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Indicate whether the statement is true or false.
1. Mail order sales have grown at about twice the rate of retail store sales in recent years.
a. True
b. False
2. The pricing strategies seldom influence consumer perceptions of a retailer.
a. True
b. False
3. The term “atmospherics” exclusively refers to the interior décor of a store.
a. True
b. False
4. Many consumers shop for reasons other than just purchasing needed products.
a. True
b. False
5. Convenience retail stores attract consumers by providing easy access, extended store hours, and adequate
parking facilities.
a. True
b. False
6. Through direct selling, manufacturers completely bypass retailers and wholesalers and set up their own
channels to sell their products directly to consumers.
a. True
b. False
7. Retailers must consider the overall profitability of each product line and product category to develop a
successful merchandise mix.
a. True
b. False
8. Chain stores usually obtain merchandise at lower prices from manufacturers compared to their independent
rivals.
a. True
b. False
9. Nordstrom carefully combines defined product lines and services in an attempt to convince consumers to
expend considerable effort shopping at their stores. Nordstrom can be regarded as a specialty retailer.
a. True
b. False
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10. The main factors involved in determining a product’s markup are the inventory turnover rate and the services
performed by the retailer.
a. True
b. False
11. When determining a customer service strategy, retailers must decide whether or not they will charge
customers for the services they offer.
a. True
b. False
12. It is imperative for the components of retailing strategy to work together in order to create a consistent
image that appeals to the retailer’s target market.
a. True
b. False
13. Vending machines are classified as a form of automatic merchandising.
a. True
b. False
14. IKEA is well-known for selling furniture in flat-packed boxes that customers assemble at home. If IKEA
were to start selling already assembled furniture delivered to customer’s homes, you could expect that IKEA
would need to increase prices on the furniture it sells.
a. True
b. False
15. A full-service retailer usually sells convenience products that people can purchase without any assistance.
a. True
b. False
16. Chain stores are groups of retail outlets that operate under central ownership and management and handle
the same product lines.
a. True
b. False
17. Other things being equal, stores with a higher inventory turnover rate can cover their costs and earn a profit
while charging a smaller markup.
a. True
b. False
18. In the case of convenience stores, customers usually compare prices, assortments, and quality levels at
competing outlets before making purchase decisions.
a. True
b. False
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19. For retailers, the decision on where to locate a store usually depends on just one or two factors.
a. True
b. False
20. Retailers are using direct mail in favor of digital advertisements.
a. True
b. False
21. Macy’s is a retail store that focuses on fashion-oriented merchandise, backed by a complete array of
customer services. It can be considered as a self-service store.
a. True
b. False
22. A retailer’s merchandising strategy guides decisions regarding the items it will offer.
a. True
b. False
23. If merchandise selection changes frequently to follow fashion trends, advertising is typically used to
promote current styles effectively.
a. True
b. False
24. The response rates for direct-mail marketing are measurable and higher compared to other types of
advertising.
a. True
b. False
25. A local food store can be regarded as a convenience retailer.
a. True
b. False
26. Supermarkets are a mix between specialty and shopping merchandise.
a. True
b. False
27. Specialty retailers typically attract customers by offering the products at the lowest possible prices.
a. True
b. False
28. Fitness Zone is a gym that offers its customers a chance to buy health drinks through a vending machine.
This type of service is called automatic merchandising.
a. True
b. False
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29. Other things being equal, stores that offer more services charge smaller markups to cover their costs.
a. True
b. False
30. The level of competition for business in the market is an important criterion considered by retailers while
selecting the target market.
a. True
b. False
31. For manufacturers, the basis for choosing retail partners is if they reach and serve the company’s target
market in a way that is consistent with the company’s objectives.
a. True
b. False
32. General merchandise retailers distinguish themselves from specialty and limited-line retailers by the large
number of product lines they carry.
a. True
b. False
33. The retail industry has a significant impact on the U.S.economy, accounting for 16% of the U.S. GDP.
a. True
b. False
34. Technology and e-commerce have not had an impact on retailers.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
35. Uniqlo, a Japanese retailer, has started selling clothing items in vending machines in U.S. malls and airports.
This is an example of:
a. direct selling.
b. automatic merchandising.
c. direct response retailing.
d. online retailing.
