Deck 14: Retailing and Wholesaling

Question 1

Retailers who typically offer some sales assistance and information as well as credit and merchandise return services to support the sale of the shopping goods they carry are known as:

A) low- service.
B) limited- service.
C) self- service.
D) no service.
E) full- service.

Answer 1

B

Question 2

David Jones is a chain of stores in Australia. Each store carries several product lines, and each line is managed separately by a specialist buyer or merchandiser. David Jones offers many types of customer service, and its prices reflect that fact. David Jones is an example of a:

A) combination store.
B) speciality store.
C) department store.
D) factory outlet.
E) superstore.

Answer 2

C

Question 3

Some retail stores are designed to allow customers to easily locate merchandise which they pay for at centrally- located checkouts before loading the goods in their own cars. This approach to retailing is best described as:

A) full- service retailing.
B) self- service retailing.
C) no- service retailing.
D) limited- service retailing.
E) none of the above

Answer 3

B

Question 4

The Adelaide Wine Company is preparing to open a new territory with which it is completely unfamiliar. The firm, which hopes to enter the market as quickly and inexpensively as possible, is most likely to utilise:

A) manufacturer's agents.
B) selling agents.
C) purchasing agents.
D) commission merchants.
E) none of the above

Question 5

Well- known manufacturers such as Calvin Klein and Levi Strauss have decided the most profitable way to dispose of out- of- season and irregular stock is to open stores and sell their own merchandise. This is the retail strategy of:

A) mass merchandisers.
B) bargain basements.
C) factory outlets.
D) hypermarkets.
E) discount stores.

Question 6

Your text identifies a number of trends in wholesaling. Which of the following is NOT one of the trends identified in your text?

A) Wholesalers are making greater use of automation and new technologies.
B) More wholesalers are going global.
C) Wholesalers are beginning to deal directly with end users.
D) Wholesalers face considerable challenges as more retailers deal direct with producers.
E) Wholesalers are increasing the variety of services offered to retailers.

Question 7

Wholesalers that are owned by farmer- members who assemble farm products to sell in local markets are known as:

A) truck wholesalers.
B) producers' cooperatives.
C) produce wholesalers.
D) cash- and- carry cooperatives.
E) drop shippers.

Question 8

The most successful wholesaler- distributors have:

A) become horizontally integrated.
B) stressed price reduction over increased services.
C) reduced their operating costs by investing in more advanced materials- handling technology and information systems.
D) engaged in significantly more vertical integration.
E) divested themselves of marginally profitable markets and only sell to target markets that provide high margins.

Question 9

Which of the following is NOT a part of a store's atmosphere?

A) the music played by the speakers located throughout the store
B) the smell from potpourri containers scattered throughout the store
C) the way merchandise is displayed
D) the lighting system used in the store
E) the employee who helps you carry your purchases to your car

Question 10

A _ is a free- form corporation that combines several diversified retailing lines and forms under central ownership, along with integration of distribution- and- management functions of those retailing lines and forms.

A) retailer cooperative
B) consumer cooperative
C) merchandising conglomerate
D) voluntary chain
E) retail licensing arrangement

Question 11

When Bill goes to do his grocery shopping for the week, he also likes to drop off his dry cleaning and obtain cash out using his debit card. He would also like the idea of getting his shoes repaired there while he is shopping. Bill would enjoy doing his grocery shopping at a:

A) warehouse store.
B) combination store.
C) hypermarkt.
D) category killer.
E) superstore.

Question 12

A store that consistently offers merchandise at lower prices, offering national brands rather than inferior goods or seconds is referred to as a(n):

A) speciality store.
B) supermarket.
C) off- price store.
D) surplus store.
E) discount store.

Question 13

As a type of agent, take physical possession of products and negotiate sales. Theirs is a short- term relationship, and they tend to work in agriculture.

A) drop shippers
B) commission merchants
C) truck wholesalers
D) cash- and- carry wholesalers
E) rack jobbers

Question 14

Ponsonby Wholesale takes title to the products that it handles. The firm is best classified as a(n):

A) merchant wholesaler.
B) wholesaler.
C) agent wholesaling middleman.
D) sales branch.
E) broker.

