Deck 5: Retail Market Strategy

Question 1

A cafe focuses primarily on customers who are aged between 18 and 35 and earning about $20,000 to $40,000 annually. This segmentation of customers is known as its

A) retail market.
B) target market.
C) virtual market.
D) global market.
E) labor market.

Answer 1

B
The target market is the market segment(s) toward which the retailer plans to focus its resources and retail mix.

Question 2

A ________ is a group of consumers with similar needs and a group of retailers that satisfy those needs using a similar retail channels and format.

A) retail market segment
B) virtual market segment
C) wholesale market segment
D) target market segment
E) global market segment

Answer 2

A
A retail market segment is a group of consumers with similar needs and a group of retailers that satisfy those needs using similar retail channels and format.

Question 3

Scale economies are cost advantages due to a retailer's size.

Answer 3

True
Scale economies are cost advantages due to a retailer's size.

Question 4

The ________ is the market segment(s) toward which the retailer plans to focus its resources and retail mix.

A) target market
B) retail market
C) virtual market
D) labor market
E) global market

Question 5

Which of the following statements is True of a sustainable competitive advantage?

A) It is not easily copied by the competitors.
B) It cannot be maintained over a long period of time.
C) It can only be maintained over a short period of time.
D) It can be easily copied by the competitors.
E) It can be achieved by reducing the price of the product.

Question 6

Store design is a component of the

A) pricing mix.
B) product mix.
C) wholesale mix.
D) organizational mix.
E) retail mix.

Question 7

A retail format development growth opportunity is an opportunity in which a retailer develops a new retail format for the same target market.

Question 8

Market expansion approaches include opening more stores in the target market and/or keeping existing stores open for longer hours.

Question 9

Direct investment occurs when a retail firm invests in and owns a retail operation in its home country.

Question 10

The first step in the strategic retail planning process is to define the business mission.

Question 11

Customer relationship management programs collect data about customer shopping behavior to enable retailers to build and maintain customer loyalty.

Question 12

Hot Topic LLC appeals to tweens and teens through their Gothic frocks, fad movie gear, piercing paraphernalia, and popular T-shirts and posters. The staff at Hot Topic wears the merchandise. Also, they are active in helping their young customers choose from the hip merchandise. The teens and tweens can be considered the

A) target market.
B) marketing mix.
C) marketing objective.
D) retail format.
E) retail mix.

Question 13

A retail strategy is a statement that identifies all the following except

A) the target market.
B) the format that the retailer plans to use.
C) the employee compensation plan.
D) the bases upon which the retailer plans to build a sustainable competitive advantage.
E) the retail mix.

Question 14

After selecting a target market and a retail mix, the final element in a retail strategy is the identification of prospective wholesalers.

Question 15

A toy store has acquired an edge over its competition that cannot be easily copied by its competitors. Which of the following has the store achieved?

A) Customer brand affiliation
B) Sustainable competitive advantage
C) Customer loyalty
D) Service excellence
E) Brand recall

Question 16

A(n) ________ describes the nature of the retailer's operations that it will use to satisfy the needs of its target market.

A) situation analysis
B) organizational chart
C) competitor analysis
D) market research report
E) retail format

Question 17

Horizontal integration describes diversification by retailers into wholesaling or manufacturing.

Question 18

A retail format describes the nature of the retailer's operations that it will use to satisfy the needs of its target market.

Question 19

Which of the following is a component of retail mix?

A) Product design
B) Market intelligence
C) Human resource practice
D) Pricing policy
E) Employee performance data

Question 20

Building strong relationships with wholesalers is one of the three approaches for developing a sustainable competitive advantage.

Question 21

Sally's LLC, a local supermarket, has all of the following characteristics. Which of the following characteristics of Sally's is most likely to be a more sustainable competitive advantage?

A) Extended hours of operation
B) More employees
C) Shared systems with vendors
D) More merchandise
E) More sales promotions

Question 22

Why should a retailer be concerned with building a sustainable competitive advantage?

