If the owner of the local Red Nails Beauty Salon has determined that 1,100 target
customers will come in contact with its print advertisement in the local newspaper, the
owner is estimating the _____ of the medium.
a. frequency
b. reach
c. impact
d. awareness
e. coverage
The _____ is NOT considered when calculating BOM stock using the basic stock
method.
a. number of months in the season
b. total planned sales for the season
c. number of weeks in the retailer’s merchandising season
d. estimated turnover rate for the season
e. basic stock level needed
What are adjustments made in the selling price due to customer dissatisfaction with the
product or service performance?
a. Insurance costs
b. Costs of goods sold
c. Goodwill
d. Net sales
e. Allowances
As a retail executive you are presented with the following index of retail saturation
(IRS) numbers. As such, which of the following would be the least attractive index of
retail saturation number?
a. 43.17
b. 99.2
c. 71.77
d. 68.41
e. 25.31
A(n) _____ is when there is no better use for a site than the retail store that is being
planned for that site.
a. terminal retail location
b. 100-percent location
c. idealized retail site location
d. measured response to retail density
e. freestanding location
Southwest Airlines sponsors a number of public service activities at both the national
and local levels. For instance, at the national level, employees support the Ronald
McDonald House. In doing so, Southwest is attempting to achieve what long-term
promotion objective?
a. Public service promotion
b. Image reinforcement
c. Store repositioning
d. Traffic development
e. Attraction of new customers
When retailers believe that it is necessary to have a given level of inventory available at
all times, they will likely use the _____ method for inventory management.
a. basic trade
b. basic stock
c. weeks’ supply
d. percentage-variation
e. stock-to-sales
Which of the following would be an example of a market performance objective for
Record World?
a. Open or acquire five to ten stores over the next year.
b. Increase this year’s net profit margin by 3 percent over last year.
c. Improve public relations with customers by holding two major in-store events per
six-month season.
d. Increase labor productivity by 12 percent over the next six months.
e. Increase return on assets from 12 percent to 15 percent over the next 12 months.
For leader pricing to be effective, which of the following guidelines should be
followed?
a. Not many customers should actually want to buy the leader item.
b. The leader item must have had a very high markup before being discounted.
c. The leader item must have narrow appeal within the retailer’s target market.
d. The leader item must be an item frequently purchased by the consumer.
e. It should never be sold below cost.
Which of the following is NOT an effective method of closing a sale?
a. Assume that the customer has already made a decision
b. Make the decision for the customer
c. Tell the customer that it would be really stupid if he/she does not buy the
merchandise you have just suggested
d. Ask the customer to select the product/service
e. Turn an objection around by stressing a positive aspect of the product
The _____ theory suggests that all firms seek superior financial performance in an
ever-changing environment, and as a result, firms are forced to change the elements of
their retail mix to match changing consumer preferences.
a. wheel of retailing
b. retail accordion
c. retail life cycle
d. resource-advantage
e. monopolistic competitive
The two types of interfacing are soft interfacing and_____ interfacing.
a. complex
b. simple
c. hard
d. cognitive
e. affective
Which of the following is NOT one of the ways by which retailers are categorized?
a. Location
b. Market share
c. Number of outlets
d. Size
e. Margin vs. turnover
_____ is power derived from one channel member’s desire to identify with their channel
partner.
a. Reward power
b. Expertise power
c. Legitimate power
d. Referent power
e. Coercive power
_____ describes a situation where consumers already have one unit of an item and as a
result place a lower value on an additional unit.
a. Decreasing marginal revenue
b. Leveling product usage
c. Monopolistic decline
d. Declining marginal utility
e. The law of diminishing markets
The analysis that provides management with a critical view of the organization’s
position relative to its internal and external environment is known as:
a. SWOT analysis.
b. strategic window analysis.
c. leverage analysis.
d. retail audit.
e. opportunities awareness.
A _____ is any object or phenomenon in the environment that is capable of eliciting a
response.
a. stimulus
b. drive
c. cue
d. need
e. want
An inventory turnover of 3.7 indicates that a retailer sells its inventory:
a. for 37 percent of cost times cost.
b. every 3.7 months.
c. 3.7 times a year.
d. about every four weeks.
e. about every four days.
_____ is the stage in the retail sales process where an effective salesperson continues to
sell even after the sale has been competed.
a. Approach
b. Prospecting
c. Sales presentation
d. Closing the sale
e. Suggestion selling
_____ refers to American households that are made up of married couples, with each
partner earning an income, and who do not have children.
a. Yuppies
b. Minks
c. Dinks
d. Mingles
e. Yawns
The _____ is a relatively new phenomenon that describes the recent trend of children
returning to live with their parents after having already moved out for what they
thought was a permanent move.
a. nesting effect
b. return effect
c. multi generational effect
d. sandwich generational effect
e. boomerang effect
Walmart became the world’s largest retailer by:
a. offering better value in price and quality.
b. cutting unnecessary costs.
c. concentrating only on profits.
d. selling products at low prices.
e. becoming more service oriented.
_____ is the dollar amount that a buyer can currently spend on merchandise without
exceeding a planned dollar stock level.
a. ‘Planning monies’
b. Open-to-buy
c. Inventory shortage funds
d. Unlimited funds
e. EOM shortfall funds
The rules of action or guidelines that ensure uniformity of pricing decisions within a
retail operation are know as the retailer’s pricing:
a. tactics.
b. rules.
c. policies.
d. strategies.
e. objectives.
When selecting a retail site, a retailer should NOT consider the site’s:
a. traffic flow and accessibility.
b. retail competition.
c. demographics.
d. level of inflation.
e. lease terms.
Strategic plans that provide a differential advantage lead to high profit only if
competitors need large amounts of time or money to overcome them.
The retailer needs to understand the potential legal and ethical constraints within each
country in which it does business.
What are the three different components of customer service, and how can they enhance
a retailer’s relationship with its customers? What types of financial and social benefits
can a retailer offer customers to develop stronger relationships with them?
The retail mix is a combination of merchandise, price, advertising and promotion,
location, customer service and selling, and store layout and design that best serves the
segments targeted by the retailer.
The three dimensions of the optimal merchandise mix include: variety, breadth, and
depth.
The fact that seniors are the most homogeneous group in the marketplace makes
targeting stores and retail services to them easier.
The type of music may have an effect not only how long the customers stay in a store,
but also on how much merchandise they purchase.
When customers utilize the self check out lanes offered by many supermarkets, they are
being active in the co-creation of value.
Most shoppers cannot consciously identify the elements of a good store, but they know
when these elements are missing.