Deck 16: Retailing and Direct Marketing

Question 1

In the case of convenience stores, customers usually compare prices, assortments, and quality levels at competing outlets before making purchase decisions.

Answer 1

False

Question 2

Retailers must consider the overall profitability of each product line and product category to develop a successful merchandise mix.

Answer 2

True

Question 3

Chain stores usually obtain merchandise at lower prices from manufacturers compared to their independent rivals.

Answer 3

True

Question 4

The term "atmospherics" exclusively refers to the interior décor of a store.

Question 5

Other things being equal, stores with a higher inventory turnover rate can cover their costs and earn a profit while charging a smaller markup.

Question 6

The main factors involved in determining a product's markup are the inventory turnover rate and the services performed by the retailer.

Question 7

Convenience retail stores attract consumers by providing easy access, extended store hours, and adequate parking facilities.

Question 8

General merchandise retailers distinguish themselves from specialty and limited-line retailers by the large number of product lines they carry.

Question 9

If merchandise selection changes frequently to follow fashion trends, advertising is typically used to promote current styles effectively.

Question 10

The pricing strategies seldom influence consumer perceptions of a retailer.

Question 11

A full-service retailer usually sells convenience products that people can purchase without any assistance.

Question 12

Macy's is a retail store that focuses on fashion-oriented merchandise, backed by a complete array of customer services. It can be considered as a self-service store.

Question 13

Nordstrom carefully combines defined product lines and services in an attempt to convince consumers to expend considerable effort shopping at their stores. Nordstrom can be regarded as a specialty retailer.

Question 14

A local food store can be regarded as a convenience retailer.

Question 15

Chain stores are groups of retail outlets that operate under central ownership and management and handle the same product lines.

Question 16

A retailer's merchandising strategy guides decisions regarding the items it will offer.

Question 17

The level of competition for business in the market is an important criterion considered by retailers while selecting the target market.

Question 18

Many consumers shop for reasons other than just purchasing needed products.

Question 19

Specialty retailers typically attract customers by offering the products at the lowest possible prices.

Question 20

Other things being equal, stores that offer more services charge smaller markups to cover their costs.

Question 21

_____ represent the distribution channel to most consumers because of their direct contact with the ultimate consumers.

A) Wholesalers
B) Retailers
C) Manufacturers
D) Selling agents

Question 22

LensCrafters focuses on fashion-oriented merchandise, backed by a complete array of customer services. Hence, LensCrafters can be regarded as a:

A) self-selection retailer.
B) full-service retailer.
C) self-service retailer.
D) partial-assistance retailer.

Question 23

Retailers, when classified on the basis of form of ownership, are grouped as:

A) wholesalers and service providers.
B) convenience, shopping, and specialty retailers.
C) chain stores and independent retailers.
D) limited-line and general merchandise retailers.

Question 24

Which of the following statements is most likely to be true about a convenience retailer?

A) It offers huge selections and low prices in single product lines.
B) It appeals to customers by having an accessible location, rapid checkout, extended store hours, and adequate parking.
C) It combines carefully defined product lines, services, and reputations in attempts to persuade consumers to expend considerable effort to shop at their stores.
D) It offers a complete array of services to its customers.

Question 25

A retail establishment that carries a wide variety of product lines, stocking all of them in some depth is referred to as a _____.

A) rack jobber
B) category killer
C) specialty store
D) general merchandise retailer

Question 26

_____ refers to the amount a retailer adds to the cost of a product to determine its selling price.

A) Allowance
B) Discount
C) Rebate
D) Markup

Question 27

Vending machines are an example of:

A) automatic merchandising.
B) Internet retailing.
C) telemarketing.
D) direct selling.

Question 28

General product categories, specific product lines, specific products within lines, and the depth and width of its assortment are factors considered by retailers while developing their:

A) product liability strategy.
B) interactive marketing policy.
C) customer service program.
D) merchandising strategy.

