Deck 16: Managing Retailing, Wholesaling, and Logistics

Question 1

They carry more shopping goods and services such as credit and merchandize-return privileges. Customers need more information and assistance. These are usually features of ________ retailing.

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

Answer 1

A

Question 2

An independent retailer using a central buying organization and joint promotion efforts is known as a

A) merchandising conglomerate.
B) franchise organization.
C) retailer cooperative.
D) corporate chain store.
E) voluntary chain.

Answer 2

C

Question 3

Retailers can position themselves as offering one of four service levels. Which of the following is characterized by customers finding their own goods, but able to ask for assistance?

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

Answer 3

E

Question 4

Retailing involves getting the goods or services to the ultimate consumer. A ________ is any business enterprise whose sales volume comes primary from retailing.

A) superstore
B) wholesaler
C) retailer
D) agent
E) intermediary

Question 5

Nonstore retailing falls into four major categories. Which of the following involves telemarketing, television direct-response marketing, and electronic shopping?

A) direct selling
B) internet sales
C) buying service
D) direct marketing
E) automatic vending

Question 6

Franchising accounts for more than $1 trillion of annual U.S. sales and nearly one-third of all retail transactions. Franchises are distinguished by three characteristics that are: (1) the franchisee pays for the right to be part of the system: (2) the franchisor provides its franchisees with a system for doing business; and (3)

A) the franchisor receives a percentage of sales from the franchisee for the right to belong.
B) the franchisor controls all actions of the franchisee including hiring and marketing decisions.
C) the franchisor owns a trade or service mark and licenses it to franchisees in return for royalty payments.
D) the franchisee has unlimited freedom to change the operation once he/she pays the upfront charges.
E) the franchisee has the most control over the marketing plan.

Question 7

In your restaurant you offer a wide variety of dishes and are open for breakfast, lunch, and dinner. In terms of product assortment, you can claim that your restaurant has a product-assortment that has a large

A) variety and long hours.
B) appeal to all consumers.
C) narrow focus and narrow target market.
D) breadth and depth.
E) location and variety.

Question 8

After deciding on the product-assortment strategy, the retailer must establish merchandise source, ________, and practices.

A) buyers
B) vendors
C) lead-times
D) suppliers
E) policies

Question 9

Intermediaries include retailers, ________, and logistical organizations.

A) competitors
B) manufacturers
C) box stores
D) wholesalers
E) internet companies

Question 10

Retailers must make marketing decisions in the areas of product assortment and procurement, services and store atmosphere, price, communications, locations and

A) procedures.
B) niche.
C) target market.
D) shoppers.
E) style.

Question 11

One of the advantages of corporate retailing is that corporate retail organizations achieve economies of scale, greater purchasing power, better-trained employees, and

A) more advertising.
B) branded merchandise.
C) wider brand recognition.
D) more locations.
E) "fresh" merchandise.

Question 12

A retailer that has salespeople ready to assist in every phase of the locate-compare-select process for the shopper, that has high staffing, and high specialty goods would be considered a ________ retailer.

A) part-time service
B) limited service
C) events and experiences
D) self-service
E) full service

Question 13

You have ideas of owning a Subway after graduation. In owning a Subway location, you are entering a ________ agreement.

A) franchisor
B) merchandising
C) voluntary
D) discounter
E) franchisee

Question 14

In the pursuit of higher sales volume, retailers are studying their store environments for ways to improve the shopper's experience. According to Paco Underhill, one of his suggestions for fine-tuning retail space is to

A) honor the "transition zone" and allow the shopper time to "sort out" the stimuli.
B) place the checkouts in the rear of the store.
C) make the store more receptive to "men" shoppers.
D) make them "hunt" for it.
E) make the store "fun" and "interesting" but move the shoppers through it quickly.

Question 15

The retailer must decide on product-assortment breadth and

A) store location.
B) selection.
C) depth.
D) layout.
E) prices.

