Chapter 15—Retailing
TRUE/FALSE
1. Retailing can be defined as all activities directly related to the sale of goods and services to the
ultimate consumer for personal, nonbusiness use.
2. A retail establishment can be classified according to its ownership, level of service, product
assortment, and price.
3. Independent retailer shops are stores owned and operated as a group by a single organization.
4. Traditional department stores and specialty stores are more likely to charge the full “suggested retail
price” for goods than are factory outlets.
5. Emily has just opened a health food store that sells organic foods, herbal supplements, and
environmentally-friendly products. Because it will be a specialty store, she should have a broad
product assortment with moderately low prices.
6. Supermarkets are self-service retailers that specialize in food and food products, although many now
carry nonfood items as well.
7. Jennifer owns a greeting card store where she also sells women’s purses, Crocs shoes for the whole
family, Jibbitz charms, cell phone skins, Sandy Lion stickers, Yankee candles, Godiva chocolates,
Precious Memories figurines, beaded jewelry, and stuffed animals. Jennifer uses multibrand
merchandising.
8. Flash Foods is the name of a chain of small stores, which carry high-turnover products such as lip
balm, milk, soda, beer, bread, and aspirin. Flash Foods stores are open all day every day and would
best be classified as convenience stores.
9. Supercenters are more than just larger versions of traditional “markets.” In addition to foodstuffs,
supercenters have pharmacies, dry cleaners, portrait studies, photo finishing, hair salons, and
restaurants.
10. Dollar General and Family Dollar stores are examples of extreme-value retailers, which entice
shoppers from the low-income segment.
11. Specialty discount stores differ from other discount stores. While most other discounters offer a
predictable assortment of merchandise, the styles and brands offered at specialty discount stores
change frequently because they buy only what is currently available at a good deal.
12. Factory outlet stores are generally the same as warehouse clubs, except that a factory outlet store
carries only the merchandise of the manufacturer that owns it.
13. Marketers who use nonstore retailing no longer have to worry about the “place” element of the four Ps.
14. Direct retailers’ sales have skyrocketed over the past few decades as women have entered the
workforce.
15. The person who called Alisa last night and tried to sell her double-paned windows for her home was
using outbound telemarketing.
16. Electronic retailing includes the 24 hour, shop-at-home television networks and online retailing.
17. M-commerce involves consumers using wiresless mobile devices to connect to the Internet and shop.
18. The two types of franchising are target market franchising and geographic franchising.
19. Franchisors usually allow franchisees to alter their business format slightly in foreign markets.
20. The six Ps of the retailing mix are product, place, price, promotion, personnel, and planning.
21. Pick of the Litter has just purchased a sizable plot of land on which it will build a store building with a
large parking lot. Across the street is a collection of specialty shops and a furniture store. Pick of the
Litter will be part of a strip shopping center.
22. A store’s atmosphere is the overall impression conveyed by a store’s physical layout, decor, and
surroundings.
23. Color can be used by retailers to create a mood or focus customer attention on a particular product.
24. Providing great customer service is one of the most challenging elements in the retail mix because
customer expectations for service are so varied.
25. Interactivity in the retail environment is not feasible in terms of its costs.
26. Every September and October, Halloween Express opens a temporary store in many malls to sell
products during the Halloween season without the long-term commitment of a more expensive retail
lease. This is an example of a pop-up shop.
MULTIPLE CHOICE
1. _____ is defined as all activities directly related to the sale of goods and services to the ultimate
consumer for personal, nonbusiness use or consumption.
a.
Wholesaling
b.
Retailing
c.
Business
d.
Franchising
e.
Distribution
2. Which U.S. retailer is the number one sales volume retailer in the world?
a.
Sears
b.
JCPenney
c.
Target
d.
Kroger
e.
