 Merchandise Kiosk

Case 1

As retailer of merchandise kiosk have two alternate choices of locating for sale, first on a mall’s
where available in main, second or third floor. However, typically on mall’s, the main floor offers is
the best, moreover most expensive. The second alternate is on train station.

The locations can be considered is three times two meters and situated near the main ground floor
entrance, rent is Rp. 500,000 per m/square, for annual total of Rp. 30,000,000, but it will be sign a
three years lease.

The second alternate is train station lobby, there is five times two meters, It’s slightly larger than
previous, but it’s long and narrow, rent is Rp. 400,000 per m/square, for an annual total of Rp.
40,000,000, the head of train station will allow with require a two-year lease.

Develop by: Eddy Syah Yahya

Case Study for Student

  The stuff-em-quick fast food outlet

Case 2

As a retail fast food stuff-em-quick needs built-up the information system in order to compete
with ‘Burger King’ and ‘Mc.Donald’. It has been a long time Stuff-em-quick just have
communication information system commonly. Now the outlet want to introduce the new system
are ‘hybrid system’ in the next few days to it’s competitor.

Management outlet tries to improve the whole administration such as; report schedule in regular
basis daily, weekly and monthly. The report will covers based line named paper work system are;
firstly, measurement that is the key success factor for retail operating likes production function
such; tasted, packaging, price, service and space lay-out (including: kitchen utensil and materials),
secondly, strategic planning is respond through the business environment to determining finance
department, marketing department and good location.

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  Bandung Electronic Centre

Case 3

A hand-phone outlet centre of BEC (Bandung Electronic centre) located in Bandung plans a big sale
in long week end (Friday through Sunday). On sale will be nearly Rp. 2 milliar worth of consumer
mobile-phone products. 50% of the merchandise sold in the store.

The company hopes to realize at least more or less Rp. 1 milliar in sales during the three days. In
retail’s past experience. Firstly, the first day’s sales were 50 percent of the total, the second day’s
were 35 percent, and the last day’s 15 percent. Secondly, one of every two customers who came made
a purchase. It’s known further that large numbers of people always flock to such sales, some driving
as far as 50 kilometers. They come for all economic levels, but all confirmed bargain hunters. If you
are as the assistant to the general merchandise manager, who has asked you to plan the event’s
marketing campaign, and then you have the following information:

 A full-page, a half-page, a quarter-page of Kompas or Times newspaper to get the maximum

value from a newspaper campaign, it’s company policy to always run to ads (not necessarily
the same size) for such events.

 The local newspaper of Bandung is Pikiran Rakyat, Tribune and one else are printed once a
week and distributed free to some 15,000 households. It costs depends of ads for a double
full-page or for a single page.

 To get adequate television coverage, at least three private channels must be used, with a
minimum of eight 30 second spots on each, spread over three or more days. Producing a TV
spot costs approximately Rp. 50.juta.

 The store has contacts with three radio stations. One appeals to abroad general audience aged
25 to 35. One is popular with 18 to 25 group. A classical music Delta Radio Station has a
small but wealthy audience. Minimum cost for a saturation radio campaign, including
production respectively.

 To produce and mail a full-color flyer to the store’s 80,000 charge customer costs Rp. 10 juta.
When the company used such a mailing piece before, about three percent responded.

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  Activity Based Costing

Case 4

Jogja Department store is considering reducing the amount of shelf space dedicated to new product of
premium cookies in order to expand Jogja’s own private lable cookie line. The company is
performing an activity based costing analysis to evaluate the profitability of the two lines. Based on
past experience, Jogja Dept.store believes that, in general private-lable, (stored brand) items offer
higher profits.

