Deck 14: Retailing, Direct Marketing, and Wholesaling

Question 1

What type of situation would provoke a conflict between department stores and manufacturers?

Answer 1

To ensure a regular flow of merchandise into their stores, off-price retailers establish long-term relationships with suppliers that can provide large quantities of goods at reduced prices. Manufacturers may approach retailers with samples, discontinued products, or items that have not sold well. Also, off-price retailers may seek out manufacturers, offering to pay cash for goods produced during the manufacturers' off­season. Although manufacturers benefit from such arrangements, they also risk alienating their specialty and department store customers. Department stores tolerate off-price stores as long as they do not advertise brand names, limit merchandise to last season's or lower­quality items, and are located away from the department stores. When off-price retailers sell stocks of in-season, top-quality merchandise, tension builds between department stores and manufacturers.

Question 2

What is a "party plan" with respect to nonstore retailing?

Answer 2

A "party plan" is a form of direct selling. With a party plan, a consumer acts as a host and invites friends and associates to view merchandise in a group setting, where a salesperson demonstrates products. The informal atmosphere helps salespeople to overcome customers' reluctance and encourages them to buy.
Tupperware and Mary Kay were the pioneers of this selling technique and remain global leaders.

Question 3

What are the three types of nonstore retailing? Give examples of each.

Answer 3

Direct marketing, direct selling, and vending are the three types of nonstore retailing.
Direct marketing is the use of telephone, Internet, and nonpersonal media to communicate product and organizational information to customers, who can purchase products via mail, telephone, or the Internet. Direct marketing can occur through catalog marketing, direct-response marketing, telemarketing, television home shopping, and online retailing. Companies such as Land's End, Pottery Barn, and Crate & Barrel, sell via catalogs, online, and through retail stores. The Home Shopping Network originated and popularized the television home shopping format.
Direct selling is the marketing of products to ultimate consumers through face-to- face sales presentations at home or in the workplace. The top five global direct selling companies are Avon, Amway, Herbalife, Natura Cosmeticos, and Vorwerk & Co. Product categories that have been highly successful for direct selling include cosmetics and personal-care products, health products, jewelry, accessories, and household products.
Automatic vending is the use of machines to dispense products. It is one of the most impersonal forms of retailing and accounts for a small minority of all retail sales.
InstyMeds vending machines dispense prescription medications to customers, and fishermen in Pennsylvania can even buy live bait via PA Live Bait Vending.

Question 4

Why would any specific retail store, such as PetSmart, be considered a category killer?

Question 5

What role does wholesaling play in the marketing channel? Is this role necessary?

Question 6

Discuss the advantages and disadvantages of catalog marketing.

Question 7

What are the two categories of retail stores based on breadth of products offered, and what are the types of stores in each category?

Question 8

Discuss some of the functions that full-service wholesalers provide. How do these differ from those that limited- service wholesalers provide?

Question 9

Compare the services wholesalers provide to producers with the services they provide to retailers.

Question 10

Compare and contrast department stores and discount stores.

Question 11

Discuss the role of merchant wholesalers. When is a producer most likely to use them?

Question 12

Why is a store's location one of the most important strategic retailing decisions?

Question 13

Identify and describe the three kinds of specialty stores.

Question 14

What situations would benefit from using a selling agent?

Question 15

Kate owns a refreshment-stand business at the community ballpark. She goes to a warehouse store like Sam's and purchases snacks and canned soda that she will sell at her refreshment stand. Kate is considered a(n) .

A) wholesaler
B) broker
C) retailer
D) intermediary
E) agent

Question 16

What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?

Question 17

What is a store's image, and how does it affect retailing strategy decisions?

Question 18

What are superstores? How do they differ from supermarkets?

Question 19

What are the wholesaling activities performed by selling agents and brokers?

Question 20

In what ways do retailers add value to products?

Question 21

Compared with other types of retailers, department stores compete mainly on the basis of:

A) customer services.
B) low prices.
C) a very deep assortment of a few specific products.
D) high sales volume.
E) catalog sales.

Question 22

Retailing is best characterized as:

A) large organizations that carry wide and deep product mixes.
B) transactions in which a buyer intends to consume a product through personal, family, or household use.
C) arrangements whereby a supplier grants a dealer the right to sell its products.
D) the use of telephone, Internet, and nonpersonal media to communicate product and organizational information to customers.
E) exchanges that take place only in a store or service establishment.

