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All of the activities involved in managing the retailer’s physical facilities comprise _____. a. store maintenance b. merchandising c. energy management d. operations management Under what condition would it be rational for the trading areas of two branch locations to […]

A danger to a retailer with a very high financial leverage is _____. a. the reduction in inventory valuation b. the reduction in return on net worth c. that high debt service must be paid d. high variable cost levels […]

A stationery retailer generally prices portable copiers using a 30 percent markup. The retailer expects to sell 125 portable copiers at the 30 percent markup. How many units would it have to sell at a 40 percent markup to maintain […]

The four functional areas defined in the Mazur plan are _____. a. buying, selling, store operations, and accounting b. merchandising, communications, store management, and financial accounting c. marketing, management, accounting, and finance d. product, price, promotion, and distribution Total demand […]

Retailers can get some of the benefits of ownership and leasing through a _____. a. sale-leaseback b. graduated lease c. net lease d. straight lease Which retail institution is often part retailer and part wholesaler? a. off-price retail chain b. […]

A retailer tries to appeal to consumers’ one-stop shopping needs through _____. a. the retail life cycle b. vertical marketing systems c. the wheel of retailing d. scrambled merchandising A mystery shopper is a form of which primary data collection […]

A slotting allowance is a form of _____. a. channel conflict b. short-run strategy by a manufacturer c. channel cooperation d. electronic data interchange A 100 percent markup at cost equals what markup at retail? a. 20 percent b. 40 […]

A retailer that owns several of its locations and desires capital to expand should consider using a _____. a. percentage lease b. sale-leaseback c. short-term lease with renewal options d. graduated lease Low perceived risk, high experience with a retailer, […]

The retail ownership form that has the greatest capacity for raising funds through the sale of stock is a _____. a. sole proprietorship b. corporation c. partnership d. franchise A firm cannot devote its total promotional efforts to publicity since […]

A major difference between the sale of complementary goods/services versus the sale of substitute goods is that the sale of substitute goods may _____. a. have little impact on total retail sales b. increase inventory turnover c. give a retailer […]

Which retail institution generally does not mention specific brand names and/or prices in its advertising? a. department store b. off-price chain c. full-line discount store d. variety store An area where nondisplayed items are stocked is _____ space. a. merchandise […]

A retailer seeks to acquire and maintain a proper assortment of merchandise while keeping ordering, shipping, handling, and other costs in check in _____. a. retail operations b. just-in-time inventory planning c. store maintenance d. inventory management Which statement concerning […]

The first step in undertaking a retail audit is _____. a. developing audit form(s) b. determining when and how often the audit is conducted c. determining who does the audit d. conducting the audit A retail ownership form that combines […]

Efficient consumer response (ECR) is an example of _____. a. electronic data interchange b. floor-ready merchandise c. third-party logistics d. collaborative planning, forecasting, and replenishment A retailer can best implement a consumer’s right to safety by _____. a. selling foods […]

In a horizontal cooperative advertising agreement, _____. a. two or more retailers share an advertisement b. a manufacturer (or wholesaler) and a retailer share an advertisement c. retailers pay for half of the cost of an advertisement d. retailers must […]

A systematic procedure for analyzing the performance of a retailer is _____. a. tactical performance evaluation b. a retail audit c. feedback d. strategy evaluation Ease of entry is simplest for which service retailer type? a. nongoods retailer b. rental-goods […]

A difficulty associated with the use of advertising by an independent or a chain with few units is the _____. a. high total costs b. long lead time c. high waste in geographic coverage d. low opportunity for computerization A […]

A climate-controlled open entry _____. a. is a revolving door b. reduces congestion and enables customers to see inside the store c. is set at a different temperature than in the mall d. provides a moving walkway for pedestrians. Sole […]

Regional buying preferences are best served through which buying organization? a. informal buying organization b. formal buying organization c. decentralized buying organization d. centralized buying organization The major advantage of a compensation cafeteria plan over a traditional salary and bonus […]

