Mktg 351 Test 3 CH 16

In order to justify direct-response marketing, a product really needs to be priced above

$20.

The target market of a regional shopping center typically includes at least _____ people.

150,000

With respect to retailing, what is the "party plan"?

A consumer acts as a host and invites friends to view merchandise in a group setting, where a salesperson demonstrates the products.

Which type of franchising is most popular in the soft-drink industry?

A manufacturer licenses distributors to sell a given product to retailers.

Which of the following is not one of the basic types of franchising arrangements?

A wholesaler franchising a number of producers

What is the primary difference between an agent and a broker?

An agent represents a company on a permanent basis while a broker is employed temporarily.

Which of the following is a common feature of a warehouse club?

Annual fees

While on their family vacation, the Millers realize they left their camera at home. They purchase a disposable camera at an amusement park using their credit card, but never interact with a person. What type of retailing did this transaction most likely involve?

Automatic vending

What type of retailing began with Montgomery Ward in the late 1800s?

Catalog marketing

Which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their ice boxes?

Convenience stores

What type of retailers are the primary competitors for specialty retailers?

Department stores

What is the most expensive form of retailing?

Direct selling

Advo Systems is an organization that mails product brochures and coupons to potential consumers who can then purchase these products by mail or by phone. Advo Systems illustrates which of the following methods of selling retail products?

Direct-response marketing

Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume?

Discount stores

Which of the following wholesalers never take actual possession of the goods?

Drop shippers

Which of the following is a full-service merchant wholesaler?

General merchandise wholesaler

What is the primary distinction between superstores and hypermarkets?

Hypermarkets are larger and have more types of products than superstores.

What is the most popular type of product sold through television home shopping?

Jewelry

Jannette Down is planning to open an upscale dress boutique. She is evaluating ease of movement to and from sites, vehicular traffic, types of stores in the area, and transportation networks. Which strategic retailing issue is she concerned with at the time?

Location

Which of the following is the least flexible of these important retailing strategy issues?

Location

Which of the following services would a wholesaler least likely provide to a manufacturer?

Look for and coordinate supply sources

___________ provide an effective method of selling small items to customers in remote areas that other wholesalers might find unprofitable to serve.

Mail-order wholesalers

Sherri McRae wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid obsolescence of high-fashion items, Sherri does not want to establish an organization in which she has title to the garments. Which of the following types of wholesale establishments has she ruled out?

Merchant wholesaler

An example of an emerging type of power shopping center might contain

Michael's, Office Depot, T.J. Maxx, and Circuit City.

What type of shopping center usually consists of several small convenience and specialty stores?

Neighborhood

Which retail store invests the most in atmospherics?

Neiman Marcus

Which of the following best describes wholesalers?

Organizations or individuals who buy products for resale to government, reseller, producer, and institutional users.

________ have been successful because consumers are willing to drive significant distances to save money buying manufacturers' closeouts and irregulars.

Outlet shopping centers

Norah operates an upscale shop that does both pet grooming and human manicures and pedicures. She is reaching a market segment with people who place great value on their dogs and are concerned with their own appearance, yet pressed for time. No other businesses meet the needs of these consumers. Which strategic issue in retailing does Norah appear to have addressed?

Retail positioning

Who provides the environment in which exchanges with ultimate consumers occur?

Retailers

Through the years, drugstores have added more unrelated products to their product mix, such as lawn care supplies, food items, housewares, and small appliances. This illustrates which of the following retail strategy issues?

Scrambled merchandising

What is a potential disadvantage of direct selling?

Some customers view direct selling negatively.

Based on what he has heard regarding the profitability of such items, Paul Goldstein is considering adding a fresh shellfish case in his grocery store. Paul knows very little about this product or the concerns of shoppers who buy shellfish. He is looking for help in display set-up and merchandising ideas. He should contact which of the following types of wholesalers?

Specialty-line

Which of the following offers the widest product mixes and the deepest product lines?

Superregional shopping center

Which of the following may include special attractions such as amusement parks or skating rinks

Superregional shopping centers

Laura goes to Wal-Mart and buys some clothing, a DVD, and all the groceries she needs for her family. What type of retailer is this particular Wal-Mart?

Superstore

Which type of retail outlet can have up to 200,000 square feet?

Superstores

Which of the following is not an advantage of franchising for the franchisee?

