MKTG 3348 Retail Management Exam 2

A(n)_______ vertical marketing channel exists when one of the members takes the initiative to manage the channel. a. administered b. allocated c. conventional d. concentrated e. concentric

A

The _____ Act establishes protection for trademarks. a. Lanham b. Hart-Scott-Rodino c. Sherman d. Clayton e. Robinson-Patman

A

Retailers frequently use _____ for short-term loans to fund working-capital requirements. a. commercial banks b. factors c. e-tailing brokers d. stock and commodity exchanges e. venture-capital firms

B

Sylvan Learning, The UPS Store, AAMCO Transmissions, H&R Block, and Lawn Doctor are examples of what kind of vertical marketing channel? a. Wholesaler-sponsored voluntary group b. Contractual channel system c. Administered system d. Retailer-owned cooperative e. Conventional marketing system

B

Which of the following external forces does NOT have a major influence on the supply chain? a. Technological environment b. Employee morale c. Legal environment d. Consumers e. Behavior of competitors

B

A _____ is defined as a set of institutions that moves goods from the point of production to the point of consumption. a. retail system b. transporter c. supply chain d. franchisee e. value chain

C

A(n) _____ is the introductory or first material viewers see when they access a retailer's Internet site. It is the equivalent to a retailer's store-front in the physical world. a. virtual store b. web presence c. home page d. on-line presence e. virtual reality

C

All of the following EXCEPT _____ are included in the top categories for counterfeit products sold in the United States. a. video games b. apparel c. handbags d. watches e. golf clubs

C

There are three types of primary marketing institutions: manufacturers, retailers and: a. transporters. b. agents/brokers. c. wholesalers. d. advertisers. e. warehouses.

C

When all airlines agree to set fares at the same price, they are: a. engaging in vertical price fixing. b. violating fair trade laws. c. engaging in horizontal price fixing. d. violating the Federal Trade Commission Act. e. engaging in price discrimination.

C

Which of the following statements about dual distribution is incorrect? a. It may have an adverse effect on manufacturer-retailer relationships. b. It can take place when a manufacturer opens it own retail store in a market area when it feels that the current retailers handling the product line are not doing an adequate job. c. All dual distribution arrangements are illegal. d. It is legal for a manufacturer to manage a corporately owned vertical marketing system that competes with independent retailers that the manufacturer also supplies. e. It occurs when a manufacturer sells to independent retailers and also through its own retail outlets.

C

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices. a. Horizontal price fixing b. Vertical price fixing c. Price discrimination d. Deceptive pricing e. Predatory pricing

C

_____ price fixing occurs when a retailer collaborates with the manufacturer or wholesaler to resell an item at an agreed upon price. a. Deceptive b. Horizontal c. Vertical d. Negotiated e. Coordinated

C

A _____ business district is smaller than a central business district (CBD) and revolves around at least one department or variety store at a major street intersection. a. secondary b. substandard c. community d. suburban e. neighborhood

A

A _____ business district usually consists of an unplanned shopping area around the geographic point at which all public transportation systems converge; it is usually in the center of the city and often where the city originated historically. a. central b. convenient c. secondary d. suburban e. neighborhood

A

A salesperson tells a customer, "Ninety percent of the people we've sold these tires to over the past five years have gotten at least 25,000 miles of use out of them without any problems. Therefore, I can assume that you should get no less than 30,000 miles with them given the way you drive." The salesperson: a. may be creating an expressed warranty. b. is engaging in false advertising. c. could never be held responsible for the tire's longevity. d. may be creating an implied warranty of merchantability. e. is creating a warranty of title.

A

Burger Blaster claims on its website that it uses only the best beef in making its burgers, unlike Burger Barn, its largest competitor. Actually, Burger Blaster and Burger Barn buy exactly the same type of beef from the same wholesaler, and Burger Blaster's management knows it. As a result of Burger Blaster's claims, Burger Barn's sales fall. Burger Blaster is probably guilty of: a. deceitful diversion of patronage. b. bait advertising. c. deceptive advertising. d. puffery. e. deceptive sales practices.

