MKT 320 Exam 2
Kent Dent and his partner "Scratch" Hatch own Scratch & Dent Appliance, which is located in an old house that Scratch inherited from his grandmother. They sell otherwise-new, perfectly usable refrigerators, washers and dryers, and dishwashers that have minor cosmetic damage or defects. Key financial figures for Scratch & Dent for fiscal year 2019 include: Net Sales: $610,000 Total Current Assets: $59,115 Fixed Assets: $177,700 Net After-Tax Profit: $55,900 Taxes: $50,000 Cost of Goods Sold: $410,000 What was Scratch & Dent's return on assets (ROA) in FY 2019?
23.6%
Sara Herrera runs an Internet-based retail operation from her spare bedroom. The online storefront - named For Reality Lovers - sells DVDs, posters, figurines, bobblehead dolls, collectors' cards, licensed logo apparel, and other memorabilia from TV reality shows such as Survivor, Dance Moms, Fear Factor, American Idol, The Apprentice, The Amazing Race, Dating in the Dark, Top Chef, Project Runway, Big Brother, Kate Plus 8, Dancing with the Stars, Jersey Shore, Naked and Afraid, Tough Enough, Real Housewives of [insert city name], Dog the Bounty Hunter, The Glee Project, Bachelor in Paradise, Here Comes Honey Boo Boo, Duck Dynasty, and Keeping Up with the Kardashians. Key financial figures for Sara's business for fiscal year 2019 include: Net Sales: $23,000 Operating Expenses: $2,200 Interest Expense: $0 Average Inventory: $5,900 Total Current Assets: $8,400 Fixed Assets: $9,400 Net After-Tax Profit: $8,150 Taxes: $3,450 Cost of Goods Sold: $9,200 What was For Reality Lovers' return on assets (ROA) in FY 2019?
45.79%
Common sense tells us that customers will stay away from a shopping center if there are too few parking spaces. The textbook authors tell us, however, that too many empty spaces may also send a negative signal (i.e., that the stores are unpopular). For a shopping center, retail industry experts recommend _____ spaces per thousand square feet of retail store space.
5.5
Which of the following pairs of items would retailers think of as the same SKU?
A 14.3-ounce package of Golden Oreo cookies and a 14.3-ounce package of Golden Oreo cookies
Even though Michelle LaBelle is 22 years old and "tech savvy," she prefers to buy most items at a brick-and-mortar store rather than shopping through other retail channels, such as catalogs or the Internet. According to the authors of your text, what might be the reason why Michelle would rather take the time to drive to the mall or a standalone store, park her car, and spend time walking through the store in search of an item?
A. Ever since Michelle's mom became a victim of identity theft, Michelle has been reluctant to use a credit card on the Internet, or over the phone, or even in a store. She now pays cash most of the time. B. Michelle genuinely enjoys her surroundings when she is in a store—she likes being around sales associates and other shoppers, she likes looking at the merchandise displays, and she feels "at home." C. Michelle has more faith in her ability to "pick the right one" when she's able to examine merchandise in person. And, if she should happen to make the wrong decision or an item should turn out to be defective, she would also rather handle the return locally and in person. D. All of the above.
Regarding catalog retailing, with which of the following statements would the authors of your textbook likely agree?
A. Some consumer groups view catalogs as an unnecessary waste of natural resources. B. Consumers do not need a computer, mobile device, or Internet connection to place a catalog order. C. Compared to websites, catalogs are often easier to browse. D. All of the above.
Sondra Alondra owns Gothic Ghoullery, a specialty apparel and accessories retailer. At present, the retailer has eleven locations: three at regional malls, six in strip centers, and two standalone stores. Thus far, Gothic Ghoullery has sold its merchandise only through traditional brick-and-mortar stores. If Sondra were begin selling through the Internet channel, what advantage(s) would she gain?
A. Sondra Alondra owns Gothic Ghoullery, a specialty apparel and accessories retailer. At present, the retailer has eleven locations: three at regional malls, six in strip centers, and two standalone stores. Thus far, Gothic Ghoullery has sold its merchandise only through traditional brick-and-mortar stores. If Sondra were begin selling through the Internet channel, what advantage(s) would she gain? B. Gothic Ghoullery could offer more personalized information about products. C. Gothic Ghoullery could offer a deeper and broader selection of products. D. All of the above.
With regard to developing and maintaining a sustainable competitive advantage, with which of the following statements would the authors of your textbook likely agree?
A. Supply chain efficiency can be a source of sustainable competitive advantage. B. Location can be a source of sustainable competitive advantage. C. A carefully-cultivated brand image can be a source of sustainable competitive advantage. D. All of the above.
With regard to building a sustainable competitive advantage through customer loyalty, which of the following statements is consistent with the information that appears in your textbook?
A. Unique merchandise has enabled Lululemon to create customer loyalty. B. Outstanding customer service has helped Ritz-Carlton hotels to build customer loyalty. C. Starbucks has boosted customer loyalty by building a strong online retail community. D. All of the above.
According to the authors of your textbook, one of the ways a retailer can develop a sustainable competitive advantage is by building strong relationships with customers, i.e., by cultivating customer loyalty. All other things being equal, retailers can build strong customer loyalty by __________.