36. Babies R Us sells a deep assortment of baby-related items including furniture, car seats, and clothing. Target
also sells baby related items but also offers groceries, home goods, and beauty items. Expectant mothers may
appreciate the ability to purchase a variety of items from Target while they also shop for their baby needs. This
is an example of:
a. merchandising strategy.
b. customer service strategy.
c. store atmospherics.
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d. promotional strategy.
37. _____ refers to the amount a retailer adds to the cost of a product to determine its selling price.
a. Allowance
b. Discount
c. Rebate
d. Markup
38. The per reader cost of direct mail is high, so the effectiveness depends largely on:
a. the quality of the mailing list.
b. the markup on products the retailers sell.
c. whether the piece is printed in color or black and white.
d. the frequency in which direct mail is sent.
39. Which elements of retail strategy would be most important for a company that has just decided to construct a
brick-and-mortar storefront?
a. Location and customer service
b. Store atmospherics and customer service
c. Promotion and store atmospherics
d. Location and store atmospherics
e. Promotion and customer service
40. _____ stores differentiate themselves through advertising, in-store displays, knowledgeable salespeople, and
appropriate merchandise assortments.
a. General merchandise
b. Specialty
c. Convenience
d. Shopping
41. _____ are groups of retail outlets that operate under central ownership and management and handle the same
product lines.
a. Specialty stores
b. Chain stores
c. Variety stores
d. Department stores
42. A manufacturer for a child’s tablet has received advanced recognition as one of the hottest toys for the
upcoming holiday season. As a result, the manufacturer expects to sell an exceptionally large number of its
tablets. One concern the company has is the ability to keep the product in stock in retail stores for demanding
consumers. The company is most concerned with their:
a. customer service strategy.
b. pricing strategy.
c. location/distribution strategy.
d. promotional strategy.
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43. Target utilizes television and print advertisements as well as weekly circulars in Sunday newspapers as part
of its ______ strategy.
a. customer service
b. merchandising
c. promotional
d. location/distribution
44. The basic objective of all customer services focuses on:
a. attracting and retaining target customers, thus increasing sales and profits.
b. charging higher prices on products, therefore increasing profits.
c. making the shopping experience more enjoyable.
d. encouraging customers to shop in brick-and-mortar stores rather than online.
45. Hallmark Cards stores, if classified by product lines, would be considered:
a. a specialty store.
b. a self-service store.
c. a shopping store.
d. a general merchandise retailer.
46. The new CEO of a struggling cell phone service provider is trying to revitalize the company by revamping
its business strategy. The CEO surveys the current service provider market and sees that there are a few large
companies with similar business models: customers are required to choose from a limited number of plans, and
are then locked into those plans for at least two years by contract. In order to even enter into a contract with the
service provider, the customer must have proof of a steady income and be able to pass a credit check. The CEO
sees that many individuals in the 15 to 24-year-old age bracket cannot meet these standards and are not being
served by the larger companies. She decides to make her company unique by offering no-contract, pay-as-you-
go cell phone service. Customers do not need to pass a credit check or provide proof of income in order to sign
up for service, and can discontinue service at any time.
According to this scenario and your knowledge of marketing strategies, which statement best explains the new
CEO’s actions?
a. The CEO felt sorry for people with bad credit because other cell phone companies were not meeting
their needs, so she decided to create a company that did.
b. The CEO decided to create a unique business plan even though it would not meet the needs of the
majority of the population, just so that her company would stand out.
c. The CEO created a business plan that would target the low-income market, knowing she could take
advantage of the fact that other companies require proof of income.
d. The CEO wanted to make an alternative cell phone service available for indecisive people who disliked
the contracts and plan choices required by other companies.
e. The CEO realized that the youth segment of the market was not being served and decided to fill that
niche in the business by creating a business plan that targeted it.