Question 15

The widest variety of wholesaling services is provided by:

A) agents.
B) manufacturers' representatives.
C) merchant wholesalers.
D) brokers.
E) none of the above

Question 16

The wholesaler who contracts to sell a producer's entire output with no territory limits is called a:

A) broker.
B) contractor.
C) manufacturer's agent.
D) commission merchant.
E) selling agent.

Question 17

Which of the following statements about manufacturers' branches and offices is true?

A) Sales branches carry inventory.
B) Sales offices perform a role similar to one performed by agents and brokers.
C) Sales branches are often able to provide customers with faster access to products.
D) Only A and B are true.
E) all of the above

Question 18

Tom loves to go to the Nike Store where he finds athletic shoes and clothing at lower prices than at department stores. The Nike Store carries leftover merchandise, overruns and irregulars. This retail store is an example of a:

A) factory outlet.
B) superstore.
C) combination store.
D) warehouse club.
E) discount store.

Question 19

Whangarei Development Inc. is planning a complex of 90 stores designed to offer one- stop shopping in a weather- controlled environment to consumers located within a 75 kilometre radius. This development would be an example of a:

A) community shopping centre.
B) strip shopping centre.
C) regional shopping centre.
D) megamall.
E) suburban shopping centre.

Question 20

The set of activities involved in selling goods and services to those buying for resale or business use is termed:

A) retailing.
B) exchange.
C) wholesaling.
D) procurement.
E) brokering.

Question 21

How do wholesalers' marketing decisions differ from a retailer's?

A) Wholesalers do not have to make decisions dealing with time and place utility.
B) Wholesalers do not have to make target market decisions.
C) Wholesalers do not have to make store atmosphere decisions.
D) Wholesalers do not have to make assortment and procurement decisions.
E) Wholesalers do not have to make promotion decisions.

Question 22

Which of the following is the store that is BEST described as a large, low- cost, low- margin, high- volume, self- service retailer?

A) factory outlet store
B) speciality store
C) discount store
D) convenience store
E) supermarket

Question 23

A limited service wholesaler who performs a delivery function by delivering food products to convenience stores, mill- bars, small supermarkets, hotels and cafeterias is known as a:

A) rack jobber.
B) drop shipper.
C) cash and carry wholesaler.
D) truck wholesaler.
E) none of the above

Question 24

Every night at about 1:00 am, Nadine stops by the Jiffy Store near her house. She often buys milk or bread while she's there even though the prices at the Jiffy Store are higher than at her local supermarket. The Jiffy Store is an example of a:

A) combination store.
B) warehouse store.
C) superstore.
D) speciality store.
E) convenience store.

Question 25

Z- Force has opened a new store that is over 200,000 square feet and combines a supermarket and discount department store. The store must generate a volume of over $1,000,000 per week in sales just to break even. This new store is an example of a:

A) mass merchandiser.
B) hypermarket.
C) cooperative buying group.
D) factory outlet.
E) discount store.

Question 26

A study conducted by consulting firm, Deloitte, and cited in your text identified key trends affecting retailing. Which of the following is NOT one of those trends?

A) retail investment in services
B) focus on the customer experience
C) short- tail retailing
D) multichannel integration
E) emerging market investment in developed retailers

Question 27

A supermarket typically carries some product lines.

A) 45,000
B) 6,000
C) 12,000
D) 125,000
E) 25,000

Question 28

Mini Case 14- 1
Elliott and Robin want to open a store and call it The Hamilton Home Shop. They have decided that it will feature household items such as decorative vases and planters, sheets and towels, bathroom accessories, and pictures. Their offerings will change from week to week depending on what's available from their wholesalers. Initially, they plan to sell irregulars and factory overruns, but they are flexible. Elliott has a real knack for spotting items others admire. People are always telling him what good taste he has. They must, however, be careful about how they spend the small amount of capital they have. One of their goals is to find an inexpensive location.
Once the store is up and operational, they hope they can use their cash flow to meet expenses. They plan to have no more than two full- time employees other than themselves and possibly some part- time help as the need arises. Customers will be allowed to make their own selections, but either Elliott or Robin will be there if they request some advice. Elliott and Robin plan on letting their customers use credit cards. They also feel it is important to have a generous merchandise return policy. Because Elliott and Robin are retailing novices, they want to join a retail organisation for advice and support and to share the costs of promotions. Elliott and Robin think that word- of- mouth will be their most powerful advertising tool. They expect to attract customers that appreciate the merchandise found at major department stores and mall speciality stores, but who would like the
lower prices.
Refer to Mini Case 14- 1. What would be the best location for this outlet, given Elliott and Robin's perspective on their business?

