Chapter 11 Test Bank
1. An organization purchases products with the intention of selling them to the ultimate consumer for their personal, family, or
household use. This organization is a
A. wholesaler.
B. supplier.
2. All of the following situations involve retailing except
A. dining out at the new restaurant in town.
B. booking a European vacation from a travel agent.
3. Which of the following can be said about retailing as an economic activity?
A. Historically, retailing accounted for a large part of the U.S. economy, but recent figures indicate that retailing’s impact has
waned.
B. Retailing’s biggest impact can be seen in the amount of spending on clothing and food service items.
4. On the whole, which of the following accurately depicts the vast majority of retailers?
D. The vast majority of retailers are very large organizations, like Walmart, that have many outlets.
E. The vast majority of retailers are now found on the Internet.
People commonly think of retail predominately in terms of very large organizations. But retail very much remains a “mom–and–
pop”-type business. Almost nine out of 10 retail companies employ fewer than 20 employees; over 95 percent of retailers
operate just one store.
5. All of the following have contributed to the changes in modern retailing except
6. The best-known framework for explaining changes in retail institutions in terms of how retail outlets enter and move through
the market is referred to as the
A. retail market mix.
B. retail life cycle.
7. Which of the following is not a channel function of retailers?
A. completing transactions with end-consumers
B. facilitating functions that enhance the buying of goods
8. Bill’s appliance store offers free delivery and set–up of the appliances he sells to his customers and services the appliances
after the sale. In doing so, Bill’s appliance store is performing which channel function?
A. communication functions
B. breaking bulk
9. Three factors differentiate retail marketing from marketing practiced in other types of businesses: the average dollar amount
of a single sales transaction, impulse purchasing, and
A. the method of marketing used.
10. A retailer that uses strategies to enhance long-term mutually beneficial relationships with its customers is considering the
______ of each customer.
A. marketing value
B. competitive value
11. While Natalie was at the mall, she saw a kiosk that was selling cell phone covers. Although she had no intention of buying a
new cell phone cover, the kiosk caught her eye and she ended-up buying a leopard-print cover. Which of the following describes
Natalie’s behavior?
12. Which statement regarding the physical presence of retail stores is true?
A. Customers rarely integrate their digital and in-store shopping experiences.
B. Unlike in the past, most retail transactions now occur over the Internet.
13. Which of the following is not one of the dimensions marketers commonly use to classify retailers?
D. ownership/organization
E. merchandise pricing
Marketers commonly classify retailers along four key dimensions: level of service, breadth and depth of merchandise
assortment, merchandise pricing, and ownership/organization.
14. A retailer wanting to incorporate self-service into its stores may choose to
A. publish its advertising circular earlier.
B. hire a professional sales staff.
15. Juanita’s Place is a dress shop that caters to dresses for special occasions such as school proms, holiday parties, and
weddings. Juanita has a staff of trained employees that help in the selection of dresses regarding style, fit, and appropriateness
for the occasion. The store also offers alteration services and free delivery. Juanita’s Place is an example of
16. How are stores like Best Buy or JCPenney classified?
17. The majority of retail operations are
A. corporate chains.
B. conglomerates.
18. What is a corporate chain?
A. an independent retail operation that employs 50 or more people
B. businesses in which a supplier grants a dealer the right to sell products for a fee
19. A group of independent retailers that band together to set up a jointly owned, central wholesale operation that also conducts
joint merchandising and promotion is referred to as a
20. In a(n) ______ franchise arrangement, the franchisee gains preferred exclusive access to the products manufactured by the
franchisor.
A. business format
B. exclusive
21. The number of distinct goods or service product lines that a retailer carries is referred to as
A. width of assortment.
22. A local craft brewer offers many varieties of beer. You can find robust stout beer, pale ales, and beer flavored with
everything from coffee to citrus fruit. This is an example of the brewer’s
D. width of assortment.
E. variety of assortment.
23. A retailer that adds goods and services that may be unrelated to each other and to the firm’s original business is engaged in
A. deceptive merchandising.
24. How is the distribution of retailers along a price continuum shown?
A. The distribution is shown as a downward sloping curve.
B. The distribution is shown as a straight line.
25. In order to maintain high inventory turnover, discount stores choose
D. goods over services.
E. full-service over self-service.
Discount stores are general merchandise outlets that offer brand-name and private-label products at low prices. In order to
maintain high inventory turnover, discount stores choose breadth over depth: They carefully select merchandise across a
number of categories, from appliances and electronics to housewares, clothing, and toys.
26. Retail outlets such as Best Buy or Home Depot that are able to gain high market share within their chosen category are
sometimes referred to as
D. department stores.
E. high-margin retailers.
27. Which of the following is not a reason why growth in the supermarket sector has been consistently declining over the last
decade?
A. the increase in out–of-home eating
B. the increase in competition from online retailers.
28. A retailer that offers ultra-low prices, but requires customers to pay an annual fee for the privilege of shopping in the store is
referred to as
A. a category killer.
B. a convenience store.
29. _______ stores are small, self-service retailers that aim to capture sales from people who are willing to pay higher prices in
exchange for the ease of purchase these retailers offer.
D. Specialty stores
E. Supercenters
30. “Fast fashion” is a term unique to which type of retailer?
D. discount stores
E. off-price retailers
31. A type of purchasing behavior in which off-price retail stores negotiate especially low prices for certain categories of
merchandise, such as end–of-season goods and closeouts is called
A. rock-bottom buying.
B. negotiated buying.
32. Nordstrom and Macy’s are both types of
A. specialty discount stores.
B. off-price retailers.
33. A retailer that operates a brick-and-mortar store but also sells the same merchandise on its website is practicing
A. secondary retailing.
B. direct selling.
34. Carla owns a candy store called “Carla’s confections.” She just finalized an arrangement where she will operate one of her
stores next to the floral department of a local grocery store. She will pay rent for the space and will be responsible for all aspects
of her business. What is this type of arrangement called?
D. omni-channel retailing
E. scrambled merchandising
A leased department is a section within a retail store that is rented to an outside party. The leased department proprietor is
responsible for all aspects of its business, including fixtures and equipment; it normally pays a percentage of sales as rent.
35. The two types of extreme value retailers are
A. off-price retailers and discount stores.
B. factory outlets and closeout chains.
36. _______ retailers primarily offer mechanical or human efforts, rather than merchandise to consumers.
D. Personal
E. Benefit
37. Which of the following is a type of nonstore retailing?
A. warehouse clubs
B. specialty stores
38. Online retailing is also known as
A. web-retailing.
B. cyber-retailing.
39. Which of the following is true regarding nonstore retailing?
A. Online shopping has failed to expand due to poor performance of retailing websites.
40. What is a “bricks–and-clicks” strategy?
A. a strategy where online retailers offer better discounts than what is available at a physical store
B. a strategy where retailers with physical stores offer better discounts than what is available online
41. Grouping many items together in a printed piece or an online store is referred to as
A. fast fashion.
B. scrambled merchandising.
42. The most impersonal form of retailing is
A. direct selling.
B. online retailing.
43. Kendra works as an independent representative for a jewelry company. She holds “parties” in peoples’ homes where she
can display and talk about the jewelry she sells. What form of retailing does this represent?
44. The direct selling business model in which a direct seller makes money by buying products from a parent organization and
selling them directly to customers is called
D. network marketing.
E. person-to-person marketing.
45. Because it involves high costs and commits company resources for a period of time, which of the following does your text
cite as being an important factor in opening a retail store?
D. product availability
E. promotional options
46. There are many factors to take into consideration when choosing a site to open a retail location. Which of the following would
be least important?
A. parking availability
B. population characteristics
47. Reilly’s law of ______ is one of the oldest and most commonly used trading area models.
A. site selection
B. retail trading
48. Reilly’s law of retail gravitation describes
A. the profit potential of various retail locations.
B. the profit potential for two competing stores located in close proximity.
49. Reilly’s law of retail gravitation calculates a ______ in retail trade between two communities.
A. travel point
50. What does Reilly’s law of retail gravitation state about the correlation between the size of a trading area and population
density?
A. the size of a trading area decreases as population density decreases
B. the population density increases when the size of a trading area increases
51. A freestanding retail outlet located on either a highway or major road is referred to as a(n)
D. planned store.
E. solitary store.
52. A(n) ______ is a type of retail location where two or more stores are situated together or in close proximity and the overall
mix of stores is not the result of prior long-range planning.
D. variety shopping center
E. main street center
53. Large regional shopping malls and neighborhood strip malls are examples of
D. isolated shopping centers.
E. unplanned business districts.
54. Which of the following is a unique feature of a planned shopping center?
D. It does not place retailers adjacent to one another.
E. It is located on either a highway or a major road.
55. A ______ shopping center is an upscale retail operation that also offers fine dining and entertainment options and is often
located within affluent neighborhoods.
D. premium
E. high-end
56. According to your text, consumer interest in lower prices and ______ are the two things driving strategic issues in 21-century
retailing.
A. brand loyalty
B. global retailing
C. a focus on product quality
57. When the economy takes a downward shift, such as during a recession, what factor drives retailers to reduce costs by
improving operational efficiency?
D. a desire to import more goods
E. a desire to streamline the marketing mix
58. ______ refers to how consumers perceive a retailer.
D. Atmospherics
E. Operational efficiency
Store image refers to how consumers perceive a retailer.
59. All of the following are factors that contribute to shaping a retailer’s image EXCEPT
A. the store’s brand communications.
B. the characteristics of the store or website.
60. Sensory-based stimuli within a retailer’s environment—the sights, sounds, smells, and other attributes—that project an
image and draw customers to the store are referred to as
D. aspects.
E. impressions.