Deck 15: Retailing, Direct Marketing and Wholesaling

Question 1

What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?

Answer 1

Franchising offers several advantages to a franchisee. It enables a franchisee to start a business with limited capital and benefit from the business experience of others. Franchised outlets are generally more successful than independently-owned businesses. Generally speaking, franchises have lower failure rates than independent retail establishments. However, franchise failure rates vary greatly depending on a particular franchise. If business problems arise, a franchisee can obtain guidance and advice from a franchisor at little or no cost. Also, a franchisee receives materials to use in local advertising and can benefit from national promotional campaigns sponsored by the franchisor.
Franchise arrangements also have several drawbacks. Franchisees must pay to use a franchisor's name, products, and assistance. Usually, there is a one-time franchise fee and continuing royalty and advertising fees, often collected as a percentage of sales. Franchisees often must work very hard, putting in 10- to 12-hour days six or seven days a week. In some cases, franchise agreements are not uniform, meaning one franchisee may pay more than another for the same services.

Question 2

What is a store's image, and how does it affect retailing strategy decisions?

Answer 2

Atmospherics, the physical elements in a store's design that appeal to consumers' emotions and encourage buying, help to create an image and position a retailer.?Exterior atmospheric elements include the appearance of the storefront, display windows, store entrances, and degree of traffic congestion. These are particularly important to new customers, who tend to judge an unfamiliar store by its outside appearance.?Interior atmospheric elements include aesthetic considerations, such as lighting, wall and floor coverings, dressing facilities, and store fixtures.?Color can attract shoppers to a retail display. Many fast-food restaurants use bright colors, such as red and yellow, because these have been shown to make customers feel hungrier and eat faster, which increases turnover. Sound is another important sensory component of atmosphere. A low-end, family dining restaurant might play fast pop music to encourage customers to eat quickly and leave, increasing turnover and sales. A high-end restaurant, on the other hand, will opt to play classical music to enhance the dining experience and encourage patrons to indulge in multiple courses. Many retailers employ scent, especially food aromas, to attract customers. Most consumers expect the scent of a store to be congruent with the products that are sold there.

Question 3

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.

Answer 3

C

Question 4

What role does wholesaling play in the marketing channel? Is this role necessary?

Question 5

What are the two categories of retail stores based on breadth of products offered, and what types of stores are in each category?

Question 6

In what ways do retailers add value to products?

Question 7

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 that 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

Question 8

Compare and contrast department stores and discount stores.

Question 9

Walmart, Macy's, Nordstrom, and Toys 'R' Us are examples of

A) manufacturers.
B) merchant wholesalers.
C) end-users.
D) agents.
E) retailers.

Question 10

Identify and describe three kinds of specialty stores.

Question 11

What are the three types of nonstore retailing, and what are some examples of each?

Question 12

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.

Question 13

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.

Question 14

Discuss the role of merchant wholesalers. When is a producer most likely to use them?

Question 15

Direct selling, direct marketing, and vending machines are all examples of

A) producing.
B) advertising.
C) promoting.
D) retailing.
E) wholesaling.

Question 16

Discuss the advantages and disadvantages of catalog marketing.

Question 17

Why is a store's location one of the most important strategic retailing decisions?

Question 18

What wholesaling activities do selling agents and brokers perform?

Question 19

Discuss some of the functions that full-service wholesalers provide. How do these differ from those that limited-service wholesalers provide?

Question 20

Compare the services wholesalers provide for producers with the services they provide to retailers.

Question 21

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.

Question 22

Kroger, Safeway, and Publix are all considered

A) superstores.
B) grocery stores
C) department stores.
D) supermarkets.
E) food stores.

Question 23

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

Question 24

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

Question 25

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.

Question 26

Sam's and Costco are examples of

A) discounters.
B) warehouse clubs.
C) warehouse showrooms.
D) discount clubs.
E) wholesalers.

Question 27

Jack gets a shopping list from his wife. On the list are a potted plant, fresh salmon, vitamins, 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.

Question 28

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

Question 29

Nordstrom, Macy's, and JCPenney are all considered

A) department stores.
B) discount stores.
C) off-price retailers.
D) specialty retailers.
E) category killers.

Question 30

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

Question 31

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.

Question 32

Ollie's is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Ollie's is an example of a

A) department store.
B) discount store.
C) warehouse showroom.
D) specialty store.
E) superstore.

Question 33

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) convenience store.
B) hypermarket.
C) department store.
D) general merchandise retailer.
E) discount store.

Question 34

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

A) discount store.
B) superstore.
C) supermarket.
D) department store.
E) warehouse club.

Question 35

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

Question 36

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.

Question 37

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

Question 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.

Question 39

Which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their iceboxes?

A) Supermarkets
B) Convenience stores
C) Discount stores
D) Department stores
E) Specialty stores

Question 40

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.

Question 41

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.

Question 42

Greg chooses to have his hunting equipment store 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 nontraditional shopping center.
E) a free-standing structure.

Question 43

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.

Question 44

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.

Question 45

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.

Question 46

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.

Question 47

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.

Question 48

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

Question 49

Off-price retailers and category killers are both

A) specialty retailers.
B) discount stores.
C) showrooms.
D) general merchandisers.
E) department stores.

Question 50

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.

Question 51

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.

Question 52

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

Question 53

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.

Question 54

Which of the following is an example of a category killer?

A) JCPenney
B) Walmart
C) Marshalls
D) Sam's
E) Toys "R" Us

Question 55

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

Question 56

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.

Question 57

Stores that buy manufacturers' seconds, overruns, returns, and off-season production run 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.

Question 58

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

Question 59

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.

Question 60

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.

Question 61

A shopping center containing a Macy's, Sears, and JCPenney 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.

Question 62

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.

Question 63

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.

Question 64

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.

Question 65

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

Question 66

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.

Question 67

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.

Question 68

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

Question 69

An example of an emerging type of power shopping center might contain

A) JCPenney, Sears, some specialty shops, McDonald's, and Dairy Queen.
B) Michael's, Office Depot, T.J. Maxx, and Best Buy.
C) Liz Claiborne, Van Heusen, Corning Ware, and Mikasa outlets.
D) Safeway, CVS, and Subway.
E) a Supercenter Walmart.

Question 70

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 sidewalk sales and boat shows. This mall is most likely a ____ shopping center.

A) neighborhood
B) national
C) regional
D) community
E) city

Question 71

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

Question 72

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

Question 73

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

Question 74

Which retail store invests the most in atmospherics?

A) Target
B) Sears
C) Neiman Marcus
D) Macy's
E) Dick's Sporting Goods

Question 75

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.

Question 76

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.

Question 77

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.

Question 78

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.

Question 79

A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers is called

A) category management.
B) scrambled merchandising.
C) line extensions.
D) aggregate management.
E) wheel of retailing.

Question 80

____ 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