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Chapter 14: Retailing
Copyright Cengage Learning. Powered by Cognero.
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1. In a franchise, a franchisor pays a franchisee for the right to use its name, product, and methods of operation.
a.
True
b.
False
ANSWER:
False
2. Service quality is a priority in service industries because they are so customer oriented.
a.
True
b.
False
ANSWER:
True
3. Target markets in retailing are often defined by demographics, geographic boundaries, and psychographics.
a.
True
b.
False
ANSWER:
True
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
ANSWER:
False
5. Salespeople should practice trading-up techniques, whether customers need those products or not, to increase overall
product sales.
a.
True
b.
False
ANSWER:
False
6. Specialty stores compete on the basis of low prices, high turnover, and high volume.
a.
True
b.
False
ANSWER:
False
7. Suggestion selling by sales or service associates should always help shoppers recognize true needs rather than sell them
unwanted merchandise.
a.
True
b.
False
ANSWER:
True
8. The use of mobile devices and social media while browsing, comparison shopping, and making a purchase limits
retailers from accessing any useful information about their customers, thereby giving retailers no concrete way to appeal
to shoppers.
a.
True
b.
False
ANSWER:
False
9. Customers are always skeptical about the reasons for retailer errors, however, their reactions to mistakes such as
product stockouts and unexpectedly poor quality products are limited to casual indifference.
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Chapter 14: Retailing
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a.
True
b.
False
ANSWER:
False
10. Shopper marketing is responsible for the decline of the partnership trend between brand manufacturers and specific
retailers.
a.
True
b.
False
ANSWER:
False
11. Unlike nonstore retailing, in-store retailing enables customers to shop without visiting a physical store location.
a.
True
b.
False
ANSWER:
False
12. Since retail prices are usually based on the cost of the merchandise, an essential part of pricing is efficient and timely
buying.
a.
True
b.
False
ANSWER:
True
13. Establishing channel-wide network coherence is a key factor in maintaining service quality.
a.
True
b.
False
ANSWER:
True
14. In-store retailing adds a level of convenience for customers who wish to shop from their current locations.
a.
True
b.
False
ANSWER:
False
15. Will, a salesperson 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
ANSWER:
False
16. Determining a target market is optional while creating the retailing mix.
a.
True
b.
False
ANSWER:
False
17. Higher prices often indicate a level of exploitation that weakens the prestigious image of retailers.
a.
True
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Chapter 14: Retailing
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b.
False
ANSWER:
False
18. Retailers can better acquire and use assets when they customize store layouts and merchandise mixes to the tastes of
local consumer bases.
a.
True
b.
False
ANSWER:
True
19. 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.
ANSWER:
b
20. Redoubt Nation, a specialty store that sells adventure sports gears, employs one salesperson per customer. Each
salesperson is required to influence customers to purchase items related to the products they have purchased. In this
scenario, Redoubt Nation is using _____ as its marketing strategy.
a.
low employee density
b.
suggestion selling
c.
merchandise type
d.
trading up
ANSWER:
b
21. _____ is the technique used to sift through the data collected by point-of-purchase scanning equipment.
a.
Big data analysis
b.
Shopper marketing
c.
Market-basket analysis
d.
Shopper analytics
ANSWER:
c
22. _____ 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
ANSWER:
c
23. 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
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c.
telemarketing
d.
e-tailing
ANSWER:
b
24. Which of the following statements is true of retail channel omnification?
a.
Physical and online stores are combined into a single system for delivering on customer demand.
b.
Consumers are required to pick up their orders from a physical store after purchasing them online.
c.
Physical stores are replaced by warehouses to store goods that can be purchased online.
d.
Consumers are required to visit physical stores before getting access to their online store.
ANSWER:
a
25. Providing great customer service is one of the most challenging elements in the retail mix because:
a.
customer relations do not increase brand value.
b.
customers are indifferent to service quality.
c.
customer expectations for service vary greatly.
d.
customers do not trust retail salespeople.
ANSWER:
c
26. At the store level, the goal of tactical retailing is to:
a.
eliminate the need for segmenting a market.
b.
increase the sales of a specific item.
c.
increase overhead costs.
d.
eliminate the need for new advertising campaigns.