A disadvantage associated with the model stock approach to the determination of space needs is that _____. a. distinctive items with low sales or profit levels may not be stocked b. seasonal items may be placed in improper locations c. […]

A major disadvantage to the use of census data in trading-area analysis is its _____. a. cost b. being limited to city and state data c. lack of comprehensiveness d. dated nature A subculture can be based upon all of […]

A department store utilizes different personnel for the main store (central business district) and for the suburban (regional shopping center) locations. The store utilizes a _____. a. geographic classification b. product classification c. functional classification d. combination organization chart Which […]

Both consignment purchases and memorandum purchases enable a retailer to _____. a. increase information flows b. lower insurance costs c. improve cash flow d. reduce inventory levels A retailer has $100,000 in cash, $300,000 in accounts receivable, $500,000 in inventory, […]

According to the wheel of retailing, a retailer is vulnerable when _____. a. consumers do not accept the retailer’s old image b. its upgraded strategy gives new institutions a significant cost advantage c. its strategy is no longer considered unique […]

Which act prevents large retailers from using their bargaining power to receive price concessions not warranted by their sizable orders? a. Miller-Tydings Act b. Cellar-Kefauver Act c. Federal Trade Commission Act d. Robinson-Patman Act Information search involves generating a list […]

A store’s merchandise is categorized and displayed by common end uses in a _____ product grouping. a. functional b. market segment c. purchase motivation d. storability A retailer that increases its product line assortment width by adding new products unrelated […]

Most types of retail selling can be categorized as either _____. a. order taking or order getting b. clerical or professional c. institutional or direct d. promotional or institutional Defining and adhering to an organizational mission, evaluating ownership and management […]

A retail firm wants to focus its efforts on a narrow target market: deep-sea fishing enthusiasts who wish to purchase costly fishing accessories. The most appropriate nonstore-based strategy mix (with the lowest waste coverage) is _____. a. airport retailing b. […]

The high ease of entry into retailing _____. a. generates a great deal of competition for new and existing retailers b. means that investment per worker in retailing is generally higher than for most manufacturers c. contributes to low new-retailer […]

Merchandise cannot generally be examined by consumers in which retail formats? a. membership clubs and flea markets b. direct selling and specialty stores c. direct marketing and vending machines d. retail catalog showrooms and membership clubs The quick ratio measures […]

A central business district is characterized by a concentration of _____. a. convenience stores b. parking facilities c. suburban housing d. cultural and entertainment facilities A deduction from a bill made by a retailer due to such infractions as late […]

Customer requests for unstocked or out-of-stock merchandise are recorded in a(n) _____. a. generic product file b. UPC system c. OCR-A system d. want book or want slip Most data on the characteristics of residents of specific trading areas are […]

A retailer with a less-than-average profit margin could seek to increase its profit margin by _____. a. reducing its operating expenses b. increasing its asset turnover c. increasing its financial leverage d. increasing its inventory turnover Which of the following […]

A furniture retailer has a beginning-of-year inventory (at cost) of $400,000; ending inventory (at cost) is $270,000. Yearly purchases are $700,000 and transportation charges equal $5,700. The retailer’s cost of goods sold is _____. a. $570,000 b. $575,700 c. $835,700 […]

In 2010, the ten largest U.S. retailers earned average after-tax profits amounting to about _____ percent of sales. a. 1.1 b. 2.5 c. 3.5 d. 5.7 The basic Mazur plan divides all retail activities into _____. a. main store and […]

An example of a product/trademark franchise is a _____ franchise. a. McDonald’s fast-food b. Wendy’s fast-food c. Super 8 hotel d. Chevrolet auto dealership A retailer’s planned expenditures for a given time period based on its expected performance is its […]

Department stores are now facing increased competition from factory outlets, membership clubs, and flea markets. This illustrates _____. a. rationalized retailing b. scrambled merchandising c. the retail life cycle d. the wheel of retailing Low merchandise continuity and opportunistic buying […]

Which aspect of a direct marketing strategy involves the merging and purging of client names? a. business definition b. customer response c. order fulfillment d. data-base maintenance Retailers practice relationship retailing with _____ customers. a. nonregular b. regular c. core […]

Which type of service is generally leased? a. rented-goods service b. owned-goods service c. nongoods service d. regulated-goods service In-store displays designed to increase sales are examples of _____. a. ensemble displays b. promotional displays c. point-of-purchase promotion d. personal […]

Signals of performance such as employee satisfaction questionnaires, sales reports, and inventory records are examples of _____. a. retail audits b. feedback c. tactics d. retail demographic data The quick ratio equals _____. a. (total assets)/(annual net sales) b. (total […]

When the price elasticity of demand is elastic and prices go up, _____. a. revenues stay the same b. revenues decline c. revenues increase d. profits increase Inventory management planning is easiest for _____. a. fad products b. growing products […]

A limited target market consisting of high-income and innovative consumers exists in which stage of the product life cycle? a. decline b. growth c. maturity d. introduction Strategy and tactics need to be evaluated _____. a. on a continuous basis […]

Functional account expenses are _____. a. shared by two or more departments b. reported by the names of their cost c. classified on the basis of purpose or activity d. related to a retailer’s performance during the budget period Copies […]

The high sales volume at off-price chains, factory outlets, membership clubs, and flea markets can be explained by the retail life cycle. Examples of negative feedback include consumer complaints, chronic out-of-stock situations, and declining sales. Answer: T Only controllable variables […]

A retailer can best implement a consumer’s right to be informed by _____. a. providing a money-back guarantee on all goods and services b. utilizing per-unit pricing c. monitoring store waiting lines d. installing automatic teller machines Which of the […]

A theory which predicts that retail institutions have identifiable stages from introduction to decline is _____. a. the retail life cycle b. the wheel of retailing c. scrambled merchandising d. rationalized retailing A benefit of franchising to a franchisor is […]

An objective, easily identifiable, and measurable population characteristic is called a(n) _____. a. AIO inventory b. demographic statistic c. lifestyle measure d. reference group measure A retailer with sales of $10 million and selling expenses of $3 million has an […]

A retailer specifically attempts to increase its average sale through carrying complementary goods and services in _____. a. cross-merchandising b. impulse sales c. scrambled merchandising d. merchandising Which computer-based site-selection model generally includes the largest number of variables? a. analog […]

(Total assets/net worth) equals _____. a. asset turnover b. cost of goods sold c. profit margin d. financial leverage The increased participation of women in the workforce, longer commuting times, and increased numbers of single parents all contribute to the […]

A string is composed of _____. a. a supermarket or a variety store and convenience-oriented stores b. at least one major department store and a broad group of specialty stores c. at least one junior department store, a variety store, […]

Which of the following is not a major advantage of having a large inventory for a retailer? a. quantity discounts in purchases b. lower risk of obsolescence and deterioration c. lower frequency of stockouts d. low per-item shipping costs The […]

Direct product profitability for a new product over a three-year period can be assessed through _____. a. use of a sales opportunity grid b. measuring a product’s sales potential c. estimating holding costs d. computing a product’s markup Which aspect […]

The use of a survey and observation under controlled conditions most closely resembles _____. a. an experiment b. simulation c. a semantic differential d. multidimensional scaling Dead areas are in-store locations where _____. a. normal displays cannot be set up […]

A narrow but deep product assortment characterizes _____. a. department stores b. specialty stores c. variety stores d. retail catalog showrooms Prior to establishing a quick response (QR) inventory planning system, suppliers need to rethink their _____. a. credit terms […]

The opposite of in-home shopping, on a convenience dimension, is _____. a. routine decision making b. outshopping c. store loyalty d. mapping Direct marketers can be divided into two categories: _____ and _____. a. general; specialty b. mail; phone order […]

A bricks-and-mortar retailer questions whether it should also sell goods through the Web as part of a dual distribution channel strategy. What step is involved in the retailer’s direct marketing strategy? a. order fulfillment b. customer contact c. customer response […]

A disadvantage of a leased department to the leased department operator is the _____. a. restriction on goods/services carried b. high promotional expense c. poor cash flow due to centralized checkouts d. creation of a one-stop shopping environment Which medium […]

The distinction between internal and external secondary data is based on the _____. a. focus of the data (company or industry) b. firm collecting the data (government or commercial research house) c. cost of data collection d. source of the […]

A store with the largest trading area in a shopping center is a(n) _____. a. parasite store b. destination store c. independent retailer d. leased department If selling expenses equal 40 percent of a retailer’s annual sales, its selling efficiency […]

A major advantage of advertising is that _____. a. costs per viewer, reader, or listener are low b. media costs are free c. advertising has higher credibility than public relations d. immediate feedback is provided How many million people are […]

Which of the following is not a benefit to a department or discount store using leased departments instead of company-operated units? a. a one-stop shopping environment b. low investment requirements c. high control of operations d. payment based on sales, […]

Which statement concerning vending machines is correct? a. Over 95 percent of vending machine sales involve hot and cold beverages and food items. b. Eighty-five percent of vending machine sales involve cigarettes. c. There has been significant growth in the […]

The concept stating that the type and number of stores within any planned center should complement each other as to the quality and variety of their product offerings is _____. a. balanced tenancy b. occupancy certainty c. retail balance d. […]

Unbranded, no-frills goods are classified as _____. a. generics b. private brands c. manufacturer brands d. scrambled merchandising A significant difference between the organizational structure used by a chain retailer and by a diversified retailer is that the chain retailer […]

A retailer uses the percentage variation method in inventory level planning. If the store plans an average monthly stock of $200,000 and September sales are estimated at 15 percent more than average, the store’s planned inventory level for September is […]

Two components of problem awareness are _____. a. information search and purchase behavior b. commercial and noncommercial cues c. recognition of shortage and recognition of unfulfilled desire d. physical risk and social risk An example of internal secondary data is […]

An advantage of the use of a wireless scanner in conjunction with a radio frequency identification tag (RFID) over a Universal Product Code (UPC) is its _____. a. ability to scan a package without lifting it b. tie-in to speech […]

A retailer’s organizational mission is its _____. a. consumer orientation b. commitment to a type of business and to a distinctive role in the marketplace c. focus on determining and satisfying consumer wants and needs d. good or service category […]

A unique disadvantage for independent retailers is a lack of _____. a. competitive advantages b. independence c. control over strategy d. management succession Order lead time is defined as _____. a. average sales per day b. extra inventory kept on […]

In developing performance measures for a retailer, it is important to _____. a. focus on short-term measures b. develop measures unique to the firm c. use the same measures over time to allow trends to be ascertained d. use measures […]

The most appropriate financial performance standard of a department store retail buyer is _____. a. customer satisfaction b. total unit sales c. total dollar gross profit in department d. total dollar sales Which inventory management system in retailing corresponds to […]

The increased deregulation of industries should have a positive impact on which consumer right? a. the right to safety b. the right to be heard c. the right to choose d. the right to be informed An area with a […]

The difference between gross profit and total costs equals the _____. a. cost of goods sold b. net profit after taxes c. cost of goods available for sales d. net profit before taxes Partial, revolving payments are not permitted in […]

The most common form of vertical marketing system is _____. a. independent vertical marketing system b. partially integrated marketing system c. fully integrated marketing system d. a retail cooperative The evolution of the conventional supermarket into combination stores and supercenters […]

A discount department store aims its retailing strategy at a large homogeneous (similar) group of consumers. A wide assortment of goods is offered at popular prices. The retailer utilizes which target market strategy? a. mass marketing b. market segment c. […]

Increased coordination among channel members is a major advantage of clear channel roles to all channel members. An area can be understored with regard to one type of good or service and overstored with regard to another type of good […]

A retailer uses a 20-unit reorder point based on assuming a 3-day lead time, a 5-day usage rate, and a 5-unit safety stock. In how many days will a stockout occur if the lead time becomes 7 days and the […]

