44) Which of the following statements about full-line discount stores is true?
A) They carry only private-label merchandise.
B) They have a narrow breadth of merchandise.
C) They typically carry more brands and sizes in each category than department stores.
D) They have inconsistent assortments.
E) They confront intense competition from category specialists.
45) Why are category specialists sometimes called category killers?
A) They are often located close to full-line discount stores and discount stores that offer a deep
assortment of merchandise.
B) They are located at stand-alone sites.
C) They have a broad merchandise mix and shallow assortment.
D) They can dominate a category of merchandise making it difficult for other retailers to compete.
E) They carry mainly technologically obsolete merchandise.
46) Best Buy is a category specialist for the electronics industry. This means the stores
A) offer their customers narrow breadth and depth of merchandise.
B) sell only their own private-label brands.
C) have excellent after-sales customer service.
D) avoid a self-service approach.
E) offer a narrow but deep assortment of merchandise.
47) What type of retail store is Victoria’s Secret considered to be?
A) Department store
B) Convenient store
C) Full-line discount store
D) Specialty store
E) Supermarket
48) Which of the following statements is true about specialty stores?
A) They tailor their retail strategy toward very specific market segments.
B) They group products by brand instead of product category like in department stores.
C) They offer very shallow and narrow assortments.
D) They completely avoid including their own private-label brands in the store.
E) They discourage sampling.
49) A special type of resale store where merchandise is donated and proceeds go to charity is
called a(n)
A) extreme-value retailer.
B) thrift store.
C) consignment shop.
D) dollar store.
E) supercenter.
50) A type of resale store that accepts used merchandise from people and pays them after it is sold
is called a(n)
A) dollar store.
B) consignment shop.
C) supercenter.
D) thrift store.
E) extreme-value retailer.
51) Which of the following types of general merchandise retailers is also sometimes referred to as
dollar stores?
A) Extreme-value retailers
B) Department stores
C) Full-line discount stores
D) Category specialists
E) Specialty stores
52) What type of a retail store is Walgreens considered to be?
A) Full-line discount store
B) Drugstore
C) Department store
D) Convenience store
E) Supercenter
53) What type of retail store is Dollar General considered to be?
A) Off-price retailer
B) Department store
C) Full-line discount store
D) Extreme-value retailer
E) Specialty retailer
54) The drugstore industry has seen a decrease in their annual sales mainly due to
A) higher prices on prescription drugs.
B) pharmacies in full-line discount stores.
C) the aging population.
D) government regulations on pharmaceutical sales.
E) the wide assortment of merchandise they sell
55) ________ offer an inconsistent assortment of brand-name merchandise at a significant
discount off the manufacturers’ suggested retail price.
A) Off-price retailers
B) Department stores
C) Discount retailers
D) Convenience stores
E) Specialty retailers
56) What type of store is TJ Maxx considered to be?
A) Off-price retailer
B) Department store
C) Full-line discount store
D) Extreme-value retailer
E) Specialty retailer
57) Which of the following is true of off-price retailers?
A) They offer a consistent assortment of soft goods at low prices.
B) They sell brand-name merchandise at reduced prices.
C) They offer gift registries.
D) They require suppliers to give them a variety of advertising allowances and markdown
discounts.
E) They sell designer-label merchandise at 20 to 60 percent higher than the manufacturer’s
suggested retail price.
58) Off-price retailers will often sell merchandise for less than the MSRP, which means
A) the merchandise sales are profitable.
B) the merchandise is sold below the suggested retail price.
C) the merchandise is sold below the suggested realized profit.
D) the merchandise is sold less than the surrounding retail competitors.
E) the merchandise sold by them are always closeouts.
59) ________ are products that have minor blemishes to the fabric or errors in the construction.
A) Closeouts
B) Irregulars
C) Category killers
D) Soft goods
E) Hard goods
60) ________ are end-of-season merchandise that will not be in the manufacturer’s offerings going
forward.
A) Closeouts
B) Irregulars
C) Endcaps
D) Category killers
E) Soft goods
61) ________ are off-price retailers owned by manufacturers or retailers.
A) Dollar stores
B) Closeouts
C) Thrift stores
D) Outlet stores
E) Supercenters
62) With respect to off-price retailing, in a ________ sale, each day at the same time, members
receive an e-mail that announces the deals available.
