An operator of which of the following establishments is NOT a retailer?
a. A catering service specializing in weddings.
b. A computer firm selling software to households via the Internet.
c. A student going door-to-door selling magazine subscriptions.
d. A corporate property management firm.
e. An ice cream shop in the student union.
When a retailer represents merchandise as being made by a firm other than the true
manufacturer, it is said to be engaged in:
a. palming off.
b. product substitution.
c. gray marketing.
d. overt faking.
e. a bait-and-switch.
Which of the following factors is NOT characteristic of a market experiencing pure
competition?
a. Ease of entry into the market
b. Many buyers
c. Many sellers
d. Similar products
e. Differentiated products
A vendor profitability analysis statement:
a. is a vendor’s financial statement that is made available to all retailers.
b. is a schedule maintained by the retailer which shows each vendor’s initial data for
new lines, shipment of orders, and gross margins.
c. is a retailer’s financial statement used by the vendor for determining available credit
limits.
d. is a retailer’s analysis of the profitability of the different vendors and their lines from
the prior year(s).
e. breaks down vendors using an A-B-C classification based on the reliability of
delivery from each vendor.
A major benefit of the loop layout is that it:
a. provides a major customer aisle which begins at the entrance, loops through the store
and then moves the customer to the ‘clearance’ merchandise section of the store.
b. never lets the customer stray more than 10 feet from any of the merchandise in the
store.
c. encourages customers to flow freely through all the fixtures, since there are usually
no defined traffic patterns in the store.
d. lets the shopper get in and out of the store very quickly.
e. exposes shoppers to the greatest possible amount of merchandise.
If net profit margin is 5.0 percent, rate of asset turnover is 4.0x, and financial leverage
is 2.0x, then return on net worth is:
a. 8.0 percent.
b. 10.0 percent.
c. 20.0 percent.
d. 40.0 percent.
e. 80.0 percent.
Which of the following is an example of publicity?
a. Advertising your ‘After-Christmas’ Sale the day after Thanksgiving.
b. Sponsoring a Fourth of July Fireworks Celebration and Band Concert, open free to
the public.
c. Mailing special discount coupons to your credit card customers.
d. Offering a free pair of wool mittens with any purchase of a winter jacket.
e. A department store’s cosmetic department providing in-store samples of the newest
perfumes.
Which of the following statements is FALSE?
a. An implicit code of ethics is learned as employees become socialized into the
organization and the corporate culture of the retailer
b. Ethics are a set of rules for moral human behavior
c. All retailers must have a written explicit code of ethics
d. When buying merchandise, the retailer can face at least four ethical dilemmas; these
relate to product quality, sourcing, slotting fees, and bribery
e. Ethical standards can influence the retailer-employee relationship in three ways:
misuse of company assets, job-switching, and employee theft
A grocery store is most likely to employ what type of salespeople?
a. Order getters
b. Persuasive sellers
c. Sales support staff
d. Order takers
e. Informational sellers
When the authors made a book purchase through the Amazon.com Web site, they
received a $50 coupon to purchase garden supplies from Amazon. Amazon’s use of
coupons to cross-sell is an example of _____ advertising.
a. patronage
b. reinforcement
c. institutional
d. promotional
e. performance
In the text, when the authors refer to chain stores they are normally referring to
operations having _____ or more units.
a. 2
b. 7
c. 10
d. 20
e. 25
To be successful in retailing today, given the slower population growth rate, retailers
will grow by:
a. taking away sales from competitors.
b. reducing the number of stores they have.
c. having their industry legislated as a monopoly.
d. accusing their competitors of unfair competition.
e. reducing customer services.
The _____ Act prevents the marketing and selling of harmful toys and dangerous
products.
a. Sherman
b. Federal Trade Commission
c. Mail Fraud
d. Child Safety
e. Fair Packaging and Labeling
The chief advantage of a round rack is:
a. it allows garments to be presented face out.
b. it holds more merchandise than either the straight rack or the four-way rack.
c. it holds the bulk of merchandise without looking as heavy as a long straight rack.
d. it is less expensive than the gondola and twelve-hold rack.
e. it takes up less floor space than either the straight rack or the four-way rack.
The application of knowledge and skills through deeds, processes, and performances for
the benefit of another is known as:
a. marketing.
b. service.
c. community based retailing.
d. social networking.
e. performance based retailing.
A _____ area is the geographic area from which a retailer, group of retailers, or
community draws its customers.
a. market
b. trading
c. shopping
d. merchandising
e. customer drawing
A simple but powerful truism in retailing is: ‘The more merchandise customers are
exposed to that is presented in an orderly manner:
a. the higher their evaluation of the store.’
b. the higher the store’s average price per unit.’
c. the more they tend to buy.’
d. the lower the store’s average price per unit.’
e. the more crammed the store’s appearance will be.’
One of the main reasons for the increased retail competition during the ‘marketing to’
era was:
a. improved transport and communication.
b. growth of chain stores.
c. movement of customers from rural areas to larger cities.
d. the emergence of collaboration with vendors.
e. identifying specific consumer needs.
If delivery terms are FOB factory, who would be responsible for the transportation
charges?
a. The transportation company
b. The vendor
c. The buyer
d. The buyer and the vendor share the expenses
e. The final customer
Which of the following would NOT be considered a “category killer?”
a. Office Depot
b. PetSmart
c. Toys “R” Us
d. Target
e. Best Buy
Since online customers browse frequently, which are the two aspects to be considered in
keeping the content current?
a. Merchandise presentation and merchandise description
b. Store image and space productivity
c. Visual communications and store planning
d. Store design and merchandising
e. Microretailing and space productivity index
One disadvantage of television advertising is that competition is high for the viewer’s
attention.
Since 1995, slotting fees are illegal in the United States.
What are the major environmental forces that should be constantly assessed by
retailers?
Two-way exclusive dealing arrangements potentially violate the Clayton Act.
It costs the average retailer two times as much money to get a new customer into its
store as it does to retain a current customer.
Some forms of deceptive advertising are considered legal.
Experts predict that e-tailing will soon make up 75 percent of total retail sales.
The most common performance predictors used in selecting retail salespeople are
demographics, personality, knowledge and intelligence, and prior work experience.
For purposes of evaluating sites, the potential return on equity is critical.
Retail managers must be skillful at managing changes that occur in their markets.