Deck 13: Retailing

Question 1

The person who called Grace last night and tried to sell her a subscription to Better Homes & Gardens magazine was using inbound telemarketing.

Answer 1

False

Question 2

Retailing can be defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal and nonbusiness use.

Answer 2

True

Question 3

A retail establishment can be classified according to its ownership,level of service,product assortment,and price.

Answer 3

True

Question 4

Supermarkets are self-service retailers that specialize in food and food products although many now carry nonfood items as well.

Question 5

Marketers who use nonstore retailing no longer have to worry about the "place" element of the four Ps.

Question 6

Baggie Waggie is the name of a chain of small stores,which carry high-turnover products such as lip balm,milk,laundry detergent,bread,and aspirin.Baggie Waggie stores are open all day every day and would best be classified as convenience stores.

Question 7

Hildebrand Stein operates a retail store that has a wide assortment of window treatments with little depth in any one product line.Stein operates a specialty store.

Question 8

Electronic retailing includes the twenty-four hour,shop-at-home television networks and on-line retailing.

Question 9

Roland LaFarge owns an appliance store where he also sells bird feeders,tools,electrical and plumbing supplies,collectible figurines,homemade candy,and greeting cards,as well as wall paint.LaFarge uses multibrand merchandising.

Question 10

Most direct retailers use a party plan in lieu of door-to-door selling.

Question 11

Esther Jui has just opened a specialty store that will sell Asian wedding gowns to Asian-Americans who want a traditional wedding.Because it will be a specialty store,she should have a broad product assortment with moderately low prices.

Question 12

Supercenters are more than just larger versions of traditional "markets." In addition to foodstuffs,supercenters have pharmacies,dry cleaners,portrait studies,photo finishing,hair salons,and restaurants.

Question 13

Factory outlet stores are generally the same as warehouse clubs,except that a factory outlet store carries only the merchandise of the manufacturer that owns it.

Question 14

The retailing industry is dominated by a large number of small- and medium-sized companies.

Question 15

The two types of franchising are target market franchising and geographic franchising.

Question 16

Lou Farrigamo is the store manager of a local retailing establishment that sells a wide variety of shopping and specialty goods,including apparel,cosmetics,housewares,and electronics.Farrigamo probably manages a department store.

Question 17

Off-price retailers differ from other discount stores in the merchandise they carry.While most other discounters offer a predictable assortment of merchandise,the styles and brands offered at off-price retailers change frequently because they buy only what is currently available at a good deal.

Question 18

Specialty discount stores are often called category killers because they dominate the competition in their narrow merchandise segment.

Question 19

Justin Nilssen and Joe Metzger disagree about what it means to be a specialty store.Nilssen says,"A specialty store is just one type of store." Metzger says,"It's more than that--it's also a method of retailing,and involves specializing in a type of merchandise,too." Metzger is correct.

Question 20

A typical discount store competes by carrying a limited line of high-turnover,high-margin goods.

Question 21

Petco has just purchased a sizable plot of land on which it will build a store building with a large parking lot.Across the street is a collection of specialty shops and a furniture store.Petco will be part of a strip shopping center.

Question 22

M-commerce is a type of managed commerce in which both buyer and seller end the transaction with a win-win feeling.

Question 23

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) discount specialty and full-line specialty
C) factory outlet and specialty store
D) warehouse club and discount specialty
E) off-price retailer and wholesale store

Question 24

The six Ps of the retailing mix are product,place,price,promotion,personnel,and planning.

Question 25

For the past few years,adding interactivity in the retail environment has been one of the most popular strategies in retailing.

Question 26

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

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

Question 27

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

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

Question 28

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

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

Question 29

_____ 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) Wholesaling
B) Retailing
C) Business
D) Franchising
E) Distribution

Question 30

Housing several departments under one roof,a(n)_____ carries a wide variety of shopping and specialty goods and provides a high level of service.

A) supermarket
B) specialty store
C) convenience store
D) super club
E) department store

Question 31

To ensure that a firm has the desired atmosphere,retailers must select appropriately dense employees with lots of character.

Question 32

As a general rule of thumb,a retailer that has a high gross margin will have:

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

Question 33

_____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

A) Net income
B) Retained earnings
C) Profitability
D) Net equity
E) Gross margin

Question 34

A retail store can be classified according to its:

A) distribution method
B) inventory control
C) product assortment
D) management style
E) decor and atmosphere

Question 35

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

A) doubly managed outlet
B) chain store
C) franchise
D) independent retailer
E) licensor

Question 36

Providing great customer service is one of the most challenging elements in the retail mix because customer expectations for service are so varied.

Question 37

Small neighborhood florists,shoe stores,and ethnic food markets are most likely to be:

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

Question 38

Color can be used by retailers to create a mood or focus customer attention on a particular product.

Question 39

The number of different varieties of scented soaps carried by The Beauty Shoppe refers to the store's:

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

Question 40

Retail stores that are owned and operated as a group by a single organization are called _____.Under this form of ownership,administrative and purchasing tasks are handled by the home office.

