Types of Retailers

Which of the following statements about warehouse clubs is TRUE? A. Warehouse clubs only sell to ultimate customers. B. Warehouse clubs have a category specialist format. C. Warehouse clubs typically have low inventory holding costs. D. Warehouse clubs have extensive merchandise depth.

C. Warehouse clubs typically have low inventory holding costs.

A massage parlor that requires its therapists to keep a database on each customer and include in that database what was done on each visit as far as customer aches and paints and peculiar characteristics of the customer. is trying to cope with which service characteristic? A. intangibility B. perishability C. inconsistency D. compatibility

C. inconsistency

Each different item of merchandise in a retail store is called a(n) __________________________________________________. A. consumer offering B. stored and keyed unit (SKU) C. stock keeping unit (SKU) D. economic unit

C. stock keeping unit (SKU)

Because the only merchandise categories at the University Futon Shop are double-sized futons, the Futon Shop can be said to have no _______________. A. inventory control B. need for customer service C. variety D. shrinkage

C. variety

The North American Industry Classification System (NAICS): A. was developed by the Federal Trade Commission (FTC) B. uses an 8-digit classification system C. was created to collect data on North America's business activity D. is limited in its use to only retail institutions

C. was created to collect data on North America's business activity

________________________________ are end of season merchandise that will NOT be in the manufacturer's offerings going forward. A. Close-outs B. Irregulars C. Third-degree items D. Undergrounds

A. Close-outs

Compared to other food retailers, convenience stores A. Have higher food prices B. Have a wide breadth and depth of merchandise C. Benefit from the high margins of gasoline sales D. Have less than 30% of their store devoted to food

A. Have higher food prices

Which of the following is a second tier department store? A. Macy's B. TJ Maxx C. Nordstrom D. None of the above

A. Macy's

What type of store is T.J. Maxx considered to be? A. Off-price retailer B. Department store C. Full-line discount store D. Specialty retailer

A. Off-price retailer

__________________________________ offer an inconsistent assortment of brand-name, fashion-oriented, soft goods at low prices. A. Off-price retailers B. Department stores C. Discount retailers D. Convenience stores

A. Off-price retailers

Frank was shopping for electric fuses for his fuse box. Flash Hardware sold them for $3.99 for a box of six, but when he went to the same retailer's website, he found the same set for $2.99. Flash Hardware has a problem with: A. Price consistency across channels B. A pricing mistake by the store manager C. A communication problem between channels D. Product consistency E. Depth of merchandise

A. Price consistency across channels

Kelly is a primary school teacher. She needed some small gifts for her students. She was pleased when she went in A Buck or Two and found she could buy colouring books, plastic scissors, pencil bags, puzzles, and games all priced at $1.00 each. A Buck or Two is an example of a: A. Value retailer B. General merchandise retailer C. Specialty retailer D. Price killer

A. Value retailer

Stocking a deep and broad assortment is appealing to customers, but costly for retailers. What option does a small specialty store owner have to offset costs, and make a profit? A. charge higher prices B. hire less staff C. offer less expensive assortments D. offer less hours of operation

A. charge higher prices

What format of ownership combines the advantages of owner-managed businesses with the efficiency of centralized decision making in chain store operations? A. franchise B. retail chain C. full-line discount stores D. single-store establishment

A. franchise

Office Depot offers customers a huge selection of office supply merchandise. As a result, inventory investment __________________________. A. increases because they have to carry back up stock for each SKU B. increases because if the increase in demand C. increases because of the value of the assortment D. decreases because of the increase of the customer base

A. increases because they have to carry back up stock for each SKU

Services are difficult to be evaluated before customers buy or even after they buy and consume them. Which of the following characteristics of service causes this challenge for service retailers? A. intangibility B. perishability C. inconsistency D. compatibility

A. intangibility

The dermatologist has her diplomas prominently displayed above her large desk, which sits on a Persian rug in an office filled with tasteful, yet expensive furnishings. Which service characteristic is the doctor trying to handle with her office décor? A. intangibility B. perishability C. inconsistency D. compatibility

A. intangibility

The outer walls of a supermarket that stock fresh merchandise such as diary, bakery, meat, produce, etc. is referred to as the _______________. A. power perimeter B. fresh track C. profit border D. edge force

A. power perimeter

Speciality stores that focus on specific market segments are vulnerable to _____________________________________. A. shifts in customer tastes and preferences B. high price points C. operating parameters set by mall management D. overstocking

A. shifts in customer tastes and preferences

Why do movie theaters sell tickets for an afternoon showing of a movie at a lower price than the 7 p.m. showing of the same movie? A. to deal with the perishability of services B. to make sure the service offered is consistent C. to deal with intangible characteristic of services D. to minimize inventory losses