A) It could increase organizational turnover.
B) It would decrease organizational commitment.
C) It could decrease organizational productivity.
D) It could result in short-term profitability.
E) It could result in long-term profitability.

Question 23

Tara gets her oil changed only at Tires Plus Inc. This commitment to Tires Plus Inc. illustrates

A) ethical business practices.
B) store awareness.
C) good customer service.
D) customer loyalty.
E) price competitiveness.

Question 24

Customers who shop at Books-A-Million find that it has a large selection of books, in addition to a helpful and friendly staff. Furthermore, they can enjoy a peaceful place to read while sipping a cappuccino at its in-store Joe Muggs Café. This intimate perception of the store indicates its ________ strategy.

A) perceptual retailing
B) imaging
C) positioning
D) visual merchandising
E) retail feedback

Question 25

________ is the design and implementation of a retail mix in order to create an image of the retailer within the customer's mind relative to its competitors.

A) Retail perception
B) Positioning
C) Imaging
D) Detailing
E) Competitive feedback

Question 26

Forester, a jewelry store, has developed a sustainable competitive advantage. Which of the following characteristics of Forester is most likely to be the reason for this advantage?

A) Repeat purchases from a vendor due to limited alternatives
B) Knowledgeable and helpful salespeople
C) Automated warehouses
D) More merchandise
E) Higher advertising budgets

Question 27

Myra wanted to purchase a vase as a wedding gift. Pier 1 Imports offers a better assortment and slightly lower prices, but she immediately went to her local gift shop instead of Pier 1 Imports. This is an example of

A) a SWOT analysis.
B) strategic control.
C) direct competition.
D) retail perception.
E) customer loyalty.

Question 28

Positioning is the process of

A) acquiring a lease for a retail store in a region.
B) creating and supporting a clear and distinct retailer image.
C) finding a retail location site.
D) negotiating the percentage-of-sales payment to the mall owners.
E) performing a situation audit.

Question 29

Which of the following characteristics is most likely to be the least sustainable competitive advantage?

A) Convenient locations
B) Ability to get scarce merchandise
C) Shared systems with vendors
D) More sales promotions
E) Coordination of procurement efforts

Question 30

Wendy's has established itself in the fast food market as one of the top five restaurants in the city. Customers frequent Wendy's because of the impeccable quality of food associated with it. Which of the following is most likely to be the reason for Wendy's sustainable competitive advantage?

A) Unique merchandise
B) Brand image
C) Customer service
D) Location
E) Price

Question 31

Establishing a sustainable competitive advantage is the key to ________ performance.

A) short-term market
B) short-term financial
C) short-term employee
D) long-term employee
E) long-term financial

Question 32

________ are developed such that the distance between two retailers' positions on the map indicates how similar those stores appear, according to consumers.

A) Perceptual maps
B) Geographical maps
C) Brand perceptions
D) Product perceptions
E) Demographic maps

Question 33

After selecting a target market and a retail mix, the final element in a retail strategy is the retailer's approach to

A) build a sustainable competitive advantage.
B) identify all potential wholesalers.
C) identify all possible channels of communication.
D) identify possible channels of distribution.
E) manage the logistics of the product.

Question 34

Which of the following characteristics is most likely to be the more sustainable competitive advantage?

A) Extended hours of operation
B) Bigger warehouses
C) Ability to get scarce merchandise
D) More employees
E) Greater assortment of merchandise

Question 35

In perceptual maps, retailers that are closer to an ideal point are evaluated

A) less favorably by the consumers.
B) more favorably by the producers.
C) more favorably by the suppliers.
D) less favorably by the suppliers.
E) more favorably by the consumers.

Question 36

My Favorite Quilt Shop offers members of their Fabric Lovers Club merchandise worth $20 for every $200 they purchase plus additional discounts on classes and new fabric lines. The Fabric Lovers Club is a good way to develop

A) internal excellence.
B) store awareness.
C) good customer service.
D) customer loyalty.
E) ethical business practices.

Question 37

Which of the following characteristics of a footwear store would most likely be its least sustainable competitive advantage?

