Deck 15: Retailing and Wholesaling Strategies

Question 1

Which type of store carries several product lines across multiple categories?

A) convenience
B) department
C) specialty
D) wholesaler
E) category killer

Answer 1

B

Question 2

Which of the following is any method a firm uses to complete an exchange that does not require a customer to visit a store?

A) kiosk merchandising
B) nonstore retailing
C) direct selling
D) exchange retailing
E) e-commerce

Answer 2

B

Question 3

A retail margin is the difference between ________ and ________.

A) the volume of merchandise ordered; the volume of merchandise sold
B) the revenue generated by a retailer in a year; the taxes paid by a retailer in that same year
C) the retailer's operating expenses; the retailer's revenue
D) a product's retail selling price; a product's wholesale cost
E) a product's wholesale cost; a product's mark-up

Answer 3

D

Question 4

________ offer leftover goods, overruns, and irregular merchandise.

A) Off-price retailers
B) Discount stores
C) Convenience stores
D) Department stores
E) Superstores

Question 5

________ carry a broad range of choices for a narrow product line.

A) Convenience stores
B) Specialty stores
C) Superstores
D) Discount stores
E) Off-price retailers

Question 6

Which type of store carries a deep assortment, has knowledgeable staff, and is a giant specialty store?

A) category killer
B) superstore
C) department store
D) off-price retailer
E) discount store

Question 7

Which of the following statements about retailers and retailing activities is true?

A) Wholesalers cannot generate revenue through retailing.
B) Retailers generate most of their revenue through selling to institutions.
C) Retailers sell products to consumers for nonbusiness use.
D) About half of all U.S. workers are employed by retailers.
E) Retailers sell only to businesses.

Question 8

Customers of a ________ buy most of the store's products in larger-than-normal packages and quantities.

A) warehouse club
B) department store
C) specialty store
D) convenience store
E) superstore

Question 9

________ focus on offering lower prices and turning products over quickly.

A) Specialty stores
B) Discount stores
C) Department stores
D) Superstores
E) Category killers

Question 10

A retailer's ________ should differentiate the retailer while matching target shoppers' expectations. One strategy is to offer products that no other competitor carries.

A) atmospherics
B) retail price policy
C) merchandise assortment
D) environment
E) distribution strategy

Question 11

________ are self-service retailers that carry food and nonfood items arranged in departments.

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

Question 12

________ combine an economy supermarket and a discount store.

A) Variety stores
B) Category killers
C) Superstores
D) Off-price retailers
E) Convenience stores

Question 13

Apparel manufacturers send overruns and factory seconds to ________, while they send new merchandise to department stores.

A) convenience stores
B) discount stores
C) off-price retailers
D) supermarkets
E) superstores

Question 14

Which of the following is true about convenience stores?

A) They carry mostly durable goods.
B) They charge lower-than-normal prices for nondurable goods.
C) They are reluctant to change their store designs and offerings to adjust to changes in the market.
D) They create time utility for their customers.
E) They create form, time, and place utility for their customers.

Question 15

Specialty stores carry ________ with ________ within them.

A) narrow product categories; mostly staples
B) narrow product categories; wide selections
C) narrow product categories; limited selections
D) wide product categories; wide selections
E) wide product categories; limited selections

Question 16

Which of the following statements about retailers and retailing activities is true?

A) Few American retailers are major players in the global economy.
B) Retailers represent about 10% of the total businesses in the United States.
C) Retailers sell durable goods, but not nondurable goods.
D) Retailers generated about 25% of the U.S. gross national product in 2008.
E) Manufacturers do not directly participate in retailing.

Question 17

In recent years, ________ has been growing fast. This includes selling to final consumers through vending machines, self-serve kiosks, the Internet, and smart phone applications.

A) self-service retailing
B) private labeling
C) off-price retailing
D) nonstore retailing
E) e-commerce

Question 18

Which of the following is NOT true about warehouse clubs?

A) They are not full-service stores.
B) They often charge their customers with a modest annual membership fee.
C) They carry items in bulk.
D) They carry a more limited selection of merchandise than that offered by most grocery stores.
E) Groceries account for the smallest portion of sales revenue.