A) regional shopping centre
B) a location within a larger store
C) central business district
D) stand- alone destination site
E) strip shopping centre

Question 29

The Beta Corporation views itself as a manufacturing specialist. The firm has a surplus of one line that it would like to dispose of immediately. The firm is most likely to sell to:

A) manufacturer's agents.
B) a selling agent.
C) clearing house.
D) sales offices.
E) commission merchants.

Question 30

are essentially specialists who locate buyers or sellers, bring the two parties together, and assist in negotiation.

A) Manufacturer's agents
B) Brokers
C) Wholesale merchants
D) Commission merchants
E) all of the above

Question 31

A role similar to that of brokers or agents, but which is part of the buyer's organisation is performed by a:

A) purchasing office.
B) branch office.
C) sales office.
D) sales branch.
E) manufacturer's office.

Question 32

Independent retailers who join together to form their own wholesaling operation and conduct joint merchandising and promotional activities are called a:

A) hyperchain.
B) voluntary chain.
C) purchasing cooperative.
D) retailer cooperative.
E) wholesaler cooperative.

Question 33

Which of the following product differentiation strategies would NOT allow retailers to significantly distinguish themselves from others?

A) offer merchandise customising services
B) feature mostly private branded merchandise
C) offer a broad merchandise assortment
D) feature the latest or newest merchandise before any other retailer can
E) feature exclusive national brands not carried by competitors

Question 34

Mini Case 14- 1
Elliott and Robin want to open a store and call it The Hamilton Home Shop. They have decided that it will feature household items such as decorative vases and planters, sheets and towels, bathroom accessories, and pictures. Their offerings will change from week to week depending on what's available from their wholesalers. Initially, they plan to sell irregulars and factory overruns, but they are flexible. Elliott has a real knack for spotting items others admire. People are always telling him what good taste he has. They must, however, be careful about how they spend the small amount of capital they have. One of their goals is to find an inexpensive location.
Once the store is up and operational, they hope they can use their cash flow to meet expenses. They plan to have no more than two full- time employees other than themselves and possibly some part- time help as the need arises. Customers will be allowed to make their own selections, but either Elliott or Robin will be there if they request some advice. Elliott and Robin plan on letting their customers use credit cards. They also feel it is important to have a generous merchandise return policy. Because Elliott and Robin are retailing novices, they want to join a retail organisation for advice and support and to share the costs of promotions. Elliott and Robin think that word- of- mouth will be their most powerful advertising tool. They expect to attract customers that appreciate the merchandise found at major department stores and mall speciality stores, but who would like the
lower prices.
Refer to Mini Case 14- 1. Elliott and Robin should join what type of retail organisation?

A) merchandising conglomerate
B) consumer cooperative
C) voluntary chain
D) retailer cooperative
E) wholesaler- sponsored cooperative

Question 35

Speciality stores such as Toys 'R' Us are often called category killers because:

A) they carry only fast- selling items.
B) they can destroy the profit potential for a category of merchandise for other retailers.
C) they offer an exclusive category of merchandise.
D) they have a broad merchandise mix and shallow assortment.
E) they are located at stand- alone sites.

Question 36

Beatrice is choosing the types of products and determining how many different product lines she will carry in her educational toy store. Beatrice is making the decision.

A) target market
B) market segmentation
C) service level
D) store atmosphere
E) product- assortment

Question 37

A consists of a wholesaler- sponsored group of independent retailers engaged in bulk buying and common warehousing.