A. offering unique merchandise B. training employees to deliver superior customer service C. offering attractive rewards through a frequent shopper program D. doing any or all of the above
For a retailer, which of the following is a potential disadvantage of locating in an enclosed mall?
A.Mall management has tight control over retailers' operations, such as strict rules about window displays and signage. B. Customers may choose to go to strip centers or other shopping centers where they can park close to a retailer's front door. C. Occupancy costs are higher than those of strip centers, freestanding sites, and most central business districts. D. All of the above.
The authors of the textbook classify __________ as a limited-assortment supermarket.
ALDI
Regarding a Metropolitan Statistical Area (MSA), which of the following is true?
An MSA is a core urban area consisting of more than 50,000 inhabitants, plus any adjoining communities that have a high degree of economic and social integration with the core community. The Lexington-Fayette MSA consists of six counties: Bourbon, Clark, Fayette, Jessamine, Scott, and Woodford. It may make sense for a retailer to locate several stores in one MSA and none in some others. All of the above.
Regarding retail channels, with which of the following statements would the authors of your textbook likely agree?
At present, the retail channel with the highest growth rate is the mobile channel.
Shirley Turley owns Ballistic Bazaar (a gun shop and shooting range). Shirley decides she can segment her market into three distinct groups: those who want a weapon for home protection those who want a weapon for seasonal hunting of varmints collectors who enjoy owning a wide variety of firearms for their intrinsic and aesthetic value Thus, she segments her market into those who are seeking safety for their household and/or family, those who are seeking recreation, and those who are seeking the satisfaction of ownership in and of itself. Which label most closely resembles the dimension that Shirley is using to segment her market?
Benefit segmentation
_______________ is the process of grouping consumers into market segments based on what they want the product to do for them.
Benefit segmentation
Bianca Wonka has inherited a candy store chain that was started by her uncle. Bianca has completed an analysis of the company's financial statements and is now strategizing to improve the company's performance. Which of the following actions would result in greater return on assets (ROA)?
Bianca successfully implements a market penetration growth strategy, which increases the company's "top line" (i.e., net sales). At the same time, she negotiates with vendors and lowers the company's per-unit cost of goods sold. Bianca reduces operating expenses by finding ways to reduce energy costs and cut waste. Bianca identifies idle and underperforming company assets and sells them. The money from the sale of assets is then used to pay off all of the company's debt. Any or all of the above.
The emerging international markets that are sometimes referred to as "the BRIC" countries are __________.
Brazil, Russia, India, and China
The emerging international markets that are sometimes referred to as "the BRIC" countries are __________, Russia, __________, and China.
Brazil; India
__________ is the number of merchandise categories a retailer offers. Women's clothing, food, and household cleaning products, for example, are three different categories.
Breadth
Which of the following describes a consumer who is using an internal source of information during the information search step of the buying process?
Cierra Barrera "takes mental inventory" of what she has learned from her past shopping and purchase experiences.
On her way home from classes at the university, Staci Casey remembers that she used her last paper towel that morning. Staci is aware that Walmart is likely to have the best price in town on national brands such as Bounty or Brawny. She also knows that Kroger may have one brand of paper towels or another on sale at a reasonable price. Staci does not alter her course to drive toward either Walmart or Kroger; rather, she turns into the parking lot of a Walgreens drug store that is directly on her route home from school. Staci enters the store with the intention of buying whatever brand of paper towels is available, in whatever quantity of rolls the package contains, at whatever price Walgreens is charging. The authors of your textbook would say that this scenario illustrates which "shopping situation"?
Convenience shopping
A "Walmart Neighborhood Market" is smaller than a Walmart Supercenter or a standard Walmart discount store. It occupies, on average, 38,000 square feet and offers about 28,000 items, including fresh produce, meat and dairy products, bakery and deli items, household supplies, health and beauty aids, and a pharmacy. At present, there are approximately 200 Neighborhood Markets in the U.S. (compared with approximately 3,000 Supercenters and about 600 standard Walmart discount stores). Walmart Neighborhood Markets most closely resemble stores in which food retailer category?
Conventional supermarkets
__________ refers to the total amount of money that a retailer pays vendors for the merchandise that it (i.e., the retailer) subsequently sells.
Cost of goods sold (COGS)
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. 445110 is also the NAICS code for all of the following except
Costco in Florence, Kentucky.
__________ is the number of different items offered within a merchandise category. For example, a pint of Ben & Jerry's Cherry Garcia, a 13-ounce bag of Tostitos Scoops, and an 18.8-ounce can of Campbell's Chunky New England clam chowder are three different items in the food category.
Depth
Which of the following is not a service retailer?
Dick's Sporting Goods
__________ is a retail channel in which salespeople interact with customers face-to-face in a convenient location, often in the customer's home. Salespeople in this channel are often independent agents rather than full-time employees. Typically, they demonstrate the product and/or explain the service, take an order, and deliver the merchandise. Examples of companies that sell through this channel (in the U.S.) include _________, __________, and __________.
Direct selling; Cutco Cutlery; Nu Skin; Primerica Financial Services
Which of the following is not a service retailer?
Foot Locker
Which method of entering the global marketplace is the least expensive and also the least risky - but also has the lowest profit potential?