Question 19

Retailers offering ________ require customers to perform their own product selection; contact between customers and employees typically only takes place when the actual sale is made.

A) limited-service
B) full-service
C) self-service
D) specialty service
E) wholesale service

Question 20

Which type of store is much larger than other stores and offers a wider range of products and services?

A) category killer
B) specialty store
C) factory outlet
D) superstore
E) off-price retailer

Question 21

Which of the following types of retailers place the most emphasis on salespeople assisting customers throughout the purchase process?

A) limited-service retailers
B) full-service retailers
C) limited-service retailers
D) discount retailers
E) off-price retailers

Question 22

The owner of a grocery store wants to have non-food items delivered, priced, displayed and inventoried by a wholesaler. Which type of wholesaler best fits the owner's needs?

A) drop shipper
B) cash-and-carry wholesaler
C) truck jobber
D) rack jobber
E) mail-order wholesaler

Question 23

Drop shippers do all of the following EXCEPT which one?

A) take title to the merchandise
B) take actual possession of the merchandise
C) take orders from retailers and industry buyers
D) bill retailers and industry buyers
E) carry bulk products such as coal or timber

Question 24

A wholesaler who ________ legally owns the goods being handled.

A) breaks bulk
B) takes title
C) creates assortments
D) takes consignments
E) selectively distributes

Question 25

Which of the following statements about the services provided by retailers is true?

A) Discount stores are full-service retailers.
B) Convenience stores are unlikely to be full-service retailers.
C) Superstores are typically full-service retailers.
D) Walmart, Target, and Kohls are all examples of self-service retailers.
E) Only a few stores are actually classified as full-service retailers.

Question 26

________ is the sorting, storing, and reselling of products to retailers or businesses.

A) Wholesaling
B) Retailing
C) Franchising
D) Discounting
E) Logistics

Question 27

Mail-order wholesalers are associated with all of the following EXCEPT which one?

A) selling products to small retailers and other industrial customers
B) selling products to retailers in remote locations
C) automatically replenishing merchandise for retailers
D) selling office supplies and computer hardware
E) selling through catalogs

Question 28

Truck jobbers are limited-service merchant wholesalers who would most likely handle which of the following?

A) building materials
B) fruits and vegetables
C) coal and lumber
D) cosmetics
E) magazines

Question 29

Which of the following is LEAST likely to happen at a full-service retailer?

A) Customers have access to alteration services.
B) Gift wrapping services are offered.
C) Customers seek and receive helpful guidance from trained sales associates.
D) Customers handle their own checkout process.
E) Product consultants are available to answer specialized questions.

Question 30

Which of the following factors is most likely to be used to create store atmospherics?

A) employee training
B) sales promotion
C) store layout
D) event sponsorship
E) price points

Question 31

Which of the following is NOT one of a wholesaler's typical channel functions?

A) financing
B) simplifying product flows between producers and customers
C) simplifying information flows between producers and customers
D) off-price retailing
E) storing goods

Question 32

Why do stores cluster together?

A) to decrease competition
B) to ensure an adequate level of traffic
C) to take advantage of tax breaks
D) to create retailer cooperatives
E) to standardize the service mix

Question 33

________ are the largest category of wholesalers.

A) Brokers
B) Manufacturer sellers
C) Agents
D) Merchant wholesalers
E) Specialty wholesalers

Question 34

________, such as Best Buy and Sears, allow customers to serve themselves, but also have knowledgeable sales associates available to provide guidance.

A) Self-service retailers
B) Full-service retailers
C) Specialty retailers
D) Off-price retailers
E) Limited-service retailers

Question 35

________ buy mostly from producers and sell to retailers, institutions, and government agencies.

A) Nonstore retailers
B) Factory outlets
C) Wholesalers
D) Discount stores
E) Superstores

Question 36

Which type of stores usually carries more specialty goods for which customers like to be "waited on" and has much higher operating costs, which are passed along to the customer?

A) self-service store
B) category killer store
C) full-service store
D) convenience store
E) specialty-service retailer

Question 37

Limited-service merchant wholesalers are less likely than full-service merchant wholesalers to do which of the following?

