Chapter 11 BMGT350
B
1) ________ refers to the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. A) Sole sourcing B) Retailing C) Manufacturing D) Procurement E) Warehousing
C
16) Pawz is a larger retailer that specializes in pet products and services such as pet food, accessories, grooming, toys, and medical treatment. Pawz also has animals available for adoption at all of its many stores located across the nation. Pawz is most likely an example of a ________. A) convenience store B) pop-up store C) category killer D) lifestyle center E) supermarket
A
19) ________ have filled the ultralow-price, high-volume gap by buying at less-than-regular wholesale prices and charging consumers less than retail. A) Off-price retailers B) Specialty stores C) Convenience stores D) Designer shops E) Full-service retailers
E
2) ________ refers to using point-of-purchase promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decisions. A) Internal marketing B) Sole sourcing C) Warehousing D) Test marketing E) Shopper marketing
B
22) An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods is called a ________. A) category killer B) factory outlet C) specialty store D) superstore E) warehouse club
A
29) Rhonda recently entered into a contractual agreement with StellarCutz, a national chain of affordable, walk-in hair salons. Under the agreement, Rhonda uses the StellarCutz trade name and receives support from StellarCutz in terms of business methods and processes. Rhonda paid a start-up fee to StellarCutz and will pay annual licensing fees for the use of the StellarCutz brand. Which of the following best describes Rhonda's business? A) franchise B) factory outlet C) superstore D) acquisition E) joint agreement
A
43) Retail convergence most likely leads to ________. A) reduced differentiation B) reduced competition C) increased sales D) increased profit margins E) reduced advertising costs
C
5) Which types of stores are characterized by specialty goods for which customers need assistance and higher operating costs that are passed along to customers as higher prices? A) self-service stores B) convenience stores C) full-service stores D) discount stores E) off-price stores
B
52) A ________ brings buyers and sellers together and assists in negotiations. A) distributor B) broker C) retailer D) manufacturer E) supplier
C
53) ________ represent buyers or sellers on a more permanent basis than brokers. A) Distributors B) Franchisees C) Agents D) Retailers E) Manufacturers
B
54) C & G Retail, a chain of local supermarkets, procures all its goods directly from the producers' factories. This type of wholesaling is usually done in ________. A) corporate broker branches B) manufacturers' offices C) value-retail centers D) warehouse clubs E) factory outlet malls
D
57) Wholesalers most likely discourage less-profitable customers by ________. A) increasing product promotions B) carrying exclusive product lines C) overseeing inventory control systems D) adding service charges to small purchase orders E) requiring smaller orders to lower transportation costs
T
61) Retailers are businesses whose sales come primarily from retailing.
T
62) Shopper marketing involves focusing the entire marketing process-from product and brand development to logistics, promotion, and merchandising-toward turning shoppers into buyers at the point of sale.
F
64) Department stores carry narrow product lines with deep assortments within those lines.
T
67) Category killers are superstores that carry a deep assortment of a particular product line.
C
7) Customers at Carat, a premium jewelry store, are encouraged to make an appointment before a visit so that a customer service representative is assigned to them. These representatives help every customer make a purchase that meets his or her needs and budget after considering numerous options. The different styles and special features of the jewelry are explained to each customer to aid the purchase decision. In this case, Carat is an example of a(n) ________. A) self-service retailer B) off-price retailer C) full-service retailer D) supermarket E) convenience store
F
70) Factory outlet malls combine manufacturers' outlets with off-price retail stores and department store clearance outlets.
F
71) Voluntary chains are normally based on one unique product or a specific trade name.
T
72) In a retailer cooperative, independent retailers band together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts.
T
73) Retailers cannot make consistent decisions about product assortment and pricing until they define and profile their markets.
T
74) The retailer's product assortment should be distinguishable and also match target shoppers' expectations.
B
51) When compared to merchant wholesalers, brokers and agents ________. A) perform greater functions B) do not take title to goods C) deal only in services and not products D) do not engage in any negotiation of wholesale deals
C
55) Jacob Kendler works in a wholesale business which specializes in industrial goods needed in automobile industries. Jacob's job involves locating and contacting potential buyers and sellers and facilitating the negotiation process. Which of the following, if true, would strengthen the argument that Jacob works as an agent and not as a merchant wholesaler? A) Jacob runs an independently-owned business. B) Jacob is an employee of an organization producing automobiles. C) Jacob represents his company but is not liable for any damaged or low-quality goods. D) Jacob works in a highly specialized market and does not venture into other product categories. E) Jacob provides a full set of services ranging from locating sellers to delivering goods.