Franchising
Magee's Bakery is located at 726 East Main Street (near the intersection of East Main and South Ashland Avenue). The bakery/café adjoins a parking lot and is the sole occupant of its building. Which of the following is the correct label for Magee's location?
Freestanding
At Fayette Mall, which of the following is an anchor store?
H&M
Which of the following is not a retail channel?
HGTV
An example of intratype competition is when __________ and __________ compete for the same customer's dollar.
Home Depot; Lowe's
At which stage of the strategic retail planning process does a retailer analyze market factors, competitive factors, environmental factors, and its own internal strengths and weaknesses?
In Step 2, as it conducts a SWOT analysis.
At which stage of the strategic retail planning process does a retailer establish numerical indices against which progress may be measured, and determine the level of investment needed to achieve its objectives?
In Step 5, as it establishes specific objectives and allocates resources.
Which of the following does not describe asset turnover?
In the strategic profit model, it is on the profit management path.
Which of the following successful retail entrepreneurs is not matched with the correct retailer?
Ingvar Komprad: H&M
When gasoline stations, convenience stores, and supermarkets all sell milk, bread, and motor oil, this is an example of which kind of competition?
Intertype
When two discount department stores such as JCPenney and Kohl's compete for the same customer, what type of competition is occurring?
Intratype
Jay Bird just found out that his mother is coming to visit for three days. Between now and the time Mom arrives (which is about six hours from now), Jay needs to buy paper towels, eggs, milk, diet soda, an air-freshener refill cartridge, bathroom cleaner/disinfectant, cereal, furniture polish, and dish soap. Four retailers are in Jay's consideration set for the quick trip he is about to make: Kroger (about three miles away), Family Dollar (about a mile away), Walgreens (about a half-mile away), and Walmart (about six miles away). Jay believes he can accomplish one-stop shopping at any one of the four stores. In the terminology of the multiattribute model, if Jay were to articulate his beliefs about the stores' performance benefits, Kroger would receive the following scores (on a scale of 1 to 10, with 10 being best). Desirability of brands carried: 9 Ease of parking-lot and front-entrance access: 4 Budge friendliness: 6 Pleasure of the shopping experience: 6 Proximity to home: 4 Jay would give Family Dollar the following scores on the same performance benefits. Desirability of brands carried: 4 Ease of parking-lot and front-entrance access: 8 Budget friendliness: 10 Pleasure of the shopping experience: 3 Proximity to home: 7 Jay would give Walgreens the following scores on the same performance benefits. Desirability of brands carried: 5 Ease of parking-lot and front-entrance access: 6 Budget friendliness: 2 Pleasure of the shopping experience: 5 Proximity to home: 8 Jay would give Walmart the following scores. Desirability of brands carried: 8 Ease of parking-lot and front-entrance access: 1 Budget friendliness: 8 Pleasure of the shopping experience: 2 Proximity to home: 2 Jay places the following importance weights on the five key performance benefits (with 10 representing "very important" and 1 representing "very unimportant"). Desirability of brands carried: 8 Ease of parking-lot and front-entrance access: 5 Budget friendliness: 4 Pleasure of the shopping experience: 7 Proximity to home: 8 If we use the multiattribute model to predict which retailer Jay will choose, which of the following can we conclude?
Jay will go to Kroger.
Which of the following is not a service retailer?
Lululemon
Which of the following is not one of the overriding principles of conscious marketing?
Maximizing sales revenue, profit, and market share
At the time of the 2010 U.S. Census, the Nashville-Davidson-Murfreesboro-Franklin __________ had a population of 1,670,890 and ranked 36th in the nation in size. In that same census year, the Louisville-Jefferson County __________ had a population of 1,235,708 and ranked 45th.
Metropolitan Statistical Area (MSA); Metropolitan Statistical Area (MSA)
Which of the following ratios appears in the strategic profit model and is one of the terms used to calculate return on assets (ROA)?
Net profit margin
Regarding legal issues that affect a retailer's location decision, with which of the following would the authors of your textbook likely agree?
Retailers typically do not need to concern themselves with "environmental issues" such as hazardous waste disposal or the environmental impact of construction materials. Usually, only manufacturers have to navigate their way through such regulations and restrictions. Municipal regulations such as zoning ordinances, signage restrictions, and licensing requirements rarely - if ever - change. In the U.S., federal law prohibits insurance companies from offering policies that protect retailers from economic damages due to below-ground environmental and health hazards, such as buried petroleum tanks or containers of acid. All of the above. None of the above. !!
When evaluating the performance of a retailer, which of the following is the best financial performance measurement to use?
Return on assets
Which of the following examples best illustrates a hedonic need?
Sophie Brophy buys herself a new pair of shoes to cheer herself up at the end of a bad day.
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. 445110 is also the NAICS code for all of the following except
Speedway on Euclid Avenue in Lexington.
An example of intertype competition is when __________ and __________ compete for the same customer's dollar.
Speedway; Walgreens
The __________ system classifies all U.S. neighborhoods into 67 segments based on demographics and socioeconomic characteristics. To get this proprietary analysis of the population surrounding a prospective retail site, a retailer would need to buy it from _________. A retailer might use this information if it wished to take a __________approach to market segmentation.