A) Shared systems with vendors
B) Convenient store location
C) Knowledgeable employee force
D) Helpful sales force
E) Lower price

Question 38

Although Rosa visits several retailers when shopping for suits, she always buys suits at Bow and Arrow Inc. Which of the following approaches best demonstrates her affinity for Bow and Arrow Inc.?

A) Customer loyalty
B) Product pricing
C) Location
D) Unique merchandise assortment
E) Good vendor relations

Question 39

John plans to start a grocery store in his locality. Which of the following is most likely to give him the least sustainable competitive advantage in the market?

A) Convenient locations
B) More employees
C) Exclusive merchandise
D) Coordination of procurement efforts
E) Helpful sales force

Question 40

Retailers can foster customer loyalty by

A) having a generalized organizational mission statement.
B) providing good customer service.
C) having no distinct brand image.
D) trying to attain qualitative objectives rather than quantitative ones.
E) using a mass advertising strategy.

Question 41

A bagel shop that decides to open up an hour earlier every morning is taking advantage of a ________ opportunity.

A) market penetration
B) diversification
C) retail format development
D) market depletion
E) market divestment

Question 42

Private-label brands are also called

A) personal brands.
B) store brands.
C) faith brands.
D) umbrella brands.
E) individual brands.

Question 43

Which of the following is an opportunity for retailers to develop a sustainable competitive advantage?

A) Reduced prices
B) Deeper assortment
C) Longer hours of operation
D) Good customer service
E) Coupons

Question 44

Walgreens has had rapid growth in their store openings. Many times, they have stores within just a few blocks of each other. This is an example of Walgreens practicing

A) retail format development.
B) diversification growth.
C) market penetration.
D) market expansion.
E) market divestment.

Question 45

Customer relationship management programs are also known as

A) transitional programs.
B) sustaining programs.
C) twelve-step programs.
D) incentive programs.
E) loyalty programs.

Question 46

The best way for a retailer to develop a sustainable competitive advantage is to

A) concentrate on finding the best location.
B) concentrate on having the lowest prices in town.
C) develop a good distribution system.
D) rely on multiple approaches.
E) maintain good vendor relations.

Question 47

Which of the following is most likely to be a disadvantage for a retailer in developing customer loyalty through offering popular national brands?

A) The costs associated with offering popular national brands are very high.
B) There is often a huge reduction in the profit margin for the retailer.
C) Other competitors can purchase and sell the same popular products.
D) Training employees to operate the new product or service involves time and effort.
E) It leads to brand cannibalization.

Question 48

Cross-selling is most commonly practiced with the

A) wholesale format development growth opportunity.
B) market expansion growth opportunity.
C) retail format development growth opportunity.
D) diversification growth opportunity.
E) market penetration growth opportunity.

Question 49

Which of the following is True of private-label brands?

A) Products developed and marketed by a retailer and available with other retailers
B) Products developed by a retailer but marketed and available with a third party
C) Products developed and available with a retailer but marketed by a third party
D) Products developed by a third party but marketed and available with a retailer
E) Products developed and marketed by a retailer and available only from that retailer

Question 50

La Rouge, a fabric store, is one of the most famous in the country. Customers flock to the store from all across the nation for its exclusive collection of store brands. Which of the following is most likely to be the sustainable competitive advantage of La Rouge?

A) Unique merchandise
B) Ethical business practices
C) Customer service
D) Location
E) Price

Question 51

A ________ involves using the retailer's existing retail format in new market segments.

A) market expansion growth opportunity
B) market penetration growth opportunity
C) diversification growth opportunity
D) wholesale format development growth opportunity
E) retail format growth opportunity

Question 52

A ________ is a growth opportunity directed toward existing customers using the retailer's present retailing format.

A) market expansion growth opportunity
B) market penetration growth opportunity
C) retail format development growth opportunity
D) wholesale format development growth opportunity
E) diversification growth opportunity

Question 53

Bine Lane is a fabric store that sells only cotton clothing. After a situation analysis, the marketing team of Bine Lane wants its current customers to visit and purchase from the store more frequently. Which of the following growth strategies should Bine Lane follow to achieve its objective?

