Chapter 16—Retailing, Direct Marketing, and Wholesaling
ESSAY
1. In what ways do retailers add value to products?
2. What are the two categories of retail stores based on breadth of products offered, and what types of
stores are in each category?
3. Compare and contrast department stores and discount stores.
4. What is a superstore? What types of customers does it attract?
5. Identify and describe three kinds of specialty stores.
6. What type of situation would provoke a conflict between department stores and a manufacturer’s outlet
mall?
7. Why would any specific retail store, such as PetSmart, be considered a category killer?
8. What are the three types of nonstore retailing, and what are some examples of each?
9. What should be considered when preparing a “party plan”?
10. Discuss the advantages and disadvantages of catalog marketing.
11. What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?
12. Why is a store’s location one of the most important strategic retailing decisions?
13. What is a store’s image, and how does it affect retailing strategy decisions?
14. What role does wholesaling play in the marketing channel? Is this role necessary?
15. Compare the services wholesalers provide for producers with the services they provide to retailers.
16. Discuss the role of merchant wholesalers. When is a producer most likely to use them?
17. Discuss some of the functions that full-service wholesalers provide. How do these differ from those
that limited-service wholesalers provide?
18. What wholesaling activities do selling agents and brokers perform?
19. What situations would benefit from using a selling agent?
20. Under what conditions would a selling agent most likely be used?
MULTIPLE CHOICE
21. Kate owns a refreshment-stand business at the community ballpark. She goes to a warehouse store
like Sam’s and purchases snacks and canned soda that she will sell at her refreshment stand. Kate is
considered a(n)
a.
wholesaler.
b.
broker.
c.
retailer.
d.
intermediary.
e.
agent.
22. Walmart, Macy’s, Nordstrom’s, and Toys “R” Us are examples of
a.
manufacturers.
b.
merchant wholesalers.
c.
end-users.
d.
agents.
e.
retailers.
23. Direct selling, direct marketing, and vending machines are all examples of
a.
producing.
b.
advertising.
c.
promoting.
d.
retailing.
e.
wholesaling.
24. Retailing is best characterized as
a.
large organizations that carry wide and deep product mixes.
b.
transactions in which the buyer intends to consume the product through personal, family,
or household use.
c.
arrangements whereby a supplier grants a dealer the right to sell its products.
d.
transactions in which the purchaser intends to use the product for resale or for business
operations.
e.
exchanges that take place only in a store or service establishment.
25. Taylor works for a company that buys snacks such as chips, cookies, and candy in bulk from
manufacturers. Taylor’s company then repackages them and sells them to vending companies who
have vending machines at government institutions. Taylor most likely works for a(an) ___, while the
vending machine company is a(an) _____.
a.
Wholesaler; retailer
b.
Wholesaler; broker
c.
Broker; retailer
d.
Broker; agent
e.
Agent; retailer
26. A retailer is an organization that purchases products for the purpose of reselling them to
a.
other retail organizations.
b.
the government.
c.
ultimate consumers.
d.
wholesalers.
e.
nonprofit organizations.
27. By locating in the same general vicinity as other car dealerships, Hartfield Honda can
a.
facilitate comparison shopping.
b.
create form utility.
c.
facilitate wholesale exchanges.
d.
create possession utility.
e.
create exchange utility.
28. A general merchandise retailer offers
a.
a single product line that is stocked in depth.
b.
few product lines with deep assortments of these lines.
c.
few choices of a large variety of product lines.
d.
products through the Internet and catalogs only.
e.
a variety of product lines that are stocked in depth.
29. Supermarkets, discount stores, and hypermarkets can all be classified as
a.
superstores.
b.
general merchandise retailers.
c.
department stores.
d.
specialty retailers.
e.
off-price retailers.
30. Compared with other types of retailers, department stores compete mainly on the basis of
a.
customer services.
b.
low prices.
c.
a very deep assortment of a few specific products.
d.
high sales volume.
e.
catalog sales.
31. Nordstrom’s, Macy’s, and JC Penney’s are all considered
a.
department stores.
b.
discount stores.
c.
off-price retailers.
d.
specialty retailers.
e.
category killers.
