Question 1

As a general rule of thumb, what will a retailer with a high gross margin also have?

Accepted Answer

A retailer with a high gross margin tends to have higher prices. This is because the gross margin is calculated as the difference between the revenue from sales and the cost of goods sold, so a higher gross margin implies higher markups on the products sold.

Question 2

What is a full-line discount store?

Accepted Answer

A full-line discount store typically offers a wide variety of merchandise with limited service and competes primarily on price, making choice A the most accurate description.

Question 3

When a store offers a wide variety of nontraditional goods and services under one roof, what is this called?

Accepted Answer

Scrambled merchandising refers to a store that offers a diverse range of nontraditional goods and services under a single roof. This retailing strategy has become increasingly prevalent in recent years, as retailers seek to differentiate themselves from their competitors and provide consumers with a convenient one-stop shopping experience. Scrambled merchandising can be seen in stores that sell a mix of products such as groceries, electronics, fashion, and home décor.

Question 4

This type of retailer concentrates in a given type of merchandise with a deep but narrow assortment. It is not only a type of store, but also a method of retail operations. What is it?

Accepted Answer

A specialty store focuses on a specific category or type of merchandise, with a deep and narrow assortment. This is different from a general store, which carries a wider variety of merchandise but with a shallower assortment. Warehouse clubs focus on offering bulk goods at low prices, while convenience stores typically offer a limited range of products for immediate consumption or convenience.

Question 5

Which of the following is one way that a retail store can be classified?

Accepted Answer

Retail stores can be classified based on their product assortment, which refers to the different types of products they offer. For example, a store that specializes in electronics would have a different product assortment than a store that specializes in clothing. This classification is based on the merchandise that the store carries.

Question 6

The Big House is a large, departmentalized, self-service retailer that specializes in a wide assortment of food and some nonfood items? What kind of retailer is it?

Accepted Answer

The Big House offers a wide assortment of food and nonfood items, but the fact that it is departmentalized and self-service points towards it being a supermarket. Supermarkets typically offer a larger selection of food and household items than convenience stores and discount stores, and they are organized into various departments (such as produce, meats, dairy, and bakery). The Big House does not fit the definition of a membership wholesale club, as these typically require a membership fee and focus on selling items in bulk.

Question 7

A manufacturer wants to introduce a line of handmade children's clothing to the growing number of professional women who are now having babies. The least expensive of these outfits will be $75. Which of the following types of stores would most likely support an effective product launch?

Accepted Answer

A specialty store would be the best choice for introducing a line of handmade children's clothing to professional women. Specialty stores typically offer a carefully selected range of high-quality products to a specific target market, which in this case is professional women who are willing to spend more on handmade clothing for their children. The higher price point of the clothing also aligns with the premium shopping experience that specialty stores provide.

Question 8

The Gap Inc. is an American multinational clothing company. All of its stores are owned and operated as a group by head office. All of its administrative and purchasing tasks are also handled by head office. What are Gap's stores called?

Accepted Answer

Gap's stores are known as chain stores because they are all owned and operated as a group by the head office.

Question 9

What types of operations are small neighbourhood florists, shoe stores, and ethnic food markets most likely to be?

Accepted Answer

Small neighbourhood florists, shoe stores, and ethnic food markets are most likely to be independent retailers, meaning they are privately-owned and operated businesses. Franchise outlets and chain stores have a larger scope and infrastructure, and membership clubs typically require a membership fee and have a different business model.

Question 10

Applying what you have learned about retailing, which type of retail store would typically have the highest labour costs?

Accepted Answer

Department stores typically have a higher labor cost compared to other retail stores due to their larger size, variety of merchandise, and additional services such as beauty salons and personal shoppers. They also tend to have more employees per store location.

Question 11

What type of retailer is the Running Room?

Accepted Answer

The Running Room is a specialty store that sells running shoes, apparel, and accessories. They focus solely on the running category and provide specialized knowledge and services to customers.

Question 12

Harry Rosen is a retail chain of 15 high-end men's clothing stores. A privately owned company, Harry Rosen accounts for 40 percent of the Canadian market in high-end menswear. The Harry Rosen stores carry the best of the best in menswear in Canada. How is Harry Rosen differentiating itself from other clothing stores?

Accepted Answer

Harry Rosen is differentiating itself from other clothing stores through specialty retailing, by focusing solely on high-end men's clothing and offering the best of the best in menswear in Canada. This allows them to provide a unique shopping experience and establish themselves as experts in this niche market. Cultural positioning, unique products, and store location modelling may also be factors in their differentiation strategy, but they are not explicitly mentioned in the given information.

Question 13

Snow White Toys sells Disney based products to children for their own enjoyment. What would Snow White Toys be characterized as?

Accepted Answer

Snow White Toys sells directly to the end consumer, making them a retailer.

Question 14

Long & McQuade sells only guitars by Fender and ukuleles by Kala. It makes large margins on its products and ensures that its customers are dealt with by highly trained staff. What would Long & McQuade be characterized as?

Accepted Answer

Long & McQuade would be characterized as a specialty store since it specializes in selling only guitars by Fender and ukuleles by Kala and ensures that its customers are dealt with by highly trained staff.

Question 15

The Grape Vine Market is a nearly 1,700-square-metre store offering highly collectible food and wine-along with some other culinary experiences, including a cooking school-all in a setting crafted to make shoppers feel comfortable. It stocks more than 5,500 different kinds of wine. From this description, what is Grape Vine Market?

Accepted Answer

Grape Vine Market is described as a store offering highly collectible food and wine, along with a cooking school, which suggests it is a specialty store. The large selection of wine also supports this idea. It is not a hypermarket, factory outlet, or department store.

Question 16

Which of the following is the best example of a retailer?

Accepted Answer

A retailer is a business or person that sells goods directly to consumers. The real estate company mentioned in option C is a business that sells property directly to consumers, making it the best example of a retailer. The public library mentioned in option A is a public institution that provides access to books, media, and other materials but does not sell them. The radio station mentioned in option B is a media outlet that provides broadcasting services but does not sell physical goods. The advertising agency mentioned in option D is a business that provides advertising services to other businesses but does not sell physical goods directly to consumers.

Question 17

Which of the following statements best describes specialty stores?

Accepted Answer

Specialty stores typically avoid price wars because they focus on offering unique products and a specialized shopping experience, rather than competing on price.

Question 18

Which of the following houses several departments under one roof, carries a wide variety of shopping and specialty goods, and provides a high level of service?

Accepted Answer

A department store houses several departments such as clothing, home goods, and electronics under one roof. They carry a wide variety of shopping and specialty goods and provide a high level of service through sales associates and customer service departments. Supermarkets only carry groceries and a limited selection of household goods, specialty stores focus on a specific product or category, and convenience stores typically offer only a small selection of items.

Question 19

Costco carries automotive supplies and other products.How would you describe Costco?

Accepted Answer

Costco is a shop with a large product assortment that includes automotive supplies among other products. It is not an independent retailer as it is part of a chain, but it is also not a licensor.

Question 20

Around the world, most merchandisers operate one or a few stores in their community, owned by a single person or partnership and not operated as part of a larger retail institution. What are these operators called?

Accepted Answer

Independent retailers operate one or a few stores in their community and are owned by a single person or partnership. Chain stores refer to a group of retail stores owned by a single company, while franchise outlets are owned by a franchisee who pays a fee to use the trademark and operating system of the franchisor. Specialty clubs refer to stores that offer goods to a specific group of consumers with an exclusive membership.

Quiz 15: Retailing