LESSON PLANS
RETAILING

CONTENTS

Total Instructional Time
Lesson: Market Research
Lesson: Product
Lesson: Place
Lesson: Price
Lesson: Promotion - Traditional Media
Lesson: Promotion - Email
Lesson: Staffing, Selling & Customer Service
Lesson: Purchasing & Inventory Control
Lesson: Merchandising
Lesson: Security & Risk Management
Lesson: Financing & Business Planning
Lesson: Retailing Mogul - Unique City Per Class
Lesson: Extra Credit: Retailing Mega Mogul - Unique City Per Class
Lesson: Extra Credit: Turnaround

Total Instructional Time

The instructional time for RETAILING ranges from 24 hours (simulation exercises only) to 35 hours (simulation exercises, reading assignments , reading quizzes, and math quizzes). You can configure your course to include or exclude reading assignments (3.7 hours), reading quizzes (1.8 hours) and math quizzes (5.5 hours). For instructions on how to configure your course, click here to access a series of videos to help you get your classroom up and running with Virtual Business.

Prior to beginning work with RETAILING, students should sign in to their account at vb.KnowledgeMatters.com and go through the Tutorial.

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Lesson: Market Research

marketResearch

DESCRIPTION

In this lesson, students learn that market research is critical to the success of a retail business. They begin by taking a survey of prospective customers to learn both product preferences and time of day preferences. Students then try to save some money by taking a similar survey but with reduced sample size. They are introduced to the mathematical concept of decreasing reliability of a survey as the sample size decreases. Students then explore the more sophisticated technique of analyzing survey data through segmentation. Finally, students use market research information to book radio advertising on a radio station that matches the demographic of their target customers. They run the simulation to try to achieve a specific profit goal.

LEARNING OBJECTIVES

  • Define market research
  • Explain the difference between primary and secondary research
  • Determine an adequate sample size for a survey
  • Use segmentation to analyze survey results
  • Use market research to make smart advertising decisions for a business

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Product

product

DESCRIPTION

In this lesson, students begin as managers of a grocery store that is performing poorly. They look at their location and surrounding customers. Next, students use surveys to discover what products these customers want. Unfortunately, those aren’t the products their store is currently stocking. They replace a non-popular product with a popular one and see sales rise. Students then add a display to carry another popular product and and see an additional increase in sales. Finally, students take over an electronics store with similar problems and work to change the product offerings in pursuit of a specific weekly profit goal.

LEARNING OBJECTIVES

  • Explain the importance of product choices in retailing
  • Use surveys to determine most popular products
  • Be able to change product mix and interpret sales results
  • Manage product selection to achieve profit goals

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Place

place

DESCRIPTION

In this lesson, students learn about location...location, location. Students begin by looking around their city. They identify the available square footage of buildings and the cost per square foot for the space. They compare costs per square foot for downtown versus suburban locations. Students next study what types of customers are near each location. Students also scout competitor locations within the city. Finally, students are asked to choose a location for their store. They run the simulation to try to reach a specific profit goal. If they are not successful, they try relocating their store.

LEARNING OBJECTIVES

  • Understand the concept of cost per square foot
  • Be able to compare amount and cost of space at different locations
  • Assess the types of customers around a given location
  • Assess potential locations given competitor locations
  • Choose a store location that will yield a profit

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Price

price

DESCRIPTION

In this lesson, students see how prices interact with the law of supply and demand to determine sales levels. They begin by reviewing the concepts of price, cost and margin. They then intentionally set prices quite high and observe that volume and profits drop. Next, they try setting prices very low. The observe greatly increased volume, but profits remain low due to slim margins. They try a price in between the initial price points and see how profit can be maximized. They see how profit can be plotted as a curve against price levels. Students then learn about the use of “loss leaders” to drive customers into stores with very low prices on attractive items. Finally, students are challenged to set prices for their store to meet a specific weekly profit goal.

