Deck 18: Managing Retailing, Wholesaling, and Logistics

Question 1

Aldi, Lidl, Dollar General, and Family Dollar are examples of ________, as they carry a more restricted merchandise mix than discount stores at even lower prices.

A) off-price retailers
B) extreme value stores
C) superstores
D) convenience stores
E) specialty stores

Answer 1

B

Question 2

E&OE produces and markets its own brand of skincare products using herbal remedies and natural ingredients through standalone stores as well as an online portal. E&OE is a(n) ________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) extreme value

Answer 2

B

Question 3

Which of the following is an example of direct selling?

A) E&OE sells its herbal skincare products exclusively through its standalone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne's sells most of its products to customers through home sales parties.
D) J3 is an online shopping portal where customers can buy directly from manufacturers.
E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

Answer 3

C

Question 4

H&A is a retail chain that specializes in selling goods at very low prices. To achieve this, it stocks a very narrow assortment of basic necessities and offers customers a "no-frills" shopping experience. H&A is an example of a(n) ________ store.

A) off-price
B) specialty
C) hard-discount
D) superstore
E) convenience

Question 5

Which of the following types of retailing generally entails the highest costs?

A) full-service
B) self-service
C) limited-selection
D) limited service
E) self-selection

Question 6

________ includes all the activities in selling goods or services directly to final consumers for personal, non-business use.

A) Wholesaling
B) Retailing
C) Procurement
D) Promoting
E) Warehousing

Question 7

In the ________ type of retailing, customers usually find their own goods, although they can ask salespeople for assistance.

A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection

Question 8

A large staff, along with a higher proportion of specialty goods and slower-moving items and many services, are usually features of ________ retailing.

A) self-service
B) self-selection
C) limited service
D) full-service
E) limited-selection

Question 9

Bill and Josh are considering opening a retail store. They have identified their target market and location and are finalizing the details of the merchandise they will carry. Since the neighborhood is rundown and the customers in the area are very price-conscious, Bill and Josh want to offer goods from well-known brands, but at lower rates than the full retail prices of the products. They choose to stock excess production from manufacturers or goods that have remained unsold at other retailers. This is a description of a(n) ________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) catalog

Question 10

Which of the following is an example of a limited-service retailer?

A) Customers at TAB pick out the products they want and pay at the checkout counter.
B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing products.
C) Mina's allows customers to checkout their own purchases in order to reduce the staff count.
D) As CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping.
E) Alison's stocks a number of specialty products and the store's salespeople generally help shoppers with all their needs.

Question 11

Companies that sell products door-to-door or at home sales parties are engaging in ________.

A) franchising
B) network marketing
C) direct-response marketing
D) corporate selling
E) direct marketing

Question 12

A factory outlet is an example of a(n) ________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) catalog

Question 13

Which of the following is true for retailing?

A) Manufacturers are not considered to be retailers as they are engaged in producing the product.
B) Vending machines are considered to be retailing only if they are located within stores.
C) Retailing deals only with goods; it does not include services.
D) Selling from a consumer's home is direct selling, but not retailing.
E) Wholesalers are only considered to be retailers if they are selling to final consumers.

Question 14

In ________ retailing, salespeople are ready to assist in every phase of the "locate-compare-select" process.

A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection

Question 15

Discount stores that try to keep prices as low as possible are more likely to function using ________ operations.

A) limited service
B) self-selection
C) full-service
D) self-service
E) limited-selection

Question 16

Which of the following is an example of retailing?

A) Dylan's sends catalogs to retail, industrial, and institutional customers.
B) SEZ U Inc. sells a limited line of fast-moving goods to small retailers for cash.
C) BEL Inc. sells FMCG goods to merchant wholesalers and distributors.
D) Praxis International sells products to consumers directly through the Internet.
E) Hub Styles procures its raw materials directly from farmers in the region.

Question 17

Which of the following is true for self-service retailing?

A) They carry more shopping goods and services such as credit and merchandise-return privileges.
B) This service model is favored by discount stores and customers who want to save money.
C) It results in high staffing costs compared to other forms of retailing.
D) Salespeople are ready to assist in every phase of the "locate-compare-select" process.
E) Customers need more information and assistance than in other forms of retailing.

Question 18

An example of a restaurant with a narrow and deep assortment is a ________.

A) small lunch counter
B) cafeteria
C) large restaurant
D) casual dining restaurant chain
E) delicatessen

Question 19

Avon, Tupperware, and Southwestern Company of Nashville are among companies in the multibillion-dollar ________ industry, which involves selling door-to-door or at home sales parties.

