Chapter 12

Retailers may have a difficult time crossing borders if they fail to appreciate similarities in retailing environments, and consumer behavior and preferences.

False

Trucks capability is second only to water in terms of the variety of products that can be transported.

False

When Carrefour, Tesco, or Walmart set up shop in developing countries, they provide customers with access to more products but at higher prices than were available previously. This is an example of global retailing.

False

When utilizing the services of a local independent distributor, management is well advised to treat the distributor as a temporary market-entry vehicle.

False

"Channel strategy" involves an analysis of each shipping mode to determine which mode, or combination of modes, will be both effective and efficient in a given situation.

True

A company or activity that is somewhat removed from the final customer is said to be upstream in the value chain.

True

After successfully penetrating China's first-tier cities, Mary Kay expanded into second- and third-tier locations

True

As Walmart extends its reach around the globe, observers are using words such as "assault" and "invasion" to describe what it's like for a nation that the company has fixed in its sights.

True

By definition, a retailer that caters to the general public would be "downstream" in an industry's supply chain.

True

Due to political upheaval in the Middle East, in spring 2011, Procter & Gamble was forced to briefly close plants in Egypt that supply products for South Africa.

True

E-bay pioneered a form of online commerce known as p-to-p or peer-to-peer marketing whereby individual consumers market products to other individuals.

True

Hypermarkets are a hybrid retailing format combining the discounter, supermarket, and warehouse club approaches under a single roof.

True

In Japan, the biggest barrier facing U.S. auto manufacturers is that half the cars that are sold each year are sold door-to-door.

True

In many countries, it is customary to eat horse meat, since the flesh is lean, and high in iron and other nutrients.

True

Laura Ashley, The Body Shop, Victoria's Secret, Starbucks, the Disney Store and Gap are examples of global retail operators that can be classified as specialty retailers since they offer less variety than department stores.

True

Legislatures in India are suspicious about Walmart's motives in going to India, since they fear, the foreigners will raise prices after they have driven small operators out of business.

True

Tesco came up short in its effort to penetrate the U.S. market.

True

The close long-term relationships between auto salespersons and the Japanese people can be considered as a consumer version of the keiretsu system.

True

The reason why Saks Fifth Avenue has licensed stores in the Middle East is to limit their risk when targeting unfamiliar, difficult-to-enter markets.

True

The term "logistics" management describes the integration of activities necessary to ensure the efficient flow of raw materials, in-process inventory, and finished goods from producers to customers.

True

Three of the world's five largest malls are in Asia.

True

Walmart pulled out of Germany and South Korea and Best Buy closed several stores in China. This is an example that illustrates that it is not possible to export a retail business model that has proven successful in the domestic market

True

Water transportation is rated "low" in reliability since approximately 200 freighters sink due to bad weather or other factors.

True

When British entrepreneur Richard Branson opened the first Virgin Megastore in Japan, he did so by establishing a joint venture with the Marui retailing chain. This represents an appropriate market-entry approach for a global retailer.

True

Which of the following most accurately describes the relative length of consumer and industrial distribution channels? A) Consumer channels tend to be longer (consist of more intermediaries) than industrial channels. B) Industrial channels tend to be longer (consist of more intermediaries) than consumer channels. C) Both consumer and industrial channels tend to be long (consist of several intermediaries). D) Both consumer and industrial channels tend to be short (consist of few intermediaries). E) Consumer channels tend to be shorter (consist of few intermediaries) than the industrial channels.

A) Consumer channels tend to be longer (consist of more intermediaries) than industrial channels.

Which of the following does not qualify as a "category killer?" A) Victoria's Secret B) IKEA C) Home Depot D) Circuit City E) Toys "R" Us

A) Victoria's Secret

When British entrepreneur Richard Branson established the first Virgin Megastore in France, he invested a great deal of money to develop a retail space on the famous Champs-Elysées. Judging by the approach Branson used, he and his management team must have viewed France as: A) culturally close and easy to enter. B) culturally distant and easy to enter. C) culturally close and difficult to enter. D) culturally distant and difficult to enter. E) culturally difficult and easy to enter.

