Deck 3: Strategic Planning in Retailing

Question 1

Retail managers in individual departments have major input into decisions in a(n)_____.

A)franchise system
B)centralized structure
C)owner-manager system
D)decentralized structure

Answer 1

D

Question 2

The questions "What is the firm's current status?" and "In which direction should it be heading?" are evaluated in which retail strategy stage?

A)philosophy of business
B)situation analysis
C)strategy determination
D)implementation and analysis

Answer 2

B

Question 3

Sales objectives are generally in the form of _____.

A)satisfaction of stockholders and customers
B)return on investment,efficiency,and level
C)customer and industry image
D)growth,stability,and/or market share

Answer 3

D

Question 4

A retailer's organizational mission is its _____.

A)consumer orientation
B)commitment to a type of business and to a distinctive role in the marketplace
C)focus on determining and satisfying consumer wants and needs
D)good or service category determination

Question 5

The steps in a retail strategy are _____.

A)interdependent of each other
B)independent of each other
C)organized by specific and then general factors
D)organized by short- and then long-term factors

Question 6

A retail ownership form that combines independent ownership and management assistance is _____.

A)sole proprietorship
B)franchising
C)partnership
D)corporation

Question 7

The retail ownership form that has the greatest capacity for raising funds through the sale of stock is a _____.

A)sole proprietorship
B)corporation
C)partnership
D)franchise

Question 8

A family-oriented Italian restaurant's strategy consists of appealing to budget-conscious individuals and families with high-quality food,quick service,clean surroundings,and a wholesome environment.This constitutes its _____.

A)goods/service category
B)target market
C)competitive advantage
D)organizational mission

Question 9

Which management format is associated with decision making being limited to top management or ownership?

A)professional manager system
B)centralized
C)owner-manager system
D)decentralized

Question 10

A major disadvantage of the partnership form of ownership and management is that it _____.

A)is subject to double taxation
B)faces more government rules than other ownership forms
C)binds all partners to actions made by any individual partner acting on behalf of the firm
D)may separate ownership from management

Question 11

Which ownership and management alternative is simple to form,fully controlled by the owner,and subject to single taxation by the government?

A)corporation
B)sole proprietorship
C)partnership
D)franchising

Question 12

Rigid operations standards and restriction on the choice of supplier characterizes _____.

A)partnerships
B)the professional manager system
C)franchising
D)the owner-manager system

Question 13

Planning tends to be less formal and more intuitive in which management format?

A)centralized structure
B)professional manager system
C)corporation
D)owner-manager system

Question 14

The personal needs of the retailer during the early,unprofitable stage of business are paid through _____.

A)a bank credit plan
B)life insurance loans
C)personal savings
D)a personal drawing account

Question 15

Double taxation characterizes which retail ownership form?

A)sole proprietorship
B)government stores
C)partnership
D)corporation

Question 16

A retailer with sales of $10 million and selling expenses of $3 million has an efficiency rating of _____.

A)20 percent
B)40 percent
C)60 percent
D)70 percent

Question 17

Which objective is generally pursued by only large retailers or retail chains?

A)sales
B)market share
C)profitability
D)stability of profits

Question 18

Defining and adhering to an organizational mission,evaluating ownership and management alternatives,and outlining the goods/service category to be sold are parts of which element of retail strategy?

A)store operations
B)situation analysis
C)identification of consumer characteristics
D)objectives determination

Question 19

A major advantage of the use of strategic planning by a retailer is that _____.

A)crises are anticipated and often avoided
B)it focuses mostly on controllable factors
C)it focuses mostly on uncontrollable factors
D)inventory needs and stock on hand are balanced

Question 20

An overall plan or framework of action that guides a retailer is its _____.

A)mission statement
B)retail strategy
C)corporate philosophy
D)retail tactics

Question 21

Sole proprietorships are most likely to use which management alternative?

A)professional manager system
B)decentralized structure
C)owner-manager system
D)franchise

Question 22

A retailer aims efforts at two or more distinct consumer groups,with different retailing approaches for each group,in _____.

A)differentiated marketing
B)mass marketing
C)target marketing
D)undifferentiated marketing

Question 23

An integral component of a concentrated marketing strategy is _____.

A)a high-fashion image
B)a clear organizational mission statement
C)a focus on one specific market segment
D)a mass market appeal

Question 24

A retailer can determine how consumers perceive the company relative to its retail category and its competitors through _____.

A)positioning
B)situation analysis
C)target market assessment
D)control analysis

Question 25

An appliance retailer sells only national brands of major appliances,displays all products sold,delivers and installs appliances as part of the purchase price,and will meet all advertised competitor prices.This illustrates the retailer's _____.

A)organizational mission
B)store positioning
C)competitive advantage
D)satisfaction of publics

Question 26

Which disadvantage is common to both sole proprietorships and partnerships?

A)single taxation
B)complexity and costs in setting up
C)depersonalization
D)personal liability of owner(s)

Question 27

The consumer group that a retailer tries to satisfy is called its _____.