A. to deal with the perishability of services

Ben saw a half-hour TV show with George Foreman on it. During the show Foreman was showing how to prepare a variety of foods so that they would be totally fat-free. Each item was prepared using a special cooker. During the show the TV audience were given several opportunities to buy the cooker. Ben was watching: A. Direct selling B. An informercial C. A sales promotion D. Outbound telemarketing

B. An informercial

What is the word used to describe a retailer's merchandise "depth"? A. Apparition B. Assortment C. Variety D. Product

B. Assortment

Why do category specialists call themselves "category killers"? A. Because they have a lock on the competition, they can demand higher prices. B. By offering a complete assortment in a category at low prices, category specialists can "kill" a category of merchandise for other retailers. C. To keep costs low, employee assistance is nonexistent, thus has "killed" off customer service. D. As they edit their product assortments, they narrow down and drop off classifications.

B. By offering a complete assortment in a category at low prices, category specialists can "kill" a category of merchandise for other retailers.

What type of store is Kohl's considered? A. Off-price retailer B. Department store C. Full-line discount store D. Extreme value retailer

B. Department store

The Home Depot offers customers a huge selection of home improvement merchandise. As a result inventory investment: A. Increases because of the increase in demand in the home improvement industry B. Increases because they have to carry backup stock for each SKU C. Increases because of the value of the assortment D. Decreases because of the increase of the customer base

B. Increases because they have to carry backup stock for each SKU

___________________________ are products that have minor blemishes to the fabric or errors in the construction. A. Close-outs B. Irregulars C. Third-degree items D. Undergrounds

B. Irregulars

Which of the following is a first tier department store? A. Macy's B. Nordstrom C. Sears D. Kohl's

B. Nordstrom

A retailer that carries a broad variety and deep assortment, offers customer services, and is organized into separate departments for displaying merchandise is called a _______________________________________. A. off-price retailer B. department store C. discount retailer D. convenience store

B. department store

Department stores have placed an emphasis on their own private branded merchandise to _______________________________________. A. attract the attention of the junior market B. differentiate their product offerings C. keep price points lower D. Reduce the number of markdowns at the end of a season

B. differentiate their product offerings

In a franchise contract, the franchisee pays the franchisor a ______________________________. A. bonus if the sales quota is achieved B. lump sum plus a royalty on all sales C. start-up costs plus a monthly predetermined cash amount D. commission on all sales

B. lump sum plus a royalty on all sales

Which of the following describes an advantage that independent, single-store establishments have over other forms of ownership? A. economies of scale B. react quickly to market changes C. very low set-up costs D. distribution efficiency

B. react quickly to market changes

A company that operates multiple retail units under common ownership, most commonly have centralized decision making for defining and implementing its strategy, is called a ________________________. A. franchise B. retail chain C. full-line discount stores D. single-store establishment

B. retail chain

Off-price retailers ___________________________________. A. offer a consistent assortment of soft goods at low prices B. sell brand name merchandise at reduced prices C. offer gift registries D. None of the above

B. sell brand name merchandise at reduced prices

Building on their strength, supermarkets are offering fresh meal solutions for ___________________ consumers. A. low-income B. time-pressured C. ethnic D. vegetarian

B. time-pressured

Mark's Work Wearhouse (clothing retailer) carries sizes for small, average, and big men, but all sizes are not available in all their stores. What should Mark's do to communicate this message to their customers? A. They should advertise big men's merchandise on all of their newspaper supplements and commercials B. They should train their sales associates to mention this when closing sales with each customer C. A database should be developed of those who purchase merchandise for big men and then Mark's should market specifically to those shoppers D. Mark's should actively advertise these assortments to competitors E. Mark's should advertise this by featuring big men on their Holiday Catalogue

C. A database should be developed of those who purchase merchandise for big men and then Mark's should market specifically to those shoppers

Pinch-A-Penny sells a variety of pool maintenance supplies including filters, chemicals, lights, skimmers, and pool toys. Pinch-A-Penny can be said to have: A. Supply standard B. Complete retail offering C. Breadth of merchandise D. Retail mix E. Depth of merchandise

C. Breadth of merchandise

New retail formats are created and evolve because _______________. A. consumer lose interest B. large retailers have undertaken stronger marketing campaigns C. Consumers needs and competition change D. private branding dictates new fashion

C. Consumers needs and competition change

Which of the following is a self-service food store offering groceries, meat, and produce with limited sales of nonfood items? A. Big-box food retailer B. Convenience store C. Conventional supermarket D. Superstore