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

Question 41

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) off-price retailer
B) specialty store
C) full-discount store
D) general store
E) warehouse club

Question 42

The development and opening of a store that sell nothing but materials used in creating scrapbooks is an example of:

A) repositioning
B) specialty retailing
C) electronic point of sale
D) store location modeling
E) consumer density

Question 43

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

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

Question 44

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

Question 45

Prices are usually higher in convenience stores than in supermarkets because convenience stores offer:

A) more specialty goods
B) a wider variety of products
C) a higher level of customer services
D) better location,longer hours,and faster service
E) higher quality goods

Question 46

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

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

Question 47

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

A) raised their prices
B) taken legal steps to prevent the sale of prescription drugs at supermarkets
C) provided customers with value-added services
D) introduced generic prescription medicines
E) nothing

Question 48

The buyer who heads a department in a department store is responsible for the:

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

Question 49

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.The store would most likely be classified as a:

A) hypermarket
B) convenience store
C) specialty store
D) department store
E) general store

Question 50

______ are large,departmentalized,self-service retailers that specialize in wide assortments of foodstuffs and a few nonfood items.

A) Supermarkets
B) Convenience stores
C) Membership wholesale clubs
D) Discount stores
E) Assortment merchandisers

Question 51

Each department in a department store is usually headed by a _____ who selects the merchandise mix for the department and may also choose the promotional devices and personnel for that department.

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

Question 52

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) Customers at specialty stores are not concerned with the distinctiveness of the merchandise or the store's physical appearance.
C) Specialty stores typically avoid price wars.
D) Specialty stores are ineffective test markets.
E) A typical specialty store carries a wider assortment of specialty merchandise than department stores.

Question 53

A _____ is not only a type of store,but also a method of retail operations.This type of retailer specializes in a given type of merchandise with a deep but narrow assortment.

A) warehouse club
B) convenience store
C) factory warehouse store
D) specialty store
E) general store

Question 54

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

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

Question 55

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

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

Question 56

_____ carry a limited line of high-turnover,high-priced goods and resemble miniature supermarkets.These self-service stores are typically located near residential areas and are open long hours,seven days a week.

A) Specialty stores
B) Wholesale stores
C) Convenience stores
D) Factory outlets
E) General stores

Question 57

The _____ at a Dillard's department store selects the merchandise for his or her department and is often responsible for the promotion and for personnel in that department.

A) buyer
B) purchasing agent
C) retail broker
D) merchandiser
E) franchisee

Question 58

Albertson's,Kroger,Winn-Dixie,and other supermarket chains offer a variety of nontraditional goods and services such as video rental,flower shops,dry cleaning,and banking.This practice is called:

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

Question 59

_____ are retailers that compete on the basis of low prices,high turnover,and high volume.

A) Convenience outlets
B) Discount stores
C) General stores
D) Department stores
E) Specialty stores

Question 60

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.Michaelson's stores are:

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

Question 61

_____ are 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) Specialty discount stores
B) Factory outlets
C) Mass merchandisers
D) Membership clubs
E) General stores

Question 62

Kmart utilizes 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.Kmart offers a wide variety of different product lines.Kmart is an example of a:

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

Question 63

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

A) seasonal outlets
B) mass merchandisers
C) factory outlets
D) discount stores
E) bargain basements

Question 64

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

A) Membership wholesale clubs
B) Extreme-value retailers
C) Factory outlets
D) Neighborhood outlets
E) Category killers

Question 65

Off-price retailers:

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

Question 66

Which of the following statements about nonstore retailing is true?

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

Question 67

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:

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

Question 68

A warehouse membership club:

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

Question 69

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

A) Full-line discount stores
B) Discount specialty stores
C) Factory outlets
D) Fashion stores
E) Specialty supercenters

Question 70

Specialty stores such as Office Depot,Bed Bath & Beyond,and Staples are often called category killers because:

A) they can destroy the profit potential for a category of merchandise for other retailers
B) they are located at stand alone sites
C) of their broad merchandise mix and shallow assortment
D) they are offer an exclusive category of merchandise
E) they carry only fast-selling items

Question 71

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

A) Nonstore retailing
B) Customerization
C) Hypershopping
D) Niche marketing
E) Specialty merchandising

Question 72

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.Laura is most likely shopping at a(n):

A) off-price discount retailer
B) factory outlet
C) industrial supply warehouse
D) warehouse membership club
E) wholesale outlet

Question 73

Which of the following statements about restaurants is true?

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

Question 74

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.This facility is correctly called a:

A) membership warehouse club
B) wholesale outlet
C) factory outlet
D) supercenter
E) mass merchandiser

Question 75

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

A) teenagers
B) professionals who like bargains
C) Asian-Americans
D) middle class innovators
E) people who are on fixed incomes

Question 76

_____ is 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) Specialty store positioning
B) Merchandise positioning
C) M-store retailing
D) The wheel of retailing
E) Mass merchandising

Question 77

_____ 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) Super outlets
B) Factory outlets
C) Wholesale discounters
D) Off-price discount retailers
E) Warehouse membership clubs

Question 78

Discount stores :

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

Question 79

A _____ 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) factory outlet
C) wholesale club
D) discount store
E) bargain basement store

Question 80

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

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