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Indicate whether the statement is true or false.
1. Will, a sales person at a superstore, mistakenly provides wrong information to a customer about the location of a
specific brand of dishwashing liquid. The customer, as a result, wastes time searching for the product. This is an example
of brand cannibalization.
a. True
b. False
2. Unlike nonstore retailing, in–store retailing enables customers to shop without visiting a physical store location.
a. True
b. False
3. Service quality is a priority in service industries because service industries are customer oriented.
a. True
b. False
4. Floor stock refers to the inventory held in reserve for potential future sale in a retailer’s storeroom or stockroom.
a. True
b. False
5. Target markets in retailing are defined by demographics, geographic boundaries, and psychographics.
a. True
b. False
6. Shopper analytics is used in searching for and discovering meaningful patterns in shopper data for the purpose of fine-
tuning, developing, or changing market offerings.
a. True
b. False
7. A retailer is a channel intermediary that sells mainly to consumers.
a. True
b. False
8. Establishing channel-wide network coherence is a key factor in maintaining the quality of service.
a. True
b. False
9. Determining a target market is optional while creating the retailing mix.
a. True
b. False
10. Specialty stores compete on the basis of low prices, high turnover, and high volume.
a. True
b. False
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Indicate the answer choice that best completes the statement or answers the question.
11. Delta Graphics Inc., a company specializing in publishing educational books, recruits and trains college students to
sell its products door-to-door. Which of the following forms of nonstore retailing is illustrated in the scenario?
a. Direct retailing
b. Telemarketing
c. Automatic vending
d. E-tailing
12. In the context of retail operations models, unlike off-price retailers, specialty shops:
a. adopt an operating model that implies low prices for customers.
b. focus on lean inventory management.
c. can accommodate a broader range of customer demands.
d. de-emphasize customer service and product selection.
13. Trevinsse, an old restaurant in a coastal town, is famous for its local cuisine. The restaurant is highly recommended to
tourists who want to some authentic local food. Given this information, Trevinsse is mostly likely to be a(n) _____.
a. independent retailer
b. warehouse club
c. chain store
d. franchise outlet
14. While getting ready for a party, Joana realized that the red dress she was planning to wear did not fit. Without getting
upset, she bought a similar dress from Emeliafashion.com, a fashion e-commerce marketplace, and then proceeded to go
and pick it from one of their nearby stores. This scenario illustrates the strategy of _____.
a. microtargeting
b. click-and-collect
c. telemarketing
d. e-tailing
15. Strategic retailing goals typically focus on:
a. reducing costs of goods sold.
b. increasing the cost of goods sold.
c. reducing return on assets or equity.
d. not using a retailing mix.
16. Which of the following statements is true of service failures?
a. They can be eliminated by successful market segmentation.
b. Retailers cannot recover from service failures.
c. They can be solved by cancelling return policies.
d. If handled effectively, they will result in customer loyalty.
17. Tamikoes, a baby shop, designs customized baby clothes and for gifting. The shop, with its tag line “My baby’s
choice,” has gained a lot of popularity for its customized services. Tamikoes has defined its target market by its _____.
a. nonparametric statistics
b. time series
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c. geographic boundaries
d. psychographic characteristics
18. _____ is a selling technique that seeks to broaden customers’ original purchases with related items.
a. Suggestion selling
b. Co-marketing
c. Shopper marketing
d. Benefit selling
19. Every time Drucillet, a luxury handbag brand, enters into a new market, it selects an upper-class locality to set up its
store. All of its stores are spacious and have elegant landscaping. Which of the following factors is most likely to
influence the atmosphere of Drucillet’s stores?
a. Psychographic factors
b. Fixture type and density
c. Merchandise type and density
d. Visual factors
20. Everenett’s is considered to be a one-stop retail shopping destination in the neighborhood of Macedonia for a wide
variety of products. People come to buy food products, groceries, and a range of other household products at the store.
When the Smiths moved in to Macedonia from another locality, their neighbors advised them to visit Everenett’s for
weekly essential supplies. In this scenario, Everenett’s is most likely a _____.
a. supermarket
b. category killer
c. warehouse club
d. specialty store
21. Which of the following is true of retail channel omnification?
a. It creates separate distribution systems for different distribution channels.
b. It makes each distribution channel accountable for its own dedicated inventory.
c. It involves treating each distribution channel as an entirely different business.
d. It combines different distribution channels into a single, unified system for saving costs.