A) set the prices of the merchandise they sell
B) take title to the merchandise they sell
C) suffer financial losses if the merchandise they sell is damaged or stolen
D) offer marketing assistance or delivery for the products they sell
E) use their own sales force

Question 38

Which of the following is NOT one of the categories of wholesalers?

A) merchant wholesalers
B) agents
C) limited-service wholesalers
D) specialty line wholesalers
E) cash-and-carry brokers

Question 39

Which of the following is NOT an element involved in the creation of store atmospherics?

A) color
B) furnishings
C) fixtures
D) sounds
E) knowledgeable personnel

Question 40

Which of the following groups can be divided into the two broad types of full-service and limited-service?

A) brokers
B) agents
C) sales branches
D) specialty wholesalers
E) merchant wholesalers

Question 41

A ________ brings buyers and sellers together and assists in negotiations.

A) jobber
B) merchandise broker
C) retailer
D) mail-order wholesaler
E) drop shipper

Question 42

Which of the following statements about manufacturers' agents is true?

A) Manufacturers' agents are also called manufacturers' brokers.
B) Manufacturers' agents most typically work for only one manufacturer.
C) Manufacturers' agents have little control over the selling price of the products they carry.
D) Manufacturers' agents have unlimited sales territories.
E) Manufacturers' agents are entirely supervised by the manufacturer for whom they sell.

Question 43

A ________ maintains inventory for a company in different geographic areas, while a ________ carries no inventory but provides selling services for specific geographic areas.

A) manufacturers' showroom; sales branch
B) sales branch; sales office
C) sales branch; manufacturers' showroom
D) manufacturers' showroom; drop shipper
E) selling agent; manufacturers' agent

Question 44

Costco's surprise offerings of seconds, overstocks, and closeouts occasionally including diamonds is an example of how a retailer can differentiate itself through its ________.

A) merchandise assortment
B) services mix
C) destination retailing
D) store atmosphere
E) level of service

Question 45

Which of the following are intermediaries that receive fees for facilitating transactions in markets such as real estate, food, and insurance in which there are a lot of small buyers and sellers?

A) manufacturers' agents
B) selling agents
C) commission merchants
D) merchandise brokers
E) sale mediators

Question 46

The Paper Moon sells gift wrapping paper, stationery, and greeting cards. It does not sell any other products. The number of different kinds of wrapping paper, stationery, and cards make up its ________.

A) point-of-sale range
B) retail price policy
C) atmospherics
D) merchandise assortment
E) retail format

Question 47

The lighting in Jake's Steak Restaurant is muted. The chairs are covered in leather and solid enough to last a lifetime, and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons can not hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________.

A) promotions
B) layout
C) atmospherics
D) level of service
E) merchandise assortment

Question 48

Stop-N-Go and Circle K, small stores that traditionally have had a market of consumers who are willing to pay a higher price for the ease of buying staples close to home, are ________.

A) specialty stores
B) convenience stores
C) supermarkets
D) superstores
E) off-price retailers

Question 49

Avon is successful at giving customers alternatives to traditional store outlets. Avon uses ________, which does not require a customer to visit a store.

A) locational merchandising
B) social shopping
C) mass retailing
D) nonstore retailing
E) broad geographic exchange

Question 50

GameStop sells video games and systems, offering a narrow product line with a broad range of choices within that line. GameStop is a(n) ________.

A) department store
B) convenience store
C) specialty store
D) discount store
E) off-price retailer

Question 51

Rack jobbers are limited-service merchant wholesalers who would most likely handle which of the following?

A) imported plants
B) precious minerals
C) agricultural products
D) perishable food items
E) magazines

Question 52

Stan Clark, the owner of Eskimo Joe's bar, is considering closing the bar and selling the logo apparel with direct marketing through a catalog. Stan Clark is considering a(n) ________ option.

A) wholesaling
B) nonstore retailing
C) off-price retailing
D) warehouse
E) broker

Question 53

A commission merchant would most likely sell which of the following?

A) agricultural products
B) durable goods such as furniture
C) convenience goods such as gum and candy
D) clothing and textiles
E) real estate

Question 54

________ and ________ do not take title to goods.

A) Full-service wholesalers; limited-service wholesalers
B) Brokers; agents
C) Rack jobbers; truck jobbers
D) General merchandise wholesalers; specialty line wholesalers
E) Drop shippers; cash-and-carry wholesalers

Question 55

Manufacturers' ________ represent a buyer or seller on an ongoing basis, replacing the manufacturer's sales team.

