chapter 13 - retailing & wholesaling

Refer to the scenario below to answer the following question(s). In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who were intrigued by the lifestyle of Shipshewana's largest population—the Amish. Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same variety. Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles as customers had requested such items. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. The Millers also hired four more people to help customers throughout the purchasing process and to provide the required product-related information to the customers. "Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods." 37) Indiana Wood can be best classified as a(n) ________. A) full-service retailer B) industrial distributor C) self-service retailer D) warehouse club E) limited-service retailer 38) Retailers can also be classified by the length and breadth of their product assortments. In terms of product line, what kind of retailer is Indiana Wood? A) supermarket B) specialty store C) category killer D) department store E) convenience store 92) The authentic Amish décor of Indiana Wood's contributes to the store's ________. A) product assortment B) services mix C) atmosphere D) segmentation E) retail convergence 109) Which of the following would be the most logical way for Indiana Wood to expand? A) establishing an online presence B) pursuing retail convergence C) implementing RFID inventory tracking D) establishing a community-gathering environment in the store E) joining a producers' cooperative

37) A) full-service retailer 38) B) specialty store 92) C) atmosphere 109) A) establishing an online presence

26) ________ are two or more outlets that are commonly owned and controlled. A) Corporate chains B) Convenience stores C) Off-price retailers D) Independent off-price retailers E) Power centers

A) Corporate chains

22) ________ have filled the ultra low-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) Chain stores E) Supercenters

A) Off-price retailers

118) ________ includes all activities involved in selling goods and services to those buying for resale or business use. A) Wholesaling B) Retailing C) Franchising D) Discounting E) Showrooming

A) Wholesaling

16) Which type of store carries a deep assortment of a particular product line, has knowledgeable staff, and can be viewed as a giant specialty store? A) category killer B) convenience store C) factory outlet D) warehouse club E) off-price retailer

A) category killer

79) 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) neighborhood shopping center C) strip mall D) regional shopping center E) power center

A) community shopping center

14) A ________ is a small store, located near a residential area that is open long hours seven days a week and carries a limited line of high-turnover goods. A) convenience store B) chain store C) department store D) supermarket E) specialty store

A) convenience store

139) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet from Chemical Inc. Then Chemical Inc. placed the order with the manufacturer, and the manufacturer then transported the tablets directly to the Tony Pool store. In this case, Chemical Inc. is an example of a ________. A) drop shipper B) truck jobber C) rack jobber D) full-service wholesaler E) cash-and-carry wholesaler

A) drop shipper

7) At Neiman Marcus, a first-class department store, customers shop for high-end products and they are assisted in every phase of the shopping process. Neiman Marcus is a ________. A) full-service retailer B) limited-service retailer C) self-service retailer D) specialty store E) superstore

A) full-service retailer

130) Which type of wholesaler sells to manufacturers rather than to retailers? A) industrial distributor B) full-service wholesaler C) cash-and-carry wholesaler D) wholesale merchant E) limited-service wholesaler

A) industrial distributor

85) Springfield, a convenience store, has recently begun to redesign and restock its stores to offer a more upscale environment with products such as house wines and fresh foods. This information indicates that Springfield has most likely changed its ________. A) positioning B) price strategy C) service level D) corporate identity E) organizational structure

A) positioning

74) Press conferences, speeches, store openings, special events, newsletters, and store magazines are examples of ________ activities used by retailers to promote themselves. A) public relations B) sales promotions C) personal selling D) affinity marketing E) social marketing

A) public relations

81) Most shopping centers are ________. A) strip malls B) regional shopping malls C) community shopping centers D) lifestyle centers E) power centers

A) strip malls

137) You own a small independent retail store in your neighborhood. You want to offer fresh seafood, milk, and bread in your store. In this case, which of the following types of wholesalers will serve you the best? A) truck jobber B) independent distributor C) drop shipper D) mail-order wholesaler E) manufacturers' agent

A) truck jobber

28) A ________ is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. A) voluntary chain B) retailer cooperative C) franchise D) wholesale club E) warehouse club

A) voluntary chain

25) Which of the following is an off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees? A) warehouse club B) service retailer C) convenience store D) hypermarket E) superstore