A

Each of the following is a marketing function that retailers perform EXCEPT: a. pricing. b. information gathering. c. selling. d. financing. e. storing.

A

Ease of access refers to: a. the consumer's ability to easily and quickly find a retailer's Web site in cyberspace. b. the ease with which a consumer can return merchandise. c. the consumer's ability to gain credit. d. the consumer's ability to obtain parking. e. the amount of time between when an order is placed and when it is delivered to the customer.

A

Exclusive distribution: a. means only one retailer is used in the trading area. b. means that a smaller number of retailers are used to reach the target market. c. means that all possible retailers are used to reach the target market. d. is associated with the distribution of convenience goods. e. is associated with shopping goods.

A

Facilitating institutions may best be described as specialists that: a. while not taking title, still perform marketing functions for supply chain members. b. create new markets for the manufacturer. c. serve as the supply chain leaders. d. perform functions supply chain members cannot legally perform. e. eliminate conflict from the supply chain.

A

Identify the incorrect statement about an implied warranty of merchantability. a. The notion of implied warranty applies only to new merchandise. b. Every retailer selling goods makes an implied warranty of merchantability. c. By offering the goods for sale, the retailer implies that they are fit for the ordinary purpose for which such goods are typically used. d. Because of the potential legal liability that accompanies an implied warranty, many retailers will expressly disclaim at the time of sale any or all implied warranties and seek to mark a product "as is." e. Some retailers will not be able to avoid implied warranties of merchantability.

A

Marketing institutions are classified into two categories: a. those that take title to the goods and those that do not. b. those that are paid a flat fee and those that work on commission. c. those that take possession and those that do not. d. those that are profitable and those that are not. e. those with high margin and those with low margin.

A

Nike engaged in dual distribution when it began: a. to sell through its own retail outlets as well as independent retailers. b. to sell to retailers competing with its existing retailers. c. to encourage two different distributors to serve the same retailer. d. to offer two different prices to retailers, based on volume purchased. e. to produce private label brands for the retailers currently selling Nike shoes.

A

Sun Fashions offered to display Shark Sportswear's new line of swimwear at the entrance of its store if Shark pays 50 percent of the advertising expenses for Sun Fashions' Spring/Summer Catalog. Sun Fashions is employing which type of power? a. Reward power b. Traffic power c. Referent power d. Legitimate power e. Expertise power

A

The Clayton Act: a. adds to the Sherman Act by prohibiting specific practices. b. establishes the Federal Trade Commission. c. amends the Robinson-Patman Act. d. requires large companies to notify the government of their intent to merge. e. amends Section 7 of the Celler-Kefauver Antimerger Act.

A

The major difference between primary marketing institutions and facilitating marketing institutions is that facilitating members: a. do not take title to the goods. b. are paid only a percentage of profits made. c. take title to the goods. d. perform all eight functions in all channels situations. e. are always paid by the manufacturer.

A

TrueValue, Ace, and Handy Hardware are all examples of a(n): a. retailer-owned cooperative. b. contractual vertical marketing system. c. wholesaler-sponsored voluntary group. d. independent retailer. e. franchisee.

A

Vertical marketing channels are typically classified into the following three categories: a. contractual, administered, and corporate. b. cooperatives, owned, and voluntary. c. wholesaler-sponsored, retailer-sponsored, and franchised. d. vertical, horizontal, and interfaced. e. facilitating, primary, and conventional.

A

When a retailer represents merchandise as being made by a firm other than the true manufacturer, it is said to be engaged in: a. palming off. b. product substitution. c. gray marketing. d. overt faking. e. a bait-and-switch.

A

When the customer relies on the retailer to make a selection of goods to serve a particular purpose, it is termed a(n): a. implied warranty of fitness. b. implied warranty of service. c. implied warranty of quality. d. implied warranty of merchantability. e. implied warranty of sale.