A) culturally close and easy to enter.

"Containerization" refers to a company's: A) designing attractive product packaging that will help a product "sell itself." B) use of computer technology to keep a lid on ("contain") distribution costs. C) use of refrigerated warehouses for perishable products. D) use of standard-sized shipping boxes that can be transported in various ways. E) method of shipment by using oval size steel containers to fit different commodities.

A) designing attractive product packaging that will help a product "sell itself."

Which of the following correctly characterizes the retailing strategy of Benetton, IKEA, and Gap? A) few product categories, own-label focus B) few product categories, manufacturer brand focus C) many product categories, own-label focus D) many product categories, manufacturer brand focus E) none of the above

A) few product categories, own-label focus

A French winery packs its wine in a 40-foot container that is trucked to a port and then loaded onto an ocean-going vessel. This is an example of: A) intermodal transportation. B) inventory control. C) hypermarketing. D) "cherry picking" a product. E) containerization.

A) intermodal transportation.

A freighter loaded with 40-foot shipping containers leaves a port in Europe and sails to New York, where the containers are transferred to railroad cars and transported to the West coast. At the port of San Francisco, the containers are loaded onto another freighter bound for Japan. The term that best describes this situation is: A) intermodal transportation. B) inventory management. C) greenfield investment. D) hypermarketing. E) containerization.

A) intermodal transportation.

Saks Fifth Avenue has ________ stores in the Middle East. A) licensed B) organic C) franchise D) joint venture E) own-label focus

A) licensed

"Organized retail" is a term used to describe: A) modern chain stores. B) grocery stores. C) local retail chains. D) supermarkets. E) hypermarkets.

A) modern chain stores.

Coca-Cola Company's global marketing leadership position is based in part on its ability to put Coke "within an arm's reach of desire"; in other words, it is the ability to create: A) place utility. B) time utility. C) form utility. D) information utility. E) all of the above

A) place utility.

In the axis which differentiates between retailers, IKEA falls in: A) quadrant A. B) quadrant B. C) quadrant C. D) quadrant D. E) quadrant E.

A) quadrant A.

Which country has the biggest market for Tupperware? A) Romania B) Indonesia C) China D) Russia E) India

B) Indonesia

Which of the following is the largest retailer in the world in terms of annual sales according to the top five global retailers, 2012? A) Sears B) Metro C) Kmart D) Carrefour E) Walmart

B) Metro

What solution did Andersen Consulting provide to the Moscow Bread Company to solve the problem of stale bread? A) Deliver the bread frozen. B) Package the bread in plastic bags. C) MBC should convert a paperless office to cut red tape. D) Deliver the bread sliced rather than in whole loaf form. E) Use paper packaging for bread.

B) Package the bread in plastic bags.

An important new tool for inventory management is: A) ODW. B) RFID. C) LEGO. D) VUCA. E) EPOS.

B) RFID.

Departmentalized, single-story retail establishments that offer food and nonfood items, mostly on a self-service basis are called: A) Specialty retailers. B) Supermarkets. C) Convenience stores. D) Discount retailers. E) Hyper markets.

B) Supermarkets.

Peer-to-peer (p-to-p) marketing uses distribution channels through: A) business-to-consumers. B) electronic commerce. C) business-to-business. D) door-to-door. E) manufacturer-to-wholesalers.

B) electronic commerce.

Which of the following correctly characterizes the retailing strategy shared by Toys "R" Us and Virgin Megastores? A) few product categories, own-label focus B) few product categories, manufacturer brand focus C) many product categories, own-label focus D) many product categories, manufacturer brand focus E) none of the above

B) few product categories, manufacturer brand focus

The scandal about finding horse DNA in frozen beef burgers sold in supermarkets in Ireland became a big issue. However, the fact remains that 60,000 tons of horse meat were sold in Europe in 2012. Other facts about horse meat include all of the following except: A) in Europe, horse meat is available from a variety of suppliers. B) it is legal to produce horse meat in the United States. C) horses are shipped from the United States to Mexico and Canada for slaughter. D) Italy imports 50 million pounds of horse meat annually from Ireland. E) horse meat is lean and high in iron and other nutrients.

