Both consignment purchases and memorandum purchases enable a retailer to _____.
a. increase information flows
b. lower insurance costs
c. improve cash flow
d. reduce inventory levels
A retailer has $100,000 in cash, $300,000 in accounts receivable, $500,000 in
inventory, $200,000 in marketable securities, and $800,000 in total current liabilities.
What is its current ratio?
a. 0.375
b. 0.5
c. 1.125
d. 1.375
A functional approach to the study of retailing stresses _____.
a. retail planning
b. the activities that retailers perform
c. adaptation of strategy to match the retail environment
d. opportunities and constraints in decision making
The cost of merchandise available for sale minus the value of ending inventory at cost
equals the _____.
a. gross profit
b. cost of goods sold
c. beginning inventory
d. open-to-buy
The creation of regional editions, editorial association, and use of color have increased
retailer use of _____.
a. direct mail
b. telephone directories
c. magazines
d. outdoor or billboard advertising
A retailer reduces the amount of inventory it keeps on hand by ordering more frequently
and in lower quantity through _____.
a. quick response inventory planning
b. top-down inventory planning
c. bottom-up inventory planning
d. UPC-based computerized ordering systems
In comparison to lifestyles, demographics are _____.
a. easier to measure
b. more likely to be profiles
c. more difficult to measure
d. growing at a faster rate
Which strategy is the opposite of direct store delivery?
a. central warehousing
b. third-party logistics providers
c. decentralized warehousing
d. efficient consumer response
A retail ownership change financed by low-grade loans from banks and investors is a(n)
_____.
a. initial public offering
b. sale-leaseback
c. leveraged buyout
d. reorganization loan
A retailer with the least degree of diversification in its product line or service category
is a _____ store.
a. full-line discount
b. variety
c. department
d. specialty
A major potential problem associated with franchising for the franchisor is that _____.
a. money is obtained when goods are delivered, rather than when they are sold
b. franchisees as owners have less incentive to work hard than employees
c. it is difficult to set up and enforce franchise qualifications
d. poorly performing franchises can undermine both consumer and investor confidence
Which forms of nontraditional marketing do not clearly fit into a ‘store-based” or
“nonstore-based” classification?
a. catalog sales and airport retailing
b. vending machines and direct selling
c. video kiosks and airport retailing
d. direct marketing and direct selling
A retailer can best implement a consumer’s right to be heard by _____.
a. developing a consumer advisory council
b. selling private-label merchandise
c. expanding store hours
d. providing a money-back guarantee on all goods and services
In an independent vertical marketing system, _____.
a. successive stages of production and distribution are jointly owned
b. manufacturers seek out wholesalers, who seek out retailers to stock and sell products
c. two channel members can perform all production and marketing functions
d. marketing operations are franchised
A retailer can shift credit management responsibilities to others via the use of
third-party credit organizations (such as MasterCard and/or Visa) or through the use of
debit cards.
The retailer does not pay for items until they are sold and can return merchandise
_____.
a. when title is transferred on purchase
b. when title is transferred when the shipment is received
c. for all generics
d. in a consignment purchase
A retailer opening in a shopping center six months before all tenants will be ready to
move in is concerned about early pedestrian traffic. This potential problem can be
partially resolved through a _____.
a. net lease
b. lease with a maintenance-increase-recoupment provision
c. percentage lease
d. sliding-down-scale lease
A customer is encouraged to look at a variety of merchandise but not touch it or try it
on in a(n) _____ display.
a. rack
b. open assortment
c. cut case
d. closed assortment
In contrast to organizational arrangements used by small independent retailers, the
organizational arrangement used by department stores is categorized by _____.
a. centralized decision making
b. a flat organization
c. specialization of functions
d. simple organizational arrangements
A retailer with annual sales of $10 million and selling expenses of $2.5 million has an
efficiency rating of 25 percent.
As enunciated by President Kennedy about 50 years ago, consumers have the right to
low prices, safety, full employment, and to be heard.
A retailer has raised the price of children’s gloves from $5 to $6. It expects annual
demand to decrease from 1,000 units to 700 units. Therefore, demand is inelastic.
A convenience store’s natural advantage over a supermarket is its low prices due to
higher inventory turnover.
The best retailers in a given category have perfected potential retail strategies.
Top-down retail plans are generally developed by firms that believe in participative
management.
The most valuable source of information in implementing merchandise plans is the final
consumer.
While probability samples are more accurate than nonprobability samples, they are
more costly and difficult to undertake.
The issue (problem) definition stage of the marketing research process often seeks to
determine which controllable factor in retailing strategy to further study.