Deck 14: Retailing

Question 1

Which statement describes department stores such as JCPenney and Macy's?

A) All departments-such as shoes,children's clothing,electronics,housewares,etc.-operate collectively as a single profit center,but policies about pricing and the types of merchandise carried are set at the individual departmental level.
B) All the departments-such as shoes,children's clothing,electronics,housewares,etc.-operate collectively as a single profit center,and the central management sets policies about pricing and the types of merchandise carried.
C) Each department acts as a separate profit center,setting its own policies about pricing and the types of merchandise carried.
D) Each department acts as a separate profit center,but the central management sets policies about pricing and the types of merchandise carried.

Answer 1

B

Question 2

Henry runs Moonlight Café,a world-renowned,fast-food restaurant,in his locality.He started the restaurant after getting a license from Moonlight Café and by regularly paying a fee for the right to use its brand name,products,and methods of operation.Henry most likely operates a(n)_____.

A) independent retail store
B) warehouse club
C) chain store
D) franchise

Answer 2

D

Question 3

A large discount store that specializes in a single line of merchandise and becomes the dominant retailer in its category is called a ______.

A) superstore
B) category killer
C) warehouse club
D) factory outlet

Answer 3

B

Question 4

Off-price retailers sell their goods at prices 25 percent or more below traditional department store prices.What makes such a policy viable?

A) They offer only volume discounts in exchange for a periodic membership fee.
B) They specialize in a single line of merchandise and are the dominant retailer in their category.
C) They pay cash for its stock and usually doesn't ask for return privileges.
D) They resell items purchased from one of the other types of retailers.

Question 5

Which of the following represents all activities directly related to the sale of goods and services to the ultimate consumer for personal,nonbusiness use?

A) Product development
B) Production
C) Retailing
D) Manufacturing

Question 6

Which of the following represents the thinking behind off-price retailers?

A) They sell items from a full-line discount stock to customers who are drawn in primarily by the food on sale.
B) They sell overruns,irregular merchandise,and/or overstocks purchased from manufacturers at or below cost.
C) They turn customers into suppliers by buying back pre-owned items from customers and reselling to different customers.
D) They offer a nearly complete selection of merchandise within a single category and use self-service,discount prices,high volume,and high turnover to their advantage.

Question 7

Which of the following is true of the current retail industry?

A) About one in every ten American jobs is in the retail industry.
B) Most current retail employees are dissatisfied with their jobs.
C) Most retail businesses employ less than 50 people.
D) The industry is dominated by many large companies.

Question 8

Which of the following represents the thinking behind supercenters?

A) They offer a nearly complete selection of merchandise within a single category and use self-service,discount prices,high volume,and high turnover to their advantage.
B) They sell overruns,irregular merchandise,and/or overstocks purchased from manufacturers at or below cost.
C) They sell items from a full-line discount stock to customers who are drawn in primarily by the food on sale.
D) They specialize in a single line of merchandise and become the dominant retailer in its category.

Question 9

Which of the following sells bulk quantities of merchandise to customers at volume discount prices in exchange for a periodic membership fee?

A) Full-line discount store
B) Specialty discount store
C) Factory outlet
D) Warehouse club

Question 10

Which of the following is a similarity between factory outlets and off-price retailers?

A) Both sell at prices well below traditional department store prices.
B) Both offer high levels of customized service to customers.
C) Both follow an agile approach to inventory.
D) Both carry multiple product lines that are considerably deep.

Question 11

Gross margin is how much the retailer makes as a percentage of ______.

A) profit after the discount on the goods sold is subtracted
B) sales after the cost of the goods sold is subtracted
C) sales after the discount on the goods sold is added
D) the cost of all goods after the profit is subtracted

Question 12

Both Goodwill stores and thredUP ______.

A) are online used goods retailers
B) are brick-and-mortar used goods retailers
C) turn customers into suppliers
D) turn suppliers into customers

Question 13

A(n)_____ is a retail business where the operator is granted a license to operate and sell a product under the brand name of a larger supporting organizational structure.

A) chain store
B) independent retail store
C) franchise
D) factory outlet

Question 14

Which of the following is a similarity between specialty stores and restaurants?

A) Both have low gross margins.
B) Both have narrow product assortment.
C) Both offer high levels of service.
D) Both have low prices.

Question 15

A _____ is the originator of a trade name,product,methods of operation,and the like that grants operating rights to another party to sell its product.

A) broker
B) franchisor
C) consumer
D) wholesaler

Question 16

Which type of retailer generally has a medium-to-broad product assortment,while the others typically have a broad product assortment?

A) Department stores
B) Warehouse clubs
C) Supermarkets
D) Full-line discount stores

Question 17

Which of the following is always true of a factory outlet?

