A Framework for Marketing Management, 5e (Kotler)
Chapter 14 Managing Retailing, Wholesaling, and Logistics
1) ________ includes all the activities in selling goods or services directly to final consumers for
personal,
nonbusiness use.
A) Wholesaling
B) Retailing
C) Procurement
D) Promoting
E) Warehousing
2) Discount stores that try to keep prices as low as possible are more likely to function using
________ operations.
A) limited service
B) self-selection
C) full-service
D) self-service
E) limited selection
3) Reynold’s is a grocery chain that has always catered to mid-market customers. However, the
owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost
products and products on discount. To attract customers, Mal decides to make a gradual switch
to the discount store format, but to do this, he will have to cut costs wherever possible. Which of
the following types of service should Mal avoid in order to lower costs?
A) limited service
B) self-selection
C) full-service
D) self-service
E) limited selection
4) In ________ retailing, salespeople are ready to assist in every phase of the “locate-compare-
select” process.
A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection
5) In the ________ type of retailing, customers usually find their own goods, although they can
ask salespeople for assistance.
A) self-service
B) self-selection
C) full service
D) limited service
E) limited-selection
6) Which of the following is true for self-service retailing?
A) These retailers carry more shopping goods and services such as credit and merchandise-return
privileges.
B) This service model is favored by discount stores and customers who want to save money.
C) It results in high staffing costs compared to other forms of retailing.
D) Salespeople are ready to assist in every phase of the “locate-compare-select” process.
E) Customers need more information and assistance than in other forms of retailing.
7) Which of the following is an example of a limited service retailer?
A) Customers at TAB pick out the products they want and pay at the checkout counter.
B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing
products.
C) Mina’s allows customers to check out their own purchases in order to reduce the staff count.
D) As CLO’s offers a number of merchandise-return privileges, customers need information and
assistance while shopping.
E) Alison’s stocks a number of specialty products and the store’s salespeople generally help
shoppers with all their needs.
8) Bill and Josh are considering opening a retail store. They have identified their target market
and location and are finalizing the details of the merchandise they will carry. Since the
neighborhood is rundown and the customers in the area are very price-conscious, Bill and Josh
want to offer goods from well-known brands, but at lower rates than the full retail prices of the
products. They choose to stock excess production from manufacturers or goods that have
remained unsold at other retailers. This is a description of a(n) ________ retailer.
A) off-price
B) specialty
C) discount
D) department
E) catalog
9) H&A is a retail chain that specializes in selling goods at very low prices. To achieve this, it
stocks a very narrow assortment of basic necessities and offers customers a “no-frills” shopping
experience. H&A is an example of a(n) ________ store.
A) off-price
B) specialty
C) hard-discount
D) superstore
E) convenience
10) E&OE produces and markets its own brand of skincare products using herbal remedies and
natural ingredients through standalone stores as well as an online portal. E&OE is a(n) ________
retailer.
A) off-price
B) specialty
C) discount
D) department
E) extreme value
11) A factory outlet is an example of a(n) ________ retailer.
A) off-price
B) specialty
C) discount
D) department
E) catalog
12) Which of the following is an example of direct marketing?
A) E&OE sells its herbal skincare products exclusively through its stand-alone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne’s sells most of its products to customers through home sales parties.
D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms.
E) Reynold’s tries to minimize its staff costs by installing vending machines in its stores.
13) Telemarketing is a type of ________.
A) direct selling
B) network marketing
C) multilevel selling
D) close-range marketing
E) direct marketing
14) Electronic shopping is a type of ________.
A) direct selling
B) network marketing
C) multilevel selling
D) corporate selling
E) direct marketing
15) Which of the following is true of store retailers?
A) A hard-discount store offers a wider merchandise mix than discount stores at higher prices.
B) A discount store offers leftover goods, overruns, irregular merchandise sold at less than retail.
C) A specialty store generally stocks a very narrow product line.
D) An extreme value store generally has a broad selection of high-markup, brand-name goods.
E) A catalog showroom is a large, low-cost, low-margin, high-volume, self-service store.
16) A(n) ________ is a storeless retailer serving a specific clientele–usually employees of large
organizations–who are authorized to buy from a list of retailers that have agreed to give
discounts in return for inclusion on the list.
A) direct-selling vendor
B) direct marketing vendor
C) buying service
D) automatic vendor
E) corporate retailer
17) An independent retailer using a central buying organization and joint promotion efforts with
other retailers is part of a ________.
