Devon MacGregor, known to his many friends as "Mac," jokes about being true to his Scottish heritage when he opened his warehouse-style store selling odd lots and large quantities of basic household staples. Mac and his partner, Donnie Antonio, talked for many hours as they planned the new company launch. Donnie felt they would be better off setting up a more traditional retail store with attractive merchandise displays, lighting, and a "classier" looking place. Both men had recently graduated from State University and were committed to building a successful retail store, but they needed to get agreement on the focus of their business.
"It's all about value proposition, Donnie," Mac said. "If we try to be all things to all people, we'll be competing with all the big boys. We can't be a Walmart or a Target. We're little guys. We need to give people something different, and the best way to do that is to give great deals. Our customers are cost-conscious. Let's stick with our stack 'it deep, sell it cheap' philosophy." After considerable discussion, Donnie came to agree and that is the direction they decided to take.
Probes
1. If Mac and Donnie stick with this value proposition, how might that affect customer service? What are the pros and cons from the customers' perspective?
2. What expectations would you have as you went to shop at their store? Be specific—what would you expect it to like?
3. How can they best stick with their value proposition? What should they avoid?
4. Is customer service in such a low-cost operation less important than it would be in a full service retailer? Defend your answer.
5. How could Mac and Donnie best avoid customer turnoffs? Exceed customer expectations?