Deck 12: Retailing

Question 1

Which of the following shows how much the retailer makes as a percentage of sales after the cost of goods sold is subtracted?

A) net income
B) net equity
C) gross margin
D) profitability

Answer 1

C

Question 2

What does gross margin refer to?

A) how much money a retailer makes as a percentage of sales after the cost of goods sold is subtracted
B) how much money a retailer makes after the cost of goods sold is subtracted
C) how much money a retailer makes as a percentage of sales after the cost of goods sold and business expenses are subtracted
D) how much money a retailer makes after the cost of goods sold and business expenses are subtracted

Answer 2

A

Question 3

Around the world,most retailers operate one or a few stores in their community,and are owned by a single person or partnership,not operated as part of a larger retail institution.What are they known as?

A) franchise outlets
B) product assortment stores
C) independent retailers
D) specialty clubs

Answer 3

C

Question 4

As a general rule of thumb,what will a retailer with a high gross margin have?

A) high prices
B) salespeople trained in cross-selling techniques
C) an inventory management system
D) low prices

Question 5

How can a retail store be classified?

A) according to its distribution method
B) according to its decor and atmosphere
C) according to its inventory control
D) according to its product assortment

Question 6

What was the largest retailer in Canada,measured in Canadian dollar sales,for 2007?

A) Walmart
B) Sobey's
C) Loblaws
D) Costco

Question 7

Under this form of ownership of retail stores,administrative and purchasing tasks are handled by the home office.The stores are owned and operated as a group by a single organization.What are these stores called?

A) chain stores
B) home base stores
C) independent retailers
D) franchisees

Question 8

What is the buyer who heads a department in a department store responsible for?

A) the merchandise mix in that department
B) the store's advertising program
C) the store's exchange and return policies
D) the store's credit policies

Question 9

Each department in a department store is usually headed by a person who selects the merchandise mix for the department and may also choose the promotional devices and personnel for that department.What is this person known as?

A) a financial broker
B) a human resources manager
C) a comptroller
D) a buyer

Question 10

Who is the person at a Sears department store who selects the merchandise for his or her department and is often responsible for the promotion and personnel in that department?

A) the purchasing agent
B) the franchisee
C) the merchandiser
D) the buyer

Question 11

Which of the following is the best example of a retailer?

A) an advertising agency
B) a television station
C) a real estate company
D) the local tax office

Question 12

Ingrid owns and operates her own income tax preparation service,but the establishment is licensed by H&R Block.What is Ingrid's tax preparation service?

A) a franchise
B) a licensor
C) an independent retailer
D) a doubly managed outlet

Question 13

Small neighbourhood florists,shoe stores,and ethnic food markets are most likely to be which of the following?

A) franchise outlets
B) chain stores
C) membership clubs
D) independent retailers

Question 14

Which of the following types of stores has a high gross margin,a narrow product assortment,and a high level of service?

A) full-line discount store
B) supermarket
C) warehouse club
D) specialty store

Question 15

The Canadian economy is heavily dependent on retailing.How much did retailers ring up in sales in 2005?

A) over $43 billion
B) over $403 billion
C) over $403 million
D) over $4.3 billion

Question 16

The number of different varieties of scented soaps carried by The Beauty Shoppe refers to which of the following?

A) the store's assortment depth
B) the store's supply standard
C) the store's retail mix
D) the store's complete retail offering

Question 17

Using what you have learned about retailing,which type of retail store would typically have the highest labour costs?

A) a warehouse club
B) a department store
C) a discount store
D) an off-price retailer

Question 18

Housing several departments under one roof,which of the following carries a wide variety of shopping and specialty goods and provides a high level of service?

A) a super club
B) a supermarket
C) a department store
D) a specialty store

Question 19

Which of the following is defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal,nonbusiness use or consumption?

A) retailing
B) business
C) wholesaling
D) distribution

Question 20

According to Statistics Canada,what is the average gross margin for a Canadian retail operation?