Question 23

Supermarkets, discount stores, and hypermarkets can all be classified as .

A) superstores
B) general merchandise retailers
C) department stores
D) specialty retailers
E) off-price retailers

Question 24

A is a small, self-service store that is open long hours and carries a narrow assortment of products, usually items such as soft drinks and other beverages, snacks, news-papers, tobacco, and gasoline, as well as services such as ATMs.

A) discount store
B) department store
C) convenience store
D) supermarket
E) category killer

Question 25

Ollies' is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Ollies' is an example of a .

A) department store
B) discount store
C) warehouse showroom
D) specialty store
E) superstore

Question 26

Cash and Carry is a store that carries food, clothing, and household goods at lower price margins than other nearby stores. There is little service provided and customers have to bag their own purchases. Cash and Carry is most likely an example of a _.

A) department store
B) category killer
C) discount store
D) supermarket
E) warehouse showroom

Question 27

Walmart, Macy's, Nordstrom, and Toys "R" Us are examples of .

A) manufacturers
B) merchant wholesalers
C) end-users
D) agents
E) retailers

Question 28

A general merchandise retailer offers:

A) a single product line that is stocked in depth.
B) few product lines with deep assortments of these lines.
C) few choices of a large variety of product lines.
D) products through the Internet and catalogs only.
E) a variety of product lines that are stocked in depth.

Question 29

Jack gets a shopping list from his wife. On the list are a potted plant, aspirin, fresh salmon, motor oil, bread, milk, and a birthday cake. To make just one stop to save time, Jack should go to a .

A) discount store
B) category killer
C) specialty store
D) specialty retailer
E) supermarket

Question 30

Direct selling, direct marketing, and vending machines are all examples of .

A) producing
B) advertising
C) promoting
D) retailing
E) wholesaling

Question 31

A retailer is an organization that purchases products for the purpose of reselling them to .

A) other retail organizations.
B) the government.
C) the ultimate consumers.
D) the wholesalers.
E) nonprofit organizations.

Question 32

Which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their supplies?

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

Question 33

If a store has areas for men's apparel, women's apparel, housewares, cosmetics, and jewelry and competes mostly on the basis of service, it is most likely a(n) _.

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

Question 34

By locating in the same general vicinity as other car dealerships, Hartfield Honda can

A) facilitate comparison shopping.
B) create form utility.
C) facilitate wholesale exchanges.
D) create possession utility.
E) create exchange utility.

Question 35

Self-service, general-merchandise outlets that regularly offer brand-name and private-brand products at low prices are known as _.

A) discount stores
B) warehouse showrooms
C) catalog showrooms
D) superstores
E) specialty retailers

Question 36

Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume?

A) Department stores
B) Traditional specialty retailers
C) Warehouse showrooms
D) Direct marketers
E) Discount stores

Question 37

Aidan is getting ready to move to campus for his freshman year of college. To get the products he needs for his dorm room, he goes to a store that sells household goods such as plastic containers, sheets, and towels. The store also sells items such as shampoo, deodorant, and toothpaste. Aidan has most likely gone to a .

A) discount store
B) superstore
C) wholesaler
D) department store
E) warehouse club

Question 38

Taylor works for a company that buys snacks such as chips, cookies, and candy in bulk from manufacturers. Taylor's company then repackages them and sells them to vending companies who have vending machines at government institutions. Taylor most likely works for a wholesaler, and the vending machine company is a(n) _____.

A) retailer
B) broker
C) wholesaler
D) agent
E) franchisee

Question 39

Nordstrom's, Macy's, and JC Penney's are all considered as:

A) department stores.
B) discount stores.
C) off-price retailers.
D) specialty retailers.
E) category killers.

Question 40

As discount stores improve their services and atmosphere as well as raise their prices, the distinction between discount stores and is becoming blurred.

A) superstores
B) supermarkets
C) specialty stores
D) department stores
E) category killers

Question 41

What is the primary distinction between superstores and hypermarkets?

A) Superstores offer a wider variety of products than hypermarkets.
B) Superstores offer low prices, while hypermarkets have moderate to high prices.
C) Hypermarkets have fewer departments but deeper product lines than superstores.
D) Hypermarkets are larger and have more types of products than superstores.
E) These two types of retailers carry very different types of products.

Question 42

After shopping in the same store for nearly two hours, Chelsea goes to Burger King for a Whopper, while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a _.

A) superstore
B) hypermarket
C) department store
D) warehouse club
E) discount store

Question 43

Sam's and Costco are examples of:

A) discounters.
B) warehouse clubs.
C) warehouse showrooms.
D) discount clubs.
E) wholesalers.

Question 44

Which of the following is a large-scale, members-only, retailer that combines cash-and-carry wholesaling with discount retailing?

A) Warehouse showroom
B) Warehouse club
C) Catalog showroom
D) Category killer
E) Hypermarket

Question 45

Which type of retailers are the primary competitors for specialty retailers?

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

Question 46

A large retailer selling food and most routinely purchased consumer products is a .

A) hypermarket
B) supermarket
C) discount store
D) warehouse club
E) superstore

Question 47

Retailers that sell only to members and feature discount retailing combined with cash-and-carry wholesaling are called .

A) hypermarkets
B) retail groups
C) warehouse showrooms
D) discount stores
E) warehouse clubs

Question 48

Kroger, Safeway, and Publix are all considered:

A) superstores.
B) groceries.
C) department stores.
D) supermarkets.
E) food stores.

Question 49

Off-price retailers and category killers are both:

A) specialty retailers.
B) discount stores.
C) showrooms.
D) general merchandisers.
E) department stores.

Question 50

Levitz Furniture locates in huge, low-cost buildings, maintains large, on-premises inventories, and offers minimum service. Levitz is a .

A) warehouse showroom
B) catalog showroom
C) superstore
D) warehouse club
E) department store

Question 51

Specialty stores offer than department stores.

A) greater varieties of product lines and higher prices
B) lower prices and higher quality
C) more product lines and less customer service
D) more sales expertise and better selections
E) more frequent price discounts and less selection

Question 52

Which of the following is not a common feature of a warehouse club?

A) Concrete floors
B) Wide aisles
C) Good customer service
D) Large packages
E) Low price per unit

Question 53

A store that offers a wide variety of shoes for men, women, and children would most likely be considered a(n) _____.

A) department store
B) traditional specialty retailer
C) category killer
D) off-price retailer
E) warehouse showroom

Question 54

Laura goes to a Walmart store and buys some clothing, a DVD, light bulbs, and all the groceries she needs for her family. What type of retailer is this particular Walmart outlet?

A) Supermarket
B) Superstore
C) Hypermarket
D) Discount store
E) Department store

Question 55

A narrow product mix with a deep product line would most likely be carried by .

A) mass merchandisers
B) supermarkets
C) discount stores
D) specialty retailers
E) warehouse showrooms

Question 56

Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal services are called _____.

A) catalog showrooms
B) category killers
C) warehouse showrooms
D) warehouse clubs
E) display outlets

Question 57

Off-price retailers feature:

A) deep discounts, few customer services, and central checkouts.
B) sales expertise, wide selections, and low prices.
C) overstocks, private-brand products, and moderate prices.
D) a narrow product range and enormous product availability.
E) cash only sales and few customer services.

Question 58

Matt's girlfriend tells him she wants a cashmere sweater for Christmas. Matt decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a store.

A) department
B) catalog
C) discount
D) traditional specialty
E) convenience

Question 59

Which type of retail outlet can have up to 200,000 square feet?

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

Question 60

Stores that buy manufacturers' seconds, overruns, returns, and off-season production runs at below wholesale prices and resell this merchandise to consumers at deep discounts are known as .

A) category killers
B) off-price retailers
C) specialty retailers
D) hypermarkets
E) discount retailers

Question 61

A shopping center containing a Macy's, Sears, and J.C. Penney as well as dozens of specialty shops, restaurants, and entertainment is most likely a:

A) superregional shopping center.
B) neighborhood shopping center.
C) community shopping center.
D) complete business district.
E) lifestyle shopping center.

Question 62

Which of the following types of shopping centers usually consists of several small convenience and specialty stores?

A) Specialty
B) Regional
C) Neighborhood
D) Convenience
E) Community

Question 63

In Cara's hometown, there is a mall with a small Sears store, a Macy's department store, a couple of fast food restaurants, a few specialty shops, and some convenience stores. The mall features seasonal sidewalks sales and boat shows. This mall is most likely a shopping center.

