Deck 9: Trading-Area Analysis

Question 1

The determination of trading-area overlap is most important for which retailer?

A)chain
B)supermarket
C)independent
D)department store

Answer 1

A

Question 2

The trading-area segment from which a retailer draws customers from the longest distances is the _____ trading area.

A)secondary
B)satellite
C)fringe
D)primary

Answer 2

C

Question 3

The most quantitative type of computerized trading analysis is _____.

A)the regression model
B)the analog model
C)the gravity model
D)license-plate analysis

Answer 3

A

Question 4

A department store in a major shopping center can be classified as a(n)_____ store.

A)parasite
B)destination
C)unsaturated
D)saturated

Question 5

The most widely dispersed group of customers can be found in which trading area segment?

A)trading-area overlap
B)secondary trading area
C)primary trading area
D)fringe trading area

Question 6

A clear description of a trading area allows a retailer to determine _____.

A)customer shopping frequency
B)its overall store image
C)the focus of promotion activities
D)private-brand strategy

Question 7

Which system combines digitized mapping with key locational data?

A)geographic information system
B)primary trading-area analysis
C)secondary trading-area analysis
D)TIGER

Question 8

In a regional shopping center,the store with the largest trading area is a _____.

A)shoe store
B)variety store
C)department store
D)supermarket

Question 9

The least flexible element of a retailer's strategy is _____.

A)pricing
B)promotion
C)store location
D)product line

Question 10

Which type of store does not have its own trading area?

A)unsaturated
B)saturated
C)parasite
D)destination

Question 11

The primary trading area generally encompasses what percent of a store's customers?

A)5 to 10
B)10 to 25
B)25 to 50
D)50 to 80

Question 12

The trading area with the highest average purchase by a customer is the _____.

A)parasite
B)primary trading area
C)secondary trading area
D)fringe trading area

Question 13

The traditional means of trading-area delineation for a new store is _____.

A)Huff's model
B)Gautschi's model
C)license-plate analysis
D)Reilly's law of retail gravitation

Question 14

A store that does not create its own traffic is a _____.

A)fringe store
B)low trading-area overlap store
C)parasite
D)primary trading area store

Question 15

The store location of a coffee shop in a hotel lobby can best be described as _____.

A)overstored
B)understored
C)parasite
D)saturated

Question 16

Primary,secondary,and fringe trading areas for an existing store can be described on the basis of _____.

A)trading-area overlap with existing stores
B)the average dollar purchases at a store by people from given geographic locales
C)customer attitudes
D)the frequency of large orders

Question 17

A trading area can best be defined as _____.

A)the geographic area containing the customers of a particular retailer or group of retailers for specific goods and services
B)those competitive stores that interchange customers
C)a specific cluster of similar stores
D)stores that are located in a free-trade zone

Question 18

An example of an economic trading-area barrier is _____.

A)travel distance
B)travel time
C)high sales-tax rates
D)travel difficulty as measured by road conditions

Question 19

Which marketing research company identifies communities on the basis of lifestyle clusters?

A)A.C.Nielsen
B)Sales & Marketing Management
C)Editor & Publisher
D)Information Resources Inc.(IRI)

Question 20

In Reilly's law of retail gravitation,the point of indifference is _____.

A)the customer's perceived similarity between two competing retailers
B)the geographic breaking point at which shoppers are indifferent to shopping at either of two cities
C)the limit of a city's trading area
D)determined solely by the merchandising effectiveness of a city's retail operations

Question 21

An area that has too few retail stores to satisfy its population's needs is _____.

A)saturated
B)understored
C)not reaching its economic base potential
D)located at the point of indifference

Question 22

Which of the following is the best economic base?

A)affluent consumers
B)single,but growing industry
C)diversified employment
D)young,educated consumers

Question 23

Huff's law of shopper attraction improved Reilly's law of retail gravitation by adding a consideration of _____.

A)customer demographics
B)product assortment of the items carried at various shopping locations
C)customer lifestyles
D)a store's promotional effectiveness

Question 24

The most important trading area for a retailer to study is the _____.

A)fringe trading area
B)secondary trading area
C)primary trading area
D)trading-area overlap

Question 25

The major assumptions of Reilly's law are that two competing areas are equally accessible from a major road and that _____.

A)each city has an equal population
B)each city is equally distant from shoppers at the point of indifference
C)retailers in the two cities are equally effective
D)consumers are willing to travel for lower prices

Question 26

An area with a relatively large number of consumers per square foot of available store space is _____.

A)understored
B)saturated
C)overstored
D)oversaturated

Question 27

A retailer's location strategy can be made more flexible through _____.

A)the use of longer-term leases
B)sale and leaseback arrangements
C)the use of renewal options versus a long-term lease
D)ownership versus leasing

Question 28

The Census of Population is conducted every _____ years.

A)3
B)5
C)7
D)10

Question 29

An area's economic base refers to its _____.

A)population characteristics
B)GDP
C)sources of employment
D)population size

Question 30

When proposed and existing stores have a very high trading-area overlap,_____.

A)many additional customers will be attracted to the proposed store
B)few additional customers will be attracted to the proposed store
C)the proposed store will focus on geographic weaknesses in the existing store
D)advertising will have to be assessed due to possible promotional waste

Question 31

Which customers are generally not studied in trading-area analysis?

A)outshoppers
B)mail and telephone order shoppers
C)fringe trading-area customers
D)parasites

Question 32

Which of the following is not a disadvantage associated with the use of TIGER maps?

A)Its Web site can be cumbersome to use.
B)Service on the TIGER site may be slow.
C)The maps cannot be tailored to reflect physical attributes of U.S.areas.
D)The maps do not include retail facilities,other commercial entities,population characteristics,and so on.

Question 33

A major disadvantage to the use of census data in trading-area analysis is its _____.

A)cost
B)being limited to city and state data
C)lack of comprehensiveness
D)dated nature

Question 34

An area that has just enough retail facilities to satisfy the needs of its population for a specified good is _____.

A)saturated
B)overstored
C)understored
D)parasitic

Question 35

A retailer seeking a stable economic environment should seek a trading area with a _____.

A)large military base
B)diversified economic base
C)large government facility
D)booming economy

Question 36

A major advantage of the Census of Population for use by retailers in trading-area analysis is _____.

A)the small size of census tracts and blocks
B)its timeliness
C)its projections of population,retail sales,and income
D)its economic base analysis

Question 37

Under what condition would it be rational for the trading areas of two branch locations to completely overlap?

A)when the retailer desires cost economics in promotion
B)when the retailer decides to switch store locations from one large store to two small stores
C)when a retailer pursues a mass marketing strategy
D)when each store has a different target market

Question 38

The most important disadvantage to the use of the American Community Survey data in trading-area analysis is _____.

A)the substantial cost
B)the use of projections
C)lack of timeliness
D)use of county-based vs.narrower geographic areas

Question 39

A retailer with a relatively large trading area and higher than average profitability is most likely to have which type of store location?

A)saturated
B)understored
C)overstored
D)oversaturated

Question 40

Important economic base data for cities can be found in the _____.

A)Federal Register
B)American Community Survey
C)Census of Population
D)Editor & Publisher Market Guide

Question 41

A department store uses a regression computer site-selection model.This model contains data on the following variables: _____.

A)distance to store and store size
B)disposable income,retail sales,and population
C)traffic barriers,store size,and traffic counts
D)trading-area population and expected market share

Question 42

The trading area that generally encompasses the greatest geographic area (in terms of square miles)is the _____.

A)fringe trading area
B)trading-area overlap
C)secondary trading area
D)primary trading area

Question 43

The distance between city A and city B is 25 miles;city A is 1/16 the size of city B.The point of indifference between the two cities is _____ miles from A and _____ miles from B.

A)15;10
B)18;7
C)20;5
D)22;3

Question 44

The trading area of an existing store can best be estimated through examining _____.

A)the American Community Survey
B)customer delivery records
C)pedestrian and vehicle traffic
D)Census of Population data

Question 45

Huff's law is an example of a(n)_____ model.

A)regression
B)analog
C)gravity
D)trend

Question 46

A supermarket has developed an analog model to aid in its site-selection process.The model contains variables such as _____.

A)traffic counts,visibility,and manager ability
B)trading-area population and expected market share
C)disposable income,retail sales,and population
D)competition,store size,and total retail sales

Question 47

Which computer-based site-selection model generally includes the largest number of variables?

A)analog
B)gravity
C)regression
D)interactive

Question 48

A retailer with a large fringe trading area should consider _____.

A)expanding the trading-area overlap
B)direct marketing opportunities to this segment
C)broadening the community's economic base
D)establishing the point of indifference using Reilly's law

Question 49

Which statement concerning destination stores is not correct?

A)A destination store has a larger trading area than a traditional retailer.
B)The presence of a destination store in a major shopping center has no effect on the trading area of parasite stores.
C)Reilly's law does not reflect higher trading areas for a destination store.
D)Huff's law does not reflect higher trading areas for a destination store.

Question 50

Direct marketing should be used to increase sales to the _____.

A)trading-area overlap
B)secondary trading area
C)primary trading area
D)fringe trading area

Question 51

A store with the largest trading area in a shopping center is a(n)_____.

A)parasite store
B)destination store
C)independent retailer
D)leased department

Question 52

The major refinement in Huff's law versus Reilly's law is Huff's use of _____.