The franchisee gives up a certain amount of control when participating in a franchise agreement.

In franchising, which of the following is not a benefit that the franchiser gains?

The franchiser gains more control over how the franchisees operate the establishments.

Which of the following is not a factor used to classify wholesalers?

The price range of the products carried by the wholesaler

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

Toys "R" Us

Greg Prakash works with a group of farmers who provide him with a regular supply of a variety of fresh vegetables. He picks up their produce and has a regular route of grocers and restaurants who purchase quantities of the items he has on any given day. Greg's operation is which type of wholesaler?

Truck

What type of wholesaler transports a limited line of products directly to customers for immediate inspection and selection?

Truck jobbers

Which of the following is a large-scale, members-only, retailer that combines cash-and-carry wholesaling with discount retailing?

Warehouse club

Select the true statement about wholesaling.

Wholesaling activities must be performed during distribution of all goods, whether or not a wholesaling institution is involved.

Greg chooses to have his hunting equipment stored in a location away from the main part of town so that he can have a large parking lot and an outdoor range for customers to test out his merchandise. Greg's store is

a free-standing structure.

Alison asks ten of her friends over to her home to learn about exciting new cosmetic products. A salesperson from Angel Products makes a presentation and takes the women's orders. This is an example of

a party plan.

Automatic vending is

a type of nonstore retailing.

A general merchandise retailer offers

a variety of product lines that are stocked in depth.

Brianna owns and operates a gift and interior store called The Gingerbread House. She works hard to put together beautiful arrangements and displays throughout the store and always features a burning scented candle and light music. She hopes these efforts will encourage her customers to buy more. Brianna is focusing on

atmospherics.

Exterior and interior characteristics such as layout, displays, color, and lighting are all elements of a store's

atmospherics.

ATMs are an example of

automatic vending.

Chelsea has extensive contacts in the real estate business and brings together buyers and sellers. Although she assumes no risks, she can offer specialized knowledge about real estate. Chelsea is a

broker

The primary purpose of a(n) _____ is to bring buyers and sellers together.

broker

Karen Shapiro has been a buyer for Ocean Mist, a large cranberry processor, for several years. Believing that she knows a great deal about cranberries, their growers, and processors, she decides to go into business for herself. Karen wants to assume no risks of spoilage or price fluctuations. She sees herself as simply bringing the growers and processors together. Her new company would be a

broker.

Laura Lucas and Marie Clark own and operate a small restaurant. On a weekly basis, they go to their local Sam's Wholesale Club to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they purchase and the items' intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery store. Sam's is serving as a ___________ wholesaler for these entrepreneurs.

cash-and-carry

Andrea owns and operates a small novelty store that sells home décor, gifts, jewelry, and gourmet snacks. Because her business is very small, many wholesalers will not deal with her, so she relies primarily on _____ for the survival of her business.

cash-and-carry wholesalers

Chadwick's sends its customers booklets containing its product offerings and allows them to place orders on the telephone, through the mail, or online. Chadwick's is primarily a(n)

catalog marketer.

A(n) ___________ is a very large specialty store that competes on the basis of lower prices and enormous product availability.

category killer

Michael's, PetsMart, and Staples are all examples of

category killers.

A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers is called

category management.

Calhoun Produce, a ___________, takes possession of truckloads of tomatoes, arranges for storage, and transports them to auctions to be sold.

commission merchant

An agent that receives goods on consignment from local sellers and negotiates sales in large, central markets is called a

commission merchant.

Hickory Village Shopping Center has two department stores and some specialty and convenience stores. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory is a _________ shopping center.

community

In Cara's hometown, there is a mall with a small Sears store, a Macy's department store, a couple of fast food restaurants, a few specialty shops, and some convenience stores. The mall features seasonal sidewalks sales and boat shows. This mall is most likely a ______ shopping center.

community

A small self-service store that is open long hours and carries a narrow product assortment in convenient locations is best described as a

convenience store.

Compared with other types of retailers, department stores compete mainly on the basis of

customer services.

Off-price retailers feature

deep discounts, few customer services, and central checkouts.

If a store has areas for men's apparel, women's apparel, housewares, cosmetics, and jewelry and competes mostly on the basis of service, it is a(n)

department store.

