Question 1

Costco is a warehouse membership club. Which of the following best describes it?

Accepted Answer

Costco is known for displaying merchandise in a no-frills environment with quick inventory turnover, making it a warehouse club. It may sell to both ultimate consumers and business owners, but its focus is on offering bulk items at discounted prices. It does not typically use extensive merchandise depth to create demographic positioning like a category specialist would.

Question 2

The Mad Stencilist has decided to demonstrate how to use its products to create custom gift tags on a local television channel and to encourage shoppers to call a toll-free number to purchase the merchandise with a credit card. What is this form of retailing called?

Accepted Answer

This is an example of a shop-at-home network, where the Mad Stencilist is showcasing their products on a television channel and encouraging viewers to purchase by calling a toll-free number with their credit card information.

Question 3

Jeanette Pelletier has decided to sell a sourcebook of French Canadian suppliers to businesses in French areas. She plans to call prospective customers and try to sell to them over the phone. Which of the following retailing techniques will Pelletier be using?

Accepted Answer

Jeanette Pelletier will be using direct marketing as she is selling her sourcebook directly to businesses over the phone, without the need of intermediaries.

Question 4

What is the term for a low-profile yet important form of retailing in which consumers get products out of machines, and that accounts for $60 million worth of sales each year in Canada?

Accepted Answer

The term for this type of retailing is automatic vending, as consumers are getting products out of machines. This industry accounts for $60 million worth of sales each year in Canada. The other options, machine retailing and robotic purchasing, are not commonly used terms for this type of retailing. Direct marketing refers to promoting products directly to consumers through various channels, such as mail, email, or social media.

Question 5

Chez Amie manufactures children's clothing for infants and toddlers. Its sales representatives set up parties at homes of mothers of preschool children so that its sales reps can demonstrate the quality and value of the Chez Amie products. What is Chez Amie using?

Accepted Answer

Chez Amie is using direct retailing, as its sales representatives are directly selling products to consumers in a home setting, similar to a home party sales model.

Question 6

What is the term for the use of a telephone to sell directly to customers?

Accepted Answer

Telemarketing is the term used for selling directly to customers over the phone. It involves contacting potential customers and promoting products or services. The main objective of telemarketing is to generate leads, increase sales, and build customer relationships. Therefore, option A is the correct choice. The other options, B, C, and D are not relevant to the use of a telephone for selling directly to customers.

Question 7

Sunni received a phone call last night during supper. The caller wanted her to subscribe to a travel magazine. Since Sunni had never thought of purchasing this type of magazine before she received the call, this is obviously an example of what type of telemarketing?

Accepted Answer

Outbound telemarketing involves a company initiating contact with potential customers to sell products or services. In this scenario, the company called Sunni to sell a travel magazine subscription, making it an example of outbound telemarketing.

Question 8

Which of the following sell a limited selection of brand-name appliances, household items, and groceries, usually in bulk on a cash-and-carry basis to those who belong?

Accepted Answer

This is a description of warehouse membership clubs, such as Sam's Club, Costco, and BJ's Wholesale Club.

Question 9

Surj is constantly called at dinner time by unsolicited telemarketers. What is the name for the opposite of these types of calls?

Accepted Answer

Inbound calling refers to calls that are initiated by customers or potential customers who are interested in the products or services that a company offers. This is the opposite of telemarketing, which is a form of outbound calling. Therefore, D is the best answer as it describes the opposite type of call to the one Surj receives at dinner time.

Question 10

What is the term for an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise-its own?

Accepted Answer

A factory outlet is an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise - its own. It offers discounted prices on a brand's products that may have been overproduced or have minor flaws. Mass merchandisers, wholesale clubs, and discount stores may carry various brands and product lines, but not necessarily owned by the retailer.

Question 11

Manufacturers of Pampered Chef kitchen equipment and Longaberger baskets utilize party plan selling. The sales transactions usually occur in a home setting. What is the name for this form of nonstore retailing?

Accepted Answer

This is known as direct retailing, where sales transactions occur outside of a traditional physical store setting, often through home parties or other personal encounters.

Question 12

A publisher of books on holiday decorating, cooking, and crafts has to find a way to dispose of its overrun and unsold end-of-season output. To whom should the firm sell the remaining merchandise?

Accepted Answer

Off-price discount retailers specialize in buying and selling excess and unsold merchandise from other retailers. These retailers purchase products at a lower price and then sell them at a discount to consumers, making them a suitable option for the publisher to dispose of their overrun and unsold holiday books. Convenience stores, department stores, and supermarkets are unlikely to carry seasonal items all year round and may not be interested in purchasing the remaining merchandise.

Question 13

Laura buys supplies for her catering business at a retailer that stocks a limited selection of items, which are sold in bulk on a cash-and-carry basis to those who belong. As she browses through a huge store, she buys flour, a set of muffin pans, and a package of paper towels as well as an assortment of fresh produce. Where is Laura most likely shopping?

Accepted Answer

Laura is most likely shopping at a warehouse membership club as they stock a limited selection of items sold in bulk on a cash-and-carry basis to those who belong. The fact that she is buying supplies for her catering business also suggests that she is purchasing in bulk, which is a common feature of warehouse membership clubs. Additionally, the mention of browsing through a "huge store" suggests that she is shopping at a large retailer, which is another characteristic of warehouse membership clubs.

Question 14

Well-known manufacturers such as Nike and Polo Ralph Lauren have decided the most profitable way to dispose of out-of-season and irregular stock is to open stores and sell their own merchandise. What type of stores are these?

Accepted Answer

Factory outlets are stores opened by manufacturers to sell their own merchandise, including out-of-season and irregular stock, directly to consumers at discounted prices. This allows the manufacturers to clear their inventory and earn revenue while maintaining control over their brand image and positioning. Seasonal outlets are typically opened for a limited time during specific seasons, while discount stores and bargain basements are more general retail concepts not specific to manufacturers. Therefore, B) factory outlets is the best choice for this question.

Question 15

The Cedar Store carries a full line of cedar swings, gliders, garden benches, and tables. All of its products can be purchased through its website. The site has done well since the Cedar Store's products do not need to be touched or smelled before purchase. What is The Cedar Store engaging in?

Accepted Answer

The Cedar Store is engaging in online retailing, as it sells its products through its website.

Question 16

Which of the following statements best describes nonstore retailing?

Accepted Answer

Nonstore retailing is currently growing faster than in-store retailing, according to the information provided in the question. The other answer choices are either incorrect or not supported by the given information.

Question 17

Sarah hates shopping at malls during the Christmas rush. She much prefers to use catalogues, the internet or even vending machines. In fact this type of shopping is currently growing faster than in-store shopping. What is this known as?

Accepted Answer

The described type of shopping, using catalogues, the internet, or vending machines, is known as nonstore retailing.

Question 18

Techniques used to get consumers to buy from their home include direct mail, catalogues and mail order, telemarketing, and electronic retailing. What is the term for this process?

Accepted Answer

Direct marketing refers to the process of reaching consumers directly through various methods such as direct mail, telemarketing, and electronic retailing. It allows companies to target specific customers and promote their products or services directly to them, without the need for intermediaries. Options A and D are not commonly used terms in the industry, and option B refers to a different business model altogether.

Question 19

Mr. Bilson, the owner of a new restaurant, wants to target customers based upon their gender, age, lifestyle, and values. Which method should he use?

Accepted Answer

Direct mail allows for targeted marketing by using customer data to segment the market based on characteristics such as gender, age, lifestyle, and values, making it the most suitable option for Mr. Bilson's needs.

Question 20

Which of the following best describes off-price retailers?

Accepted Answer

Off-price retailers are known for offering brand-name merchandise at discounted prices. They are often able to do this by purchasing excess inventory or products with minor defects directly from the manufacturer at a discount. This allows them to offer deep discounts to consumers while still turning a profit.

Quiz 15: Retailing