LEARNING OBJECTIVES

  • Explain the relationship between price, cost, and margin
  • Explain how prices and sales volume is related
  • Find a price that maximizes profit by generated reasonable volume and reasonable margins
  • Define a “loss leader”
  • Set prices across all products to achieve a profit goal

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Promotion - Traditional Media

promotion

DESCRIPTION

In this lesson, students study the role of promotion in the marketing mix. They begin by finding their current weekly revenue on their Income Statement. Students then examine where their current customers are coming from -- a relatively small area of the city. To grow their customer base, they lease a billboard across town then compare their increase in revenue with the expense of the billboard. As an alternative to billboard promotion, they try running a one page ad in a newspaper circular. Students compare the revenue and expenses of the two different forms of promotion. Finally, students use promotions of their choosing to achieve a weekly revenue goal while keeping their promotional spending below a specified level.

LEARNING OBJECTIVES

  • Understand promotion as a key element of the marketing mix
  • Identify different types of promotion
  • Track revenue and expenses associated with promotional activities
  • Be able to compare efficiency of promotional campaigns
  • Choose promotional means to achieve business goals

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Promotion - Email

email

DESCRIPTION

In this lesson, students explore the use of Email as part of the marketing mix. Email is a relatively new, but extremely important, component of retail promotion. Students begin by looking atways to assemble target lists, including customer loyalty programs and purchased lists of Email addresses. They purchase a list and then make a strong offer to attract customers to sign up to receive more Emails. Students discover some perils of Email promotion by trying to send to the same list too frequently. This results in high spam reports that could shut down their Email capability. Finally, students use what they have learned about Email to promote their business successfully and reach a specific profit goal.

LEARNING OBJECTIVES

  • Identify different sources of Email address lists
  • Understand the importance of subject lines and offers in Email marketing
  • Track and analyze Email response metrics
  • Avoid spam reports by properly spacing Emails
  • Use Email promotion to achieve profit goals

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Staffing, Selling & Customer Service

staffing

DESCRIPTION

In this lesson, students take responsibility for staffing several types of retail stores. They begin in a grocery store and set conservative staffing levels for cashiers and stockers. They observe customers complaining about long lines and unstocked shelves. Students correct the staffing problem and observe increased profit on their Income Statement. Next students switch to an electronics store with high-ticket items that may require consultative selling. They use sales reports to find an item that is selling poorly. They then add salespeople and use the sales report to examine the subsequent increase in sales. Finally, students take on a sporting goods store with poor overall staffing and are challenged to staff the store to make a specific profit goal.

LEARNING OBJECTIVES

  • Explain several different job functions within a retail store
  • List the problems that can result from understaffing at each position
  • Discuss why some retail establishments staff salespeople while others don’t
  • Understand the expense/revenue tradeoff of staffing decisions
  • Adequately staff a retail store to achieve a profit goal

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Purchasing & Inventory Control

purchasing

DESCRIPTION

In this lesson, students take over the role of purchasing manager in a retail business. They begin by intentionally purchasing a very low, conservative amount. They observe employees and customers complaining that they can’t find products they need. Next, they try purchasing very large amounts. This eliminates stock-outs, but now they observe certain products expiring. Students identify a specific product with a short shelf-life and set a custom purchasing level to eliminate expiration. Then students see how they can re-allocate space in their backroom to insure adequate stockpiles of products. Finally, students take control of all purchasing to try to run a full week with no products expiring and no complaints of customers being unable to find goods.

LEARNING OBJECTIVES

  • Explain why purchasing is essential to a retail business
  • Understand target inventory levels
  • Explain the tradeoffs between purchasing too much and too little
  • Set custom purchasing policies for rapidly expiring items
  • Manage purchasing for efficiency and customer satisfaction

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Merchandising

merchandising

DESCRIPTION

In this lesson, students take over control of the layout of their store. Students begin by finding their weekly revenue on their Income Statement. Their revenue is good, but not great. They then identify whether certain items in the store are more likely “needs” or “impulse” items. Students are next introduced to the merchandising concept of putting needs in the back of the store to draw customers past impulse items. They rearrange a need item and watch as revenue increases. Students then place a “complementary” good next to the item it complements. Again, they experience rising sales. Finally, students are asked to apply these principles by rearranging their store layout to achieve a specific weekly revenue goal.

LEARNING OBJECTIVES

  • Define merchandising in a retail store
  • Identify items that are likely needs
  • Identify items that are likely impulse purchases
  • Identify items that are likely complementers
  • Describe strategies for placing needs, impulse items, and complementers
  • Use merchandising principles to improve the revenue of a business

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Security & Risk Management

security

DESCRIPTION

In this lesson, students take on the role of security consultant for three different types of retail stores. They begin by looking at shrinkage (unexplained product shortages) at a grocery store. They identify which items are likely being shoplifted and reduce shoplifting by moving those items to more visible areas. Next, they look at an electronics store with high value items. They install an expensive scanner system and compare its cost with the shoplifting losses prevented. Finally, they head to a sporting goods store with medium value items and try to find an appropriate security system that will reduce losses within a certain budget.

LEARNING OBJECTIVES

  • Explain the importance of security in a retail business
  • Given different options for increasing security
  • Analyze the cost-effectiveness of a security system
  • Plan store security to achieve profit goals

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Financing & Business Planning

financing

DESCRIPTION

In this lesson, students will discover how to estimate their financing needs when starting a new business. They begin by figuring out how much they will need to spend on their building lease, equipment leases, and initial inventory. They then add in staffing costs to estimate their total start-up expenses. They take out a loan for the appropriate amount and start the business. After several weeks, they look at their Balance Sheet to see what their lowest cash position was. Using this information, they take on the challenge of starting an even larger retail store. Their goal is to borrow enough money to get the business off the ground while minimizing financing costs.

LEARNING OBJECTIVES

  • Understand that most business require substantial financing (capital) to get started
  • Be able to estimate start-up costs for a business
  • Monitor cash levels to determine adequacy of financing
  • Extrapolate from a small business to a larger business when estimating financing needs
  • Acquire adequate financing to start a business while minimizing financing costs

TIME

Reading: 20 minutes (optional)
 Reading Quiz: 10 minutes (optional)
 Math Quiz: 30 minutes (optional)
 Simulation Exercise: 45 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students complete the reading assignment (optional).
 Students take the reading quiz (optional).
 Students take the math quiz (optional).
 Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Retailing Mogul - Unique City Per Class

retailingMogul

DESCRIPTION

In this capstone project, students put to use the knowledge and skills they have learned in the lessons. They are challenged to build a retail grocery business from the ground up. They must choose a location, design their store layout, staff the business, choose products to carry, set prices, and more.  All students start in the same city and pursue a specific profit goal. By default, the class scoreboard is turned on so students can compare their profitability to others. The instructor can turn the scoreboard off.

LEARNING OBJECTIVES

  • Understand the options for financing a start up
  • Choose a suitable location for a business
  • Design an effective retail floor plan
  • Understands how to staff a retail business efficiently
  • Plan merchandise selection and purchasing
  • Use common financial statements to pursue a profit goal
  • Understand the challenges and rewards of entrepreneurship

TIME

Simulation Exercise: 240 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Extra Credit: Retailing Mega Mogul - Unique City Per Class

retailingSuperMogul

DESCRIPTION

In this extra credit project, students are free to explore all that the simulation has to offer. They can start grocery, sporting goods, and electronics stores. They can also start multiple stores of each type. This project is open-ended; students do not have a specific profit goal and can continue on as long as they desire. By default, the class scoreboard is turned on so instructors can use this project as a competition.

LEARNING OBJECTIVES

  • Understand how to start a grocery business
  • Understand how to start a sporting goods business
  • Understand how to start an electronics business
  • Compare and contrast running different types of retail businesses
  • Manage the complexity of running multiple businesses
  • Understand the importance of long-term planning and effort in growing a large business or businesses

TIME

Simulation Exercise: 240 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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Lesson: Extra Credit: Turnaround

turnaround

DESCRIPTION

In this extra credit project, students take over a struggling sporting goods retailer. The business has poor staffing, inappropriate product selection, and a terrible layout. Students are challenged to find and diagnose the problems. They then set about correcting them. Students learn that a single correction may not produce profits if other factors are not aligned. Eventually, students work through all the issues to achieve a profit.  By default, the class scoreboard is turned on so students can compete against each other for the title of “Turnaround King.”

LEARNING OBJECTIVES

  • Identify problems within an existing business
  • Formulate corrective actions
  • Use financial statements and other reports to assess effectiveness of corrections
  • Understand how corrections in one area of a business affect and depend on other areas of the business
  • Restore an unprofitable business to profitability

TIME

Simulation Exercise: 240 minutes

PROCEDURE

Students sign in to RETAILING at vb.KnowledgeMatters.com.
Students click Run SIM and follow the lesson instructions.
Student progress and grades may be tracked from the Instructor page.
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