Tapestry™ Segmentation; Esri; geodemographic
Regarding stakeholders, which of the following is not consistent with the information that appears in your textbook?
The words stakeholder and shareholder mean the same thing.
Regarding omnicenters, with which of the following statements would the authors of your textbook likely agree?
They accommodate the desires of cross-shoppers, such as the shopper who wants to visit Neiman Marcus, Walmart, and P.F. Chang's in one outing. B. Omnicenters typically combine more than one retail setting (e.g., an enclosed mall, a lifestyle center, and a power center) into the same location. C. Compared to most other shopping center locations, they spread the common area maintenance (CAM) charges among a larger pool of retail tenants, which reduces each individual retailer's share of the cost. D. All of the above.
Inside the corporate offices of a well-known store chain, marketing executives Carly Farley and Cecil Diesel are having a spirited discussion. Specifically, they are debating whether they should tailor the marketing mix of their new product to appeal to the "Achievers" market segment or the "Innovators" segment, or whether they should develop a separate marketing mix for each of those segments. From their use of labels like "Achievers" and "Innovators" to describe their target market, we can determine that Carly and Cecil's company has bought into the __________ segmentation typology.
VALS™
__________ is the number of merchandise categories a retailer offers. Women's clothing, food, and household cleaning products, for example, are three different categories.
Variety
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. 445110 is also the NAICS code for all of the following except
Walmart supercenter in the Hamburg area of Lexington.
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. The first five digits (44511) identify it as __________.
a grocery store or supermarket
Beverly Everly takes her lunch to work every day, and a sandwich is always part of her lunch. Bev's favorite part of a sandwich is the cheese, and she enjoys just about any cheese that has a bold flavor. Bev is loyal to the Sargento brand of sliced cheese, which she buys at her neighborhood supermarket. In the past, Bev has bought—and enjoyed—Sargento Chipotle Cheddar slices, Sargento Jarlsberg Swiss slices, Sargento Pepper Jack slices, Sargento Muenster slices, Sargento Extra-Sharp Cheddar slices, Sargento Aged Swiss slices, and Sargento Vermont White Cheddar. Each of these Sargento cheeses is almost always available at Bev's neighborhood supermarket, as are the more "ordinary" kinds (such as Sargento Mild Cheddar, Sargento Monterrey Jack, Sargento Provolone). Today, Bev is unable to shop at her neighborhood supermarket because of recent storm damage to the store. Instead, she is shopping at a competing supermarket a few miles from her home. When she arrives at the cheese section, Bev is dismayed to see that this store carries only five kinds of Sargento slices: Swiss, Mild Cheddar, Monterey Jack, Medium Cheddar, and a Cheddar-Mozzarella blend—and none of these appeal to her adventuresome taste buds. Compared to Bev's neighborhood supermarket, the store where she is shopping today appears to offer __________.
a more shallow assortment of merchandise
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. The first three digits (445) identify it as __________.
a store that sells food and beverages
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. The first two digits (44) identify it as __________.
a store that sells merchandise
The authors of your textbook refer to __________ as the "gold standard" of omnichannel retailing.
apple
When Paul Swentzel, principal owner and CEO of S&S Tire (a retail chain), purchased a Bridgestone/Firestone distributorship (a wholesaler), S&S became a wholesaler selling to S&S stores, as well as a wholesaler selling to the S&S chain's retail competitors. When S&S Tire retail stores began buying Bridgestone and Firestone tires from a distributorship that was also owned by S&S Tire, the company was engaging in __________.
backward integration
The asset turnover management path is one of two analytical sequences that are woven into the strategic profit model. The information that is used to analyze a retailer's asset management path comes primarily from the retailer's __________.
balance sheet
The authors of your textbook state that retailers create value by ordering large quantities that are convenient for manufacturers to ship, and then offering them for sale in the smaller quantities that are convenient for consumers to buy. According to the authors, the technical name for providing value in this manner is __________.
breaking bulk
In the present-day marketplace, retailers receive most of their sales revenue through __________.
brick-and-mortar stores
To minimize conflict among franchisees, most franchise agreements grant franchisees an exclusive territory. This can be one of the benefits of operating a franchise, namely the avoidance of __________.
cannibalization
On March 16, 2016, a long-awaited event took place in Lexington, Kentucky: Cabela's opened its Hamburg store. According to the authors of your textbook, the correct general-merchandise retailer classification for Cabela's is __________.
category specialist
The authors of your textbook state that a retail __________ "defines the way a retailer sells and delivers merchandise and services to its customers."
channel
Gwendolyn Gwynn-Dolin was interested in buying a digital camera, so she went on Best Buy's Web site to learn about the available brands and features, as well as to read product reviews and customer ratings. As she gathered information at the site, the Nikon Coolpix B500 emerged as her clear favorite. The next day, while Gwen was inside a Target store buying household supplies and toiletries, she also bought a Coolpix. The label __________ is used to describe Gwen's shopping behavior.
channel migration
If a retailer identifies customers in its target market by benefits sought, lifestyles, and demographics, it is taking the __________ approach to segmentation.
composite
According to the authors of your textbook, a retailer that engages in __________ has a sense of purpose that is higher than simply making a profit by selling products and services.
