End of Semester 2, 2017

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MKTG3007 Retail Marketing and Distribution
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School of Marketing

EXAMINATION
End of Semester 2, 2017

MKTG3007 Retail Marketing and Distribution

This paper is for Bentley Campus, Bentley Campus (External) and Miri Sarawak Campus students

This is a CLOSED BOOK examination

Examination paper IS NOT to be released to student

Examination Duration 2 hours

For Examiner Use Only
Reading Time 10 minutes
Q Mark
Notes in the margins of exam paper may be written by Students during reading time
1
Total Marks 35
2

Supplied by the University 3

1 x 16 page answer book 4

Supplied by the Student 5

6
Materials
7
None
8
Calculator
9
A non-programmable calculator is permitted in this exam
10

Instructions to Students 11

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15

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18

Examination Cover Sheet

Total ________
 End of Semester 2, 2017
MKTG3007 Retail Marketing and Distribution

SECTION A: Case study (5 Marks for each question = 15 Marks)

Case study: Shopper Marketing Ramps Up

Retail experts may disagree as to an exact definition of "shopper

marketing." However, most agree that it encompasses in-store deals,
promotions that are not store-based and even digital coupons. Shopper
marketing includes promotional activity by retailers and manufacturers before a
shopper enters the store (such as a Web-based search), as well as in-store
promotions. According to the director of integrated shopper marketing at
Campbell’s Soup (www.campbellsoup.com): "Shopper marketing is bigger than
just customer marketing because it takes into account what the consumer is
thinking when he or she is outside the store and not planning an immediate
purchase."

In many cases, shopper marketing is conducted in a coordinated manner

by manufacturers and retailers. A marketing manager at General Mills
(www.generalmills.com) says that by working closely with retailers, it helps
"them win their share of wallet, align with their programs, and offer solutions
that are going to ultimately benefit them [the retailers] the most."

Both manufacturers and retailers can gain from working together in

shopper marketing activities. Manufacturers may be able to limit competition
from retailers’ private brands or to ensure that its second- and third-tier brands
get adequate promotion. Retailers may want to use shopper marketing to
access new technologies developed by manufacturers, such as in-store
couponing via a consumer's smart phone.

Nonetheless, there are major obstacles that need to be overcome for

shopper marketing to reach its full potential. In the past, many retailers and
manufacturers did not work together on joint promotions. Sometimes, shopper
marketing is impeded by channel conflict among channel members, such as
when retailers have insisted on obtaining slotting fees, trade allowances, and
promotional reimbursements.

An executive at a firm that manufactures private-label products suggests

that: "If you continue with the mode of accepting money as a trade allowance
[absent other changes], the reality is you are actually letting a national
manufacturer control your store environment."

Another major impediment to shopper marketing is the control of prime

shelf space by retailers. Wal-Mart (www.walmart.com) and other major
retailers tightly control the amount of shelf space allocated to each brand, as
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 End of Semester 2, 2017
MKTG3007 Retail Marketing and Distribution

well as their location on a shelf. In general, eye-level locations and end-of-aisle

end-cap locations are preferable to ankle-level and mid-aisle locations. Some
retailers will give the best locations to either the best-selling national brands or
their own private label products. Changing this culture may be very difficult.

The increased utilization of the Web, including social media, has had a
major influence on shopper marketing. A study by the Grocery Manufacturers
Association (www.gmaonline.org) found that 62 percent of shoppers now look
for deals on­ line before at least one-half of their shopping trips. This behaviour
shifts channel power to manufacturers by influencing shoppers through
discount coupons and other special incentives. Manufacturers such as General
Mills have also become more adept at reaching shoppers by using social media
and other digital tools. The goal for General Mills is to "build a relationship with
them [consumers] so that they take that relationship into the stores and you
don't have to work as hard to win in that moment when they're at the shelf."

Questions: Answer ALL 3 questions

1. Provide three of your own examples of shopper marketing that are beneficial for
both manufacturers and retailers. (5 marks)
2. Is a retailer's desire to build up its private-label brands an inevitable source of
channel conflict? Explain your answer. (5 marks)
3. Describe how digital coupons offered by manufacturers shift channel power to the
manufacturer. (5 marks)

SECTION B: Short answer questions

Answer any 2 questions (10 Marks each = 20 Marks)

Question 1

Outline the contingency plan a retailer could have in the event of each of these
occurring: (10 marks)

(a) A shopper’s accidentally setting off the burglar alarm.

(b) A flood in the store caused by a ruptured water pipe.
(c) A firm’s Web site inadvertently making personal customer information
available to a mailing list company.
(d) The bankruptcy of a key supplier.

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 End of Semester 2, 2017
MKTG3007 Retail Marketing and Distribution

Question 2

(a) Describe the different factors retailers must consider when devising
merchandise plans. (3 marks) Provide appropriate examples to illustrate how
these factors have impacted the merchandise placed in retail stores. (2
marks)

(b) Describe the different types of brands that retailers can carry in their stores. (3
marks) Provide appropriate examples to illustrate how retailers are currently
using these brands. (2 marks)

Question 3

(a) There are six types of perceived risk: functional, physical, financial, social,
psychological and time. Using examples, explain how a retailer selling
expensive furniture could reduce the six types of perceived risk. (6 marks)

(b) How could a seasonal retailer improve its cash flow during periods when it
must buy goods for future selling periods? (4 marks)

Question 4

(a) Describe the different obstacles for conducting a retail audit. (3 marks)
Provide appropriate examples to illustrate how retailers can reduce these
obstacles. (2 marks)

(b) Describe the different reasons for holding inventory. (3 marks) Provide
specific examples to illustrate the different strategies that retailers can use to
reduce inventory levels. (2 marks)

END OF EXAMINATION

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