Under which method is it assumed that old stock is sold first and that new stock remains on the shelves? a. FIFO b. retail method of accounting c. LIFO d. cost method of accounting A firm’s markdown strategy has the […]

Retailing is best characterized by which of the following? a. independent ownership dominating sales b. franchise organizations dominating sales c. ease of entry into the marketplace d. vertical marketing systems being fully integrated It is important for franchisors to specify […]

Retail managers in individual departments have major input into decisions in a(n) _____. a. franchise system b. centralized structure c. owner-manager system d. decentralized structure Which of the following is an element of perceived risk? a. physical risk b. reference […]

Which food-oriented retailer specializes in fill-in merchandise? a. convenience store b. supermarket c. specialty store d. superfood store The trading area that generally encompasses the greatest geographic area (in terms of square miles) is the _____. a. fringe trading area […]

The major difference between a consignment purchase and a memorandum purchase is based on _____. a. when title passes from seller to buyer b. when an item is paid for c. purchase price d. eligibility for cooperative advertising allowances The […]

Respondent cooperation is not required in which primary data source? a. personal survey b. mail survey c. telephone survey d. observation Goods which are highly visible and which consumers feel they are judged by have high _____ perceived risk. a. […]

Retail tasks can be performed _____. a. by the retailer, manufacturer, wholesaler, specialists, or consumers b. only by the retailer c. by the retailer, manufacturer, or wholesaler d. by the retailer, manufacturer, wholesaler, or specialists Primary, secondary, and fringe trading […]

Which one of the following is not a crucial element in Target’s overall retail strategy? a. growth-oriented objectives b. a focus on its discount store niche c. sale of goods at the lowest competitive price d. strong customer service for […]

The basic distinction between advertising and publicity is that _____. a. publicity only deals with print media b. in publicity, the media are not paid c. publicity is nonpersonal d. publicity is regulated by the Robinson-Patman Act Price discrimination is […]

A major disadvantage of the use of the U.S. Census of Retail Trade is its _____. a. lack of accuracy b. dated nature c. low credibility d. sampling error Frequent shopper programs and customer and vendor analysis are made possible […]

Both capital and operating expenditures can be depreciated. Firms that promote mostly on a seasonal basis utilize massed advertising efforts. Answer: T Air travelers are captive audiences for a temporary time period. Answer: T Annual demand for color ink jet […]

The system to process a direct marketing order is referred to as _____. a. outsourcing b. logistics c. inventory management d. order fulfillment The use of franchising and the designation of suggested retail selling prices are channel control strategies of […]

The regular products carried by a retailer constitute _____ merchandise. a. fashion b. staple c. assortment d. fad The job titles of channel member salesperson, vice-president of real-estate, vendor quality inspector, and channel member support person are most likely to […]

The opposite of a “moving-up-the-wheel-of-retailing” strategy is _____. a. cost containment b. mergers and acquisitions c. value-driven retailing d. power retailing Which statement concerning customer satisfaction is not correct? a. According to the American Customer Satisfaction Index, fast-food firms rate […]

Each employee is responsible for limited functions under _____. a. independent ownership b. specialization c. centralization d. a branch-store system Contingency planning for no store electricity, vendors being out-of-stock on key items, and strikes need to be considered in _____. […]

Which statement concerning customer service is correct? a. Customer service only concerns a retailer’s intangible activities. b. Different people almost always judge a retailer’s customer service in a similar manner. c. People’s assessment of customer service depends on perceptions€not necessarily […]

A fundamental concept of the value chain is the _____. a. interrelationship among manufacturer, wholesaler, and retailer b. independence of all channel members c. notion that value is interpreted similarly by all final consumers d. notion that value is affected […]

Which group is not reflected in the traditional family life cycle? a. solitary retired b. single-parent families c. young marrieds d. old aged The most common form of planned shopping center is the _____. a. neighborhood shopping center b. regional […]

Information that can be obtained only through personal observation and questioning is amassed by which selection method? a. case method b. job analysis c. interview d. achievement tests What percent of retail transactions are by either credit or debit card? […]