A) consumer cooperative
B) merchandising conglomerate
C) retailer cooperative
D) retailing franchise
E) voluntary chain

Question 38

Supermarket, discount and warehouse retailing are combined under one roof in:

A) megamarkets.
B) multimarkets.
C) hypermarkets.
D) superstores.
E) all of the above

Question 39

Costco Wholesale Corporation opened its first Australian outlet in Melbourne's Docklands in 2009 and now has outlets in Canberra and Sydney. Costco's business model is to offer deep discounts and a wide product assortment which customers can purchase in bulk. Costco's approach to retailing is that members of the public are only entitled to shop at Costco outlets after paying a $60 annual subscription fee. Costco would be BEST described as a(n):

A) off- price store.
B) wholesale club.
C) hypermarket.
D) speciality store.
E) discount store.

Question 40

In the face of competitive pressure and changes in the way that retailers purchase merchandise, long-term survival for wholesalers depends on:

A) defending existing territory rather than expanding into new geographic territories.
B) purchasing their own production facilities.
C) serving only the largest retail chains.
D) improving services and reducing costs.
E) doing all of the above.

Question 41

Many retail stores are using technology to provide superior customer service. Which of the following is NOT a technology used to provide in- store customer service?

A) store inventory databases
B) hand- held shopping assistants
C) self- scanning check- out systems
D) touch screen information kiosks
E) RFID inventory tracking

Question 42

A category killer such as Bunnings hardware stores carries product lines.

A) 45,000
B) 125,000
C) 250,000
D) 12,000
E) 25,000

Question 43

The agent who takes physical possession of products and negotiates sales is called a:

A) commission merchant.
B) manufacturer's agent.
C) purchasing agent.
D) contractor.
E) broker.

Question 44

The set of activities involved in selling goods or services to the consumer for personal or non- business use is termed:

A) exchange.
B) brokering.
C) retailing.
D) wholesaling.
E) procurement.

Question 45

Most convenience goods are sold through retailing.

A) self- service
B) limited- service
C) full- service
D) self- selection

Question 46

Speciality stores and "first- class" department stores are most likely to employ:

A) limited- service.
B) low- service.
C) full- service.
D) self- service.
E) none of the above

Question 47

A store that sells at less than standard retail prices, but tends to offer an unstable and changing collection of higher quality merchandise, including leftover goods, production overruns and irregular items obtained at reduced prices from independent manufacturers is known as a(n):

A) factory outlet.
B) hypermarket.
C) discount store.
D) off- price store.
E) speciality store.

Question 48

Two or more outlets that are commonly owned and controlled, have central buying and merchandising, and sell similar lines of merchandise are known as:

A) corporate chain stores.
B) hypermarkets.
C) catalogue showrooms.
D) megamarkets.
E) merchandise marts.

Question 49

Mini Case 14- 1
Elliott and Robin want to open a store and call it The Hamilton Home Shop. They have decided that it will feature household items such as decorative vases and planters, sheets and towels, bathroom accessories, and pictures. Their offerings will change from week to week depending on what's available from their wholesalers. Initially, they plan to sell irregulars and factory overruns, but they are flexible. Elliott has a real knack for spotting items others admire. People are always telling him what good taste he has. They must, however, be careful about how they spend the small amount of capital they have. One of their goals is to find an inexpensive location.
Once the store is up and operational, they hope they can use their cash flow to meet expenses. They plan to have no more than two full- time employees other than themselves and possibly some part- time help as the need arises. Customers will be allowed to make their own selections, but either Elliott or Robin will be there if they request some advice. Elliott and Robin plan on letting their customers use credit cards. They also feel it is important to have a generous merchandise return policy. Because Elliott and Robin are retailing novices, they want to join a retail organisation for advice and support and to share the costs of promotions. Elliott and Robin think that word- of- mouth will be their most powerful advertising tool. They expect to attract customers that appreciate the merchandise found at major department stores and mall speciality stores, but who would like the
lower prices.
Refer to Mini Case 14- 1. The Hamilton Home Shop will offer what level of service?