A)mass market
B)store positioning market
C)target market
D)market segment

Question 28

Which one of the following is a controllable variable to a retailer?

A)legislation
B)economy
C)technology developments
D)store location

Question 29

Store hours and days during which retailers can conduct business are regulated by _____.

A)blue laws
B)Green River laws
C)the Robinson-Patman Act
D)the Universal Product Code

Question 30

Those aspects of business that a retailer can directly affect are referred to as _____.

A)controllable variables
B)strategy
C)uncontrollable variables
D)tactics

Question 31

A major problem associated with the sole proprietorship form of retail organization may be _____.

A)management succession
B)unionization
C)double taxation
D)duality of objectives between management and ownership

Question 32

A retailer with sales of $1 million wants to increase its efficiency rating from 20 percent to 30 percent.To what must it reduce selling expenses?

A)$200,000
B)$300,000
C)$400,000
D)$700,000

Question 33

Tactics involve _____.

A)target market determination
B)daily and short-run operations of a retailer
C)organization mission determination
D)evaluation of performance

Question 34

Signals of performance such as employee satisfaction questionnaires,sales reports,and inventory records are examples of _____.

A)retail audits
B)feedback
C)tactics
D)retail demographic data

Question 35

An advantage of starting a new business (versus buying an existing business or becoming a franchisee)is the _____.

A)established name and following
B)time lag before opening
C)flexibility in controllable variable selection
D)management assistance and training

Question 36

Satisfaction of publics as a retail objective is involved with which of the following?

A)stockholders only
B)consumers only
C)stockholders and consumers
D)stockholders,consumers,suppliers,employees,and government

Question 37

The distinct competency of a retailer relative to its competitors is referred to as _____.

A)economies of scale
B)its cost advantage
C)a focused strategy
D)its competitive advantage

Question 38

A systematic procedure for analyzing the performance of a retailer is _____.

A)tactical performance evaluation
B)a retail audit
C)feedback
D)strategy evaluation

Question 39

The Robinson-Patman Act _____.

A)reduced the bargaining power of large retail chains
B)removed the fair trade laws in all states
C)limited mergers between large firms
D)reduced monopolies and restraints of trade

Question 40

A positioning approach involving retailers that present a discount or value-oriented image,a wide and/or deep merchandise assortment,and large store facilities is _____.

A)positioned retailing
B)mass merchandising
C)bifurcated retailing
D)multiple segmentation

Question 41

It is important for franchisors to specify rigid operations standards and to restrict choice of suppliers so that _____.

A)franchisors can receive operating revenues
B)financial resource requirements for franchisees can be limited
C)a uniform image can be presented to customers regardless of location
D)a professional manager system can be utilized

Question 42

Which of the following retailers is most likely to use market share as an objective?

A)national discount store chain
B)neighborhood luncheonette
C)a local dry cleaner
D)new car franchise

Question 43

Intensive owner participation in a business is most likely to occur when _____.

A)a retailer is well-capitalized
B)delegation of work to others will diminish consumer loyalty
C)a firm has strong financial controls
D)store hours are long

Question 44

An integral component of any differentiated marketing strategy is _____.

A)a unique set of product/service offerings to each customer group
B)an overall company-based integrated strategy
C)coordination of retailing strategy across units
D)geographic differentiation to meet customer needs

Question 45

Stockholder satisfaction is an important objective for a retailer using which ownership and management alternative?

A)corporation
B)partnership
C)sole proprietorship
D)franchise

Question 46

A major retailer studied the image of two of its units,a discount specialty store chain and an upscale specialty store chain,using a positioning map technique.Both of these units' images were clustered in the same quadrant.Which statement best explains this phenomenon?

A)Each chain has a distinct image.
B)Both chains appeal to the mass market.
C)Both chains appeal to the same target market.
D)Both chains are perceived as being upscale.

Question 47

A retailer attempting to improve its selling efficiency from 60 percent to 70 percent reduced its selling expense budget from $400,000 to $300,000.However,its new selling efficiency was reduced to 50 percent.What happened?

A)Sales decreased from $1,000,000 to $500,000.
B)Sales decreased from $1,000,000 to $600,000.
C)Sales decreased from $1,000,000 to $700,000.
D)Sales increased from $1,000,000 to $1,250,000.

Question 48

Which of the following is an example of a controllable variable to an independent family-oriented shoe retailer?

A)consumer acceptance of the store's above-average pricing strategy
B)development and implementation of a cheerful,friendly store atmosphere
C)competition from a new family-oriented shoe chain with below-average pricing
D)high seasonality during the week before school,at Easter,and before camp time periods

Question 49

An advantage of a centralized management structure to a retail chain is _____.

A)better training opportunities for branch personnel
B)more autonomy to each branch manager
C)more uniform store image
D)better ability to adapt to individual markets

Question 50

The division of authority and responsibility in a major retail organization by product categories and geographic areas illustrates a(n)_____.

A)centralized structure
B)decentralized structure
C)professional manager system
D)owner-manager system

Question 51

A heavily diversified retailer requires _____.