Walmart
3. Retail establishments are generally classified according to all of the following EXCEPT:
a.
ownership
b.
level of sales
c.
level of service
d.
price
e.
product assortment
4. A retail store can be classified according to its:
a.
distribution method
b.
inventory control
c.
product assortment
d.
management style
e.
decor and atmosphere
5. Around the world, most retailers are _____, operating one or a few stores in their community, owned
by a single person or partnership and not operated as part of a larger retail institution.
a.
independent retailers
b.
chain stores
c.
franchise outlets
d.
specialty clubs
e.
product assortment stores
6. Small neighborhood florists, shoe stores, and ethnic food markets are most likely to be:
a.
supercenters
b.
franchise outlets
c.
membership clubs
d.
chain stores
e.
independent retailers
7. Jim’s Bike Shop sells bicycles for the serious racer to the casual cyclist. Jim’s also sells biking gear
and clothing. Jim is the sole owner of the store, so in terms of ownership, his store would be
classified as a(n):
a.
independent retailer
b.
free-standing store
c.
franchise
d.
chain store
e.
common retailer
8. Stores that are owned and operated as a group by a single organization are called _____. Under this
form of ownership, administrative and purchasing tasks are handled by the home office.
a.
home base stores
b.
independent retailers
c.
franchisees
d.
chain stores
e.
strip centers
9. Which type of retail ownership is owned and operated by an individual but is licensed by a larger
supporting organization?
a.
Independent retailer
b.
Chain store
c.
Franchise
d.
Cooperative
e.
Secondary retailer
10. Rochelle owns and operates a McDonald’s restaurant. She has licensed the right to use McDonald’s
name, logo, and products. Rochelle’s restaurant is an example of a(n):
a.
doubly managed outlet
b.
chain store
c.
franchise
d.
independent retailer
e.
licensor
11. Which of the following retailers probably offers the LOWEST level of service?
a.
a dressmaker
b.
a warehouse club
c.
a small hardware store
d.
an upscale restaurant
e.
All retailers offer the same level of service.
12. The number of different varieties of fishing lures carried by the Angler’s Store refers to the store’s:
a.
store’s supply standard
b.
complete retail offering
c.
retail mix
d.
volume
e.
assortment depth
13. _____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is
subtracted.
a.
Net income
b.
Retained earnings
c.
Profitability
d.
Net equity
e.
Gross margin
14. As a general rule of thumb, a retailer that has a high gross margin will have:
a.
m-commerce capabilities
b.
an inventory management system
c.
low prices
d.
salespeople trained in cross-selling techniques
e.
high prices
15. Housing several departments under one roof, a _____ carries a wide variety of shopping and specialty
goods, including apparel, cosmetics, housewares, electronics, and sometimes furniture.
a.
supermarket
b.
specialty store
c.
convenience store
d.
super club
e.
department store
16. Which type of retail store would typically have the highest labor costs?
a.
A warehouse club
b.
A department store
c.
An off-price store
d.
An off-price retailer
e.
A discount store
17. Each department in a department store is usually headed by a _____ who selects the merchandise mix
for the department and may also choose the promotional devices and personnel for that department.
a.
franchisee
b.
financial broker
c.
comptroller
d.
human resources manager
e.
buyer
18. The buyer who heads a department in a department store is responsible for the:
a.
store’s exchange and return policies
b.
store’s credit policies
c.
chain’s expansion efforts
d.
merchandise mix in that department
e.
store’s advertising program
19. Melanie’s job for Coldwater Creek, a clothing retailer, is to choose items that are appropriate for the
store and its clientele. The items must suit the needs of the customers but be within the price range that
the store has developed for its customers. Melanie’s job is that of a(n):
a.
buyer
b.
purchasing agent
c.
store manager
d.
sales clerk
e.
franchisee
20. Which type of retail store specializes in a given type of merchandise?
a.
An independent store
b.
A department store
c.
A discount store
d.
A specialty store
e.
A first-level store
21. James wants to open a small store that caters to the model railroad hobbyist. The store would sell
model trains, scenery, accessories, and books on the subject of model railroading. Which of the
following types of stores would most likely support an effective launch of his business idea?
a.
