If a retailer is assessing the remodeling needs of its stores, as well as evaluating the
effect that the lack of a formal training program is having on the management of its
establishments, the retailer is reviewing the firm’s:
a. strengths.
b. weaknesses.
c. opportunities.
d. threats.
e. operations.
In attempting to determine whether a new fast-food restaurant should be opened in a
small town, a retailer gathered information on demographics, competitors’ sales, and
real estate available in that area. The retailer was employing the _____ method of retail
decision-making.
a. analytical
b. creative
c. intuitive
d. strategic
e. tactical
_____ retailing includes all the activities designed to attract, retain, and enhance
customer relationships.
a. Relationship
b. Consumer
c. High-performance
d. Service
e. Promotional
Which of the following is NOT part of a retailer’s visual communications program?
a. Store name and logo
b. Background music
c. Institutional signage
d. Directional and category signage
e. Lifestyle graphics
Which of the following statements best defines coverage?
a. The actual number of target customers that come into contact with a given advertising
message.
b. The theoretical maximum number of a retailer’s target market that can be reached by
the medium.
c. The number of newspapers in which a retailer advertises.
d. The strength of the impression of an advertisement on potential customers.
e. The number of consumers in the retailer’s target market actually reached.
The relationship between a retailer’s pricing decisions and the other (i.e. merchandise
selection, promotion, location) decision areas can best be described as:
a. independent.
b. competitive.
c. separate.
d. counter-related.
e. interactive.
The following information is known for a buyer of cosmetics:
What is the cosmetic department’s open-to-buy at retail?
a. $10,000
b. $25,200
c. $32,400
d. $34,800
e. $38,600
All of the following discount mass merchandiser stores were founded in 1962,
EXCEPT:
a. Walmart.
b. FedMart.
c. Kmart.
d. Woolco.
e. Target.
_____ signage is usually smaller, since it is intended to be seen from a shorter distance
and is located on or close to the fixture itself.
a. Fixture
b. Directional
c. Point-of-sale
d. Price/info
e. Category
Unmarried couples are also referred to as:
a. home-aloners.
b. mingles.
c. singles.
d. dinks.
e. empty nesters.
When the customer has well-defined, explicit choice criteria, the best selling strategy is
to illustrate how a specific product fits these criteria.
Retailers use _____, which consists of four components (advertising, sales promotion,
publicity, and personal selling), as a means to bring traffic into their stores.
a. the marketing mix
b. promotion
c. a sales generation plan
d. the retail mix
e. competition analysis
Identify the incorrect statement about an implied warranty of merchantability.
a. The notion of implied warranty applies only to new merchandise.
b. Every retailer selling goods makes an implied warranty of merchantability.
c. By offering the goods for sale, the retailer implies that they are fit for the ordinary
purpose for which such goods are typically used.
d. Because of the potential legal liability that accompanies an implied warranty, many
retailers will expressly disclaim at the time of sale any or all implied warranties and
seek to mark a product ‘as is.’
e. Some retailers will not be able to avoid implied warranties of merchantability.
Intel sold Pentium III computer processing chips to Gateway Computer for $12 per
chip. Four days earlier, before the announcement of the new Pentium IV computer
processor, Intel sold the Pentium III to Dell Computer for $22 per chip. Intel may
attempt to justify its prices with a:
a. meeting competition defense.
b. cost justification defense.
c. preferable customer defense.
d. good faith defense.
e. changing market conditions defense.
A store manager notes that the space productivity index for a particular product
category is 1.35. Based on this information, the manager should consider:
a. reducing the amount of space allocated to this category, since it is underperforming.
b. lowering the price of the merchandise in this department in order to boost its sales
per sq. ft., which will improve its index.
c. firing the buyer, because 1.35 is a very poor space productivity index number.
d. moving the product class to a more visible location within the store in hopes of
improving the department’s weak performance.
e. increasing the amount of space allocated to this category, since it has a very good
space productivity index.
The _____ provides management with a detailed analysis of current sales activity by
location and by selling area.
a. merchandise management audit
b. closing audit
c. customer service and sales enhancement audit
d. customer choice audit
e. sales audit
To alleviate space constraints, some retailers become involved in:
a. buying on consignment.
b. negotiating new building plans.
c. charging manufacturers slotting fees.
d. using extra dating on bills.
e. adding more shelf space.
When doing next season’s merchandise budget, the buyer’s planned purchases at retail
are $125,000 with a markup percentage of 40% at retail. What is the buyer’s planned
initial markup?
a. $50,000
b. $75,000
c. $60,000
d. $96,000
e. $84,000
Which of the following is an example of a cash outflow?
a. Cash sales
b. Taxes
c. Collecting accounts receivable
d. Collecting notes receivable
e. Sale of stock
A retailer’s long-term promotion objectives should:
a. focus on increasing patronage of existing customers.
b. attract new customers from the existing trade area.
c. increase customer satisfaction.
d. seek to create a positive store image.
e. always seek to bolster short-term results as well.
One of the most dramatic changes created by e-tailing is a shift in power between
retailers and consumers. This shift in power is derived from:
a. the ability of consumers to purchase from retailers in other countries as a result of the
Internet.
b. the inability of Internet retailers to compete with more traditional bricks-and-mortar
retailers.
c. the loss of control of pricing information by retailers due to the information
dissemination capabilities of the Internet.
d. the lack of competition in e-tailing.
e. the decreased power of consumers when transacting and negotiating with retailers.
Reductions cause the difference between a retailer’s maintained markup and initial
markup.
The easiest way for a retailer to differentiate itself in the eyes of consumers is to use
market segmentation to break up America’s homogeneous markets into more
heterogeneous population bases.
When retailers speak of ‘store planning,’ they are referring to decisions related to the
location of new stores.
Unethical actions may be legal.
Explain the four different methods for planning dollars invested in merchandise.
The NAICS codes are an effective means of categorizing retailers as they reflect all
types of retail activity.