Deck 4: Retail Market Strategy

Question 1

Why should a retailer be concerned with building a sustainable competitive advantage?

A) It could affect merchandise planning
B) They should not as other retailers would just duplicate the efforts
C) It could result in long-term profitability
D) It is the final step in developing the retail strategy
E) The competition's advantage will stimulate the retailer's market

Answer 1

C

Question 2

A retailer's format uses the ___________ to satisfy the needs of the target market.

A) buying plan
B) demographic information
C) positioning statement
D) retail mix
E) sustainable competitive advantage

Answer 2

D

Question 3

The Knotty Question is a tie store chain that is found in many airport concourses.Its _____ is business travelers who have either forgotten to pack a tie or spilled something on their tie and need a replacement.

A) retail format
B) retail mix
C) target market
D) marketing mix
E) marketing objective

Answer 3

C
Explanation: The target market is the segment toward which the retailer focuses its investment.

Question 4

Which of the following is a group of consumers with similar needs and a group of retailers using a similar format to satisfy those consumers' needs?

A) marketing format
B) retail market
C) retail mix
D) target audience
E) target market

Question 5

Fastlane (Sports shoe company)has decided to expand and is experimenting with various growth strategies.It first decided to purchase some Burger King (fast food franchises)and Mobay (Jamaican restaurant)stores.This move was considered a failure and now Fastlane has decided to open more Fastlane stores and to keep them open longer than their competitors.Fastlane has:

A) Abandoned a retail format development strategy and adopted a diversification strategy
B) Abandoned a diversification strategy and adopted a market penetration strategy
C) Abandoned a market penetration strategy and adopted a retail format development strategy
D) Abandoned a diversification strategy and adopted a market expansion strategy
E) Abandoned a market expansion strategy and adopted a market penetration strategy

Question 6

Talbots is a catalogue and a specialty store retailer.Its target market is 35-to-55-year-old women.Sixty percent of its customers are college-educated with an average family income of $75,000.Talbots offers private brands,moderate to better-priced women's classic apparel,shoes,and accessories.Its stores are located in village locations and upscale regional malls.Synergies among the store,catalogue and website operations provide a competitive advantage over other retailers.This is a description of Talbots':

A) retail strategy
B) marketing objective
C) merchandise budget plan
D) mission statement
E) organizational structure

Question 7

Which of the following provides the direction that the retailer plans to take to deal effectively with environmental factors?

A) marketing objective
B) merchandise budget plan
C) mission statement
D) organizational structure
E) retail strategy

Question 8

Fingerhut is best known as a catalogue retailer selling a variety of merchandise.Their reach is over 500 million homes with a target market of households with annual incomes between $15,000 and $35,000.Fingerhut offers unique payment plans to meet the needs of their customers and has a sophisticated database management technique that targets marketing activities and minimizes credit risks.This is an example of a:

A) marketing segmentation
B) merchandise assortment pan
C) mission statement
D) retail classification
E) retail strategy

Question 9

Which of the following is an area in which a retailer can develop a long-term competitive advantage?

A) advertising
B) loss prevention
C) carry national brands
D) vendor relations
E) visual merchandising

Question 10

A retail strategy is a statement that will identify which of the following?

A) output measures
B) price points
C) the advertising campaign
D) the retail market
E) the target market

Question 11

Starbucks is a chain of gourmet cafes that cater to coffee drinkers.Many of their customers commute from the suburbs and many of the stores are in business districts to accommodate the commuters' needs.Starbucks sells their private brand of coffees and accompanies them with fresh baked goods.They have a synergy between their stores and their website which helps to maintain an advantage over competing local coffee shops.This is a description of Starbuck's:

A) marketing objective
B) merchandise budget plan
C) mission statement
D) organizational structure
E) retail strategy

Question 12

A management orientation that focuses a retailer on determining its target market's needs and satisfying those needs more effectively than its competitors is called:

A) the retail mix
B) the retailing concept
C) a merchandise assortment plan
D) a management style
E) the communication management

Question 13

Although she considers many retailers when shopping for clothes,Rosa always buys suits in Reitmans because their selection and prices are second to none.Her affinity for Reitmans best demonstrates which of the following?

A) brand awareness
B) brand familiarity
C) customer loyalty
D) good vendor relations
E) unique merchandise assortment

Question 14

A SWOT analysis is often conducted during which stage of the strategic retail planning process?

