Which of the following statements about the makeup of the American household is
FALSE?
a. Household growth and consumer demand go together.
b. The number of households without children has decreased in recent years.
c. The retailer, like the social scientist, has little knowledge of how joint decision
making occurs or does not occur in households of unmarried adults.
d. The number of unmarried couples has increased in recent years.
e. Seventy-five percent of American households are not directly concerned about
back-to-school sales and other family-oriented retail activities.
Because many retailers have access to the same merchandise, high-profit performing
retailers have sought to use _____ in order to develop a protected niche in the
marketplace so that they cannot be easily copied by the competition.
a. revenue management
b. yield management
c. asset management
d. store positioning
e. category killers
When retailers establish specific outcomes and then estimate the amount of advertising
funds that are needed to achieve these results, it is called the:
a. budget allocation method.
b. affordable method.
c. task-and-objective method.
d. percentage-of-sales method.
e. co-op planning method.
The North American Industrial Classification System (NAICS) code is used to reflect
the:
a. location of the retailer.
b. industrial category of the retailer.
c. type of merchandise the retailer sells.
d. size of the retailer in terms of sales dollars.
e. margin the retailer maintains in its industrial category.
Albertson’s Supermarkets recently began offering DVD rentals to compete with
Blockbuster. What type of competition is this?
a. Intertype
b. Intratype
c. Scrambled
d. Mixed share
e. Mixed location
A(n)_______ vertical marketing channel exists when one of the members takes the
initiative to manage the channel.
a. administered
b. allocated
c. conventional
d. concentrated
e. concentric
If the top four firms of an industry account for more than 60 percent to 80 percent of the
market, which of the following occurs?
a. Monopolistic competition
b. Oligopoly
c. Pure monopoly
d. Pure competition
e. Perfect competition
Which of the following are examples of compatible businesses?
a. A home improvement store and a beauty shop
b. A drugstore and a restaurant
c. A post office and a hair salon
d. A hardware store and a fast-food restaurant
e. A furniture store and a leather store specializing in recliners
A(n) ______occurs when the manufacturers sell their goods directly to the final
consumer.
a. supply chain width
b. selective distribution channel
c. direct supply chain
d. exclusive distribution channel
e. indirect supply chain
An example of coercive power is a manufacturer’s:
a. refusal to sell merchandise to any retailer who sells to diverters.
b. offer to increase the cash discounts if the retailer meets a sales quota.
c. offer a co-op promotional plan to all retailers in a key city.
d. payment for a prominent display area in a retailer’s store.
e. act of sending the retailer a Christmas card without a year-end bonus.
Maintained markup percentage equals:
a. initial markup percentage – [(reduction percentage)(100 percent – initial markup
percentage)].
b. (original retail price – cost)/original retail price.
c. initial markup percentage + [(reduction percentage)(100 percent – initial markup
percentage].
d. (gross margin + alteration costs + reductions) / (net sales + reductions).
e. (percentage markup on selling price) / (100 percent – percentage markup on selling
price).
Nike engaged in dual distribution when it began:
a. to sell through its own retail outlets as well as independent retailers.
b. to sell to retailers competing with its existing retailers.
c. to encourage two different distributors to serve the same retailer.
d. to offer two different prices to retailers, based on volume purchased.
e. to produce private label brands for the retailers currently selling Nike shoes.
If prices become too high, merchandise selection too limited, or services too poor,
residents of these communities will travel to larger communities to shop. This is known
as:
a. Outsourcing.
b. Store positioning.
c. Outshopping.
d. Internet shopping.
e. Transport shopping.
The first US based chain store is 1859 was:
a. Walmart.
b. Sears Roebuck.
c. JCPenny.
d. Woolworth’s.
e. The Great Atlantic and Pacific Tea Company (A&P).
Which element of the store’s environment is concerned with the store’s retail identity,
graphics, and POS signage?
a. Merchandising
b. Productivity
c. Store design
d. Store planning
e. Visual communications
When the manufacturer offers a retailer a percentage discount in exchange for
performing certain wholesaling and retailing services, the manufacturer is offering a
_____ discount.
a. cash rebate
b. Trade
c. performance incentive
d. Quantity
e. Cash
Retailers should remember that Baby Busters:
a. have an annual spending power of over $800 billion.
b. generally have similar buying behavior as boomers.
c. feel alienated and angry at the baby boomers’ culture and lifestyle which they believe
has placed the economy in such poor shape.
d. have buying behavior patterns that make it easy for retailers to reach them.
e. usually behave as the boomers did 20 years ago.
_____ is the most frequently used advertising medium in retailing.
a. Television
b. The Internet
c. Direct mail
d. Radio
e. Newspaper
A buyer is given cash discount terms of 3/10, net 30, MOM. The invoice for the goods
is dated May 14. When will the discount period expire?
a. May 25
b. May 22
c. June 10
d. June 15
e. June 30
A sporting goods store that has photo mural displays of people engaged in different
sports is an example of:
a. value as unique.
b. resource integration.
c. service as basis of human exchange.
d. value co-creation.
e. sensory marketing.
Which of the following is an incorrect statement regarding strategic planning?
a. A short-term commitment of resources is required by strategic planning.
b. The strategic planning process is started by assessing the external environment.
c. Effective strategic planning can aid a retailer in contending with competitors.
d. Strategic planning takes into consideration how a retailer responds to the
environment.
e. Ineffective strategic planning can lead to a decrease in a retailer’s level of
profitability.
Target has recently introduced Archer Farms Market as a separate department in its
stores. This is an example of:
a. two different independently owned retailers operating within one retail store.
b. Target allowing a national food manufacturer to set up its operations within Target’s
store.
c. leveraging of a famous national brand from France to operate in the U.S.
d. a private label branding strategy extended to a department.
e. reintroducing products that have strong name recognition but that have fallen from
the retail scene.
A planning orientation refers to a retail manager’s continual attention to external forces.
An interaction can be hard surfaced if it is a intangible interface or soft surfaced if it is
an tangible interface.
Single-unit retailers have no inherent advantages over their chain store competitors,
despite the fact that single-unit owners are often harder-working and more motivated.
Advertising is paid, nonpersonal communication and includes communication about
products, services, institutions, and ideas.
The Consumer Product Safety Act specifies the retailer’s responsibilities in monitoring
the safety of consumer products.
Gross margin is equal to net cost of goods sold minus net sales.
Secondary markets have become attractive to retailers because, among other factors,
they have lower labor costs.
Pricing is an interactive decision made in conjunction with the firm’s mission statement,
its goals and objectives, its strategy, its operational management, and administrational
management.