A

_____ data is the most commonly available objective data that a retailer can obtain about a target market(s). a. Demographic b. Psychographic c. Biological d. Geographic e. Personality

A

The _____ Act prevents the marketing and selling of harmful toys and dangerous products. a. Sherman b. Federal Trade Commission c. Mail Fraud d. Child Safety e. Fair Packaging and Labeling

D

Which of the following is a store-based retail format? a. Street peddling b. Automated merchandising systems c. Interactive television d. A shopping mall e. The Internet

D

Which one of the following institutions involved in a supply chain would take title to the goods it is dealing with? a. Trucking company b. Insurance company c. Market researcher d. Retailer e. Public warehouse

D

_____ involves breaking down heterogeneous materials or product into more homogenous groups. a. Organizing b. Classifying c. Synthesizing d. Sorting e. Grouping

D

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. selective; convenience c. selective; specialty d. exclusive; shopping e. exclusive; specialty

E

The _____ Act requires companies to notify the government of their intent to merge. a. Sherman b. Clayton c. Federal Trade Commission d. Robinson-Patman e. Hart-Scott-Rodino

E

The major facilitating institution involved in storage is the: a. private warehouse. b. in-transit warehouse. c. demand collection channel. d. contract warehouse. e. public warehouse.

E

Manufacturers usually listen to a retailer's statements about the introduction of new products because retailers are often more knowledgeable about how their consumers will react. Manufacturers understand that retailers possess what type of power in this example? a. Legitimate b. Expertise c. Knowledge-based d. Reward e. Referent

B

The Equal Credit Opportunity Act: a. regulates the reporting and use of credit information; limits consumer liability for stolen credit cards to $50. b. prohibits discrimination in credit transactions because of gender, marital status, race, national origin, religion, age, or receipt of public assistance. c. empowers the FTC to determine rules concerning consumer warranties and provides for consumer access to means of redress, such as the "class action" suit. d. makes it a federal crime to defraud consumers through use of the mail. e. requires lenders to state the true costs of a credit transaction; established a National Commission on Consumer Finance.

B

The courts have interpreted this doctrine to suggest that retailers must be careful in how they sell their products. a. The substantial performance doctrine b. The foreseeability doctrine c. The doctrine of collective responsibility d. The doctrine of reasonable expectations e. The doctrine of approximation

B

The supply chain, or channel, is affected by five external forces: consumer behavior, the legal and ethical environment, the socioeconomic environment, the technological environment, and: a. the natural or physical environment. b. competitive behavior. c. personal relationships. d. channel function management. e. new government regulations.

B

Vertical marketing channels attempt to: a. increase channel effectiveness but not channel efficiency. b. minimize the suboptimization of the channel. c. increase channel efficiency while minimizing channel effectiveness. d. maximize the suboptimization of the channel. e. coordinate activities among retailers.

B

When all possible retailers are used in a trading area, the channel strategy is termed: a. exclusive. b. intensive. c. selective. d. partial coverage. e. pull coverage.

B

A supply chain in which each member is loosely aligned with the others is a(n): a. modified channel. b. unadministered channel. c. conventional marketing channel. d. corporate marketing channel. e. contractual marketing channel.

C

A(n) _____ is a type of contractual vertical marketing channel that is actually a form of licensing. a. retailer-owned cooperative b. conventional marketing channel c. franchise d. wholesaler-sponsored voluntary group e. independent retailer

C

A(n) ______occurs when the manufacturers sell their goods directly to the final consumer. a. supply chain width b. selective distribution channel c. direct supply chain d. exclusive distribution channel e. indirect supply chain

C

Attempts by a manufacturer to limit the geographical area in which a retailer may resell its products are called _____ restrictions. a. geographical b. sales c. territorial d. tying e. physical

C

Deceptive pricing occurs when retailers: a. state that their lower prices were made in good faith in order to meet an equally low price of a competitor. b. ban "fair trade" items from their store. c. advertise merchandise at an artificially low price and then try to add hidden, or extra, charges. d. tell lies about a competitor's price in an attempt to make a sale. e. sell merchandise above the manufacturer's cap.