A) neighborhood
B) national
C) regional
D) community
E) city

Question 64

Colin brags to his friend Reid that his new bike shop has lots of parking and great visibility from Harper Avenue, and his nearest business neighbors are several hundred feet away. Colin has selected a site for his retail business.

A) freestanding
B) traditional business district
C) neighborhood shopping center
D) community shopping center
E) regional shopping center

Question 65

When off-price retailers obtain too much in-season, high-quality merchandise, tension between manufacturers and builds.

A) discount stores
B) category killers
C) specialty retailers
D) warehouse clubs
E) department stores

Question 66

Which of the following is an example of a category killer?

A) J.C. Penney
B) Walmart
C) Marshalls
D) Sams
E) Toys "R" Us

Question 67

Category killers compete primarily on the basis of:

A) enormous product selection and sales expertise.
B) low prices and enormous product availability.
C) convenient locations and customer services.
D) rock-bottom prices and moderate selections.
E) one-stop shopping and product availability.

Question 68

Which of the following represents the different types of shopping centers that exist?

A) Neighborhood, regional, superregional, power, and strip malls
B) Community, rural, urban, and traditional business districts
C) Outlet, power, lifestyle, superregional, regional, neighborhood, and community
D) Outlet malls, lifestyle, strip malls, and shopping malls
E) Freestanding, convenience, traditional, and regional

Question 69

The target market of a regional shopping center typically includes at least people.

A) 25,000
B) 50,000
C) 100,000
D) 150,000
E) 250,000

Question 70

The kinds of products being sold and the availability of public transportation are both factors that influence a retailer's decision about .

A) store atmosphere
B) store location
C) retail positioning
D) store image
E) the wheel of retailing

Question 71

Which of the following offers the widest product mixes and the deepest product lines?

A) Category killer
B) Outlet mall
C) Traditional business district
D) Community shopping center
E) Superregional shopping center

Question 72

Alex is preparing a new strategic plan for a large retailer. Several aspects of the retailer are to be evaluated in order to make plans and set goals. Of all the issues that Alex can select in developing the new strategic plan, which of the following is the least flexible?

A) Store atmosphere
B) Scrambled merchandising
C) Retail positioning
D) Store image
E) Retail store location

Question 73

Stores that are in a factory outlet mall, such as Ralph Lauren, Tommy Hilfiger, Clarks' Shoes, and Samsonite Luggage are most appropriately classified as a(n) .

A) discounter
B) specialty retailer
C) off-price retailer
D) category killer
E) department store

Question 74

Dawn is concerned that there are not enough buyers in Centerville to support her Quilts Unlimited store. Her business adviser suggests that she should not limit her promotion to the Centerville population but also consider out shoppers. This approach is most likely to work if her store is located in a:

A) freestanding location.
B) traditional business district.
C) strip center.
D) community shopping center.
E) regional shopping center.

Question 75

Location is important to a retailer because:

A) suppliers charge more to service stores in certain trading areas.
B) a desirable location appeals to consumers' emotions.
C) location is the major determinant of store image which attracts a certain category of consumers.
D) location determines the trading area from which a store must draw its customers.
E) convenient location is an essential customer service element.

Question 76

Michael's, PetSmart, and Staples are all examples of:

A) discount stores.
B) off-price retailers.
C) category killers.
D) traditional specialty retailers.
E) superstores.

Question 77

Ariana is planning to open an upscale dress boutique. She is evaluating ease of movement to and from sites, vehicular traffic, types of stores in the area, and transportation networks. At the moment, which of the following strategic retailing issues is Ariana concerned with?

A) Store location
B) Production depth
C) Product mix
D) Scrambled merchandising
E) Retail positioning

Question 78

Greg chooses to have his hunting equipment store in a location away from the main part of town so that he can have a large parking lot and an outdoor range for customers to test out his merchandise. Greg's store is:

A) in a traditional business district.
B) a rural shopping center.
C) in a neighborhood shopping center.
D) a non-traditional shopping center.
E) a freestanding structure.

Question 79

In contrast to business purchases, consumer purchases are likely to be influenced by .

A) economic planning
B) necessity
C) prior planning
D) social influences
E) rational needs

Question 80

Hickory Village Shopping Center has two department stores and some specialty and convenience stores. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory is a shopping center.

A) community
B) regional
C) nontraditional
D) neighborhood
E) power