A) 6 percent
B) 16 percent
C) 26 percent
D) 36 percent

Question 21

According to the text,what is one way supermarkets establish long-term relationships with their customers?

A) They avoid any obviously ethnic appeal.
B) They conduct longitudinal focus group studies.
C) They create and use loyalty marketing programs.
D) They limit the number of nonfood items carried by the stores.

Question 22

A manufacturer wants to introduce a line of hand-smocked children's clothing in conjunction with the growing number of professional women who are now having babies.The least expensive of these outfits will be $75.Which of the following types of stores would most likely support an effective product launch?

A) a specialty store
B) a full-discount store
C) an off-price retailer
D) a warehouse club

Question 23

The development and opening of a store that sell nothing but materials used in creating scrapbooks is an example of which of the following?

A) store location modelling
B) repositioning
C) specialty retailing
D) consumer density

Question 24

The initial attraction of drugstores for consumers was the pharmaceuticals they carried,but now consumers can have their prescriptions filled at mass merchandisers and supermarkets,and through the mail.What have drugstores done to remain competitive?

A) taken legal steps to prevent the sale of prescription drugs at supermarkets
B) introduced generic prescription medicines
C) provided customers with value-added services
D) raised their prices

Question 25

Loblaws and Safeway,along with other supermarket chains,offer a variety of nontraditional goods and services such as DVD rental,flower shops,dry cleaning,and banking.What is this practice called?

A) specialty service
B) retail wheeling
C) trade-up positioning
D) scrambled merchandising

Question 26

The Faux Store is a chain of stores selling an assortment of products needed to create custom decorator painting effects such as crackling,aging,and marble textures.Its products have high gross margins,and its salespeople are willing and able to answer any how-to questions its customers might ask.How would the store most likely be classified?

A) as a department store
B) as a general store
C) as a hypermarket
D) as a specialty store

Question 27

These self-service stores are typically located near residential areas and are open long hours,seven days a week.They carry a limited line of high-turnover,high-priced goods and resemble miniature supermarkets.Which of the following is being described?

A) convenience stores
B) factory outlets
C) wholesale stores
D) general stores

Question 28

This type of retailer specializes in a given type of merchandise with a deep but narrow assortment.It is not only a type of store,but also a method of retail operations.Which of the following is being described?

A) a specialty store
B) a warehouse club
C) a general store
D) a factory warehouse store

Question 29

Which of the following provides the most likely reason to explain why Ingall's supermarkets sell planters,lawn furniture,and baking utensils as well as food products?

A) the fulfillment of the wheel of retailing hypothesis
B) growth of convenience merchandising
C) repositioning as a discounter
D) consumer demand for one-stop shopping often leads to scrambled merchandising

Question 30

According to the text,which of the following statements about specialty stores is true?

A) Customers usually consider price to be the most important factor in their selection of a specialty store.
B) Specialty stores typically avoid price wars.
C) A typical specialty store carries a wider assortment of specialty merchandise than department stores.
D) Customers at specialty stores are not concerned with the distinctiveness of the merchandise or the store's physical appearance.

Question 31

Why are prices usually higher in convenience stores than in supermarkets?

A) Convenience stores offer higher-quality goods.
B) Convenience stores offer a higher level of customer services.
C) Convenience stores offer better location,longer hours,and faster service.
D) Convenience stores offer a wider variety of products.

Question 32

When supermarkets offer a wide variety of nontraditional goods and services under one roof,what are they engaged in?

A) cross-selling
B) scrambled merchandising
C) cross-docking
D) disintermediation

Question 33

Which of the following environmental trends is most directly influencing supermarket operations?

A) Regional malls are hosting fewer anchor stores.
B) The number of dual-income and single-parent families is increasing.
C) To make a profit,supermarkets are having to carry products with high gross margins.
D) Recessionary trends are decreasing the amount of money spent on nonfood items.

Question 34

National chains dominate this segment.The retailers carry a broad assortment of nationally branded hard goods (broader than a department store)and offer customers very limited service.