conscious marketing
Retailing is described by the authors of your textbook as "the set of business activities that adds value to the products and services sold to __________ for their __________."
consumers; personal and family use
Trade area zones are best determined based upon __________.
customer drive time
Abercrombie & Fitch operates three well-known chains of stores, each designed to serve a different target market. The company's namesake Abercrombie & Fitch stores target young adults age 21 and older, while its Hollister stores are geared to teens 14 and older and its Abercrombie Kids stores sell clothing for children from 7 to 14. From this information, we can conclude that A&F has taken a __________ approach to market segmentation.
demographic
Decision makers at a department store chain know from market research that their average customer comes from a household of $60,000 annual income, 33% of their customers have children at home, 51% of their customers have a college education, and the median age of their customers is 42. These statistics are an example of __________ information that a retailer might use for market segmentation.
demographic
Typically, we'd expect a(n) __________ to carry a broader variety of merchandise than a(n) __________.
department store; category specialist E.
According to the authors of your textbook, we can consider Nordstrom, Neiman Marcus, Macy's, JCPenney, and Kohl's to be __________.
department stores
In 1985, Kroger Co. purchased Turkey Hill Minit Markets (a Lancaster, Pennsylvania-based chain of convenience store/gas stations). As part of the same deal, Kroger also acquired Turkey Hill Minit Markets' sister company - Turkey Hill Dairy, based in Conestoga, Pennsylvania - a producer of fresh milk products, ice cream, frozen yogurt, and bottled drinks. In total, Kroger's Turkey Hill acquisition was part of a(n) __________ growth strategy.
diversification
Operating profit margin is also referred to as __________.
earnings before interest and taxes (EBIT)
According to the authors of your textbook, if you use a desktop or laptop computer to shop, you are shopping in the ________ channel. On the other hand, if you use a smartphone or a tablet, that is called __________.
electronic; the mobile channel
The authors of your textbook would classify Fayette Mall as a(n) __________.
enclosed regional mall
Kirk Burke is shopping for tires for his pride and joy, i.e., his 2016 Camaro SS. When Kirk bought the car new, it came equipped with Pirelli P Zero tires. Kirk is not sure he wants to replace the original tires with more of the same. The Pirellis performed admirably in the spring and summer months. However, for the $850 to $1,100 that he'll end up spending, Kirk suspects that there may be other brands and types of tires that would be more appropriate for year-round driving. Kirk also knows that some tires are more appropriate than others for a cool car like his. He wouldn't want to buy tires that he and his buddies think of as belonging on their grandfathers' Oldsmobiles (such as Uniroyal, Goodyear, or General), just like he wouldn't want to disgrace his beloved Camaro by buying tires that would look more at home on the Volvos, Subarus, and minivans of cautious "soccer moms." Maybe BFGoodrich? Toyo? Stick with Pirelli? Kirk isn't at all sure what to buy. All he knows at this point is that he'll visit a lot of websites and tire retailers, and he'll have a lot of conversations with service representatives before he makes his final choice. Kirk's tire shopping behavior most closely resembles __________.
extended problem solving
Compared to a(n) __________, a(n) __________ usually carries deeper assortments of merchandise within the merchandise categories that it sells.
extreme-value retailer; drugstore
All other things being equal, retailers can expect a consumer's most important reference group to be his or her __________.
family
According to the authors of your textbook, we can consider Saks Fifth Avenue, Bloomingdale's, Nordstrom, and Neiman Marcus to be __________.
first-tier department stores
Sondra Alondra owns Gothic Ghoullery, a specialty apparel and accessories retailer. At present, the retailer has eleven locations: three at regional malls, six in strip centers, and two standalone stores. Sondra has five-year leases for each of her standalone locations. At one of these (the Batwing Boulevard location), Sondra pays a monthly amount that is equal to $1.30 per square foot. At the other store (located on Darque Alley), Sondra pays a monthly amount that is equal to 7 percent of her previous month's sales, but no more than $3,100 per month. Sondra's current lease at the Batwing Boulevard location is a(n) __________ lease. The Darque Alley lease, on the other hand, is a(n) __________ lease.
fixed-rate; percentage
Gordon Food Service is a Grand Rapids, Michigan-based wholesaler/distributor. The company sells to grocers, restaurants, and institutions in a multi-state area that extends from Northern Michigan to Key West. You've probably seen its red-and-white "GFS" tractor/trailer rigs delivering food to restaurants. In 1979, the company opened its first retail store, GFS Marketplace, making a large selection of restaurant-quality products available for household use. GFS Marketplace stores now exist in over 100 locations, and are an ideal source for large households and consumers who may be planning to throw parties - and no membership fee is required of those who wish to shop there. When Gordon Food Service began opening GFS Marketplace stores, the company was engaging in __________.
forward integration
Orlando, Florida-based Darden Restaurants, Inc., the world's largest full-service restaurant company, owns a portfolio of brands that includes Olive Garden, LongHorn Steakhouse, Capital Grille, Seasons 52, Eddie V's, Yard House, and Bahama Breeze. In Lexington, the Olive Garden and LongHorn locations are wholly owned by Darden, as are most other U.S. locations. However, if you were to visit a Middle East or North Africa location of one of these three restaurants - such as the LongHorn Steakhouse in Riyadh, Saudi Arabia or the Olive Garden in Abu Dhabi, United Arab Emirates - you might notice a wall plaque stating that the restaurant is operated by Americana Group. Indeed, Americana Group (headquartered in Kuwait City) has paid an upfront fee to Darden for the right to operate a total of 60 Darden-branded restaurants. In addition to that, Americana pays a monthly fee to Darden based on the restaurants' sales performance. Americana Group also operates TGI Fridays (a TriArtisan Capital Companies brand), KFC (a Yum! brand), Pizza Hut (also a Yum! brand), and Krispy Kreme locations in the Middle East, under agreements that are similar to the company's agreement with Darden. If the authors of your textbook were to use this scenario to illustrate nondomestic market entry, they would cite it as an example of __________.
franchising
In 2017, Target made charitable contributions of $217,673,712 in cash and products. Much of the money was used to improve children's education and development through grants for field trips, youth soccer, and the arts. In addition to supporting K-12 education through its giving, the company also provides financial support to St. Jude's Children's Research Hospital, the American Red Cross, and the Salvation Army. Target employees also donate hundreds of thousands of hours to volunteer projects in their communities each year. Target's actions are an example of a retail corporation's commitment to __________.
fulfilling its corporate social responsibility
According to the authors of your textbook, we can consider Walmart, Target, and Kmart (if it continues to exist) to be __________.
full-line discount stores
Many inner-city areas are going through a process of ________, which is the renewal and rebuilding of offices, housing, and retailers in deteriorating areas. This practice has been criticized by some, because it often results in more affluent people moving into the area and lower-income residents having to leave because they cannot afford to stay.
gentrification
Retail executives who are examining trade areas for a potential store will typically buy information packages (often as a software subscription, sometimes as a complete hardware + software combination) to help them make an informed decision. Such systems describe the spatial features of an area, such as rivers and roads, street addresses and the characteristics of the household at an address, and information about competing retailers in the area. The authors of your textbook refer to this type of information resource as a(n) __________.
geographic information system (GIS)
Jared Sherrod prefers Nike athletic shoes over any other brand. He does not, however, have a strong preference for any particular retailer, or even for any category of retailer. His next pair of Nikes may be purchased at Finish Line, Shoe Carnival, Foot Locker, JCPenney . . . one never knows. And, since Jared wears his Nikes as an all-around sneaker rather than for playing a particular sport, his next pair may be running shoes, basketball shoes, cross trainers - whatever happens to be convenient to purchase when it's time to buy. Jared's purchase behavior, when it comes to athletic shoes, most closely resembles __________.
habitual decision making
Tucker Rucker has little to no preference for a brand of tires. He says, "Goodyear, Bridgestone, Toyo, Michelin, Uniroyal, Dunlop, BF Goodrich, Cooper, Hankook, Yokohama, Mastercraft, Cooper, General - they're all about the same. Round, black, and made of rubber." Tucker will go only one place to buy tires for his Ford F-150 truck and for the family Taurus: Walmart Auto Care Center. If one of the vehicles needs tires, Tucker goes to Walmart. Once he's there, he'll try to keep the process short and simple by buying whatever the sales associate recommends, unless he considers the price to be outrageously out of line. Based on the authors' explanation of "types of buying decisions," Tucker's tire shopping behavior most closely resembles __________.
habitual decision making
One of the four criteria for deciding whether a retail segment is a viable target market is "substantiality." A substantial segment:
has enough buying power to warrant developing a special retailing mix.
The authors of your textbook state that retailers create value by having products available when consumers want them. They go on to say that this enables consumers to keep smaller quantities at home because they know local retailers will have the products available when they need them. According to the authors, the technical term for providing value through these activities is __________.
holding inventory
The profit margin management path is one of two analytical sequences that make up the strategic profit model. The information that is used to analyze a retailer's profit management path comes from the retailer's __________.
income statement
One of the four criteria for deciding whether a retail segment is a viable target market is "actionability." An actionable segment:
is made up of customers whose needs are significantly different from those of customers in other segments - and the retailer knows how to satisfy these needs.
One of the four criteria for deciding whether a retail segment is a viable target market is "reachability." A reachable segment:
is one to which the retailer can effectively target promotions and other elements of the retail mix.
The NAICS code for the Kroger supermarket on Euclid Avenue in Lexington is 445110. Which of the following is also true about NAICS code 445110?
it is also the NAICS code of Whole Foods Market at The Summit.
Which of the following is not a service retailer?
kroger
Finley McKinley has little to no preference for a brand of tires. He says, "Goodyear, Hoosier, Firestone, Toyo, Michelin, Uniroyal, Dunlop, BF Goodrich, Cooper, Hankook, Yokohama, Mastercraft, Bridgestone, Nexxen, Cooper, General — they're all about the same. Round, black, and made of rubber." Finley will go only one place to buy tires for his Toyota Camry: NTB (National Tire and Battery) Auto Center. When the tires on the Camry are worn enough to need replacement, Finley goes to NTB. Once he's there, Finley will look at the displays and read the signs and brochures, as well as talking to the service representative (if necessary). Finley's strategy is to choose the tires that have the best warranty in his price range. Based on the authors' explanation of "types of buying decisions," Finley's tire shopping behavior most closely resembles __________.
