MKTG 409 - Chapter 15

Which of the following collection of retailers is most likely to be found at a power shopping center?

Babies 'R' Us, T.J. Maxx, Bed Bath & Beyond, and Home Depot

Direct selling is a type of specialty retailing.

False

K-Mart is an example of an extreme-value store.

False

The primary advantage of franchising is the complete control the franchisee has over the business.

False

While at the mall, Adrienne decides to buy a new MP3 player. She purchases one using a credit card. The transaction takes place at a machine and involves no contact with a person. This transaction most likely used

automatic vending.

Which of the following is a limited-service wholesaler?

cash-and-carry wholesaler

Which of the following is not one of the benefits of television home shopping for a marketer engaged in direct marketing?

consumers can seek out hard-to-find items

Target is a self-service store that sells general merchandise. It is a

discount store.

Which of the following is least likely to be considered when deciding on a retailer's location?

distance from corporate headquarters

Ridgeland Designs is a small manufacturer of novelty t-shirts and is trying to decide on an intermediary to help get the t-shirts to retailers. The owner does not want the intermediary to take title of the t-shirts, but wants someone to represent the company in negotiating with retailers. More importantly, the owner wants to retain control over the pricing and promotion of the t-shirts to retailers. Ridgeland Design would most likely be looking for a

manufacturer's agent.

Kate owns a refreshment-stand business at the community ballpark. She goes to a warehouse store like Sam's and purchases snacks and canned soda that she will sell at her refreshment stand. Kate is considered a(n) __________.

retailer

Which of the following is not considered an element of a store's atmospherics?

variety of products

When Alexa visited a furniture store called the Barrington Store for the first time, it was a lot larger than she expected. She was surprised that it had a warehouse feel and large displays of merchandise. There was minimal service, but it had a lot of stock on hand that she was able to carry away in large cartons. The Barrington Store can most likely be categorized as a

warehouse showroom.

A general-merchandise wholesaler would be expected to carry a _____ product mix.

wide and shallow

Which of the following is a difference between selling agents and manufacturer's agents?

Selling agents have complete control over product pricing.

You are conducting a business startup workshop sponsored by the Small Business Administration. The workshop attendees are all aspiring business owners who are excited and fearful about the prospect of starting their own business. Early in the workshop, you asked the attendees to complete a questionnaire about their major concerns in starting a new business. The majority of the respondents indicated their biggest concerns were limited capital and lack of business experience. Based on these concerns, which of the following business strategies do you think would be most appropriate for these workshop attendees?

Start their business as a franchisee.

All of the following are differences between superstores and discount stores except

Superstores carry routinely purchased consumer products, but discount stores do not.

What is the primary difference between Supermarkets are larger in size than superstores.

Superstores offer routinely purchased products in addition to products found at supermarkets.

Which of the following is an example of an off-price retailer?

T.J. Maxx

Companies such as Avon and Amway choose to market their products to ultimate consumers. They use face-to-face sales presentations either at home or at work. This strategy is referred to as

Taylor Fence Company manufactures fencing popular for farms and large fields. It sells them in retail locations exclusively through wholesalers. It has been unable to find a wholesaler willing to sell the fencing to retailers in remote areas because the wholesalers do not find them to be profitable. Taylor Fence should consider using a _____ to reach these retail customers.

Multichannel retailing has made it easier for consumers to research products even before entering a store.

True

Rapidly evolving consumer trends and changing demographics is blurring the line between the various types of retailers.

True

The use of wholesalers permits producers to concentrate on developing and manufacturing products that match consumers' wants.

True

Jessica invites a sales representative from The Pampered Chef, a company that sells kitchen tools, to her home. The representative brings sample products and makes a sales presentation to Jessica and 10 of her friends. Once the presentation is over, the representative takes orders from Jessica and the guests. This is an example of

a party plan.

Whole Foods was able to identify a market segment that was looking for healthy and organic foods. This segment was underserved in that there were no large grocery stores that provided a broad assortment of healthy and organic foods, so it created _____ to meet the needs of that segment.

a retail positioning

Jack is shopping for a birthday present for his mother. He wants to buy her a pair of earrings and decides to go to a store that provides the best selection of earrings and jewelry. The best store for him to shop at would be

a traditional specialty store.

A general-merchandise retailer offers ____________.

a variety of product lines that are stocked in depth

Larry runs an upscale tanning salon targeting consumers who wish to tan in a luxurious environment. He is working hard to make sure the salon is appealing to his customers. He has installed marble countertops and floors and has gold-plated accents throughout the salon. He has adjusted the music and lighting and uses scented candles that all help add to the luxurious feeling. He believes these changes will make his customers return more frequently. Larry has been focusing on

atmospherics.

