Deck 5: Retail Institutions by Store-Based Strategy

Question 1

A theory which predicts that retail institutions have identifiable stages from introduction to decline is _____.

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

Answer 1

A

Question 2

Which of the following best illustrates a retail cost containment strategy?

A)buying refurbished equipment
B)closing down unprofitable locations
C)increasing services
D)expanding store hours

Answer 2

A

Question 3

The retail life cycle stage characterized by excess capacity and overstoring is _____.

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

Answer 3

C

Question 4

Which statement concerning scrambled merchandising is correct?

A)Supermarkets have not engaged in scrambled merchandising.
B)Retailers typically trade up as part of scrambled merchandising.
C)Scrambled merchandising is contagious.
D)Scrambled merchandising typically occurs at the innovation stage of the retail life cycle.

Question 5

The growth of box stores did not reach original expectations,in large part,because _____.

A)they lacked brand continuity
B)they could not fulfill customer one-stop shopping needs
C)they were not price competitive on nonfood items
D)store managers could not handle widely divergent product lines

Question 6

Which food-oriented retailer specializes in fill-in merchandise?

A)convenience store
B)supermarket
C)specialty store
D)superfood store

Question 7

A self-service food store with grocery,meat,and produce departments and minimum annual sales of $2 million is a _____.

A)convenience store
B)specialty store
C)superfood store
D)supermarket

Question 8

Which retail theory predicts that innovators will start with a low-cost structure and low profit margin requirements?

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

Question 9

A food-oriented retailer in which general merchandise accounts for 25 percent to 40 percent of total store sales is a _____.

A)superstore
B)combination store
C)box store
D)warehouse store

Question 10

In downsizing,retailers increase productivity through _____.

A)closing unprofitable stores or selling unprofitable divisions
B)economies of scale
C)increasing the number of destination stores
D)appealing to consumers with value-driven retailing

Question 11

A special type of combination store that integrates an economy supermarket with a discount department store is a _____.

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

Question 12

Which food-oriented retailer traditionally uses cut cases,relies on customers doing their own bagging,and heavily utilizes private-label brands?

A)box (limited-line)store
B)convenience store
C)combination store
D)superstore

Question 13

A high level of investment is needed to sustain growth during which retail life cycle stage?

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

Question 14

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

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

Question 15

Which of the following is not a basic assumption of the wheel of retailing?

A)A large number of price-sensitive shoppers exist.
B)Retailers increase operating costs over time to improve their image.
C)New institutions are able to reduce operating costs.
D)Related-item merchandising increases sales because of one-stop shopping appeals.

Question 16

A retailer that increases its product line assortment width by adding new products unrelated to its original business and to each other is practicing _____.

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

Question 17

Which of the following retail institutions does not fit into the definition of a supermarket?

A)conventional supermarket
B)warehouse store
C)superstore
D)convenience store

Question 18

Which concept characterizes all destination retailers?

A)Destination retailers are dominant in terms of some aspect of their overall retail strategy.
B)Destination retailers are chains.
C)Destination retailers have large locations.
D)Destination retailers have low prices.

Question 19

During which stage of the retail life cycle do sales and then profits rise for the first retailers in this category?

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

Question 20

A retailer with high customer loyalty is able to attract shoppers who come from long distances.This retailer is described as a(n)_____.

A)destination retailer
B)parasite retailer
C)scrambled merchandising retailer
D)innovator

Question 21

Which retail institution is often part retailer and part wholesaler?

A)off-price retail chain
B)factory outlet
C)flea market
D)membership club

Question 22

A narrow but deep product assortment characterizes _____.

A)department stores
B)specialty stores
C)variety stores
D)retail catalog showrooms

Question 23

Which retail institution has disappeared from the U.S.marketplace?

A)off-price chain
B)catalog showroom
C)box (limited-line)store
D)conventional variety store

Question 24

According to the wheel of retailing,retail institutions _____.

A)become vulnerable when they engage in scrambled merchandising
B)stay as low-end strategy firms
C)begin as low-end strategy firms and become vulnerable when they upgrade their strategy to medium or high end
D)always increase sales and profits when they upgrade their strategy

Question 25

Which retail institution commonly uses locations based in racetracks,stadiums,and arenas?

A)off-price retail chain
B)flea market
C)factory outlet
D)membership club

Question 26

Which of these is not a basic strategic position according to the wheel-of-retailing theory?

A)power position
B)high-end position
C)low-end position
D)medium position

Question 27

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

A)full-line discount store
B)hypermarket
C)variety store
D)retail catalog showroom

Question 28

According to the wheel of retailing,a retailer is vulnerable when _____.

A)consumers do not accept the retailer's old image
B)its upgraded strategy gives new institutions a significant cost advantage
C)its strategy is no longer considered unique
D)sales and profits exhibit rapid growth

Question 29

Other retailers' canceled orders,manufacturers' irregulars and overruns,and end-of-season items form the core of merchandise at which retail institution?

A)off-price chain
B)box (limited-line)store
C)full-line discount store
D)factory outlet

Question 30

Which institution caters to both final and organizational consumers?

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

Question 31

Which retail institution generally does not mention specific brand names and/or prices in its advertising?

A)department store
B)off-price chain
C)full-line discount store
D)variety store

Question 32

Which theory suggests that a retailer becomes vulnerable to competition when its costs (and profit margin requirements)increase?

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

Question 33

The high total sales volume from off-price chains,factory outlets,membership clubs,and flea markets can be explained by _____.

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

Question 34

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

A)ability of outlets to purchase merchandise for cash
B)success of wholesale sales
C)success of catalog sales
D)desire/need for manufacturer control where discounted merchandise is to be sold

Question 35

A retailer with the least degree of diversification in its product line or service category is a _____ store.