A) warehouse club

127) ________ and ________ do not take title to goods, and they perform only a few channel functions. A) Full-service wholesalers; limited-service wholesalers B) Brokers; agents C) Industrial distributors; cash-and-carry wholesalers D) Cash-and-carry wholesalers; industrial distributors E) Rack jobbers; off-price retailers

B) Brokers; agents

20) ________ sell standard merchandise at lower prices by accepting lower margins and selling higher volume. A) Merchant wholesalers B) Discount stores C) Full-service retailers D) Limited-service retailers E) Factory outlets

B) Discount stores

24) ________ are manufacturer-owned and operated stores that offer prices as low as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular items. A) Category killers B) Factory outlets C) Specialty stores D) Superstores E) Power centers

B) Factory outlets

83) ________ are huge unenclosed shopping centers consisting of a long strip of retail stores, including at least one large, freestanding anchor store like Walmart. Each store has its own entrance with parking directly in front for shoppers who wish to visit only one store. A) Shopping malls B) Power centers C) Superstores D) Chain stores E) Regional shopping centers

B) Power centers

134) ________ are wholesalers who serve grocery and drug retailers, mostly in nonfood items. They price the goods, keep them fresh, set up point-of-purchase displays, and keep inventory records. A) Purchasing agents B) Rack jobbers C) Drop shippers D) Cash-and-carry wholesalers E) Manufacturers' agents

B) Rack jobbers

2) ________ includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. A) Franchising B) Retailing C) Brokering D) Wholesaling E) Disintermediation

B) Retailing

4) ________ is a type of service offered by those retailers who serve customers that are willing to perform their own "locate-compare-select" process in order to save money. A) Limited-service B) Self-service C) Full-service D) Specialty-service E) Wholesaling

B) Self-service

3) ________ involves using in-store promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decisions. A) Differentiation B) Shopper marketing C) Social media marketing D) Retailer marketing E) Segmentation

B) Shopper marketing

91) Which of the following is most likely true about shoppers who prefer to shop at "lifestyle centers"? A) They use coupons. B) They prefer upscale stores. C) They prefer indoor shopping locations. D) They rarely dine out in expensive restaurants. E) They are motivated by deals on last year's merchandise.

B) They prefer upscale stores.

128) A(n) ________ brings buyers and sellers together and assists in negotiations. A) agent B) broker C) retailer D) wholesaler E) industrial distributor

B) broker

34) Stop-N-Go , 7-Eleven, and Circle K are examples of ________. A) department stores B) convenience stores C) category killers D) specialty stores E) supermarkets

B) convenience stores

108) Today's retailers increasingly adopt environmentally sustainable practices. Which of the following is NOT one of these practices? A) working with channel partners to reduce their environmental impact B) cutting back on recycling programs C) greening up their stores and operations D) launching programs to help customers be more responsible E) promoting more environmentally responsible products

B) cutting back on recycling programs

69) In recent years, service differentiation among retailers has ________. A) increased at a steady rate B) decreased C) stayed the same D) increased exponentially E) tripled

B) decreased

11) Which type of store carries a wide variety of product lines and has been squeezed in recent years between more focused and flexible specialty stores on the one hand and more efficient, lower-priced discounters on the other? A) warehouse clubs B) department store C) factory outlet D) merchant wholesaler E) category specialist

B) department store

87) Big and Tall Men's Shop carries men's clothing in larger sizes; this allows the store to ________ other stores. A) align itself with B) differentiate itself from C) cluster with D) affect the store atmosphere of E) converge with

B) differentiate itself from

30) Which of the following statements best represents a contractual association between a manufacturer, wholesaler, or service organization and independent businesspeople who buy the right to own and operate one or more units in the system represented by the contract? A) corporate chain B) franchise C) voluntary chain D) retailer cooperative E) warehouse club

B) franchise

8) Which type of retailer is most likely to require its employees to focus most on assisting customers as they shop? A) self-service retailer B) full-service retailer C) off-price retailer D) limited-service retailer E) convenience retailer

B) full-service retailer

75) Which of the following is most likely gained by stores that cluster together? A) decreased competition B) increased customer pulling power C) compliance with franchise agreements D) creation of retailer cooperatives E) standardization of the service mix