An off-price retailer
b.
A specialty store
c.
A full-discount store
d.
A general store
e.
A warehouse club
22. Texas-based Grape Vine Market is an 18,000-square-foot store offering highly collectible food and
wine—along with some other culinary perks, including a cooking school—all in a setting crafted to
make shoppers feel comfortable. It stocks more than 5,500 different kinds of wine. Grape Vine Market
is best described as a:
a.
hypermarket
b.
convenience store
c.
specialty store
d.
department store
e.
general store
23. Which of the following types of stores has a high gross margin, a narrow product assortment, and a
high level of service?
a.
A supermarket
b.
A warehouse club
c.
A convenience store
d.
A full-line discount store
e.
A specialty store
24. Which of the following statements about specialty stores is true?
a.
Specialty stores find it easy to compete on price with big-box stores.
b.
Customers at specialty stores are not concerned with the distinctiveness of the
merchandise or the store’s physical appearance.
c.
Customers of specialty stores usually consider price to be secondary.
d.
Specialty stores are ineffective test markets.
e.
A typical specialty store carries a wider assortment of specialty merchandise than
department stores.
25. _____ are large, departmentalized, self-service retailers that specialize in wide assortments of
foodstuffs and a few nonfood items.
a.
Supermarkets
b.
Convenience stores
c.
Membership wholesale clubs
d.
Discount stores
e.
Assortment merchandisers
26. Fareway is a chain of retail outlets in Iowa, Minnesota, Nebraska, and Illinois markets that are
described as large, departmentalized, self-service stores that specialize in wide assortments of
foodstuffs and limited nonfood items. Fareway stores are:
a.
off-price retailers
b.
discount stores
c.
wholesale clubs
d.
convenience stores
e.
supermarkets
27. When supermarkets offer a wide variety of nontraditional goods and services under one roof, they are
engaged in:
a.
cross-selling
b.
trading up
c.
scrambled merchandising
d.
disintermediation
e.
cross-docking
28. Kroger is the largest supermarket chain in the U.S. Which of the following is the most likely reason
why Kroger supermarkets sell all types of foodstuffs as well as nonfood products including a wide
range of eyewear and accessories?
a.
Consumer demand for one-stop shopping often leads to scrambled merchandising
b.
The fulfillment of the wheel of retailing hypothesis
c.
Inflationary economic climate
d.
Repositioning as a discounter
e.
Growth of convenience merchandising
29. A _____ is a retail store that stocks pharmacy-related products and services as its main draw.
a.
convenience store
b.
drugstore
c.
supermarket
d.
discount store
e.
extreme-value store
30. _____ carry a limited line of high-turnover, high-priced goods and resemble miniature supermarkets.
These self-service stores are typically located near residential areas and are open long hours, seven
days a week.
a.
Specialty stores
b.
Wholesale stores
c.
Convenience stores
d.
Factory outlets
e.
General stores
31. Prices are usually higher in convenience stores than in supermarkets because convenience stores offer:
a.
more specialty goods
b.
a wider variety of products
c.
a higher level of customer services
d.
better location, longer hours, and faster service
e.
higher quality goods
32. Flash Foods is the name of a chain of convenience stores with self-service gas pumps. What do you
know about the convenience stores?
a.
They carry a wide assortment of products
b.
They carry a limited line of high-turnover goods
c.
They compete on the basis of low price
d.
They carry a limited but deep assortment of products
e.
They carry the freshest of produce
33. _____ are retailers that compete on the basis of low prices, high turnover, and high volume.
a.
Convenience outlets
b.
Discount stores
c.
General stores
d.
Department stores
e.
Specialty stores
34. Which type of discount store offers consumers very limited service and carries a broad assortment of
nationally branded “hard goods,” such as housewares, toys, automotive parts, clothing, bedding, and
maybe a limited line of nonperishable food items?
a.
