Retail Test Bank 12

A(n) ________ developed by a retailer is comparable with national brands on quality rather than price. A) premium brand B) copycat brand C) umbrella brand D) exclusive brand E) subbrand

A) premium brand

When a grocery retailer develops its own high-quality private-label organic food product, this would be a(n) A) premium brand. B) copycat brand. C) umbrella brand. D) exploratory brand. E) superbrand.

A) premium brand.

Home Day is a large supermarket. It recently launched its own brand of cereals called Fast Bites, equivalent to most national brands and also priced slightly lower. Therefore, Fast Bites is an example of a(n) A) premium store brand. B) generic brand. C) copycat brand. D) parallel import. E) licensed brand.

A) premium store brand.

Which of the following is neither a store brand nor a national brand? A) Premium brand B) Exclusive brand C) Generic brand D) Copycat brand E) Private-label brand

C) Generic brand

What is the outcome when a retailer sells counterfeit merchandise? A) It can be heavily fined through the rulings of the Robinson-Patman Act. B) The retailer will lose money once the customers discover the truth. C) It can destroy the relationship with the vendor of the legitimate brand. D) The retailer gains a low profit margin by selling counterfeit goods. E) It is known as the gray market.

C) It can destroy the relationship with the vendor of the legitimate brand.

Popular national brands are placed next to a manufacturer's brands in a store and look like them. This kind of brand is called a(n) A) premium brand. B) generic brand. C) copycat brand. D) exclusive brand. E) licensed brand.

C) copycat brand.

The only retailer that offers Fresh Sun organic food products is Daily Needs. Therefore, Fresh Sun is an example of a(n) A) generic brand. B) private-label brand. C) exclusive brand. D) premium private label. E) copycat brand.

C) exclusive brand.

Violations of human rights are avoided by A) only sourcing products in third-world countries. B) only sourcing products from Asia. C) observing core labor standards. D) having a collaborative system. E) having a willingness to pay more for the products.

C) observing core labor standards.

A(n) ________ is a brand that is developed by a national-brand vendor, often in conjunction with a retailer, and sold solely by the retailer. A) premium brand B) generic brand C) copycat brand D) exclusive brand E) subbrand

D) exclusive brand

National brands are also called A) generic brands. B) private-label brands. C) exclusive brands. D) manufacturer's brands. E) distributor's brands.

D) manufacturer's brands.

How does a national retailer benefit from selling private-label brands? A) The retailer spends less on advertising private-label brands and therefore saves money. B) Since the retailer carries the cost of advertising of a private-label brand, the costs are covered by the consumer. C) Since nationwide stores carry the private-label brands, it gives little choice to the consumer about assortments. D) Since it is a national retailer, customers will naturally know the private-label brand. E) By selling private-label brands, a national retailer can differentiate its assortments.

E) By selling private-label brands, a national retailer can differentiate its assortments.

What is an advantage of selling private-label brands for a national retailer? A) There are fewer steps and supply chain resources needed to develop private-label products. B) The retailer saves costs as it does not need to market private-label products. C) There is less risk involved with selling private-label brands. D) Private-label brands have more clout than national brands. E) Customers can't compare prices for private-label products because of their exclusivity.

E) Customers can't compare prices for private-label products because of their exclusivity.

Which of the following is a subjective issue associated with global sourcing? A) Transportation costs B) Tariffs C) Longer lead times D) Relative value of foreign currencies E) Quality control

E) Quality control

Louise runs a successful shop in Chicago featuring unique dolls from Western Europe. Louise speaks German and a little Dutch, but no Italian, French, or Spanish. Which of the following is the best way for Louise to procure dolls from all Western European countries? A) She can visit wholesale market centers throughout the year. B) She can attend trade shows in the United States and meet vendors there. C) She can establish a time for vendors to visit her in her own office. D) She can buy from local artists of European descent. E) She can utilize a resident buying office when she visits Europe to buy.

E) She can utilize a resident buying office when she visits Europe to buy.

The availability of national brands can affect a customer's image of the retailer.

True

________ target a price-sensitive segment by offering a no-frills product at a discount price. A) Generic brands B) Store brands C) National brands D) Family brands E) Diverted merchandise

A) Generic brands

Which of the following is true of collaborative supply chain management? A) It is difficult to implement these strategies when sourcing globally. B) These systems are based on large inventories. C) Collaborative systems are based on child labor laws and regulations. D) Lead times are long when using these systems. E) Interactions between the vendor and retailer are minimal.

A) It is difficult to implement these strategies when sourcing globally.

Why are inventory carrying costs higher for retailers who source internationally? A) Lead times are longer, and there is a need to maintain higher levels of safety stocks. B) There is no way to predict the extra tariffs that will be levied by importing countries. C) Labels of origin are typically put on products and need to be removed upon arrival. D) Changes in fixed costs result in additional inventory. E) Foreign distribution centers charge higher storage fees.

A) Lead times are longer, and there is a need to maintain higher levels of safety stocks.

________ refers to funds vendors give retailers to cover lost gross margin dollars. A) Markdown money B) Slotting allowance C) Chargeback D) Tariff E) Buyback

A) Markdown money

If there are so many advantages to selling national brands, why do retailers still carry private-label brands? A) Private-label brands yield higher profits to retailers. B) Private-label brands require less investment for a retailer from design to display. C) Customers have loyalty to national brands. D) National brands have better quality overall than private-label brands. E) National brands offer a retailer more flexibility on how merchandise is displayed and advertised.

A) Private-label brands yield higher profits to retailers.

As a vendor, Melissa works well with a buyer she's known for years at Dream Toys. This year, Melissa's line of toys had a few products that sold poorly, and it is now time to show the Dream Toys' buyer the next holiday season's product line. Melissa knows the Dream Toys' buyer will be a hard negotiator. What should Melissa be prepared to do? A) Provide markdown money. B) Suggest pulling out of Dream Toys for a season to strategize and reinvent. C) Suggest selling the toys for another season giving consumers time to acclimate to the products. D) Advise that Dream Toys can sell the products at lower prices, but maintain the original prices at other retailers. E) Provide the Dream Toys buyer with a vacation package.

A) Provide markdown money.

Fantasy and Stanley's are popular apparel stores. A Fantasy vendor has offered a Stanley's buyer an attractive discount on merchandise that had been returned to Fantasy by a different retailer. The Stanley's buyer realizes the high gross margin opportunity but refuses the offer nevertheless. Why? A) The buyer wants to preserve Stanley's image as a fashion leader by not selling returned merchandise that could be out of season. B) By accepting additional merchandise, Stanley's would be paying the additional costs of carrying the merchandise. C) Stanley's would be accepting unknown merchandise and could risk the purchase as becoming more problems than it is worth. D) Accepting the excess merchandise could alter the terms of the purchase as well as delivery dates. E) Transportation costs would increase.

A) The buyer wants to preserve Stanley's image as a fashion leader by not selling returned merchandise that could be out of season.

Randolph is the divisional merchandise manager for home products for Daisy's, a supermarket. At a recent trade show, he noticed small kitchen appliances being shown in retro colors like pistachio, eggplant, and cotton candy. Knowing the kitchen designs were moving in this direction, he decided to discuss it with his senior buyers to see if these retro colors would suit the Daisy's market. Randolph is in the ________ phase of building strategic relationships. A) awareness B) consideration C) exploration D) expansion E) commitment

A) awareness

Steve buys men's dress shirts for Martin's, a clothing retailer. At a recent trade show, he took the opportunity to see a few new vendors. During one meeting, a vendor proposed a ticket to a high-profile college football game. Steve graciously declined because he was concerned he would be engaging in A) commercial bribery. B) free-riding. C) greenwashing. D) an exclusive dealing. E) a tying contract.

A) commercial bribery.

Companies are practicing ________, which is the practice of marketing products or services as being environmentally friendly with the purpose of gaining public approval and sales rather than actually improving the environment. A) green sheen B) whitewashing C) black marketing D) fair trade E) unlicensed branding

A) green sheen

Linda is a fashion designer who sourced out to a manufacturer in India in order to assemble her fall line. She assumed the patterns for the clothes were simple, and she deemed it unnecessary to personally visit the factory and supervise the workers sewing her clothes. Months later, the shipment arrived in New York and, the seams on all of the blouses were sewn incorrectly. This mishap is an issue of A) quality control. B) tariff ramifications. C) poor strategy. D) global market satiation. E) global trends.

A) quality control.

What is the best reason for retailers to develop and maintain relationships with multiple and sometimes competing suppliers? A) A more efficient supply chain occurs when multiple vendors are involved. B) A function of retailers is to provide assortments, so they must deal with a variety of suppliers. C) By working with multiple suppliers, retailers tend to make better negotiators. D) A variety of vendors assures more profit. E) It would be unethical for a buyer to solely work with one supplier.

B) A function of retailers is to provide assortments, so they must deal with a variety of suppliers.

________, also known as stocklifts or lift-outs, are activities engaged in by vendors with retailers to get their products into retail stores. A) Charge backs B) Buybacks C) Greenwashing D) Co-op advertising E) Reverse auctions

B) Buybacks

Which of the following is a drawback for a retailer offering national brands? A) Retailers view national brands as a threat to private-label brands. B) Retailers have to discount some national brands in order to attract customers to their stores because customers compare prices for these brands across stores. C) Significant investment is needed to develop relationships with national brands' vendors. D) Retailers have to work to market national brands to make them better known and desired by customers. E) Many customers will only patronize retailers that sell particular national brands.

B) Retailers have to discount some national brands in order to attract customers to their stores because customers compare prices for these brands across stores.

Which of the following prohibits vendors offering different retailers different prices and purchase order terms for the same merchandise and quantity? A) Tying contracts B) Robinson-Patman Act C) Resale price maintenance D) Buybacks E) Copyright infringement Act

B) Robinson-Patman Act

Janine buys swimwear for a chain of apparel stores. At a recent trade show, she took the opportunity to meet with a few vendors. During a meeting with the vendor that she normally purchased from each season, he proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing. Janine knows that it would be beneficial to see what European tourists are wearing and then translate what she is seeing into her assortment for her target customers. Before continuing her discussions with the vendor, what should she do? A) She should ensure that all her work is completed before she leaves for an extended weekend. B) She must inform her divisional merchandise manager of the proposal. C) She should look at her budget to see how much product she would be able to purchase from this vendor this season. D) She should see what other vendors might be offering. E) She should check to see if there might be a better place than the Cayman Islands to scope out swimwear trends.

B) She must inform her divisional merchandise manager of the proposal.

_______ are charges imposed by a retailer to stock a new item. A) Chargebacks B) Slotting allowances C) Additional markup dollars D) Advertising allowances E) Markdown allowances

B) Slotting allowances

One way for a buyer to become familiar with products and styles is to A) interact with retail exchanges. B) attend trade shows. C) become acquainted with diverted merchandise. D) insist on objective information. E) have and maintain a common goal with vendors.

B) attend trade shows.

By sharing common goals, buyers and vendors A) can avoid sharing each firm's most strategic information. B) can pool their strengths and abilities to exploit potential opportunities. C) can conclude that the long-term results of the relationship are insignificant. D) do not have to coordinate systems for the partnership to succeed. E) commonly miscalculate the cost of merchandise.

B) can pool their strengths and abilities to exploit potential opportunities.

Tide detergent, Ralph Lauren polo shirts, and Hewlett-Packard printers are all examples of A) private-label brands. B) national brands. C) general brands. D) generic brands. E) licensed brands.

B) national brands.

Yves, an English-speaking Frenchman, meets with buyers from the United States when they visit Paris. Once in Paris, the buyers rely on Yves to make appointments with French vendors to save time and penetrate the market. Yves works to help interpret and negotiate during the buyer-vendor meetings. Therefore, Yves works for a A) black market. B) resident buying office. C) reverse auction office. D) cohort exchange office. E) stock market.

B) resident buying office.

At FN Platform, vendors display their fashion footwear in designated areas at the Las Vegas Convention Center and have sales representatives available to talk with buyers as they walk through the exhibit area. This exhibition is an example of a A) retail exchange. B) trade show. C) diverted merchandise sale. D) gray-market sale. E) reverse auction.

B) trade show.

A ________ for retail buyers is a concentration of vendors within a specific geographic location, perhaps even under one roof or over the Internet. A) distribution center B) wholesale market C) gray market D) black market E) resident buying office

B) wholesale market

When a swimwear buyer negotiates for delivery and exclusivity with a vendor, what would a buyer typically want? A) A buyer would want the swimwear to arrive late in the season to avoid markdowns. B) A buyer would ask to have merchandise at competing stores so the only competition factor is price. C) A buyer would want unique swimwear to arrive early in the season to get the most sales at the original price. D) A buyer would ask for last season's swimwear as well as the latest swimwear to be able to offer a price differentiation. E) A buyer would ask for parallel merchandise to be able to offer more variety in assortments.

C) A buyer would want unique swimwear to arrive early in the season to get the most sales at the original price.

Which of the following does not describe an approach for buying national brand merchandise? A) Buyers meeting national brand vendors in wholesale market centers B) Buyers attending trade shows to see the latest products and styles C) Buyers using reverse auctions to procure seasonal merchandise D) Buyers discussing the performance of the vendor's merchandise during the previous season E) Vendors meeting with buyers at their offices to review and reorder last week's best sellers

C) Buyers using reverse auctions to procure seasonal merchandise

________ are private-label products produced by the retailer that imitate the national brand in both appearance and packaging, but are often offered at a lower price. A) Premium brands B) Generic brands C) Copycat brands D) Exclusive brands E) Licensed brands

C) Copycat brands

When contemplating sourcing products internationally, which of the following would not be an additional cost associated with global sourcing? A) Foreign currency fluctuations B) Tariffs C) Reduced lead times D) Larger inventory carrying costs E) Increased transportation costs

C) Reduced lead times

Which of the following is a drawback of selling private-label merchandise? A) National brands are far superior to private-label brands. B) National brands are produced with better quality. C) Significant investment is needed to develop, manage, and market private-label brands. D) Gross margins are lower with private-label brands than with national brands. E) Designing private-label merchandise is only possible for department store retailers.

C) Significant investment is needed to develop, manage, and market private-label brands.

National brands A) offer no alternatives for getting rid of excess inventory. B) offer a higher profitability potential than store brands. C) can limit a retailer's flexibility. D) are specific to a retailer. E) pose a risk in the form of uncertain sales.

C) can limit a retailer's flexibility.

When negotiating with a vendor, the best outcome for a retailer would be to A) dismiss the negotiation if there's no agreement and ultimately cancel the vendor relationship. B) leave the negotiations with an advantage over the vendor. C) have mutual gain. D) give the vendor the advantage in the negotiation only to use it in the retailer's favor for the following season. E) agree to disagree on performance thresholds.

C) have mutual gain.

Retailers use ________ to get quality private-label merchandise at low prices. A) chargebacks B) buybacks C) reverse auctions D) commercial bribery E) markdown money

C) reverse auctions

When identifying national brands, vendors use a(n) ________ associated with their company. A) premium brand B) copycat brand C) umbrella brand D) exclusive brand E) subbrand

C) umbrella brand

Spring Clean, Sparkle Glass, and Dazzle Floor are various cleaning liquids marketed under the brand name Clean Homes. Therefore, Clean Homes is a(n) A) premium brand. B) copycat brand. C) umbrella brand. D) exclusive brand. E) subbrand.

C) umbrella brand.

________ are taxes collected by a government on imported merchandise. A) Chargebacks B) Country of origin costs C) Slotting fees D) Duties E) Obligation fees

D) Duties

Which of the following is a negotiation issue that is often used in fashion merchandise categories? A) Slotting allowances B) Additional markup dollars C) Advertising allowances D) Exclusivity arrangement E) Co-op (cooperative) advertising

D) Exclusivity arrangement

________ is a socially responsible movement that ensures that producers receive adequate prices for their products. A) Green sheen B) Whitewashing C) Black marketing D) Fair trade E) Licensed branding

D) Fair trade

________ involve the flow of merchandise through distribution channels, usually across international borders, other than those authorized or intended by the manufacturer or producer. A) Reverse auctions B) Chargebacks C) Lift-outs D) Gray-market goods E) Exclusive dealing arrangements

D) Gray-market goods

_______ are imposed by governments to shield domestic manufacturers from foreign competition. A) Chargebacks B) Country of origin costs C) Slotting fees D) Import tariffs E) Obligation fees

D) Import tariffs

A vendor's recent shipment at the retailer's distribution center was on time, but the boxes were mislabeled along with other infractions against the retailer's mandated shipment policies. What should the retailer do? A) Pay the vendor invoice immediately to assure deliveries are still on time in the future. B) Initiate legal proceedings against the vendor. C) Accept the vendor's gifts to repay the inconvenience infractions. D) Issue a chargeback. E) Send the shipment back.

D) Issue a chargeback.