32. If a store has areas for men’s apparel, women’s apparel, housewares, cosmetics, and jewelry and
competes mostly on the basis of service, it is most likely a(n)
a.
niche retailer.
b.
department store.
c.
specialty retailer.
d.
superstore.
e.
category killer.
33. Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher
sales volume?
a.
Department stores
b.
Traditional specialty retailers
c.
Warehouse showrooms
d.
Direct marketers
e.
Discount stores
34. Self-service, general merchandise stores such as Kmart are known as
a.
discount stores.
b.
warehouse showrooms.
c.
catalog showrooms.
d.
superstores.
e.
specialty retailers.
35. Cash and Carry is a store that carries food, clothing, and household goods at lower price margins than
other nearby stores. There is little service provided and customers have to bag their own purchases.
Cash and Carry is most likely an example of a(an)_
a.
department store.
b.
category killer.
c.
discount store.
d.
supermarket.
e.
warehouse showroom.
36. Ollies’ is a regional self-service retail store that sells name-brand electronics, tools, housewares, and
sporting goods at low prices. Ollies’ is an example of a
a.
department store.
b.
discount store.
c.
warehouse showroom.
d.
specialty store.
e.
superstore.
37. As discount stores improve their services and atmosphere as well as raise their prices, the distinction
between discount stores and ____ is becoming blurred.
a.
superstores
b.
supermarkets
c.
specialty stores
d.
department stores
e.
category killers
38. A small self-service store that is open long hours and carries a narrow product assortment in
convenient locations is best described as a
a.
discount store.
b.
department store.
c.
convenience store.
d.
supermarket.
e.
category killer.
39. Which of the following was developed in 1927 to supply milk, eggs, and other products for customers
replenishing their ice boxes?
a.
Supermarkets
b.
Convenience stores
c.
Discount stores
d.
Department stores
e.
Specialty stores
40. Jack gets a shopping list from his wife. On the list are a potted plant, fresh salmon, motor oil, bread,
milk, and a birthday cake. To make just one stop to save time, Jack should go to a(n)
a.
convenience store.
b.
category killer.
c.
specialty store.
d.
specialty retailer.
e.
supermarket.
41. Aidan is getting ready to move to campus for his freshman year of college. To get the products he
needs for his dorm room, he goes to a store that sells household goods such as plastic containers,
sheets, and towels. The store also sells items such as shampoo, deodorant, and toothpaste. Aidan has
most likely gone to a(n)
a.
discount stores.
b.
superstores.
c.
supermarkets.
d.
department stores.
e.
warehouse clubs.
42. Kroger, Safeway, and Publix are all considered
a.
superstores.
b.
groceries.
c.
department stores.
d.
supermarkets.
e.
food stores.
43. Which type of retail outlet can have up to 200,000 square feet?
a.
Superstores
b.
Supermarkets
c.
Discount stores
d.
Department stores
e.
Category killers
44. Laura goes to Walmart and buys some clothing, a DVD, and all the groceries she needs for her family.
What type of retailer is this particular Walmart?
a.
Supermarket
b.
Superstore
c.
Hypermarket
d.
Discount store
e.
Department store
45. A large retailer selling food and most routinely purchased consumer products is a
a.
hypermarket.
b.
supermarket.
c.
discount store.
d.
Warehouse club
e.
Superstore
46. What is the primary distinction between superstores and hypermarkets?
a.
Superstores offer a wider variety of products than hypermarkets.
b.
Superstores offer low prices while hypermarkets have moderate to high prices.
c.
Hypermarkets have fewer departments but deeper product lines than superstores.
d.
Hypermarkets are larger and have more types of products than superstores.
e.
These two types of retailers carry very different types of products.
47. After shopping in the same store for nearly two hours, Chelsea goes to Burger King for a Whopper,
while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities
without leaving the store in which they have been shopping. They are most likely in a
a.
superstore.
b.
hypermarket.
c.
department store.
d.
general merchandise retailer.
e.
discount store.
48. Which of the following is a large-scale, members-only, retailer that combines cash-and-carry
wholesaling with discount retailing?
a.
Warehouse showroom
b.
