Deck 20: Integrating and Controlling the Retail Strategy

Question 1

A disadvantage of using company department managers in conducting a retail audit involves the _____.

A)costs per day
B)time pressure
C)inability to conduct a vertical audit
D)company knowledge

Answer 1

B

Question 2

Which of the following is not an attribute studied as part of the SERVQUAL measure?

A)accuracy
B)tangibles
C)empathy
D)assurance

Answer 2

A

Question 3

To be successful,strategic planning should be _____.

A)conducted by a planning group
B)viewed as an integrated and ongoing process
C)focused on short-term objectives
D)focused on technology

Answer 3

B

Question 4

A retailer with high inventory turnover is likely to have _____.

A)high gross margin return on investment
B)low operating costs
C)low employee turnover
D)high profits

Question 5

Contingency planning is conducted in _____.

A)benchmarking
B)opportunity cost analysis
C)scenario analysis
D)gap analysis

Question 6

The most well-known measurement tool of service quality is _____.

A)the PricewaterhouseCoopers index
B)the McKinsey service quality index
C)the American Customer Satisfaction Index
D)SERVQUAL

Question 7

Which of the following is not a component of the global retail development index?

A)market attractiveness
B)market saturation
C)country risk
D)growth in Gross Domestic Product (GDP)

Question 8

Sales revenue by goods/service category,gross margin return on investment,employee turnover,and financial ratios are examples of _____.

A)performance measures
B)specific activities
C)objectives
D)a retail audit

Question 9

An ongoing benchmarking survey of customer satisfaction is _____.

A)the PricewaterhouseCoopers index
B)the McKinsey service quality index
C)the American Customer Satisfaction Index
D)SERVQUAL

Question 10

The retailer with the highest 2010-2011 index score based on the American Customer Satisfaction Index (ASCI)is _____.

A)Nordstrom
B)J.C Penney
C)Amazon.com
D)Costco

Question 11

An example of a tangible attribute as studied by SERVQUAL is _____.

A)a service technician's uniform
B)the providing of services when promised
C)the giving of attention to a customer's complaint by a service technician
D)keeping customers informed about when their service will be performed

Question 12

The systematic examination and evaluation of a retailer's effort (or some aspect of it)is a _____.

A)consultant's report
B)situation analysis
C)primary data analysis
D)retail audit

Question 13

Outside auditors _____.

A)have a complete understanding of departmental operations
B)have prime responsibility to another job position
C)have limited independence
D)require time lags while gaining familiarity

Question 14

Internal personnel whose primary responsibility is the retail audit are _____.

A)consultants
B)company department managers
C)outside auditors
D)company audit specialists

Question 15

Small retailers would generally find that it is less costly to use _____ in conducting retail audits than _____.

A)company audit specialists;outside auditors
B)company audit specialists;company department managers
C)company audit specialists;independent consultants
D)outside auditors;company audit specialists

Question 16

A firm compares its actual performance against its potential performance in _____.

A)benchmarking
B)scenario analysis
C)gap analysis
D)opportunity cost analysis

Question 17

An advantage of using company specialists in conducting a retail audit is the _____.

A)objectivity
B)high independence
C)ongoing nature of the process
D)low cost

Question 18

A retailer gauges the effectiveness of a strategy through comparing its performance to a high performance retailer.This illustrates _____.

A)downsizing
B)competitor analysis
C)benchmarketing
D)the sales opportunity grid

Question 19

The first step in undertaking a retail audit is _____.

A)developing audit form(s)
B)determining when and how often the audit is conducted
C)determining who does the audit
D)conducting the audit

Question 20

The potential performance of new goods,services,and/or store outlets can be assessed using _____.

A)a sales opportunity grid
B)a market share/market growth grid
C)estimated markups
D)a product/market attractiveness grid

Question 21

An advantage of a bottom-up retail plan is the _____.

A)ability to keep the plan secret
B)ability to handle complex assumptions
C)active involvement of lower- and middle-level managers
D)ability to gain acceptance by senior-level retail personnel

Question 22

Which of the following is not a major difficulty in conducting a retail audit?

A)An audit may be very time-consuming.
B)An audit may be quite costly.
C)A yearly audit may be much too frequent.
D)Employees may feel threatened and not fully cooperate.

Question 23

Which statement about a retailing effectiveness checklist is not correct?

A)The retailing effectiveness checklist enables the retailer to compute a total score based on summing individual scores for each category.
B)The retailing effectiveness checklist is a type of retail audit.
C)The retailing effectiveness checklist enables retailers to rate performance in each area.
D)The retailing effectiveness checklist is equally suited for small and large retailers.

Question 24

An evaluation of the extent to which salespeople engage in cross-selling can be best measured through a _____ audit.

A)disguised
B)nondisguised
C)companywide
D)horizontal

Question 25

A horizontal retail audit _____.

A)identifies the relative importance of each retailing mix element
B)focuses on separate functional elements
C)evaluates the environment facing a retailer: the economy,demographics,competition,and consumers
D)is always disguised

Question 26

In a disguised audit,_____.