A) brokers
B) franchisers
C) agents
D) retailers
E) intermediaries

Question 56

Which of the following is a manufacturer-owned intermediary that permanently displays a firm's products for customers to view?

A) sales offices
B) selling agent
C) manufacturers' showrooms
D) manufacturers' offices
E) merchandise brokerages

Question 57

Overstock.com, a Web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________.

A) discount store
B) off-price retailer
C) factory outlet
D) wholesale club
E) category killer

Question 58

Which of the following is true about sales branches, sales offices, and manufacturers' showrooms?

A) They are all manufacturer-owned intermediaries.
B) They all determine the marketing strategy for the products they sell.
C) They are all independent intermediaries.
D) They all carry inventory and take title to the inventory they carry.
E) They perform the same functions as self-service wholesalers.

Question 59

Home Depot offers "how-to" classes for do-it-yourselfers, featuring instructions on how to complete home improvement projects using products sold at its stores. This is an example of how Home Depot has differentiated itself through its ________.

A) merchandise
B) customer service
C) segmentation
D) atmosphere
E) pricing

Question 60

At Neiman Marcus, a first-class department store, customers shop for specialty products and have come to expect assistance in every phase of the shopping process. Neiman Marcus is a ________.

A) self-service retailer
B) limited-service retailer
C) full-service retailer
D) specialty store
E) superstore

Question 61

Department stores carry only a few product lines with wide assortments within those lines.

Question 62

To create the right atmosphere, some retailers control every aspect of the consumer's store experience, including what customers hear.

Question 63

Private label goods have grown less popular over the past few decades as the products offer retailers lower margins.

Question 64

Retailers employ about 10% of the American workforce.

Question 65

Wholesaling includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

Question 66

Refer to the scenario below to answer the following questions. In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods."
The Amish décor and shop workers give customers an authentic impression of the pride and skill built into the shop's products. These aspects also contribute to the store's ________.

A) price policy
B) retail margin
C) atmospherics
D) segmentation
E) targeting

Question 67

Warehouse clubs generate substantial revenue from membership fees alone.

Question 68

M-Commerce is conducted through smart phones and other mobile devices.

Question 69

Sales made via the Internet are expected to level off or even decline in the upcoming years.

Question 70

Durable goods are products that are expected to last for three or more years.

Question 71

Category killers carry a deep assortment of a particular product line and have a knowledgeable staff.

Question 72

Refer to the scenario below to answer the following questions. In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods."
Indiana Wood is best classified as a(n) ________ retailer.

A) full-service
B) self-service
C) limited-service
D) discount
E) off-price

Question 73

A discount store buys at less-than-regular wholesale prices and charges consumers less than retail.

Question 74

Refer to the scenario below to answer the following questions. In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods."
Which of the following is most critical to Indiana Wood's success?

A) location
B) price
C) promotion
D) atmospherics
E) level of service

Question 75

An independent hardware retail store is 100 miles from the nearest city of more than 5,000 people and provides needed supplies for area ranchers. This hardware store would most likely buy its plumbing and electrical supplies through a ________.

A) truck jobber
B) commission merchant
C) mail-order wholesaler
D) rack jobber
E) merchandise broker

Question 76

Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet from Chemical, Inc., which then placed the order with the manufacturer and arranged for its transportation by truck to the Tony Pool store. Chemical, Inc. took title to the pool chemicals but never actually took possession of them. Chemical, Inc. is an example of a ________.

A) drop shipper
B) truck jobber
C) rack jobber
D) mail-order wholesaler
E) cash-and-carry wholesaler

Question 77

Some retailers use vending machines to sell products that previously could not be stocked due to security concerns.

Question 78

Retailers first must position themselves in a market and then decide how they will define the target customers in these markets.

Question 79

Off-price retailers pay regular wholesale prices for their merchandise but maintain low prices by accepting lower margins and selling higher volume.

Question 80

Durable goods are also known as soft goods.