Warehouse club
c.
Catalog showroom
d.
Category killer
e.
Hypermarket
49. Retailers that sell only to members and feature discount retailing combined with cash-and-carry
wholesaling are called
a.
hypermarkets.
b.
retail groups.
c.
warehouse showrooms.
d.
discount stores.
e.
warehouse clubs.
50. Which of the following is not a common feature of a warehouse club?
a.
Concrete floors
b.
Wide aisles
c.
Good customer service
d.
Large packages
e.
Low price per unit
51. Sam’s and Costco are examples of
a.
discounters.
b.
warehouse clubs.
c.
warehouse showrooms.
d.
discount clubs.
e.
wholesalers.
52. Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal
services are called
a.
catalog showrooms.
b.
category killers.
c.
warehouse showrooms.
d.
warehouse clubs.
e.
display outlets.
53. Levitz Furniture locates in huge, low-cost buildings, maintains large, on-premises inventories, and
offers minimum service. Levitz is a
a.
warehouse showroom.
b.
catalog showroom.
c.
superstore.
d.
warehouse club.
e.
department store.
54. A narrow product mix with a deep product line would most likely be carried by
a.
mass merchandisers.
b.
supermarkets.
c.
discount stores.
d.
specialty retailers.
e.
warehouse showrooms.
55. A store that offers a wide variety of shoes for men, women, and children would most likely be
considered a(n)
a.
department store.
b.
specialty retailer.
c.
category killer.
d.
off-price retailer.
e.
warehouse showroom.
56. Matt’s girlfriend tells him she wants a cashmere sweater for Christmas. Matt decides to go to a store
that provides the best possible selection of sweaters. His best choice would be to shop at a ____ store.
a.
department
b.
catalog
c.
discount
d.
traditional specialty
e.
convenience
57. Off-price retailers and category killers are both
a.
specialty retailers.
b.
discount stores.
c.
showrooms.
d.
general merchandisers.
e.
department stores.
58. Specialty stores offer ____ than department stores.
a.
greater varieties of product lines and higher prices
b.
lower prices and higher quality
c.
more product depth and less customer service
d.
more sales expertise and better selections
e.
more frequent price discounts and less selection
59. What type of retailers are the primary competitors for specialty retailers?
a.
Discount stores
b.
Category killers
c.
Catalog marketers
d.
Department stores
e.
Superstores
60. Off-price retailers feature
a.
deep discounts, few customer services, and central checkouts.
b.
sales expertise, wide selections, and low prices.
c.
overstocks, designer brands, and moderate prices.
d.
a narrow product range and enormous product availability.
e.
cash only sales and few customer services.
61. Stores that buy manufacturers’ seconds, overruns, returns, and off-season production runs at below
wholesale prices. These firms resell this merchandise to consumers at deep discounts, and are called
a.
category killers.
b.
off-price retailers.
c.
specialty retailers.
d.
hypermarkets.
e.
discount retailers.
62. When off-price retailers obtain too much in-season, high-quality merchandise, tension between them
and ____ builds.
a.
discount stores
b.
category killers
c.
specialty retailers
d.
warehouse clubs
e.
department stores
63. Stores that are in a manufacturers’ outlet mall, such as Ralph Lauren, Tommy Hilfiger, Clarks’ Shoes,
and Samsonite Luggage are most appropriately classified as a(n)
a.
discounter.
b.
specialty retailer.
c.
off-price retailer.
d.
category killer.
e.
department store.
64. Category killers compete primarily on the basis of
a.
enormous product selection and sales expertise.
b.
low prices and enormous product availability.
c.
convenient locations and customer services.
d.
rock-bottom prices and moderate selections.
e.
one-stop shopping and product availability.
65. Which of the following is an example of a category killer?
a.
JCPenney
b.
Walmart
c.
Marshalls
d.
Sams
e.
Toys “R” Us
66. Michael’s, PetSmart, and Staples are all examples of
a.
discount stores.
b.
off-price retailers.
c.
category killers.
d.
traditional specialty retailers.
e.
superstores.