Full-line discount stores
b.
Discount specialty stores
c.
Factory outlets
d.
Fashion stores
e.
Specialty supercenters
35. _____ is the retailing strategy of using moderate to low prices on large quantities of products and
lower service to stimulate a high turnover of inventory.
a.
Specialty store positioning
b.
Merchandise positioning
c.
M-store retailing
d.
The wheel of retailing
e.
Mass merchandising
36. Kmart utilizes a strategy of moderate to low prices on large quantities of products and lower levels of
service to stimulate a high turnover of inventory. Kmart offers a wide variety of different product
lines. Kmart is an example of a:
a.
factory outlet
b.
mass merchandiser
c.
convenience store
d.
franchising operation
e.
specialty store
37. A retail operation that has a 90,000-square-foot facility, that houses a florist, baker, bank, craft shop,
photo finisher, dry cleaner, and pharmacy under the same roof as grocery and household items is
correctly called a:
a.
membership warehouse club
b.
wholesale outlet
c.
factory outlet
d.
supercenter
e.
mass merchandiser
38. _____ are full-line discount, off-price retailers who entice the low- and fixed-income customers who
live near the stores.
a.
Membership wholesale clubs
b.
Extreme-value retailers
c.
Factory outlets
d.
Neighborhood outlets
e.
Category killers
39. Which of the following groups is most likely to be the target market for extreme-value retailers?
a.
Teenagers
b.
Professionals who like bargains
c.
Asian Americans
d.
Middle-class innovators
e.
People who have fixed or low incomes
40. _____ are single-line stores that offer a nearly complete selection of one line of merchandise and use
self-service, discount prices, high volume, and high turnover of merchandise to their advantage.
a.
Specialty discount stores
b.
Factory outlets
c.
Mass merchandisers
d.
Membership clubs
e.
General stores
41. Toys “R” Us sells a huge assortment of toys and children’s books at greatly reduced prices. It offers
customers few services and competes on the basis of moderate to low prices on the large quantities of
merchandise it stocks. Toys “R” Us is an example of a:
a.
full-line discount store
b.
specialty discount store
c.
general store
d.
department store
e.
wholesale store
42. Specialty stores such as Best Buy, Staples, Dick’s Sporting Goods, and Bed, Bath, and Beyond are
often called category killers because:
a.
they can destroy the profit potential for a category of merchandise for other retailers
b.
they are located at stand-alone sites
c.
of their broad merchandise mix and shallow assortment
d.
they offer an exclusive category of merchandise
e.
they carry only fast-selling items
43. _____ sell a limited selection of brand-name appliances, household items, and groceries, usually in
bulk on a cash-and-carry basis to members only.
a.
Super outlets
b.
Factory outlets
c.
Wholesale discounters
d.
Off-price discount retailers
e.
Warehouse membership clubs
44. Katie buys supplies for her consulting business at a retailer that stocks a limited selection of items,
which are sold in bulk on a cash-and-carry basis to members only. As she browses through a huge
store, she buys flour, a set of muffin pans, and a package of paper towels as well as an assortment of
fresh produce. Katie is most likely shopping at a(n):
a.
off-price discount retailer
b.
factory outlet
c.
industrial supply warehouse
d.
warehouse membership club
e.
wholesale outlet
45. Off-price retailers:
a.
are often able to take advantage of manufacturers’ faulty sales forecasting
b.
very often offer a consistent assortment of merchandise
c.
seldom stock brand-name merchandise
d.
are owned by the manufacturer of the products they sell
e.
offer very deep assortments
46. A publisher of books on holiday decorating, cooking, and crafts has to find a way to dispose of its
overrun and unsold end-of-season output. As a marketing consultant, you suggest the firm sell the
merchandise to:
a.
mass merchandisers
b.
convenience stores
c.
department stores
d.
supermarkets
e.
off-price discount retailers
47. A _____ is an off-price retailer that is owned and operated by a manufacturer and carries one line of
merchandise—its own.
a.
mass merchandiser
b.
factory outlet
c.
wholesale club
d.
discount store
e.
bargain basement store
48. Well-known manufacturers such as Bose, Ralph Lauren, and Reebok have decided the most profitable
way to dispose of out-of-season and irregular stock is to open stores and sell their own merchandise.