A) Wholesale format development growth opportunity
B) Market expansion growth opportunity
C) Retail format development growth opportunity
D) Diversification growth opportunity
E) Market penetration growth opportunity

Question 54

Which of the following is an advantage of the use of sophisticated distribution and information systems?

A) It creates a positive image of the brand in the minds of the consumers.
B) It offers an opportunity for the retailer to reduce operating costs.
C) It helps an organization to attain cultural diversity within its workforce.
D) It helps an organization to monitor the productivity of its entire workforce.
E) It helps an organization to monitor the movements of its employees.

Question 55

Which of the following is an example of a market penetration growth opportunity?

A) Opening new stores in new geographical markets
B) Changing the brand name to appeal to newer market segments
C) Keeping existing stores open for longer hours
D) Opening new stores to cater to a different demographic segment
E) Changing the brand name in new geographical markets

Question 56

Which of the following is a suggested method for improving the efficiency of internal operations?

A) Unique merchandise
B) Customer service
C) Human resource management
D) Brand image
E) Building a retail community using social media

Question 57

Competitive retailers can sell the same popular-national brands. Which of the following should retailers do to secure a competitive advantage?

A) Prevent its customers from comparison shopping.
B) Limit its store traffic to qualified buyers.
C) Increase its sales expenses.
D) Increase its merchandising flexibility.
E) Develop private-label brands.

Question 58

Sam loves shopping. She frequently goes window shopping in the city. During times of need, she visits the nearest supermarket even though she loathes going there. Which of the following is most likely to be the reason why Sam shops in the supermarket?

A) Unique merchandise
B) Brand image
C) Customer service
D) Location
E) Price

Question 59

Developing programs to motivate and coordinate employee efforts, providing incentives, fostering a positive organizational culture, and managing diversity are functions of the

A) human resource management.
B) district management.
C) general store manager.
D) chief executive officer.
E) marketing manager.

Question 60

Kola is a chain of supermarkets across the country. Kola's sales staff treat their customers very well, which in turn creates great customer satisfaction. Which of the following is most likely to be the sustainable competitive advantage of Kola?

A) Unique merchandise
B) Ethical business practices
C) Customer service
D) Location
E) Price

Question 61

Which of the following retail growth strategies has the greatest chance for succeeding?

A) Related diversification growth opportunity
B) Market penetration growth opportunity
C) Market expansion growth opportunity
D) Retail format development growth opportunity
E) Unrelated diversification growth opportunity

Question 62

Which of the following statements is True of the challenges faced by organized retailing in India?

A) The cost of setting up facilities is significantly high.
B) The ever-increasing operating costs.
C) Government impedes foreign investment in retailing.
D) The supply chain is underdeveloped and inefficient.
E) Managerial talent is becoming more difficult to find and retain.

Question 63

In a related diversification growth opportunity,

A) the retailer's present target market and retail format share nothing in common with the new opportunity.
B) the retailer's future target market and retail format share nothing in common with a missed opportunity.
C) the retailer's past target market and retail format share nothing in common with a missed opportunity.
D) the retailer's future target market and retail format share something in common with a missed opportunity.
E) the retailer's present target market and retail format share something in common with the new opportunity.

Question 64

Which of the following is an example of related diversification?

A) Purchasing from different vendors
B) Operating in similar locations
C) Targeting another market segment
D) Using a newer medium for advertising
E) Developing a management information system

Question 65

Ashton, a chain of supermarkets, intends to change its pricing policy and promotional mix but intends on catering to the same market segment. Which of the following growth strategies will best suit Ashton LLC?

A) Market penetration growth opportunity
B) Market expansion growth opportunity
C) Retail format growth opportunity
D) Diversification growth opportunity
E) Wholesale format growth opportunity

Question 66

The emerging international markets that receive the most attention from global retailers are collectively referred to as the ________ nations.

A) Asian Tigers
B) Next Eleven
C) MIKT
D) CIVETS
E) BRIC

Question 67

Designing private-label merchandise is a(n) ________ because it builds on the retailer's knowledge of its customers.