As discount stores improve their services and atmosphere as well as raise their prices, the distinction between discount stores and ____ is becoming blurred.

department stores

When off-price retailers obtain too much in-season, high-quality merchandise, tension between them and ________ builds.

department stores

Nordstrom's, Macy's, and JC Penney's are all considered

department stores.

The three major types of nonstore retailing are

direct marketing, direct selling, and automatic vending.

The use of the telephone and other nonpersonal media to introduce products to consumers, who then can purchase the products through the mail, telephone, or the Internet is called

direct marketing.

All of the following are types of direct marketing except

direct selling.

The marketing of products to ultimate consumers through face-to-face sales presentations either at home or the workplace is called

direct selling.

In the Sunday paper, Caitlin sees a flyer for a collector's edition Thomas Kinkade plate that is available to purchase by filling out and mailing in a form or by calling a 1-800 number. This is an example of

direct-response marketing.

When a retailer advertises a product and makes it available for purchase through telephone or mail orders, the retailer is using

direct-response marketing.

Ollies' is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Ollies' is an example of a

discount store.

Self-service, general merchandise stores such as Kmart are known as

discount stores.

Wal-Mart and Target are both examples of

discount stores.

Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to the _____ component of the marketing mix.

distribution

Mark Bradley's company takes orders from its collection of retail customers and arranges the shipment of goods directly from manufacturers or other wholesalers to its customers' businesses. Mark is operating as a

drop shipper.

By locating in the same general vicinity as other car dealerships, Hartfield Honda can

facilitate comparison shopping.

By using Johnson Wholesale Co. for its distribution needs, the Apex Production has a distinct competitive advantage because the services performed by Johnson allow Apex to

focus on producing products that meet consumers' needs.

An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of consideration is

franchising.

Malcolm Lewis has come up with the idea of a system for picking up people's cars while they are at work, washing and waxing them, and returning them for a fee. Having been a big success in his home city, Malcolm plans to expand his operation into other cities. The service described here seems best suited to

franchising.

Colin brags to his friend Reid that his new bike shop has lots of parking and great visibility from Harper Avenue, and his nearest business neighbors are several hundred feet away. Colin has selected a ____________ site for his retail business.

free-standing

Merchant wholesalers can be divided into two basic categories:

full-service and limited service.

Cigarette manufacturer Philip Morris uses the services of Universal Corporation, the world's largest buyer and processor of leaf tobacco, which provides financing for its customers. This means that Universal is a

full-service wholesaler.

If a retailer needed help with store design and training sales personnel, it would most likely use the services of a

full-service wholesaler.

Customers rely on ______ for product availability, breaking larger quantities into smaller ones, technical advice and service, financial assistance, and suitable assortments.

full-service wholesalers

Agents and brokers that facilitate and negotiate purchases but do not actually take title to products are also known as

functional middlemen.

Supermarkets, discount stores, and hypermarkets can all be classified as

general merchandise retailers.

A wholesaler that carries a wide product mix but offers only limited depth within product lines is called a

general merchandise wholesaler.

Brad operates a wholesale company that specializes in providing a wide variety of services to its customers, which are all restaurants. He carries a wide assortment of restaurant equipment and cookware. Brad's business is a

general-line wholesaler.

Kevin is talking with Peter about purchasing a Wendy's franchise. Peter tells Kevin that one of the major advantages of franchising for him to consider is the

higher success rate for franchises.

A ___________ is a retail establishment that combines a supermarket and a discount store in one location.

hypermarket

After shopping in the same store for nearly two hours, Chelsea goes to Burger King for a Whopper, while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a

hypermarket.

The primary advantage of automatic vending as a form of retailing is that

it eliminates the need for sales personnel.

Victor knows that if he decides to buy a franchise, he will most likely have to supply

labor and daily operations.

An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually owned by national chains, is generally called a(n)

lifestyle shopping center.

Merchant wholesalers who specialize in just a few functions and pass others along to other intermediaries or customers are called

limited-service wholesalers.

Location is important to a retailer because

location determines the trading area from which the store must draw its customers.

The kinds of products being sold and the availability of public transportation are both factors that influence a retailer's decision about

location.

Category killers compete primarily on the basis of

low prices and enormous product availability.

The wheel of retailing is a hypothesis that holds that new types of retailers often enter the market as _________ operators.

low-status, low-margin, low-priced

Alison lives in a remote area of Montana, where few good roads exist. She runs a small retail store specializing in western attire. Due to her remote location, Alison is most likely to obtain the merchandise for her store from

mail-order wholesalers.

All of the following are examples of full-service wholesalers except

mail-order wholesalers.

Because Gem Supply's sales have continued to decline, the jewelry manufacturer has found that the costs associated with maintaining its own five-person sales force are prohibitive. The firm's marketing director begins to look for a small company or individual willing to perform the sales function for Gem Supply in its least productive region, the Far West. The ideal entity would carry complementary but non-competing lines. Such a firm or individual would be classified as a

manufacturers' agent.

Independent intermediaries that represent two or more sellers and usually offer customers complete product lines in a restricted territory are called

manufacturers' agents.

Martin owns and operates a wholesale hardware business that supplies small hardware parts to various manufacturers in the area. He takes title to the hardware and assumes all risks associated with ownership. Martin is a

merchant wholesaler.

Specialty stores offer ______ than department stores.

more sales expertise and better selections

The wheel-of-retailing hypothesis suggests that

new retailers enter the marketplace with low prices, low profit margins, and low status but eventually move to the high end of the price/cost/service scale.

Manufacturers' agents offer products that are both

noncompeting and complementary.

Direct marketing, direct selling, and automatic vending are all examples of _________ retailing.

nonstore

The selling of merchandise outside the confines of actual facilities is generally called

nonstore retailing.

A manufacturers' outlet mall is most appropriately classified as a(n)

off-price retailer.

Stores such as T.J. Maxx, Burlington Coat Factory, and Marshalls buy manufacturers' seconds, overruns, returns, and off-season production runs at below wholesale prices. These firms resell this merchandise to consumers at deep discounts, and are called

off-price retailers.

Brad accesses Borders Books and Prints' site on the World Wide Web and purchases a copy of a new best seller. This is an example of

online retailing.

A shopping center that contains stores owned by manufacturers who make a special effort not to conflict with traditional retailers is a(n)

outlet shopping center.

Shopping centers include

outlet, power, lifestyle, superregional, regional, neighborhood, and community.

The primary function of most wholesalers is to

perform physical distribution of products from manufacturers to retailers.

Wal-Mart has its own fleet of trucks and works directly with producers to take care of the ordering, delivery, and handling of goods. In addition, Wal-Mart works directly with suppliers through its advanced system of inventory control and data processing. Wal-Mart is

performing many of the critical functions of wholesalers through its own system.

With respect to inventory, wholesalers can help retailers with all of the following except

production.

Angela Barton approaches David Hughes, owner of Hughes Auto Parts, to talk about the possibility of adding a new line of products to his store. Angela tells David that the product is a line of high-quality driving sunglasses. She offers to set up the display, service and restock it weekly, and maintain billing and inventory records. She tells David that all she needs is a couple of square feet of space. Angela is in the business of serving retailers as a

rack jobber.

Lynn Taylor sells Revlon cosmetics on consignment to grocery stores, maintains the display racks, and restocks when necessary. Lynn's job is best described as a

rack jobber.

Full-service, specialty-line wholesalers that own and maintain displays in discount stores and supermarkets are called

rack jobbers.

A shopping center containing a Macy's, Marshall Fields, and JC Penney's as well as dozens of specialty shops, restaurants, and entertainment is most likely a

regional shopping center.

Dawn is concerned that there are not enough avid quilters in Centerville to support her Quilts Unlimited store. Her business adviser suggests that she not limit her promotion to the Centerville population but also consider outshoppers. This approach is most likely to work if her store is located in a

regional shopping center.

Josh tells the loan officer at First Bank and Trust that Clarksville really needs a store that offers high-quality fishing gear to enthusiasts and provides the service and advice that many people want. No other store in the area seems to provide this combination. Josh is trying to use ___________ to support his request for a loan to start such a retail operation.

retail positioning

Identifying an unserved or underserved market segment and serving it through a strategy that is distinguished in the mind of the consumer is called

retail positioning.

Any organization that purchases products for the purpose of reselling them to ultimate consumers is a(n)

retailer

Wal-Mart, Macy's, Nordstrom's, and Toys "R" Us are examples of

retailers.