A) direct marketing
B) catalog showroom
C) direct selling
D) automatic vending
E) buying services

Question 20

Reynold's is a grocery chain that has always catered to mid-market customers. However, the owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost and discounted products. To attract customers, Mal decides to make a gradual switch to the discount store format, but to do this, he will have to cut costs wherever possible. Which of the following types of services should Mal avoid in order to lower costs?

A) limited service
B) self-selection
C) full-service
D) self-service
E) limited-selection

Question 21

The ________ marketing sales system works by recruiting independent businesspeople who act as distributors.

A) catalog
B) multilevel
C) direct-response
D) corporate
E) direct

Question 22

Discount stores usually stock leftover goods, overruns, and irregular merchandise, sold at less than retail.

Question 23

An independent retailer using a central buying organization and joint promotion efforts with other retailers is part of a ________.

A) corporate chain store
B) voluntary chain
C) retailer cooperative
D) merchandising conglomerate
E) franchise organization

Question 24

Which of the following is an example of direct marketing?

A) E&OE sells its herbal skincare products exclusively through its standalone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne's sells most of its products to customers through home sales parties.
D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms.
E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

Question 25

The network marketing sales system works by recruiting independent businesspeople who act as distributors.

Question 26

Retailing includes all the activities involved in selling goods or services directly to final consumers.

Question 27

A ________ is a wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising.

A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization

Question 28

Electronic shopping is a type of ________.

A) direct selling
B) network marketing
C) multilevel selling
D) corporate selling
E) direct marketing

Question 29

Which of the following is a benefit of franchising for franchisees?

A) The franchisee finds it easier to borrow money from financial institutions.
B) The franchisee receives ownership of the franchisor's trademark.
C) The franchisee must change its operations to suit those of the franchisor.
D) The franchisee collects royalty payments from the franchisor.
E) The franchisee is paid by the franchisor for being part of the system.

Question 30

Which of the following is true for franchisors?

A) The franchisor has to pay the franchisee to be part of the franchise system.
B) The franchisor licenses the trademark from the franchisee.
C) The franchisor must change its operations to suit those of the franchisee.
D) The franchisor collects royalty payments from the franchisee.
E) The franchisor pays startup costs for the franchisee.

Question 31

Jake wants to open a Subway franchise in his small town. To do this, he must pay the company a ________ fee.

A) slotting
B) title
C) royalty
D) merchandising
E) residual

Question 32

Telemarketing is a type of ________.

A) direct selling
B) network marketing
C) multilevel selling
D) close-range marketing
E) direct marketing

Question 33

________ includes all the activities in selling goods or services to those who buy for resale or business use.

A) Retailing
B) Wholesaling
C) Procurement
D) Promoting
E) Warehousing

Question 34

A(n) ________ is a storeless retailer serving a specific clientele - usually employees of large organizations - who are authorized to buy from a list of retailers that have agreed to give discounts in return for inclusion on the list.

A) direct-selling vendor
B) direct marketing vendor
C) buying service
D) automatic vendor
E) corporate retailer

Question 35

A ________ is a retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends.

A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization

Question 36

Which of the following is true for franchisees?

A) The franchisee is paid by the franchisor to be part of the franchise system.
B) The franchisee licenses a trademark to the franchisor.
C) The franchisee must change its operations to suit those of the franchisor.
D) The franchisee collects royalty payments from the franchisor.
E) The franchisee owns the trade or service mark.

Question 37

Which of the following wholesaler functions reduces inventory costs and risks to suppliers and customers?

A) selling and promoting
B) warehousing
C) transportation
D) market information
E) assortment building

Question 38

Electronic shopping is a form of direct marketing.

Question 39

In ________, a salesperson goes to the home of a host who has invited friends, demonstrates the products, and takes orders.

A) catalog marketing
B) franchising
C) direct-response selling
D) network marketing
E) direct marketing

Question 40

Full-service retailers generally have the lowest costs of all retail types.

Question 41

Electronic shelf labeling allows retailers to ________.

A) check inventory levels instantaneously
B) order electronically from suppliers
C) run continual promotional messages
D) advertise sales and special offers
E) change price levels instantaneously

Question 42

Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. Offer one possible reason why this move is justified.

Question 43

A retailer cooperative is a retail firm that is owned by its customers.

Question 44

Staples is a giant retailer that concentrates on selling office supplies. Staples is an example of a(n) ________.

A) ambush marketer
B) supercenter
C) megamarketer
D) category killer
E) guerilla marketer

Question 45

List and explain the four service levels offered by retailers.

Question 46

Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. What can Sandy's do to justify this move?

Question 47

Differentiate between brokers and agents.

Question 48

List the major types of limited-service wholesalers and explain how each type functions.

Question 49

Gap and Pottery Barn are examples of franchise organizations, where two or more retail outlets are owned and controlled by a corporation that employs central buying and merchandising and sells similar lines of merchandise.