A) full service
B) relationship service
C) self- service
D) self- selection
E) limited service

Question 50

A contractual association between a manufacturer, wholesaler, or service organisation and independent business people is known as a:

A) retail cooperative.
B) consumer cooperative.
C) franchise.
D) voluntary chain.
E) none of the above

Question 51

Wonthaggi Wholesaling is attempting to persuade a group of independent retailers to agree to concentrate their purchases through it in order to obtain bulk- buying advantages that would make them more competitive with corporate chains. It is trying to form a:

A) voluntary chain.
B) retail cooperative.
C) hyperchain.
D) buying club.
E) none of the above

Question 52

Which of the following statements about off- price retailers is TRUE?

A) They seldom stock brand- name merchandise.
B) They offer very deep assortments.
C) They buy at less than regular wholesale prices and charge consumers less than retail prices.
D) They are are owned by the manufacturer of the products they sell.
E) They typically offer a consistent assortment of merchandise.

Question 53

One of the fastest growing forms of retailing is:

A) franchising.
B) virtual retailing.
C) merchandising conglomerates.
D) experiential retailing.
E) corporate chains.

Question 54

Consumers who value such factors as location, ease of access, and non- traditional store hours more than large assortments and lower prices are MORE likely to purchase in:

A) hypermarkets.
B) discount stores.
C) shopping stores.
D) convenience stores.
E) department stores.

Question 55

Corporations that combine several different retailing forms under central ownership and that share some distribution and management functions are called:

A) merchandising conglomerates.
B) voluntary chains.
C) franchisers.
D) retail cooperatives.
E) retail conglomerates.

Question 56

Swedish retailer, IKEA, understands that prospective customers will spend more time in store, browsing and comparing prices if they are not encumbered with children. Accordingly, all IKEA stores offer a children's play area that is fully supervised by qualified attendants at no charge to IKEA patrons. The children's play area is an example of:

A) experiential service.
B) supplementary service.
C) core service.
D) in- store merchandising.
E) primary service.

Question 57

Wholesalers who have a limited line of fast- moving goods, sell to small retailers for cash, and normally do not deliver are known as:

A) truck wholesalers.
B) drop shoppers.
C) rack jobbers.
D) cash- and- carry wholesalers.
E) none of the above

Question 58

Mini Case 14- 1
Elliott and Robin want to open a store and call it The Hamilton Home Shop. They have decided that it will feature household items such as decorative vases and planters, sheets and towels, bathroom accessories, and pictures. Their offerings will change from week to week depending on what's available from their wholesalers. Initially, they plan to sell irregulars and factory overruns, but they are flexible. Elliott has a real knack for spotting items others admire. People are always telling him what good taste he has. They must, however, be careful about how they spend the small amount of capital they have. One of their goals is to find an inexpensive location.
Once the store is up and operational, they hope they can use their cash flow to meet expenses. They plan to have no more than two full- time employees other than themselves and possibly some part- time help as the need arises. Customers will be allowed to make their own selections, but either Elliott or Robin will be there if they request some advice. Elliott and Robin plan on letting their customers use credit cards. They also feel it is important to have a generous merchandise return policy. Because Elliott and Robin are retailing novices, they want to join a retail organisation for advice and support and to share the costs of promotions. Elliott and Robin think that word- of- mouth will be their most powerful advertising tool. They expect to attract customers that appreciate the merchandise found at major department stores and mall speciality stores, but who would like the
lower prices.
Refer to Mini Case 14- 1. What type of wholesaler would best serve The Hamilton Home Shop?

A) cash and carry wholesalers
B) limited- service wholesalers
C) home decorating broker
D) producer's cooperative
E) purchasing agents

Question 59

do not take title to goods and perform only a few functions. Their main function is to facilitate buying and selling, for which they are paid a commission.

A) Producers' cooperatives
B) Industrial distributors
C) Rack jobbers
D) Commission merchants
E) Agents and brokers

Question 60

The wholesaler who brings buyers and sellers together and assists in negotiation is called a:

A) selling agent.
B) broker.
C) rack jobber.
D) middleman.
E) drop shipper.

Question 61

Retailers that carry a huge selection of merchandise in a single product category at such good prices that they destroy competitors are known as:

A) discount houses.
B) category killers.
C) copy catters.
D) price dealers.
E) warehouse firms.

Question 62

Which of the following is an example of a limited- service wholesaler?

