Deck 14: Retailing, Direct Marketing, and Wholesaling

Question 1

Discuss some of the functions that full-service wholesalers provide. How do these differ from those that limited-service wholesalers provide?

Answer 1

Full-service wholesalers perform the widest possible range of wholesaling functions. Customers rely on them for product availability, suitable product assortments, breaking large shipments into smaller ones, financial assistance, and technical advice and service. Full-service wholesalers handle either consumer or business products and provide numerous marketing services to their customers. Although full-service wholesalers often earn higher gross margins than other wholesalers, their operating expenses are also higher because they perform a wider range of functions.
Limited-service wholesalers provide fewer marketing services than do full-service wholesalers and specialize in just a few functions. Producers perform the remaining functions or pass them on to customers or other intermediaries. Limited-service wholesalers take title to merchandise, but often do not deliver the merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers' future needs. Because they offer restricted services, limited service wholesalers charge lower rates and have smaller profit margins than do full-service wholesalers. Although limited-service wholesalers are less common than other types, they are important in the distribution of products like specialty foods, perishable items, construction materials, and coal. Limited-service wholesalers are categorized as cash-and-carry wholesalers, truck wholesalers, drop shippers, and mail-order wholesalers.

Question 2

Compare the services wholesalers provide for producers with the services they provide to retailers.

Answer 2

Wholesalers provide essential services to both producers and retailers. By initiating sales contacts with a producer and selling diverse products to retailers, wholesalers serve as an extension of producer's sales force. Wholesalers also provide financial assistance. They often pay for transporting goods, reduce a producer's warehousing expenses and inventory investment by holding goods in inventory, extend credit and assume losses from buyers who turn out to be poor credit risks, and can be a source of working capital when they buy a producer's output in cash. Wholesalers keep producers up-to-date on market developments and pass along manufacturers' promotional plans to other intermediaries. Using wholesalers gives producers a distinct advantage because the specialized services wholesalers perform allow producers to concentrate on developing and manufacturing products that match customers' needs and wants.
Wholesalers support retailers by assisting with marketing strategy, especially the distribution component. Wholesalers also help retailers select inventory. They are often specialists on market conditions and experts at negotiating final purchases. Effective wholesalers can reduce a retailer's burden of looking for and coordinating supply sources. Independent wholesalers always have a wide range of products available. Thus, through partnerships, wholesalers and retailers can forge successful relationships for the benefit of customers.

Question 3

Taylor works for a company that buys snacks such as chips, cookies, and candy in bulk from manufacturers. Taylor's company then repackages them and sells them to vending companies who have vending machines at government institutions. Taylor most likely works for a(an) ___, while the vending machine company is a(an) _____.

A) Wholesaler; retailer
B) Wholesaler; broker
C) Broker; retailer
D) Broker; agent
E) Agent; retailer

Answer 3

A

Question 4

Retailing is best characterized as

A) large organizations that carry wide and deep product mixes.
B) transactions in which the buyer intends to consume the product through personal, family, or household use.
C) arrangements whereby a supplier grants a dealer the right to sell its products.
D) transactions in which the purchaser intends to use the product for resale or for business operations.
E) exchanges that take place only in a store or service establishment.

Question 5

Walmart, Macy's, Nordstrom's, and Toys "R" Us are examples of

A) manufacturers.
B) merchant wholesalers.
C) end-users.
D) agents.
E) retailers.

Question 6

Direct selling, direct marketing, and vending machines are all examples of

A) producing.
B) advertising.
C) promoting.
D) retailing.
E) wholesaling.

Question 7

What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?

Question 8

Discuss the role of merchant wholesalers. When is a producer most likely to use them?

Question 9

Why is a store's location one of the most important strategic retailing decisions?

Question 10

What role does wholesaling play in the marketing channel? Is this role necessary?

Question 11

What are the three types of nonstore retailing, and what are some examples of each?

Question 12

Discuss the advantages and disadvantages of catalog marketing.

Question 13

What is a store's image, and how does it affect retailing strategy decisions?

Question 14

Compare and contrast department stores and discount stores.

Question 15

Kate owns a refreshment-stand business at the community ballpark. She goes to a warehouse store like Sam's and purchases snacks and canned soda that she will sell at her refreshment stand. Kate is considered a(n)

A) wholesaler.
B) broker.
C) retailer.
D) intermediary.
E) agent.

Question 16

In what ways do retailers add value to products?

Question 17

What wholesaling activities do selling agents and brokers perform?

Question 18

What are the two categories of retail stores based on breadth of products offered, and what types of stores are in each category?

Question 19

Identify and describe three kinds of specialty stores.