A) unrelated diversification growth opportunity
B) market expansion growth opportunity
C) related diversification growth opportunity
D) market penetration growth opportunity
E) retail format development growth opportunity

Question 68

Krueger Burgers, a chain of restaurants, intends to change its pricing policy and promotional mix to cater to a new market segment. Which of the following growth strategies will best suit Krueger Burgers?

A) Market penetration growth opportunity
B) Market expansion growth opportunity
C) Retail format growth opportunity
D) Diversification growth opportunity
E) Wholesale format growth opportunity

Question 69

A ________ is one in which a retailer introduces a new retail format directed toward a market segment that's not currently served by the retailer.

A) retail format growth opportunity
B) market penetration growth opportunity
C) diversification growth opportunity
D) market expansion growth opportunity
E) wholesale format development growth opportunity

Question 70

Which of the following statements is True of the challenges faced by organized retailing in China?

A) Government impedes foreign investment in retailing.
B) Stringent regulations on profit margins discourage capitalism.
C) An unstable political scenario increases the risk associated with direct investments.
D) Managerial talent is becoming more difficult to find and retain.
E) Retailers cannot rely on domestic products as their quality is low.

Question 71

Alvo's, a producer of candy, has decided to expand its operations geographically. Which of the following strategies should Alvo's use to achieve its objective?

A) Retail format growth opportunity
B) Market penetration growth opportunity
C) Diversification growth opportunity
D) Market expansion growth opportunity
E) Wholesale format development growth opportunity

Question 72

When Home Movies Inc. opened stores in other countries, it increased the company's international market share. Home Movies took advantage of a ________ opportunity.

A) diversification
B) market expansion
C) market divestment
D) retail format development
E) market penetration

Question 73

Which of the following is an example of a market expansion growth opportunity?

A) Displaying merchandise to increase impulse purchases
B) Opening new stores in new geographic markets
C) Opening more stores in the same market
D) Keeping existing stores open for long hours
E) Engaging in cross-selling

Question 74

Jose runs a gallery that specializes in neon art with an emphasis on vacation icons like flamingos, dolphins, and palm trees. Since demand was high and supplies were low, he decided to buy an old warehouse and then hire craftspeople to work there in order to produce the art. He would provide them with all of the supplies they needed, and he would be their only customer. Jose engaged in

A) horizontal integration.
B) market expansion.
C) co-operative buying.
D) market penetration.
E) vertical integration.

Question 75

Which of the following statements is True of vertical integration?

A) It is the diversification by retailers into manufacturing.
B) It is the diversification by wholesalers into retailing.
C) It is the diversification by manufacturers into marketing.
D) It is the diversification by supply chain management into marketing.
E) It is the diversification by marketing into manufacturing.

Question 76

An unrelated diversification growth opportunity

A) has a lot in common between the retailer's present business and the new growth opportunity.
B) is less risky compared to a related growth opportunity.
C) is less effective compared to a related growth opportunity.
D) is less expensive compared to related growth opportunity.
E) has little commonality between the retailer's present business and the new growth opportunity.

Question 77

A ________ is an opportunity in which a retailer develops a new retail mix for the same target market.

A) retail format development growth opportunity
B) market penetration growth opportunity
C) diversification growth opportunity
D) market expansion growth opportunity
E) wholesale format development growth opportunity

Question 78

Which of the following is an example of unrelated diversification?

A) Operating in similar locations
B) Creating a new management information system
C) Using the same distribution
D) Advertising in the same newspapers
E) Purchasing from the same vendors

Question 79

Retailers have the least opportunity to exploit a competitive advantage when they pursue

A) retail format growth opportunities.
B) market penetration growth opportunities.
C) diversification growth opportunities.
D) market expansion growth opportunities.
E) wholesale format development growth opportunities.

Question 80

When Nordstrom department stores launched a website to sell its merchandise to its present customers; it took advantage of a ________ opportunity.

A) diversification
B) market format investment
C) market expansion
D) market penetration
E) retail format development