A) closeout
B) clearance
C) enterprise
D) consultative
E) flash
63) A special type of off-price retailer owned by manufacturers is called a
A) consignment shop.
B) thrift store.
C) dollar store.
D) warehouse club.
E) factory outlet.
64) Merrill Lynch, Marriott, and Century 21 are examples of
A) dollar stores.
B) off-price retailers.
C) service retailers.
D) specialty stores.
E) full-line discount stores.
65) Services are difficult to be evaluated before customers buy or even after they buy and consume
them. Which of the following characteristics of service causes this challenge for service retailers?
A) Intangibility
B) Perishability
C) Inconsistency
D) Consumability
E) Compatibility
66) How can a service retailer best cope with the problems associated with the intangibility of
service?
A) Use low prices during off-seasons to help match supply and demand.
B) Use mass production.
C) Emphasize quality control.
D) Solicit customer evaluations and complaints.
E) Increase staffing at peak demand times.
67) A dermatologist has her diplomas prominently displayed above her large desk, which sits on a
Persian rug in an office filled with tasteful, yet expensive furnishings. Which of the following
service characteristics is the doctor trying to handle with her office décor?
A) Intangibility
B) Perishability
C) Inconsistency
D) Consumability
E) Compatibility
68) A therapeutic massage service requires its therapists to keep a database on each customer and
include in that database what was done on each visit for the customer’s aches and pains. Which of
the following service characteristics is the massage service trying to cope with?
A) Intangibility
B) Perishability
C) Inconsistency
D) Consumability
E) Compatibility
69) Due to the ________ of services, service retailers like Six Flags, Delta, and Applebee’s
restaurants, sometimes find it difficult to match supply and demand.
A) intangibility
B) perishability
C) inconsistency
D) consumability
E) compatibility
70) Why do movie theaters sell tickets for an afternoon showing of a movie at a lower price than
the 7 p.m. showing of the same movie?
A) To deal with the perishability of services
B) To make sure the service offered is consistent
C) To deal with the intangible characteristic of services
D) To deal with the incompatibility characteristic of services
E) To minimize inventory losses
71) How can a service retailer best cope with the problems associated with the inconsistency of
service?
A) Use low prices during off-seasons to help match supply and demand.
B) Use mass production.
C) Avoid simultaneity of production and consumption of service.
D) Train and motivate service providers.
E) Increase staffing at peak demand times.
72) Which of the following is true of single-store retailers?
A) They do not have direct contact with their customers.
B) They are not bound by the bureaucracies inherent in large retail organizations.
C) They are totally independent of their owner-managers’ capabilities to make any retail decision.
D) They must join a wholesale-sponsored voluntary competitive group to compete against
corporate chains.
E) They are very rigid and lack quick adaptability to market changes and customer needs.
73) Which of the following is a drawback of the franchise ownership?
A) The franchisee lacks any kind of off- or onsite training from the franchisor.
B) The franchisor lacks any benefit from the success of his or her franchisee.
C) The franchisee must adhere to the franchisor’s rules and operating guidelines.
D) The franchisee must join a single-store retailer to become independent of the franchisor.
E) The franchisor must incur the capital costs like purchase and modification of the retail space.
74) Differentiate between variety and assortment of merchandise offered by a retailer.
75) Explain the strategies that limited-assortment supermarkets (extreme-value food retailers) use
in order to provide customers with high-quality merchandise at low prices to compete against other
food retailing formats.
76) How are department stores categorized into tiers? How do the tiers differ? Give examples of
each tier.
77) Discuss the reasons that department stores are losing their market share to discount stores, and
list the steps taken by department stores to deal with their eroding market share.
78) Describe what category specialist retailers are while providing specific examples of category
specialist retailers and how they differentiate themselves from their competitors.
79) Explain what drugstores do to remain competitive in the marketplace.
80) Discuss how off-price retailers opportunistically obtain their merchandise and the different
types of merchandise found at off-price retailers.
81) Describe the four important differences in the nature of the offerings provided by services and
merchandise retailers.
82) What is franchising? What does a franchisor offer its franchisees to get the franchisees off to a
good start?