Description Roma Marie Cookies Private-Lable Cookies

Retail price per case $ 31.20 $ 27.00

Cost per case $ 24.00 $18.00

Gross Margin $ 7.20 $ 9.00

Other relevant cost $ 1.50 $ 5.00

Operating Margin $ 5.70 $ 4.00

Supposed Mayora’s cost is $ 2.00 per unit ($ 24.00 per case of 12) for each variety of Roma marie
cookies. The retail selling price is $ 2.60 ($ 31.20 per case), so the gross margin (per case) is $ 7.20 or
23%.Jogja Dept.store pays $ 1.50 per unit ($ 18 per case of 12) for each private-lable cookies, which
retail for $ 2.25 ($ 27 per case). The gross margin per case is $ 9.00 or 33.33%.

The total costs (classified as operating expenses) of receiving, inspection, storage, and transportation
Jogja’s private-lable cookie line were calculated to be $ 5.00 per case. The cost Roma marie cookie
(primarily for receiving) was calculated at $ 1.50 per case. Operating margin are $ 5.70 per case (or
18.3%) for Roma marie cookie and $ 4.00 per case (14.8%) for Jogja private-lable.

The traditional gross margin measured of profitability suggest that the private-lable cookies are
Jogja’s most attractive option. However the real profit picture may be obscured because all relevant
costs have not been applied directly to the products.

Roma marie cookie allows 30 days for payment and gives immediate credit for any damaged
merchandise. The private-lable cookies are shipped to Jogja Dept.store distribution centre, stored, and
then shipped to the individual stores. The private-lable vendor demands payment in 10 days, rather
than 30 days, and it is not responsive to damaged-good claims. Jogja’s

Activity Based Costing (ABC) analysis, which followed the steps outline above, included an
examination of the warehouse costs related to the company’s private-lable cookies.
The ABC analysis, unlike traditional gross margin analysis, suggest that it would not be optimal for
Jogja Dept.store to expand it’s private-labele cookie line by reducing Roma marie cookie’s shelf
space.

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Case Study for Student

  Sephora Shop in France

Case 5

Sephora, a division of Moet Hennesy Louis Vuitton (LVMH), is an innovative retail concept from
France that is changing the way cosmetics are sold. Sephora dares to be different in its store design
and product offerings. In fact, it defines the fashion retail concept to give its customers what they
want: freedom, beauty, and pleasure. Some of Sephora product offering include makeup, fragrances,
bath and body products, and skin care. There is no doubt that every woman can find the products that
the desires at Sephora to pamper herself like a queen.

Sephora takes beauty offering in a new, exciting direction, allowing the customer to choose her own
level or service. The customer may opt for an individual experience and reflection to detailed expert
advice, whether that is in Sephora’s store locations or on it’s highly interactive website. Sephora has
been taking the U.S market by storm ever since it arrived in mid-1998 with its first two store that
encompasses 21,000 square feet opened in Rockefeller Center in New York City in October 1999.
Now Sephora operates more than 70 store nationwide, and it continues to expand at a rapid pace.

Most fashion-oriented cosmetics are sold in department stores. The scent and cosmetics area in
department stores consist of area devoted to the products made by each manufacturer. Salespeople
specializing in specific line stand behind a counter and assist customers in selecting merchandise.

Sephora represents the future of the beauty, so it no surprise that is store designs are a reflection of
what to expect in the future. It lures customers into its store with a bright red carpet that immediately
induces an excitement and intrigue that can not be matched. Once the customers enter the store, they
are surrounded by what Sephora likes to call the temple of beauty. An extraordinary assortment of
products is arranged alphabetically and by category along the walls of the store. Customers are
encouraged to sample the beauty products on their own from self-serve modules. The stores sell a
tremendous variety of brands, including new lines, best seller, classics, and an exclusive Sephora
collection.

Sephora has a strong presence throughout the U.S; however it also has stores located in France,
Luxembourg, Spain, Portugal, Poland, Italy, Turkey, and England. It decided to pull out of Japan and
Germany because of financial concern, unable to sell Japanese and Germany consumers on its unique
retail concept.