A) full-line discount stores
B) specialty supercentres
C) discount specialty stores
D) factory outlets

Question 35

Of the following types of stores,which pair can be described as having low levels of service,broad product assortments,and low gross margins?

A) supermarket and warehouse club
B) warehouse club and discount specialty
C) discount specialty and full-line specialty
D) off-price retailer and wholesale store

Question 36

Which of the following are retailers that compete on the basis of low prices,high turnover,and high volume?

A) discount stores
B) convenience outlets
C) general stores
D) department stores

Question 37

Lorenzo Michaelson owns a small chain of retail outlets that are described as large,departmentalized,self-service stores that specialize in wide assortments of foodstuffs and limited nonfood items.What are Michaelson's stores?

A) off-price retailers
B) wholesale clubs
C) supermarkets
D) discount stores

Question 38

Which of the following are large,departmentalized,self-service retailers that specialize in wide assortments of foodstuffs and a few nonfood items?

A) discount stores
B) assortment merchandisers
C) supermarkets
D) membership wholesale clubs

Question 39

Which of the following BEST describes discount stores?

A) They compete on the basis of assortment and depth.
B) They offer more SKUs than department stores.
C) They compete on the basis of low prices,high turnover,and high volume.
D) They provide their customers with full service.

Question 40

Blockbuster offers recent and classic movies for sale or rent,along with a variety of candies,soft drinks,and popcorn.What is Blockbuster using?

A) product depth
B) merchandise assortment
C) scrambled merchandising
D) mass merchandising

Question 41

Manufacturers of Pampered Chef kitchen equipment and Longaberger baskets utilize party plan selling.The sales transactions usually occur in a home setting.What is this form of nonstore retailing called?

A) direct retailing
B) direct-response marketing
C) selling representation
D) personal marketing

Question 42

Zellers uses a strategy of setting moderate to low prices on large quantities of products,and then uses substantial amounts of promotion to stimulate a high turnover of inventory.Zellers offers a wide variety of different product lines.What is Zellers an example of?

A) a factory outlet
B) a mass merchandiser
C) a franchising operation
D) a specialty store

Question 43

Which of the following groups is most likely to be the target market for extreme-value retailers?

A) professionals who like bargains
B) middle-class innovators
C) teenagers
D) low-income earners

Question 44

Laura buys supplies for her catering business at a retailer that stocks a limited selection of items,which are sold in bulk on a cash-and-carry basis to members only.As she browses through a huge store,she buys flour,a set of muffin pans,and a package of paper towels as well as an assortment of fresh produce.Where is Laura most likely shopping?

A) a factory outlet
B) a wholesale outlet
C) an off-price discount retailer
D) a warehouse membership club

Question 45

Which of the following sell a limited selection of brand-name appliances,household items,and groceries,usually in bulk on a cash-and-carry basis to members only?

A) warehouse membership clubs
B) factory outlets
C) off-price discount retailers
D) wholesale discounters

Question 46

A publisher of books on holiday decorating,cooking,and crafts has to find a way to dispose of its overrun and unsold end-of-season output.As a marketing consultant,you suggest that the firm sell the merchandise to which of the following?

A) supermarkets
B) department stores
C) off-price retailers
D) mass merchandisers

Question 47

Well-known manufacturers such as Nike,Liz Claiborne,and Roots have decided the most profitable way to dispose of out-of-season and irregular stock is to open stores and sell their own merchandise.What are these stores?

A) types of discount stores
B) types of factory outlets
C) types of seasonal outlets
D) types of mass merchandisers

Question 48

Which of the following BEST describes a warehouse membership club?

A) It offers a medium level of customer service.
B) It has extensive merchandise depth,which it uses to create demographic positioning.
C) It tends to have more educated and more affluent customers than other retail establishments.
D) It sells only to ultimate consumers.

Question 49

According to the text,which of the following statements about restaurants is true?