Ryan has been a florist for years and considers himself to be an expert in how florists and flower growers exchange their products. He wants to start a new business as an intermediary that can help growers find florists to sell their flowers. He does not want to represent either party and also does not want to take ownership of any of the product. He simply wants to bring the flower growers and florists together. He will be a

broker.

amie works in the insurance industry and has expertise in different types of insurance. She is not affiliated with any insurance company, but helps bring together individuals with the insurance company and policy that is right for them. Jamie is a

broker.

Many small restaurants visit Costco to purchase supplies for their food and operating items. While Costco is a retailer, it combines retailing with _____ functions, allowing small businesses that are able to supply their own transportation the ability to pay for and take their products immediately.

cash-and-carry wholesaler

Welty Popcorn is a manufacturer of gourmet popcorn that is sold in small, independent retailers rather than large retail chains. Most wholesalers do not want to carry Welty Popcorn because their customers are all small retailers. Welty most likely deals with

cash-and-carry wholesalers.

Beremand Limited sends out paper copies of a listing of its products. Customers can then look through the listing and place orders online, through mail, or by calling a toll-free number. Beremand Limited is primarily a

catalog marketer.

You represent a group of investors who are exploring alternatives for entering the retailing business. Many of these investors have significant past experience working for other retailing companies and they realize the retailing business is very competitive. They also realize there is a high failure rate for startups in this industry. They ask you to recommend a retailing strategy that would meet the following criteria: -No storefront would be needed -No personal selling would be needed -No traditional store operating expenses are necessary -Customers can place orders via the Internet, telephone, or mail -Low operating expenses and limited customer service required Which of the following retailing strategies are you going to recommend they use?

catalog marketing

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

category killer

Isabella works at a discount store and is coordinating her store's supply chain. She has a system that collects information on sales demand and on consumer behavior. The system then determines optimal product allocations for her store's shelves between competitors for each type of product. Isabella is working on

category management.

When a supermarket allocates space for different competing products on a shelf, it is engaging in

category management.

Meade Farms wants to hire an intermediary to help with the distribution of the yield from its farms. It wants someone that will take possession of the harvested crops, store them, and sell them at an auction. Meade Farms is willing to give the distributor a percentage of what it raises from selling the crops. It should most likely hire a

commission merchant.

Zac works in the agriculture industry, dealing with farmers. He takes possession of crops such as corn or soybeans, arranges for them to be stored, and then takes them to be sold at auctions. For his work, he receives a percentage of what the crops are sold for. He is a

commission merchant.

Dennis enjoys going to a shopping center about 10 miles from his house. It has two department stores, a JC Penney and a Dillard's, a convenience store, and some specialty stores. This weekend, he is excited to go see the RV show that is taking place in the center's parking lot. This shopping center is most likely a _____ shopping center.

community

Last summer, Colonial Gardens Center had a fine arts fair where artists were invited to sell their work in booths located throughout the center. This helped draw in traffic to the two department stores and various specialty stores located at Colonial Gardens. Colonial Gardens Center is most likely a

community shopping center.

What type of self-service store typically is less than 5,000 square feet, open 24 hours a day and 7 days a week, and stocks about 500 items?

convenience store

low prices and broad product availability in one major product category.

deeply discounted prices on name-brand merchandise.

Clayton's is a large retail store that has distinct areas for housewares, appliances, men's apparel, women's apparel, cosmetics, and jewelry. It offers personal assistance with shopping, merchandise returns, delivery options, and a pleasant atmosphere. Clayton's is most likely an example of a

department store

Companies such as Avon and Amway choose to market their products to ultimate consumers. They use face-to-face sales presentations either at home or at work. This strategy is referred to as

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

Hannah is reading through one of her favorite magazines. She notices an ad for a complete set of mint-condition state quarters. To order the coins, she would have to dial a toll-free number or mail in a form printed on the ad. This is an example of

direct-response marketing.

Script to Screen is an agency that produces television infomercials. When potential consumers view the infomercial, they can purchase the product by phone, mail, or online. Script to Screen is an example of a company engaging in

direct-response marketing.

KidRead is developing a way to increase the number of subscribers to its children's book subscription service using direct marketing. It has narrowed down the options to _____ in which it would mail out postcards advertising the service and having new customers place mail, telephone, or online orders or _____ in which it would call potential subscribers to sell them the service over the phone.

direct-response marketing; telemarketing

Cash and Carry is a store that carries food, clothing, and household goods at lower price margins than other nearby stores. There is little service provided and customers have to bag their own purchases. Cash and Carry is most likely an example of a(an) ____________.

discount store

Which type of store offers a wide assortment of products, has high inventory turnover, and operates with low margins and high sales volume?

discount store

Brookdale is a regional self-service store that sells name-brand and private-brand clothing, home goods, and electronics at low prices. Brookdale is an example of a

discount store.