A)store employees are unaware that an audit is taking place
B)the real purpose of the audit is told to employees,but not customers
C)consumers are aware of the audit
D)results of the audit are not given to management

Question 27

Which type of planning is in accord with the principles of participative management?

A)top-down
B)bottom-up
C)short range
D)long range

Question 28

Which audit is considered as a "retail strategy audit?"

A)disguised audit
B)vertical audit
C)undisguised audit
D)horizontal audit

Question 29

A retail audit should be conducted with what minimum time frequency?

A)every 5 years
B)every 3 years
C)yearly
D)semiannually

Question 30

Which of the following should be audited when the store is open?

A)fixture quality
B)inventory turnover
C)parking lot adequacy
D)employee records

Question 31

Which of the following should be audited when the store is closed?

A)in-store traffic flow
B)vertical transportation adequacy
C)parking lot adequacy
D)inventory levels

Question 32

Which type of planning is in accord with the principles that subordinates should have minimal involvement in retail planning?

A)top-down
B)short range
C)bottom-up
D)long range

Question 33

An audit which focuses on a retailer's pricing strategy illustrates a _____ audit.

A)vertical
B)disguised
C)horizontal
D)nondisguised

Question 34

A vertical retail audit _____.

A)is one in which a retailer's employees are not aware that the audit is taking place
B)involves an analysis of the overall performance of the retailer
C)is also called a "retail strategy audit"
D)involves an in-depth analysis of a retailer's performance in one area of its strategy mix or operations

Question 35

The sales opportunity grid could best be used in conjunction with _____.

A)category management
B)bottom-up retail plans
C)short-run plans
D)top-down retail plans

Question 36

A retailer is concerned with how to better compete with a newly-opened membership club located 3 miles from its main store.What type of audit should be conducted?

A)horizontal audit
B)vertical audit
C)disguised audit
D)undisguised audit

Question 37

A sales opportunity grid evaluates retail good/service alternatives on the basis of _____.

A)sales per square feet
B)display costs
C)markup
D)net profit estimates

Question 38

A vertical audit _____.

A)identifies the relative importance of each retailing mix element
B)focuses on separate functional elements
C)evaluates the environment facing a retailer: the economy,demographics,competition,and consumers
D)is always nondisguised

Question 39

An evaluation of the how well a firm's buyers understand the computation of maintained markups can best be ascertained through a _____ audit.

A)mystery shopper
B)disguised
C)horizontal
D)nondisguised

Question 40

An evaluation of a retailer's overall strategy is a(n)_____ audit.

A)vertical
B)horizontal
C)disguised
D)undisguised

Question 41

A sales opportunity grid evaluates new opportunities on the basis of such criteria as _____.

A)sales per square foot
B)retail price
C)net profit in specific time periods
D)sales revenues

Question 42

A firm's comparing its performance to competitors based on the components of the strategic profit model illustrates _____.

A)SERVQUAL
B)benchmarking
C)opportunity cost analysis
D)gap analysis

Question 43

A retailer's actual GMROI was 25 percent,whereas its planned GMROI was 30 percent.The retailer should perform _____.

A)benchmarking
B)retail performance indexing
C)gap analysis
D)opportunity cost analysis

Question 44

In developing performance measures for a retail operation,it is important to _____.

A)change the measures on an annual basis
B)use measures comparable to secondary source data
C)develop measures unique to the firm
D)focus on inventory management measures

Question 45

In developing performance measures for a retailer,it is important to _____.

A)focus on short-term measures
B)develop measures unique to the firm
C)use the same measures over time to allow trends to be ascertained
D)use measures that cannot be directly compared to widely respected secondary sources

Question 46

A home improvement chain plans for various contingencies such as higher interest rates reducing home sales and the effect of electricity disruption due to major storms.This analysis is _____.

A)scenario analysis
B)gap analysis
C)benchmarking
D)opportunity cost analysis

Question 47

Which statement concerning the sales opportunity grid is not correct?

A)The sales opportunity grid includes such factors as sales,gross profit,and net profit.
B)The sales opportunity grid assumes that all products have the same markup.
C)The sales opportunity grid uses data on costs from direct product profitability.
D)The sales opportunity grid measures a product's performance over multiple time periods.

Question 48

What type of auditor is most appropriate for a small,independent retailer?

A)outside auditor
B)company department manager
C)company specialist
D)company founder

Question 49

A chain with 100 stores is currently opening between 7 and 10 stores per year.What performance measure most accurately reflects continuing sales productivity?

A)total sales
B)sales increase on a year-to-year basis
C)compound sales growth
D)sales per square foot in stores open one year or more

Question 50

Very large retail organizations are best able to use which type of person to conduct an audit?

A)company department managers
B)consultants
C)outside auditors
D)company specialists

Question 51

Which of SERVQUAL's attributes relates to whether the service was performed correctly the first time?