A) It works quite unlike an off-price retailer.
B) It is owned and operated by a manufacturer.
C) It stocks and sells a wide variety of merchandise.
D) It is the dominant retailer in its category.

Question 18

Which of the following is a miniature supermarket,carrying only a limited line of high-turnover goods?

A) Specialty discount store
B) Warehouse club
C) Department store
D) Convenience store

Question 19

Which of the following represents the thinking behind used goods retailers?

A) They sell items from a full-line discount stock to customers who are drawn in primarily by the food on sale.
B) They sell overruns,irregular merchandise,and/or overstocks purchased from manufacturers at or below cost.
C) They offer a nearly complete selection of merchandise within a single category and use self-service,discount prices,high volume,and high turnover to their advantage.
D) They turn customers into suppliers by buying back pre-owned items from customers and reselling to different customers.

Question 20

Full-line discounters typically carry ______.

A) narrow assortments of merchandise that are shallow
B) narrow assortments of merchandise that are deep
C) wide assortments of merchandise that are shallow
D) wide assortments of merchandise that are deep

Question 21

Which of the following allows direct mailers from a manufacturing company to pick out (based on data analytics of census data,lifestyle patterns,financial information,and past purchase and credit history)those most likely to buy its products?

A) Automatic vending
B) Direct retailing
C) Microtargeting
D) Telemarketing

Question 22

The Hunt,a liquor store,is famous for its unique and extensive collection of alcoholic beverages.Its employees possess up-to-date knowledge of the liquor available in the store,which allows them to assist customers in their purchasing decisions.The Hunt is an example of a _____.

A) supermarket
B) specialty store
C) warehouse club
D) convenience store

Question 23

Specialty stores such as Best Buy,Staples,and GameStop have the thinnest product assortments,usually carrying single or narrow product lines that are considerably deep.Specialty stores compete on the basis of low prices,high turnover,and high volume.

Question 24

Many drugstores also carry an extensive selection of cosmetics,health and beauty aids,seasonal merchandise,greeting cards,toys,and some non-refrigerated convenience foods.

Question 25

A _____ is a discount store that carries a vast depth and breadth of product within a single product category.

A) supercenter
B) specialty discount store
C) warehouse club
D) full-line discount store

Question 26

Microtargeting is an effective tool for online retailing.

Question 27

Among department stores,specialty stores,drugstores,and convenience stores,the gross margin is highest for specialty stores.

Question 28

_____ is a form of nonstore retailing that uses machines to sell its goods.

A) Direct retailing
B) Telemarketing
C) Automatic vending
D) E-tailing

Question 29

In a franchise,a franchisor pays a franchisee for the right to use its name,product,and methods of operation.

Question 30

Unlike supermarkets,convenience stores:

A) charge lower prices.
B) carry a much more limited line of high-turnover convenience goods.
C) enable customers to shop without visiting a physical store location.
D) offer no service to customers.

Question 31

Social networking sites such as Facebook,Instagram,and Twitter enable users to immediately purchase items recommended by their social connections,a phenomenon known as ______.

A) e-tailing
B) sharing economy
C) microtargeting
D) social shopping

Question 32

In-store retailing adds a level of convenience for customers who wish to shop from their current locations.

Question 33

With fewer loyal customers and a low customer penetration,the shop-at-home industry has shrunk over the years.

Question 34

Delta Graphics Inc.specializes in publishing educational books.It recruits and trains college students to sell its products door-to-door.Which of the following forms of nonstore retailing is illustrated in this scenario?

A) Direct retailing
B) Telemarketing
C) Automatic vending
D) E-tailing

Question 35

Berkley's Nooks are a self-service chain of service stations with stores that are located near residential areas.They are open long hours and offer fast service in exchange for charging premium prices.Their customers are beginning to demand more from them,such as higher quality food and lower prices on staple items such as gasoline and milk.Which type of retailers are Berkley's Nooks?

A) Supermarket
B) Convenience store
C) Superstore
D) Specialty store

Question 36

Which of the following represents the thinking behind single-line specialty discount stores such as Foot Locker?

A) They offer a nearly complete selection of merchandise within a single product category and use self-service,discount prices,high volume,and high turnover to their advantage.
B) They sell items from a full-line discount stock to customers who are drawn in primarily by the food on sale.
C) They specialize in a single line of merchandise and become the dominant retailer in their category.
D) They sell overruns,irregular merchandise,and/or overstocks purchased from manufacturers at or below cost.

Question 37

Which of the following describes vending as a nonstore option?