In recent years, Target has become more upscale in its appearance and offerings, charging slightly higher prices for products. It has also introduced low-cost clothing lines by designer labels. These changes have blurred the line between

discount stores and department stores

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

Clifton Medical Supplies has hired a wholesaler to sell its medical products to business customers. Although the wholesaler never physically possesses the products, it takes ownership of them and is responsible if the products do not sell. The wholesaler sells the product and then makes arrangements for Clifton to ship the products directly to the businesses. The wholesaler is a

drop shipper.

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

facilitate comparison shopping

Pat and Taylor want to furnish their apartment with new furniture. They decide to go to an area where there are several furniture stores close to each other. They chose this area because having several stores together helps

facilitate comparison shopping.

What type of shopping centers would be located outside of metropolitan areas and feature stores owned by manufacturers selling upscale products from last season?

factory outlet malls

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

Aaron has been running a successful food truck that sells gourmet grilled cheese sandwiches and macaroni and cheese. He has been thinking of expansion and approached by people who would like to open up a similar food truck using the same name and business model that he uses. The situation here would be 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

A grocery store is using a wholesaler that provides a variety of nonprescription medicines for its pharmacy section. If the wholesaler is providing financing to the grocery store, assisting with promotional materials, and streamlining coupon redemption, then the wholesaler is most likely a

full-service wholesaler.

If a retailer needs help with document management, communication management, and the distribution of retailer flyers, it would most likely hire a

full-service wholesaler.

Department stores, convenience stores, and warehouse clubs can all be classified as

general-merchandise stores.

Gino's Italian Restaurant is an upscale restaurant. The management is updating the atmosphere of the restaurant to relax the customers and have them indulge in multiple courses. To do so, it is repainting the interior _____, which is known to be calming and associated with wellness, and playing _____ music, which has been shown to encourage customers to stay longer in restaurants.

green; soft classical

Hans can spend hours at his local Carrefour. He will shop for household items and clothing, paying lower prices than at other stores. If he needs to, he can also get his eyeglasses, make deposits at a branch of his bank, and eat lunch at a fast food restaurant. Carrefour is a

hypermarket.

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

labor and daily operations

The Grove is an open-air shopping center that has upscale specialty stores, nice restaurants, and a movie theater. It is designed to encourage customer loyalty by looking like a "mini-city" with streets, benches, and a small park. The Grove is most likely a _____ shopping center.

lifestyle

Kaitlynn is debating opening a Jimmy John's Gourmet Sandwiches franchise. As she is looking over the information, the major advantage that she sees for opening a franchise is

limited capital required to open a franchise.

A wholesaler that carries a narrow product mix but offers a deep selection within product lines is called a

limited-line wholesaler.

Kroger is planning to open a new suburban grocery store. Management is currently evaluating how easy it will be to get deliveries at different sites, leasing terms of sites, and compatibility with potential neighboring stores. Kroger is evaluating a new store's

location.

Taylor Fence Company manufactures fencing popular for farms and large fields. It sells them in retail locations exclusively through wholesalers. It has been unable to find a wholesaler willing to sell the fencing to retailers in remote areas because the wholesalers do not find them to be profitable. Taylor Fence should consider using a _____ to reach these retail customers.

mail-order wholesaler

Mike's Bikes has expanded sales of its bicycles throughout most of the United States. As it finishes its expansion, it wants to find an intermediary to handle its sales functions in the new territory west of the Rocky Mountains. This intermediary would be restricted to that territory and Mike's Bikes would retain control over pricing and other marketing decisions. Mike's Bikes should hire a

manufacturer's agent.

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

Johnson Produce is a company that is an intermediary that works to get the produce section in grocery stores stocked with fruits and vegetables. Because of the perishability of food items, Johnson Produce does not take title over any of the produce moving from farmers to grocery stores. That means Johnson Produce cannot be which of the following?

merchant wholesaler

Tri-County Supply is a wholesaler that works in the home construction industry, providing building supplies such as doors, windows, gutters, and other components used in home construction. Tri-County Supply takes ownership of the components, which means that it assumes the risk associated with the products if it is unable to sell them to home builders. Tri-County Supply is a

merchant wholesaler.

