CASE 1 Rainforest Café: A Wild Place to Shop and Eat
Steve Schussler the first Rainforest Café in the Mall of America, the largest enclosed mall in the worlds, in 1994. Before opening this unique retail store and theme restaurant, Schussler tested the concept for 12 years, eventually building a prototype in his Minneapolis home. It was not easy sharing a house with parrots, butterflies, tortoises, and tropical fish, but Schussler’s creativity resulted in a highly profitable and fast-growing chain.
In 1996, the Rainforest Cafés (….
, Landry’s closed a number of Rainforest’s mall locations but opened up new locations in London’s Piccadilly Circus, Euro Disney outside Paris, Niagara Falls, the MGM Grand Hotel and Casino in Las Vegas, and Fisherman’s Wharf in San Francisco.
DISCUSSION QUESTIONS
1. What is Rainforest Café’s retail offering and target market?
2. Were malls good locations for Rainforest Cafés? Why or why not? What would be the best location types?
3. Many retailers have tried to make their stores more entertaining. In a number of cases, these efforts have failed. What are the pros and cons of providing a lot of entertainment in a retail store or restaurant?
CASE 2 Providing a Retail Experience: Build-A-Bear Workshop
Today’s consumers want good value, low prices, and convenience, but they also are attracted to a great shopping experience. Build-A-Bear Workshop, a chain with over 170 stores generating $300 million in annual sales, is a teddy-bear-themed entertainment retailer whose stores are playgrounds for children.
…
windows and doors. Besides adding value as playhouses, the boxes advertise Build-A-Bear to the child’s friends. “[You] could buy a bear anywhere” says Maxine Clark, founder and Chief Executive Bear. “It’s the experience that customers are looking for.” The experience is depicted on the retailer’s Web site, www.buildabear.com.
Customers pay about $25 for the basic bear, but they can also buy sound, clothing, and accessories for their bear. To keep the experience fresh, Build-A-Bear regularly introduces new and limited-edition animals. Cloths and accessories are also updated to reflect current trends. There are also in-store birthday parties and an official CD. To make sure that customers have a great experience every time they visit, all sales associates attend a three-week training program at “Bear University,” and the firm offers incentive bear styles arriving weekly. Build-A-Bear stores also feature seasonal merchandise such as a King of the Grill bear for Father’s Day and a Sweetheart bear for Valentine’s Day.
Refact
The origin of the teddy bear was a 1930 incident in which President Teddy Roosevelt refused to shoot a cub while bear hunting. The spared animal was thereafter referred to as the Teddy Bear.
DISCUSSION QUESTIONS
1. Is the Build-A-Bear concept a fad, or does it have staying power?
2. What can Build-A-Bear do to generate repeat visits to the store?
CASE 3 WeddingChannel.com
Anne is sitting at her desk eating her lunch and surfing the Internet. For a few months, she has been preparing for her wedding, which will take place in less than a month. She found many helpful articles that gave her some good ideas. These articles also helped her face reality and change her childhood dreams of a white carriage pulled by a team of horses to a stretch limo. She gave up the Snow White wedding gown with a 15-foot train and has now settled on a sleek sheath gown.
In planning her big day, Anne used the help of WeddingChannel.com to make a checklist of what she needs to do. The Web site helped her organize a guest list, design and buy her invitations, set up a gift registry, and post some information for her friends about how she and Steven met. They met in college and are from different cities; therefore, they decided to have their wedding somewhere in between where their friends and family could meet. She used the resources provided on WeddingChannel.com to book the chapel and restaurant where the reception would be held.
Every year, $72 billion is …
/colors for the big day. Guests can go online and shop at the well-known stores associated with WeddingChannel.com and conveniently purchase exactly what the couple needs for their future together.
DISCUSSION QUESTIONS
(1) What are the keys to making WeddingChannel.com a success from the perspective of the companies investing in it?
(2) Why would a retailer want to invest in a virtual community like WeddingChannel.com?
(3) Can you think of other retailers that might benefit from developing a virtual community?
CASE 4 The Chen Family Buys Bicycles
The Chens live in Riverside, California, west of Los Angeles. Terry is a physics professor at the University of California, Riverside. His wife Cheryl is a volunteer, working 10 hour a week at the Crisis Center. They have two children: Judy, age 10, and Mark, age 8.
In February, Cheryl’s parents sent her $100 to buy a bicycle for Judy’s birthday. They bought Judy her first bike when she was five. Now they wanted to buy her a full-size bike for her eleventh birthday. Even though Cheryl’s parents felt every child should have a bike…
der a Serrato for Terry but that they weren’t in inventory and delivery took between six and eight weeks. He suggested a Ross and showed Terry one he currently had in stock. They thought the $500 price was too high, but the owner convinced him to try it next weekend. They would ride together in the country. The owner and some of his friends took a 60-mile tour with Terry. Terry enjoyed the experience, recalling his college days. After the tour, Terry bought the Ross.
DISCUSSION QUESTIONS
1. Outline the decision-making process for each of the Chens’ bicycle purchases.
2. Compare the different purchase processes for the three bikes. What stimulated each of them? What factors were considered in making the store choice decisions and purchase decisions?
3. Go to the student side of the Online Learning Center (OLC) and click on multiattribute model. Construct a multiattribute model for each purchase decision. How do the attributes considered and importance weights vary for each decision?
CASE 5 Consumer Buying Behaviors—Is Wal-Mart in Vogue?
The September 2005 issue of Vogue magazine contained eight pages of advertisements from the world’s largest retailer, Wal-Mart. The other 792 pages contained advertisements from Ralph Lauren, The Gap, Saks Fifth Avenue, Dior, Estee Lauder, Gucci, Lancome, St. John, Louis Vuitton, Bill Blass, Yves Saint Laurent, L’Oreal, Guess Mitchael Kors, David Yurman, Clinique, Marc Jacobs, Burberry, Calvin Klein, Manolo Blahnik, Donna Karan, Paul Mitchell, Vera Wang, And Jimmy Choo, to name just a portion of the brands in this fall issue.
The ads from Wal-Mart feature…
.
Socioeconomic Income, education, occupation.
Benefits sought To meet customers’ desires.
Usages Rate Purchase behavior (frequency), brand loyalty.
DISCUSSION QUESTIONS
1. Is there an overlap in these two consumer segments?
2. Can Wal-Mart changes its image and appeal to an upscale shopper, or should it stick to loyal, cash-strapped customers?
3. Would you recommend that Wal-Mart purchase additional pages in Vogue magazine this year? Explain your rationale.
CASE 6 Dollar General and Family Dollar Cater to an Underserved Market Segment
Dollar General, headquartered in Goodlettsville, Tennessee, and Family Dollar, based in Mathews, North Carolina, are the two leading retailers in the fastest growing segment of the industry, referred to as extreme value retailing. In 2005, Dollar General has over 7,500 stores in 30 states with sales surpassing $7 billion. Its annual growth in sales has been above 20 percent for the last six years. Family Dollar, with 5,600 stores in 44 states, generated over $5 billion in sales in 2004. Both retailers are opening new stores at rates exceeding a store a day.
The extreme value retail format has …
tracking systems, automated distribution centers, space allocation software, and replenishment systems to reduce stockouts and increase inventory turnover.
DISCUSSION QUESTIONS
1. What is the target market of extreme value retailers like Dollar General and Family Dollar?
2. Why are customers increasingly patronizing these extreme value retailer stores?
3. How do extreme value retailers make a profit when their prices and average transactions are so low?
4. Can extreme value retailers defend themselves against general merchandise discount retailers like Wal-Mart, or will Wal-Mart eventually drive them out of business? Why?
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