Management Chapter 5 A retail format describes the nature of the retailer

Retailing Management, 10e (Levy)

Chapter 5 Retail Market Strategy

1) A retail format describes the nature of the retailer’s operations that it will use to satisfy the needs

of its target market.

2) After selecting a target market and a retail mix, the final element in a retail strategy is the

identification of prospective wholesalers.

3) Building strong relationships with wholesalers is one of the three approaches for developing a

sustainable competitive advantage.

4) Customer relationship management programs collect data about customer shopping behavior to

enable retailers to build and maintain customer loyalty.

5) Market expansion approaches include opening more stores in the target market and/or keeping

existing stores open for longer hours.

6) A retail format development growth opportunity is an opportunity in which a retailer develops a

new retail format for the same target market.

7) Horizontal integration describes diversification by retailers into wholesaling or manufacturing.

8) Direct investment occurs when a retail firm invests in and owns a retail operation in its home

country.

9) The first step in the strategic retail planning process is to define the business mission.

10) Scale economies are cost advantages due to a retailer’s size.

11) A retail strategy is a statement that identifies all the following except

A) the target market.

B) the format that the retailer plans to use.

C) the employee compensation plan.

D) the bases upon which the retailer plans to build a sustainable competitive advantage.

E) the retail mix.

12) The ________ is the market segment(s) toward which the retailer plans to focus its resources

and retail mix.

A) target market

B) retail market

C) virtual market

D) labor market

E) global market

13) A cafe focuses primarily on customers who are aged between 18 and 35 and earning about

$20,000 to $40,000 annually. This segmentation of customers is known as its

A) retail market.

B) target market.

C) virtual market.

D) global market.

E) labor market.

14) Hot Topic LLC appeals to tweens and teens through their Gothic frocks, fad movie gear,

piercing paraphernalia, and popular T-shirts and posters. The staff at Hot Topic wears the

merchandise. Also, they are active in helping their young customers choose from the hip

merchandise. The teens and tweens can be considered the

A) target market.

B) marketing mix.

C) marketing objective.

D) retail format.

E) retail mix.

15) A(n) ________ describes the nature of the retailer’s operations that it will use to satisfy the

needs of its target market.

A) situation analysis

B) organizational chart

C) competitor analysis

D) market research report

E) retail format

16) Which of the following is a component of retail mix?

A) Product design

B) Market intelligence

C) Human resource practice

D) Pricing policy

E) Employee performance data

17) Store design is a component of the

A) pricing mix.

B) product mix.

C) wholesale mix.

D) organizational mix.

E) retail mix.

18) Which of the following statements is true of a sustainable competitive advantage?

A) It is not easily copied by the competitors.

B) It cannot be maintained over a long period of time.

C) It can only be maintained over a short period of time.

D) It can be easily copied by the competitors.

E) It can be achieved by reducing the price of the product.

19) A toy store has acquired an edge over its competition that cannot be easily copied by its

competitors. Which of the following has the store achieved?

A) Customer brand affiliation

B) Sustainable competitive advantage

C) Customer loyalty

D) Service excellence

E) Brand recall

20) A ________ is a group of consumers with similar needs and a group of retailers that satisfy

those needs using a similar retail channels and format.

A) retail market segment

B) virtual market segment

C) wholesale market segment

D) target market segment

E) global market segment

21) After selecting a target market and a retail mix, the final element in a retail strategy is the

retailer’s approach to

A) build a sustainable competitive advantage.

B) identify all potential wholesalers.

C) identify all possible channels of communication.

D) identify possible channels of distribution.

E) manage the logistics of the product.

22) Why should a retailer be concerned with building a sustainable competitive advantage?

A) It could increase organizational turnover.

B) It would decrease organizational commitment.

C) It could decrease organizational productivity.

D) It could result in short-term profitability.

E) It could result in long-term profitability.

23) Forester, a jewelry store, has developed a sustainable competitive advantage. Which of the

following characteristics of Forester is most likely to be the reason for this advantage?

A) Repeat purchases from a vendor due to limited alternatives

B) Knowledgeable and helpful salespeople

C) Automated warehouses

D) More merchandise

E) Higher advertising budgets

24) Which of the following characteristics is most likely to be the least sustainable competitive

advantage?

A) Convenient locations

B) Ability to get scarce merchandise

C) Shared systems with vendors

D) More sales promotions

E) Coordination of procurement efforts

25) Which of the following characteristics is most likely to be the more sustainable competitive

advantage?

A) Extended hours of operation

B) Bigger warehouses

C) Ability to get scarce merchandise

D) More employees

E) Greater assortment of merchandise

26) Which of the following characteristics of a footwear store would most likely be its least

sustainable competitive advantage?

A) Shared systems with vendors

B) Convenient store location

C) Knowledgeable employee force

D) Helpful sales force

E) Lower price

27) John plans to start a grocery store in his locality. Which of the following is most likely to give

him the least sustainable competitive advantage in the market?