Sephora is the one of the few retailers offering cosmetic product online. There has been much
speculation in recent years that beauty products can not be displayed properly on a two-dimensional
web page. Many other retailers have attempted to make the transition, but they have been
unsuccessful time and time again. On the other hand, Sephora has managed to set itself apart from
other retailers once again by making it work while still yielding a profit. Sephora offers brands that
consumer have a difficult time finding in department store, such as urban decay, hard candy, stila and
dirty girl. Woman have been making purchases on the sephora website because they can not find these
products in their hometown malls. To many customers dismay, Sephora stores are not located in every
regional mall across the country. For these customers, Sephora .com represents a one-stop shop for all
of their beauty needs. They know that they can find the brands they love at a reasonable price with no
hassles. What else van a person ask for?

In August 2001, Sephora unveild its new advertising campaign. These new advertisement feature
close-up photograph that capture the playful application of colorful make-up to various feature of the
Case Study for Student
woman’s face. These new photograph and direct mail campaign. Sephora believes that this new
advertising campaign will capture their philosophy of freedom exploration, and discovery. By
focusing on a different feature of a woman’s face in each ads, Sephora strives to emphasize that its
products are not about a particular kind of look or beauty. Also, it is important for a woman to
remember that every feature on her face is unique and beautiful. Beauty products only help to
emphasize a woman’s natural beauty and make her feel more confident about her overall appearance.

Even though Sephora is the world’s largest beauty retailer, it still recognizes the important of giving
back to the community, it joint forces with operation smile, which provides reconstructive facial
surgery for young children in developing countries and in the U.S, to provide kids with greater sense
of confidence so that they can live a more normal life. It committed itself to help improve the lives of
children around the world. This is procedures to get the help that they deserve to feel like a regular
kid. The children have no reason to be self conscious anymore because they are beautiful on the inside
and outside. Sephora continues to make a difference by getting involved in the community even
though its daily operations. Even recognized some woman do not believes in the art of makeup, it is
essential to recognized that it does allow many other woman to feel more confident about their looks
on a daily basis, and this contribution, in itself, is truly irreplaceable.

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Case Study for Student

  Hutch and Hutch Store

Case 6

Hutch Fashion is considered one of the leading popular-priced women’s fashioned apparel in the
southeast. The stores carry trendy apparel selections in juniors’, misses, and woman’s sizes, all at
popular prices.

The chain offers the complementary array of accessories in addition to its main features of dresses,
coats, and sport wear. Located mainly in strip centre and mall, these shops typically require 4,000 to
5,000 square feet. Hutch Extra stores are primarily located in strip centre and malls. They bear a
strong resemblance to Hutch Fashions.

The difference is that Hutch Extra stores require less space (from 2,000 to 3,000 square feet) and cater
to woman requiring large and half-size apparel. (Woman who wear half-sizes require a larger size but
are not tall enough to wear a standard large size. In other words, a size 18.50 is the same as size 18
except that is cut for a shorter woman).

Although Hutch Fashions and Hutch Extra store selectivity appear as separate entries, the corporate
goal is to position both as a single entity. The combination store emerged in 1986 and is now used for
all new stores.

The Hutch Fashion*Hutch Extra combination occupies a combined space of 6,000 to 7,000 square
feet, with separate entrance for each entity. A partial wall separate the frontal areas feet of the store
but allows a combined checkout/customer service area in the rear. The new stores are primarily
located in strip centre and occasionally be found in mall. So There is lay-out of Hutch
Fashions*Hutch Extra as follows:

Storage, Receiving, Marking

Checkout Counter

Entrance Entrance

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Case Study for Student

  AHOLD Albert Heijn Holding

Case 7

In 1887, about 22 years old Albert heijn took over his father’s small grocery store near Zaandam,
West Holland. His strategy for grow products with excellent customer service at the lowest price.
Now, 115 year later, Ahold (an abbreviation of Albert Heijn Holding) is the world’s second largest
food retailer. It operates 9,000 stores in 27 countries, with 2002 sales greater than $. 60 billion. But its
name is not on single store it owns.