Question 29

Fitness Zone is a gym that offers its customers a chance to buy health drinks through a vending machine. This type of service is called automatic merchandising.

Question 30

Vending machines are classified as a form of automatic merchandising.

Question 31

Which of the following terms refers to the combination of physical characteristics and amenities that contribute to a store's image?

A) Atmospherics
B) Simulation
C) Tableaux
D) Logistics

Question 32

Through direct selling, manufacturers completely bypass retailers and wholesalers and set up their own channels to sell their products directly to consumers.

Question 33

Which of the following is an example of a specialty store?

A) A discount house
B) A hypermarket
C) A men's shoe store
D) An off-price retailer

Question 34

The response rates for direct-mail marketing are measurable and higher compared to other types of advertising.

Question 35

How do retailers develop a marketing strategy?

Question 36

_____ are groups of retail outlets that operate under central ownership and management and handle the same product lines.

A) Specialty stores
B) Chain stores
C) Variety stores
D) Department stores

Question 37

A store's exterior appearance, including architectural design, window displays, signs, and entryways:

A) exerts no influence on the retailer's image.
B) exerts a major influence on the pricing of the goods sold by the store.
C) helps identify the retailer and attract its target market.
D) indicates the range and assortment of product lines it offers.

Question 38

Which of the following is one of the fundamental steps in the marketing strategy process on which a retailer bases its key decisions?

A) Selecting a target market
B) Stipulating a minimum profit margin
C) Determining the store location and atmosphere
D) Determining the method of inventory management

Question 39

How do retailers select target markets?

Question 40

What is retailing? Why is retailing an essential part of the marketing channel?

Question 41

How are retailers classified on the basis of form of ownership? Explain the advantages of each type of ownership.

Question 42

Discuss the different types of direct marketing.

Question 43

​Developing a customer service strategy for your sporting goods store, you know that services can add value to the shopping experience. Your business partner agrees, but makes a comment that shows he doesn't really understand this type of strategy. Identify his comment.

A) ​At this point, we should agree to offer gift wrapping.
B) ​At this point, we should specify our return privileges.
C) ​At this point, we should agree to provide home delivery.
D) ​We don't need to decide whether to charge customers for gift wrapping.
E) ​Our basic objective is to attract and retain customers.

Question 44

Technology and e-commerce have not had an impact on retailers.

Question 45

Explain how store atmospherics help retailers to attract customers.

Question 46

Discuss the pricing strategies used by retailers to attract consumers.

Question 47

Which elements of retail strategy would be most important for a company that has just decided to construct a brick-and-mortar storefront?

A) Location and customer service
B) Store atmospherics and customer service
C) Promotion and store atmospherics
D) Location and store atmospherics
E) Promotion and customer service

Question 48

You are in the process of starting your own business, a specialty cupcake store. From your study of marketing, you realize that many of your business decisions, such as where to open the store and how to advertise it, will depend on the segment of the population you want to attract as customers for your product. You start looking at data about the types of stores in different parts of the town and the demographics of the individuals in different neighborhoods. What are you doing in this process?

A) Engaging in category management
B) Creating a promotional strategy
C) Selecting a target market
D) Analyzing the wheel of retailing
E) Marketing to the environment

Question 49

You are worried about adding too high a markup to the watches you sell at your jewelry store. To reduce this markup and still cover costs, you will focus on:

A) increasing inventory turnover rate.
B) decreasing inventory turnover rate.
C) reducing the number of retail services you perform.
D) increasing the number of retail services you perform.
E) carefully judging the price that consumers are willing to pay for your jewelry.

Question 50

Fastenal was one of the first business-to-business suppliers to offer vending machines or kiosks in manufacturing facilities to enable their customers' employees to "purchase" supplies such as gloves and safety equipment including goggles, ear protection, and masks. This innovation enabled the customers to track their purchases and hold employees accountable for using supplies. This is an example of:

A) automatic merchandising.
B) telemarketing.
C) direct-response retailing.
D) direct mail.

