Question

Zappos provides value to its customers by

a) dividing all their customers into two distinct segments: people shopping for low price and people shopping for style.
b) offering the best access to fashionable shoes through multiple channels of distribution.
c) offering the best selection of shoes and the best service to online shoppers.
d) maintaining the simplest method of pricing to make the purchase process easy.
d) designing shoes for every type of occasion.

Answer 1

Zappos provides value to its customers primarily by offering a wide selection of shoes online and excellent customer service. Efficiency leads to lower costs and is used by large retailers to offer competitive prices. Bundling services can also provide value to customers by offering combined products or services at a better price.

Step-by-step explanation:

Zappos provides value to customers predominantly by offering the best selection of shoes and the best service to online shoppers. This business model focuses on variety and customer service, which might come with a higher cost per unit due to the diversity of products offered. However, the benefit of this approach is that it caters to individual customer preferences and provides a wide range of choices.

Efficiency often leads to lower unit costs because it can capitalize on economies of scale, which is the case with the production model mentioned for giant retailers. Organizations may choose to focus on efficiency over variety when aiming to minimize costs and maximize production output. However, too much efficiency at the expense of variety can lead to dissatisfaction among customers seeking specific features or styles.

The idea of bundling services also comes into play with firms offering multiple products or services at a better price, giving customers value through a combined offering. This can be an effective strategy for companies that wish to sell additional services and for consumers who are looking to attain a better deal on a set of related products.

Answer 2

Zappos provides value to its customers by c) offering the best selection of shoes and the best service to online shoppers (Option C).

Step-by-step explanation:

Zappos values providing a wide selection of shoes and excellent service, reflecting a preference for variety over efficiency in their business model, balancing consumer preferences for diverse stylistic and functional needs. This focus on variety as opposed to efficiency plays into the larger discussion of the opportunity cost of variety in products. While production efficiency, like the model used by Amazon, can reduce costs, it may not satisfy all consumer needs - which may include a diverse selection tailored to a myriad of occasions, styles, and functions.

The historical shift in shoe production from individual craftsmanship to the putting-out system, where tasks were divided among different groups to standardize parts like shoe soles and uppers, demonstrates a movement towards efficiency. However, this may have reduced the variety of shoes available, while modern retailers like Zappos have brought back a focus on variety by providing a vast selection alongside excellent customer service. Firms today, including large ones like Amazon and small local businesses, must balance the trade-offs between efficiency and variety, considering their cost structures and what they choose to offer in terms of products, services, and pricing.

When it comes to footwear, considerations such as comfort, fit, and suitability to the occasion are paramount. Products like high heels, which may be stylish, aren't always practical or comfortable for prolonged wear. This illustrates the complexity of balancing consumer preferences when discussing the right amount of variety in a market.

Thus, the correct option is C.