Chapter 13 Retailing and Wholesaling

Corporate Chains

two or more outlets that are commonly owned and controlled •Size allows them to buy in large quantities at lower prices and gain promotional economies ex: Sears or CVS

20) ________ have filled the ultralow-priced, high-volume gap by buying at less-than-regular wholesale prices and charging consumers less than retail. A) Off-price retailers B) Discount stores C) Convenience stores D) Chain stores E) Limited-service retailers

A) Off-price retailers

15) Which type of store carries a deep assortment, has knowledgeable staff, and might actually be viewed as a giant specialty store? A) category killer B) chain C) factory outlet D) shopping center E) independent

A) category killer

13) Which type of small store carries a limited line of high-turnover convenience goods and makes most of its revenues from cigarette, beverage, and gasoline sales? A) convenience B) chain C) department D) supermarket E) hypermarket

A) convenience

Types of Retailers: Organizational Approach

Corporate chains Voluntary chains Retailer cooperatives Franchise organizations Merchandising conglomerates

18) ________ sell standard merchandise at lower prices by accepting lower margins and selling higher volume. A) Merchant wholesalers B) Discount stores C) Full-service retailers D) Limited-service retailers E) Factory outlets

B) Discount stores

1) ________ includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. A) Franchising B) Retailing C) Brokering D) Wholesaling E) Disintermediation

B) Retailing

3) ________ is the basis of all discount operations and is typically used by sellers of convenience goods. Retailers offering this level of service require customers to perform their own "locate-compare-select" process in order to save money. A) Limited-service B) Self-service C) Full-service D) Specialty-service E) Wholesaling

B) Self-service

8) ________ are flourishing due to increased use of market segmentation and market targeting. A) Chain stores B) Specialty stores C) Superstores D) Discount stores E) Off-price stores

B) Specialty stores

10) Which type of store carries a wide variety of product lines and differentiates itself through service, but has been squeezed in recent years between more focused and flexible specialty stores on the one hand and more efficient,lower-priced discounters on the other? A) chain B) department C) factory outlet D) merchant wholesaler E) independents

B) department

7) Which of the following types of retailers likely requires their employees to focus most on assisting customers as they shop? A) self-service retailers B) full-service retailers C) off-price retailers D) limited-service retailers E) mega-retailers

B) full-service retailers

9) Specialty stores carry ________ with ________ within them. A) convenience items; mostly staples B) narrow product lines; deep assortments C) narrow product lines; shallow assortments D) wide product lines; shallow assortments E) wide product lines; deep assortments

B) narrow product lines; deep assortments

17) ________ retailers in the United States are growing faster than product retailers. A) Discount B) Merchant C) Service D) Specialty E) Off-price

C) Service

19) Early ________ cut expenses by offering few services and operating in warehouse-like facilities in low-rent,heavily traveled districts. A) chain stores B) factory outlet malls C) discount stores D) off-price retailers E) full-service retailers

C) discount stores

6) At Neiman Marcus, a first-class department store, customers shop for high-end products and have come to expect assistance in every phase of the shopping process. Neiman Marcus is a ________. A) self-service retailer B) limited-service retailer C) full-service retailer D) specialty store E) power center

C) full-service retailer

5) Which type of stores usually carry more specialty goods for which customers like to be "waited on" and have much higher operating costs, which are passed along to the customer? A) self-service stores B) category killer stores C) full-service stores D) independent stores E) specialty-service retailers

C) full-service stores

4) ________ such as Sears provide more sales assistance because they carry more shopping goods about which customers need information. Their increased operating costs result in higher prices. A) Self-service retailers B) Full-service retailers C) Off-price retailers D) Limited-service retailers E) Specialty-service retailers

D) Limited-service retailers

11) ________ are facing slow sales growth because of slower population growth, increased competition, and the rapid growth of out-of-home eating. A) Convenience stores B) Department stores C) Chain stores D) Supermarkets E) Hypermarkets

D) Supermarkets

2) In recent years, ________ has been growing fast. This includes selling to final consumers through direct mail,catalogs, telephone, and the Internet. A) social marketing B) shopper marketing C) franchising D) non-store retailing E) e-commerce

D) non-store retailing

12) Which type of retailer tends to be the most frequently shopped? A) convenience stores B) department stores C) superstores D) supermarkets E) off-price retailers

D) supermarkets

14) Which type of store is much larger than regular supermarkets and offers a large assortment of routinely purchased food products, nonfood items, and services? A) category killer B) chain C) factory outlet D) superstore E) off-price

D) superstore

Category killers•

Deep in category with sales staff

Types of Retailing Relative to Prices

Discount stores Off-price retailers Factory outlets Warehouse clubs

16) Service retailers include all of the following EXCEPT ________. A) hotels and motels B) airlines C) movie theaters D) bowling alleys E) convenience stores

E) convenience stores

Convenience stores•

Limited line of high-turnover goods

Types of Wholesalers

Merchant wholesalers Agents and brokers Manufacturers' sales branches and offices

Specialty stores•

Narrow product line with deep assortment

Superstores•

Non-food goods

Department stores•

Wide variety of product lines

Retailers

are businesses whose sales come primarily from retailing

Franchise organizations

based on some unique product or service; on a method of doing business; or on the trade name, good will, or patent that the franchisor has developed -McDonalds

Brokers and agents

do not take title, perform a few functions, and specialize by product line or customer type •Brokers bring buyers and sellers together and assist in negotiations •Agents represent buyers or sellers

Retailing

includes all the activities in selling products or services directly to final consumers for their personal, non-business use

Retailer cooperatives

independent retailers that band together to set up a joint-owned, central wholesale operation and conduct joint merchandising and promotion effort •Ace Hardware •Associated Grocers

Everyday low price (EDLP)

involves charging constant, everyday low prices with few sales or discounts

High-low pricing

involves charging higher prices on an everyday basis, coupled with frequent sales and other price promotions

Merchant wholesalers

largest group of wholesalers and include: •Full-service wholesalers who provide a full set of services •Limited service wholesalers who provide few services and specialized functions

Wheel-of-retailing concept

many new types of retailing forms begin as low-margin, low-price, low-status operations, and challenge established retailers. As they succeed they upgrade their facilities and offer more services, increasing their costs and forcing them to increase prices, eventually becoming the retailers they replaced.

Retail convergence

merging of consumers, producers, prices, and retailers, creating greater competition for retailers and greater difficulty differentiating offerings

Price policy

must fit the target market and positioning, product and service assortment, and competition •High markup on lower volume •Low markup on higher volume

Importance of retail technology

provides better forecasts, inventory control, electronic ordering, transfer of information, scanning, online transaction processing, improved merchandise handling systems, and the ability to connect with customers

Voluntary chains

wholesale-sponsored groups of independent retailers that engage in group buying and common merchandising •IGA •Western Auto

Bulk breaking

wholesaler buys in larger quantity and breaks into smaller lots for its customers

Warehousing

wholesaler holding inventory, reducing its customers' inventory cost and risk

non-store retailing includes:

•Mail order •Television •Phone •Online

Marketing mix decisions (4 P's)

•Product •Price •Promotion •Place

Challenges in Wholesaling

•Resistance to price increases •Fewer suppliers •Changing customer needs •Adding value by increasing efficiency and effectiveness

Target market and positioning decisions

•Size of customer •Type of customer •Need for service