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Retailers need to provide a consistent brand image of themselves and their private-label
merchandise across all channels.
Answer:
In a Dutch auction, the retail buyer provides a specification for what they would like to
be produced for their private-label products, and then manufacturers bid on the
opportunity to be the supplier.
Answer:
To reduce the delivery gap and provide a consistent service, retailers should ensure that
employees get approval from their managers before making any decisions regarding
customer service.
Answer:
The quantity of merchandise has a bigger impact on profitability than allocation
decisions.
Answer:
The biggest difference between service retailers and merchandise retailers is their
profits.
Answer:
The debt-to-equity ratio is the retailer's short- and long-term debt divided by the value
of the owners' or stockholders' equity in the firm.
Answer:
Stores offer immediate gratification to customers.
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Drycleaners, hair salons, and auto repair businesses are considered retailers.
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When using the analog approach, the retailer finds a site and then describes the desired
trade area characteristics.
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Gross margin are the total revenues received by a retailer that are related to selling
merchandise during a given time period minus returns, discounts, and credits for
damaged merchandise.
Answer:
The buildup of inventory in an uncoordinated channel is called the bell-curve effect.
Answer:
The legal/political system in countries often dictates the human resource management
practices that retailers can use.
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Drop shipping is the process of capturing value from and/or properly disposing of
merchandise returned by customers and/or stores.
Answer:
The store design that provides a major aisle to facilitate customer traffic with access to
the store's multiple entrances is called the racetrack layout.
Answer:
Aided recall is the highest level of brand awareness.
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Customers have two sources of information: internal and external.
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The consequences of security breaches are worse for the retailer than the consumer if a
credit card number was stolen from their place of business.
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A retail format describes the nature of the retailer's operations that it will use to satisfy
the needs of its target market.
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Building strong relationships with wholesalers is one of the three approaches for
developing a sustainable competitive advantage.
Answer:
Electronic data interchange (EDI) is a set of activities and techniques firms employ to
efficiently and effectively manage the flow of merchandise from the vendors to the
retailer's customers.
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The formula for calculating inventory turnover is: Inventory turnover = Cost of
goods/Total inventory.
Answer:
Stores provide hedonic benefits when it enables customers to locate and purchase
products in an efficient and timely manner with minimum hassle.
Answer:
Direct selling is a retail channel where salespeople interact with customers face-to-face.
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The first step in the strategic retail planning process is to define the business mission.
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Retailers are a key component in a supply chain that links manufacturers to consumers.
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Conducting a competitive analysis is typically the first step in the selection of a site.
Answer:
Vertical price fixing involves agreements between competing retailers to illegally set
the same prices.
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Vendor-managed inventory (VMI) is an approach for improving supply chain efficiency
in which the vendor is responsible for maintaining the retailer's inventory levels.
Answer:
Slotting allowances are charges imposed by a retailer to stock a new item.
Answer:
A premium offers an item for free or at a bargain price to reward some type of behavior,
such as buying, sampling, or testing.
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Customer loyalty is limited to ensuring satisfaction by offering a wide assortment of
products.
Answer:
McDonald's, with its use of specific policies and procedures to provide an acceptable,
consistent service quality, would best be described as using the personalized approach
for customer service.
Answer:
Communication objectives are specific goals related to the retail communication mix's
effect on the customer's decision-making process.
Answer:
Predatory pricing arises when a dominant retailer sets prices below its costs to drive
competitive retailers out of business.
Answer:
(p.103-104) Retailer loyalty can be increased by:
A. rewarding customers for frequent purchases.
B. offering only private-label brands.
C. decreasing customers' importance weights.
D. encouraging cross-shopping.
E. offering alternatives for customers' preferred brands.
Answer:
In a(n) _____, merchandise is allocated to stores on the basis of forecasted demand.
A. push supply chain
B. cross check logistic strategy
C. influential logistic strategy
D. pull supply chain
E. cost efficient logistic strategy
Answer:
Luke was interested in developing a communication budget for his holistic vitamin
shop which he will be opening in thirty days. He is planning a few promotional sales
and will advertise through local newspapers. With the available information, what
method would be best for Luke to pursue to develop his communication program?
A. Affordable method
B. Objective-and-task method
C. Percentage-of-sales method
D. Competitive-parity method
E. Developmental method
Answer:
A party plan system:
A. is a form of direct-response advertising.
B. is a form of direct selling involving salespeople.
C. forms a part of automated retailing.
D. uses a master distributor as lead salesperson.
E. is a recruiting tool for multilevel networks.
Answer:
Which of the following is NOT true of category management?
A. Managing merchandise within a category by brand can lead to inefficiencies because
it fails to consider the interdependencies between SKUs in the category.
B. The category management approach to managing breakfast cereals in supermarkets
should have one buyer or category manager who oversees all merchandising activities
for the entire category.