C

Identify the incorrect statement about expressed warranties. a. They are the result of the interaction between the retailer and the customer. b. They may be either written into the contract or verbalized. c. They are based on custom, norms, or reasonable expectations. d. They can cover all characteristics or attributes of the merchandise or only one attribute. e. An expressed warranty can be created without the use of the words warranty or guarantee.

C

In order for a deceptive advertising charge to hold up, it must be shown that: a. there was no intent to deceive. b. the total damage exceeded $100. c. the consumer was misled. d. the advertisement was paid for by multiple members of the channel. e. competition was heightened.

C

Items for which are frequently purchased and the consumer is not willing to spend a great deal of effort to purchase are known as: a. shopping goods. b. industrial goods. c. convenience goods. d. raw materials. e. specialty goods.

C

Selective distribution: a. means that all possible retailers are used to reach the target market. b. means only one retailer is used in the trading area. c. means that a smaller number of retailers are used to reach the target market. d. is associated with the distribution of convenience goods. e. is identified with specialty goods.

C

The Magnuson-Moss Warranty Act only applies to written warranties on: a. all products. b. all products costing more than $5. c. all products costing more than $15. d. all products costing more than $50. e. all products costing more than $100.

C

The _____ Act makes it a federal crime to defraud consumers through use of the mail. a. Sherman b. Federal Trace Commission c. Mail Fraud d. Automobile Information Disclosure e. Fair Packaging and Labeling

C

The retailer's first step in developing a cost-effective way for a retailer to reach its customer with either a traditional store or virtual store is: a. establish its budget. b. identify its strengths and weaknesses. c. identify its target market. d. develop a list of constraining factors. e. hire a real-estate consultant.

C

The three concepts of inter-organizational management that a retail executive needs to understand are dependency, _____, and conflict. a. trouble-shooting b. interorganizational transfers c. power d. chain of command e. personalities

C

The three most common defenses available to suppliers charged with price discrimination are: a. changing market conditions, meeting competition, and good faith actions. b. ignorance of law, unprofitability of the supplier, and cost justification. c. cost justification, changing market conditions, and meeting competition. d. unprofitability of supplier, cost justification, and meeting competition. e. changing market conditions, meeting competition, and ignorance of law.

C

Three product constraints that influence a retailer's product decisions are: a. product safety, express warranties, and implied warranties. b. product safety, trademarks, and warranties. c. product safety, product liability, and warranties. d. product liabilities, warranties, and trademarks. e. trademarks, product liabilities, product safety

C

When a retailer speaks of accessibility, within the context of reaching a target market, the retailer is referring to the: a. access of the store to handicapped persons. b. access of the store to major traffic arteries. c. degree to which the retailer can target its promotional or distribution efforts to a particular market segment. d. ease with which consumers can shop the retailer's location. e. degree to which the retailer can target its pricing strategy to appeal to a particular market segment.

C

All of the pub owners in a small college town met and decided to charge $7.99 for a burger and beer during the school year. The pub owners may be in violation of the: a. Wheeler-Lea Act. b. Clayton Act. c. Federal Trade Commission Act. d. Sherman Antitrust Act. e. Hart-Scott-Rodino Act.

D

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. intensive; specialty c. selective; specialty d. selective; shopping e. selective; convenience

D

Classic Jeans has informed its retailers that they must either sell its new line of jeans for $39.99 or no longer be supplied by Classic Jeans. The retailers agree to this. Classic Jeans and its retailers are involved in: a. violation of the Wheeler-Lea Act. b. horizontal price fixing. c. violation of the Lanham Act. d. vertical price fixing. e. an attempt to maximize profits.