Question 16

Retailers are rapidly improving their skills in demand forecasting, merchandise selection, stock control, space allocation, and

A) customer service.
B) choosing the media mix.
C) display.
D) selecting the marketing channels.
E) advertising.

Question 17

Which of the following major retailer types is characterized by a narrow product line?

A) catalogue showroom
B) off-price retailer
C) specialty store
D) discount store
E) superstore

Question 18

One-on-one selling firms like Avon, Electrolux, and Mary Kay are examples of the type of retailing that has been growing much faster than traditional brick-and-mortar retailers have. To which of the following types of retailing is this referring?

A) direct marketing
B) corporate retailing
C) buying service
D) automatic vending
E) direct selling

Question 19

Some intermediaries use strategic planning, advanced information systems, sophisticated marketing tools, measure performance on a return-on-investment basis, segment their markets, improve their target marketing and positioning, and

A) contend with dwindling customer bases.
B) aggressively pursue market expansion and diversification strategies.
C) aggressively "squeeze" manufacturer margins.
D) dominant the manufacturers they do business with.
E) aggressively pursue take over strategies.

Question 20

You and your best friend are considering opening a retail store. You have identified your target market and location. Now you must decide on the format. You are pressing for a store that offers leftover goods, overruns and irregular merchandise sold at less than full retail. This is a description of a(n) ________ retailer.

A) superstore
B) off-price retailer
C) self-service
D) limited service
E) discount store

Question 21

Retailers can locate their stores in the central business district, a regional shopping centre, a ________, a shopping strip, or within a larger store.

A) freestanding
B) strip malls
C) community shopping centre
D) suburbia
E) town centres

Question 22

Research has shown that supermarket chains practicing ________ can be more profitable than those practising high-low sale pricing.

A) "smart" tagging
B) everyday low pricing
C) e-commerce
D) atmospherics
E) customer service

Question 23

Telemarketing is a type of ________.

A) direct marketing
B) direct selling
C) network marketing
D) multilevel selling
E) close-range marketing

Question 24

The three elements of the services mix for retailers includes pre-purchase, post-purchase, and ________ services.

A) transition zone
B) target marketing
C) breadth and depth
D) ancillary
E) direct product profitability

Question 25

One of the trends in retailing includes which of the following?

A) Reduction in the level of global competition.
B) Competition between Internet selling and store based retailing.
C) Competition between store-based and non-store based retailing.
D) Growth of the "smaller" boutique types of stores.
E) A decline in the "shop at home" markets.

Question 26

The ________ marketing sales system works by recruiting independent businesspeople who act as distributors.

A) catalog
B) multilevel
C) direct-response
D) corporate
E) direct

Question 27

________ measures a product's handling costs from the time the product reaches the warehouse until a customer buys it in the retail store.

A) Direct Product Profitability
B) Direct Product Performance
C) Shelf management
D) Brand management
E) Profitability

Question 28

Fine specialty retailers most likely fall into the ________ group with respect to margins and volume.

A) low-volume, mixed markup
B) low-volume, low-markup
C) high-volume, high-markup
D) mixed markup, high-volume
E) high-markup, lower-volume

Question 29

Which of the following retailers could be considered a category killer?

A) Staples
B) Marks & Spencer
C) Holt Renfrew
D) Sears
E) Zellers

Question 30

Most retailers will put low prices on some items to serve as traffic builders or

A) loss leaders.
B) traffic leaders.
C) profit leaders.
D) markdowns.
E) ad items.

Question 31

Traditional brick-and-mortar retailers are responding to the growth of e-commerce by providing and emphasizing ________ as a strong differentiator to stay at home shopping.

A) shopping experience
B) reputation of the retailer
C) celebrities on premises
D) wider selection of merchandise
E) expert advice in selecting

Question 32

A EDLP pricing strategy for a retailer could lead to lower advertising costs, greater pricing stability, ________, and higher retail profits.

