Retailing and Supply Chain Management

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Questions and Answers

What is the main benefit of offering a broad assortment in retail?

It increases profits for retailers regardless of sales volume.

It simplifies the shopping experience by limiting choices.

It allows customers to choose from a wide selection. (correct)

It reduces the need for marketing.

Which of the following exemplifies the service retailers provide to facilitate purchases?

Restricting payment methods to cash only.

Stocking only high-demand products.

Providing a dedicated salesperson for each customer. (correct)

Offering a discount for bulk purchases.

What is the process of breaking bulk in retail?

Shipping larger quantities to consumers directly.

Reducing the variety of products in order to cut costs.

Offering products in smaller quantities tailored to consumer needs. (correct)

Increasing the number of products available for sale.

How does holding inventory provide value for consumers?

It ensures products are available when needed by consumers. Signup and view all the answers

What is a potential drawback of value-creating activities in retail?

They often lead to increased product costs. Signup and view all the answers

Which retailer practice helps customers experience products before purchasing?

Displaying products for testing, like in beauty stores. Signup and view all the answers

Why might a retailer decide to offer flexible payment options?

To make purchasing easier for customers. Signup and view all the answers

What happens to the product mix during challenging economic times, such as Covid-19?

It may drop significantly. Signup and view all the answers

What is one primary objective of prospective customers as stakeholders?

Low prices Signup and view all the answers

Which of the following describes corporate social responsibility (CSR)?

Voluntary adherence to ethical and legal expectations Signup and view all the answers

What does conscious retailing primarily emphasize?

Recognition of the retailer's greater purpose Signup and view all the answers

In the context of stakeholder consideration, what does it mean to strive for a balance in needs?

Integrating various stakeholder objectives rather than maximizing one Signup and view all the answers

Which example illustrates a company's commitment to social issues?

Ben & Jerry supporting the Black Lives Matter movement Signup and view all the answers

What is the total cost to produce the T-shirt including added values in the distribution channel?

$19.95 Signup and view all the answers

Which type of integration involves a retailer engaging in manufacturing activities?

Backward Integration Signup and view all the answers

What is the role of consumer spending in developed economies?

It plays an essential role. Signup and view all the answers

What is one of the added values of the handling and storing process in the distribution channel for the T-shirt?

Folding the shirt Signup and view all the answers

Which example illustrates forward integration in retailing?

Nescafe Dolce Gusto selling directly to consumers Signup and view all the answers

Which cost in the supply chain is included as part of value-added activities for a T-shirt?

Design cost Signup and view all the answers

What is included in the cost structure for the distribution channel of a T-shirt?

Both direct and indirect costs Signup and view all the answers

Which of the following is NOT a benefit of vertical integration in retailing?

Reduced marketing efforts Signup and view all the answers

What happens to the economy when consumers spend more money on goods and services?

The economy flourishes. Signup and view all the answers

What is a challenge faced when engaging in retailing activities for the base of the pyramid (BoP) markets?

Limited communication and transaction capabilities. Signup and view all the answers

How does the entrepreneurial program 'Eye Mitra' assist low-income individuals in India?

By training them to open shops for vision tests and glasses. Signup and view all the answers

What is one of the key responsibilities of retailers besides providing goods and services?

Addressing the needs of all stakeholders. Signup and view all the answers

What percentage of the world's population lives on under $2 a day according to the content?

10% Signup and view all the answers

What significant outcome resulted from the Eye Mitra program?

Access to inexpensive glasses for millions. Signup and view all the answers

When consumers feel uncertain about their financial future, what is the likely effect on the economy?

Slowdown in economic activity. Signup and view all the answers

Which aspect makes retailing in BoP markets particularly challenging?

High cost of transporting goods to remote areas. Signup and view all the answers

What is the primary function of a retailer within the supply chain?

Selling products and services to consumers Signup and view all the answers

Which of the following is NOT a way retailers create value?

Setting prices for manufacturers Signup and view all the answers

Which component comes directly after the wholesaler in a supply chain example?

Retailer Signup and view all the answers

What is meant by 'breaking bulk' in the context of retailing?

Dividing larger quantities into smaller, more manageable sizes for consumers Signup and view all the answers

How does holding inventory contribute to the retailer's value creation?

By catering to customer needs at any time Signup and view all the answers

What is an example of a retailer in the Coca Cola supply chain?

7-Eleven Signup and view all the answers

Which of the following is a characteristic of conventional supermarkets?

They carry about 33,000 different items from over 500 companies. Signup and view all the answers

What function does the retailer perform in relation to the supply chain?

Make products available to the final consumer Signup and view all the answers

Study Notes

The Retailer’s Role in a Supply Chain

A retailer sells products and services to consumers.
A supply chain is a network of businesses that work together to bring goods and services to consumers.

Retailers Create Value

Retailers add value by providing an assortment of goods that can satisfy consumers' needs.
Providing services makes buying and using products easier for consumers.
Example services: offering credit, displaying products, and offering information about products.
Breaking bulk means offering products in smaller quantities tailored to individual consumption.
Holding inventory ensures products are available when consumers want them.

Costs of Channel Activities

Value-creating activities increase the costs of products and services.
The costs in the supply chain can be almost as much as the cost to make the product.

Retailers Perform Wholesaling and Production Activities

Vertical integration occurs when a firm performs more than one set of activities in the channel.
Example: A retailer investing in wholesaling or manufacturing.
Backward integration occurs when a retailer performs some distribution and manufacturing activities.
Example: Aeon's private label, TOPVALU.
Forward integration occurs when manufacturers undertake retailing activities.
Example: Nescafe Dolce Gusto, Pensonic Official Store.

Consumer spending is crucial to the economies of developed countries.
Increased consumer spending leads to economic growth, creating more jobs and production.
In developing economies, the Base of the Pyramid (BoP) refers to consumers living on under $2 a day.
Reaching the BoP market requires innovative approaches, as consumers may lack access to mass media, the internet, or credit cards.
The BoP market presents significant potential for retailers.
Example: EssilorLuxottica's Eye Mitra program provides eye care services to low-income individuals in India.

Role in Society

Retailers have a social responsibility to meet the needs of their stakeholders, including:
Prospective customers, supply chain partners, employees, shareholders, government agencies, and community members.
Conscious retailing recognizes the retailer's greater purpose and focuses on balancing the needs of all stakeholders.
Corporate social responsibility (CSR) is voluntary and exceeds ethical and legal expectations of stakeholders.
Examples of conscious retailers: TOMS, Eye Mitra.
Conscious retailers prioritize ethical decision-making and social issues.
Example: Ben&Jerry's support of the Black Lives Matter movement.

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Description

Explore the critical role of retailers in the supply chain and how they create value for consumers. This quiz covers the various functions of retailers, their impact on costs, and the concept of vertical integration. Test your knowledge on the intersections between retailing, wholesaling, and production activities.