MKTG 361 Chapter 15
Which type of retail store would typically have the highest labor costs?
A department store
Why is the selection of a retail location so critical to a store's success?
A location decision typically requires long-term commitment of resources.
James wants to open a small store that offers only products, knowledge, and advice for those who like to build Hot Rods, Street Rods, and refurbish classic cars. Which of the following types of stores would most likely support an effective launch of his business idea?
A specialty store
Which of the following types of stores has a high gross margin, a narrow product assortment, and a high level of service?
A specialty store
Which type of retail store specializes in a given type of merchandise?
A specialty store
_____ is a low-profile yet important form of retailing in which consumers get products out of automated machines, and it accounts for billions of dollars worth of goods each year in the United States.
Automatic vending
Which of the following statements about restaurants is true?
Because barriers to entry are low, the restaurant business appeals to many people.
Which form of franchising is an ongoing business relationship between a franchisor and a franchisee where the franchisor "sells" a franchisee the rights to use the franchisor's approach to doing business?
Business format franchising
Kroger is the second-largest supermarket chain in the United States. Which of the following is the most likely reason why Kroger supermarkets sell all types of foodstuffs as well as nonfood products including a wide range of eyewear and accessories?
Consumer demand for one-stop shopping often leads to scrambled merchandising.
_____ carry a limited line of high-turnover, high-priced goods and resemble miniature supermarkets. These self-service stores are typically located near residential areas and are open long hours, seven days a week.
Convenience stores
_____ are stores that consumers purposely plan to visit. They are often built as freestanding stores.
Destination stores
_____ refers to the techniques used to get consumers to buy from their home. Those techniques include direct mail, catalogs and mail-order, telemarketing, and electronic retailing.
Direct marketing
Which type of retailing is the selling of products by representatives who work door-to-door, office-to-office, or at home sales parties?
Direct retailing
_____ are retailers that compete on the basis of low prices, high turnover, and high volume.
Discount stores
Which type of retail ownership is owned and operated by an individual but is licensed by a larger supporting organization?
Franchise
Which type of discount store offers consumers very limited service and carries a broad assortment of nationally branded "hard goods," such as housewares, toys, automotive parts, clothing, bedding, and maybe a limited line of nonperishable food items?
Full-line discount stores (aka mass merchandiser)
_____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
Gross margin
_____ is the retailing strategy of using moderate to low prices on large quantities of products and lower service to stimulate a high turnover of inventory.
Mass merchandising
_____ refers to shopping without visiting a store and is currently growing faster than in-store shopping because of the consumer demand for convenience.
Nonstore retailing
Which of the following statements about nonstore retailing is true?
Nonstore retailing is currently growing faster than in-store retailing.
_____ is a type of shopping available to consumers with access to the Internet.
Online retailing
Which form of franchising involves a dealer agreeing to sell certain products provided by a manufacturer or a wholesaler?
Product and trade name franchising (coke and pepsi)
_____ is defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use or consumption.
Retailing
_____ are single-line stores that offer a nearly complete selection of one line of merchandise and use self-service, discount prices, high volume, and high turnover of merchandise to their advantage.
Specialty discount stores
Which of the following statements about specialty stores is true?
Specialty stores typically avoid price wars.
_____ are large, departmentalized, self-service retailers that specialize in food and some nonfood items.
Supermarkets
_____ is the use of the telephone to sell directly to consumers.
Telemarketing
Who is the originator of a trade name, product, methods of operation, and so on that grants operating rights to another party to sell its product?
The franchisor
Which of the following statements about a retailer's promotion strategy is true?
The goal of a retail store's promotion mix is to position the store in consumers' minds.
Flash Foods is the name of a chain of convenience stores with self-service gas pumps. What do you know about the convenience stores?
They carry a limited line of high-turnover goods.
Which U.S. retailer is the number one sales volume retailer in the world?
Walmart
_____ sell a limited selection of brand name appliances, household items, and groceries, usually in bulk on a cash-and-carry basis to members only.
Warehouse membership clubs
Off-price retailers:
are often able to take advantage of manufacturers' faulty sales forecasting
Anchor stores:
are often large department stores that are located at opposite ends of a mall to create a heavy pedestrian traffic flow
The number of different varieties of fishing lures carried by the Angler's Store refers to the store's:
assortment depth
Home Depot has selected orange as its corporate color. It's a good choice. At the gut level, orange connotes happiness and warmth. A recent article in one of the company's advertising brochures spoke about choosing colors for home decorating. It referred to this color as "joyful orange." The color orange is part of the _____ at Home Depot stores.
atmosphere
The overall impression conveyed by a store's physical layout, decor, and surroundings is referred to as the store's:
atmosphere
When you walk into an Apple store, you are immediately greeted by a clerk. The store is simply designed with layouts where you can experience products such as iMacs, iPhones, a variety of iPods, cameras, printers, and other accessories. If you have questions about the products, you can visit the Genius Bar. There is a place where kids can play and experience Mac to by sitting on big round cushy chairs. This description is of the store's:
atmosphere
Prices are usually higher in convenience stores than in supermarkets because convenience stores offer:
better location, longer hours, and faster service
Arby's, Jiffy-Lube, Baskin-Robbins, and Sylvan Learning Centers are examples of _____ because the franchisee buys the right to use the franchisor's approach to doing business.
business format franchising
Domino's pizza, Hyatt Corporation, and Wendy's are all examples of _____ because the franchisee buys the right to use the franchisor's approach to doing business.
business format franchisors (ongoing relationship between a franchisor and a franchisee in which the franchisor sells a franchisee the rights to format or approach to doing business)
Each department in a department store is usually headed by a _____ who selects the merchandise mix for the department and may also choose the promotional devices and personnel for that department.
buyer
The _____ at John Lewis, Britain's largest department store chain, selects the merchandise for his or her department and is often responsible for its promotion and for managing the personnel in that department.
buyer
Stores that are owned and operated as a group by a single organization are called _____. Under this form of ownership, many administrative tasks are handled by the home office.
chain stores
Discount stores:
compete on the basis of low prices, high turnover, and high volume
The first task of developing a retail strategy is to:
define the target market
Housing several departments under one roof, a _____ carries a wide variety of shopping and specialty goods, including apparel, cosmetics, housewares, electronics, and sometimes furniture.
department store
Marketers can precisely target their customers according to demographics, geographics, and psychographics with:
direct mail
Susan Adams makes children's clothing. She is also the sales representatives and sets up parties and fashion shows at homes of mothers to demonstrate the quality and value of her clothing. Susan is using:
direct retailing
The manufacturer of Cutco knives uses students as salespeople. The salespeople go into customers' homes and demonstrate the product, and the sales transactions usually occur in a home setting. This form of nonstore retailing is called:
direct retailing
When opening a new retail operation, the retailer needs to consider all of the following factors EXCEPT:
employee density
Interactivity is one of the new developments in retailing. In retailing, interactivity refers to:
entertainment for customers to get them involved
84. When JCPenney announced it would open a 97,000-plus square foot anchor store in the new West Grand Promenade, it meant that JCPenney would be:
expected to create heavy foot traffic for the center
A _____ is an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise--its own.
factory outlet
Well-known manufacturers such as Bose, Ralph Lauren, and Reebok have decided that the most profitable way to dispose of out-of-season and irregular stock is to open stores and sell their own merchandise. These stores are types of:
factory outlets
A(n) _____ is a continuing relationship in which an individual or business grants business rights to operate or sell a product to another individual or business.
franchise
Rick owns and operates his own UPS shipping store. He has licensed the right to use UPS business systems. Rick's shipping store is a:
franchise
The party in a franchise relationship that is an individual or business granted the right to sell another party's product is called the:
franchisee
Maggie Moo's has decided that consumers will drive out of their way for the store's yummy ice cream offerings. The owner needs to keep his overhead costs (such as rent) low and wants to avoid locating near competitors. For a location, Maggie Moo's should open in a:
freestanding store
Large retailers such as Target and Walmart and sellers of shopping goods such as automobiles and furniture often use _____ for their locations.
freestanding stores
Another name for an anchor store is a:
generator store
Banana Republic stores are usually built in shopping centers, but in a few cities the company has chosen to build a stand-alone store. Its freestanding store entices customers to shop because it:
has greater visibility to customers than it would in a shopping center
As a general rule of thumb, a retailer that has a high gross margin will have:
high prices
Around the world, most retailers are _____, operating one or a few stores in their community, owned by a single person or partnership and not operated as part of a larger retail institution.
independent
Tiffany owns a gift shop that carries clothing and memorabilia of local high school teams as well as home decor objects. She is the sole owner of the store, so in terms of ownership, her store would be classified as a(n):
independent retailer
Small neighborhood florists, shoe stores, and ethnic food markets are most likely to be:
independent retailers
At the American Girl store in Chicago, dolls can be purchased and girls can then go to the American Girl Cafe or American Girl Theatre and even have birthday parties. This is an example of using:
interactivity
Build-a-Bear is a retailer where children can design and assemble a stuffed animal from shelves full of parts. Each child starts by choosing an animal. Then, the child moves to a place where the stuffing is added. Finally, the child moves to the area where the last accessories are added. Build-a-Bear is part of a recent trend in retailing referred to as:
interactivity
The merchandise mix:
is the retailer's product offering
Retail establishments are generally classified according to all of the following EXCEPT:
level of sales
The newest generation of shopping centers is:
lifestyle centers
Many technologically advanced retailers are using a technique called _____ to analyze the huge amounts of data collected through their point-of-purchase scanning equipment that will enable them to better meet the needs of customers.
