Retail →
- 25 May 2011
- HBS Case
QuikTrip’s Investment in Retail Employees Pays Off
Instead of treating low-paid staffers as commodities, a new breed of retailers such as QuikTrip assigns them more responsibility and invests in their development, says professor Zeynep Ton. The result? Happy customers and even happier employees. Key concepts include: Unusual for a retailer, QuikTrip offers its operational employees above-average wages, job security, and significant benefits. By using operational efficiencies and standardization, QuikTrip reduces complexity to create higher employee productivity and fewer errors. By investing in employees and giving them more responsibility, QuikTrip enjoys a competitive advantage in service and benefits from continuous process improvement. Closed for comment; 0 Comments.
- 14 Feb 2011
- Research & Ideas
Clay Christensen’s Milkshake Marketing
Many new products fail because their creators use an ineffective market segmentation mechanism, according to HBS professor Clayton Christensen. It's time for companies to look at products the way customers do: as a way to get a job done. Closed for comment; 0 Comments.
- 15 Nov 2010
- Lessons from the Classroom
Connecting Goals and Go-To-Market Initiatives
In some respects, developing strategy is the easy part. Executing that strategy in alignment with strategic priorities is where real mastery of management takes place. Harvard Business School senior lecturer Frank V. Cespedes shows how it is done. Open for comment; 0 Comments.
- 25 Oct 2010
- HBS Case
Tesco’s Stumble into the US Market
UK retailer Tesco was very successful penetrating foreign markets—until it set its sights on the United States. Its series of mistakes and some bad luck are captured in a new case by Harvard Business School marketing professor John A. Quelch. Key concepts include: Entering the US, Tesco deserves credit for creating a neighborhood market approach—emphasizing fresh produce and meats, and good quality but value-priced prepared meals. By not partnering or hiring local executives, Tesco missed the opportunity to learn more about the habits and needs of target customers. Tesco rightly aimed to scale the concept as soon as possible so that fixed overhead investments in its own distribution centers could be spread across a larger number of stores. Perhaps Tesco's original rollout plan was too ambitious, with executives assuming that the company would get everything right on the first try. Tesco has listened to its customers, learned from its mistakes, and made appropriate midcourse corrections. Closed for comment; 0 Comments.
- 26 Jul 2010
- Research & Ideas
Yes, You Can Raise Prices in a Downturn
If you and your customers understand the value represented in your pricing, you can—and should—charge more for delivering more. An interview on "performance pricing" with researchers Frank Cespedes, Benson P. Shapiro, and Elliot Ross. Key concepts include: Pricing builds or destroys value faster than almost any business action. Performance pricing seeks to maximize both the customer benefit and the selling company's profitability. The idea is to create more space between the value provided to customers and your cost. Performance pricers make attractive returns in almost every business—at least over the full business cycle. Closed for comment; 0 Comments.
- 19 Jul 2010
- Research & Ideas
How Mercadona Fixes Retail’s ’Last 10 Yards’ Problem
Spanish supermarket chain Mercadona offers aggressive pricing, yet high-touch customer service and above-average employee wages. What's its secret? The operations between loading dock and the customer's hands, says HBS professor Zeynep Ton. Key concepts include: The last 10 yards of the supply chain lies between the store's loading dock and the customer's hands. Poor operational decisions create unnecessary complications that lead to quality problems and lower labor productivity and, in general, make life hard for retail employees. Adopting Mercadona's approach requires a long-term view and a leader with a strong backbone. Closed for comment; 0 Comments.
- 12 Jul 2010
- Research & Ideas
Rocket Science Retailing: A Practical Guide
How can retailers make the most of cutting-edge developments and emerging technologies? Book excerpt plus Q&A with HBS professor Ananth Raman, coauthor with Wharton professor Marshall Fisher of The New Science of Retailing: How Analytics Are Transforming the Supply Chain and Improving Performance. Key concepts include: Retailers can better identify and exploit hidden opportunities in the data they generate. Integrating new analytics within retail organizations is not easy. Raman outlines the typical barriers and a path to overcome them. Incentives must be aligned within organizations and in the supply chain. The first step is to identify the behavior you want to induce. To attract and retain the best employees, successful retailers empower them in specific ways. Closed for comment; 0 Comments.
- 29 Mar 2010
- Research & Ideas
Ruthlessly Realistic: How CEOs Must Overcome Denial
Even the best leaders can be in denial—about trouble inside the organization, about onrushing competitors, about changing consumer behavior. Harvard Business School professor Richard S. Tedlow looks at history and discusses how executives can acknowledge and deal with reality. Plus: Book excerpt. Key concepts include: Denial is the unwillingness to acknowledge and deal with reality. What is different today is that the cost of denial has become so high. Being ruthlessly realistic with oneself is one of the greatest challenges for any CEO. Closed for comment; 0 Comments.