limited problem solving
The retail mix consists of merchandise management, pricing, communication mix, store design and display, customer service, and __________.
location
Tanner Danner believes that his choices about what food to eat matter a lot. He thinks that in addition to the impact of his food choices on his own physical well-being, they have profound environmental, political, and economic consequences as well. Tanner's favorite books are Coming Home to Eat (by Gary Paul Nabham), Food Rules: An Eater's Manual (by Michael Pollan), and The Complete Idiot's Guide to Urban Homesteading (by Sundari Elizabeth Kraft). After reading in HuffPost that Denver is the #1 city in the U.S. for local food, Tanner left his native Shelbyville, Kentucky and moved there. Tanner tries very diligently to eat only vegetables that were grown within a 100-mile radius of where he lives. Similarly, most of the beef, chicken, and pork that Tanner eats comes from animals that were raised and slaughtered in the surrounding region, and most of the dairy products that he consumes come from Colorado dairies. Tanner's favorite food shopping venue is the Metro Farmer's Market. For items that he can't buy at Metro Farmer's Market (which is located outdoors and closes during the winter), Tanner shops at Vitamin Cottage Natural Grocers, In Season Local Market, Foodcopia's Online Corner Store, and - if he absolutely must - Whole Foods Market. (Tanner has mixed feelings about Whole Foods because some of its products are shipped from faraway locations, which requires large amounts of fossil fuel to be burned.) Six months ago, Tanner gave up coffee and chocolate, since their base ingredients are not grown on the U.S. mainland. However, his latest hobby is growing bonsai coffee and hydroponic cacao trees in his living room, and he hopes that his harvest will enable him to begin consuming these items once more. The authors of your textbook would describe Tanner as a(n) __________.
locavore
While Vince Pence is buying a pair of Air Jordan XXXIII basketball shoes at Dick's Sporting Goods, the sales associate asks him if he has a ScoreCard®. After Vince replies that he does not, the sales associate explains that if Vince were to become a member, he would earn a $10 reward every time his points reached 300 - and points add up at the rate of 1 point per dollar spent in the store or at DicksSportingGoods.com. The sales associate asks if Vince would like to become a member. Vince does some mental arithmetic and concludes that if he had become a member a year ago, he would have earned $40 worth of free merchandise by now. When Vince says yes, he would indeed like to have a ScoreCard®, the sales associate puts a brochure (which includes a wallet-sized card and two key fobs) in his bag and informs Vince that he can go online at his convenience and activate his membership. If the ScoreCard® program is the principal component of Dick's growth strategy, then the retailer's strategy can best be described as a(n) __________ growth strategy.
market penetration
A(n) __________ retailer uses more than one channel to sell and deliver merchandise and services to customers. A(n) __________ retailer coordinates multichannel retail activities in a way that provides seamless and synchronized customer experience.
multichannel; omnichannel
In the five-stage buying process, as it is presented by the authors of your textbook, a customer enters the __________ stage because of an unsatisfied need.
need recognition
The authors of your textbook describe a buying process that begins with __________ and ends with __________.
need recognition; postpurchase evaluation
According to the authors of your textbook, we can consider Burlington (formerly known as Burlington Coat Factory), Marshalls, and Big Lots to be __________.
off-price retailers
In a SWOT analysis, the letter O stands for __________.
opportunities
The authors of your textbook would describe McDonald's at Palomar Centre as a(n) __________.
outparcel
To develop and refine its target marketing and positioning, a retailer may rely on a two-dimensional plot of consumers' perceptions of the retailer and its competitors. This visual aid is called a __________.
perceptual map
According to the authors of your textbook, the three basic types of retail locations are __________, __________, and __________.
planned; unplanned; nontraditional
A store's __________ is the geographic area from which it draws 50 to 70 percent of its customers. Its __________ is located immediately beyond that area, and generates another 20 to 30 percent of the store's customers. The remaining customers come from the store's __________.
primary trading area; secondary trading area; tertiary trading area
Positioning is the __________.
process of creating an image in the customer's mind, relative to the retailer's competitors
McLane Company is a Temple, Texas-based company that distributes grocery and nonfood products to convenience stores, discount retailers, wholesale clubs, drugstores, military bases, quick service restaurants, and fast casual restaurants throughout the United States. Retailers who buy from McLane's include Walmart, Sam's Club, Walgreens, Circle K, 7-Eleven, Target, Love's, Family Dollar, and Army and Air Force Exchange Service (AAFES). Restaurants that are supplied by McLane include Taco Bell, Pizza Hut, KFC, Sonic, Long John Silver's, Applebee's, and Sonic. McLane is a __________.
producer
The authors of your textbook state that retailers create value by offering credit so that customers can have the product now and pay later. They also state that retailers create value by displaying products so customers can see them before buying, by employing salespeople to answer customers' questions, and by maintaining websites to provide additional information. According to the authors, the technical term for providing value through these activities is __________.
providing services
A(n) __________ describes the nature of the retailer's operations - its retail mix - that will be used to satisfy the needs of its target market.
retail format
A(n) __________ is a group of consumers with similar needs and a group of retailers that satisfy those needs using a similar retail format.
retail market segment
In a typical supply chain for a low-cost, frequently-purchased consumer product (such as a magazine or package of candy), a wholesaler would primarily sell to and be concerned about the ___________, and a manufacturer would primarily sell to and be concerned about the ___________.
retailer; wholesaler
The strategic profit model graphically summarizes the factors that affect a retail firm's financial performance. A manager or analyst who completes the strategic profit model will compute several dollar figures and ratios and "plug them into" the model. The final computation - and the main point of using the model - will be __________, which is reported as a __________.
return on assets (ROA); ratio
To report chainwide sales growth statistics, retailers and retail industry analysts generally exclude locations that have been open for less than one year. The resulting figure is known as __________ .
same-store sales growth
To report chainwide sales growth statistics, retailers and retail industry analysts generally exclude locations that have been open for less than one year. The resulting figure is known as __________ or, alternately, "comparable store sales growth."
same-store sales growth
The authors of the textbook classify __________ as a limited-assortment supermarket.
save a lot
Most of us think of Staples and Office Depot as places to buy school or office supplies, such as an office chair, a package of file folders, an ink cartridge, a flash drive, office software, a printer, a shredder, or a stapler. However, at Staples you can also buy a Monster energy drink and at Office Depot you can buy a king size Snickers bar. These are examples of __________.
scrambled merchandising
According to the authors of your textbook, we can consider Dillard's and Macy's to be __________.
second-tier department stores
When Scott Free moved into his new apartment, he decided to buy a new TV. Scott went to Best Buy and looked at various Samsung, LG, Sony, and Vizio televisions. Once he had decided that he wanted a particular 50-inch Samsung model, Scott searched for a lower price online and ended up ordering that same Samsung from Amazon. The label __________ is used to describe Scott's shopping behavior.
showrooming
The s in s-retailing stands for __________. An example would be when __________.
social; Jay Walker clicks the buy button on a picture on Instagram
According to the authors of your textbook, we can consider Victoria's Secret, GameStop, and Sephora to be __________.
specialty stores
In the world of retailing, the initials SKU stand for __________.
stock keeping unit
Hypermarkets originated in France in the mid-20th century, and are common in Europe and in some South American countries. Shoppers in the United States, on the other hand, have not responded well to the hypermarket concept. Therefore, true hypermarkets are rare in the U.S. American consumers seem be more comfortable with a retail format that is similar in some ways to, say a Carrefour hypermarket, but which offers more nonfood items. This American "equivalent" of a hypermarket is called a(n) __________, and __________ is an example of one. However, in comparison, a hypermarket would typically carry a larger proportion of __________.
supercenter; Meijer; packaged food items
A __________ is a set of firms that make and deliver goods and services to consumers.
supply chain
Which of the following retailers is not classified as a category specialist?
target
All other things being equal, the best area for locating a store is __________.
the area that will generate the greatest long-term profit
Compared to other retail channels, __________ enable(s) retailers the greatest ability to personalize merchandise offerings and information for each customer - and the ability to do so the most economically.
the internet
The authors of your textbook define a retail strategy as a statement that identifies (1) __________, (2) the format the retailer plans to use to satisfy the target market's needs, and (3) the bases on which the retailer plans to build a sustainable competitive advantage.
the retailer's target market
The authors of your text define conversion rate as __________.
the total number of customers who leave the store (or exit a website) having made a purchase, divided by the total number of shoppers who enter the store (or access the website)
When a retailer is deciding upon a type of location (e.g., freestanding location, Main Street, regional mall, community strip center), it needs to select a location that is consistent with __________.
the typical shopping behavior of members of its target market its positioning strategy the density of the target market in relation to the location all of the above
According to the authors of your textbook, we can consider JCPenney, Kohl's, and Sears (if it continues to exist) to be __________.
third-tier department stores
Consultants at Insula Research are presenting a SWOT analysis of McDonald's to McDonald's senior executives. The Insula consultants mention that of all QSR (quick-service restaurant) chains, Chick-fil-A has the highest rating for drive-through service accuracy. The chain fills orders correctly 91.6% of the time. Chick-fil-A's closest competitors in order accuracy are Taco Bell (at 90.9% accuracy), Taco John's (at 89.7% accuracy), McDonald's at 88.3% accuracy), and Wendy's (at 86.8% accuracy). From the perspective of top management at McDonald's, the ability of Chick-fil-A to deliver more accurate drive-through service would be classified as a(n) __________.
threat
Intratype competition is competition between _____________ for the same customer.
two retailers of the same type, such as two supermarkets
According to the authors of your textbook, people go shopping because of __________ needs.
utilitarian and hedonic
Gordon Food Service is a Grand Rapids, Michigan-based wholesaler/distributor. The company sells to grocers, restaurants, and institutions in a multi-state area that extends from Northern Michigan to Key West. You've probably seen its red-and-white "GFS" tractor/trailer rigs on the highway. In 1979, the company opened its first retail store, GFS Marketplace, making a large selection of restaurant-quality products available for household use. GFS Marketplace stores now exist in over 100 locations, and are an ideal source for large households and consumers who may be planning to throw parties - and no membership fee is required of those who wish to shop there. When Gordon Food Service began opening GFS Marketplace stores, the company was engaging in __________.
vertical integration