Question 1

The customer-service strategy is used by retailers to secure the loyalty of shoppers to retail outlets; it is ineffective, however, in building demand for products.

Accepted Answer

The customer-service strategy is effective in building demand for products because excellent customer service can enhance the shopping experience, increase customer satisfaction, and encourage repeat business, thereby indirectly boosting demand for products.

Question 2

To improve profitability, many department stores have increased the amount of space devoted to product categories like appliances, furniture, and toys.

Accepted Answer

The answer of To improve profitability, many department stores have...

Question 3

The components of retailing strategy must work together to create an image that appeals to a store's target market.

Accepted Answer

The components of retailing strategy (such as merchandise selection, pricing, store location and layout, advertising, etc.) are interconnected and must be aligned in a way that resonates with the desired consumer audience. This helps to create a distinct brand image and value proposition that differentiates a store from its competitors and fosters customer loyalty.

Question 4

Needs and preferences of the target market, offerings of competitors, and the profitability of each product line and category are all factors included in the choice of the perfect merchandising mix for a retailer.

Accepted Answer

These factors are indeed important considerations in determining the most suitable mix of merchandise for a retailer to offer.

Question 5

Category management focuses on the profitability of individual items rather than entire product lines in determining what to stock.

Accepted Answer

Category management considers the entire range of products in a category to optimize sales and profitability, rather than focusing on individual items.

Question 6

Retailers analyze cost data, geographic location expenses, and product uniqueness in order to segment markets.

Accepted Answer

The answer of Retailers analyze cost data, geographic location expenses,...

Question 7

Markdowns occur only when fashion trends reduce the appeal of current merchandise.

Accepted Answer

Markdowns can occur for various reasons including overstock, seasonal changes, and product damage, not just due to changes in fashion trends.

Question 8

Vending machines and convenience stores are NOT affected by the wheel of retailing because their strategy for customer satisfaction is based on location and convenience, not pricing.

Accepted Answer

The wheel of retailing theory suggests that retailers begin as low-cost, low-margin establishments and then evolve into higher-priced, higher-margin stores as they become more established. Vending machines and convenience stores do not follow this pattern as their success is based primarily on location and convenience rather than low pricing. Therefore, they are not affected by the wheel of retailing.

Question 9

Location is a major determining factor in the success or failure of a retail business.

Accepted Answer

The location of a retail business can greatly impact its success. Being situated in a high traffic area with good visibility and accessibility can attract more customers and increase sales, while a poor location can make it difficult for the business to attract customers and thrive.

Question 10

Some large-scale retailers have assumed traditional wholesaling functions, resulting in a shift of power away from the wholesalers and increasing the likelihood of retailers assuming channel captaincy.

Accepted Answer

The statement is true. Some large-scale retailers have assumed the traditional roles of wholesalers, which has decreased the power and influence of wholesalers in the supply chain. This shift in power has increased the likelihood of retailers becoming the channel captain, leading and coordinating the activities of other members in the supply chain.

Question 11

Once a retailer has identified a target market, it can then apply a standard merchandising strategy to attract customers to its stores.

Accepted Answer

While identifying a target market is an important part of developing a merchandising strategy, a standard merchandising strategy may not be effective for every target market. Retailers need to tailor their merchandising strategies to the specific needs and preferences of their target customers in order to attract them to their stores.

Question 12

A retailer's image is determined by the perception the consumer has of its stores and the shopping experience that the stores provide.

Accepted Answer

A retailer's image is indeed determined by the perception the consumer has of its stores and the shopping experience that the stores provide. This includes factors such as the store's layout, product selection, customer service, and overall atmosphere. A positive image can lead to increased customer loyalty and sales, while a negative image can drive customers away.

Question 13

A retailer bases its marketing decisions on two fundamental steps in the marketing strategy process: the selection of profitable products and selection of high-traffic retail locations.

Accepted Answer

The answer of A retailer bases its marketing decisions on...

Question 14

The main factors in determining a product markup are inventory turnover rate and cost of customer services.

Accepted Answer

The answer of The main factors in determining a product...

Question 15

In recent years, many retail markets have become saturated with stores.As a result, newer stores have had to re-evaluate their location strategies, including many, such as GoodLife Fitness, which have chosen nontraditional locations they would once have avoided.

Accepted Answer

The statement provides information that many retail markets have become saturated with stores, causing newer stores to re-evaluate their location strategies. It also mentions that some stores, like GoodLife Fitness, have chosen nontraditional locations they would have once avoided. Therefore, the statement is true.

Question 16

The goal of customer service is to attract and retain target customers, thereby increasing sales and profits.

Accepted Answer

The primary goal of customer service is to attract and retain customers in order to increase sales and profits. By providing a positive experience for customers, businesses can build brand loyalty and encourage repeat purchases.

Question 17

Markup is the amount a retailer adds to the product's cost to determine the net profit rate to be earned when it is sold.

Accepted Answer

Markup is the amount a retailer adds to the product's cost to determine its selling price, not the net profit rate. Net profit is calculated by subtracting all expenses, including the cost of goods sold, from the total revenue.

Question 18

A planned shopping centre is a group of retail stores built as an adjunct to a planned living community.

Accepted Answer

The answer of A planned shopping centre is a group...

Question 19

An objective of customer-service strategy is to identify the cost of services and adjust prices to cover them.

Accepted Answer

The objective of customer-service strategy is to provide high-quality service and satisfy customers, not necessarily to adjust prices to cover costs. While cost considerations are important, they are not the sole focus of customer-service strategy.

Question 20

The wheel of retailing describes the cycle of stores moving back and forth from rural/suburban areas to urban areas, based on the shifting trends in demographics.

Accepted Answer

The wheel of retailing theory describes how new types of retailers usually begin as low-margin, low-price operations to attract customers and then, over time, evolve into more established businesses offering more services with higher prices and margins. It does not specifically address the movement between rural/suburban and urban areas.

Quiz 12: Retailers Wholesalers and Direct Marketers