Question 20

A retailer is an organization that purchases products for the purpose of reselling them to

A) other retail organizations.
B) the government.
C) ultimate consumers.
D) wholesalers.
E) nonprofit organizations.

Question 21

Which type of retail outlet can have up to 200,000 square feet?

A) Superstores
B) Supermarkets
C) Discount stores
D) Department stores
E) Category killers

Question 22

A small self-service store that is open long hours and carries a narrow product assortment in convenient locations is best described as a

A) discount store.
B) department store.
C) convenience store.
D) supermarket.
E) category killer.

Question 23

By locating in the same general vicinity as other car dealerships, Hartfield Honda can

A) facilitate comparison shopping.
B) create form utility.
C) facilitate wholesale exchanges.
D) create possession utility.
E) create exchange utility.

Question 24

Nordstrom, Macy's, and JCPenney are all considered

A) department stores.
B) discount stores.
C) off-price retailers.
D) specialty retailers.
E) category killers.

Question 25

A general-merchandise retailer offers

A) a single product line that is stocked in depth.
B) few product lines with deep assortments of these lines.
C) few choices of a large variety of product lines.
D) products through the Internet and catalogs only.
E) a variety of product lines that are stocked in depth.

Question 26

As discount stores improve their services and atmosphere as well as raise their prices, the distinction between discount stores and ____ is becoming blurred.

A) superstores
B) supermarkets
C) specialty stores
D) department stores
E) category killers

Question 27

Kroger, Safeway, and Publix are all considered

A) superstores.
B) groceries.
C) department stores.
D) supermarkets.
E) food stores.

Question 28

Jack gets a shopping list from his wife. On the list are a potted plant, fresh salmon, vitamins, bread, milk, and a birthday cake. To make just one stop to save time, Jack should go to a(n)

A) convenience store.
B) category killer.
C) specialty store.
D) specialty retailer.
E) supermarket.

Question 29

Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume?

A) Department stores
B) Traditional specialty retailers
C) Warehouse showrooms
D) Direct marketers
E) Discount stores

Question 30

A large retailer selling food and most routinely purchased consumer products is a

A) hypermarket.
B) supermarket.
C) discount store.
D) Warehouse club.
E) Superstore.

Question 31

Self-service, general merchandise stores such as Kmart are known as

A) discount stores.
B) warehouse showrooms.
C) catalog showrooms.
D) superstores.
E) specialty retailers.

Question 32

Supermarkets, discount stores, and hypermarkets can all be classified as

A) superstores.
B) general merchandise retailers.
C) department stores.
D) specialty retailers.
E) off-price retailers.

Question 33

Cash and Carry is a store that carries food, clothing, and household goods at lower price margins than other nearby stores. There is little service provided and customers have to bag their own purchases. Cash and Carry is most likely an example of a(an)_

A) department store.
B) category killer.
C) discount store.
D) supermarket.
E) warehouse showroom.

Question 34

Laura goes to Walmart and buys some clothing, a DVD, and all the groceries she needs for her family. What type of retailer is this particular Walmart?

A) Supermarket
B) Superstore
C) Hypermarket
D) Discount store
E) Department store

Question 35

Compared with other types of retailers, department stores compete mainly on the basis of

A) customer services.
B) low prices.
C) a very deep assortment of a few specific products.
D) high sales volume.
E) catalog sales.

Question 36

Ollies' is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Ollies' is an example of a

A) department store.
B) discount store.
C) warehouse showroom.
D) specialty store.
E) superstore.

Question 37

If a store has areas for men's apparel, women's apparel, housewares, cosmetics, and jewelry and competes mostly on the basis of service, it is most likely a(n)

A) niche retailer.
B) department store.
C) specialty retailer.
D) superstore.
E) category killer.

Question 38

Aidan is getting ready to move to campus for his freshman year of college. To get the products he needs for his dorm room, he goes to a store that sells household goods such as plastic containers, sheets, and towels. The store also sells items such as shampoo, deodorant, and toothpaste. Aidan has most likely gone to a(n)

A) discount stores.
B) superstores.
C) supermarkets.
D) department stores.
E) warehouse clubs.

Question 39

Which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their ice boxes?

A) Supermarkets
B) Convenience stores
C) Discount stores
D) Department stores
E) Specialty stores

Question 40

What is the primary distinction between superstores and hypermarkets?

A) Superstores offer a wider variety of products than hypermarkets.
B) Superstores offer low prices while hypermarkets have moderate to high prices.
C) Hypermarkets have fewer departments but deeper product lines than superstores.
D) Hypermarkets are larger and have more types of products than superstores.
E) These two types of retailers carry very different types of products.