A) Retailers generally avoid opportunities to sell via vending as it is too impersonal.
B) A downside of vending is that it is yet to integrate cashless payment into its systems.
C) Automatic vending can serve customers seeking luxury items such as champagne.
D) Its users are generally time strapped and live in rural or suburban areas.

Question 38

Around the world,most retailers are independent,with each owner operating a singular store within a local community.

Question 39

A restaurant has a narrow product assortment and its level of service,price,and gross margin all range between low and high.

Question 40

Unlike nonstore retailing,in-store retailing enables customers to shop without visiting a physical store location.

Question 41

The ways in which connected consumers exchange goods and services with each other through a digital marketplace,such as Craigslist,is called ______.

A) e-tailing
B) the sharing economy
C) microtargeting
D) social shopping

Question 42

Strategic retailing goals typically focus on:

A) reducing costs of goods sold.
B) increasing costs of goods sold.
C) reducing return on assets or equity.
D) not using a retailing mix.

Question 43

At the store level,one goal of tactical retailing is to:

A) eliminate the need for segmenting a market.
B) increase the sales of a specific item.
C) increase overhead costs.
D) eliminate the need for new advertising campaigns.

Question 44

Which of the following is a case of brand cannibalization?

A) A tea manufacturer introduces a new brand of tea that eats into the sales of an existing brand of another manufacturer.
B) A tea manufacturer introduces a new but inferior brand of tea to promote the sales of an existing tea brand in its product mix.
C) A tea manufacturer introduces a new brand of tea that eats into the sales of an existing tea brand in its product mix.
D) A tea manufacturer introduces a new brand of tea that has the unintended result of promoting the sales of an existing brand of another manufacturer.

Question 45

The retailing mix consists of six Ps: the four Ps of the marketing mix (product,promotion,place,and price)plus ______.

A) presentation and personnel
B) population and personnel
C) presentation and preference
D) population and purpose

Question 46

Floor stock refers to the inventory held in reserve for potential future sale in a retailer's storeroom or stockroom.

Question 47

Which methodology does Walmart use to determine where in the store to stock products for customer convenience (for example,placing Kleenex tissues in the paper-goods aisle and also beside cold medicines)?

A) Shopper marketing
B) Shopper analytics
C) Big data analysis
D) Market-basket analysis

Question 48

Lily's Apparel,a renowned apparel store,focuses on Generation Y customers and provides them with a customized clothing experience.Lily's Apparel has defined its target market by _____.

A) religious convictions
B) educational qualifications
C) geographic boundaries
D) psychographic characteristics

Question 49

Which of the following is a difference between off-price retailers and specialty shops?

A) Off-price retailers keep a greater amount of floor stock,whereas specialty shops keep a lower amount of floor stock.
B) Off-price retailers charge customers higher prices,whereas specialty shops charge customers lower prices.
C) Off-price retailers focus on lean inventory management,whereas specialty shops have an agile approach to inventory.
D) Off-price retailers focus on providing high-quality customer service,whereas specialty shops de-emphasize customer service.

Question 50

One risk of executing a store promotion that results in brand cannibalization is that the promotion could ______.

A) create inaccurate sales forecasts for both the promoted and cannibalized products.
B) create inaccurate sales forecasts for the promoted product and none for the cannibalized products.
C) increase the accuracy of the sales forecasts for both the promoted and cannibalized products.
D) create accurate sales forecasts for the promoted product and none for the cannibalized products.

Question 51

In addition to making shopping easy and convenient for the customer,an effective layout:

A) heightens the olfactory sense of the customers.
B) provides customers with the ability to easily replace sold items.
C) can persuade customers to purchase expensive products.
D) has a powerful influence on traffic patterns and purchasing behavior.

Question 52

Unlike off-price retailers,specialty shops:

A) adopt an operating model that implies low prices for customers.
B) focus on lean inventory management.
C) can accommodate a broader range of customer demands.
D) de-emphasize customer service and product selection.

Question 53

Providing great customer service is one of the most challenging elements in the retail mix because:

A) customer relations do not increase brand value.
B) customers are indifferent to service quality.
C) customer expectations for service vary greatly.
D) customers do not trust retail salespeople.

Question 54

_____ is the technique used to sift through the data collected by point-of-purchase scanning equipment.

A) Big data analysis
B) Shopper marketing
C) Market-basket analysis
D) Shopper analytics

Question 55

Which factor is considered the most critical in determining where customers choose to shop?

A) Store/website design
B) Display
C) Merchandise selection
D) Service

Question 56

TJ Maxx,a discount apparel and home decor store,recently added an online retail option.It cautiously promoted this online shopping outlet because the company was concerned that online shopping might decrease in-store sales.TJ Maxx wanted to minimize ______.