B) it is legal to produce horse meat in the United States.

Order processing, warehousing, and inventory management are all functions pertaining to: A) a polycentric orientation. B) physical distribution and logistics. C) sales promotion. D) personal selling. E) chain acquisition.

B) physical distribution and logistics.

Marketing channels exist to create utility for customers. The major categories of channel utility include all of the following except: A) place utility. B) price utility. C) information utility. D) form utility. E) time utility.

B) price utility.

In less-developed countries the most important channel of distribution is: A) door to door. B) public marketplaces. C) wholesale marketplaces. D) pyramid schemes. E) retail stores.

B) public marketplaces.

By definition, ________ feature a narrow but deep merchandise mix and high levels of service. A) department stores B) specialty retailers C) supermarkets D) convenience stores E) discount stores

B) specialty retailers

When a company uses intermodal or multimodal transportation, it is: A) using multiple channels. B) using land and water shipping. C) shipping via more than one railroad line. D) using the services of both UPS and FedEx. E) using different size containers for shipment.

B) using land and water shipping.

Which personal computer company began life as a b-to-b marketer and then began marketing direct to the home PC market? A) Hewlett-Packard B) Compaq C) Dell D) Acer E) Sony

C) Dell

Which of the following is not an appropriate guideline for companies selecting independent distributors in international markets? A) Select distributors; don't let them select you. B) Look for distributors capable of developing markets. C) Give local distributors control over marketing strategy. D) Treat local distributors as long-term partners. E) All of the above are appropriate guidelines.

C) Give local distributors control over marketing strategy

When Walmart entered the German market, ________ were already entrenched. A) Specialty retailers B) Discount retailers C) Hard discounters D) Hypermarkets E) Supermarkets

C) Hard discounters

Kodak adopted a direct involvement approach in Japan by utilizing independent agents, distributors and retailers.

False

Which of the following statements is not correct? A) Walmart pulled out of Germany and South Korea. B) Best Buy closed several stores in China. C) Home Depot pulled out of China. D) Mattel closed its flagship Barbie store in Shanghai. E) Tesco shout down Fresh & Easy stores in the United States.

C) Home Depot pulled out of China.

All of the following stores are categorized as "superstores" except: A) Toys "R" Us. B) Home Depot. C) IKEA. D) Babies "R" Us. E) The Body Shop.

C) IKEA.

Sales representatives in which Japanese industry cultivate close, long-term relations with customers by selling door-to-door? A) consumer electronics B) pharmaceuticals C) automobiles D) soft drinks E) groceries

C) automobiles

The entry global retailing market expansion strategies include all of the following except: A) franchise. B) chain acquisition. C) departmental stores. D) joint ventures. E) organic.

C) departmental stores.

Some wine importers insist on shipping their wines in refrigerated containers to protect the wines from being damaged by high temperatures. Such importers are creating which kind of utility? A) place utility B) time utility C) form utility D) information utility E) worker utility

C) form utility

Which approach to retail expansion is most appropriate when targeting a country that management considers both culturally close and easy to enter? A) organic growth B) chain acquisition C) franchise D) joint venture E) own-label focus

C) franchise

To motivate shopkeepers to stock more of P & G's products, the company launched a: A) door-to-door program. B) retail store program. C) golden store program. D) hypermarket program. E) sole distributor program.

C) golden store program.

Breaking all the conventional norms, Selfridge opened his department store just off Oxford Street. The changes incorporated include all of the following except one: A) perfume and fragrance were moved to the front in order to avoid any horse dung odors. B) goods were put within reach of the customers. C) goods were kept behind counters and were available by asking store clerks. D) customers always came first. E) early bird specials were offered.

C) goods were kept behind counters and were available by asking store clerks.

Channel decisions are important because: A) commitments are flexible. B) relationships change with time. C) it is expensive to terminate. D) issues can be solved by arbitration. E) local laws do not protect agreements.

C) it is expensive to terminate.