A) Restaurants are clearly retailing establishments.
B) Because barriers to entry are low,the restaurant business appeals to many people.
C) The demographic issue of time-poor consumers has led to a growing demand for restaurants.
D) Restaurants are clearly a service industry.

Question 50

Which of the following BEST describes off-price retailers?

A) They seldom stock brand-name merchandise.
B) They are owned by the manufacturer of the products they sell.
C) They are often able to take advantage of manufacturers' faulty sales forecasting.
D) They very often offer a consistent assortment of merchandise.

Question 51

What is the term for single-line stores that offer a nearly complete selection of one line of merchandise and use self-service,discount prices,high volume,and high-turnover merchandise to their advantage?

A) factory outlets
B) general stores
C) specialty discount stores
D) mass merchandisers

Question 52

Zellers carries a broad assortment of nationally branded hard goods (broader than a department store),and offers customers few services.Zellers competes on the basis of moderate to low prices on large quantities of merchandise and lower service to stimulate rapid turnover of products.What is Zellers an example of?

A) a department store
B) a full-line discount store
C) a wholesale store
D) a category killer

Question 53

Which of the following is the term for the retailing strategy of setting moderate to low prices on large quantities of products and utilizing promotion to stimulate a high turnover of inventory?

A) m-store retailing
B) mass merchandising
C) merchandise positioning
D) the wheel of retailing

Question 54

According to the text,which of the following statements about nonstore retailing is true?

A) The high growth rate for nonstore retailing is due to the growth of TV home shopping
B) Nonstore retailing is increasing at a rate lower than in-store retailing.
C) Nonstore retailers are currently growing faster than in-store retailing.
D) More than 80 percent of all sales are made through nonstore retailing.

Question 55

Why are specialty stores such as,Office Depot and Staples,often called category killers?

A) They can destroy the profit potential for a category of merchandise for other retailers.
B) They have a broad merchandise mix and shallow assortment.
C) They offer an exclusive category of merchandise.
D) They are located at stand-alone sites.

Question 56

Which of the following refers to shopping without visiting a store and is currently growing faster than in-store shopping because of the consumer demand for convenience?

A) niche marketing
B) nonstore retailing
C) customerization
D) specialty merchandising

Question 57

Schwegman's has a 90,000-square-foot facility that houses a florist,baker,bank,craft shop,photo finisher,dry cleaner,and pharmacy under the same roof as grocery and household items.What is this facility called?

A) a factory outlet
B) a supercentre
C) a membership warehouse club
D) a mass merchandiser

Question 58

What are full-line discount,off-price retailers that entice shoppers from the low- and fixed-income customers who live near the stores?

A) category killers
B) neighbourhood outlets
C) extreme-value retailers
D) membership wholesale clubs

Question 59

Which of the following is an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise-its own?

A) mass merchandiser
B) wholesale club
C) factory outlet
D) discount store

Question 60

Which of the following is a low-profile,yet important form of retailing in which consumers get products out of automated machines?

A) professional selling
B) automatic vending
C) direct marketing
D) party-plan selling

Question 61

Which of the following BEST describes the merchandise mix?

A) It describes the composition of a traditional shopping centre.
B) It is the retailer's product offering.
C) It refers to the six levels in a buying organization.
D) It is the term for the marketing communications used by retailers.

Question 62

Chez Amie manufactures children's clothing for infants and toddlers.Its sales representatives set up parties at homes of mothers of preschool children so that its sales reps can demonstrate the quality and value of the Chez Amie products.What is Chez Amie using?

A) personal marketing
B) direct-response marketing
C) direct retailing
D) selling representation

Question 63

The Mad Stencilist has decided to demonstrate how to use the company's products to create custom gift tags on a local cable television channel and encourage shoppers to call a toll-free number to purchase the merchandise with a credit card.What is this form of retailing called?

A) in-store electronic shopping
B) videotex
C) an electronic point of sale
D) a shop-at-home network

Question 64

Which of the following is the term for the use of a telephone to sell directly to customers?