A)responsiveness
B)reliability
C)assurance
D)tangibles

Question 52

A retailer wants an audit to be as objective as possible.The retailer recognizes that there is significant rivalry and competition within the firm.The retailer should use a(n)_____ to conduct the audit.

A)outside auditor
B)company department manager
C)team auditor
D)company specialist

Question 53

Direct product profitability for a new product over a three-year period can be assessed through _____.

A)use of a sales opportunity grid
B)measuring a product's sales potential
C)estimating holding costs
D)computing a product's markup

Question 54

Which statement about the use and interpretation of secondary data to measure a retailer's performance is not correct?

A)A retailer has to develop performance standards based on the best retailers,regardless of industry.
B)A retailer needs to adjust nationally-based data to reflect regional differences.
C)A retailer needs to adjust nationally-based data to reflect the size of the companies used in the sample.
D)A retailer's performance measures must be comparable to those used by secondary sources.

Question 55

The appearance of service technicians and of the service equipment is referred to as _____ in SERVQUAL.

A)responsiveness
B)assurance
C)reliability
D)tangibles

Question 56

Average sales per store,sales per square foot of selling space,and inventory turnover are examples of retail _____.

A)return on net worth performance ratios
B)non-key business ratios
C)inventory management ratios
D)performance measures

Question 57

A firm benchmarking its customer satisfaction on the basis of secondary data should use _____.

A)reliability measures
B)the American Customer Satisfaction Index
C)gap analysis
D)SERVQUAL

Question 58

Which auditor provides a retailer with the highest level of objectivity?

A)outside auditor
B)company department manager
C)disguised auditor
D)company specialist

Question 59

A retailer would not conduct an audit unless it would involve the lowest incremental costs possible.The retailer should consider using a(n)_____.

A)outside auditor
B)company specialist
C)company department manager
D)consultant

Question 60

A horizontal audit is often conducted prior to a vertical audit,since the horizontal audit _____.

A)often reveals areas that need further study
B)is less costly
C)is more likely to be conducted by a company specialist
D)is more likely to be nondisguised

Question 61

A retailer can benchmark its customer satisfaction through use of the American Customer Satisfaction Index (ACSI).

Question 62

Retail auditing procedures are standardized through the use of _____.

A)audit forms
B)nondisguised audits
C)disguised audits
D)vertical audits

Question 63

What type of retail audit can be conducted as exploratory research in evaluating a retailer's response to problems and opportunities?

A)nondisguised audit
B)vertical audit
C)disguised audit
D)horizontal audit

Question 64

Which audit technique should be used to determine the accuracy of a retail buyer's sales forecasts?

A)nondisguised
B)systematic
C)disguised
D)horizontal

Question 65

Which audit needs to be conducted when the store is open?

A)determining shortages
B)determining the efficiency of a new lighting system
C)analyzing a point-of-sale system in handling price changes
D)analyzing the extent of employee turnover

Question 66

The major advantages in the use of company department managers as auditors are objectivity and lack of time pressure.

Question 67

Sales opportunity grids provide estimates of store and brand sales,and gross and net profits for selected time periods.

Question 68

An audit is doomed to failure if _____.

A)top management is not responsive to accepting the need for change
B)the audit is conducted by company specialists
C)the purpose of the audit is kept secret from middle managers
D)the audit must be conducted when the store is closed

Question 69

A preliminary study of a retailer's operations revealed that employees might feel threatened by the retail audit process.What type of audit should be conducted?

A)disguised audit
B)audit by company department managers
C)audit by outside auditors
D)nondisguised audit

Question 70

A retail audit should be implemented at least once every five years.

Question 71

An appropriate time period for an audit is the busiest month of the year.

Question 72

A good retail audit is conducted on a regular basis,comprehensive,systematic,and conducted in an independent manner.

Question 73

Audit forms generally resemble _____.

A)management reports
B)questionnaires/checklists
C)computer printouts
D)survey research data

Question 74

It is important that a retail audit be conducted during a different month each year to minimize time bias.

Question 75

Which audit is especially suitable for monitoring sales presentations of retail salespersons?

A)systematic
B)horizontal
C)disguised
D)nondisguised

Question 76

Common performance measures used by retailers are sales revenues,gross margin percentages,markdown percentages,and financial ratios.

Question 77

A retailer is concerned about the degree of integration of its overall strategy.While the retailer prices goods above the market,customer service is uneven and,at times,the parking lot is inadequate.What type of retail audit should the retailer pursue?

A)nondisguised audit
B)vertical audit
C)disguised audit
D)horizontal audit

Question 78

A firm can benchmark its current performance against its own prior performance,specific competitors,and high performance retailers.

Question 79

A retailer is concerned that many sales clerks do not complete a want slip when a customer requests merchandise that the store does not currently stock.What type of audit should be conducted?

A)disguised horizontal audit
B)disguised vertical audit
C)nondisguised horizontal audit
D)nondisguised vertical audit

Question 80

Common methods of improving retail productivity for a variety of retail institutions are changing the merchandise mix,improving sales training,and redesigning stores.