A)a separate retail strategy for each major retail business unit
B)a uniform strategy so that each retail business unit has a common image
C)a centralized organization structure for all key functional areas
D)the use of a mass marketing strategy

Question 52

An advantage of buying an existing business versus starting a new business is _____.

A)the ability to generate new supplier relationships
B)the ability to generate immediate sales
C)no cost for goodwill
D)flexibility in developing and changing retail strategy

Question 53

A retailer that sells to multiple segments should use which management alternative?

A)professional manager system
B)decentralized structure
C)owner-manager system
D)centralized structure

Question 54

A discount department store aims its retailing strategy at a large homogeneous (similar)group of consumers.A wide assortment of goods is offered at popular prices.The retailer utilizes which target market strategy?

A)mass marketing
B)market segment
C)multiple segmentation
D)store positioning

Question 55

While a differentiated marketing strategy allows a firm to diversify,a major difficulty associated with differentiated marketing is _____.

A)the need to create and maintain distinct images
B)that a market segment may be cluttered
C)that competition is increased
D)that one market plan may not adequately cover both segments

Question 56

A store positioning map for bookstores found various stores occupying each quadrant (classical to contemporary and full-service to self-service).This map illustrates that _____.

A)many different market segments exist
B)a mass marketing strategy could be effective
C)the ideal target market should be classical,full-service
D)few opportunities exist for additional bookstores

Question 57

If selling expenses equal 40 percent of a retailer's annual sales,its selling efficiency would be _____.

A)20 percent
B)40 percent
C)60 percent
D)80 percent

Question 58

Operations standards are most rigid and the choice of suppliers is most restricted in which ownership and management alternative?

A)franchise
B)buying an existing business
C)starting a new business
D)partnership

Question 59

A retailer operates different store formats to appeal to different groups of customers.This strategy illustrates _____ marketing.

A)target
B)concentrated
C)mass
D)differentiated

Question 60

An excellent retail location,a long-term relationship with suppliers,and access to low-cost capital are examples of a firm's _____.

A)store positioning
B)target market
C)competitive advantages
D)resources

Question 61

Which of these laws do not enable suppliers to offer unjustified discounts to large retailers?

A)Robinson-Patman Act
B)Miller-Tydings Act
C)Sherman Act
D)Clayton Act

Question 62

Strategy and tactics need to be evaluated _____.

A)on a continuous basis
B)yearly
C)during a retail audit
D)prior to evaluating a retail unit for sale

Question 63

A retail strategy must anticipate and adapt to the changing business.

Question 64

An example of an uncontrollable variable to a chain supermarket owner/manager is _____.

A)legal restrictions relating to price advertising
B)store cleanliness
C)choice of an upscale target market
D)width and depth of assortment

Question 65

Which of the following has had the greatest impact on making merchandise handling and inventory control more efficient?

A)merger and acquisition activity
B)computer systems
C)multi-channel retailing
D)foreign ownership of U.S.retailers

Question 66

An important advantage of a corporate form of ownership is the reduction of stockholder liability.

Question 67

A retailer's time demand requirements can be reduced through use of a partnership organization,self-service formats,and automation/industrialization.

Question 68

Retail franchisees generally have a large degree of latitude in the operation of their businesses.

Question 69

Which of the following is not an example of feedback?

A)consumer complaints about inconsistent delivery times
B)government fines for excessive out-of-stock conditions on sale merchandise
C)the lack of a management succession plan for an independent retailer
D)high employee turnover among newly-recruited sales personnel

Question 70

The partnership form of organization is ideal when two or more individuals possess complementary skills and experiences.

Question 71

Managers in individual departments generally have greater autonomy in a centralized structure than in a decentralized organization structure.

Question 72

An example of a tactical pricing decision is _____.

A)pricing at market levels
B)charging list prices on all items
C)reducing prices on specific seasonal merchandise which is overstocked
D)allowing in-store negotiation

Question 73

An advantage to a retailer's having a deep assortment is _____.

A)the appeal to innovative consumers
B)the appeal to one-stop shopping for a variety of product needs
C)being able to appeal to diverse consumer needs
D)less likelihood of having too much stock on hand

Question 74

One partner is not liable for the other partner's actions in the conduct of their business.

Question 75

A firm's organizational mission is reflected in its general attitude toward consumers,employees,suppliers,competitors,government,and others.

Question 76

An advantage to a retailer's having a wide assortment is _____.

A)a broad selection within a merchandise category
B)less likelihood of being out-of-stock
C)high inventory turnover
D)the appeal to one-stop shopping

Question 77

Which of these is an uncontrollable part of a retail strategy?

A)positioning
B)objectives
C)store location
D)consumers

Question 78

In computing a retailer's financial requirements,a personal drawing account should be listed as a source of funds.

Question 79

In retailing,market share is usually an objective for only large retailers or retail chains.

Question 80

If a wide retail assortment enables customers to undertake one-stop shopping,what is the benefit of a deep assortment?

A)less likelihood of having national brands
B)ample selection within a product category
C)quantity discounts on purchases
D)meeting family members' needs