Deck 5: Retail Institutions by Store-Based Strategy Mix

Question 1

The wheel of retailing suggests that ________.

A) consumers desire customer service over price
B) established retailers should be cautious in changing their strategy from low end to high end
C) retail consumers are store loyal
D) retailers that move up the wheel typically can keep their price-conscious customers

Answer 1

B

Question 2

A departmentalized self-service food store with minimum annual sales of $2 million is a ________.

A) convenience store
B) specialty store
C) supermarket
D) food-based superstore

Answer 2

C

Question 3

Through ________,retailers seek to jointly maximize resources,enlarge their customer base,and improve productivity and bargaining power.

A) mergers
B) diversification
C) downsizing
D) rightsizing

Answer 3

A

Question 4

In scrambled merchandising,a retailer ________.

A) adds goods and services that may be unrelated to each other and to the firm's original business
B) trades up its customer services to attract a new target market
C) attempts to reduce its out-of-stock inventory
D) attempts to become a "category killer" retailer through its extensive assortment of merchandise

Question 5

Progressive firms expand their geographic bases of operations and newer companies enter the marketplace at which retail life cycle stage?

A) introduction
B) growth
C) maturity
D) decline

Question 6

According to the wheel of retailing theory,retail innovators first appear as ________.

A) low-price operators with low costs
B) power retailers
C) firms that provide a wide complement of customer services
D) firms that offer wide selections of highly specialized goods and services

Question 7

Retailers reduce both initial investments and ongoing costs through ________.

A) adaptation strategies
B) a cost-containment approach
C) positioned retailing
D) mass merchandising

Question 8

In which stage of the retail life cycle theory does a company alter at least one element of the strategy mix from that of its traditional competitors?

A) maturity
B) decline
C) introduction
D) growth

Question 9

A retailer can become a ________ through low prices,specialized products,a large selection,and superb customer service.

A) destination retailer
B) relationship retailer
C) parasite store
D) value-based retailer

Question 10

The retail life cycle stage characterized by market saturation is ________.

A) introduction
B) growth
C) maturity
D) decline

Question 11

In the long-run,scrambled merchandising is ________ in nature.

A) low-end
B) nondistinctive
C) contagious
D) self-defeating

Question 12

An important advantage of scrambled merchandising to consumers is ________.

A) one-stop shopping
B) self-service merchandising
C) increased customer service
D) lower prices

Question 13

A merger benefits the affected retailers through ________.

A) increased bargaining power
B) greater store name awareness
C) more efficient ordering systems
D) higher return on investment

Question 14

Which retail institution is not included in the traditional definition of a supermarket?

A) convenience store
B) food-based superstore
C) warehouse store
D) box (limited-line) store

Question 15

A retailer can reduce dependency on its core operations through ________.

A) a cost-containment strategy
B) downsizing
C) diversification
D) mergers

Question 16

The use of standardized store layouts,second-use locations,and buying refurbished equipment are characteristics of ________.

A) adaptation strategies
B) a cost-containment approach
C) positioned retailing
D) mass merchandising

Question 17

Which theory asserts that retail institutions pass identifiable stages ranging from innovation to decline?

A) scrambled merchandising
B) the wheel of retailing
C) rationalized retailing
D) the retail life cycle

Question 18

According to the wheel of retailing theory,as retail innovators mature,they ________.

A) increase their market share at the expense of high-cost, full-service retailers
B) reduce customer services to concentrate on the price-conscious customer segment
C) further reduce price levels to maintain their low-cost competitive advantage
D) increase their services which leads to higher prices

Question 19

Sales of fill-in merchandise are particularly important to which food-oriented retailer?

A) convenience store
B) conventional supermarket
C) food-based superstore
D) box (limited line) store

Question 20

An advantage to a retailer's reaching destination retailer status is its ability to ________.

A) charge higher prices for its goods
B) attract shoppers from a larger geographic area
C) attract a better work force
D) develop its own line of private label goods

Question 21

A destination retailer is characterized by ________.

A) high consumer loyalty
B) multiple department organization structure
C) an extensive direct marketing operation
D) a low-cost operating structure

Question 22

Which institution sells goods to both final consumers and retailers?

A) retail cooperative
B) flea market
C) factory outlet
D) membership club

Question 23

Two types of retail institutions satisfy the definition of a department store: the traditional department store and the ________.

A) full-line discount store
B) supercenter
C) variety store
D) hypermarket

Question 24

Which retail institution has the most selection of any general merchandise retailer?

A) full-line discount store
B) factory outlet
C) variety store
D) department store

Question 25

The average gross margins (selling prices less merchandising costs)for conventional supermarkets have averaged about what percent of sales?

A) 5-6
B) 10-12
C) 20-22
D) 40-42

Question 26

A destination retailer ________.