market-basket analysis
Kmart utilizes a strategy of moderate to low prices on large quantities of products and lower levels of service to stimulate a high turnover of inventory. Kmart offers a wide variety of different product lines. Kmart is an example of a:
mass merchandiser
The buyer who heads a department in a department store is responsible for the:
merchandise mix in that department
One of the new developments in retailing is m-commerce. The "m" in m-commerce stands for:
mobile
A publisher of books on holiday decorating, cooking, and crafts has to find a way to dispose of its overruns and unsold end-of-season output. As a marketing consultant, you suggest the firm sell the merchandise to:
off-price discount retailers
The Cedar Store carries a full line of cedar swings, gliders, garden benches, and tables. All of its products can be purchased through its Web site. The site has done well since the Cedar Store's products do not need to be touched or smelled before purchase. The Cedar Store is engaging in:
online retailing
Amy received a phone call last night during supper. The caller wanted her to attend a meeting to learn about timeshares. Since Amy had never thought of purchasing this type of product before she received the call, this is obviously an example of _____ telemarketing.
outbound (unsolicited selling)
Telemarketing can consist of either unsolicited _____ sales calls, or _____ sales calls, which allow companies to receive orders through toll-free telephone numbers.
outbound; inbound
The Halloween Super Store is only open from September until November, usually in an otherwise vacant store. This is an example of a:
pop-up shop
Retailers control the six Ps of the retailing mix. The six Ps include the marketing mix plus:
presentation and personnel
All of the following are factors in creating a store's atmosphere EXCEPT:
price
A retailer in Winnsboro, Louisiana, is licensed to sell John Deere tractors. This retailer is a:
product and trade name franchisee
Chattanooga Bottling Company is licensed to bottle Coke products. The Chattanooga Bottling Company is an example of a:
product and trade name franchisee
A retail store can be classified according to its:
product assortment
Retailers such as Target and JCPenney are responding to consumer needs by changing product mixes, hours of operation, locations, and prices. These stores are changing aspects of their:
retailing mixes
Safeway, Avanza (for the Hispanic market), Publix, and other supermarket chains offer a variety of nontraditional goods and services such as video rental, flower shops, dry cleaning, and banking. This practice is called:
scrambled merchandising
When supermarkets offer a wide variety of nontraditional goods and services under one roof, they are engaged in:
scrambled merchandising
One of the new developments in retailing is m-commerce. M-commerce refers to the ability to:
shop using wireless mobile devices
The Mad Stencilist has decided to demonstrate how to use its products to create custom gift tags on a local cable television channel and is encouraging shoppers to call a toll-free number to purchase the merchandise with a credit card. This form of retailing is called a(n):
shop-at-home network
Glen's Safety First! sells a huge assortment of firefighting equipment at greatly reduced prices. It offers customers few services and competes on the basis of moderate to low prices on the large quantities of merchandise it stocks. Glen's Safety First! is an example of a:
specialty discount store
Texas-based Grape Vine Market is an 18,000-square-foot store offering highly collectible food and wine—along with some other culinary perks, including a cooking school—all in a setting crafted to make shoppers feel comfortable. It stocks more than 5,500 different kinds of wine. Grape Vine Market is best described as a:
specialty store
A common practice among most retailers that seeks to broaden customers' original purchases with related items is called:
suggestion selling
Whenever a customer opens an account at First Southern National Bank, a teller or account representative asks the customer whether he or she needs a CD, online banking, or other services. In other words, the account representative engages in:
suggestion selling
A retail operation that has a 90,000-square-foot facility and houses a florist, baker, bank, craft shop, photo finisher, dry cleaner, and pharmacy under the same roof as grocery and household items would be called a:
supercenter
Giant Eagle is a chain of retail outlets in Ohio, West Virginia, Maryland, and Pennsylvania that are described as large, departmentalized, self-service stores that specialize in food and limited nonfood items. Giant Eagle stores are:
supermarkets
Pop-up shops are:
temporary retail establishments
Specialty stores such as Best Buy, Babies "R" Us, and Bed, Bath, and Beyond are often called category killers because:
they can destroy the profit potential for a category of merchandise for other retailers
When Irvin went into Lowe's to buy his wife a small tool set she said she wanted, the sales clerk suggested a larger set with a tool kit on wheels that included a router and circular saw. In this example, the sales clerk engaged in:
trading up
Persuading customers to buy a higher-priced item than they originally intended to buy is referred to as:
trading up (persuading)
Laura buys supplies for her catering business at a retailer that stocks a limited selection of items, which are sold in bulk on a cash-and-carry basis to members only. As she browses through the huge store, she buys flour, a set of muffin pans, and a package of paper towels as well as an assortment of fresh produce. Laura is most likely shopping at a(n):
warehouse membership club