47. David is recently divorced and his ex-wife took most of their kitchen equipment when she relocated. He’s
decided to host a Pampered Chef party and invite friends who enjoy cooking. He knows that they will enjoy
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sampling various dips and dishes and will likely buy an item or two. He can purchase Pampered Chef items at a
discount and may even earn free items as a benefit of hosting the party. Pampered Chef is classified as a(n):
a. direct sales retailer.
b. mass merchandiser.
c. specialty retailer.
d. retail cooperative.
48. Offering same day pickup and having items shipped to stores for free is part of a retailer’s ______ strategy.
a. customer service
b. location/distribution
c. promotional
d. merchandising
49. Products in Charming Charlie jewelry and accessory stores are organized by color, making the perfect
accessory easy to find. This is an example of Charming Charlie’s:
a. promotional strategy.
b. customer service strategy.
c. merchandising strategy.
d. store atmospherics.
50. Vending machines are an example of:
a. automatic merchandising.
b. Internet retailing.
c. telemarketing.
d. direct selling.
51. The largest retailers in the United States are significant because:
a. of their revenue and the number of stores they have.
b. of the resources spent on e-commerce and online retailing.
c. they are global companies with locations in foreign countries.
d. they have all been in business for over 30 years.
Just Jerky makes jerky from bison, kangaroo, and alligator meat. Because of the unique aspect of the products,
the company would like to maintain a premium product status and prices their jerky products higher than
traditional beef jerky. The company would like to target hunters, campers, and hikers as their main customers.
52. Which of the following retail partners would be the best fit for Just Jerky’s products?
a. Walmart
b. 7-Eleven convenience stores
c. Cabela’s
d. Big Lots
53. Historically, customers visited brick-and-mortar locations to:
a. purchase products they had researched and compared online.
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b. pick up products that had been ordered online and shipped to the store.
c. compare prices in order to shop online.
d. browse and compare products and make purchases.
54. Direct marketing and nonstore retailing are part of the _____ strategies for retailers.
a. pricing and merchandising
b. promotion and pricing
c. distribution and promotion
d. merchandising and distribution
55. Which of the following terms refers to the combination of physical characteristics and amenities that
contribute to a store’s image?
a. Atmospherics
b. Simulation
c. Tableaux
d. Logistics
56. Developing a customer service strategy for your sporting goods store, you know that services can add value to the
shopping experience. Your business partner agrees, but makes a comment that shows he doesn’t really understand this
type of strategy. Identify his comment.
a. At this point, we should agree to offer gift wrapping.
b. At this point, we should specify our return privileges.
c. At this point, we should agree to provide home delivery.
d. We don’t need to decide whether to charge customers for gift wrapping.
e. Our basic objective is to attract and retain customers.
57. You are in the process of starting your own business, a specialty cupcake store. From your study of
marketing, you realize that many of your business decisions, such as where to open the store and how to
advertise it, will depend on the segment of the population you want to attract as customers for your product.
You start looking at data about the types of stores in different parts of the town and the demographics of the
individuals in different neighborhoods. What are you doing in this process?
a. Engaging in category management
b. Creating a promotional strategy
c. Selecting a target market
d. Analyzing the wheel of retailing
e. Marketing to the environment
58. Home Depot hardware stores sell a wide variety of home improvement items including lumber, tools, and
appliances, while smaller hardware store, Ace, focuses on just a few brands in each category and does not sell
appliances. Although both are hardware stores, Ace and Home Depot differ on their:
a. merchandising strategy.
b. customer service strategy.
c. promotional strategy.
d. location/distribution strategy.
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59. A retail establishment that carries a wide variety of product lines, stocking all of them in some depth is
referred to as a _____.
a. rack jobber
b. category killer
c. specialty store
d. general merchandise retailer
60. Coca-Cola just announced a new carbonated drink that will feature twice the caffeine as their regular sodas.
Coca-Cola expects this new drink to be just as popular as their Coca-Cola and Diet Coke beverages. Which of
the following type of store would not be a good location in which to sell this new drink?
a. Specialty retailers
b. Convenience stores
c. Grocery stores nationwide
d. Chain stores
61. Which of the following is an example of a specialty store?
a. A discount house
b. A hypermarket
c. A men’s shoe store
d. An off-price retailer
Just Jerky makes jerky from bison, kangaroo, and alligator meat. Because of the unique aspect of the products,
the company would like to maintain a premium product status and prices their jerky products higher than
traditional beef jerky. The company would like to target hunters, campers, and hikers as their main customers.