ANSWER:
b
27. _____ 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
ANSWER:
a
28. Henry runs Moonlight Café, a world renowned fast-food restaurant, in his locality. He started the restaurant after
getting a license from Moonlight Café and by regularly paying it a fee for the right to use its 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
ANSWER:
d
29. Service delivery can be improved by:
a.
implementing a no-return policy after sale.
b.
maximizing wait times for customers.
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c.
increasing the costs of services provided.
d.
choosing the right distribution channel.
ANSWER:
d
30. A _____ is a discount store that carries a vast depth and breadth of product within a single product category.
a.
supercenter
b.
specialty discount store
c.
warehouse club
d.
full-line discount store
ANSWER:
d
31. The first element in the retailing mix is the _____.
a.
retail promotion
b.
product offering
c.
retail location
d.
product pricing
ANSWER:
b
32. A(n) _____ is a retail business where the operator is granted a license to operate and sell a product under the brand
name of a larger supporting organizational structure.
a.
chain store
b.
independent retail store
c.
franchise
d.
factory outlet
ANSWER:
c
33. Which of the following statements 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 doors.
ANSWER:
c
34. 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
ANSWER:
b
35. _____ is an emerging retailing trend that employs market data to best serve customers as they prepare to make a
purchase.
a.
Channel omnification
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b.
Click-and-collect
c.
Shopper marketing
d.
Cloud computing
ANSWER:
c
36. _____ 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
ANSWER:
c
37. 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 lower 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.
ANSWER:
c
38. In addition to making shopping easy and convenient for the customer, an effective layout:
a.
heightens the olfactory sense of the customers.
b.
provides customers with the ability to easily replace sold items.
c.
can persuade customers to purchase expensive products.
d.
has a powerful influence on traffic patterns and purchasing behavior.
ANSWER:
d
39. 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.
ANSWER:
c
40. Which of the following is a similarity between factory outlets and off-price retailers?
a.
Both sell at prices 25 percent or more below traditional department store prices.
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.
ANSWER:
a
41. The Hunt, a liquor store, is famous for its unique and extensive collection of alcoholic beverages. Its employees
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Chapter 14: Retailing
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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
ANSWER:
b
42. Which of the following statements is true of big data analytics?
a.
It analyzes customers' needs based on their proximity to a retail store.
b.
It focuses on understanding the behavior of a brand's target customers.
c.
It enables retailers and suppliers alike to gain better customer insights.
d.
It allows customers to evaluate the service quality offered by retailers.
ANSWER:
c
43. Strategic retailing goals typically focus on:
a.
reducing costs of goods sold.
b.
increasing costs of goods sold.
c.
reducing return on assets or equity.
d.
not using a retailing mix.
ANSWER:
a
44. 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.
a beacon
c.
shopper marketing
d.
click-and-connect
ANSWER:
b
45. 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 canceling return policies.
d.
If handled effectively, they can result in higher customer loyalty.
ANSWER:
d
46. Lily's Apparel, a renowned apparel store, focuses on Gen Y customers and provides them with a customized clothing
experience. Lily's Apparel has defined its target market by _____.
a.
religion
b.
educational qualifications
c.
geographic boundaries
d.
psychographic characteristics
ANSWER:
d
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Name:
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Chapter 14: Retailing
In short, the best retailers treat customer disappointments as opportunities to interact with and improve
relations with their customers. Evidence indicates that successful handling of such failures can sometimes
yield even higher levels of customer loyalty than if the failure had never occurred at all.
51. Briefly explain the process of defining a target market.
ANSWER:
Answers will vary. The first and foremost task in developing a retail strategy is to define the target market.
This process begins with market segmentation. Successful retailing has always been based on knowing the
customer. Sometimes retailing chains flounder when management loses sight of the customers the stores
should be serving. Customers' desires and preferences change over their personal and professional lifespans,
and it is important for retailers to be sensitive to these changes by migrating them to new and different
products as their buying patterns evolve.Target markets in retailing are often defined by demographics,
geographic boundaries, and psychographics. For example, supermarket chain Publix recently introduced an
app that makes shopping easier and more convenient for its customers. App users can even have groceries
delivered directly to their homes to reduce shopping time. This app is targeted squarely at Millennials, who
often have busy schedules and are technology savvy. Whole Foods, on the other hand, is opening smaller,
more convenient, and more cost-effective store formats targeted at Millenials. Determining a target market is
a prerequisite to creating the retailing mix. For example, Target's merchandising approach for sporting goods
is to match its product assortment to the demographics of the local store and region.
