would "fine-tune" the survey based on the small pilot study.
Note: Market research firms often collect between 10 and 50 responses for a pilot study and between 150 and 300 responses overall. Incidentally, there are several advanced multivariate statistical techniques used by market researchers about which those of you so inclined might be interested in learning.
One example is conjoint analysis, which involves a preference assessment and can be analyzed with regression analysis. The elective in market research covers such techniques in detail.
10 Retail Design Exercise
Write a business plan for a new retail concept of interest to you. Your plan may apply for a single store or for a new chain. In particular, describe the following:
1. Positioning Statement: Value Offer and Shopping Experience
This is a restatement, and possible refinement, of the one-sentence positioning statement you developed earlier. This describes the basic value offer. It also provides a sentence that suggests how the attributes/benefits of your product are distinguished from your competitors' offerings and your "tag line."
You should then indicate, in general terms in two or three paragraphs, how your assortment, location, store layout, customer services, and pricing combine to create the desired value offer and shopping experience.
2. Assortment
This describes the mix of products that you plan to carry. Describe how this mix of products will appeal to a particular segment of consumers. Also describe the suppliers you expect to be using.
3. Location
Indicate where, in general terms, your store concept is intended to be located. Then, as an example, pick a particular cite in Edmonton for one of your stores. You should be able to justify this cite on the basis of demographics, consumer traffic patterns, and rent or real estate costs. It may be helpful to include a map as an exhibit with consumer locations and the planned store location.
4. Organization of Merchandise and Services: Store Layout
Provide a detailed plan of your store layout. This should indicate doors, merchandise placement, shelf orientation, check-out counters, toilets, and storage and loading facilities. (Possible scales are 1/4 or 1/8 inch to the foot, or a 2 or 1 cm. to the meter.) You should also describe the essentials of your interior decorating, including materials, color palate, and lighting. You should then explain how your layout facilitates the desired value offer and shopping experience. Also describe the suitability of this design from the standpoint of managing logistics.
5. Personnel Management and Customer Service
Describe the types of customer services you intend to provide. Then indicate the skill and pay levels of the various types of employees you will use to provide these services, as well as job descriptions.
Indicate who will have responsibility for monitoring and reordering inventory and who be in charge of day to day merchandising (placement of inventory on shelves, recognizing deals, trends, and the season). For some types of stores, you may need to employ buyers to search out products embodying recent fashions. If you are planning a large store or retail chain, you may wish to provide an organizational chart.
6. Pricing
Explain your plan of pricing. Whether your margins are high or low depends on the positioning of your store. You should also indicate whether your store will give frequent price deals (high/low pricing) or maintain relatively even prices over the year (everyday low pricing).
7. Communications/Promotions
Describe the message you plan to use in your advertising and other promotional materials. Then describe, in general terms, the media, frequency, and cost of your planned advertisements or other types of promotions.
8. Financial Projections
Provide projections of income and net cash flow for one of your stores for the first three years.
Indicate the profitability of this retail concept. Also indicate the amount of investment it will take to start this venture and the expected payback period.
General Points
Please limit yourself to eight pages of text and seven pages of exhibits (containing maps, layouts, mock-ups of planned advertising and signage, job descriptions and organizational charts, summary market research statistics, and financial statements). Write in business memo format (single-spaced within paragraphs and double spaced between paragraphs). Address the memo to perspective investors. Give an opening paragraph or two with a salutation, indication of what the retail concept is, and a summary description which lets the reader know what the memo contains. Use section headings and subheadings to organize the body of the memo containing the five elements requested above. Give a closing paragraph.
Also prepare a fifteen to eighteen minute presentation of your retail business plan for the class.
Share the speaking among your group members in a way that enhances everyone's learning. Each group will go through a practice run with me to provide tips on presentations. Before this you should do at least one practice run by yourselves.
The objectives of this assignment are five-fold: (1) to take you through the process of developing and executing marketing policy based on sound strategy, (2) to apply several of the concepts of this course in an experiential-based setting, (3) to help refine your communication skills, (4) to give you a "taste" of what is involved in opening up a store, and (5) to have fun.
12 Preparation for the Second Midterm
This preparation for the midterm involves describing a retail sector. As you prepare, you should think about (but not necessarily be limited to) the issues listed below.
1. Describe the trends in the retail sector. Then explain why these trends are occurring in terms of underlying economic or societal causes.
2. Describe the segmentation that has emerged in the retail sector. Also describe how the structure of the retail sector has been affected by such consumer factors as the nature of the decision making unit and the consumer decision making process.
3. Describe the nature of competition. In particular, describe the positioning strategies used by three or four competitors in the retail sector and the relevant dimensions of positioning.
4. Describe how these competitors carry out their positioning strategies in terms of their choices of assortment, service, location, layout, pricing, and advertising.
5. Do you think that this is an attractive retail sector either for the purpose of entering with a new business or investing in the stock of an existing competitor?