B
56) Hamilton Wholesaling, an electronics wholesaling firm, provides many services to customers including buying, storing, and transporting expensive and delicate electronics equipment. Hamilton takes title of ownership to all goods that the firm handles. Hamilton is most likely a(n) ________. A) wholesaling broker B) merchant wholesaler C) agent wholesaler D) manufacturer's agent E) manufacturer's representative
B
58) According to the text, today's large and progressive wholesalers have successfully reacted to rising costs by ________. A) relocating to low-rent, low-tax areas B) investing in information technology systems C) eliminating the need for brokers and agents D) increasing customer service responsibilities E) reducing promotional and personal selling activities
D
59) Which of the following is true about trends in wholesaling? A) New laws prevent wholesalers from having their own retailing operations. B) Value-added customer relationships have been replaced by control systems. C) Merchant wholesalers are decreasing in number and relevance. D) The demand for lower prices and higher quality has increased. E) Bulk breaking is increasingly popular and necessary.
C
6) Flax is a chain of stores that carries several product lines including clothing, home furnishings, and household appliances. Each line is operated as a separate department, and employees are available to assist and advise customers in every phase of the shopping process. Flax is most likely a ________. A) self-service retailer B) category killer C) full-service retailer D) supermarket E) pop-up store
E
60) JP Wholesalers is one of the largest wholesalers of wooden furnishings in the country. Recently, the company opened a chain of stores called JP Designer Homes that has become popular due to the good reputation the company has as a wholesaler. The company has now started acquiring smaller retail chains and consolidating its position in the market. Which of the following trends is reflected in this scenario? A) the shift toward self-service retailing B) the decline of superstores and megastores C) the decline of the voluntary chain distribution method D) the rise of franchise organizations and joint partnerships E) the blurring of distinctions between retailers and wholesalers
F
63) PennyLane Retailers believe in a do-it-yourself approach, and their stores are designed for consumers who are willing to perform their own locate-compare-select process. PennyLane is an example of a full-service retailer.
F
65) Venns is a chain of department stores that has become more focused in recent years and now stocks only exclusive labels of designer home accessories. Venns has transformed itself into a chain of pop-up stores.
F
66) Convenience stores are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services.
T
68) Off-price retailers can be found in all areas, from food, clothing, and electronics to no-frills banking and discount brokerages.
F
69) Independent off-price retailers purchase merchandise at rates that are substantially higher than regular wholesale rates.
F
75) Pricing decisions of specialty stores are typically based on low markups on a high volume of products.
T
76) Casey's is a large supermarket that practices everyday low pricing. Therefore, consumers should expect few discounts or sales if shopping at Casey's regularly.
T
77) The rise of megaretailers has shifted the balance of power between retailers and producers. Since megaretailers have access to numerous consumers, they have significant power when dealing with manufacturers.
F
78) A majority of shoppers who buy products at traditional stores first check them out online.
T
79) Wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence
B
8) Which type of retailer typically carries deep product assortments of narrow product lines? A) self-service retailers B) specialty stores C) warehouse clubs D) discount stores E) factory outlets
T
80) Merchant wholesalers are the largest single group of wholesalers, accounting for roughly 50 percent of all wholesaling.
F
81) Brokers and agents usually take title to goods and perform various functions for retailers.
T
82) Manufacturers' agents are the most common type of agent wholesaler.
F
83) The Great Recession put heavy pressure on wholesalers to increase their operation costs and limit warehouse automation systems.
T
84) In an automated warehouse, orders are fed directly from the retailer's information system into the wholesaler's, and the items are picked up by mechanical devices and taken to a shipping platform where they are assembled.
F
85) The suppliers who are not adding value based on cost and quality are more in demand than their competitors.
F
86) What is retailing? Explain the concept of shopper marketing.