A)a point of indifference
B)sensitivity of the kind of shopping to travel time
C)mileage versus driving time
D)small versus large cities

Question 53

The point of indifference between two cities or communities can be studied _____.

A)based on economic base characteristics
B)using the index of retail saturation
C)using census data
D)based on the buying power index

Question 54

Two cities have populations of 10,000 and 160,000.Based on Reilly's law,the point of indifference is 40 miles from the larger city.What is the total distance between each city?

A)40 miles
B)45 miles
C)50 miles
D)60 miles

Question 55

Based on Reilly's law,a city with a population of 40,000 would draw people from how many times the distance as a city with 10,000 population?

A)1.5 times
B)2 times
C)3 times
D)4 times

Question 56

Reilly's law and Huff's law are examples of what type of computer site-selection model?

A)regression model
B)digital model
C)analog model
D)gravity model

Question 57

Which of the following retailers is most likely to be a parasite in a shopping center?

A)high-fidelity specialty retailer
B)men's shoe store
C)snack bar
D)department store

Question 58

Reilly's law is an example of a(n)_____ model.

A)regression
B)analog
C)gravity
D)trend

Question 59

Two cities that have equal populations are 40 miles apart.Based upon Reilly's law,the point of indifference _____.

A)is midway between each city
B)is 10 miles from the first city
C)is 15 miles from the first city
D)cannot be determined from the information provided

Question 60

Reilly's law of retail gravitation can be improved through the use of _____.

A)perceived travel time
B)distances on major thoroughfares
C)convenience in driving
D)distance on different types of roads

Question 61

There are three shopping locations with 300,500,and 1,000 square feet of space allocated to lighting accessories.A group of potential customers lives 5 minutes from the first location,10 minutes from the second location,and 15 minutes from the third location.The retailer estimates the effect of travel time to be 2.The probability of consumers shopping at location 1 is _____ percent.

A)21
B)23
C)45
D)56

Question 62

If the use of credit varies among different geographic areas,credit-card customer analysis will accurately reflect a store's trading area.

Question 63

Two types of stores can have different trading areas even though they are located in the same shopping district/center.

Question 64

The description of a trading area is the first stage in an analysis of a retail store location.

Question 65

The optimal type of economic base is a _____ economic base.

A)specialized
B)commercial
C)governmental
D)diversified

Question 66

Blocks and census tracts are important units in the Census of Population to small retailers since _____.

A)this data is free
B)this data is timely
C)retailers can combine blocks and tracts to resemble their trading area
D)online computer tapes are available

Question 67

The fringe trading area has the highest density of customers to population.

Question 68

Retailers are often unable to earn an adequate return on investment in which type of location?

A)overstored
B)saturated
C)understored
D)zone of indifference

Question 69

Store location decisions are usually short-term decisions.

Question 70

A store that has no trading area of its own is a parasite.

Question 71

Geographic information systems enable retailers to see graphical depictions of trading-area characteristics for current,proposed,and competitor locations.

Question 72

Retailers seeking to study the population characteristics of small trading areas should utilize _____.

A)the Census of Population
B)the American Community Survey
C)Editor & Publisher Market Guide
D)Survey of Buying Power

Question 73

The trading-area overlap region represents customers who are served by two or more branch units of a chain.

Question 74

There are three shopping locations with 300,500,and 1,000 square feet of space allocated to lighting accessories.A group of potential customers lives 5 minutes from the first location,10 minutes from the second location,and 15 minutes from the third location.The retailer estimates the effect of travel time to be 1.The probability of consumers shopping at location 2 _____.

A)is 28 percent
B)is 34 percent
C)is 38 percent
D)cannot be determined from the information provided.

Question 75

The notion of trading-area overlap is particularly relevant to chains.

Question 76

A retailer's most loyal customers comprise its fringe trading area.

Question 77

A consultant found that an area's economic base was heavily diversified with a mix of different types of industrial employment sources.The consultant learned this from _____.

A)Survey of Buying Power
B)Editor & Publisher Market Guide
C)Census of Population
D)Sales & Marketing Management

Question 78

The primary trading area can be delineated in Huff's law of shopper attraction by studying the _____.

A)probability of consumers shopping at a location
B)point of indifference between two communities
C)average purchase made by consumers
D)traffic counts in different locations

Question 79

There are three shopping locations with 300,500,and 1,000 square feet of space allocated to lighting accessories.A group of potential customers lives 5 minutes from the first location,10 minutes from the second location,and 15 minutes from the third location.The retailer estimates the effect of travel time to be 2.The probability of consumers shopping at location 2 is _____.

A)17
B)21
C)23
D)42

Question 80

A destination store has a larger primary,secondary,and fringe trading area than other stores in the same shopping center.