Question 51

What is online retailing? How has the Internet enhanced the functions of the direct marketers?

Question 52

In selecting the target market for your gourmet tea store, you were influenced by multiple factors. These included:

A) the number of people who appreciate and will go out of their way to buy gourmet tea.
B) how much profit you can make by selling to gourmet tea enthusiasts.
C) how stiff the competition will be from other tea merchants or sellers of substitute products.
D) FDA standards for tea safety.
E) All of the above.

Question 53

The combination of the retailing mix -- merchandise strategy, customer service standards, pricing guidelines, target market analysis, promotion goals, location/distribution decisions, and store atmosphere -- creates a retailer's ________.

A) image
B) brand
C) competitive position
D) differential advantage

Question 54

The largest retailers in the United States are significant because:

A) of their revenue and the number of stores they have.
B) of the resources spent on e-commerce and online retailing.
C) they are global companies with locations in foreign countries.
D) they have all been in business for over 30 years.

Question 55

Which of the following statements about retailing in the United States are true?

A) Consumers make more than half of their purchases online.
B) The largest retailers also have the largest e-commerce presence.
C) Shoppers browse and compare products online but make most purchases in brick-and-mortar locations.
D) The number of consumers that shop online is expected to grow each year.

Question 56

The retail industry has a significant impact on the U.S.economy, accounting for 16% of the U.S. GDP.

Question 57

How are retailers classified on the basis of services provided? Give an example for each group.

Question 58

Casey's General Store is a popular ______-type retailer offering gasoline, snacks, extended store hours, and rapid checkout service.​

A) ​convenience
B) ​grocery
C) ​discount
D) ​specialty

Question 59

The new CEO of a struggling cell phone service provider is trying to revitalize the company by revamping its business strategy. The CEO surveys the current service provider market and sees that there are a few large companies with similar business models: customers are required to choose from a limited number of plans, and are then locked into those plans for at least two years by contract. In order to even enter into a contract with the service provider, the customer must have proof of a steady income and be able to pass a credit check. The CEO sees that many individuals in the 15 to 24-year-old age bracket cannot meet these standards and are not being served by the larger companies. She decides to make her company unique by offering no-contract, pay-as-you-go cell phone service. Customers do not need to pass a credit check or provide proof of income in order to sign up for service, and can discontinue service at any time. ​
According to this scenario and your knowledge of marketing strategies, which statement best explains the new CEO's actions?

A) The CEO felt sorry for people with bad credit because other cell phone companies were not meeting their needs, so she decided to create a company that did.
B) The CEO decided to create a unique business plan even though it would not meet the needs of the majority of the population, just so that her company would stand out.
C) The CEO created a business plan that would target the low-income market, knowing she could take advantage of the fact that other companies require proof of income.
D) The CEO wanted to make an alternative cell phone service available for indecisive people who disliked the contracts and plan choices required by other companies.
E) The CEO realized that the youth segment of the market was not being served and decided to fill that niche in the business by creating a business plan that targeted it.

Question 60

David is recently divorced and his ex-wife took most of their kitchen equipment when she relocated. He's decided to host a Pampered Chef party and invite friends who enjoy cooking. He knows that they will enjoy sampling various dips and dishes and will likely buy an item or two. He can purchase Pampered Chef items at a discount and may even earn free items as a benefit of hosting the party. Pampered Chef is classified as a(n):

A) direct sales retailer.
B) mass merchandiser.
C) specialty retailer.
D) retail cooperative.

Question 61

The best definition for retailing is:

A) determining which items will be offered for sale in a store.
B) deciding store atmospherics, store hours, and product selections for brick-and-mortar stores.
C) the activities involved in selling merchandise to consumers.
D) the distribution of goods from manufacturers to stores.

Question 62

Target utilizes television and print advertisements as well as weekly circulars in Sunday newspapers as part of its ______ strategy.

A) customer service
B) merchandising
C) promotional
D) location/distribution

Question 63

Retail experts often cite _____ as a potential determining factor in the success or failure of a retail business.