67. A(n) ____ is a very large specialty store that competes on the basis of lower prices and enormous
product availability.
a.
warehouse club
b.
off-price retailer
c.
category killer
d.
traditional specialty store
e.
super center
68. In contrast to industrial products, consumer products are often purchased because of
a.
economic planning.
b.
necessity.
c.
prior planning.
d.
social influences.
e.
rational needs.
69. The kinds of products being sold and the availability of public transportation are both factors that
influence a retailer’s decision about
a.
store atmosphere.
b.
location.
c.
retail positioning.
d.
store image.
e.
the wheel of retailing.
70. Alex is preparing the new strategic plan for a large retailer. Several aspects of the retailer are to be
evaluated, in order to make plans and set goals. Of all the issues that Alex can select in developing the
new strategic plan, which of the following is the least flexible?
a.
Store atmosphere
b.
Scrambled merchandising
c.
Retail positioning
d.
Store image
e.
Location
71. Location is important to a retailer because
a.
suppliers charge more to service stores in certain trading areas.
b.
a desirable location appeals to consumers’ emotions.
c.
location is the major determinant of store image.
d.
location determines the trading area from which the store must draw its customers.
e.
convenient location is an essential customer service element.
72. Ariana is planning to open an upscale dress boutique. She is evaluating ease of movement to and from
sites, vehicular traffic, types of stores in the area, and transportation networks. Which strategic
retailing issue is she concerned with at the time?
a.
Location
b.
Production depth
c.
Product mix
d.
Scrambled merchandising
e.
Retail positioning
73. Greg chooses to have his hunting equipment stored in a location away from the main part of town so
that he can have a large parking lot and an outdoor range for customers to test out his merchandise.
Greg’s store is
a.
in a traditional business district.
b.
a rural shopping center.
c.
in a neighborhood shopping center.
d.
a non-traditional shopping center.
e.
a free-standing structure.
74. Colin brags to his friend Reid that his new bike shop has lots of parking and great visibility from
Harper Avenue, and his nearest business neighbors are several hundred feet away. Colin has selected a
____ site for his retail business.
a.
free-standing
b.
traditional business district
c.
neighborhood shopping center
d.
community shopping center
e.
regional shopping center
75. Many cities are revitalizing their downtown areas by bringing in new retail establishments. They are
building new civic structures, passing ordinances that encourage the restoration of historic buildings,
and developing mixed-use structures that include retail, residential, and other uses. These areas are
best described as
a.
neighborhood shopping centers.
b.
community shopping centers.
c.
traditional shopping centers.
d.
traditional business districts.
e.
free-standing structures.
76. The type of retail location that is commonly being preserved and revitalized in many cities is the
a.
traditional business district.
b.
free-standing structure.
c.
community shopping center.
d.
neighborhood shopping center.
e.
nontraditional shopping center.
77. Shopping centers include
a.
neighborhood, regional, superregional, power, and strip malls.
b.
community, rural, urban, and traditional business districts.
c.
outlet, power, lifestyle, superregional, regional, neighborhood, and community.
d.
outlet malls, lifestyle, strip malls, and shopping malls.
e.
free-standing, convenience, traditional, and regional.
78. What type of shopping center usually consists of several small convenience and specialty stores?
a.
Specialty
b.
Regional
c.
Neighborhood
d.
Convenience
e.
Community
79. In Cara’s hometown, there is a mall with a small Sears store, a Macy’s department store, a couple of
fast food restaurants, a few specialty shops, and some convenience stores. The mall features seasonal
sidewalks sales and boat shows. This mall is most likely a ____ shopping center.
a.
neighborhood
b.
national
c.
regional
d.
community
e.
city
80. Hickory Village Shopping Center has two department stores and some specialty and convenience
stores. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory
is a ____ shopping center.
a.
community
b.
regional
c.
nontraditional
d.
neighborhood
e.
power
81. The target market of a regional shopping center typically includes at least ____ people.
a.
25,000
b.
50,000
c.
100,000
d.
150,000
e.
250,000
82. Dawn is concerned that there are not enough avid quilters in Centerville to support her Quilts
Unlimited store. Her business adviser suggests that she not limit her promotion to the Centerville
population but also consider outshoppers. This approach is most likely to work if her store is located in
a
a.
free-standing location.
b.
traditional business district.
c.
strip center.
d.
community shopping center.
e.
regional shopping center.