These stores are types of:
a.
seasonal outlets
b.
mass merchandisers
c.
factory outlets
d.
discount stores
e.
bargain basements
49. Which of the following statements about restaurants is true?
a.
Restaurants are clearly a retailing establishment.
b.
There is a strong demand for many more restaurants.
c.
The demographic issue of time-poor consumers has led to a growing demand for
restaurants.
d.
Because barriers to entry are low, the restaurant business appeals to many people.
e.
Restaurants are clearly a service industry.
50. _____ refers to shopping without visiting a store and is currently growing faster than in-store shopping
because of the consumer demand for convenience.
a.
Nonstore retailing
b.
Customerization
c.
Hypershopping
d.
Niche marketing
e.
Specialty merchandising
51. Which of the following statements about nonstore retailing is true?
a.
The nature of the communications between the retailer and the customer is the same in all
forms of nonstore retailing.
b.
Nonstore retailing is currently growing faster than in-store retailing.
c.
More than 80 percent of all sales are made through nonstore retailing.
d.
The high growth rate for nonstore retailing is due to the growth of TV home shopping.
e.
Nonstore retailing is increasing at a rate lower than in-store retailing.
52. _____ is a low-profile, yet important, form of retailing in which consumers get products out of
automated machines, and it accounts for $40 billion worth of sales each year in the United States.
a.
Automatic vending
b.
Party-plan selling
c.
Direct marketing
d.
A pyramid scheme
e.
Professional selling
53. Which type of retailing is the selling of products by representatives who work door-to-door,
office-to-office, or at home parties?
a.
Personal marketing
b.
Remote retailing
c.
Direct retailing
d.
Off-site retailing
e.
Primary retailing
54. Southwestern Company recruits and trains college students to sell educational reference books,
software, and children’s books door-to-door. This form of nonstore retailing is called:
a.
direct retailing
b.
personal marketing
c.
direct marketing
d.
automatic vending
e.
electronic retailing
55. Susan Adams makes children’s clothing. She is also the sales representatives and sets up parties and
fashion shows at homes of mothers to demonstrate the quality and value of her clothing. Susan is
using:
a.
primary marketing
b.
automatic vending
c.
personal marketing
d.
electronic retailing
e.
direct retailing
56. _____ refers to the techniques used to get consumers to buy from their home. Those techniques
include direct mail, catalogs and mail order, telemarketing, and electronic retailing.
a.
Nonstore vending
b.
In-home retailing
c.
Franchising
d.
Direct marketing
e.
Direct retailing
57. Marketers can precisely target their customers according to demographics, geographics, and
psychographics with:
a.
direct mail
b.
vending machines
c.
franchise stores
d.
specialty retail outlets
e.
electronic selling
58. __Which of the following statements about catalog and mail order sales is CORRECT?
a.
Sales of electronics via mail order and catalogs is virtually nonexistent.
b.
Successful catalogs are usually created and designed for generalized markets.
c.
Women make up the bulk of catalog shoppers.
d.
Catalog and mail order sales is a form of direct retailing.
e.
All of the above statements are correct.
59. _____ is the use of a telephone to sell directly to customers.
a.
Telemarketing
b.
Two-way vending
c.
Teleprompting
d.
Indirect marketing
e.
Phone vending
60. Telemarketing can consist of either unsolicited _____ sales calls, or _____ sales calls, which allow
companies to receive orders through toll-free telephone numbers.
a.
order placement; lead generation
b.
push strategy; pull strategy
c.
systematic; synergistic
d.
qualifying; finalizing
e.
outbound; inbound