- 25 Nov 2009
- Working Paper Summaries
The Devil Wears Prada? Effects of Exposure to Luxury Goods on Cognition and Decision Making
Gandhi once wrote that "a certain degree of physical harmony and comfort is necessary, but above a certain level it becomes a hindrance instead of a help." This observation raises interesting questions for psychologists regarding the effects of luxury. What psychological consequences do luxury goods have on people? In this paper, the authors argue that luxury goods can activate the concept of self-interest and affect subsequent cognition. The argument involves two key premises: Luxury is intrinsically linked to self-interest, and exposure to luxury can activate related mental representations affecting cognition and decision-making. Two experiments showed that exposure to luxury led people to think more about themselves than others. Key concepts include: Luxury does not necessarily induce people to be "nasty" toward others but rather causes them to be less concerned about or considerate toward others. Experiment 1 showed that when primed with luxury, people are more likely to endorse self-interested business decisions (profit maximization), even at the expense of others. Experiment 2 further demonstrated that exposure to luxury is likely to activate self-interest but not the tendency to harm others. Exposure to luxury goods may activate a social norm that it is appropriate to pursue interests beyond a basic comfort level, even at the expense of others. It may be this activated social norm that affects people's judgment and decision-making. Alternatively, exposure to luxury may directly increase people's personal desire, causing them to focus on their own benefits such as prioritizing profits over social responsibilities. Closed for comment; 0 Comments.
- 27 Jul 2009
- Research & Ideas
Social Network Marketing: What Works?
Purchase decisions are influenced differently in social networks than in the brick-and-mortar world, says Harvard Business School professor Sunil Gupta. The key: Marketers should tap into the networking aspect of sites such as Facebook. Key concepts include: Some social network users are influenced by the purchases of their friends. Of these users, 40 percent show a strong "keeping up with the Joneses" behavior, increasing sales by 5 percent. "High-status" users are more likely to not purchase something that others have bought. On social networks, viral campaigns may work better than advertising. Closed for comment; 0 Comments.
- 08 Jun 2009
- Research & Ideas
The Return of the Salesman
Salesmen have received a bad rap over the years, but increasingly the profession is drawing scholarly interest. Business History Review coeditor Walter A. Friedman discusses the publication's recent themed issue on salesmanship. Key concepts include: Scholarly books on the history of salespeople began to appear more frequently beginning in the 1990s, with more recent work comparing 20th-century salespeople in Europe with those in the United States. In addition to comparative trends, research in this area attempts to place the story of the salesperson within the broader themes of history. Salespeople played a positive role displacing old products and promoting innovation. A strong sales force could also create a barrier to entry, as in the case of IBM. Negative portrayals have had lasting effects on the field. Closed for comment; 0 Comments.
- 29 May 2009
- Working Paper Summaries
Crafting Integrated Multichannel Retailing Strategies
The past fifteen years has been a period of rapid growth in the practice of multichannel retailing, mirroring the rise of the Internet as a nearly ubiquitous tool that firms use to interact with customers. More than 80 percent of a broad cross-section of U.S. retailers now report that they sell merchandise through multiple channels. This practice seems to be on the cusp of a new era in which firms start demanding even more from their investments, with particular emphasis being given to financial performance in light of the current economic crisis. These circumstances present a great opportunity both to firms that are looking to gain a competitive advantage through multichannel retailing and to researchers who are interested in helping them make more informed decisions. This article provides a broad discussion of these issues, synthesizes current knowledge, and suggests directions for future research. Key concepts include: The ability of the multichannel marketers to discover, develop, and exploit fully the potential synergies among multiple channels may depend on the degree of commitment to the new channels. Commitment is likely to depend on early results. Use caution in evaluating the effectiveness of a multichannel retailing program on the basis of short-term results alone. The effects of opening a new channel can be multi-faceted, and the benefits from embarking on a multichannel strategy can take time to develop. Over time, new organizational forms may emerge as the potential for new channels becomes clearer. Closed for comment; 0 Comments.
- 18 Mar 2009
- Research & Ideas
Marketing After the Recession
This downturn has likely changed people's buying habits in fundamental ways. Professor John Quelch discusses why marketers must start planning today to reach consumers after the recession. Key concepts include: Marketers must think through how the recession has changed consumer preferences and what they think of your brand. Start preparing today by, among other steps, focusing on high-potential customers, assessing your brands, and developing scenarios. Closed for comment; 0 Comments.