A) Convenient locations

B) More employees

C) Exclusive merchandise

D) Coordination of procurement efforts

E) Helpful sales force

28) Sally’s LLC, a local supermarket, has all of the following characteristics. Which of the

following characteristics of Sally’s is most likely to be a more sustainable competitive advantage?

A) Extended hours of operation

B) More employees

C) Shared systems with vendors

D) More merchandise

E) More sales promotions

29) Establishing a sustainable competitive advantage is the key to ________ performance.

A) short-term market

B) short-term financial

C) short-term employee

D) long-term employee

E) long-term financial

30) Although Rosa visits several retailers when shopping for suits, she always buys suits at Bow

and Arrow Inc. Which of the following approaches best demonstrates her affinity for Bow and

Arrow Inc.?

A) Customer loyalty

B) Product pricing

C) Location

D) Unique merchandise assortment

E) Good vendor relations

31) Tara gets her oil changed only at Tires Plus Inc. This commitment to Tires Plus Inc. illustrates

A) ethical business practices.

B) store awareness.

C) good customer service.

D) customer loyalty.

E) price competitiveness.

32) My Favorite Quilt Shop offers members of their Fabric Lovers Club merchandise worth $20

for every $200 they purchase plus additional discounts on classes and new fabric lines. The Fabric

Lovers Club is a good way to develop

A) internal excellence.

B) store awareness.

C) good customer service.

D) customer loyalty.

E) ethical business practices.

33) Myra wanted to purchase a vase as a wedding gift. Pier 1 Imports offers a better assortment and

slightly lower prices, but she immediately went to her local gift shop instead of Pier 1 Imports.

This is an example of

A) a SWOT analysis.

B) strategic control.

C) direct competition.

D) retail perception.

E) customer loyalty.

34) Retailers can foster customer loyalty by

A) having a generalized organizational mission statement.

B) providing good customer service.

C) having no distinct brand image.

D) trying to attain qualitative objectives rather than quantitative ones.

E) using a mass advertising strategy.

35) Wendy’s has established itself in the fast food market as one of the top five restaurants in the

city. Customers frequent Wendy’s because of the impeccable quality of food associated with it.

Which of the following is most likely to be the reason for Wendy’s sustainable competitive

advantage?

A) Unique merchandise

B) Brand image

C) Customer service

D) Location

E) Price

36) Positioning is the process of

A) acquiring a lease for a retail store in a region.

B) creating and supporting a clear and distinct retailer image.

C) finding a retail location site.

D) negotiating the percentage-of-sales payment to the mall owners.

E) performing a situation audit.

37) ________ is the design and implementation of a retail mix in order to create an image of the

retailer within the customer’s mind relative to its competitors.

A) Retail perception

B) Positioning

C) Imaging

D) Detailing

E) Competitive feedback

38) Customers who shop at Books-A-Million find that it has a large selection of books, in addition

to a helpful and friendly staff. Furthermore, they can enjoy a peaceful place to read while sipping a

cappuccino at its in-store Joe Muggs Café. This intimate perception of the store indicates its

________ strategy.

A) perceptual retailing

B) imaging

C) positioning

D) visual merchandising

E) retail feedback

39) ________ are developed such that the distance between two retailers’ positions on the map

indicates how similar those stores appear, according to consumers.

A) Perceptual maps

B) Geographical maps

C) Brand perceptions

D) Product perceptions

E) Demographic maps

40) In perceptual maps, retailers that are closer to an ideal point are evaluated

A) less favorably by the consumers.

B) more favorably by the producers.

C) more favorably by the suppliers.

D) less favorably by the suppliers.

E) more favorably by the consumers.

41) Which of the following is most likely to be a disadvantage for a retailer in developing customer

loyalty through offering popular national brands?

A) The costs associated with offering popular national brands are very high.

B) There is often a huge reduction in the profit margin for the retailer.

C) Other competitors can purchase and sell the same popular products.

D) Training employees to operate the new product or service involves time and effort.

E) It leads to brand cannibalization.

42) Competitive retailers can sell the same popular-national brands. Which of the following should

retailers do to secure a competitive advantage?

A) Prevent its customers from comparison shopping.

B) Limit its store traffic to qualified buyers.

C) Increase its sales expenses.

D) Increase its merchandising flexibility.

E) Develop private-label brands.

43) La Rouge, a fabric store, is one of the most famous in the country. Customers flock to the store

from all across the nation for its exclusive collection of store brands. Which of the following is

most likely to be the sustainable competitive advantage of La Rouge?

A) Unique merchandise

B) Ethical business practices

C) Customer service

D) Location

E) Price

44) Which of the following is true of private-label brands?

A) Products developed and marketed by a retailer and available with other retailers

B) Products developed by a retailer but marketed and available with a third party

C) Products developed and available with a retailer but marketed by a third party

D) Products developed by a third party but marketed and available with a retailer

E) Products developed and marketed by a retailer and available only from that retailer