b.
scrambled merchandising.
c.
line extensions.
d.
aggregate management.
e.
wheel of retailing.
98. Through the years, drugstores have added more unrelated products to their product mix, such as lawn
care supplies, food items, housewares, and small appliances. This illustrates which of the following
retail strategy issues?
a.
Atmospheric application
b.
Product line combination
c.
Scrambled merchandising
d.
Value-pricing
e.
Brand extension
99. The use of the telephone and other nonpersonal media to introduce products to consumers, who then
can purchase the products through the mail, telephone, or the Internet is called
a.
direct marketing.
b.
telemarketing.
c.
remote purchasing.
d.
direct-response marketing.
e.
direct selling.
100. The selling of merchandise outside the confines of actual facilities is generally called
a.
nonstore retailing.
b.
direct selling.
c.
direct marketing.
d.
Internet marketing.
e.
store-front sales.
101. The three major types of nonstore retailing are
a.
direct marketing, direct selling, and automatic vending.
b.
direct selling, automatic vending, and catalog retailing.
c.
direct marketing, direct selling, and mail-order.
d.
automatic vending, direct selling, and telemarketing.
e.
telemarketing, door-to-door, and mail-order.
102. Lucas is planning a distribution strategy for his business. He is considering using direct marketing,
direct selling, and automatic vending, which are all examples of ____ retailing.
a.
off-premise
b.
portfolio
c.
nonstore
d.
off-price
e.
direct
103. Chadwick’s sends its customers booklets containing its product offerings and allows them to place
orders on the telephone, through the mail, or online. Chadwick’s is primarily a(n)
a.
online retailer.
b.
direct seller.
c.
catalog marketer.
d.
direct-response marketer.
e.
specialty retailer.
104. What type of retailing began with Montgomery Ward in the late 1800s?
a.
Catalog marketing
b.
Department stores
c.
Direct selling
d.
Discount retailing
e.
Franchising
105. All of the following are types of direct marketing except
a.
catalog marketing.
b.
direct-response marketing.
c.
direct selling.
d.
television home shopping.
e.
online retailing.
106. When a retailer advertises a product and makes it available for purchase through telephone or mail
orders, the retailer is using
a.
direct selling.
b.
television home shopping.
c.
telemarketing.
d.
automatic vending.
e.
direct-response marketing.
107. Advo Systems is an organization that mails product brochures and coupons to potential consumers
who can then purchase these products by mail or by phone. Advo Systems illustrates which of the
following methods of selling retail products?
a.
Direct-response marketing
b.
Party plan
c.
Catalog marketing
d.
Specialty retailing
e.
Direct selling
108. In order to justify direct-response marketing, a product really needs to be priced above
a.
$50.
b.
$10.
c.
$5.
d.
$20.
e.
$100.
109. In the Sunday paper, Caitlin sees a flyer for a collector’s edition Nativity set that is available to
purchase by filling out and mailing in a form or by calling a 1-800 number. This is an example of
a.
telemarketing.
b.
direct-response marketing.
c.
television home shopping.
d.
direct selling.
e.
catalog marketing.
110. Sophia is the new marketing manager for a new line of laptop, MP3, and smart phone accessories
made by the company, Skull Candy. These accessories are trendy, colorful, and more expensive than
others on the market . After considering the target market for the products, Sophia has decided not to
use marketing-related activities conducted on the telephone, called _____, and instead use _____, a
type of nonstore retailing.
a.
e-marketing; specialty marketing
b.
direct-response marketing; vending
c.
telemarketing; vending
d.
direct-selling; online retailing
e.
telemarketing; specialty marketing
111. When products are presented to television viewers, who can purchase them by calling a toll-free
number and paying with a credit card, ____ is being used.
a.
telemarketing
b.
television marketing
c.
direct-response marketing
d.
e-marketing
e.
television home shopping
112. A retailer engaged in direct marketing would probably select television home shopping over online
retailing to sell a new kitchen device because of
a.
lower costs of selling.
b.
easier financial transactions.
c.
superior ability to demonstrate the product.
d.
superior ability to offer the product at a lower price.
e.
decreased cycle time.