- 17 Dec 2008
- Lessons from the Classroom
‘Ted Levitt Changed My Life’
Many students say legendary Harvard Business School marketing professor Ted Levitt changed their lives inside his classroom and out. "Ted Levitt was the most influential and imaginative professor in marketing history," HBS professor and senior associate dean John Quelch eulogized on the occasion of Levitt's death in 2006. Colleagues and students remember a life and times. From HBS Alumni Bulletin. Closed for comment; 0 Comments.
- 08 Dec 2008
- Research & Ideas
Thinking Twice About Supply-Chain Layoffs
Cutting the wrong employees can be counterproductive for retailers, according to research from Zeynep Ton. One suggestion: Pay special attention to staff who handle mundane tasks such as stocking and labeling. Your customers do. Closed for comment; 0 Comments.
- 29 Oct 2008
- Research & Ideas
The Next Marketing Challenge: Selling to ’Simplifiers’
The mass consumption of the 1990s is fast fading in the rearview mirror. Now a growing number of people want to declutter their lives and invest in experiences rather than things. What's a marketer to do, asks professor John Quelch. Key concepts include: As the world economy slumps, one consumer segment will grow faster than ever: The Simplifiers. Simplifiers present a challenge to marketers. These are well-off people who value quality over quantity and who do not buy proportionately more goods as their net worth increases. Dining out, foreign travel, and learning a new sport will all prove more resilient than expected in the face of recession. Closed for comment; 0 Comments.
- 28 Jul 2008
- Research & Ideas
Making the Decision to Franchise (or not)
Owners operating outlets across multiple markets have a variety of organizational models to choose from, including franchising. The decision is one of the most important they will make. A new Harvard Business School study looks at how 420 convenience store chains organized to serve diverse customers. Key concepts include: Even firms that have a standardized business face the challenge of serving customers with different preferences and behaviors when that model is stretched across multiple markets. By choosing to franchise, the firm minimizes exposure to risk in a relatively unfamiliar market; as a tradeoff, it also gives up some measure of control. Chains that don't franchise employ fewer corporate and supervisory staff relative to the number of store-level employees. Early evidence from ongoing research indicates that unit sales are lower for firms that expand into multiple markets without franchising or providing some incentive system for local managers. Closed for comment; 0 Comments.
- 09 Jul 2008
- Research & Ideas
Starbucks’ Lessons for Premium Brands
After building a great franchise offering a unique customer experience, Starbucks diluted its brand when it overexpanded and offered too many new products. John Quelch thinks the trouble began when the company went public. Closed for comment; 0 Comments.
- 14 May 2008
- Research & Ideas
Getting Down to the Business of Creativity
Business leaders must manage and support creativity just as they would any other asset. Harvard Business School professors Teresa Amabile, Mary Tripsas, and Mukti Khaire discuss where creativity comes from, how entrepreneurs use it, and why innovation is often a team sport. From the HBS Alumni Bulletin. Key concepts include: People have their best days and do their best work when they are allowed to make progress. Whenever a firm introduces a truly novel product, suppliers, complementary producers, distribution channels, and consumers must often develop new capabilities, beliefs, and behaviors for the product to succeed, creating a challenge for the innovator. The perception exists that creative businesses can just start up, when in fact it takes a while for an entire ecosystem to actually generate an industry. Closed for comment; 0 Comments.
Search Diversion, Rent Extraction and Competition
Retailers, search engines, shopping malls and other intermediaries often deliberately design their physical layouts or e-commerce sites in order to divert customers' attention away from the products they were initially looking for, with hopes that they'll buy a bunch of other products, too. This paper explores various incentives for so-called "search diversion" in a couple of scenarios—when stores internalize their affiliation decisions with intermediaries, and when competition is introduced among intermediaries. Research was conducted by Andrei Hagiu of Harvard Business School and Bruno Jullien of the Toulouse School of Economics. Key concepts include: If an intermediary cannot price-discriminate among several stores, it can use search diversion to reduce the variance of store profits—thus improving its rent extraction power. When stores affiliate with multiple intermediaries but consumers affiliate with only one, the incentives to divert search are reduced. But when consumers affiliate with multiple intermediaries and stores affiliate with only one, intermediary competition may exacerbate search diversion incentives. The broad implication of this paper is that competition may lead to intermediation design decisions that go against customer preferences in favor of decisions that favor third-party sellers or advertisers. Closed for comment; 0 Comments.