C
9) GameStop, a video game retailer, offers a deep assortment of video games and video game consoles. GameStop is best described as a(n) ________. A) department store B) supermarket C) specialty store D) discount store E) off-price retailer
C
30) What is most likely the first major marketing decision that a retailer must take? A) positioning B) targeting C) segmentation D) differentiation E) promoting
D
31) For a retailer to be able to differentiate from competitors and match target shoppers' expectations, the retailer's product assortment should most likely be ________. A) identical to the product assortment offered by competitors B) devoid of any blockbuster goods since they distract most consumers C) targeted at all consumers in the global market irrespective of local needs D) constituted by national brands on which the store holds exclusive rights E) devoid of any seconds, overstocks, and closeouts that damage the retailer's image
B
10) Specialty stores are characterized by ________. A) the sale of convenience and staple items B) narrow product lines with deep assortments C) a wide range of products and categories D) low prices on a wide range of goods E) routinely purchased food products and services
E
11) Department stores are most likely characterized by ________. A) narrow product lines B) specialty goods and services C) predatory pricing strategies D) deep assortments of luxury brands E) wide varieties of product lines
B
12) Jones & Company, a major retail chain across the United States, offers a wide range of consumer goods such as clothing, furniture, home appliances, cosmetics, jewelry, and food. Jones & Company is best described as a ________. A) supermarket B) department store C) specialty store D) pop-up store E) category killer
C
13) A convenience store ________. A) markets to segments comprised mostly of white-collar workers B) stocks narrow product lines that have wide, deep assortments C) carries a limited line of high-turnover goods for consumer self-service D) involves high operation costs due to full-service customer assistance E) is a multi-channel food and discount retailer that targets niche markets
D
14) Which type of store is much larger than a regular supermarket and offers a large assortment of routinely purchased food products, nonfood items, and services? A) discount stores B) specialty stores C) factory outlets D) superstores E) off-price outlets
A
15) Which term refers to a giant specialty store with a very deep assortment of a particular product line? A) category killer B) convenience store C) factory outlet D) department store E) independent store
D
17) Which of the following statements is true of retailing? A) All retail stores are full-service retail stores. B) A department store has a narrow product line with a deep assortment. C) The largest type of retail outlet is a supermarket. D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed. E) A feature common to all types of retail stores is the use of the everyday low pricing strategy.
B
18) ________ refer to retailers that sell standard merchandise at lower prices by accepting lower margins and selling higher volume. A) Convenience stores B) Discount stores C) Full-service retailers D) Designer shops E) Specialty stores
D
20) Which of the following is a type of off-price retailer? A) specialty store B) full-service retailer C) discount store D) warehouse club E) supermarket
B
21) Allstocks.com is an online retailer that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices. Allstocks then charges customers less than retail. Allstocks is an example of a(n) ________. A) specialty retailer B) independent off-price retailer C) departmental retailer D) full-service retailer E) category killer
B
23) Dina loves branded apparel and accessories but cannot afford to buy them too often. Fortunately, Dina lives close to an off-price retail store that is owned and operated by a famous brand. The company utilizes this store to sell its surplus, discontinued, or irregular goods at significantly lower costs. The retail store is best referred to as a ________. A) category killer B) factory outlet C) specialty store D) superstore E) power center
A
24) ________ are off-price retailers that operate in huge facilities offering few frills but ultra-low prices and surprise deals on selected branded merchandise. A) Warehouse clubs B) Department stores C) Convenience stores D) Specialty stores E) Superstores
A
25) ________ refer to two or more outlets that are commonly owned and controlled. A) Corporate chains B) Factory stores C) Specialty stores D) Designer shops E) Warehouse clubs
E
26) Which term refers to a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising? A) factory outlet mall B) retailer cooperative C) corporate chain D) warehouse club E) voluntary chain
C
27) Which contractual system is distinguished by the fact that it is normally based on some unique product or service? A) voluntary chain B) retailer cooperative C) franchise D) corporate chain E) warehouse club
C
28) McPherson's, an ice cream retailer, recently entered into an agreement that allows independent businesspeople at select stores and locations across the country to sell its famous ice creams and milk shakes for a monetary consideration. Which type of contractual retail association is described in the above example? A) corporate chain B) voluntary chain C) franchise organization D) independent retailer E) retailer cooperative
B
3) Which of the following conditions increases the chances of a retailer opting to be categorized as a self-service retailer? A) when consumers need warranty information about shopping goods B) when customers are willing to conduct their own locate-compare-select process C) when the store offers luxury products at highly affordable prices D) when customers are looking for a narrow product line with a deep assortment E) when the store has been converted into a designer shop from a department store
E
32) Campbell is one of the oldest retailers in the country. While the service offered at Campbell is fairly mediocre, the retailer is famous for its surprise offerings of seconds, overstocks, and closeouts-occasionally including expensive gadgets and jewelry. Posco, a new chain of retail stores, offers products that are similar to Campbell's offerings; however, Posco is known for encouraging customers to ask questions and for providing service representatives to assist customers in the purchasing decision process. From this scenario, which of the following statements is most likely true? A) Posco fails to differentiate itself from Campbell through the services mix. B) Posco's product assortment helps differentiate it from Campbell. C) Both Campbell and Posco fail to identify the needs and wants of target markets. D) Campbell has not been able to differentiate itself on the basis of product assortment. E) Posco better utilizes the services mix to differentiate itself from Campbell.