A) Definition of business mission
B) Situational audit
C) Evaluating strategic alternatives
D) Establishing objectives
E) Retail segmentation process

Question 15

Which of the following is an opportunity for a retailer to develop a sustainable competitive advantage?

A) Customer loyalty
B) Customer service
C) Distribution systems
D) Unique merchandise
E) All of these are opportunities for the retailer

Question 16

A dry cleaner can develop a sustainable competitive advantage by:

A) securing a good location
B) developing a customer database to offer special promotions
C) developing a coupon offering with some of the local department stores
D) develop a patented chemical that removes wine stains without harming the fabric
E) doing all of these

Question 17

Zany Brainy appeals to the over-30-years old parents who have children under the age of 10 and who have annual incomes of more than $50,000.These parents are the store's:

A) marketing mix
B) marketing objective
C) retail format
D) retail mix
E) target market

Question 18

You are about to loan a friend $10,000 to start a candy store in a central business district.Where can you find information about how he plans to build a sustainable advantage?

A) In the marketing objectives
B) In the organizational chart
C) In the organizational mission statement
D) In the retail market strategy
E) In the situation audit

Question 19

Which of the following would not be an effective way for a jewellery store to develop a sustainable competitive advantage?

A) Develop an excellent relationship with the jewellery vendor
B) Develop an efficient inventory system
C) Sell gold watches at lower prices than anywhere else in town
D) Secure a good location
E) Carry unique merchandise

Question 20

How would a locally owned fitness centre develop a sustainable competitive advantage over a chain like Gold's Gym?

A) Advertise in health and fitness magazines
B) Develop relationships with members by offering unique work-out programs with assigned instructors recommending specific routines to suit their needs
C) Offer more classes
D) Reduce membership fees
E) Utilize a computerized database management system to monitor visitors and out of town guests

Question 21

A department store can foster customer loyalty by:

A) accepting all major credit cards
B) using single sourcing
C) having a sales-oriented mission statement
D) positioning itself as a store that cares as much about its customers
E) offering free gift wrap with a $50 purchase

Question 22

When Starbucks opened in Seattle,it allowed store density to promote the business.Sometimes,the storefronts occupied two corners of an intersection.Only when the Seattle market was saturated did Starbucks move into other markets.Starbucks understands the value of building a competitive advantage through securing:

A) customer loyalty
B) database warehouses
C) good locations
D) positioning
E) trained servers

Question 23

Building store loyalty by targeting customers and better meeting their needs can:

A) annoy occasional shoppers
B) attract new shoppers
C) improve customer satisfaction
D) inhibit customer growth
E) prohibit the variety of assortments in a category

Question 24

Customers that shop at Books-A-Million find that it has a marvellous selection of books with a helpful and friendly staff.In addition,they can enjoy a peaceful place to read while sipping a cappuccino at the in-store coffee shop.Their perception of the store indicates its ______________ strategy.

A) imaging
B) perceptual retailing
C) positioning
D) retail feedback
E) visual merchandising

Question 25

Having efficient distribution and information systems is vital to retailers to sustain a competitive advantage because:

A) they are able to get the merchandise to the customer quickly and efficiently
B) they are able to get the assortments to the customer they want
C) they are able to deliver merchandise at lower costs and apply the margin to lower prices or better services
D) the information flow between vendors and stores is seamless enabling rapid replenishment
E) all of these

Question 26

Mary wanted to purchase a vase as a wedding gift.Pier 1 Imports offers a better assortment and slightly lower prices,but she immediately went to her local gift shop instead and passed the Pier 1.This is an example of:

A) a situation audit
B) customer loyalty
C) direct competition
D) retail perception
E) strategic controls

Question 27

After Susan spent $500 at shopsonymusic.ca she was instantly a member of Sony Music's Most Valuable Customer (MVC)program.Members receive bonus reward dollars for future purchases.The MVC program is an example of a:

A) music club
B) customer service strategy
C) loyalty program
D) marketing strategy
E) warehouse club

Question 28

Positioning is the process of:

A) acquiring a lease for a retail store in a region
B) creating and supporting a clear and distinct image
C) finding a retail location site
D) negotiating the percentage-of-sales payment to the mall owners
E) performing a situation audit

Question 29

Retailers foster customer loyalty by:

A) having a generalized organizational mission statement
B) having no one distinct image of their brand
C) providing superior customer service
D) trying to attain qualitative objectives rather than quantitative ones
E) using a mass advertising strategy

Question 30

Customer loyalty programs are part of:

A) positioning
B) human resource management
C) the retail concept
D) data warehouses
E) customer relationship management

Question 31

Good human resource management is important to retailers because:

A) employees manipulate the system when there is no training
B) employees who are motivated and feel a part of a culture are more likely to build customer loyalty
C) management is not trained in labour laws
D) management does not have the time to develop training programs because of their other responsibilities
E) the goal is to develop long-term relationships with employees

Question 32

The Crooked Room restaurant is an interesting spot for breakfast.The floors are cracked terrazzo,the walls are covered with local art,the seats are wobbly and the cooks are grouchy,yet on Sunday mornings,there's always a wait because the food is good and cheap.The Crooked Room has _______________ itself to locals as a familiar place to go for inexpensive,good food.

A) labelled
B) offered
C) positioned
D) presented
E) solidified

Question 33

How can a small town quilting supply store compete against Walmart and still thrive?

A) The shop can extend its hours
B) The store can lower prices
C) The store can hire part time employees
D) The shop can offer classes on quilting.
E) all of these

Question 34

The parking lot of the Chevy Café contains four vintage restored Chevrolets from the 1950s and 1960s.The café building is painted the same colour blue as used on 1964 Chevrolets.The booths inside are made to look like car bench seats.The food served is limited to burgers,hotdogs,shakes,and fries.The café's image as a retro place to eat is an example of the implementation of a/an __________ strategy.

A) detailing
B) imaging
C) positioning
D) response-stimulus
E) retail perception

Question 35

Lisa loves to stop into Winners once a week.Winners purchases overruns or out-of-season merchandise from vendors and retailers then sells them in their stores for less.With each visit,she never knows what she will find,but she feels assured it will be a bargain.Winners store is ____________ in Lisa's mind as a retailer with varied assortments with reasonable prices.

A) perceived
B) positioned
C) solidified
D) sustained
E) visualized

Question 36

Even though there are several garages in town,Kelly gets her oil changed only at Mr.Lube.This commitment to Mr.Lube illustrates:

A) brand acceptance
B) customer loyalty
C) good customer service
D) store awareness
E) none of these

Question 37

The Atlantic Inn is located on Cape Breton Island.It has a 100-year history of visitors and vacationers from all over the world.The Inn exudes luxury from the moment you walk to the moment you savour the fine cuisine in its restaurant.The rooms are decorated with furniture from the early 20^th century.Visitors are served beverages on the porch as they rock in the chairs and watch the port.This model of luxury is part of The Atlantic Inn's _____________.

A) culture
B) marketing program
C) perception
D) positioning
E) strategy

Question 38

Developing programs to motivate and coordinate employee efforts,providing incentives,fostering an organizational culture and managing diversity are functions of the:

A) chief executive officer
B) district manager
C) general store manager
D) human resource manager
E) marketing manager

Question 39

By using the information provided from the data warehouse,a retailer can:

A) advertise to a more marketable demographic segment
B) determine whether moving to a new location would attract more business
C) easily gauge price points to meet the competitor's prices
D) offer more services like gift wrap, lower interest rate credit, and same-day delivery
E) tailor offerings to better meet the needs of their customers

Question 40

__________ is the design and implementation of a retail mix to create an image of the retailer in the customer's mind relative to its competitors.

A) Competitive feedback
B) Detailing
C) Imaging
D) Positioning
E) Retail perception

Question 41

A doughnut shop that decides to open up an hour earlier every morning is taking advantage of a ______ opportunity.

A) market penetration
B) diversification
C) retail format development
D) market depletion
E) market divestment

Question 42

When Jenny goes to Amazon.ca and buys The Da Vinci Code by Dan Browne,the website recommends other books by Browne.Jenny can even check to see what purchases she has made in the past at Amazon.ca.Amazon uses this sort of customer service to:

A) differentiate itself from other electronic retailers of books
B) prevent price comparisons with other electronic retailers of books
C) standardize its service offering
D) combat the problems associated with service intangibility
E) instil its importance to the customer

Question 43

After Courtney purchased a swimsuit for her cruise,the sales associate took her to the cosmetics department to sell her a water-resistant sunscreen that would allow her to have fun showing off her suit without having to worry about sunburn.This is an example of:

A) customer crossover
B) bait and switch
C) intradepartmental selling
D) cross-selling
E) transfer purchasing

Question 44

After Bill and Beth purchased a leather couch from The Brick,the sales associate took them to see end tables,coffee tables and lounge chairs that complement their new couch.The sales associate engaged in:

A) customer crossover
B) bait and switch
C) intradepartmental selling
D) cross-selling
E) transfer purchasing

Question 45

Which of the following is an example of a private-label brand?

A) President's Choice coffee
B) Kellogg's cornflakes
C) Kodak film
D) Levi's jeans
E) Sony DVD player

Question 46

Which of the following are examples of growth opportunities?

A) Market penetration
B) Diversification
C) Retail format development
D) Market expansion
E) All of these are examples of growth opportunities

Question 47

During football season at St.Mary's University,the university bookstore sells Huskies merchandise to the loyal fans.This strategy is an example of _________ opportunity.

A) market penetration
B) diversification
C) retail format development
D) market depletion
E) market divestment

Question 48

It is difficult for retailers to develop a sustainable competitive advantage just through merchandise because:

A) competitors can purchase and sell the same national brands
B) designers specify which retailers can sell their brands
C) different regions of the country carry different merchandise
D) distribution centres are unreliable on shipping dates
E) vendors favour the larger retailers because they buy more volume

Question 49

Which type of retail growth strategy is most closely associated to cross-selling?

A) market penetration
B) diversification
C) retail format development
D) market depletion
E) market divestment

Question 50

A successful private-label brand:

A) develops store loyalty
B) increases store traffic
C) enhances store image
D) differentiates a store from its competitors
E) does all of these

Question 51

When given a choice between selling a national brand of makeup and a private-label brand,a mall-based specialty store retailer might choose to develop a private-label brand:

A) to prevent its customers from comparison shopping
B) to limit its store traffic to qualified buyers
C) to increase its sales expenses
D) to increase its merchandising flexibility
E) for all of these reasons

Question 52

Since Walmart has an efficient distribution and information system,it is able to offer _____________ to its customers.

A) a greater depth of merchandise
B) better customer service
C) better locations
D) complementary services and merchandise
E) lower prices

Question 53

Another name for store brands is _________ brands.

A) national
B) private-label
C) exclusive
D) generic
E) unique

Question 54

Kenmore refrigerators are an example of:

A) competitive brands
B) multiple source advantage
C) national label brands
D) private-label brands
E) no-name brands

Question 55

The best way for a retailer to develop a sustainable competitive advantage is to:

A) concentrate on finding the best location
B) concentrate on having the lowest prices in town
C) develop a good distribution system
D) maintain good vendor relations
E) utilize multiple approaches to build as high a wall around its position as possible

Question 56

Why would a retail chain like La Senza want to develop private-brand labels to be sold exclusively at its stores?

A) To gain publicity for the chain
B) To foster customer loyalty
C) To upgrade its reputation as a lingerie boutique
D) To develop effective distribution strategies
E) To take advantage of its mall locations

Question 57

___________ means that sales associates in one department attempt to sell complementary merchandise from other departments to their customers.

A) Bait and switch
B) Cross-selling
C) Customer crossover
D) Intradepartmental selling
E) Transfer purchasing

Question 58

In order to offer consistent customer service,retailers must:

A) demand it from their employees
B) instil its importance to their employees
C) invest more in information systems
D) offer incentives for employees who offer consistent services
E) do all of these

Question 59

What is a benefit of having strong relations with a vendor?

A) A retailer could receive popular merchandise in short supply.
B) It is easier to return to a solid relationship with a vendor when private-labels fail.
C) Strong relations mean better profits for shareholders.
D) Vendors supply complementary merchandise to their most profitable supporters.
E) Vendors determine which retailers will receive the better prices.

Question 60

A ________ opportunity involves directing efforts toward existing customers by using its present retailing format.

A) market penetration
B) diversification
C) retail format development
D) market expansion
E) market divestment

Question 61

A _____ opportunity involves an entirely new retail format directed toward a market segment that is not presently being served.

A) market penetration
B) diversification
C) retail format development
D) market expansion
E) market divestment

Question 62

A _________ opportunity involves offering a new retail format to present customers.

A) diversification
B) market divestment
C) market expansion
D) market penetration
E) retail format development

Question 63

Which of the following opportunities is most likely to exploit a retailer's greatest competitive advantage?

A) diversification
B) market expansion
C) market penetration
D) retail format expansion
E) vertical integration

Question 64

When Wendy's historically bought Tim Hortons,it was taking advantage of a/an _______________ opportunity.