A) a commission merchant
B) a drop shipper
C) an industrial distributor
D) a mail- order wholesaler
E) a food broker

Question 63

Hardware retailer, Bunnings, offers its customers Do- It- Yourself (DIY) seminars at weekends and during holiday periods. These seminars, which are free of charge, cover a wide range of topics -from building a dog kennel to caring for fruit trees. These DIY seminars are an example of:

A) peripheral service.
B) experiential service.
C) primary service.
D) supplementary service.
E) core service.

Question 64

A distinctive feature of David Jones department store is the number of designer brands across all product lines. David Jones stocks some of the top international and local labels such as Pucci, Versace, Alex Perry, Collette Dinnigan and Lisa Ho. These labels cannot be purchased from any other department store or retail outlet. In this respect, David Jones has successfully bucked the trend through the use of:

A) competitive blocking.
B) national brands.
C) exclusive merchandise.
D) global brands.
E) selective merchandise.

Question 65

A store that carries a narrow product line with a deep assortment within that line is called a:

A) department store.
B) discount store.
C) speciality store.
D) self- service store.
E) convenience store.

Question 66

In 2001, Apple opened the first of a series of concept stores designed to exhibit Apple computers in a natural usage environment. Merchandise is displayed in "solution zones" for hands- on, real world use and visitors are encouraged to use computers to access the Internet or send emails. There are sit- down theatres where consumers can participate in demonstrations or receive instruction. There is a "Genius Bar" where consumers can ask questions and solve technical problems. For the consumer, perhaps the most important feature of the Apple Concept store is the hands- on use. Computers displayed in Apple stores are hooked up to camcorders, digital cameras, iPods, music keyboards and other peripherals so the visitor can actually create something, burn it to a CD/DVD, and get a feel for the hardware and software. Apple concept stores are best described as:

A) pure services.
B) full service retailing.
C) experiential retailing.
D) supplementary service providers.
E) none of the above

Question 67

Hypermarkets are large stores that combine the principles of supermarket, discount and warehousing into one store.

Question 68

A women's clothing store would be an example of a limited- line store.

Question 69

Wholesalers add value to the distribution channel by performing a number of functions. Which of the following is NOT one of the functions normally performed by wholesalers?

A) risk- reduction
B) financing
C) bulk breaking
D) warehousing and transportation
E) buying and assortment building

Question 70

The manufacturer- owned wholesaling operation that carries merchandise stocks is known as a:

A) manufacturer's agent.
B) sales branch.
C) sales office.
D) branch office.
E) purchasing office.

Question 71

Manufacturers' agents, also called manufacturers' representatives, are owned by the manufacturer.

Question 72

Speciality stores carry wide but shallow assortments.

Question 73

Star Wholesaling sells and delivers a limited line of staple products to small grocers for cash by making regular rounds in a planned area of coverage. This operation is best described as a:

A) cash- and- carry wholesaler.
B) truck wholesaler.
C) drop shipper.
D) rack jobber.
E) none of the above

Question 74

Truck wholesalers carry their inventory with them in order to sell and deliver in one stop.

Question 75

A retailer cooperative is a wholesaler- sponsored group of independent retailers that set up a central buying organisation and joint promotion efforts.

Question 76

The stores that first popularised the concept of offering a wide variety of product lines organised according to type of product are known as:

A) convenience stores.
B) department stores.
C) speciality stores.
D) discount stores.
E) none of the above

Question 77

The type of retail store that first introduced the self- service concept is called a:

A) convenience store.
B) discount store.
C) speciality store.
D) supermarket.
E) department store.

Question 78

have long-term relationships with buyers and make purchases for them. These wholesalers often receive, inspect, warehouse and ship merchandise for their buyers.

A) Selling agents
B) Brokers
C) Purchasing agents
D) Commission merchants
E) Drop shippers

Question 79

In general, limited service retailers such as hardware or Manchester stores provide more sales assistance.

Question 80

Retailers can be classified in a variety of ways. Which of the following is NOT one of the standard ways to classify retail operations?

A) geographic location
B) relative prices
C) product line sold
D) service type
E) all of the above