Question 50

Mal's father and grandfather ran Reynold's, a general store in the town of Bayswater. When Mal inherited the store, the town was expanding rapidly and a number of multinational franchisors showed interest in entering the town. Mal wants to turn Reynold's into a franchise of Blue Sun, a fast-food chain. Why shouldn't Mal go the franchise route?

Question 51

Skincare company E&OE has realized that its customers are very loyal to the brand and play a large part in popularizing it by word of mouth. E&OE wants to leverage this customer loyalty by using it to generate sales outside its store format. How can E&OE achieve this?

Question 52

In what ways does franchising benefit the franchisor? In what ways does it benefit the franchisee?

Question 53

Sandy's Stores is a small chain of grocery stores located in a few neighboring towns. The stores have always been largely self-service, but the company is considering making a switch to full-service stores. Offer reasons why Sandy's should stick with its current system.

Question 54

A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.

Question 55

Mal's father and grandfather ran Reynold's, a general store in the town of Bayswater. When Mal inherited the store, the town was expanding rapidly and a number of multinational franchisors showed interest in entering the town. Mal wants to turn Reynold's into a franchise of Blue Sun, a fast-food chain. What benefits can Mal gain from this move?

Question 56

A franchise organization is a corporate retail organization.

Question 57

The franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments.

Question 58

Corporate chain stores such as Subway, Jiffy-Lube, Holiday Inn, Supercuts, and 7-Eleven account for $1 trillion of annual US sales and 40 percent of all retail transactions.

Question 59

List the four categories of nonstore retailing and briefly explain each.

Question 60

Which of the following is true for the retail industry?

A) Discount stores and catalog showrooms are competing for the same customers.
B) Upscale retailers see a decline in sales as middle-market retailers thrive.
C) Small, specialized retailers are crowding out larger, more diverse retailers.
D) Store retailing sees no competition from nonstore retailing.
E) Discount stores are not doing as well as middle-market retailers.

Question 61

"Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.

Question 62

American businessman King Gillette pioneered the sales model in which razor handles were given away for free or sold at a loss, but sales of disposable razor blades were very profitable. This is known as the ________ model.

A) two-tiered pricing
B) predatory pricing
C) cross selling
D) loss leading
E) product churning

Question 63

Growth in the retail market is centered firmly in the middle market, leaving luxury retailers and discounting specialists struggling.

Question 64

Consumers now receive sales offers through direct-mail letters and catalogs, television, cell phones, and the Internet. The nonstore-based retailers are taking business away from store-based retailers.

Question 65

Most retailers will put low prices on some items in order to increase traffic to the store. These low-priced products are known as ________.

A) loss leaders
B) price ceilings
C) price skimmers
D) price floors
E) cold calls

Question 66

Which of the following is a postpurchase service offered by retailers?

A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet

Question 67

Supercenters retail grocery items as well as a huge selection of nonfood merchandise.

Question 68

HCN is a wholesaler that supplies consumer good products to a number of retailers. HCN has witnessed the worrying trend of its competitors losing out on suppliers who approach retailers directly. How can HCN strengthen its relationship with manufacturers and prevent this?

Question 69

Department stores only face competition from other department stores as other retailing forms are not a threat to their sales and profitability.

Question 70

In the corporate headquarters of a supermarket chain, ________ are responsible for developing brand assortments and listening to salespersons' presentations.

A) central buyers
B) brokers
C) specialist buyers
D) agents
E) specialized wholesalers

Question 71

In supermarkets and other retail outlets, RFID is used to ________.

A) change prices instantaneously
B) check for spoilage or damage to goods
C) advertise special offers and discounts
D) run continual promotional messages
E) monitor inventory and track goods

Question 72

List some recent trends in retailing.

Question 73

Which of the following is an example of a category killer?

A) PETCO
B) Walmart
C) Kohl's
D) The Limited
E) Tesco

Question 74

Which of the following is true for direct product profitability?

A) It is highly correlated with the gross margin on a product.
B) It is negligible compared to the gross margin on a product.
C) It bears little relation to the gross margin on a product.
D) It is significantly lower than the gross margin on a product.
E) It is exactly the same as the gross margin on a product.

Question 75

Firms are increasingly recognizing the importance of influencing consumers at the point of purchase.

Question 76

As discount retailers improve their quality and image, consumers have been willing to trade down.

Question 77

Which of the following is a prepurchase service offered by retailers?

A) accepting orders over the telephone
B) shipping the product
C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet

Question 78

A store selling expensive artwork and luxury goods typically falls into the ________ group with respect to margins and volume.

A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume

Question 79

Mass merchandisers and discount stores typically fall into the ________ group with respect to margins and volume.

A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume

Question 80

Electronic shelf labeling allows retailers to check inventory levels instantaneously.