A) selection
B) location
C) price
D) atmospherics

Question 64

In selected stores in California, Nike offers free pants hemming, bra fittings, and running analysis for its customers. This is an example of:

A) merchandising strategy.
B) store atmospherics.
C) customer service strategy.
D) promotional strategy.

Question 65

Shoppers looking for shoes at T.J.Maxx expect to pay less than they would if they were shopping in the shoe department at Macy's. This is an example of the different ______ that retailers have.

A) pricing strategies
B) promotional strategies
C) merchandising strategies
D) customer service strategies

Question 66

One consideration of a retailer's ______ strategy is that it must consider the preferences and needs of its previously defined target market.

A) location/distribution
B) merchandising
C) pricing
D) customer service

Question 67

Historically, customers visited brick-and-mortar locations to:

A) purchase products they had researched and compared online.
B) pick up products that had been ordered online and shipped to the store.
C) compare prices in order to shop online.
D) browse and compare products and make purchases.

Question 68

REI stores feature climbing walls, mountain bike test tracks, and Gore-Tex rain rooms for trying out Gore-Tex rainwear. These features are part of REI's:

A) store atmospherics.
B) merchandising strategy.
C) customer service strategy.
D) promotional strategy.

Question 69

When determining a customer service strategy, retailers must decide whether or not they will charge customers for the services they offer.

Question 70

It is imperative for the components of retailing strategy to work together in order to create a consistent image that appeals to the retailer's target market.

Question 71

Some grocery stores, like Wegmans and Fred Meyer, now offer pickup and even delivery of groceries to your home. The grocery stores typically charge a small fee for this service. This reflects the _____ component of retail strategy.

A) pricing
B) location/distribution
C) merchandising
D) customer service

Question 72

When a retailer decides to offer gift wrapping, product assembly, and registries, they are considering the elements of their:

A) merchandising strategy.
B) customer service strategy.
C) promotional strategy.
D) pricing strategy.

Question 73

How have retailers responded to technology changing the way consumers shop?

A) By adding mobile apps to replace their physical locations.
B) By replacing check out lines with self-service kiosks.
C) By adding e-commerce sites to complement their brick-and-mortar locations.
D) By adding computers throughout retail locations to provide product information.

Question 74

Babies R Us sells a deep assortment of baby-related items including furniture, car seats, and clothing. Target also sells baby related items but also offers groceries, home goods, and beauty items. Expectant mothers may appreciate the ability to purchase a variety of items from Target while they also shop for their baby needs. This is an example of:

A) merchandising strategy.
B) customer service strategy.
C) store atmospherics.
D) promotional strategy.

Question 75

Retailers can project their personalities through their ______.

A) pricing strategy
B) customer service strategy
C) atmospherics
D) merchandising strategy

Question 76

For retailers, the decision on where to locate a store usually depends on just one or two factors.

Question 77

A retailer seeks to communicate information about its stores through its ______ strategy.

A) merchandising
B) location/distribution
C) promotional
D) store atmospherics

Question 78

Retailers often influence consumers' images of products because:

A) consumers do not pay attention to manufacturer advertisements.
B) consumers have little contact with manufacturers and wholesaling intermediaries.
C) retailers determine locations, store layouts, merchandise selections, and return policies.
D) retailers play an important role in determining what products manufacturers produce and sell.

Question 79

Frequent buyer rewards programs help retailers attract shoppers and build customer loyalty, which is part of their:

A) promotional strategy.
B) customer service strategy.
C) merchandising strategy.
D) store atmospherics strategy.

Question 80

Home Depot hardware stores sell a wide variety of home improvement items including lumber, tools, and appliances, while smaller hardware store, Ace, focuses on just a few brands in each category and does not sell appliances. Although both are hardware stores, Ace and Home Depot differ on their:

A) merchandising strategy.
B) customer service strategy.
C) promotional strategy.
D) location/distribution strategy.