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Which of the following is an off-price retailer that is owned and operated by the
manufacturer, and stocks the manufacturers' surplus, discontinued, or irregular
products?
a. Warehouse club
b. Factory outlet
c. Supermarket
d. Supercenter
e. Independent carrier
The increase in square footage in a retailers store from 20,000 square feet to 40,000
square feet is an example of:
a. form reconfiguration
b. time reconfiguration
c. possession reconfiguration
d. place reconfiguration
e. expansion
The free-flow layout does NOT work well in large department stores or other stores
offering a great variety of merchandise because:
a. it fails to provide cues as to where one department stops and another starts.
b. customers are encouraged to spend too much time browsing rather than moving
efficiently through the store.
c. the arrangement of merchandise is difficult to blend for a consistent store
environment.
d. they encourage customers to browse through the entire store so that they can see all
of the merchandise and not concentrate on one area.
e. the average time spent in any particular department is reduced, thereby reducing
average sales.
If a retail firm is attempting to determine the potential negative effects of a new
competitor entering the market, it is assessing its:
a. strengths.
b. weaknesses.
c. opportunities.
d. threats.
e. operations.
Bait-and-switch advertising:
a. is illegal for all products retailing over $10. However, under the FTC Act,
bait-and-switch is legal if puffery was also included in the advertisements and the
product price is under $10.
b. does not apply to services.
c. is a form of deceitful diversion of patronage.
d. is permissible if interstate commerce is not involved.
e. occurs when a product is advertised at an unrealistically low price to serve as "bait"
and then the salesperson tries to 'switch" the customer to a higher-priced product.
The retailing practice of appealing to sight, sound, smell, and touch is called _____
marketing.
a. ambience
b. sensory assault
c. sensory maximization
d. total sensory
e. sensory decor
After being introduced to a higher-priced washing machine, the customer expresses a
desire to purchase a lower-priced item. When this happens, the customer is said to have:
a. bailed.
b. traded up.
c. yielded.
d. traded down.
e. extended.
Identify the correct statement about habitual problem solving.
a. It typically involves frequently purchased expensive products of low risk.
b. The consumer has a strong preference for the brand to buy and the retailer from
which to purchase it.
c. It occurs when the consumer has a strong preference for either the brand or the store,
but not both.
d. The consumer may not have a store choice in mind but may have a strong preference
for the brand to purchase.
e. It occurs when the consumer relies on past experience and learning to convert the
problem into a situation requiring less thought.
The Clayton Act:
a. adds to the Sherman Act by prohibiting specific practices.
b. establishes the Federal Trade Commission.
c. amends the Robinson-Patman Act.
d. requires large companies to notify the government of their intent to merge.
e. amends Section 7 of the Celler-Kefauver Antimerger Act.
In 2000, Samantha Toller started a small fast-food restaurant. In order to gain a
competitive foothold, Samantha offered low prices with very few extras. As her
business grew, Samantha started adding services and gradually had to increase prices to
cover the costs of these services. Today, Samantha is vulnerable to new, low-price
competitors. This is an example of what theory of retail evolution?
a. High price jinx
b. High/low
c. Retail life cycle
d. Wheel of retailing
e. Retail accordion
A retail firm that is setting goals based on its desire to help society fulfill some of its
needs is developing _____ objectives.
a. personal
b. self-respect
c. financial benefit
d. self-esteem
e. societal
A _____ is least apt to use an above-market pricing policy.
a. small neighborhood drugstore
b. top-of-line apparel retailer, such as Neiman Marcus
c. mom-and-pop grocery store
d. warehouse club
e. fast-food restaurant located on a turnpike
Retailers with several units are a stronger competitive threat because
a. they can focus all their efforts on one trade area
b. they are generally owner and family operated
c. they can spread many fixed costs over a number of stores and can achieve economies
in purchasing
d. they can tailor their merchandising to one trade area in each unit
e. they can spot customer desires sooner and respond faster.
Which of the following is NOT an example of a nonprice demand strategy that a retailer
could employ as a means of increasing its demand?
a. Increasing the width of the store's aisles, so the customer can freely move around in
the store.
b. Providing "out-of-town" customers with free gasoline.
c. Offering a 30-day guarantee to customers if they find the same product for a cheaper
price.
d. Providing customers using public transportation with complimentary "ride and shop"
coupons.
e. Developing an advertising campaign aimed at persuading consumers to make more of
their purchases at its stores.
The Sherman Antitrust Act allows manufacturers and retailers to establish territorial
responsibilities that exclude all other retailers from handling the products within a given
market area.
_____ is a record of all purchases a retailer made last year, discounts granted by the
vendors, transportation charges paid, the original markup, markdowns, and the
season-ending gross margin on a vendor's merchandise.
a. Vendor's financial history
b. Vendor profitability analysis statement
c. Vendor's blue book
d. Vendor report
e. Confidential vendor analysis
If net profit margin is 2.0 percent, the rate of asset turnover is 6.0x, and the financial
leverage is 2.1, what is the return on assets?
a. 0.333 percent
b. 8.0 percent
c. 12.0 percent
d. 25.2 percent
e. 33.0 percent
Which of the following refers to a retailer's "traffic strategy"?
a. Having the right merchandise, using the right layout and display, and having the right
sales force
b. Providing the appropriate level of service that the customers expect
c. Getting shoppers and converting them into customers at the lowest operating cost
possible
d. Converting shoppers into customers by having them purchase merchandise
e. Getting shoppers into the store
When the customer relies on the retailer to make a selection of goods to serve a
particular purpose, it is termed a(n):
a. implied warranty of fitness.
b. implied warranty of service.
c. implied warranty of quality.
d. implied warranty of merchantability.
e. implied warranty of sale.
The affordable method, percentage-of-sales method, and task-and-objective method are
all methods used to determine the amount to be spent on:
a. inventory levels.
b. promotion.
c. market research.
d. store site selection.
e. customer satisfaction.
Stores that sell convenience goods rather than specialty goods will usually have a
smaller trade area.
Dad's Sandwich Shop offers frequent buyer points to its customers through a punch
card program. Dad's is engaging in:
a. sales promotion.
b. positioning.
c. 'conning' the folks.
d. personal selling.
e. sales management.
The disposable income minus the money needed for necessities to sustain life, such as
minimal housing, minimal food, and minimal clothing is:
a. discretionary income.
b. comprehensive income.
c. aggregate income.
d. passive income.
e. basic income.
A firm's specific goals and objectives should not be identified within its mission
statement.
Retailing accounts for 20 percent of the worldwide labor force.
A big problem for retailers is that people are finding less meaning in their work and are
less loyal to their employers.
Maintained markup is the actual selling price of an item minus its cost.
It is common for wholesaler-sponsored voluntary groups to offer the retailer both store
site and location analysis as well as assistance in designing the store layout.
Throughout most of human civilization there has been a large scarcity of manufactured
or processed goods.
A seasonal discount is given by suppliers to retailers that purchase and take delivery of
merchandise during the off-season.
The number one cause of retailing bankruptcies in recent years is cash flow problems.