22. Glassuct, a glassware manufacturing company, sells a range of glassware including drinkware and tableware through
its Web site. It uses Web banner advertising and mobile advertising to reach its prospective customers. According to this
scenario, Glassuct is most likely a(n) _____.
a. telemarketer
b. direct retailer
c. online retailer
d. category killer
23. Daisy’s is a self-service retail store. Its various departments offer one-stop shopping for groceries, drugs, apparel,
florists, and banking centers. Daisy’s is an example of a _____.
a. supermarket
b. category killer
c. warehouse club
d. factory outlet
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24. Lenspertise is a famous electronics shop that sells only cameras and camera accessories. People travel across town to
shop at this store because of the expert knowledge that Lenspertise possesses. Lenspertise is most likely a _____.
a. supermarket
b. specialty store
c. warehouse club
d. convenience store
25. The Johnsons are a relatively poor family and their eldest daughter is about to leave for college. She needs a suitcase
for her belongings, so the family heads out to the Quenchin store to get one. Quenchin Inc. is a large chain store that
offers a complete range of luggage sets at heavily discounted rates. According to this scenario, Quenchin is most likely a
_____.
a. supermarket
b. factory outlet
c. warehouse club
d. category killer
26. A difference between supermarkets and convenience stores is that unlike supermarkets, convenience stores:
a. charge lower prices.
b. carry a much more limited line of high-turnover convenience goods.
c. enable customers to shop without visiting a physical store location.
d. offer no service to customers.
27. _____ is an emerging trend that employs market data to best serve customers as they prepare to make a purchase.
a. Retail channel omnification
b. Click-and-collect
c. Shopper marketing
d. Cloud computing
28. Nicolle, an amateur baker, went to a supermarket to buy baking powder. A salesman at the supermarket asked her if
she also wanted fondant paste, icing syringes, rolling pins, pastry brushes, and edible colors along with it. According to
this scenario, which of the following selling techniques did the salesman use?
a. Shopper marketing
b. Microtargeting
c. Trading up
d. Suggestion selling
29. Rosalie owns and operates an outlet of Pizza Coltello, a multinational restaurant company, in her hometown. She
started the restaurant after getting a license from the company’s headquarters. She regularly pays the company a fee in
order to use its brand name, products, and methods of operation. Rosalie most likely owns a(n) _____.
a. independent retail store
b. warehouse club
c. chain store
d. franchise
30. Choosing the right distribution channel for a service would:
a. decrease the time the service is made available.
b. vary service quality across different geographic regions.
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c. increase the costs of providing the service.
d. add to customer convenience.
31. Which of the following is a disadvantage of a freestanding store location?
a. It has reduced visibility.
b. It faces stiff competition from retailers.
c. It has high site cost and rent and a lot of nearby competitors.
d. It may be hard to attract customers to a freestanding location.
32. The goal of tactical retailing is to:
a. eliminate the need of segmenting a market.
b. increase the sales of a specific item.
c. increase overhead costs.
d. eliminate the need of new advertising campaigns.
33. Which of the following is a similarity between factory outlets and off-price retailers?
a. Both use low prices and discounts to lure shoppers.
b. Both offer high levels of customized service to customers.
c. Both follow an agile approach to inventory.
d. Both carry multiple product lines that are considerably deep.
34. Lily’s Apparel, a renowned apparel store, focuses on Gen Y customers and provides them with a customized clothing
experience. The store helps the customers to design clothes that appeal to their individual style. Lily’s Apparel has defined
its target market by _____.
a. religion
b. educational qualifications
c. geographic boundaries
d. psychographic characteristics
35. Which of the following is an advantage of retail channel omnification?
a. It allows customers to order products online and pick their orders from stores.
b. It benefits customers as they can shop from the comfort of their homes.
c. It enables retailers to offer competitive prices across their various outlets.
d. It benefits retailers as customers must enter their stores in order to claim their purchases.
36. Which of the following is a difference between off-price retailers and specialty shops?
a. Off-price retailers keep a greater amount of floor stock, whereas specialty shops keep a lesser amount of floor
stock.
b. Off-price retailers charge higher prices for customers, whereas specialty shops charge lower prices for customers.
c. Off-price retailers focus on lean inventory management, whereas specialty shops have an agile approach to
inventory.
d. Off-price retailers focus on providing high quality customer service, whereas specialty shops de-emphasize
customer service.