A) phone vending
B) telemarketing
C) two-way vending
D) indirect marketing

Question 65

How can marketers precisely target their customers according to demographics,geographics,and psychographics?

A) with franchise stores
B) with direct mail
C) with specialty retail outlets
D) with electronic selling

Question 66

Retailers such as The Bay and Zellers are responding to consumer needs by changing product mixes,hours of operation,locations,and prices.These stores are changing aspects of which of the following?

A) their retail trade areas
B) their merchandising groupings
C) their product offerings
D) their retailing mixes

Question 67

As defined in the text,what does product depth refer to?

A) merchandise mix
B) after-sales service of products offered
C) the assortment of products offered
D) the number of different brands offered within each assortment

Question 68

Which of the following is a reason that individuals may be tempted to buy a franchise business rather than develop their own independent business?

A) to try his or her own personal innovative product and service ideas in the business
B) to have the freedom to make decisions
C) to avoid management training requirements
D) to obtain a well-known product or service name

Question 69

Which of the following is a continuing relationship in which an individual or business grants business rights to operate or sell a product to another individual or business?

A) a leasing contract
B) an alliance for profit
C) a brokered partnership
D) a franchise

Question 70

What are H&R Block,Midas Muffler,and Subway all examples of?

A) business format franchisees
B) licensed franchisers
C) relationship franchisees
D) product and trade name franchisees

Question 71

A retailer in Owen Sound,Ontario,is licensed to sell Gardenia lawn mowers.What is the term for this retailer?

A) a relationship franchisee
B) a licensed franchiser
C) a business format franchisee
D) a product and trade name franchisee

Question 72

Which of the following refers to the techniques used to get consumers to buy from their home?

A) in-home retailing
B) direct retailing
C) nonstore vending
D) direct marketing

Question 73

According to the text,which of the following statements about on-line retailing is true?

A) On-line retailing is also called e-merchandising.
B) The earliest use of on-line retailing was for Internet auctions.
C) After a rapid increase in sales,the popularity of on-line retailing has declined over the last decade.
D) Most traditional retailers are using on-line retailing to move merchandise that can be purchased at their stores.

Question 74

Sunni received a phone call last night during supper.The caller wanted her to subscribe to a travel magazine.Since Sunni had never thought of purchasing this type of magazine before she received the call,this is obviously an example of what type of telemarketing?

A) inbound
B) qualifying
C) outbound
D) relationship

Question 75

What do Arby's,Jiffy-Lube,Baskin-Robbins,and Sylvan Learning Centres use?

A) product franchising
B) logistic franchising
C) trade name franchising
D) business format franchising

Question 76

What is the first task of developing a retail strategy?

A) to define the target market
B) to decide what to buy
C) to define the pricing policies
D) to create a promotional strategy

Question 77

Which of the following BEST describes analytics?

A) It uses complex mathematical models to help retailers make better product mix decisions.
B) It is a relatively new method of inventory control.
C) It determines the level of quality and service desired by customers.
D) It is a computerized technique for making site location decisions.

Question 78

Retailers control the six Ps of the retailing mix.The six Ps include the marketing mix plus which of the following?

A) personality and persuasion
B) potential and perception
C) personnel and presentation
D) positioning and purchasing

Question 79

The Cedar Store carries a full line of cedar swings,gliders,garden benches,and tables.All of its products can be purchased through its website.The site has done well since the Cedar Store's products do not need to be touched or smelled before purchase.What is the Cedar Store engaging in?

A) mobile vending
B) on-line retailing
C) shop-at-home networking
D) electronic wholesaling

Question 80

Breit Ideas is an on-line retailer licensed to sell products designed by Mary Engelbreit-everything from Christmas ornaments and books to wallpaper and toys.What is Breit Ideas an example of?

A) a business format franchisee
B) a licensed franchiser
C) a product and trade name franchisee
D) a relationship franchisee