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

Question 36

A category killer is a form of _____ store.

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

Question 37

According to the wheel-of-retailing theory,which pricing strategy is used by an innovator?

A)pricing at the market
B)prestige pricing
C)competitive pricing
D)deep discount pricing

Question 38

Which retail institution purchases brand name merchandise on an opportunistic basis and seeks to attract department store shoppers?

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

Question 39

Which retail institution is organized into specific divisions for purposes of buying,promotion,customer service,and control?

A)department store
B)variety store
C)full-line discount store
D)retail catalog showroom

Question 40

A potential problem that may limit the growth of warehouse stores is _____.

A)a lack of brand continuity
B)a concentration on private label or controlled brands
C)their high prices
D)manufacturers' refusal to sell to them

Question 41

There is much discussion about saturation of fast-food franchises and the need for unconventional locations (such as schools,zoos,or U.S.naval bases)in the United States.This illustrates which retail life cycle stage?

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

Question 42

Private labels are an integral part of the channel control strategy of _____.

A)variety stores
B)off-price chains
C)independents
D)box (limited-line)stores

Question 43

Which type of retailer is characterized by very narrow width and extensive depth of assortment?

A)variety store
B)specialty store
C)department store
D)box (limited-line)store

Question 44

A retailer tries to appeal to consumers' one-stop shopping needs through _____.

A)the retail life cycle
B)vertical marketing systems
C)the wheel of retailing
D)scrambled merchandising

Question 45

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

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

Question 46

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

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

Question 47

The food-oriented retailer with the highest percent of fill-in sales is the _____.

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

Question 48

The competitive advantage of a category killer is based on _____.

A)width of assortment
B)depth of assortment
C)imported merchandise prices
D)convenience of location

Question 49

What type of management style should accompany the introduction stage of the retail life cycle?

A)entrepreneurial
B)professional
C)centralized
D)caretaker

Question 50

The opposite of a "moving-up-the-wheel-of-retailing" strategy is _____.

A)cost containment
B)mergers and acquisitions
C)value-driven retailing
D)power retailing

Question 51

Which of these is a successful European store type that has not done well in the United States?

A)warehouse store
B)convenience store
C)superstore
D)hypermarket

Question 52

Which general merchandise retailer is most likely to appeal to a small,niche market segment?

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

Question 53

The use of boutiques by department stores to highlight designer clothing most closely resembles the strategy of a _____.

A)specialty store
B)retail catalog showroom
C)variety store
D)full-line discount store

Question 54

Which retail institution is most likely to be an example of a destination store?

A)variety store
B)specialty store
C)category killer
D)superstore

Question 55

The evolution of the conventional supermarket into combination stores and supercenters can be explained by which retail concept?

A)scrambled merchandising
B)Huff's law
C)rationalized retailing
D)the wheel of retailing

Question 56

The theory that suggests that established retailers must be cautious in converting from a low-end strategy to a high-end strategy is _____.

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

Question 57

Which retail institutions fit the scrambled merchandising concept?

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

Question 58

The food-oriented retailer with the most narrow width and depth of assortment is the _____.

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

Question 59

The institution with the greatest assortment of any general merchandise retailer is the _____.

A)department store
B)supermarket
C)full-line discount store
D)superstore

Question 60

The retail life cycle stage corresponding to a retail innovator first becoming vulnerable to new discount retailers with a lower cost structure is _____.

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

Question 61

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

A)off-price chains can generate high profit margins
B)off-price chains have too much power
C)factory outlets generate low short-term cash flow
D)greater control results in less disturbance to traditional channels

Question 62

Which retail institutions do not require advertising support from suppliers?

A)off-price chains and membership clubs
B)department stores and variety stores
C)superstores and traditional department stores
D)variety stores and membership clubs

Question 63

Which type of general merchandise retailer is most prone to have limited customer services and an austere store environment?

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

Question 64

A manufacturer seeking maximum channel control should utilize which type of retailer?

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

Question 65

A category killer is a form of destination retailer that focuses its retail strategy on an enormous selection.

Question 66

Which institution can be classified as either a wholesaler or retailer?

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

Question 67

Low merchandise continuity and opportunistic buying characterize _____.

A)retail catalog showrooms and combination stores
B)superstores and combination stores
C)variety stores and membership clubs
D)off-price chains and membership clubs

Question 68

In contrast to department stores,specialty stores carry a narrow,but deep assortment of products and tailor strategy towards selective market segments.

Question 69

The retail strategy of box (limited-line)stores is based on aggressively priced private label or controlled brands.

Question 70

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

Question 71

A significant disadvantage to consumer acceptance of warehouse stores is their lack of brand continuity.

Question 72

A fundamental assumption of the wheel-of-retailing theory is that a large proportion of consumers are first attracted to a retail innovator through image appeals.

Question 73

Which retail institution illustrates vertical integration?

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

Question 74

Off-price chains and membership clubs have similar strategies in their use of _____.

A)private labels
B)opportunistic buying
C)catalog-based sales
D)one-stop shopping appeals

Question 75

A factory outlet represents an example of a(n)_____.

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

Question 76

The growth stage of the retail life cycle is characterized by market saturation and competition from newer retailer forms.

Question 77

Department stores are now facing increased competition from factory outlets,membership clubs,and flea markets.This illustrates _____.

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

Question 78

A convenience store's natural advantage over a supermarket is its low prices due to higher inventory turnover.

Question 79

In the second stage of the retail life cycle,innovative retailers expand their geographic bases of operations and newer firms enter the field.

Question 80

In the second stage of the wheel of retailing,retailers broaden their assortments to appeal to one-stop shopping needs of consumers.