Question 41

Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal services are called

A) catalog showrooms.
B) category killers.
C) warehouse showrooms.
D) warehouse clubs.
E) display outlets.

Question 42

Which of the following is not a common feature of a warehouse club?

A) Concrete floors
B) Wide aisles
C) Good customer service
D) Large packages
E) Low price per unit

Question 43

Stores that are in a manufacturers' outlet mall, such as Ralph Lauren, Tommy Hilfiger, Clarks' Shoes, and Samsonite Luggage are most appropriately classified as a(n)

A) discounter.
B) specialty retailer.
C) off-price retailer.
D) category killer.
E) department store.

Question 44

Sam's and Costco are examples of

A) discounters.
B) warehouse clubs.
C) warehouse showrooms.
D) discount clubs.
E) wholesalers.

Question 45

A store that offers a wide variety of shoes for men, women, and children would most likely be considered a(n)

A) department store.
B) specialty retailer.
C) category killer.
D) off-price retailer.
E) warehouse showroom.

Question 46

Levitz Furniture locates in huge, low-cost buildings, maintains large, on-premises inventories, and offers minimum service. Levitz is a

A) warehouse showroom.
B) catalog showroom.
C) superstore.
D) warehouse club.
E) department store.

Question 47

A narrow product mix with a deep product line would most likely be carried by

A) mass merchandisers.
B) supermarkets.
C) discount stores.
D) specialty retailers.
E) warehouse showrooms.

Question 48

Category killers compete primarily on the basis of

A) enormous product selection and sales expertise.
B) low prices and enormous product availability.
C) convenient locations and customer services.
D) rock-bottom prices and moderate selections.
E) one-stop shopping and product availability.

Question 49

Which of the following is a large-scale, members-only, retailer that combines cash-and-carry wholesaling with discount retailing?

A) Warehouse showroom
B) Warehouse club
C) Catalog showroom
D) Category killer
E) Hypermarket

Question 50

Which of the following is an example of a category killer?

A) JCPenney
B) Walmart
C) Marshalls
D) Sam's
E) Toys "R" Us

Question 51

After shopping in the same store for nearly two hours, Chelsea goes to Burger King for a Whopper, while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a

A) superstore.
B) hypermarket.
C) department store.
D) general merchandise retailer.
E) discount store.

Question 52

Matt's girlfriend tells him she wants a cashmere sweater for Christmas. Matt decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a ____ store.

A) department
B) catalog
C) discount
D) traditional specialty
E) convenience

Question 53

What type of retailers are the primary competitors for specialty retailers?

A) Discount stores
B) Category killers
C) Catalog marketers
D) Department stores
E) Superstores

Question 54

Off-price retailers feature

A) deep discounts, few customer services, and central checkouts.
B) sales expertise, wide selections, and low prices
C) overstocks, designer brands, and moderate prices.
D) a narrow product range and enormous product availability.
E) cash only sales and few customer services.

Question 55

Michael's, PetSmart, and Staples are all examples of

A) discount stores.
B) off-price retailers.
C) category killers.
D) traditional specialty retailers.
E) superstores.

Question 56

Off-price retailers and category killers are both

A) specialty retailers.
B) discount stores.
C) showrooms.
D) general merchandisers.
E) department stores.

Question 57

A(n) ____ is a very large specialty store that competes on the basis of lower prices and enormous product availability.

A) warehouse club
B) off-price retailer
C) category killer
D) traditional specialty store
E) super center

Question 58

Retailers that sell only to members and feature discount retailing combined with cash-and-carry wholesaling are called

A) hypermarkets.
B) retail groups.
C) warehouse showrooms.
D) discount stores.
E) warehouse clubs.

Question 59

Stores that buy manufacturers' seconds, overruns, returns, and off-season production runs at below wholesale prices. These firms resell this merchandise to consumers at deep discounts, and are called

A) category killers.
B) off-price retailers.
C) specialty retailers.
D) hypermarkets.
E) discount retailers.

Question 60

When off-price retailers obtain too much in-season, high-quality merchandise, tension between them and ____ builds.

A) discount stores
B) category killers
C) specialty retailers
D) warehouse clubs
E) department stores

Question 61

An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually owned by national chains, is generally called a(n)

A) regional shopping center.
B) neighborhood shopping center.
C) community shopping center.
D) lifestyle shopping center.
E) outlet shopping center.

Question 62

Shopping centers include

A) neighborhood, regional, superregional, power, and strip malls.
B) community, rural, urban, and traditional business districts.
C) outlet, power, lifestyle, superregional, regional, neighborhood, and community.
D) outlet malls, lifestyle, strip malls, and shopping malls.
E) free-standing, convenience, traditional, and regional.