A) a weak image regarding low pricing
B) a confused image of pricing and product availability
C) a weak image of price fairness and reliability
D) a stronger image of low prices
E) a stronger image of fairness and reliability

Question 33

Gillette uses "smart" tags to let retailers know when they need to reorder. What technology is being used to create smarter labels?

A) database scans
B) DPP software
C) UPC coding
D) Internet protocol
E) radio frequency identification systems

Question 34

Pressed by discounters and by shoppers who are increasingly blasé about brands, retailers need to consider unerringly reliable ________ as a point of differentiation for their stores.

A) individualization
B) clean well-stocked stores
C) advertisements
D) customer service
E) "entertainment"

Question 35

When retailers do study the economics of buying and selling individual products, they typically find that a third of their square footage is being tied up by products that do not make a

A) "turns".
B) funds.
C) profit.
D) connection.
E) sale.

Question 36

Companies who sell products door-to-door or at home sales parties are engaging in ________.

A) franchising
B) direct-response marketing
C) corporate selling
D) network marketing
E) direct marketing

Question 37

Every store has a "look," a physical layout, its "colours," sounds, and even its "scent." These elements constitute a store's

A) layout.
B) brands.
C) transition zone.
D) atmosphere.
E) positioning.

Question 38

Approximately ________ of everything sold in this country is bought or influenced by a woman.

A) 50 percent
B) 40 percent
C) 85 percent
D) 80 percent
E) 60 percent

Question 39

________ is(are) a key positioning factor for retailers and must be decided in relation to the target market, the product-and-service assortment mix, and the competition.

A) Advertisement
B) Hours of operation
C) Assortment
D) Prices
E) Locations

Question 40

Every surface in a SonyStyle store is designed to be

A) aromatic.
B) motivating.
C) seen.
D) touchable.
E) obsolete.

Question 41

Supply Chain Management (SCM) starts before physical distribution. It involves procuring the right inputs, ________ them efficiently into finished products, and then distributing them to the right customers.

A) delivering
B) labeling
C) converting
D) using
E) procuring

Question 42

Some experts believe that achieving 50 percent of the market is the natural limit for private label brands because consumers prefer certain national brands and

A) many private label brands are of inferior quality.
B) many product categories are too large for a private-label brand.
C) many product categories have so many brands that there is not room for an additional brand.
D) many product categories have solid national brands as market leaders.
E) many product categories are not feasible or attractive for private labels.

Question 43

Retailers charge for special display spaces and in-store advertising space. Retailers typically give more ________ display space to their own brands and make sure that their private label products are well stocked.

A) attractive
B) front of store
C) access to
D) prominent
E) high traffic

Question 44

You are interviewing for a job after graduation with a wholesaler. In your preparation for the interview, you discover that the wholesaler carries over 10 000 stock keeping units, maintains a sales force, makes store door deliveries, and provides management and research assistance to retailers. You are interviewing with a ________ wholesaler.

A) merchant
B) full-service
C) specialized
D) cash and carry
E) rack jobber

Question 45

In which of the following functions that wholesalers perform do sales forces help manufacturers reach small business customers at a relatively low cost?

A) bulk breaking
B) market research
C) financing
D) buying and assortment building
E) selling and promoting

Question 46

Wholesalers-distributors have faced mounting pressure in recent years. They have had to develop appropriate strategic responses. One major drive has been to increase ________ productivity by managing their inventories and receivables better.

A) buying practices
B) asset
C) product assortment
D) products
E) personnel

Question 47

Products that use lower-quality ingredients, lower-cost labeling and packaging, and minimal advertising are called

A) reseller brands.
B) house brands.
C) private label brands.
D) generics.
E) store brands.

Question 48

Integrated logistics systems (ILS), involves materials management, ________, and physical distribution, abetted by information technology.

A) information flow systems
B) cash flow systems
C) channel systems
D) product management systems
E) material flow systems

Question 49

As a sales representative for a major food manufacturer your largest customer has asked you to provide him with a product that meets the following definition: it must not contain any brand name, be plainly packaged, use less expensive ingredients, can use lower-quality raw products in its makeup, and does not allocate any funds for advertising and promotion. What type of product is your buyer describing that he wants from you?