Deborah is opening a second-hand clothing store in a shopping center that has other small specialty stores, a convenience store, and a fast-food restaurant. The center primarily attracts customers who live within a couple miles of the stores. Deborah's store is most likely in a _____ shopping center.

neighborhood

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

neighborhood

Brett is evaluating how consumers buy his company's products. He is thinking of adding various types of _____ retailing such as publishing a catalog, hiring telemarketers, and online shopping.

nonstore

Which of the following types of retailer has put the most pressure on category killers?

online retailer

Lindsay visits jcrew.com on the Internet and orders a sweater. This is an example of

online retailing.

From early September through the beginning of November, several stores selling Halloween costumes and supplies open. These stores cut down on rental costs compared to stores that are open year-round and are called

pop-up stores.

Brad is a _____ for a magazine distributor. His job is to go into grocery stores and maintain the magazine displays, making sure the magazines are in stock and that older magazines have been removed.

rack jobber

Twin Pines Mall has a Nordstrom, JC Penney, and Macy's as well as many specialty stores that are national chains. It attracts customers traveling a distance because it has stores selling products that smaller shopping centers do not offer. Twin Pines Mall is most likely a _____ shopping center.

regional

When a retailer purchases a product, it does so in order to

resell the product to ultimate consumers.

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

Larry runs an upscale tanning salon targeting customers who wish to tan in a luxurious and private environment. These customers do not wish to be seen at the salon and want to be treated like royalty. To do so, he has private entrances and private areas for each guest, luxurious amenities, and a staff eager to assist clients. No other tanning salons meet the needs of these customers. What strategic issue in retailing has Larry addressed for his tanning salon?

retail positioning

Liz has decided to open a store that will offer second-hand children's items for sale. She will buy gently-used items and resell them to customers who are looking for children's clothes and books at discounted rates. No other store in the area seems to be offering children's items at the prices her store will offer. Liz is identifying her _____ before she opens her store.

retail positioning

Amazon, Target, Kroger, Bed Bath & Beyond, and Lowe's are examples of

retailers.

A manager at Owens Corning, a manufacturer of fiberglass, insulation, and related products, is updating the way the company interacts with its sales force. The manager has decided to open up offices in key areas that will provide support services for the sales force, carry inventory, and offer services to construction customers. This type of office is known as a

sales branch.

Joseph works for a manufacturer, but away from the manufacturing plants. He works with his company's retail customers to help provide wholesale services. His office does not contain any inventory, but his work helps strengthen the efficiency of the supply chain. Joseph works at a

sales office.

Brookdale Furniture, Inc., is a manufacturer of office furniture. It has hired a _____ named Davidson Intermediaries to market its product line. Davidson takes care of the sales and other marketing functions for the furniture maker, but does not take possession of any of the furniture.

selling agent

Sephora is a store that offers a wide variety of cosmetics and beauty products. It would most likely be categorized as a(n)

specialty retailer

Nicole manages a boutique that sells unique gifts and stationery. She wants to update the store's strategic plan. Which of the following aspects of the store is the least flexible?

store location

Beth goes shopping to buy food for dinner, but also wants to pick up a new pair of running shoes and a new shirt for her son. Because she is with her children, she wants to do all of her shopping at one store. Which of the following should Beth visit?

superstore

Chris is an advertising manager for a local car wash. The company has been trying to get new customers to visit the wash by having a staff member make phone calls in a process called _____. _____. Since this strategy has not been as successful as he had hoped, he is instead going to mail out postcards advertising the car wash. The cards, part of a strategy called ____, will include a toll-free number where potential customers can call and order prepaid cards to use at the car wash.

telemarketing; direct-response marketing

Sophia is the new marketing manager for a new line of laptop, MP3, and smart phone accessories made by the company, Skull Candy. These accessories are trendy, colorful, and more expensive than others on the market. After considering the target market for the products, Sophia has decided not to use marketing-related activities conducted on the telephone, called _____, and instead use _____, a type of nonstore retailing.

telemarketing; vending

Marilyn is at home and sees a vacuum cleaner being used on QVC. She calls a toll-free number to order the vacuum and pays with her credit card. This is an example of

television home shopping.

Many large retailers such as Target and Home Depot are finding that because of their size they can deal directly with producers and take care of ordering, delivery, and handling of goods rather than using an independent wholesaler. They are able to do so because

they are performing the functions normally performed by independent wholesalers.

Eric is a wholesaler who deals with individual bakers who want to sell their bread to independent restaurants and grocery stores. Every morning, he picks up bread from the bakers and visits the grocery stores and restaurants that purchase whatever bread he has that day. Eric is a

truck jobber.