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An electronic retailer advertised that returns would be quick and easy if customers are
dissatisfied with a product. However, customers were unable to find any detailed
information about the retailer's return policies on its website and on the purchase
invoice. This lack of information is an example of a _____.
A. market gap
B. delivery gap
C. communications gap
D. research gap
E. knowledge gap
Answer:
The Brainchild is a store that specializes in educational toys for children. In order to
increase the probability of customers visiting the store, it has now introduced offers
such as discounts, gift wrapping, and free-shipping. The Brainchild is looking to
increase the chances of customer purchases by:
A. decreasing an importance weight.
B. increasing a performance belief.
C. decreasing the performance belief for a competitive retailer.
D. adding new benefits.
E. focusing on all benefits.
Answer:
_____ refers to funds vendors give retailers to cover lost gross margin dollars.
A. Markdown money
B. Slotting allowance
C. Chargeback
D. Tariff
E. Buyback
Answer:
_____ is an analytical tool which enables retailers to know of units they need sell to
begin making a profit.
A. Yield management
B. Break-even analysis
C. Keystoning
D. Price lining
E. Cost-plus pricing
Answer:
Retailers can foster customer loyalty by:
A. having a generalized organizational mission statement.
B. providing good customer service.
C. having no distinct brand image.
D. trying to attain qualitative objectives rather than quantitative ones.
E. using a mass advertising strategy.
Answer:
Which of the following statements on markdowns is FALSE?
A. Markdowns are an unnecessary part of business if planned correctly.
B. Markdowns are an opportunity to increase sales.
C. Promotional markdowns increase customer flow.
D. If markdowns are too low the buyer may be not purchasing enough merchandise.
E. If markdowns are too low the buyer may be pricing their merchandise too low.
Answer:
Which of the following statements does NOT describe the approach which deals with
cycle (base) stock?
A. A retailer tries to reduce the base stock to keep its inventory investment low.
B. One approach for reducing the base stock is to reorder and receive merchandise from
the vendor more often.
C. Frequent orderings with smaller quantities will reduce transportation costs.
D. Shorter delivery time from the vendor will reduce the level of base stock.
E. Shorter lead time from the vendor will reduce the level of base stock.
Answer:
Hot Topic LLC appeals to tweens and teens through their Gothic frocks, fad movie gear,
piercing paraphernalia, and popular t-shirts and posters. The staff at Hot Topic wears
the merchandise. Also, they are active in helping their young customers choose from the
hip merchandise. The teens and tweens can be considered the:
A. target market.
B. marketing mix.
C. marketing objective.
D. retail format.
E. retail mix.
Answer:
In the late 90s, Sears spent much of its communication budget advertising the "Softer
Side of Sears" campaign since it felt the customer knew very little of Sears' apparel
assortments and thus there would be a substantial return from advertising apparel versus
advertising the more known appliances. What principle for budget allocation was Sears
potentially using?
A. Percentage of sales method
B. Rule of thumb method
C. Asset principle
D. High-assay principle
E. Affordable method
Answer:
Judy regularly buys cosmetics from a salesperson. She invites her friends over to her
home for an evening of socializing along with everyone getting makeovers. Afterwards,
the salesperson showed the product that was used for their makeovers, and they were
given the opportunity to purchase the product and browse through a catalog for
additional products to purchase. This is an example of a(n):
A. party plan system.
B. multilevel network.
C. infomercial.
D. pyramid scheme.
E. omniretailing program.
Answer:
Which of the following would be the best example of an output measure?
A. The square feet of shelf space allocated to a particular item
B. The expense of utilities
C. The purchase of new inventory
D. The number of employees it takes to run a store
E. Net profits for the store for the year
Answer:
Douglas decided to order a Deluxe Werewolf mask from a catalog and called the
toll-free number. Although the call was answered immediately, the operator took
Douglas's information and transferred the call twice to different departments. What
bothered Douglas was that he had to repeat his contact information and customer ID
number to different operators. The first operator was not trained to handle customer
queries. What type of service gap did Douglas encounter?
A. Knowledge gap
B. Standards gap
C. Research gap
D. Communication gap
E. Delivery gap
Answer:
How does a national retailer benefit from selling private-labels?
A. The retailer spends less on advertising private-label brands and therefore saves
money.
B. Since the retailer carries the cost of advertising of a private-label, the costs are
covered by the consumer.
C. Since nationwide stores carry the private brands, it gives little choice to the
consumer about assortments.
D. Since it is a national retailer, customers will naturally know the private-label.
E. By selling private-labels, a national retailer can differentiate its assortments.
Answer:
When Lena went to buy walking shorts, she first noticed the store had three racks of
shorts. Then, she noticed all the shorts on one rack were $14.99, all the shorts on the
second rack were priced at $19.99, and all the shorts on the third rack were priced at
$24.99. What type of merchandise presentation did Lena see?
A. Price lining
B. Idea-oriented presentation
C. Tonnage merchandising
D. Frontal presentation
E. Gondola presentation
Answer:
What measures the profitability of products that are sold?
A. Accounts receivable
B. Asset turnover
C. Gross margin
D. Owner's equity
E. Shrinkage
Answer:
Which type of consumer decision-making process will MOST likely result in an
impulse buy?
A. Extended problem solving
B. Habitual decision making
C. Utilitarian shopping
D. Limited problem solving
E. Composite segmentation
Answer:
Which of the following characteristics is most likely to be the more sustainable
competitive advantage?