83. A shopping center containing a Macy‘s, Sears, and JC Penney’s as well as dozens of specialty shops,
restaurants, and entertainment is most likely a
a.
regional shopping center.
b.
neighborhood shopping center.
c.
community shopping center.
d.
complete business district.
e.
lifestyle shopping center.
84. Which of the following offers the widest product mixes and the deepest product lines?
a.
Category killer
b.
Outlet mall
c.
Traditional business district
d.
Community shopping center
e.
Superregional shopping center
85. Which of the following may include special attractions such as amusement parks or skating rinks
a.
Convenience shopping centers
b.
Neighborhood shopping centers
c.
Community shopping centers
d.
Regional shopping centers
e.
Superregional shopping centers
86. An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually
owned by national chains, is generally called a(n)
a.
regional shopping center.
b.
neighborhood shopping center.
c.
community shopping center.
d.
lifestyle shopping center.
e.
outlet shopping center.
87. An example of an emerging type of power shopping center might contain
a.
JC Penney’s, Sears, some specialty shops, McDonalds, and Dairy Queen.
b.
Michael’s, Office Depot, T.J. Maxx, and Circuit City.
c.
Liz Claiborne, Van Heusen, Corning Ware, and Mikasa outlets.
d.
Safeway, CVS, and Subway.
e.
a Supercenter Walmart.
88. A shopping center that contains stores owned by manufacturers who make a special effort not to
conflict with traditional retailers is a(n)
a.
strip mall.
b.
neighborhood shopping center.
c.
off-price mall.
d.
lifestyle shopping center.
e.
outlet shopping center.
89. ____ have been successful because consumers are willing to drive significant distances to save money
buying manufacturers’ closeouts and irregulars.
a.
Off-price shopping centers
b.
Outlet shopping centers
c.
Regional shopping centers
d.
Upscale shopping centers
e.
Specialty shopping centers
90. Identifying an unserved or underserved market segment and serving it through a strategy that is
distinguished in the mind of the consumer is called
a.
the marketing concept.
b.
the wheel of retailing.
c.
retail positioning.
d.
targeted retailing.
e.
scrambled merchandising.
91. Josh tells the loan officer at First Bank and Trust that Clarksville really needs a store that offers high–
quality fishing gear to enthusiasts and provides the service and advice that many people want. No other
store in the area seems to provide this combination. Josh is trying to use ____ to support his request for
a loan to start such a retail operation.
a.
scrambled merchandising
b.
location analysis
c.
the wheel of retailing
d.
product mix width
e.
retail positioning
92. Norah operates an upscale shop that does both pet grooming and human manicures and pedicures. She
is reaching a market segment with people who place great value on their dogs and are concerned with
their own appearance, yet pressed for time. No other businesses meet the needs of these consumers.
Which strategic issue in retailing does Norah appear to have addressed?
a.
Store image
b.
Location
c.
The wheel of retailing
d.
Retail positioning
e.
Scrambled merchandising
93. Brianna owns and operates a gift and interior store called The Gingerbread House. She works hard to
put together beautiful arrangements and displays throughout the store and always features a burning
scented candle and light music. She hopes these efforts will encourage her customers to buy more.
Brianna is focusing on
a.
atmospherics.
b.
retail positioning.
c.
location.
d.
scrambled merchandising.
e.
value-pricing.
94. Exterior and interior characteristics such as layout, displays, color, and lighting are all elements of a
store’s
a.
services.
b.
atmospherics.
c.
location.
d.
environment.
e.
decor.
95. A functional and psychological picture in the consumer’s mind of a retail store is called
a.
retail positioning.
b.
atmospherics.
c.
store image.
d.
interior location.
e.
retail persona.
96. Which retail store invests the most in atmospherics?
a.
Target
b.
Sears
c.
Neiman Marcus
d.
Macy’s
e.
Dick’s Sporting Goods
97. A retail strategy of managing groups of similar, often substitutable products produced by different
manufacturers is called
a.
category management.