Retail Sources

Part A: Field Research Project (40 marks)

For this Part, you will gather price data for the items listed below from three retail sources, being (i) Munchy Mart in the Student Union Building; (ii) a local convenience store, perhaps near where you live; (iii) a supermarket, perhaps one that you or your household shop in regularly. You should document the names and location of the convenience store and the supermarket, and the dates that the prices were observed.

You may work in a team of no more than three people to collect these price data, and to discuss and write-up your analysis. That is, a team can submit the same answer to the Part A question [but not for Parts B and C of this Assignment]. If you are working in a team you must name its members.

Put all data, and your answers, on an Excel spreadsheet.

Your job is to attempt to explain any differences or similarities in prices charged for each item at the three retail outlets, in terms of the “3 C’s” – that is, differences or similarities in the cost, customer and competition factors faced by the retailers. You could add another column or columns on the spreadsheet in which to note any other factors you may think are relevant to the prices charged, and the reasons why difference across retailers are larger for some items than for others:

Collect and compare prices for the following items:

• 1 litre of standard milk
• 250gm jar of Marmite or Vegemite
• 1 can Coke or Pepsi (same size and type — eg, Diet…)
• 1 can Energy drink of your choice
• Meat pie or sausage roll
• Standard packet of potato crisps
• Muffin
• Instant noodles
• One other item, of your choice

Part B: ‘Library’ Research Project (30 marks)

Choose some product that you know something about (it could be in IT, or just about anything – restaurant or take-out food, fitness programs, etc etc). Pick a particular firm operating in the market for this product that you like (or dislike!). It could be your local café or it could be Amazon, or it could be something in between.

On no more (or not much more) than one typed page, explain the success (or failure) of this firm, again in terms of the “3 C’s”, plus any other factors that you deem to be relevant.

(It needn’t be actual ‘library’ research, which includes Wiki, Google, and other sources of information on the Web. If you are focussing on a local business (perhaps one you have worked in yourself), then your sources could be your own experience, and perhaps an interview with the owner…)

Part C: Quick questions (30 marks)

1. What valuable product do you purchase hoping you will lose money on the transaction?

2. Airlines reward their best customers (frequent fliers) with various perks, including preferential check in, with no queues. Supermarkets, in contrast, punish their best customers (the ones with fully loaded shopping carts) with long queues for check out, while less lucrative customers (‘fewer than 12 items’) get specially quick check-outs with short or no queueing. Why the difference?

3. Explain why the “lemons problem” is less of a problem in the market for new cars than in the used car market

4. Explain why offering a discount on accompanied children’s airfares could be a 3^rd degree price discrimination tool for airlines

5. In what ways does a new firm entering a market have (a) an advantage, and (b) a disadvantage, over established existing firms?

6. Why might paying people to give blood result in less blood being supplied?