1. By 2009, social media services, such as Facebook and Twitter, had become a popular marketing tool for small businesses. In fact, almost 25 percent of firms with fewermn than 100 employees were using social media for marketing purposes. This was more than double the percentage of the prior year. Many of these firms cite the ease of use and low cost of these social media as the main reason for using them for reaching out to and communicating with potential and existing customers.

1. How can the ability to communicate with customers via social media enhance channel management? Discuss.

2. Almost 80 percent of chief financial officers at the 100 largest retailers say that too much inventory is the greatest risk factor to the viability of their businesses during recessionary periods. High inventories lead to heavy discounting when consumer demand is lacking. This, in turn, undermines gross margins. When demand is very weak, gross margins can disappear completely as retailers may be forced to liquidate slow-moving merchandise at prices below their wholesale cost. Paradoxically, retailers also worry about having too little inventory to meet consumer demand and thus losing sales when consumers cannot find the products they are looking for on retailers' shelves. Hence, retailers attempting to manage their inventories during a recession often feel that when it comes to stocking their shelves, they are damned if they do and damned if they don't.

2. How might retailers deal with this inventory dilemma more effectively during recessionary periods? What might suppliers do to help retailers address this problem?

3. Home Depot, Toys "R" Us, Staples, Best Buy and many other giant retailers (often referred to as "category killers" or "big box" retailers because of their dominance in particular merchandise categories and the sheer physical size of the stores) are fierce competitors and are frequently accused of driving small retailers out of business. Observers who have witnessed this competitive struggle take place over the past decade say the reason that small retailers go out of business is that they "can't compete" with these giants. The verdict in most cases has been "no contest" between the retail giants and the little guys because the little guy so seldom wins or even gets to stay in business.

3. From a competitive standpoint, is such an outcome inevitable? Discuss. Is it really the "big guys" driving the "little guys" out of business or is there something more fundamental at work here?