113. What is the most popular type of product sold through television home shopping?
a.
Electronics
b.
Clothing
c.
Jewelry
d.
Shoes
e.
Cosmetics
114. Kelly Cramer sees a lovely pair of earrings on a television network and calls a toll-free number to
order them, paying with her credit card. This is an example of
a.
online retailing.
b.
television home shopping.
c.
telemarketing.
d.
direct-response marketing.
e.
catalog marketing.
115. Brad accesses Overstock.com’s’ site on the Internet and purchases a business laptop case. This is an
example of
a.
direct-selling.
b.
catalog retailing.
c.
direct-response marketing.
d.
online retailing.
e.
home shopping.
116. The marketing of products to ultimate consumers through face-to-face sales presentations either at
home or the workplace is called
a.
direct marketing.
b.
direct-response marketing.
c.
telemarketing.
d.
personal selling.
e.
direct selling.
117. What is a potential disadvantage of direct selling?
a.
Commissions for salespeople are usually low.
b.
Some customers view direct selling negatively.
c.
Personal attention tends to be lacking.
d.
Product demonstrations are difficult in this type of selling.
e.
Consumers must go out of their way.
118. With respect to retailing, what is the “party plan”?
a.
A sales representative has a party at her home to demonstrate products to a group of
friends and associates.
b.
A party is set up that demonstrates a product and provides free samples of the product to
all in attendance.
c.
An individual is asked to tell two friends about a product, who are in turn each asked to
tell two friends, etc. until a sufficient number of people are reached.
d.
A store has a special sale that resembles a party, and those who come are asked to buy the
featured products.
e.
A consumer acts as a host and invites friends to view merchandise in a group setting,
where a salesperson demonstrates the products.
119. Alison asks ten of her friends over to her home to learn about exciting new cosmetic products. A
salesperson from Angel Products makes a presentation and takes the women’s orders. This is an
example of
a.
a party plan.
b.
telemarketing.
c.
a warehouse club.
d.
direct marketing.
e.
a catalog showroom.
120. What is a potential disadvantage of direct selling?
a.
Commissions for salespeople are usually low.
b.
Some customers view direct selling in a negative light.
c.
Personal attention is lacking.
d.
Product demonstrations are difficult in this type of selling.
e.
Consumers must go out of their way.
121. The primary advantage of automatic vending as a form of retailing is that
a.
it offers a low-cost, personal method of selling products.
b.
it provides a continuous service to consumers.
c.
since vending machines must be serviced frequently, the products they sell are always
fresh.
d.
vending machines require very few repairs.
e.
it eliminates the need for sales personnel.
122. Redbox, ProActiv, and Clinique all sell their products through automatic vending, which is
a.
a type of nonstore retailing.
b.
a specialty line retailer.
c.
not considered a form of retailing.
d.
a type of direct selling.
e.
a form of franchising.
123. Tupperware, Sarah Coventry, Amway, and Avon sell products outside the confines of retail facilities.
They are ____ retailers.
a.
discount
b.
traditional
c.
specialty
d.
non-store
e.
home-delivery
124. While on their family vacation, the Millers realize they left their camera at home. They purchase a
disposable camera at an amusement park using their credit card, but never interact with a person. What
type of retailing did this transaction most likely involve?
a.
Franchising
b.
Online retailing
c.
Direct-response marketing
d.
Automatic vending
e.
Machine marketing
125. An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type
of consideration is
a.
selling products on consignment.
b.
retailing.
c.
wholesaling.
d.
licensing.
e.
franchising.
126. Victor knows that if he decides to buy a franchise, he will most likely have to supply
a.
management know-how and labor.
b.
buildings and daily operations.
c.
marketing assistance and management know-how.
d.
a percentage of total sales and expertise.
e.
labor and daily operations.
127. Malcolm Lewis has come up with the idea of a system for picking up people’s cars while they are at
work, washing and waxing them, and returning them for a fee. Having been a big success in his home
city, Malcolm plans to expand his operation into other cities. The service described here seems best
suited to
a.
party-plan retailing.
b.
franchising.
c.
vending.
d.
corporate chain retailing.
e.
off-price retailing.
128. Kevin is talking with Peter about purchasing a Wendy’s franchise. Peter tells Kevin that one of the
major advantages of franchising for him to consider is the
a.
higher start-up costs.
b.
greater freedom it provides.
c.
individuality it offers.
d.
higher success rate for franchises.
e.
gross margin it provides.
129. Which of the following is not one of the basic types of franchising arrangements?
a.
A producer franchising a number of stores to sell a particular brand of product
b.
A wholesaler franchising a number of producers
c.
A producer franchising a number of wholesalers to sell to retailers
d.
The franchising of brand names, techniques, procedures, or services
e.
All of these are basic types of franchising.
130. Which type of franchising is most popular in the soft-drink industry?
a.
The manufacturer authorizes a number of retail stores to sell a certain brand name item.
b.
Several manufacturers authorize one retail chain to sell a variety of brand name items.
c.
A franchiser supplies techniques, brand names, or other services besides complete
products.
d.
A manufacturer licenses distributors to sell a given product to retailers.
e.
A distributor provides a brand name product and marketing assistance to one retailer.
131. Which of the following is not an advantage of franchising for the franchisee?
a.
The franchisee can capitalize on the business experience of others.
b.
When problems arise, the franchisee can obtain guidance and advice from the franchiser.
c.
Franchised outlets are usually more successful than independently owned businesses with
respect to long-term survival.
d.
The franchisee can participate in national promotional campaigns sponsored by the
franchiser.
e.
The franchisee gives up a certain amount of control when participating in a franchise
agreement.
132. In franchising, which of the following is not a benefit that the franchiser gains?
a.
The franchiser can gain more rapid product distribution.
b.
The franchiser can acquire capital more quickly for expanding production.
c.
The franchiser gains more control over how the franchisees operate the establishments.
d.
The franchiser benefits from the fact that franchisees tend to be highly motivated to
succeed, which in turn leads to higher sales and higher royalties.
e.
All of these are benefits for the franchiser.
133. Which of the following best describes wholesalers?
a.
Organizations that buy products from producers and sell them to retailers.
b.
Individuals or organizations that purchase products and then resell them to other
businesses and consumers.
c.
Organizations or individuals who buy products for resale to government, reseller,
producer, and institutional users.
d.
Organizations or entities that buy products from government, reseller, and producer users
and sell them to customers in bulk.
e.
Companies that make products that have a general appeal and are resold to retailers for a
profit.
134. Carter works for a wholesaler in the home construction industry. Which of the following activities
will Carter’s company not likely do?company who engages in several supply-chain activities,
including shipping and product handling, inventory control, and information system management.
Carter likely works for
a.
shipping and product handling.
b.
inventory control.
c.
information systems management.
d.
purchase and take ownership of products.
e.
financing.
135. Select the true statement about wholesaling.
a.
Wholesaling activities must be performed during distribution of all goods, whether or not
a wholesaling institution is involved.
b.
Warehouses are necessary in order for the wholesaling function to be completed.
c.
Only wholesaling establishments can perform wholesaling activities.
d.
Wholesaling is an inefficient process that should be eliminated from the marketing
channel.
e.
The biggest problem with the wholesaling process is that inefficient wholesalers can
thrive, at the expense of consumers.
136. The primary function of most wholesalers is to
a.
support the needs of the manufacturers and provide them with market information.
b.
provide for the unique needs of the individual retailers buying their merchandise.
c.
provide information system tracking of inventory for the ultimate consumer.
d.
perform physical distribution of products from manufacturers to retailers.
e.
develop and share database information about customers.
137. By using Johnson Wholesale Co. for its distribution needs, the Apex Production has a distinct
competitive advantage because the services performed by Johnson allow Apex to
a.
provide quality merchandise to consumers.
b.
focus on increasing production capacity.
c.
focus on increasing working capital.
d.
reduce manufacturing costs to retailers.
e.
focus on producing products that meet consumers’ needs.