Direct selling, direct marketing, and vending machines are all examples of

retailing

The management at Kohler Inc., a manufacturer of sinks, tubs, and other plumbing products, thinks that there will soon be a major growth in home remodeling due to rising interest rates. The management decides to use ___________ in several key cities to provide support services for its sales force in those areas, carry inventory, and offer credit and other services to its retail plumbing customers.

sales branches

Intermediaries owned by manufacturers that sell products and provide support services to the manufacturers' sales forces are known as

sales branches.

A manufacturer-owned operation that provides services usually associated with agents is a

sales office.

Veronica Montez works for Bicardi at a location away from the manufacturing plants. She provides wholesale services to wholesale and retail customers, but her facility does not carry inventory. Veronica works at a

sales office.

When a retailer adds unrelated but fast-moving products to its existing product mix, it is using

scrambled merchandising.

A channel member that markets all of a manufacturer's goods, has authority over price, promotion, and distribution, but does not take title to the product is a

selling agent.

Thad Rather works for a company that markets all of Celetron's products. Thad's company acts as the marketing department for Celetron, performing all marketing functions without actually taking title to the goods. Thad's company is a

selling agent.

A difference between manufacturers' agents and selling agents is that

selling agents do not have the territorial restrictions that manufacturers' agents do.

All of the following are reasons that retailers might adopt scrambled merchandising except

simplifying their marketing strategies.

In contrast to industrial products, consumer products are often purchased because of

social influences.

A store that offers a wide variety of shoes for men, women, and children would most likely be considered a(n)

specialty retailer.

A narrow product mix with a deep product line would most likely be carried by

specialty retailers.

Off-price retailers and category killers are both

specialty retailers.

All of the following are types of limited-service merchant wholesalers except

specialty-line wholesalers.

A functional and psychological picture in the consumer's mind of a retail store is called

store image.

A retailer engaged in direct marketing would probably select television home shopping over online retailing to sell a new kitchen device because of

superior ability to demonstrate the product.

Jack Ingalls gets a shopping list from his wife. On the list are a potted plant, fresh salmon, motor oil, bread, milk, and a birthday cake. To make just one stop to save time, Jack should go to a(n)

supermarket.

Kroger, Safeway, and Publix are all considered

supermarkets.

Large, self-service stores that carry a complete line of food products and some nonfood products are called

supermarkets.

Drop shippers

take title to but not physical possession of the goods.

A merchant wholesaler

takes title to goods, assumes risk associated with ownership, and buys and resells products.

Selling agents perform every wholesaling activity except

taking title to products.

The performance of marketing-related activities conducted on the telephone is called

telemarketing.

When products are presented to television viewers, who can purchase them by calling a toll- free number and paying with a credit card, ________ is being used

television home shopping

Kelly Cramer sees a lovely pair of earrings on a television network and calls a toll-free number to order them, paying with her credit card. This is an example of

television home shopping.

The type of retail location that is commonly being preserved and revitalized in many cities is the

traditional business district.

Many cities are revitalizing their downtown areas by bringing in new retail establishments. They are building new civic structures, passing ordinances that encourage the restoration of historic buildings, and developing mixed-use structures that include retail, residential, and other uses. These areas are best described as

traditional business districts.

Matt's girlfriend tells him she wants a cashmere sweater for Christmas. Matt decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a________ store.

traditional specialty

Wholesaling can be defined as

transactions in which products are bought for resale.

Retailing is best characterized as

transactions in which the buyer intends to consume the product through personal, family, or household use.

A retailer is an organization that purchases products for the purpose of reselling them to

ultimate consumers.

By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the following physical distribution activities except

unit pricing.

The difference between an agent and a broker is that an agent

usually represents people on a permanent basis, whereas a broker usually does so on a temporary basis.

Retailers that sell only to members and feature discount retailing combined with cash-and- carry wholesaling are called

warehouse clubs.

Sam's and Costco are examples of

warehouse clubs.

Levitz Furniture locates in huge, low-cost buildings, maintains large, on-premises inventories, and offers minimum service. Levitz is a

warehouse showroom.

Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal services are called

warehouse showrooms.

Rachel begins her children's toy store with relatively low prices, few services, and little prestige. As she begins to attract more customers, she increases her merchandise selections and prices and offers her customers more services. Rachel's store has adhered to the

wheel of retailing hypothesis.