Ahold operates under 26 different names in Europe, America, Asia, and Latin America. In addition, it
owns two food-service companies and Peapod, an online grocer, in the United State, it uses 10
different formats for its stores, identical layouts (to reach the deli counter, for example, you always
turn left at the entrance).

Ahold is a food retailer, food sales account for 90 percent of its revenues. Recognizing the lifestyle
trend toward more out-of-home food consumption, Ahold is attempting to increase to increase its
share of the stomach through its acquisition of food-service companies. In contrast, Wal-Mart and
Carrefour focus operating larger super centers or hyper-markets that offer general merchandise as well
as food.

Another difference between Ahold and its major International competitor is its growth strategy.
Although Wal-Mart has made some acquisitions, most of its International growth, and all of
Carrefour’s has been internally generated. On the other hand, Ahold has grown primarily through
acquisitions. More than 50 percent of Ahold’s revenue now comes from the U.S supermarket chains it
acquired and its first acquisition in the U.S in 1977.

In 1999, the company bought U.S food-service, America’s second-largest supplier of ready-made
meals, prepared food, and ingredients to restaurants, hotels, and other institutions. Finally, Ahold
rescued Peapod, one of the first internet grocers, from bankruptcy in 2000 by talking majority stake in
the company. Peapod now operates out of stop & shop and Giant store in Boston, New York, and
Washington DC, areas, as well as on its own in its home base of Chicago. The profit margin for
Ahold’s U.S division is 5.7 percent, while the profit margin for the European division is 3.9 percent of
sales.

Ahold has now centralized the procurement of fresh and chiled products across its six U.S chains,
only 5 percent of all merchandise in Ahold’s stores is ordered on a cross-continental basis, about the
same as Wal-Mart and Carrefour. Ahold U.S managers are just beginning to exchange best practices
with their counterparts overseas. For example, Stop & Shop and Peapod are trying to improve their
fulfillment accuracy by learning how Ahold’s Scandinavian Internet home-delivery service has
achievedits successes in performing these activities. However, Ahold’s goal is to bring the same
supply chain efficiencies achieved by Wal-Mart and Carrefour in general merchandise distribution to
food distribution.

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Case Study for Student

  Moving goods to the final customer

Case 8
(Distributing means getting goods from the manufacturers move to the final customers. It includes
buying and reselling goods by wholesalers and retailers and the transport used to move them at each
stage).
 How you sell and distribute your products are;
 Who the customers are;
 Where the customers are;
 How many customers or people you hope to sell to;
 How much they buy.
In the table below, this can be seen clearly:

What Who Where Point Of Sales Number of Sold by

Points

Cheap clothes Poorer people Whole country Stores, shops market, Very many Salesmen, owner to big
etc store buyers

Dear leather Wealthy people Capital city, Department stores, Very few Direct by owner
goods tourist tourist towns hotels and boutique

Chocolates and Everyone, especially Mostly towns Shops, markets, street Very many Salesmen, wholesalers,
sweets children sellers retailers

Kitchenware Middle income Mostly towns Department and Not so many Salesmen, owner (big
households hardware stores order)

Metal windows Builders Mostly big Wholesalers, builders Not so many Owner, salesman,
towns catalogue

Special tools Engineering and Capital, few big Manufacturer’s factory Very few Owner, technical staff
and dies plastic industry, etc towns

Standard tables Government, Mostly big Buyer’s office, Very few Owner
and chairs schools, institute towns government or local
official

You can see that there are different ways and places for selling goods. If you are selling to the
government, you will have to go through the usual procedures. In some countries, goods for the
general public go from the manufacturer to a wholesaler, to another wholesaler, and then in smaller
lots to retailers or market sellers.

Four or five lots of people may handle the goods, each taking a profit, before they reach the buyer if
he or she lives in the country. This puts up the price of the goods to the people who want them. You
will sell fewer goods this way. You must find the best sales channels for your goods.

Develop by: Eddy Syah Yahya

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