138. Which of the following services would a wholesaler least likely provide to a manufacturer?
a.
Assume the risks of selling to poor credit customers
b.
Look for and coordinate supply sources
c.
Pay the costs of transporting goods
d.
Provide up-to-date information on market developments
e.
Serve as an extension of the manufacturer’s sales force
139. Which of the following is not a factor used to classify wholesalers?
a.
Whether the wholesaler is owned by the producer
b.
Whether the wholesaler takes title to the products it handles
c.
The range of services offered by the wholesaler
d.
The price range of the products carried by the wholesaler
e.
The breadth and depth of the product lines carried by the wholesaler
140. Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to
the ____ component of the marketing mix.
a.
distribution
b.
promotion
c.
product
d.
price
e.
channel
141. By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all
of the following physical distribution activities except
a.
inventory planning.
b.
transportation.
c.
materials handling.
d.
unit pricing.
e.
communication.
142. With respect to inventory, wholesalers can help retailers with all of the following except
a.
selection.
b.
storage.
c.
inventory control.
d.
transportation.
e.
production.
143. A merchant wholesaler
a.
arranges for transfer of goods directly to business and retail customers.
b.
takes title to goods, assumes risk associated with ownership, and buys and resells
products.
c.
takes title and possession of goods and sells only to retailers.
d.
does not take title or possession of goods but facilitates exchanges between any parties.
e.
deals exclusively with business products.
144. Walmart has its own fleet of trucks and works directly with producers to take care of the ordering,
delivery, and handling of goods. In addition, Walmart works directly with suppliers through its
advanced system of inventory control and data processing. Walmart is
a.
able to eliminate many of the functions typically performed by wholesalers.
b.
performing many of the critical functions of wholesalers through its own system.
c.
successfully using wholesalers to run its venerable chain of discount stores.
d.
using information technology to eliminate the need to perform typical wholesale functions.
e.
vertically integrated in order to produce and distribute all products itself.
145. Sherri McRae wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid
obsolescence of high-fashion items, Sherri does not want to establish an organization in which she has
title to the garments. Which of the following types of wholesale establishments has she ruled out?
a.
Merchant wholesaler
b.
Agent
c.
Broker
d.
Functional middleman
e.
Commission merchant
146. Martin owns and operates a wholesale hardware business that supplies small hardware parts to various
manufacturers in the area. He takes title to the hardware and assumes all risks associated with
ownership. Martin is a
a.
rack jobber.
b.
merchant wholesaler.
c.
wholesaler agent.
d.
drop shipper.
e.
sales branch.
147. Merchant wholesalers can be divided into two basic categories:
a.
general merchandise and general-line.
b.
rack jobbers and cash-and-carry.
c.
commission and fee-based.
d.
goods and services.
e.
full-service and limited service.
148. Cigarette manufacturer Philip Morris uses the services of Universal Corporation, the world’s largest
buyer and processor of leaf tobacco, which provides financing for its customers. This means that
Universal is a
a.
cash-and-carry wholesaler.
b.
general merchandise wholesaler.
c.
limited-service wholesaler.
d.
rack jobber.
e.
full-service wholesaler.
149. Customers rely on ____ for product availability, breaking larger quantities into smaller ones, technical
advice and service, financial assistance, and suitable assortments.
a.
full-line retailers
b.
limited-service wholesalers
c.
full-service wholesalers
d.
commission merchants
e.
cash-and-carry wholesalers
150. If a retailer needed help with store design and training sales personnel, it would most likely use the
services of a
a.
full-service wholesaler.
b.
full-price wholesaler.
c.
rack jobber.
d.
cash-and-carry wholesaler.
e.
technical wholesaler.
151. A wholesaler that carries a wide product mix but offers only limited depth within product lines is
called a
a.
specialty-line wholesaler.
b.
limited-service wholesaler.
c.
rack jobber.