B) increased customer pulling power

135) Today's large, progressive wholesalers have successfully reacted to rising costs by ________. A) relocating to low-rent, low-tax areas B) investing in information technology systems C) investing less money in expensive machinery D) reducing their markup rates E) reducing promotional activities

B) investing in information technology systems

84) A small, open-air mall with upscale stores, convenient locations, and nonretail activities, such as a playground, skating rink, hotel, dining establishments, and a movie theater, is an example of a(n) ________. A) regional shopping center B) lifestyle center C) community shopping center D) franchise E) power center

B) lifestyle center

10) Specialty stores carry ________ with ________ within them. A) only convenience products; shallow assortments B) narrow product lines; deep assortments C) narrow product lines; shallow assortments D) wide product lines; shallow assortments E) wide product lines; deep assortments

B) narrow product lines; deep assortments

36) Overstock.com, a Web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________. A) specialty store B) off-price retailer C) factory outlet D) wholesale club E) category killer

B) off-price retailer

103) Target recently opened temporary shops to celebrate limited-run collections by Jason Wu in Toronto and Missoni in New York. These temporary shops are examples of ________. A) lifestyle centers B) pop-up stores C) warehouse clubs D) strip malls E) category killers

B) pop-up stores

138) You own a neighborhood grocery store and would like to have non-food items delivered, priced, displayed and inventoried by a wholesaler. You do not want to purchase title to the goods. Which type of wholesaler best fits your needs? A) cash-and-carry wholesaler B) rack jobber C) drop shipper D) mail-order wholesaler E) agents and brokers

B) rack jobber

27) As a result of the great success of corporate chains, many independent stores choose to band together in either a voluntary chain or a(n) ________. A) factory outlet B) retailer cooperative C) wholesale club D) warehouse club E) convenience cooperative

B) retailer cooperative

73) In-store demonstrations, displays, sales, and loyalty programs are examples of ________. A) direct marketing B) sales promotion C) public relations D) personal selling E) affinity marketing

B) sales promotion

120) Which of the following wholesaler's channel functions is demonstrated when a wholesaler's sales force helps a manufacturer to reach many small customers at a low cost? A) bulk-breaking B) selling and promoting C) buying and assortment building D) risk bearing E) rack jobbing

B) selling and promoting

71) A large retailer of home improvement and construction products offers "how-to" classes for do-it-yourselfers, featuring instructions on how to complete home improvement projects using products sold at its stores. This is an example of how the retailer has differentiated itself through its ________. A) product assortment B) services mix C) segmentation D) atmosphere E) pricing

B) services mix

9) Today, ________ are flourishing due to the increased use of market segmentation and market targeting. A) chain stores B) specialty stores C) superstores D) discount stores E) off-price stores

B) specialty stores

35) Which of the following terms best describes a large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products? A) convenience store B) supermarket C) specialty store D) warehouse club E) factory outlet

B) supermarket

123) Which of the following wholesaler's channel functions is demonstrated when a buyer receives quicker delivery because wholesalers are located closer than producers? A) financing B) transportation C) buying and assortment building D) warehousing E) risk bearing

B) transportation

140) ________ perform a role similar to that of brokers or agents but are part of the buyer's organization. A) Truck jobbers B) Merchant wholesalers C) Purchasing officers D) Rack jobbers E) Cash-and-carry wholesalers

C) Purchasing officers

19) ________ retailers in the United States are growing faster than product retailers. A) Discount B) Merchant C) Service D) Specialty E) Off-price

C) Service

119) ________ buy mostly from producers and sell to retailers and industrial consumers. A) Warehouse clubs B) Factory outlets C) Wholesalers D) Discount stores E) Megaretailers

C) Wholesalers

129) A(n) ________ does not take title to goods and represents buyers or sellers on a more permanent basis than a broker. A) full-service wholesaler B) industrial distributor C) agent D) retailer E) cash-and-carry wholesaler

C) agent

88) The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________. A) promotions B) target C) atmosphere D) services mix E) product assortment

C) atmosphere

31) Sears, Target, and Kroger are examples of ________. A) voluntary chains B) retailer cooperatives C) corporate chains D) franchise organizations E) warehouse clubs

C) corporate chains

21) The early ________ cut expenses by offering few services and operating in warehouse-like facilities in low-rent, heavily traveled districts. A) department stores B) hypermarkets C) discount stores D) supermarkets E) full-service retailers

C) discount stores

29) McDonald's, Subway, and Jiffy Lube are all examples of ________. A) voluntary chains B) retailer cooperatives C) franchises D) category killers E) power centers

C) franchises

6) Which type of retailer usually carries more specialty goods at high prices and is more likely to provide customers with assistance in every phase of the shopping process? A) self-service retailer B) limited-service retailer C) full-service retailer D) independent retailer E) off-price retailer

C) full-service retailer

72) An ideal price policy scenario for retailers would be to achieve ________ while charging ________. A) low volume; high markups B) low volume; low markups C) high volume; high markups D) high volume; low markups E) high volume; zero markups

C) high volume; high markups

90) Macy's department stores carry a wide range of product lines, including clothing, jewelry, kitchenware, and home furnishings. Macy's typically charges a relatively high markup, but also holds frequent sales and price promotions, in particular offering discounts to customers who use a Macy's credit card. Macy's uses ________. A) self-service retailing B) experiential retailing C) high-low pricing D) everyday low pricing E) retail convergence

C) high-low pricing

107) Touchscreen kiosks, handheld shopping assistants, interactive dressing-room mirrors and virtual sales associates are all examples of how retailers use technology to ________. A) maintain inventory costs B) send information between stores C) meet consumers' expectations D) produce more accurate forecasts E) interact with suppliers

C) meet consumers' expectations

104) With their size and buying power, ________ can offer better merchandise selections, good service, and strong price savings to consumers. A) convenience stores B) franchises C) megaretailers D) power centers E) lifestyle centers

C) megaretailers

80) A ________ generally contains between 5 and 15 stores. It is close and convenient for consumers, usually contains a supermarket, perhaps a discount store, and several service stores such as a dry cleaner, a drugstore, and a hardware store. A) regional shopping center B) community shopping center C) neighborhood shopping center D) warehouse club E) factory outlet

C) neighborhood shopping center

102) Many retailers are now experimenting with limited-time shops that allow them to promote their brands to seasonal shoppers and create buzz in busy areas. Which of the following terms best represents such shops? A) power centers B) strip malls C) pop-up stores D) category killers E) lifestyle centers

C) pop-up stores

70) Daizy's is a shop that carries only plus-size clothing. According to this information, Daizy's differentiates itself from its competitors based on ________. A) service mix B) pricing C) product assortment D) store atmosphere E) distribution strategy

C) product assortment

77) A ________ is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit. A) warehouse club B) franchise C) shopping center D) supermarket E) hypermarket

C) shopping center

13) Which of the following is the most frequently visited type of retail store? A) convenience store B) department store C) supermarket D) superstore E) off-price retailer

C) supermarket

32) Independent Grocers Alliance, Do-It Best, and Western Auto are examples of ________. A) franchise organizations B) warehouse clubs C) voluntary chains D) category killers E) wholesale clubs

C) voluntary chains

89) Which of the following best describes a similarity between Costco and Walmart? A) Both are warehouse clubs. B) Both target the same affluent market. C) Both are specialty stores. D) Both use everyday low pricing. E) Both are examples of merchant wholesalers.

D) Both use everyday low pricing.

76) ________ were the main form of retail clusters until the 1950s. A) Strip malls B) Discount stores C) Independent off-price retailers D) Central business districts E) Regional shopping malls

D) Central business districts

5) ________ are retailers that offer sales assistance because they carry more shopping goods about which customers might need information. A) Self-service retailers B) Full-service retailers C) Off-price retailers D) Limited-service retailers E) Specialty-service retailers

D) Limited-service retailers

125) ________ are the largest group of wholesalers. They include two broad types: full-service wholesalers and limited-service wholesalers. A) Brokers B) Manufacturer sellers C) Manufacturers' agents D) Merchant wholesalers E) Selling agents

D) Merchant wholesalers

105) ________ is known as the merging of consumers, products, prices, and retailers. A) Retail conglomeration B) Consumer convergence C) Price merging D) Retail convergence E) Retail clustering

D) Retail convergence

12) ________ are facing slow sales growth because of slower population growth, increased competition, and the rapid growth of out-of-home eating. A) Warehouse clubs B) Off-price retailers C) Discount stores D) Supermarkets E) Factory outlets

D) Supermarkets

131) ________ are a type of limited-service wholesaler who carries a limited line of semiperishable merchandise (such as milk, bread, and snack foods), which is sold for cash as deliveries are made to supermarkets, small groceries, or hotels. A) Industrial distributors B) Wholesale merchants C) Full-service wholesalers D) Truck jobbers E) Purchasing agents

D) Truck jobbers

124) Which of the following wholesaler's channel functions is exemplified by buying in carload lots and then dividing these lots into small quantities? A) warehousing B) transportation C) risk bearing D) bulk breaking E) selling and promoting

D) bulk breaking

23) Which of the following is NOT a type of off-price retailer? A) independent B) factory outlet C) warehouse club D) category killer E) wholesale club

D) category killer

86) Cabela's stores are as much natural history museums for outdoor enthusiasts as they are retail outlets. This information indicates that Cabela's is practicing ________. A) wholesaling B) nonstore retailing C) shopper marketing D) experiential retailing E) showrooming

D) experiential retailing

126) What is the most common type of agent wholesaler? A) wholesale merchant B) industrial distributor C) limited-service wholesaler D) manufacturers' representative E) truck jobber

D) manufacturers' representative

121) Which of the following is NOT one of a wholesaler's channel functions? A) financing B) risk bearing C) transportation D) off-price retailing E) bulk breaking

D) off-price retailing

78) A ________ contains from 50 to 100 stores, is like a covered mini-downtown, and attracts customers from a wide area. A) community shopping center B) neighborhood shopping center C) central business district D) regional shopping center E) strip mall

D) regional shopping center

18) Which of the following would be considered a service retailer? A) factory outlets B) supermarkets C) jewelry stores D) restaurants E) gas stations

D) restaurants

106) Which term refers to looking at merchandise at a traditional store and then purchasing the merchandise online? A) pop-up shopping B) wheel-of-retailing C) off-price retailing D) showrooming E) wholesaling

D) showrooming

33) GameStop sells only video games and systems, offering a narrow product line with a deep assortment within that line. GameStop is a(n) ________. A) department store B) convenience store C) category killer D) specialty store E) off-price retailer

D) specialty store

82) Neighborhood shopping centers are also known as ________. A) power centers B) lifestyle centers C) warehouse clubs D) strip malls E) regional shopping centers

D) strip malls

15) Which type of store is much larger than regular supermarkets and offers a large assortment of routinely purchased food products, nonfood items, and services? A) off-price retailer B) specialty store C) factory outlet D) superstore E) convenience store

D) superstore

122) Which of the following wholesaler's channel functions is demonstrated when a wholesaler holds inventories and thereby reduces inventory holding costs and risks of suppliers and customers? A) financing B) transporting C) buying and assortment building D) warehousing E) bulk breaking

D) warehousing

133) ________ are agents who take physical possession of products and negotiate sales. They deal mostly with agricultural marketing. A) Industrial distributors B) Cash-and-carry wholesalers C) Purchasing officers D) Rack jobbers E) Commission merchants

E) Commission merchants

132) ________ are a type of limited-service wholesaler who does not carry inventory or handle a product. They typically operate in bulk industries, such as coal, lumber, and heavy equipment. A) Wholesale merchants B) Industrial distributors C) Cash-and-carry wholesalers D) Rack jobbers E) Drop shippers

E) Drop shippers

17) Home Depot and PetSmart are examples of ________. A) factory outlets B) warehouse clubs C) superstores D) off-price retailers E) category killers

E) category killers

136) Carey David's wholesale company helps retailers train salesclerks, improve store layouts and displays, and set up inventory control systems. According to this information, which of the following wholesaler's channel functions does Carey David provide? A) buying and assortment building B) selling and promotion services C) risk bearing services D) marketing information E) management services and advice

E) management services and advice