D
33) Venture Zone, a hiking and climbing equipment retailer, has a rock climbing wall inside the store so that consumers can test products prior to purchase. Venture Zone most likely differentiates itself from its competitors through ________. A) everyday low pricing B) predatory pricing C) self-service retailing D) experiential retailing E) franchising
C
34) The Toby's chain of first-class department stores carries a wide range of product lines, including clothing, jewelry, kitchenware, and home furnishings. Toby's typically charge higher prices on an everyday basis and then holds frequent sales and price promotions to increase store traffic. Toby's most likely uses ________. A) self-service retailing B) experiential retailing C) high-low pricing D) everyday low pricing E) franchise retailing
C
35) Barry's is a chain of retail stores that stocks a large variety of goods and practices high-low pricing. This means that Barry's is likely to ________. A) have low volume and low markups B) charge low prices constantly C) offer numerous sales or discounts D) compete on the basis of price rather than product or service quality E) use predatory pricing to eliminate competition
B
36) A ________ refers to a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit. A) pop-up store B) shopping center C) warehouse D) category killer E) convenience store
C
37) Which of the following statements is true of shopping centers? A) Most shopping centers function at the regional level rather than at the neighborhood level. B) Shopping centers typically contain only those stores that target a niche market segment of high income groups. C) Shopping centers are groups of retail businesses built on a site that is planned, developed, owned, and managed as a unit. D) Shopping centers usually contain exclusive brands and specialty stores rather than convenience stores or department stores. E) Shopping centers are huge superstores that offer a deep assortment of a particular product line
A
38) A ________ contains between 15 and 50 retail stores, including a department or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank. A) community shopping center B) warehouse club C) superstore D) neighborhood shopping center E) regional shopping mall
C
39) Power centers are characterized by the ________. A) lack of an anchor store B) sale of exclusive brands only C) provision of individual entrances to each store D) provision for nonretail activities, such as playgrounds E) absence of any pricing strategies for differentiation
D
4) Stores that provide moderate sales assistance because they carry shopping goods about which customers need a moderate level of information are called ________ retailers. A) self-service B) full-service C) off-price D) limited-service E) convenience
B
40) A ________ is a small open-air mall with upscale stores, convenient locations, and nonretail activities such as a playground, dining establishments, and a movie theater. A) regional shopping center B) lifestyle center C) community shopping center D) power center E) warehouse club
C
41) Which of the following is an impact of the Great Recession on retailing trends? A) economic shift toward higher prices B) lower costs for retailers C) tighter consumer spending patterns D) longer retail life cycles E) prohibition on new retail forms
D
42) Carleese, a leading fashion brand, sets up small temporary boutiques across numerous locations during its year-end sale, promoting its outdated products at half the price. These temporary boutiques are referred to as ________. A) power centers B) franchises C) shopping centers D) pop-up stores E) category killers
E
44) Checking out products in traditional stores and purchasing them online is referred to as ________. A) warehousing B) wholesaling C) retailing D) franchising E) showrooming
A
45) ________ includes all the activities involved in selling goods and services to those buying them for resale or business use. A) Wholesaling B) Sole sourcing C) Franchising D) Crowdsourcing E) Showrooming
B
46) Which wholesaler channel function is demonstrated when a wholesaler's sales force helps a manufacturer reach many small customers at a low cost? A) bulk breaking B) selling and promoting C) buying and assortment building D) warehousing E) risk bearing
C
47) Which wholesaler channel function helps reduce the inventory holding costs and risks of suppliers and customers? A) showrooming B) assortment building C) warehousing D) financing E) transporting
C
48) Which of the following channel functions of wholesalers is demonstrated when a buyer receives quicker delivery because wholesalers are located closer than are producers? A) buying and assortment building B) financing C) transportation D) risk bearing E) warehousing
E
49) Wayne Wholesaling fulfills many channel functions for its customers. The company mainly focuses on helping retailers to train their salespeople, improve store layouts, and set up inventory control systems. Based on this description, which channel function is provided by Wayne Wholesaling? A) buying and assortment building B) selling and promoting C) risk bearing services D) market information services E) management services and advice
D
50) ________ are the largest group of wholesalers and can be divided into two broad types of wholesalers: full-service and limited-service. A) Brokers B) Retailers C) Agent wholesalers D) Merchant wholesalers E) Manufacturers' agents