A) is patronized because of convenience
B) has a large proportion of outshoppers
C) is a parasite
D) uses price as its major component in the retailing mix

Question 27

A category killer store is ________.

A) an especially large specialty store
B) an especially aggressive department store
C) a large combination store
D) any retail store that dominates a geographic market in terms of market share

Question 28

A retailer that concentrates on selling one goods or service line is a ________ store.

A) full-line discount
B) specialty
C) variety
D) department

Question 29

A destination retailer can be differentiated from other retailers on the basis of its ________.

A) high overall value orientation
B) small trading area
C) low overall prices
D) high consumer loyalty

Question 30

A significant factor in the growth of factory outlets is the ________.

A) growth of off-price chains
B) desire of suppliers to control where their discounted merchandise is sold
C) desire for independent vertical systems by manufacturers
D) ability of outlets to purchase merchandise for cash

Question 31

Which food-based retail institution depends on aggressively priced private-label or controlled brands and cut-case displays?

A) food-based superstore
B) box (limited-line) store
C) convenience store
D) conventional supermarket

Question 32

A combination store combines ________ into one facility.

A) multiple leased departments
B) a supermarket and a general merchandise retail operation
C) a department store and a full-line discount house
D) a warehouse store and a specialty store

Question 33

According to the wheel of retailing theory,retail innovators have what major advantage over traditional retailers?

A) being a low-cost provider
B) a more convenient location
C) superior service
D) exclusive merchandise lines

Question 34

The use of nontraditional sites is generally associated with which retail institution?

A) retail cooperative
B) flea market
C) factory outlet
D) membership club

Question 35

Dollar discount stores and closeout chains are successful spinoffs of the ________.

A) full-line discount store
B) specialty store
C) department store
D) variety store

Question 36

A huge form of combination store is a ________.

A) convenience store
B) supercenter
C) box (limited-line) store
D) warehouse store

Question 37

According to the wheel of retailing theory,which pricing strategy is used by a retailer during the innovation phase?

A) pricing above the market
B) pricing at the market
C) pricing below the market
D) skimming pricing

Question 38

Which retail institution has separate units responsible for buying,promotion,customer service,and control?

A) full-line discount store
B) factory outlet
C) department store
D) variety store

Question 39

Which retail institution purchases brand-name merchandise on an opportunistic basis?

A) warehouse store
B) full-line discount store
C) flea market
D) off-price chain

Question 40

A central aspect of the retail strategy of warehouse stores is ________.

A) special purchases of popular brands
B) a concentration on private label or controlled brands
C) use of high-rent retail locations
D) a focus on fill-in merchandise

Question 41

A pharmacy (due to increased competition from a neighboring supermarket)has now added an exclusive line of cosmetics,and has expanded its line of greeting cards and gift wrapping items.This strategy illustrates ________.

A) scrambled merchandising
B) the wheel of retailing
C) the retail life cycle
D) rationalized retailing

Question 42

Opportunistic buying is a key aspect of the retail strategy of ________.

A) warehouse stores and off-price chains
B) box (limited-line) stores and conventional supermarkets
C) supercenters and factory outlets
D) supercenters and vending machines

Question 43

Which food-oriented retailer concentrates on the sale of fill-in items?

A) conventional supermarket
B) food-based superstore
C) box (limited-line) store
D) convenience store

Question 44

The food-oriented retailer with the greatest width of assortment is the ________.

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

Question 45

The food-oriented retailer with the narrowest width and depth of assortment is the ________.

A) conventional supermarket
B) food-based superstore
C) box (limited-line) store
D) convenience store

Question 46

A retailer should limit its investment in essential expenditures during which stage of the retail life cycle?

A) maturity
B) decline
C) growth
D) introduction

Question 47

A category killer store is a form of which retail institution?

A) variety store
B) specialty store
C) department store
D) off-price chain

Question 48

Which of the following allows a retailer to accomplish one-stop shopping?

A) franchising
B) licensing
C) independent vertical marketing systems
D) food-based superstores

Question 49

Which retail institutions best fit the innovator stage of the wheel of retailing theory?

A) convenience stores, food-based superstores, and supercenters
B) category killer stores, factory outlets, and Web-based direct marketers
C) food-based superstores, box (limited-line) stores, and combination stores
D) vending machines, direct selling, and direct marketing

Question 50

A retailer that believes that a retail life cycle resembles a fad should use ________.

A) rationalized retailing
B) positioned retailing
C) a cost-containment approach
D) mass merchandising

Question 51

The difference between a retail merger and diversification is based on the ________.

A) identity of the new business
B) size of the acquisition
C) similarity of the acquired business to the original business
D) source of capital for the acquisition

Question 52

According to the wheel of retailing,retail institutions become vulnerable when ________.

A) the innovator's strategy is no longer considered unique by its target market
B) consumers do not accept the retailer's new price-conscious image
C) competitors can match the innovator's low-price strategy
D) new institutions have a significant cost advantage due to the innovator's upgrading its image and costs

Question 53

Which food-based retail institutions best fit the scrambled merchandising concept?

A) warehouse store and conventional supermarket
B) combination store and food-based superstore
C) warehouse store and box (limited-line) store
D) convenience store and conventional supermarket

Question 54

An advantage of the self-service concept as applied to both food-oriented and general merchandise retailers is ________.

A) increased impulse purchases
B) lower space requirements
C) improved pilferage control
D) lower fixturing expenses

Question 55

The beginning stage of the wheel of retailing theory (when low-price institutions first appear)corresponds to which stage of the retail life cycle stage?

A) maturity
B) decline
C) introduction
D) growth

Question 56

A narrow,deep product mix characterizes which retail institution?

A) department store
B) off-price chain
C) variety store
D) specialty store

Question 57

The major difference between a combination store and a food-based superstore is based on the ________.

A) size of the average unit in square feet
B) use of individual versus centralized checkouts
C) percent of sales from general merchandise
D) percent of private-label sales

Question 58

Scrambled merchandising is most similar to which retail institution format?

A) retail cooperative
B) chain
C) franchising
D) leased department

Question 59

The evolution of the conventional supermarket into a combination store,food-based superstore,and supercenter can be explained by which retail concept?

A) wheel of retailing
B) the retail life cycle
C) rationalized retailing
D) scrambled merchandising

Question 60

The retail life cycle stage corresponding to an innovative retailer's first becoming vulnerable to a new retailer with a lower cost structure is ________.

A) maturity
B) decline
C) accelerated development
D) innovation

Question 61

A destination retailer has a relatively small trading area.

Question 62

Low operating costs characterize which of the following retailing institutions?

A) conventional supermarket, convenience store, and food-based superstore
B) variety store, specialty store, and full-line discount store
C) factory outlet, membership club, and warehouse store
D) box (limited line) store, membership club, and variety store

Question 63

A combination store consists of a supermarket and a leased department general merchandise store operator.

Question 64

Fees to customers account for a large proportion of total profits for ________.

A) membership clubs
B) flea markets
C) factory outlets
D) owned-goods service providers

Question 65

Increased consumer price consciousness explains much of the popularity of scrambled merchandising.

Question 66

A fundamental assumption of the wheel of retailing theory is that innovation is on the basis of a change in at least one component of the retail mix.

Question 67

Manufacturers often prefer to sell their closeouts,canceled orders,and out-of-season merchandise to factory outlets rather than to off-price chains because ________.

A) factory outlets generate cash flow for use in manufacturing
B) manufacturer-owned outlets can generate high profit margins
C) manufacturers can control where branded products are ultimately sold
D) off-price chains have too much bargaining power

Question 68

The use of prototype stores,second-use locations,and the buying of refurbished equipment are all an example of a cost-containment approach.

Question 69

Scrambled merchandising has a contagious effect that can affect a variety of retail institutions.

Question 70

Which retail institution has the greatest assortment?

A) variety store
B) full-line discount store
C) factory outlet
D) department store

Question 71

A factory outlet is an example of which form of vertical marketing system?

A) fully integrated system
B) partially integrated system
C) independent vertical marketing system
D) diversified vertical marketing system

Question 72

Department stores have increasingly used designer boutiques to highlight specific designers to small market segments.This strategy most closely resembles that of which retail institution?

A) superstore
B) full-line discount store
C) variety store
D) specialty store

Question 73

Two extreme cases of the wheel of retailing are the low-end and the high-end strategy.

Question 74

While traditional department stores and full-line discount stores are both classified as department stores,full-line discount stores are more likely than traditional department stores to ________.

A) allow customers to return and exchange merchandise on a decentralized basis
B) use credit sales
C) use centralized checkouts
D) use catalog-based ordering

Question 75

Conventional supermarkets can be profitable at gross margins that are far lower than warehouse stores.

Question 76

Department stores are now facing increased competition from off-price chains,factory outlets,membership clubs,and flea markets.This illustrates ________.

A) scrambled merchandising
B) the wheel of retailing
C) rationalized retailing
D) the retail life cycle

Question 77

Conventional supermarkets,food-based superstores,combination stores,box (limited-line)stores,and warehouse stores are all included in the general definition of a supermarket.

Question 78

Which retail institution is an example of vertical integration?

A) membership club
B) off-price chain
C) factory outlet
D) warehouse store

Question 79

The largest food-based retailer in terms of average store size is the supermarket.

Question 80

A manufacturer sells its goods through both department stores and factory outlets.This illustrates a(n)________.

A) independent vertical marketing system
B) dual marketing system
C) partially integrated system
D) fully integrated system