Question 63

Location is important to a retailer because

A) suppliers charge more to service stores in certain trading areas.
B) a desirable location appeals to consumers' emotions.
C) location is the major determinant of store image.
D) location determines the trading area from which the store must draw its customers.
E) convenient location is an essential customer service element.

Question 64

The type of retail location that is commonly being preserved and revitalized in many cities is the

A) traditional business district.
B) free-standing structure.
C) community shopping center.
D) neighborhood shopping center.
E) nontraditional shopping center.

Question 65

A shopping center that contains stores owned by manufacturers who make a special effort not to conflict with traditional retailers is a(n)

A) strip mall.
B) neighborhood shopping center.
C) off-price mall.
D) lifestyle shopping center.
E) outlet shopping center.

Question 66

In Cara's hometown, there is a mall with a small Sears store, a Macy's department store, a couple of fast food restaurants, a few specialty shops, and some convenience stores. The mall features seasonal sidewalks sales and boat shows. This mall is most likely a ____ shopping center.

A) neighborhood
B) national
C) regional
D) community
E) city

Question 67

In contrast to industrial products, consumer products are often purchased because of

A) economic planning.
B) necessity.
C) prior planning.
D) social influences.
E) rational needs.

Question 68

The target market of a regional shopping center typically includes at least ____ people.

A) 25,000
B) 50,000
C) 100,000
D) 150,000
E) 250,000

Question 69

Which of the following offers the widest product mixes and the deepest product lines?

A) Category killer
B) Outlet mall
C) Traditional business district
D) Community shopping center
E) Superregional shopping center

Question 70

A shopping center containing a Macy's, Sears, and JC Penney as well as dozens of specialty shops, restaurants, and entertainment is most likely a

A) regional shopping center.
B) neighborhood shopping center.
C) community shopping center.
D) complete business district.
E) lifestyle shopping center.

Question 71

An example of an emerging type of power shopping center might contain

A) JC Penney, Sears, some specialty shops, McDonald's, and Dairy Queen.
B) Michael's, Office Depot, T.J. Maxx, and Best Buy.
C) Liz Claiborne, Van Heusen, Corning Ware, and Mikasa outlets.
D) Safeway, CVS, and Subway.
E) a Supercenter Walmart.

Question 72

Alex is preparing the new strategic plan for a large retailer. Several aspects of the retailer are to be evaluated, in order to make plans and set goals. Of all the issues that Alex can select in developing the new strategic plan, which of the following is the least flexible?

A) Store atmosphere
B) Scrambled merchandising
C) Retail positioning
D) Store image
E) Location

Question 73

Many cities are revitalizing their downtown areas by bringing in new retail establishments. They are building new civic structures, passing ordinances that encourage the restoration of historic buildings, and developing mixed-use structures that include retail, residential, and other uses. These areas are best described as

A) neighborhood shopping centers.
B) community shopping centers.
C) traditional shopping centers.
D) traditional business districts.
E) free-standing structures.

Question 74

What type of shopping center usually consists of several small convenience and specialty stores?

A) Specialty
B) Regional
C) Neighborhood
D) Convenience
E) Community

Question 75

Colin brags to his friend Reid that his new bike shop has lots of parking and great visibility from Harper Avenue, and his nearest business neighbors are several hundred feet away. Colin has selected a ____ site for his retail business.

A) free-standing
B) traditional business district
C) neighborhood shopping center
D) community shopping center
E) regional shopping center

Question 76

Which of the following may include special attractions such as amusement parks or skating rinks?

A) Convenience shopping centers
B) Neighborhood shopping centers
C) Community shopping centers
D) Regional shopping centers
E) Superregional shopping centers

Question 77

Greg chooses to have his hunting equipment stored in a location away from the main part of town so that he can have a large parking lot and an outdoor range for customers to test out his merchandise. Greg's store is

A) in a traditional business district.
B) a rural shopping center.
C) in a neighborhood shopping center.
D) a non-traditional shopping center.
E) a free-standing structure.

Question 78

Ariana is planning to open an upscale dress boutique. She is evaluating ease of movement to and from sites, vehicular traffic, types of stores in the area, and transportation networks. Which strategic retailing issue is she concerned with at the time?

A) Location
B) Production depth
C) Product mix
D) Scrambled merchandising
E) Retail positioning

Question 79

The kinds of products being sold and the availability of public transportation are both factors that influence a retailer's decision about

A) store atmosphere.
B) location.
C) retail positioning.
D) store image.
E) the wheel of retailing.

Question 80

Hickory Village Shopping Center has two department stores and some specialty and convenience stores. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory is a ____ shopping center.

A) community
B) regional
C) non-traditional
D) neighborhood
E) power