A) house
B) reseller brand
C) generic
D) private label
E) store brand

Question 50

A storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership represents which kind of nonstore retailing?

A) multi-level selling
B) buying service
C) automatic vending
D) network marketing
E) direct marketing

Question 51

The company that you work for has outlined the following to its customers: On-time deliveries will be set at 95 percent; ordering and billing accuracy will be at a minimum of 98 percent; and four warehouses will be established to serve western provinces. These policies are examples of

A) customer responsiveness.
B) integrated logistics systems.
C) market logistics.
D) targeted marketing.
E) supply chain management.

Question 52

________ involves planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use, to meet customer requirements at a profit.

A) SCM
B) Wholesaling
C) Integrated logistics systems
D) Supply chain management
E) Market logistics

Question 53

Distributors differ from retailers in a number of ways. First, distributors pay less attention to promotion, atmosphere, and location than retailers do. Second, distributor transactions are usually ________ than retail transactions. Third, the government treats distributors differently in terms of legal regulations.

A) concise
B) less profitable
C) more involved
D) larger
E) more complicated

Question 54

Which of the following types of limited-service wholesalers serve bulk industries such as coal, lumber, and heavy equipment?

A) drop shippers
B) cash and carry wholesalers
C) specialized wholesalers
D) truck wholesalers
E) brokers and agents

Question 55

Electronic shopping is a type of ________.

A) direct marketing
B) direct selling
C) network marketing
D) multilevel selling
E) corporate selling

Question 56

Besides the growing power of store brands, other factors weakening national brands include the fact that

A) national brands quality is superior to store brands.
B) national manufacturers have increased advertising support for their brands.
C) consumers are more selective on purchases of national brands.
D) consumers are more price sensitive.
E) national brands have quality control problems not found in store brands.

Question 57

To maintain their power, leading brand marketers should invest in heavy and continuous ________ to bring out new brands, line extensions, features, and quality improvements.

A) P&L
B) R&D
C) advertising
D) A&P
E) promotions

Question 58

Which of the functions that wholesalers perform involves taking title and bearing the cost of theft, damage, spoilage, and obsolescence?

A) warehousing
B) risk bearing
C) bulk breaking
D) financing
E) buying and assortment building

Question 59

In order to better compete, Arrow Electronics, a global provider of products, services, and solutions to the electronic-component and computer-product industries has sought to strengthen its relationships with manufacturers. Which of the four ways cited in the text has Arrow embraced?

A) fulfilled commitments by meeting volume targets
B) gained insight by visiting manufacturers' plants and trade shows
C) fed customer information back to manufacturers
D) sought a clear agreement with manufacturers about expected functions
E) identified and offered value-added services

Question 60

A "brand" developed by a retailer and/or wholesaler that is only available in selected retail outlets is called a ________ brand.

A) private label
B) national
C) household
D) premium
E) selective

Question 61

________ cost increases at an accelerating rate as the customer service level approaches 100 percent.

A) Merchandising
B) Inventory
C) Promotion
D) Storage
E) Delivery

Question 62

Maximum customer service implies larger inventories, premium transportation, and multiple warehouses, all of which raise market-logistics costs. Market-logistics costs interact with marketing strategy and are often ________ related.

A) satisfactorily
B) complementarily
C) disproportionately
D) negatively
E) positively

Question 63

________ play a critical role in managing market logistics, especially computer, point-of-sale terminal, uniform product bar codes, EDI, and EFTs.

A) Information systems
B) Logistics systems
C) Market logistics
D) Databases
E) Supply chain management

Question 64

Inventory-carrying costs represent substantial dollars for manufacturers. These inventory-carrying costs include storage charges, cost of capital, taxes and insurance, and depreciation and obsolescence. Carrying costs might run as high as ________ of the value of the inventory.

A) 50 percent
B) 30 percent
C) 70 percent
D) 25 percent
E) 40 percent

Question 65

Today's customers want more frequent deliveries, shorter order-cycle times, direct store deliveries, mixed pallets, tighter promised times, and ________ packaging, price tagging, and display building.

A) colourful
B) easy opening
C) theft proof
D) child-proof
E) custom

Question 66

Four major decisions must be made with regard to market logistics: order processing, warehousing, inventory, and

A) purchases.
B) information.
C) pricing.
D) globalization.
E) transportation.

Question 67

The elapsed time between an order's receipt, delivery, and payment is called the

A) order cycle.
B) variable costs to payment cycle.
C) product-to-payment cycle.
D) inventory-to-sale cycle.
E) order-to-payment cycle.

Question 68

Market-logistics strategies must be derived from ________, rather than solely from cost considerations.

A) marketing strategies
B) business strategies
C) low cost considerations
D) competitive analysis
E) cost strategies

Question 69

A stock reorder point of 10 means that reordering the product when stock falls to

A) 100 units.
B) 10 units.
C) 10 hours to delivery.
D) 10 days after the first of the month.
E) 10% of max inventory level.

Question 70

Market logistics can amount to 30 to 40 percent of the product's total cost. Even though the cost of market logistics can be high, a well-planned program can be a(n) ________ tool in competitive marketing.

A) effective
B) incremental
C) potent
D) realistic
E) added

Question 71

Companies are reducing inventory costs by treating inventory items differently. Critical items defined as high risk, high opportunity and commodities defined as low risk, high opportunity. Recently, your company has introduced a product that is considered by the distributor a "bottleneck" item. What is the risk/reward relationship for "bottleneck" items?

A) High risk, low opportunity
B) High risk, high opportunity
C) Low risk, high opportunity
D) Low risk, low opportunity
E) Low risk, mediocre opportunity

Question 72

________ warehouses store goods for moderate to long periods of time.

A) Distribution
B) Company owned
C) Local
D) Storage
E) Automated

Question 73

The storage function (warehousing) helps smooth discrepancies between production and quantities desired by the market. Companies must decide on the ________ of inventory stocking locations.

A) automation
B) costs
C) size
D) quality
E) number

Question 74

Dell requires that each customer order a computer and pay for it in advance. What is their inventory strategy?

A) Running cost optimization
B) Near-zero inventory
C) Carrying costs
D) Bottleneck
E) Reorder point management

Question 75

In deciding on the method or means of transportation, shippers consider such criteria as speed, frequency, ________, capability, availability, traceability, and costs.

A) air versus ground
B) dependability
C) gypsy truckers
D) branded name truckers
E) costs per mile

Question 76

At some stock level point, management must reorder product to refill the inventory to an acceptable level. This "point" is called the ________.

A) order (or reorder) point.
B) near zero point.
C) inventory carrying costs.
D) minimum inventory level.
E) inventory.

Question 77

Total costs per unit increase with more orders and inventory-carrying costs per unit increase with more orders, the cost per unit for order-processing ________ per unit as a result.

A) increases
B) has no effect
C) continues at the same level
D) increases dramatically
E) decreases

Question 78

The trucking firm hired by your transportation manager provides service between Windsor and Quebec City on a regular schedule. Hiring this shipper is available to all at standard rates. Your transportation manager has hired a

A) piggybacked carrier.
B) contract carrier.
C) private carrier.
D) gypsy carrier.
E) common carrier.

Question 79

A ________ is a retail firm owned by its customers. Members contribute money to open their own store, vote on its policies, elect a group to manage it, and receive dividends.

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

Question 80

Marketers must be concerned with transportation decisions. Transportation choices will affect product ________, on-time delivery performance, and the conditions of the goods when they arrive, all of which affects customer satisfaction.

A) transferability
B) pricing
C) usage
D) delivery
E) performance