Which of the following categories best describes the approach of Britain's Marks & Spencer to global retailing? A) few product categories, own-label focus B) few product categories, manufacturer brand focus C) many product categories, own-label focus D) many product categories, manufacturer brand focus E) none of the above

C) many product categories, own-label focus

The retail environment in developing countries presents challenges for marketing nonperishable items. In Mexico, Proctor & Gamble, Unilever, Colgate-Palmolive, and other global consumer product companies use ________ for their products. A) door-to-door selling B) buy-in-bulk selling C) mom-and-pop stores D) franchised stores E) manufacturer-owned stores

C) mom-and-pop stores

eBay was a pioneer in a form of online marketing known as: A) b-to-c. B) b-to-b. C) p-to-p. D) d-to-d. E) c-to-b.

C) p-to-p.

If a commodity raw material comes from Africa, gets refined in Asia, then shipped to South America for finishing, and finally transported to the Middle East and then sold around the world—this represents a similar process used for products marketed by: A) Exxon. B) McDonald's. C) Caterpillar. D) IKEA. E) Sears.

D) IKEA.

Which of the following transportation modes ranks lowest in capability? A) truck B) railroad C) Internet D) air E) water

D) air

When British entrepreneur Richard Branson established the first Virgin Megastore in Japan, he established a joint venture with the Marui retailing chain. Judging by the approach Branson used, he and his management team must have viewed Japan as: A) culturally close and easy to enter. B) culturally distant and easy to enter. C) culturally close and difficult to enter. D) culturally distant and difficult to enter. E) culturally difficult and easy to enter.

D) culturally distant and difficult to enter.

When Walmart stores first expanded into Mexico, management established a joint venture with the country's largest retailer. Judging by the approach Walmart used, management must have viewed Mexico as: A) culturally close and easy to enter. B) culturally distant and easy to enter. C) culturally close and difficult to enter. D) culturally distant and difficult to enter. E) culturally difficult and easy to enter.

D) culturally distant and difficult to enter.

When companies adopt "indirect involvement" channel they have all of the following activities except: A) utilize independent agents. B) use distributors. C) utilize retailers. D) establish their own sales force. E) utilize those who have network of stores.

D) establish their own sales force.

In exchange for a pledge to carry at least 40 different Procter & Gamble products, participating stores receive regular visits from P & G representatives who tidy and arrange display areas. This motivational program is referred to as: A) "buy-in-bulk" store program. B) "high-frequency" store program. C) "mom-and-pop" store program. D) "shop operators" program. E) "golden store" program.

E) "golden store" program.

Which of the following is an appropriate guideline for companies selecting independent distributors in international markets? A) Select distributors; don't let them select you. B) Look for distributors capable of developing markets. C) Treat local distributors as long-term partners. D) Maintain control over marketing strategy from day one. E) All of the above are appropriate guidelines.

E) All of the above are appropriate guidelines.

In spite of Walmart's potential to transform India's retail sector for the better, Indian activists and policy makers are worried because: A) Western-style, big-box retailing is anathema. B) millions of shopkeepers will be out of business. C) policy makers are suspicious of the company's motives. D) attitude that can be traced back to the British East India company of the colonial era. E) all of the above

E) all of the above

Physical distribution and logistics are concerned with all but one of the following: A) order processing. B) warehousing. C) inventory management. D) transportation. E) designing in-store displays.

E) designing in-store displays.

Inventory management is: A) determining what type of warehouse to manage. B) establishing an inventory channel. C) managing physical distribution of products. D) purchasing products. E) ensuring cost control.

E) ensuring cost control.

The less frequently a product is ordered, the lower the inventory carrying costs.

F

A distributor with good contacts is obviously the best one to select in terms of generating quick sales and revenues.

False

An exporter that is new to a particular market would do well to choose a middleman with a reputation for "cherry picking" products.

False

Distribution channels for automobiles in Japan and the United States are similar in that most car buyers in both countries visit dealerships before making a purchase.

False

Swedish furniture retailer IKEA pulled meatballs from its cafeterias and grocery sections in several countries after food inspectors found some samples that contained horse meat.

T