C. A category manager ensures that the store's assortment includes the "best"
combination of sizes and vendors.
D. A category manager chooses vendors that will get the most profit from the allocated
space.
E. A category manager is also called a category captain and works with vendors to get
the most profit from collaborative relationships.
Answer:
Louise runs a successful shop in Chicago featuring unique dolls from Western Europe.
Louise speaks German and a little Dutch, but no Italian, French or Spanish. Which of
the following is the best way for Louise to procure dolls from all western European
countries?
A. She can visit wholesale market centers throughout the year.
B. She can attend trade shows in the United States and meet vendors there.
C. She can establish a time for vendors to visit her in her own office.
D. She can buy from local artists of European descent.
E. She can utilize a resident buying office when she visits Europe to buy.
Answer:
Which of the following has enabled retailers to personalize their direct mail to all
customers?
A. Customer relationship management programs
B. Employee experience management programs
C. Employee feedback management programs
D. Partner relationship management programs
E. Sales force management programs
Answer:
There are many Kroger supermarkets. Because of the principle of _____, no individual
store should be held financially responsible for the upkeep of the supermarket's
headquarters in Cincinnati, Ohio, or for the salary of the CEO.
A. unity
B. empowerment
C. delegation
D. accountability
E. equity
Answer:
An efficient supply chain and information system can improve its return on assets
(ROA) because the system _____.
A. increases sales and net profit margins, without increasing inventory
B. increases sales and net profit margins by increasing inventory
C. reduces sales, but increases net profit margins by increasing inventory
D. reduces net profit margins, but increases sales by increasing inventory
E. reduces net profit margins by festering sales, without increasing inventory
Answer:
Which of the following statements is true of references?
A. References help in screening up to 15% of applicants that have applied for a
vacancy.
B. References provide an insight about how hard potential employees will work.
C. References provide information about the employee's history and personal health.
D. References are a good way to verify information given on an application form.
E. References involve detailed interviews with the applicant.
Answer:
Calculate the return on investment for an advertisement from the given data. Net sales
is $1000, and advertising cost is $50.
A. 18
B. 19
C. 21
D. 23
E. 25
Answer:
Which of the following statements is true of a sustainable competitive advantage?
A. It is not easily copied by the competitors.
B. It cannot be maintained over a long period of time.
C. It can only be maintained over a short period of time.
D. It can be easily copied by the competitors.
E. It can be achieved by reducing the price of the product.
Answer:
Which of the following is not a reason why an efficient supply chain is important to
retailers?
A. Improved product availability
B. Higher return on investment
C. Strategic advantage
D. Trendier merchandise
E. Improved in-stock position
Answer:
What type of a retail store is Costco considered to be?
A. A supercenter
B. A hypermarket
C. A category specialist
D. A warehouse club
E. A department store
Answer:
_____ occurs when customers gather information from a retailer's channel and buy
products from a competitor's channel.
A. Channel expansion
B. Channel integration
C. Channel migration
D. Omniretailing
E. Automated retailing
Answer:
Ybor Square is a small shopping center located in the part of Tampa known as Ybor
City. The shopping center building used to be a cigar factory that prospered at the turn
of the 20th century when Cuban and Italian immigrants settled in the Tampa Bay area.
Now, it houses small antique stores, bars, and restaurants that have grown to be central
to Ybor City's night life. It is an example of a:
A. convenience center.
B. regional center.
C. price-oriented center.
D. specialty center.
E. theme/festival center.
Answer:
Ashley's is a clothing retailer. It recently launched a new range of cotton and linen
clothing aimed at women in the Middle East countries. Light fabrics are preferred in
these countries owing to the hot climate. The segmentation approach used by Ashley's
is:
A. lifestyle segmentation.
B. geographic segmentation.
C. demographic segmentation.
D. psychographic segmentation.
E. geodemographic segmentation.
Answer:
The grouped location approach is based on the principle of _____, which states that a
cluster of similar and complementary retailing activities will generally have greater
drawing power than isolated stores that engage in the same retailing activities.
A. multiple risk
B. analog approach
C. cumulative attraction
D. consumer spotting
E. diminishing adjacent
Answer:
When serving brand loyal customers, which of the following factors is most important
for a retailer?
A. Encouraging cross-shopping
B. Offering only private-label brands
C. Offering only national brands
D. Offering suitable alternatives
E. Offering specific brands
Answer:
Which of the following is a third tier department store?
A. Macy's
B. Neiman Marcus
C. TJ Maxx
D. Nordstrom
E. JCPenny
Answer:
Losses due to shoplifting can be reduced by _____.
A. reducing compensation for employees
B. the price of the merchandise
C. better relationships with local law enforcement agencies
D. the quality of the assortments
E. store design
Answer:
The pattern of buying both premium and low-priced merchandise or patronizing both
status-oriented retailers and price-oriented retailers is called _____.