A) corporate chain store
B) voluntary chain
C) retailer cooperative
D) merchandising conglomerate
E) franchise organization
18) A ________ is a retail firm owned by its customers. Members contribute money to open their
own store, vote on its policies, elect a group to manage it, and receive dividends.
A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization
19) A ________ is a wholesaler-sponsored group of independent retailers engaged in bulk
buying and common merchandising.
A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization
20) Staples is a giant retailer that concentrates on selling office supplies. Staples is an example of
a(n) ________.
A) ambush marketer
B) supercenter
C) megamarketer
D) category killer
E) guerilla marketer
21) Which of the following is true for direct product profitability analysis?
A) It is highly correlated with the gross margin on a product.
B) It is negligible compared to the gross margin on a product.
C) It bears little relation to the gross margin on a product.
D) It is significantly lower than the gross margin on a product.
E) It is exactly the same as the gross margin on a product.
22) Mass merchandisers and discount stores typically fall into the ________ group with respect
to margins and volume.
A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume
23) A store selling expensive artwork and luxury goods typically falls into the ________ group
with respect to margins and volume.
A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume
24) Most retailers will put low prices on some items in order to increase traffic to the store.
These low-priced products are known as ________.
A) loss leaders
B) price ceilings
C) price skimmers
D) price floors
E) cold calls
25) Which of the following is a prepurchase service offered by retailers?
A) accepting orders over the telephone
B) shipping the product
C) delivery to the customer’s doorstep
D) general information
E) interior decoration of the retail outlet
26) Which of the following is a postpurchase service offered by retailers?
A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer’s doorstep
D) general information
E) interior decoration of the retail outlet
27) Which of the following is an ancillary service offered by retailers?
A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer’s doorstep
D) general information
E) alterations and tailoring
28) In your neighborhood there is a small men’s store that has a limited selection of clothing, but
the selection that is carried is of very high quality and price. Services include free alterations and
tailoring, personalized record keeping, and free dry cleaning. The inside of the store has deep
leather chairs and couches and thick pile carpet. Upon entering the store, a customer feels
“special and rich.” In terms of differentiation, what is this retailer trying to communicate by its
decorations and service level?
A) differentiation based on services mix and atmosphere
B) differentiation based on prepurchase services
C) differentiation based on postpurchase services and atmosphere
D) differentiation based on ancillary services and atmosphere
E) differentiation based on prepurchase and postpurchase services
29) Which of the following is the strongest differentiator for brick-and-mortar stores who want to
emphasize their superiority over online retailers?
A) product quality
B) the shopping experience
C) product range
D) pricing
E) the retailer’s reputation
30) A brand developed by a retailer and/or wholesaler that is available only in selected retail
outlets is called a ________ brand.
A) generic
B) franchisee
C) marque
D) national
E) private-label
31) Though it is sold only in Wal-Mart stores, Wal-Mart’s Ol’Roy dog food has surpassed
Nestlé’s Purina brand as the top-selling dog food. Ol’Roy is an example of a ________.
A) generic product
B) national brand
C) franchise
D) copy-cat brand
E) private label
32) ________ are unbranded, plainly packaged, less expensive versions of common products
such as spaghetti, paper towels, and canned peaches.
A) Common carriers
B) Shills
C) Generics
D) Private labels
E) Marques
33) In addition to its store brands and nationally well-known brands of detergents, Reynold’s also
carries much cheaper varieties of detergents that are not advertised and have little-known names.
They are often manufactured from lower-quality ingredients and save on packaging and
advertising costs. These are known as ________.
A) Common carriers
B) Shills
C) Generics
D) Private labels
E) Marques
34) Because shelf space is scarce, many supermarkets now charge a ________ for accepting a
new brand, to cover the cost of listing and stocking it.
A) retainer
B) slotting fee
C) residual fee
D) contingent fee
E) royalty
35) ________ includes all the activities in selling goods or services to those who buy for resale
or business use.
A) Retailing
B) Wholesaling
C) Procurement
D) Promoting
E) Warehousing
36) ________ are independently owned businesses that take title to the merchandise they handle.
They are full-service and limited-service jobbers, distributors, and mill supply houses.
A) Brokers
B) Agents
C) Merchant wholesalers
D) Specialized wholesalers
E) Retailers’ branches