37. Jamie and his parents are traveling from one part of the city to another. On the way, they stop at a gas station to refuel
the tank. Lanellem is a small self-service retail store attached to the gas station. It sells food items like sandwiches and
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soda as well as nonfood items such as groceries, magazines, and alcohol. Jamie’s mother picks up a few sandwiches and a
magazine for the rest of the journey. According to this scenario, Lanellem is most likely a _____.
a. convenience store
b. specialty store
c. warehouse club
d. category killer
38. A _____ is the originator of a trade name, product, methods of operation, and the like that grants operating rights to
another party to sell its product.
a. broker
b. franchisor
c. consumer
d. wholesaler
39. Which of the following is true of click-and-collect?
a. It requires representatives to sell products door-to-door, in offices, or at in-home sales parties.
b. It employs outbound and inbound telephone contacts to sell directly to customers.
c. It enables consumers to make their purchases online and pick up their orders from physical stores.
d. It allows customers to shop over the Internet and have items delivered directly to their door.
40. Which of the following statements is true of specialty stores?
a. They have the widest product assortment among other retail establishments.
b. They offer virtually no service to customers.
c. They use low prices and discounts to lure shoppers.
d. They carry narrow product lines that are considerably deep.
41. Asif, a member of a local baseball team, broke his bat during a practice match. With the final match scheduled for the
next day, Asif urgently required a new bat. Therefore, he placed an order on Duke.com, an online portal for sports goods,
and he dropped in at its nearest physical store to pick up his order. This is an example of the use of _____.
a. microtargeting
b. click-and-collect
c. telemarketing
d. e-tailing
42. Henry operates an outlet of Moonlight Café, a world renowned fast-food restaurant, in his locality. He started the
restaurant after getting a license from the owners of Moonlight Café and by regularly paying them a fee for the right to
use their brand name, products, and methods of operation. Henry most likely operates a(n) _____.
a. independent retail store
b. warehouse club
c. chain store
d. franchise
43. The management of Sommersin, a newly launched online cosmetics store, wants to analyze how the Web site is faring
in comparison with its competitors. It decides to give free nail color bottles to all customers who submit an online
feedback form. In this scenario, which of the following techniques does the management of Sommersin intend to use?
a. Click-and-collect
b. Retail channel omnification
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c. Microtargeting
d. Big data analytics
44. _____ is a form of nonstore retailing that entails the use of machines to offer goods for sale.
a. Direct retailing
b. Telemarketing
c. Automatic vending
d. E-tailing
45. Herbair, a company that sells herbal shampoos, employs college students part-time to sell its shampoos by going door-
to-door in neighborhoods. Which of the following forms of nonstore retailing does Herbair employ?
a. Direct retailing
b. Telemarketing
c. Automatic vending
d. E-tailing
46. Zeta Inc., a multinational retail corporation, uses a device that notifies the respective store managers whenever a
customer is near their store. It also helps them to map customer foot traffic data. This is an example of _____.
a. cloud computing
b. beacons
c. shopper marketing
d. click-and-connect
47. Benitoss Inc. is a large retail bookseller with its headquarters in the country of Hopstonia. The company owns and
operates 105 bookshops of the brand Bennd Books, which are spread across seven countries. In this scenario, Bennd
Books is a(n) _____.
a. independent retail store
b. warehouse club
c. chain store
d. franchise
48. The Hunt, a liquor store, is famous for its unique and extensive collection of alcoholic beverages. Moreover, its
employees possess up-to-date knowledge of the liquor available in the store, which allows them to assist customers in
their purchasing decisions. The Hunt is an example of a _____.
a. supermarket
b. specialty store
c. warehouse club
d. convenience store
49. Dania Rewatch, a watch store, has created unique interiors at its store using wooden walls and exotic blue tiles.
Different types of watches are displayed under different types of lighting using cool colors like green and violet. Although
the watch collection at Dania Rewatch is not as extensive as other watch stores, customers prefer shopping there because
of its ambience. According to this scenario, which of the following factors is most likely to influence the atmosphere of
Dania Rewatch?
a. Psychographic factors
b. Fixture type and density
c. Merchandise type and density
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d. Visual factors
50. _____ represents all the activities directly related to the sale of goods and services to the ultimate consumer for
personal, nonbusiness use.
a. Product development
b. Production
c. Retailing
d. Manufacturing
51. _____ is the technique used to sift through data collected by point-of-purchase scanning equipment and help retailers
find ideal locations for each product.
a. Big data analysis
b. Shopper marketing
c. Market-basket analysis
d. Shopper analytics
52. Briefly explain the actions a retailer should take to address retail product/service failures.
53. What is brand cannibalization? Why is it dangerous to the retailer?
54. Why is it important to maintain service quality in service industries? Explain the four areas that service distribution
should focus on to maintain the quality of service.
55. Briefly explain the process of defining a target market.
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Answer Key
1. False
2. False
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