D

Concerning the "supply chain," which of the following statements is true? a. Supply chains are so closely associated with high prices that many retailers are dropping out of supply chains and performing the functions themselves. b. Most supply chains will disappear within the next decade, as all merchandise will soon be purchased directly from manufacturers. c. Supply chains do not aid the retailer in providing possession, form, or place utility, for the final consumer. d. Profits sufficient for survival and growth will be difficult for a retailer to achieve without being part of an efficient, effective supply chain. e. Supply chains seldom change over time.

D

Identify the incorrect statement about the conventional marketing channel. a. It is historically predominant in the United States. b. It is a sloppy and inefficient method of conducting business. c. It fosters intense negotiations within each pair of institutions in the supply chain. d. Its members are able to divide the marketing functions among all the participants. e. It has been on the decline in the United States since the early 1950s.

D

Resale price maintenance is another word for: a. horizontal price fixing. b. deceitful diversion of patronage. c. dual price setting. d. fair trade. e. predatory pricing.

D

The Celler-Kefauver Antimerger Act: a. prohibits unfair and deceptive acts and practices regardless of whether competition is injured. b. establishes protection for trademarks. c. defines price discrimination as unlawful (subject to certain defenses) and provides the FTC with the right to establish limits on quantity discounts. d. amends Section 7 of the Clayton Act by broadening the power to prevent corporate acquisitions where the acquisition may have a substantially adverse effect on competition. e. requires large companies to notify the government of their intent to merge.

D

The Sherman Antitrust Act sought to: a. restrict the amount of imports into the United States. b. eliminate price differences among competing suppliers. c. prevent unfair or deceptive advertising and selling practices within a marketing channel. d. prevent monopolies or conspiracies that are in restraint of trade. e. establish the first Federal "Fair Trade" Agency.

D

The question of who makes the best pizza came to blows when Pizza Hut sued Papa John's over Papa John's slogan "Better ingredients, better pizza." This slogan is known as: a. overstating. b. guaranteeing. c. deceptive advertising. d. puffery. e. understating.

D

This new law was the aftermath of a public outcry over imports of tainted toothpaste and pet food, as well as the infamous importation of lead-laden toys from Asia, especially China. a. The Consumer Protection from Unfair Trading Regulations Act b. The ADA Amendments Act c. The Emergency Economic Stabilization Act d. The Consumer Product Safety Improvements Act e. The Economic Cooperation Framework Agreement Act

D

What type of vertical marketing channel has a well established authority structure? a. Franchise system b. Contractual vertical marketing system c. Conventional marketing system d. Corporate vertical marketing systems e. Wholesaler-sponsored voluntary group

D

_____ are primarily used by retailers starting a new operation or format. a. Factors b. Merchant banks c. Stock and commodity exchanges d. Venture-capital firms e. Insurance firms

D

A central business district offers a retailer all of the following advantages EXCEPT: a. proximity to commercial activities. b. easy access to public transportation. c. exposure to a wide product assortment. d. variety in services and merchandise for sale. e. inexpensive parking.

E

Bait-and-switch advertising: a. is illegal for all products retailing over $10. However, under the FTC Act, bait-and-switch is legal if puffery was also included in the advertisements and the product price is under $10. b. does not apply to services. c. is a form of deceitful diversion of patronage. d. is permissible if interstate commerce is not involved. e. occurs when a product is advertised at an unrealistically low price to serve as "bait" and then the salesperson tries to "switch" the customer to a higher-priced product.

E

Entertainment City advertised, in its Christmas circular, a portable compact disc player on sale for $45. Sales clerks were informed that they were to attempt to persuade customers interested in the "on-sale" CD player to purchase the higher quality, $115 model. In addition, no commission will be paid on the lower priced CD player. Entertainment City is engaged in the practice of: a. palming off. b. legal advertising. c. sale advertising. d. puffery. e. bait-and-switch advertising.