62. Just Jerky is considering selling their premium jerky products themselves, through an e-commerce store. Just
Jerky would be utilizing:
a. showrooming.
b. direct mail.
c. automatic merchandising.
d. online retailing.
63. In selected stores in California, Nike offers free pants hemming, bra fittings, and running analysis for its
customers. This is an example of:
a. merchandising strategy.
b. store atmospherics.
c. customer service strategy.
d. promotional strategy.
64. How have retailers responded to technology changing the way consumers shop?
a. By adding mobile apps to replace their physical locations.
b. By replacing check out lines with self-service kiosks.
c. By adding e-commerce sites to complement their brick-and-mortar locations.
d. By adding computers throughout retail locations to provide product information.
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65. Retail experts often cite _____ as a potential determining factor in the success or failure of a retail business.
a. selection
b. location
c. price
d. atmospherics
66. Some grocery stores, like Wegmans and Fred Meyer, now offer pickup and even delivery of groceries to
your home. The grocery stores typically charge a small fee for this service. This reflects the _____ component
of retail strategy.
a. pricing
b. location/distribution
c. merchandising
d. customer service
67. A small, discount retailer would like do which of the following for their promotional strategy?
a. Television advertisements during prime time shows.
b. Full color advertisements in national magazines such as Time and People.
c. A weekly ad in the Sunday newspaper.
d. A 30-second ad spot during the Super Bowl.
68. Toys R Us has recently announced the closure of over 100 of its retail locations. Toy manufacturer, Hasbro,
is concerned about how the closures will affect their bottom line. Toys R Us would often display some of
Hasbro’s toys outside of the packages to allow children to play with the products in stores—something that
Hasbro felt greatly encouraged sales of their toys. As Hasbro searches for new retail partners, they should
consider:
a. finding a retailer that is located near schools and parks.
b. finding a retailer that carries similar products.
c. finding a retailer that shares a similar store atmospherics strategy.
d. finding a retailer that encourages showrooming.
69. _______ occurs when a customer examines and compares products at a store, then buys the product for a
lower price through an online retailer.
a. Window shopping
b. Showrooming
c. Cart abandonment
d. Webrooming
70. Casey’s General Store is a popular ______-type retailer offering gasoline, snacks, extended store hours, and
rapid checkout service.
a. convenience
b. grocery
c. discount
d. specialty
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71. Frequent buyer rewards programs help retailers attract shoppers and build customer loyalty, which is part of
their:
a. promotional strategy.
b. customer service strategy.
c. merchandising strategy.
d. store atmospherics strategy.
72. The ability to send messages quickly and achieve intensive coverage are advantages to using:
a. direct selling.
b. direct response retailing.
c. online retailing.
d. direct mail.
73. Shoppers looking for shoes at T.J.Maxx expect to pay less than they would if they were shopping in the shoe
department at Macy’s. This is an example of the different ______ that retailers have.
a. pricing strategies
b. promotional strategies
c. merchandising strategies
d. customer service strategies
74. Lands End, a clothing retailer, sells its products through its internet site and select Sears stores. The Sears
locations also have computers available for customers to purchase items that are not available in store. In
addition, Lands End utilizes catalogs mailed to consumers to spur online and telephone orders. Lands End
utilizes:
a. automatic merchandising.
b. direct response retailing.
c. direct selling.
d. online retailing.
75. The combination of the retailing mix — merchandise strategy, customer service standards, pricing guidelines,
target market analysis, promotion goals, location/distribution decisions, and store atmosphere — creates a
retailer’s ________.
a. image
b. brand
c. competitive position
d. differential advantage
76. Touchstone Crystal by Swarovski sells their jewelry through consultants and at-home parties. This is an
example of:
a. direct selling.
b. online retailing.
c. direct response retailing.
d. automatic merchandising.