Suppose a manufacturer of exercise equipment sets a suggested price to the consumer of $395 for a particular piece of equipment to be competitive with similar equipment. The manufacturer sells its equipment to a sporting goods wholesaler who receives 25 percent of the selling price and a retailer who receives 50 percent of the selling price. What demand-oriented pricing approach is being used, and at what price will the manufacturer sell the equipment to the wholesaler?
Suppose the president of a carpet manufacturing firm has asked you to look into the possibility of bypassing the firm’s wholesalers (who sell to carpet, department, and furniture stores) and selling direct to these stores. What caution would you voice on this matter, and what type of information would you gather before making this decision?
What type of channel conflict is likely to be caused by dual distribution, and what type of conflict can be reduced by direct distribution? Why?
In retail pricing, retailers often have maintained a markup. Explain how this maintained markup differs from original markup and why it is so important.
How would you classify Walmart in terms of its position on the wheel of retailing versus that of an off-price retailer?
Breadth and depth are two important components in distinguishing among types of retailers. Discuss the breadth and depth implications of the following retailers discussed in Chapter 16:
Nordstrom
Walmart
L.L. Bean
Best Buy
According to the wheel of retailing and the retail life cycle, what will happen to factory outlet stores?
Like the traditional marketplace, the digital marketspace offers marketers opportunities to create time, place, form, and possession utility. How do you think Internet-enabled technology rates in terms of creating these values? Take a shopping trip at a virtual retailer of your choice (don’t buy anything unless you really want to). Then compare the time, place, form, and possession utility provided by the virtual retailer to that provided by a traditional retailer in the same product category.