E

Identify the correct statement about quick response (QR) systems. a. They are developed by conventional channel members. b. They are also known as SKU systems. c. These systems are different despite the similar names adopted by various retail industries. d. They are designed to obtain real-time information on consumers' actions by capturing ECR data at point-of-purchase terminals. e. The information obtained is used to develop new or modified products, manage channel-wide inventory levels, and lower total channel costs.

E

Intel sold Pentium III computer processing chips to Gateway Computer for $12 per chip. Four days earlier, before the announcement of the new Pentium IV computer processor, Intel sold the Pentium III to Dell Computer for $22 per chip. Intel may attempt to justify its prices with a: a. meeting competition defense. b. cost justification defense. c. preferable customer defense. d. good faith defense. e. changing market conditions defense.

E

The Sports Barn sells football helmets for PeeWee football, and a customer buys one for his son. The helmet cracks in several places as the son makes a tackle during a game later that fall, leaving the boy seriously injured. The _____ makes the retailer potentially liable. a. implied warranty of correctness b. Clayton Act c. expressed warranty of merchantability d. Robinson-Patman Act e. implied warranty of merchantability

E

The eight marketing functions are buying, selling, storing, transporting, information gathering, financing, risk taking, and: a. managing. b. product development. c. facilitating. d. designing. e. sorting.

E

There are actually three strategy decisions to be made when designing an efficient and competitive supply chain: supply chain length, width, and: a. convenience. b. depth. c. organization. d. type. e. control.

E

Usually high-prestige branded products that the consumer expressly seeks out, such as Rolex watches, are known as: a. shopping goods. b. industrial goods. c. convenience goods. d. raw materials. e. specialty goods.

E

_____occurs when a retail chain charges different prices in different geographic areas in order to eliminate competition in those areas. a. vertical price fixing b. bait-and-switch pricing c. palm-off pricing d. horizontal price fixing e. predatory pricing

E

In addition to the Robinson-Patman Act, the _____ Act addresses the legality of price discrimination. a. Trade Discrimination b. Clayton c. Federal Trade Commission d. Sherman Antitrust e. Equal Rights

B

A supplier sells two identical shipments of clothing to two different retailers at different prices. This is a clear violation of the _____ Act. a. Sherman Antitrust b. Robinson-Patman c. Federal Trade Commission d. Lanham e. Truth in Lending

B

A(n) _____ is the total collection of all the pages of information on the retailer's Internet site. a. web presence b. virtual store c. on-line presence d. virtual reality e. megastore

B

A(n) _____ supply chain is the channel that results once independent channel members are added between the manufacturer and the consumer. a. direct b. indirect c. localized d. undiverted e. limited

B

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. intensive; convenience c. selective; specialty d. selective; luxury e. selective; convenience

B

An attempt by a wholesaler to preserve a market for its products by strengthening the retailers that it sells to is an example of what type of channel arrangement? a. Retailer-owned cooperative b. Wholesaler-sponsored voluntary group c. Corporate system d. Retail-sponsored marketing system e. Franchised retail program

B

For a retailer to successfully reach its target market using market segmentation, three criteria must be met: the target market should be: a. measurable, precise, and be motivated to buy b. measurable, accessible, and substantial enough to be profitable c. measurable, have money, and be motivated to buy d. neglected, motivated to buy, and substantial e. financially attractive, quantifiable, and be motivated to buy

B

Identify the correct statement about the changing market conditions defense which buyers and sellers use that enable some types of price discrimination to occur. a. The burden of such a defense is with the buyer. b. This defense would attempt to justify the price differential based on the danger of imminent deterioration of perishable goods. c. The seller can attempt to show that its lower price to a purchaser was made in good faith in order to meet an equally low price of a competitor, provided that this "matched price" did actually exist and was lawful itself. d. Such a defense would attempt to show that a differential in price could be accounted for on the basis of differences in cost to the seller in the manufacture, sale, or delivery arising from differences in the method or quantities involved. e. This defense would attempt to justify the price differential based on the obsolescence of seasonal goods.

B