A) microtargeting
B) brand cannibalization
C) retail mixing
D) retail channel omnification

Question 57

The first element in the retailing mix is the _____.

A) retail promotion
B) product offering
C) retail location
D) product pricing

Question 58

According to research,how does a customer typically view a product that is out of stock?

A) Customers view stockouts as an indication of the store's poor management of inventory.
B) The stockout will lead the customer to buy an item that is similar to the out-of-stock item.
C) Customers who cannot buy the out-of-stock item will not buy an item similar to that item.
D) The tendency to buy an out-of-stock item decreases with every subsequent stockout.

Question 59

How would brand cannibalization resulting from a product promotion likely affect the retailer?

A) The promotion works out cheaper for the retailer.
B) The promotion causes the brand to suffer stockouts.
C) The promotion creates accurate sales forecasts for the cannibalized product.
D) The retailer gains from discounting surplus inventory of the cannibalized brand.

Question 60

_____ is a selling technique that seeks to broaden customers' original purchases with related items.

A) Suggestion selling
B) Co-marketing
C) Shopper marketing
D) Benefit selling

Question 61

Which of the following is true of freestanding retail store units?

A) Retailers decide to relocate their businesses in pedestrian malls.
B) Retailers feel outlets generally stand out better in huge shopping centers and malls.
C) These account for more than half of all retail store construction in the United States.
D) These are a bad idea for an aggressive expansion plan in an area without shopping centers.

Question 62

Determining a target market is optional while creating the retailing mix.

Question 63

How can firms that provide services,such as hair salons and financial services,improve delivery of their services?

A) By implementing a no-return policy after sale
B) By maximizing wait times for customers
C) By increasing the costs of services provided
D) By choosing the right distribution channel

Question 64

Salespeople should practice trading-up techniques,whether customers need those products or not,to increase overall product sales.

Question 65

What is the selling technique of trading up?

A) It seeks to broaden customers' original purchases with related items available in the store.
B) It persuades customers to buy a higher-priced item than they originally intended to purchase.
C) It allows customers to shop by themselves as long as they can easily find what they need.
D) It focuses on the value of the product to the customer more than the cost of the product to the supplier.

Question 66

Which of the following is widely believed to be true of the audio and visual factors creating a store's atmosphere?

A) Red is used to open up closed-in places and create an air of elegance and cleanliness.
B) Natural lighting,either from windows or skylights,can lead to increased sales.
C) Music played in a store cannot influence store traffic or the shopper's focus of attention.
D) The type of music played cannot influence a customer's choice of product.

Question 67

Suggestion selling by sales or service associates should always help shoppers recognize true needs rather than sell them unwanted merchandise.

Question 68

Which of the following is true of regional malls?

A) They are neither enclosed nor roofed to allow an open-air shopping experience.
B) They offer a much wider variety of merchandise and acres of free parking.
C) They have no decorative elements such as fountains,sculptures,and the like.
D) The anchor stores are all usually located near the entrance of the mall.

Question 69

Higher prices often indicate a level of exploitation that weakens the prestigious image of retailers.

Question 70

Which of the following is true of freestanding store locations?

A) They may have the advantages of low site cost or rent.
B) They may have many nearby competitors to contend with.
C) They may have the advantages of easy access to customers.
D) They may have the option to share costs with nearby retailers.

Question 71

Many retailers have found that natural lighting,either from windows or skylights,can lead to increased sales.

Question 72

Retailers can better acquire and use assets when they customize store layouts and merchandise mixes to the tastes of local consumer bases.

Question 73

Briefly explain the process of defining a target market.

Question 74

Toys"R"Us working with Macy's to open stores-within-a-store at numerous Macy's locations is an example of a smaller specialty line opening shop inside a larger store to expand the former's retail opportunities without risking investment in a separate store.

Question 75

Destination stores are very likely to be profitable even in isolated locations.

Question 76

Service quality is a priority in service industries because that industry is especially customer oriented.

Question 77

Retailing's ultimate goal is to sell products to consumers,and the right price is critical to ensure sales.Because retail prices are usually based on the cost of the merchandise,an essential part of pricing is efficient and timely buying.

Question 78

Redoubt Nation,a specialty store that sells adventure sports gears,employs one salesperson per customer.Each salesperson is required to influence customers to purchase items related to the products they have purchased.In this scenario,Redoubt Nation is using _____ as its marketing strategy.

A) low employee density
B) suggestion selling
C) merchandise type
D) trading up

Question 79

What is brand cannibalization? Why is it dangerous to the retailer in terms of sales,inventory,and promotion?

Question 80

Target markets in retailing are often defined by demographics,geographic boundaries,and psychographics.