When Whitney took over her father's sporting goods store, she evaluated some of her father's vendor relationships. She found that Rodney's Exercise Wear wasn't particularly profitable for the store. Although committed, his products were expensive, and he seemed inflexible. Whitney tried to work out a more amicable relationship with him by discussing her sales goals and new ideas for the coming year, but Rodney seemed uninterested. Which of the following elements crucial for maintaining strategic relationships is absent in the given example? A) Long-term gains B) Poor leadership C) Fulfilled obligations D) Open communication E) Credible commitments

D) Open communication

Which of the following is true of store brands? A) Store brands are limited in variety when compared to national brands. B) These products are sold to competing retailers. C) They are labeled only with the commodity name and have no distinguishing brand names. D) Retailers develop the design for these products in most cases. E) National brand vendors are not involved in the development of these products.

D) Retailers develop the design for these products in most cases.

________ are products developed by retailers. A) Copycat brands B) National brands C) Exclusive brands D) Store brands E) Parallel imports

D) Store brands

Which of the following is not descriptive of a trade show? A) Buyers meet with manufacturer executives to discuss strategies to grow their business. B) Buyers review performance of the vendor during the previous season. C) Vendors have celebrities at their booth to promote their merchandise and attract buyers. D) Trade shows are often associated with wholesale market centers. E) Buyers see the latest products and styles being offered by vendors.

D) Trade shows are often associated with wholesale market centers.

The premium option in the multiple price tiers created for store brands offers A) a reduced risk of uncertain sales. B) retailers a large number of alternatives for getting rid of excess inventory. C) consumers a substantial saving without compromising on quality. D) consumers quality that is comparable to that of national brands. E) consumers a higher quality than national brands at a higher price.

D) consumers quality that is comparable to that of national brands.

Isabel works as a senior jewelry buyer for a department store chain. On a recent visit to a trade show, she noticed a new vendor selling unique earrings, necklaces, and bracelets made of glass. She had seen such pieces in trade magazines, but initially ignored them because of the exorbitant price. She thought her affluent customers would appreciate the look, so she decided to talk with the sales representative to learn more about the possibility of a trial in only a few of her top stores. Isabel is in the ________ phase of building strategic relationships. A) expansion B) consideration C) commitment D) exploration E) awareness

D) exploration

Which of the following is not true of reverse auctions? A) Retail buyers provide a group of potential vendors with a specification for what they want. B) There is one buyer, the retailer, and many potential sellers, the manufacturing firms. C) Retailers participate to get quality private-label merchandise at low prices. D) Reverse auctions are common among commodities and seasonal products. E) The retailer chooses the lowest bidder regardless of other factors.

E) The retailer chooses the lowest bidder regardless of other factors.

All of the following are terms for products developed by retailers except A) store brands. B) private-label brands. C) house brands. D) own brands. E) manufacturer's brands.

E) manufacturer's brands.

Techno Comp is a well-known national brand of computer and electronic products and accessories. Their tablet would be considered a(n) A) premium brand. B) copycat brand. C) umbrella brand. D) exclusive brand. E) subbrand.

E) subbrand.

Retailers proactively engage in enforcing the labor practices of their suppliers because A) they want to maintain their reputations of providing quality merchandise. B) they want to build strategic partnerships with developing countries. C) they want to work toward collaborative merchandising. D) they require smaller shipments at frequent intervals. E) they want to ensure a safe and healthy work environment for laborers.

E) they want to ensure a safe and healthy work environment for laborers.

A(n) ________ exists when a vendor and a retailer enter into an agreement that requires the retailer to take a product it doesn't necessarily desire to ensure that it can buy a product that it does desire. A) exclusive dealing agreement B) functional discount C) competition D) buyback E) tying contract

E) tying contract

A buyer asking or receiving something of value that influences purchasing decisions occurs in the black market.

False

Bonuses are funds vendors give retailers to cover lost gross margin dollars due to markdowns needed to sell unpopular merchandise.

False

Due to an increase in the production of private-label brands, resident buying offices have become increasingly more significant and important.

False

In a Dutch auction, the retail buyer provides a specification for what they would like to be produced for their private-label products, and then manufacturers bid on the opportunity to be the supplier.

False

Wholesale markets for retail buyers include only annual trade shows.

False

Copycat brands imitate the manufacturer's brand in appearance and packing, generally are perceived as lower quality, and are offered at lower prices.

True

Credible commitments are tangible investments in the strategic relationship and involve spending money to improve the supplier's products or services provided to the customer.

True

Diverted and gray-market goods go through distribution channels that are not authorized or intended by the manufacturer.

True

Slotting allowances are charges imposed by a retailer to stock a new item.

True