A) market divestment
B) market penetration
C) related diversification
D) retail format development
E) unrelated diversification

Question 65

Mark's Scratch and Dent sells slightly damaged name brand appliances at lower prices to lower income families.He is considering the implementation of a growth opportunity.Which of the following would most likely build on his present competitive advantage?

A) open a similar store in a nearby community
B) extend the hours that the store is open
C) open a used furniture shop for the same target market
D) open an Internet store
E) open a thrift store on the same block

Question 66

Which of the following opportunities is least likely to exploit a retailer's competitive advantage?

A) market penetration
B) vertical integration
C) diversification
D) market expansion
E) retail format expansion

Question 67

Which of the following is an example of diversification?

A) market expansion
B) cross-selling
C) retail format development
D) market penetration
E) vertical integration

Question 68

When J.Crew moved its stores into other countries,it increased the company's international market share.J.Crew took advantage of a ______ opportunity.

A) diversification
B) market divestment
C) market expansion
D) market penetration
E) retail format development

Question 69

The first step in the strategic retail planning process is to:

A) identify strategic opportunities
B) develop a retail mix
C) define the business mission
D) conduct the situation audit
E) assess the strengths and weaknesses of the business relative to its competition

Question 70

Jack runs a gallery that specializes in neon art with emphasis on vacation icons like flamingos,dolphins and palm trees.Since demand was high,and supplies were low,he decided to buy an old warehouse and hire craftspeople to work there to produce the art.He would provide them with all of the supplies they needed,and he would be their only customer.Jack engaged in:

A) horizontal integration
B) market expansion
C) co-operative buying
D) market penetration
E) vertical integration

Question 71

Market expansion opportunities help retailers grow by using:

A) existing retail formats in new market segments
B) existing retail formats in existing market segments
C) new formats in new market segments
D) new retail formats in existing market segments
E) proven formats in experimental markets

Question 72

When Disney opened mall-based specialty stores to sell the theme park merchandise,it was exercising __________________ as its growth strategy.

A) diversification
B) market divestment
C) market expansion
D) market penetration
E) retail format development

Question 73

In developing the mission statement for a retail chain,managers need to answer certain questions.Which of the following is one of those questions?

A) What business are we in?
B) What is the scope of our planned activities?
C) Who are our customers?
D) What are our objectives?
E) All of these

Question 74

The ___________________ of Gifts to Go is "to be the leading retailer of higher-priced gifts in Saint John and provide a stable income of $100,000 per year for the owner."

A) organizational objectives
B) mission statement
C) strategic plan
D) strategic implementation
E) situation audit

Question 75

Canadian Tire exploited a ____________ opportunity when it opened canadiantire.ca to sell its present line of merchandise to the same target market through a new retail format.

A) diversification
B) market divestment
C) market expansion
D) market penetration
E) retail format development

Question 76

The _____________ is the set of steps that a retailer should go through to develop a strategic retail plan.

A) strategic retail planning process
B) situation audit
C) strategic retail implementation
D) strategic retail control process
E) tactical retail implementation

Question 77

Florist Bruce Penney enjoyed his retail floral business,but his real love is kites.When a store site became available near his Ottawa shop,he opened Kite Corner,a store devoted to selling kites and anything associated with kites.Both stores are doing well,and Bruce splits his time between the two establishments.Bruce recognized a/an __________ opportunity.

A) related diversification
B) horizontal integration
C) vertical integration
D) unrelated diversification
E) market penetration

Question 78

Arthur had trouble locating the top quality tomatoes that his customers wanted in their marinated tomato salads.When he could find no vendor to supply the tomatoes necessary for the salads,he invested in a farm in southern California to produce the tomatoes.Arthur engaged in:

A) horizontal integration
B) market expansion
C) co-operative buying
D) market penetration
E) vertical integration

Question 79

Florist Gail Duffy ran a small flower shop and sold plants and flowers to people in British Columbia.She believed that she could sell more flowers if she had means to use the Internet.Thus,she borrowed money and invested in creating a website called bloom.com where she sells flower arrangements to people all over the world using various flower delivery services.Gail has realized a/an ____________ opportunity.

A) related diversification
B) horizontal integration
C) vertical integration
D) unrelated diversification
E) market penetration

Question 80

When Chapters.ca launched a website to sell its merchandise to its present customers,it was taking advantage of a ________________ opportunity.

A) diversification
B) market divestment
C) market expansion
D) market penetration
E) retail format development