C. Conventional supermarket

Martina was watching a Made-for-Television Movie on the Life Channel when she saw an ad for a series of books for people who want to save money on home repairs. She called and ordered the book on plumbing that was first in the series. Martina responded to: A. Direct selling B. An informercial C. Direct-response advertising D. Outbound telemarketing

C. Direct-response advertising

Target and Walmart are examples of: A. Convenience stores B. Department stores C. Discount stores D. Specialty stores E. Variety stores

C. Discount stores

What type of store is Target considered? A. Off-price retailer B. Department store C. Full-line discount store D. Specialty retailer

C. Full-line discount store

A retailer that sells merchandise and/or services through more than one channel is called a/an: A. Computerized retailer B. Direct seller C. Multichannel retailer D. Single-channel retailer

C. Multichannel retailer

Which of the following is a third tier department store? A. Macy's B. TJ Maxx C. Sears D. None of the above

C. Sears

What can department stores do to differentiate their merchandise offering and strengthen their image? A. Increase their pricing B. Network with a broader variety of vendors C. Seek exclusive arrangements with nationally recognized brands D. Merge with faltering retailers to gain their market share

C. Seek exclusive arrangements with nationally recognized brands

Multichannel retailers: A. Want to encourage channel migration B. Should avoid offering uniquely relevant information based on proprietary data that the retailers has collected about their customers. C. Should consider promoting private-label or exclusive merchandise that can be purchased only from them. D. Want to encourage consumers' collecting information about products and pricing on their channels and then buying the product from a competitor E. Cannot respond to the challenge of differences in local competition

C. Should consider promoting private-label or exclusive merchandise that can be purchased only from them.

How can a service retailer best cope with the problems associated with the intangibility of service? A. Use mass production. B. Emphasize quality control. C. Solicit customer evaluations and complaints. D. Increase staffing at peak demand times.

C. Solicit customer evaluations and complaints.

What do Delta, Marriott, and Century 21 have in common? A. These retailers have established long-term relationships with their manufacturers. B. They are all examples of off-price retailers. C. They are all examples of service retailers. D. They sell tangible products.

C. They are all examples of service retailers.

How can a service retailer best cope with the problems associated with the inconsistency of service? A. Use mass production. B. Emphasize quality control. C. Train and motivate employees. D. Increase staffing at peak demand times.

C. Train and motivate employees.

What is the word used to describe a retailer's merchandise "breadth"? A. Assortment B. Modicum C. Variety D. Product

C. Variety

Which of the following is NOT TRUE in describing characteristics of franchise? A. The franchise ownership format attempts to combine the advantage of owner-managed businesses with the efficiencies of centralized decision making in chain store operations B. Franchises are motivated to make their stores successful because they receive the profits C. The franchisor is motivated to develop new products and to promote the franchise because it receives a royalty on all sales D. The franchisor is solely responsible for financing advertising, product development, and system development

D. The franchisor is solely responsible for financing advertising, product development, and system development

___________________ refers to the number of different merchandise categories a retailer offers. A. Inventory mixture B. Product measurement C. Product depth D. Variety

D. Variety

Why are category specialists sometimes called category killers? A. because they are often located in dying shopping malls B. because they are located at stand-alone sites C. because of their broad merchandise mix and shallow assortment D. because they can dominate a category of merchandise making it difficult for other retailers to compete

D. because they can dominate a category of merchandise making it difficult for other retailers to compete

Variety is often referred to as the _________________________________________. A. store's supply standard B. complete retail offering C. retail mix D. breadth of merchandise

D. breadth of merchandise

The Men's Wearhouse stocks over 350 different styles and colors of ties. This assortment of ties can be referred to as the store's ______________________________________. A. supply standard B. complete retail offering C. breadth of merchandise D. depth of merchandise

D. depth of merchandise

Typically, large retail chains: A. are completely decentralized. B. are very flexible in their responses to the unique needs for their local markets. C. have less sophisticated analytical systems than other forms of ownership. D. effectively negotiate lower prices because of their buying power.

D. effectively negotiate lower prices because of their buying power.

Purchasing from factories that pay workers a living wage (more than the minimum wage) and offer other benefits to the employees is called _________________________. A. core insight B. locavore C. fair labor D. fair trade

D. fair trade

Best Buy is a category specialist for the electronics industry. This means the stores ______________________________. A. offer their customers narrow breadth and depth B. use quick-response inventory management systems C. appeal to the mature customers D. offer a narrow but deep assortment of merchandise

D. offer a narrow but deep assortment of merchandise

An off-price store is owned by manufacturers or retailers is called a/an ______________________. A. subsidiary B. tangent C. branch D. outlet

D. outlet