A. cocooning
B. comparison shopping
C. cross-retailing
D. retailer loyalty
E. cross-shopping
Answer:
A _____ is the price against which buyers compare the actual selling price of the
product, and thus it facilitates their evaluation process.
A. MSRP price
B. break-even price
C. markup price
D. reference price
E. maintained markup
Answer:
If there many advantages to selling national brands, why do retailers still carry
private-label brands?
A. Private-label brands yield higher profits to retailers.
B. Private-label brands require less investment for a retailer from design to display.
C. Customers have loyalty to national brands.
D. National brands have better quality overall than private-label brands.
E. National brands offer a retailer more flexibility on how merchandise is displayed and
advertised.
Answer:
A(n) _____ describes the nature of the retailer's operations that it will use to satisfy the
needs of its target market.
A. situation analysis
B. organizational chart
C. competitor analysis
D. market research report
E. retail format
Answer:
As Dean calculates his current assets for his used video game store, he is sure to include
which of the following?
A. Merchandise inventory
B. Accrued liabilities
C. Fixed assets
D. Notes receivable
E. Retained earnings
Answer:
The _____ identifies the activities to be performed by specific employees and
determines the lines of authority and responsibility in the firm.
A. organization culture
B. organization strategy
C. organization structure
D. market situation
E. market positioning
Answer:
When the CEO of The Home Depot visits stores, he wears an orange apron like all store
associates. As he pushes carts from the parking lot, he chats with the high school
students typically assigned to the task. By doing this, he is able to learn about the store
and make the young associates feel important. This is The Home Depot's way of:
A. creating store evaluations.
B. empowering young associates.
C. encouraging young associates to consider The Home Depot for a career.
D. reducing status differences.
E. finding out about the store management.
Answer:
When customers go shopping to accomplish a specific task, they are seeking to satisfy:
A. emotional needs.
B. hedonic needs.
C. utilitarian needs.
D. cultural requirements.
E. impulse buying desires.
Answer:
Which of the following is an excellent source of information about a retailer's offering
that helps in increasing customer satisfaction?
A. Discount coupons
B. Employee handbook
C. External environmental assessments
D. Customers' complaints
Answer:
Which of the following segmentation methods would be most appropriate for a retailer
selling fishing tackle and bait?
A. Personality segmentation
B. Buying situation segmentation
C. Demographic segmentation
D. Benefit segmentation
E. Lifestyle segmentation
Answer:
Why would a discount store have a lower gross margin percent than a jewelry store?
A. Discount stores are only beginning to explore gross margin in pricing decisions.
B. Jewelry stores cannot offer the variety that discount stores offer.
C. Discount stores traditionally do not profit as well as jewelry stores.
D. Discount stores have a lower priced merchandise strategy.
Answer:
Geraldo went to the supermarket to buy a bottle of chocolate syrup. While there, he saw
the latest copy of National Enquirer at the checkout stand. He had not planned on
buying the magazine, but on the spur of the moment, he bought himself a copy. This
decision by Geraldo is an example of:
A. impulse buying.
B. a habitual solution.
C. expected behavior.
D. extended problem solving.
E. convenience buying.
Answer:
_____ gives the retailer a measure of how much profit it is making on merchandise
sales without considering the expense associated with operating the store.
A. Gross margin
B. Financial leverage
C. General expenses
D. Expenses
E. Net profit
Answer:
Which of the following is one of the five categories of activities that are accepted by
zoning ordinances in urban areas?
A. Social
B. Cultural
C. Psychological
D. Industrial
E. Geographical
Answer:
How can working with vendors reduce the amount of markdowns?
Answer:
How are retailers affected by scanning errors? What are the measures taken to
minimize these errors?
Answer:
How do all employees of a retail firm and the elements of a retail mix contribute to
services that increase the value of the merchandise to customers?
Answer:
What are the challenges for human resources in international settings?
Answer:
How can multichannel retailers reduce showrooming?
Answer:
Compare and contrast when it is essential for a retailer to have good visibility and
accessibility, and in which cases these attributes are less important.
Answer:
What is counterfeit merchandise? How can it negatively impact the market, and what
are the ethical aspects?
Answer:
What are some of the benefits of offering store brands?
Answer:
With regard to customers, which aspects do retailers need to consider when developing
a retail strategy?
Answer:
Describe approaches that retailers use in dealing with unprofitable customers.
Answer:
In terms of merchandise, what is the difference between a classification and a category?
Answer:
What are the advantages and disadvantages of choosing a freestanding site for your
retail store?
Answer:
What are the approaches a retailer can consider when working to reduce employee
theft?
Answer:
How do retail information and supply chain management help retailers gain a strategic
advantage?
Answer:
How are vendors in a better position to manage a category than a retailer?
Answer:
