Deck 16: Retailing

Question 1

When manufacturers, wholesalers, and service sponsors sell goods and services to final consumers for personal, family, or household use, they are engaged in

A) retailing.
B) wholesaling.
C) service marketing.
D) organizational marketing.

Answer 1

retailing.

Question 2

Which of these activities is NOT considered part of retailing?

A) The sale of a car to a final consumer by a direct importer
B) The sale of a car to a corporation for use by top executives
C) The sale of a car to a final consumer by a retail car dealer
D) The leasing of a car to a final consumer by a leasing agency

Answer 2

The sale of a car to a corporation for use by top executives

Question 3

Retailers can attempt to increase their sales volume by

A) using one-stop shopping appeals.
B) encouraging more family members to go shopping.
C) increasing customer shopping frequency.
D) all of the above.

Answer 3

all of the above.

Question 4

The largest retailer in the world is

A) Federated Department Stores.
B) Wal-Mart.
C) Sears.
D) Target.

Question 5

On average, furniture stores and bookstores receive ___ cents of every sales dollar for the functions they perform.

A) 20
B) 25
C) 40
D) 50

Question 6

On average, supermarkets receive ___ cents of every sales dollar for the functions they perform.

A) 10
B) 15
C) 25
D) 35

Question 7

Which statement concerning independent retailers is NOT correct?

A) Due to their size, independent retailers have complex retail organizations.
B) The largest category of retailers in terms of number of establishments is independent retailers.
C) The failure rate for new independents is very high.
D) Ease of entry contributes to the large number of independent retailers.

Question 8

High failure rates, inadequate resources, and the highest degree of competition characterize which retail organizational format?

A) Chains
B) Independents
C) Franchises
D) Leased departments

Question 9

Retail chains are characterized by

A) simple organizational formats.
B) specialization, standardization, and elaborate control systems.
C) a complex set of rules between franchisors and franchisees.
D) decentralized buying responsibility (at the individual store level).

Question 10

The majority of retail sales are made through

A) retail franchises.
B) department stores.
C) independent retailers.
D) retail chains.

Question 11

A set business format, the use of an established name, strict operating controls, and motivated owner-operators are major characteristics of which form of retail institution?

A) Independent retailer
B) Retail chain
C) Retail franchising
D) Category killer

Question 12

In retail franchising, the franchisor usually receives payments in the form of

A) franchise fees and royalties.
B) fees for specific consulting services.
C) rental agreements.
D) maintenance agreements.

Question 13

A benefit of retail franchising to a franchisor is that

A) there is little legislation to protect franchisees.
B) the franchisor obtains greater profits through franchising than through ownership.
C) the franchisor can control franchisees more than independent retailers.
D) owner-operators are heavily motivated.

Question 14

In a leased department operation,

A) the lessor is responsible for all aspects of a department's operations.
B) a retail firm is owned by its consumer members.
C) independent retailers share purchases, storage, and shipping facilities.
D) an outside party rents retail space from a retail store operator.

Question 15

A major benefit to a lessor of a leased department operation is

A) the use of an established location.
B) increased store traffic.
C) centralized purchasing.
D) close customer contact.

Question 16

The integrated combination of hours, location, assortment, service, advertising, prices, and other factors retailers employ is referred to as the

A) differential mix.
B) store/nonstore mix.
C) wheel of retailing.
D) retail store strategy mix.

Question 17

Which of these reflects the major consumer appeal of a convenience store?

A) Fill-in merchandise
B) Low-priced merchandise
C) One-stop grocery shopping
D) A deep selection within a merchandise category

Question 18

Which of these reflects the major consumer appeal of a conventional supermarket?

A) Fill-in merchandise
B) Delivery services
C) One-stop grocery shopping
D) A deep selection within a merchandise category

Question 19

A diversified supermarket selling a broad range of food and nonfood items is a

A) food-based superstore.
B) conventional supermarket.
C) convenience store.
D) warehouse store.

Question 20

Which of these attributes best characterizes a combination store?

A) General merchandise that accounts for 25 to 40 percent of overall sales
B) Use of catalog sales
C) Membership requirements
D) Use of electronic retailing

Question 21

A combination store that integrates an economy supermarket with a discount department store is a

A) superstore.
B) food-based superstore.
C) category killer.
D) supercenter.

Question 22

A hypermarket can be classified as a form of

A) conventional supermarket.
B) superstore.
C) combination store.
D) warehouse store.

Question 23

A supercenter in the United States is known as a ___ in Europe.

A) conventional supermarket
B) superstore
C) hypermarket
D) combination store

Question 24

The food-oriented retailer with the largest average store size and the broadest product mix is a

A) supercenter.
B) food-based superstore.
C) combination store.
D) conventional supermarket.

Question 25

Which of these retailers has the deepest product assortment?

A) Combination store
B) Retail catalog showroom
C) Convenience store
D) Specialty store

Question 26

A category killer is a form of

A) full-line discount store.
B) specialty store.
C) retail catalog showroom.
D) traditional department store.

Question 27

Which form of specialty store draws customers from a very wide geographic area?

A) Category killer
B) Department store
C) Discount store
D) Membership warehouse club

Question 28

Which statement concerning department stores is NOT correct?

A) Department stores are often fashion leaders.
B) Department stores sell a deep variety of inexpensive and popularly priced merchandise.
C) Department stores are organized into functional areas for purposes of buying, promotion, service, and control.
D) There are two types of department stores: the traditional department store and the full-line discount store.

Question 29

Which retailer type has the greatest assortment?

A) Full-line discount store
B) Traditional department store
C) Retail catalog showroom
D) Specialty store

Question 30

High fashion leadership, a broad and deep assortment, and the ability to generate customer traffic for a shopping district or shopping center are characteristics of which type of retail institution?

A) Full-line discount store
B) Specialty store
C) Retail catalog showroom
D) Traditional department store

Question 31

The use of self-service, shopping carts, and lower-rent locations characterize which general merchandise-based retailer?

A) Full-line discount store
B) Department store
C) Specialty store
D) Combination store

Question 32

Which form of retail institution features the most austere atmosphere?

A) Department store
B) Membership warehouse club
C) Full-line discount store
D) Specialty store

Question 33

Nonstore retailing consists of

A) vending machines and retail franchising.
B) vending machines and leased departments.
C) consumer cooperatives and leased departments.
D) direct marketing, vending machines, and direct selling.

Question 34

Which statement concerning direct marketing is NOT correct?

A) Direct marketing is used by both traditional store-based retailers and by specialized direct marketers.
B) In direct marketing, a person is first exposed to a good or service through a nonpersonal medium.
C) In direct marketing, orders are placed through mail, telephone, or PC.
D) Direct selling is a form of direct marketing.

Question 35

Convenience for customers, coverage of a wide geographic area, and the ability to reach additional market segments are key characteristics of

A) a retail catalog showroom.
B) direct selling.
C) vending machines.
D) direct marketing.

Question 36

Which statement concerning vending machines is correct?

A) Beverages and food items comprise the overwhelming majority of vending machine sales.
B) Vending machine sales are limited to goods.
C) Eighty percent of vending machine sales come from nonfood items.
D) Gross profit requirements for vending machines are low due to the low labor costs and low servicing requirements.

Question 37

In a cold canvass form of direct selling,

A) a salesperson calls people or knocks on doors to find customers.
B) past buyers are relied on to recommend friends to the salesperson.
C) one customer acts as a host and invites friends to a sales demonstration.
D) catalog sales are used to pre-qualify potential customers.

Question 38

Which store location type is LEAST able to attract consumers?

A) Regional shopping center
B) Isolated store
C) String
D) Unplanned business district

Question 39

Which store location type is synonymous with the term "downtown?"

A) Regional shopping center
B) Neighborhood shopping district
C) Secondary business district
D) Central business district

Question 40

Which unplanned shopping area is bounded by the intersection of two major streets but has less assortment and a smaller trading area than a central business district?

A) Neighborhood shopping center
B) Regional shopping center
C) Neighborhood business district
D) Secondary business district

Question 41

Which unplanned shopping area generally contains at least one branch department store and a broad grouping of specialty and convenience stores?

A) Neighborhood shopping center
B) Regional shopping center
C) Neighborhood business district
D) Secondary business district

Question 42

Which type of store location is centrally owned and managed, and based on balanced tenancy?

A) Planned shopping center
B) Neighborhood business district
C) Central business district
D) String

Question 43

Which statement concerning balanced tenancy is NOT correct?

A) Balanced tenancy seeks to relate the number and composition of stores to the needs of the surrounding population.
B) Balanced tenancy planning occurs in both shopping centers and shopping districts.
C) To achieve a balanced tenancy, shopping centers may limit the products a store carries.
D) Balanced tenancy relates not only to a variety of merchandise carried, but also to merchandise quality.

Question 44

At least one or two department stores and up to 100 or more smaller stores comprise a

A) regional shopping center.
B) community shopping center.
C) neighborhood shopping center.
D) string.

Question 45

Exterior, general interior, store layout, and interior displays are the basic components of a store's

A) prototype.
B) balanced tenancy.
C) atmosphere.
D) affinity.

Question 46

If a retailer adds product lines that are unrelated to each other and the firm's original business, it is involved with

A) full-line retailing.
B) scrambled merchandising.
C) the wheel of retailing.
D) balanced tenancy.

Question 47

The concept that retail innovators appear as low-cost operators is central to which retail theory?

A) Reilly's law
B) Scrambled merchandising
C) The wheel of retailing
D) Balanced tenancy

Question 48

Computerized-checkout systems are used to increase retailer efficiency by

A) eliminating employee training.
B) decreasing product breakage.
C) making store displays unnecessary.
D) aiding in ordering appropriate products.

Question 49

Video kiosks are a form of

A) direct marketing.
B) direct selling.
C) vending machine.
D ) UPC-based shopping.

Question 50

Retailers are carrying labor-saving devices, lengthening store hours, and expanding catalog and phone sales efforts so as to better attract

A) college students.
B) working women.
C) empty nesters.
D) senior citizens.

Question 51

The training of store personnel in suggestion selling, and placement of selected merchandise in high-traffic locations are used to improve

A) store atmosphere.
B) impulse sales.
C) credit sales.
D) scrambled merchandising.

Question 52

The divergent viewpoints of retailers, manufacturers, and wholesalers often result in

A) channel cooperation.
B) channel conflict.
C) scrambled merchandising.
D) the sorting process.

Question 53

Low barriers to entry in retailing explain why

A) retail competition is insignificant in most markets.
B) there are few retailers in such categories as department stores and variety stores.
C) the retail failure rate is so high.
D) retail chains account for the majority of retail sales.

Question 54

A major disadvantage of independent retailing in comparison to other organizational forms is the

A) complex organizational structure of independent retailers.
B) low ability to use specialists.
C) low ability to change to meet new environmental conditions.
D) poor tailoring of a good/service to a target market.

Question 55

A major advantage of chain organizations in comparison with independent retailers is the

A) low investment requirements.
B) increased bargaining power.
C) higher motivation of personnel due to equity interest.
D) use of simple organizational formats.

Question 56

A major similarity between retail chains and retail franchising involves their

A) use of standardization and elaborate control systems.
B) long lease terms.
C) use of scrambled merchandising.
D) low barriers to entry.

Question 57

Prototype stores, comprehensive training and management assistance, and troubleshooting are important characteristics of

A) retail chains.
B) leased departments.
C) retail franchising.
D) convenience store.

Question 58

The Following Questions are linked to this scenario: A major firm is debating whether to convert from a retail chain to a retail franchising form of retail organization. Among its considerations are the advantages and disadvantages of each method in terms of costs, investment, channel control, and competitive impact.

-Which of these statements correctly differentiates between the characteristics of a retail chain organization and retail franchising?

A) Only retail chains participate in joint promotions.
B) Store management in franchising consists of owners and not employees of the chain.
C) Only retail chains typically receive site selection and troubleshooting assistance.
D) A retail franchisee cannot own more than one unit of the same franchise.

Question 59

The Following Questions are linked to this scenario: A major firm is debating whether to convert from a retail chain to a retail franchising form of retail organization. Among its considerations are the advantages and disadvantages of each method in terms of costs, investment, channel control, and competitive impact.

-From the perspective of the franchisee, a major disadvantage to retail franchising is that

A) the time period of a franchise is often limited to 30 years.
B) there may be poor synergy between the lessor and lessee.
C) the overall failure rate for franchises is very high.
D) an operator's decision-making ability is lessened.

Question 60

The Following Questions are linked to this scenario: A major firm is debating whether to convert from a retail chain to a retail franchising form of retail organization. Among its considerations are the advantages and disadvantages of each method in terms of costs, investment, channel control, and competitive impact.

-A major advantage of a retail franchise to a franchisor in comparison to expanding through a retail chain is that the franchising system

A) allows a manufacturer/service sponsor to rapidly develop national market coverage with a minimum of invested capital.
B) provides the franchisor with a maximum of control in the operation of its units.
C) allows the franchisor to secure maximum profits.
D) gives the franchisor greater choice in the selection of store managers and employees.

Question 61

An independent fine jeweler wants to locate inside a large traditional department store and benefit from the traffic generated by that store, as well as the store's overall image. What arrangement should it seek?

A) Retail franchise
B) Independent retailer
C) Isolated location
D) Leased department

Question 62

Which of these is the food-oriented store with the narrowest and shallowest product mix?

A) Specialty store
B) Warehouse store
C) Convenience store
D) Conventional supermarket

Question 63

Conventional supermarkets can most effectively compete against convenience stores by

A) implementing salad bars to appeal to single-person households.
B) using 24-hour operations and express checkouts.
C) developing in-store coupons to build store traffic.
D) promoting large sizes of goods to appeal to large families and institutional sales.

Question 64

Which food-based retailer was an innovator in terms of capitalizing on self-service, impulse buying, and one-stop shopping?

A) Conventional supermarkets
B) Convenience stores
C) Superstores
D) Limited-line stores

Question 65

Food-based retailers such as superstores, combination stores, and supercenters have branched out into nonfoods because of

A) smaller trading areas.
B) one-stop shopping appeals.
C) the wheel of retailing.
D) higher inventory turnover.

Question 66

Which food-based retail form has the largest average store size?

A) Supercenter
B) Convenience store
C) Superstores
D) Conventional supermarkets

Question 67

Which retailer has a deep but narrow product mix?

A) Department store
B) Full-line discount store
C) Specialty store
D) Independent store

Question 68

Department stores have set up boutiques, utilized rock videos in junior clothing departments, and used other atmosphere-enhancing strategies such as gourmet food emporiums in order to better compete with

A) specialty stores.
B) full-line discount stores.
C) retail catalog showrooms.
D) superstores.

Question 69

The general merchandise retailer with the widest and broadest product mix is the

A) variety store.
B) traditional department store.
C) retail catalog showroom.
D) off-price chain.

Question 70

In comparison with a traditional department store, a full-line discount store is more likely to

A) limit sales to end-of-season clearances and special events.
B) emphasize a deep product mix.
C) store merchandise in back rooms.
D) have more emphasis on self-service.

Question 71

Which institution commonly acts as both a wholesaler and a retailer?

A) Full-line discount store
B) Membership warehouse club
C) Retail catalog showroom
D) Off-price chain

Question 72

To sustain their maturity, some membership warehouse clubs now accept credit cards and offer home delivery through their Web site. This illustrates

A) atmospherics.
B) a self-fulfilling prophecy.
C) scrambled merchandising.
D) the wheel of retailing.

Question 73

A major difference between direct marketing and direct selling is that direct selling involves

A) personal contact with consumers.
B) technological advances such as interactive video shopping.
C) mail and telephone ordering by consumers.
D) television and radio advertising.

Question 74

Which retail institution type can best appeal to consumer needs for convenience in shopping?

A) Department stores
B) Convenience stores
C) Direct marketing
D) Supermarkets

Question 75

A Web-based transaction by a final consumer is a form of

A) kiosk-based sale.
B) vending machine transaction.
C) direct marketing.
D) direct selling.

Question 76

The most inflexible element of a retail store strategy is

A) store atmosphere.
B) location.
C) product mix.
D) pricing.

Question 77

Which type of store location is best suited for discounters?

A) Central business district
B) Secondary business district
C) Isolated store
D) Regional shopping center

Question 78

A major difficulty associated with the use of an isolated store location is that a retailer using such a location

A) loses substantial customer traffic when offices close.
B) must compete with adjacent retailers.
C) must pay a higher rent.
D) must generate and sustain continued customer traffic.

Question 79

Shopping goods are most likely to be emphasized in a(n)

A) central business district.
B) community business district.
C) string.
D) isolated store location.

Question 80

Convenience goods are most likely to be emphasized in a

A) central business district.
B) regional shopping center.
C) string.
D) neighborhood business district.