A. Extended hours of operation
B. Bigger warehouses
C. Ability to get scarce merchandise
D. More employees
E. Greater assortment of merchandise
Answer:
A retail strategy is a statement that identifies all the following except:
A. the target market.
B. the format that the retailer plans to use.
C. the employee compensation plan.
D. the bases upon which the retailer plans to build a sustainable competitive advantage.
Answer:
Parents shopping for their children's school uniforms and stationery are motivated by
_____ which involve accomplishing a specific task.
A. emotional needs
B. hedonic needs
C. utilitarian needs
D. cultural requirements
E. impulse buying desires
Answer:
Reese designed his gift shop specializing in teen room decoration in a free-form layout.
He used music, lighting, and color to suit the teen tastes. What could Reese add to help
customers locate specific products and departments?
A. Discounts
B. Signage
C. Longer hours
D. Frequent sales
E. Advertisement in local teen hangouts
Answer:
Which of the following statements does NOT describe a benefit of markdowns for a
retailer?
A. Markdowns generate cash flow to pay for new merchandise.
B. It is a way to make room for new merchandise.
C. It rids the store of obsolete merchandise.
D. It increases customer traffic.
E. It is a way to gain a higher gross margin.
Answer:
_____ is the segmentation method that uses multiple variables to identify customers in
the target segment according to their benefits sought, lifestyles, and demographics.
A. Hedonic need identification
B. Buying situation segmentation
C. Composite segmentation
D. Multiattribute model
E. Trickle-down approach
Answer:
The _____ focuses on reducing the carbon footprint caused by the transportation of
food throughout the world.
A. core insight plan
B. locavore movement
C. sustainable agriculture act
D. limited liabilities act
E. non-compete clause
Answer:
Hector ordered a model fighter jet at a discounted price of $22 from a hobby catalog.
However, he was charged extra $10 as shipping charges which was not mentioned
anywhere on the catalog. He decided never to buy anything from that catalog again.
Due to a _____, the catalog retailer lost a customer.
A. delivery gap
B. communications gap
C. market gap
D. knowledge gap
E. research gap
Answer:
The Americans with Disabilities Act:
A. states that stores built before 1990 must be fully accessible for the disabled.
B. states that it is illegal to discriminate in hiring and termination decisions concerning
people between the ages of 40 and 70.
C. prohibits unequal pay for men and women who perform equal work or work of
comparable worth.
D. protects people with disabilities from discrimination in employment, transportation,
public accommodations, telecommunications, and the activities of government.
Answer:
Calvin enjoys dining at Dawson's, a fast food restaurant. He feels that they make the
best french-fries for a low price. However, when it comes to dessert, he feels he's a cake
connoisseur. He prefers to have cake only at Marina's Patisserie, even though a piece of
cake costs $7.00. Calvin's patronizing of Dawson's and Marina's demonstrates a
behavior called:
A. cross-shopping.
B. comparison shopping.
C. composite segmentation.
D. cross-docking.
E. postpurchase satisfaction.
Answer:
When Peridot, a department store, centralized all its buying activities, the store and
department managers were able to spend more time working with sales associates and
talking with customers. As a result, the company was able to better understand the
expectations of the customers. Which of the following gaps was reduced as a result of
the centralization process?
A. Knowledge gap
B. Communication gap
C. Delivery gap
D. Standards gap
E. Research gap
Answer:
Bloomsberry LLC, a fashion retailer, periodically keeps updating their collection of
apparel. Woolen apparels are stocked during winter, and cotton apparels are stocked
during summer. Which of the following is this an example of?
A. Stockout
B. B-stock
C. Unique merchandise
D. Tailored assortments
E. Clearance sale
Answer:
Large retail chains can coordinate their buying and selling activities by:
A. reducing turnover in sales associates.
B. eliminating the information systems.
C. assigning employees to coordinating roles.
D. decentralizing the buying decisions.
E. increasing loss prevention efforts.
Answer:
Which of the following processes is an unstructured form of personal questioning used
in market research and involves extensive probing to get individual respondents to talk
in detail about a subject?
A. Coolhunting
B. Crowd manipulation
C. Focus group interview
D. In-depth interview
E. Showrooming
Answer:
How do retailers use customer transaction data?
Answer:
Compare and contrast the advantages of a centralized organizations and a decentralized
organization.
Answer:
Explain the differences between an autocratic leader and a democratic leader.
Answer:
Define debt-to-equity ratio.
Answer:
What are the ways in which the use of technology is reducing the delivery gap?
Answer:
What are the ways markdown merchandise can be consolidated?
Answer:
What steps do retailers take in order to increase the chances that customers will easily
convert their positive merchandise or service evaluation into purchases?
Answer:
What is the retailer's role in a supply chain?
Answer:
What are the characteristics of a site that affect store sales and thus are considered in
selecting a site?
Answer:
How can retailers enhance customer loyalty?
Answer:
What can a retailer do to increase inventory turnover, and what are the drawbacks to
these approaches?
Answer:
Describe practices which retailers use to convert good customers into their best
customers.
Answer:
How is an end-cap an effective display?
Answer:
Why do category specialists or "category-killer" retailers choose to locate their stores in
freestanding sites or in power centers?
Answer:
Identify and describe the measures retailers use to assess their financial performance.
Answer:
What are the objectives of frequent-shopper programs?
Answer:
What is the purpose of the data warehouse and how do retailers use it?
Answer:
What is the major disadvantage associated with using the competitive parity method of
determining a retail communication budget?
Answer:
What are the strengths of operating with a high/low pricing strategy?
Answer:
