Deck 1: Perspectives on Retailing

Question 1

What are the five most popular methods of classifying retailers?

A) Census Bureau, inventory method, margin versus turnover, location, and size
B) Census Bureau, margin versus turnover, inventory method, channel system, and size
C) Census Bureau, number of outlets, margin versus turnover, location, and size
D) number of outlets, margin versus turnover, location, size, and inventory method
E) number of outlets, Census Bureau, inventory method, location, and size

Answer 1

C

Question 2

Which of the following is an example of a retail transaction?

A) A firm pays a printer for printing business cards.
B) A supermarket purchases eggs from a local farmer for resale.
C) A student purchases a magazine subscription from a door-to-door salesperson.
D) A manager of a college bookstore purchases extra copies of your Retailing text from the publisher.
E) A department store purchases cosmetics from a manufacturer for sale in its stores.

Answer 2

C

Question 3

Retailing is defined as:

A) any exchange of cash and/or credit for goods or services between channel members.
B) a fairly stable and unchanging industry that has a major impact on society.
C) the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer or to provide services to the consumer.
D) the sale of any good or service by the producer to a channel member.
E) the activities and steps needed to transfer goods and/or services between channel members.

Answer 3

C

Question 4

The fastest growing form of e-tailing or e-commerce is

A) texting
B) m-tailing or m-commerce
C) social network advertising
D) personalized on line help
E) on-line auctions

Question 5

Which type of retail establishment is least likely to adopt scrambled merchandising?

A) An ATM
B) A drugstore
C) A supermarket
D) A specialty store
E) A convenience market

Question 6

A product sold at or below cost is known as:

A) freebie marketing.
B) a loss leader.
C) product bundling.
D) a bait and switch.
E) product churning.

Question 7

A retailer that carries such a large quantity of merchandise in a single category at such good prices that it makes it impossible for customers to walk out without purchasing what they need,thus killing the competition,is known as a(n):

A) capital-based retailer.
B) category killer.
C) divertive competitor.
D) killer bee.
E) supercenter.

Question 8

One of the most dramatic changes created by e-tailing is a shift in power between retailers and consumers.This shift in power is derived from:

A) the ability of consumers to purchase from retailers in other countries as a result of the Internet.
B) the inability of Internet retailers to compete with more traditional bricks-and-mortar retailers.
C) the loss of control of pricing information by retailers due to the information dissemination capabilities of the Internet.
D) the lack of competition in e-tailing.
E) the decreased power of consumers when transacting and negotiating with retailers.

Question 9

The best way to categorize retailers is:

A) by the U.S. Bureau of Census' three-digit North American Industrial Classification Systems (NAICS).
B) by the retailers' locations.
C) by the number of outlets the store maintains.
D) by the retailers' margins and turnover.
E) there is no single accepted method of classifying retail competitors.

Question 10

Walmart became the world's largest retailer by:

A) offering better value in price and quality.
B) cutting unnecessary costs.
C) concentrating only on profits.
D) selling products at low prices.
E) becoming more service oriented.

Question 11

Which of the following demographic factors have been significant sources of change over the last decade?

A) Fluctuating birth rate, the increasing number of immigrants, the growing importance of Generation-Y consumers, the fact that Generation-Xers are starting to reach middle age and that baby boomers are nearing retirement age.
B) Aging of baby boomers, declining household incomes, decline in part-time workers, redistribution of income levels, and the rise in the number of college graduates.
C) Increasing number of women in the workplace, declining household incomes, rise in part-time workers, rise in teenage suicide, and redistribution of income levels.
D) Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that Generation-Yers are starting to reach middle age, and the increasing number of women in the workforce.
E) Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that Generation-Yers are starting to reach middle age, and the decline in household incomes.

Question 12

An operator of which of the following establishments is NOT a retailer?

A) A catering service specializing in weddings.
B) A computer firm selling software to households via the Internet.
C) A student going door-to-door selling magazine subscriptions.
D) A corporate property management firm.
E) An ice cream shop in the student union.

Question 13

Same-store sales compare:

A) an individual store's sales to its sales for the same month in the previous year.
B) clearance efforts with holiday mark-downs.
C) two stores in the same district to one another.
D) advertising circulars with in-store promotions.
E) revenue with expenses.

Question 14

An alternative to scrambling merchandise to increase profitability that many retailers are implementing is:

A) limiting Internet access to customers in stores.
B) selling many different and unrelated items.
C) becoming a discount store.
D) reducing store size.
E) selling merchandise on line only.

Question 15

_____ occurs when the customer gets needed information in the store and then orders it online for a lower price and to avoid paying state sales tax.

A) Channel Surfing
B) Same-store retailing
C) Bricks-and-mortar retailing
D) Social shopping
E) Outshopping

Question 16

Market share refers to:

A) the number of competitors a retailer must contend with.
B) a retailer's total sales divided by total market sales.
C) agreements whereby retailers attempt to "share" certain costs.
D) the total sales a retailer has generated from the target market.
E) the portion of a retailer's sales that represent profit.

Question 17

Identify the incorrect statement about e-tailing.

A) It enables consumers to shop when they like and from where they like.
B) It provides access to vast amounts of information, ranging from a product's attributes to who has the lowest price.
C) Many e-tailers offer personalized help online.
D) With some Internet websites, individuals can band together for group buying.
E) Some e-tailers may have to discontinue some product categories as consumers engage in outshopping.

Question 18

The dominance of Walmart can be attributed to Sam Walton's realization that:

A) most of any product's cost gets added after the item is produced.
B) consumers desire great selection and are willing to pay higher prices to obtain that selection.
C) most consumers prefer to complete all of their shopping in one store to minimize their overall shopping time.
D) most consumers would prefer to shop in large stores rather than small stores as they believe that larger stores offer higher customer service.
E) the company's primary focus should be on its profits.

Question 19

Which of the following would NOT be considered a "category killer?"

A) Office Depot
B) PetSmart
C) Toys "R" Us
D) Target
E) Best Buy

Question 20

_____ is the result of the pressure being placed on many retailers to increase profits by carrying additional merchandise or services that will also increase store traffic.

A) Cross-merchandising
B) Piggybacking
C) Automatic merchandising
D) Product diversification
E) Scrambled merchandising

Question 21

A channel captain:

A) is a retailer that carries a large amount of merchandise in the marketing channel at good prices.
B) helps the customer gets needed information in the store and then orders it online for a lower price and to avoid paying state sales tax.
C) is the institution in the marketing channel that is able to plan for and get other channel institutions to engage in activities they might not otherwise engage in.
D) provides information on the structure of retail competition.
E) is a retailer that develops its own brand name and contracts with a manufacturer to produce the product with the retailer's brand.

Question 22

If you choose the store-management path,which of the following statements would be true?

A) Selecting, training, evaluation, and all other aspects of personnel management are your responsibility.
B) You will have to use quantitative tools such as the merchandise budget in your work.
C) You are responsible for selecting the merchandise.
D) You must select the vendors and negotiate terms with them.
E) Store managers, who usually work out of the retailer's main office but do spend a great amount of time traveling have to develop appropriate buying plans for their merchandise lines.

Question 23

Which of the following statements about NAICS codes is false?

A) Three-digit NAICS codes are very useful to the retail analyst.
B) In almost all instances, the NAICS code reflects the type of merchandise the retailer sells.
C) Four-digit NAICS codes provide much more information on the structure of retail competition than three-digit NAICS codes.
D) The U.S. Bureau of Census classifies all retailers using three-digit NAICS codes.
E) The major portion of a retailer's competition comes from other retailers in its NAICS category.

Question 24

The North American Industrial Classification System (NAICS)code is used to reflect the:

A) location of the retailer.
B) industrial category of the retailer.
C) type of merchandise the retailer sells.
D) size of the retailer in terms of sales dollars.
E) margin the retailer maintains in its industrial category.

Question 25

Which of the following is NOT one of the ways by which retailers are categorized?

A) Location
B) Market share
C) Number of outlets
D) Size
E) Margin vs. turnover

Question 26

If a retailer has a 25 percent gross-margin percentage,how much will be generated in gross-margin dollars for each $100 of sales?

A) $25.00
B) $75.00
C) $2.50
D) $4.50
E) $7.50

Question 27

Which of the following is an example of a non-traditional location that retailers are selecting:

A) travel stop plazas along interstate highways.
B) multi retail store shopping centers.
C) suburban shopping malls.
D) outlet malls.
E) local corner stores.

Question 28

Which of the following is true about a retailing career?

A) Since retailing is so diverse, all individuals are suited for a retail career.
B) A career in retailing is limited to those living in densely populated areas.
C) Starting salaries are higher in retailing than in most other careers.
D) The potential for retail career advancement is high.
E) Nationally, the number of careers in retailing is expected to decline over the next decade.

Question 29

Large chains which recognize that consumer tastes vary by region often use a(n)_____ to give each store the flexibility to adjust its merchandise mix.

A) standard stock list
B) flexible merchandise planning center
C) private label branding strategy
D) localized merchandise planning center
E) optional stock list

Question 30

Gross margin can be defined as:

A) net sales minus the cost of the goods sold.
B) the selling price charged for a piece of merchandise or a service plus variable operating expenses.
C) the difference between total profits and total expenses.
D) the cost of merchandise in a retailer's inventory.
E) the cost of goods sold at less operating expenses.

Question 31

Which of the following statements about private label brands is false?

A) Private labels allow the retailer to control the costs associated with developing, making, sourcing, and promoting the label.
B) Private labels are advertised in the newspaper as brands and are heavily promoted in stores.
C) Private label brands are usually sold at lower prices than manufacturer's brands.
D) Private label brands have been successful in the grocery industry, while failing in most other retail sectors.
E) Some retailers can't use private labels unless they are part of a buying group.

Question 32

Which of the following is NOT an operating expense?

A) Rent
B) Cost of goods sold
C) Depreciation
D) Utilities
E) Wages

Question 33

If a retailer had an average inventory of $80,000 (retail)and annual sales of $480,000,how many times has that retailer turned over its inventory?

A) Four times a month
B) Six times a month
C) Four times a year
D) Six times a year
E) Eight times a year

Question 34

Jewelry stores are generally categorized as:

A) low-margin/high-turnover.
B) high-margin/low-turnover.
C) low-margin/low-turnover.
D) high-margin/high-turnover.
E) low-margin/moderate-turnover.

Question 35

An inventory turnover of 3.7 indicates that a retailer sells its inventory:

A) for 37 percent of cost times cost.
B) every 3.7 months.
C) 3.7 times a year.
D) about every four weeks.
E) about every four days.

Question 36

In the text,when the authors refer to chain stores they are normally referring to operations having _____ or more units.

A) 2
B) 7
C) 10
D) 20
E) 25

Question 37

Which of the following statements is correct?

A) Operating costs per sales dollar are usually lower for larger retailers than they are for small retailers.
B) Larger retail firms generally have higher operating costs per sales dollar.
C) Retailers cannot be classified by number of stores.
D) Retailers are rarely classified by sales volume.
E) The operating performance of retailers has no relationship to retailers' size.

Question 38

_____ refers to the number of times per year,on average,that a retailer sells its inventory.

A) Periodic inventory
B) Carrying cost of inventory
C) Inventory reserve
D) Perpetual inventory
E) Inventory turnover

Question 39

_____ is a merchandising method in which all stores in a retail chain stock the same merchandise.

A) An optional stock list
B) Scrambled merchandising
C) A standard stock list
D) Automatic merchandising
E) Cross-merchandising

Question 40

Retailers with several units are a stronger competitive threat because

A) they can focus all their efforts on one trade area
B) they are generally owner and family operated
C) they can spread many fixed costs over a number of stores and can achieve economies in purchasing
D) they can tailor their merchandising to one trade area in each unit
E) they can spot customer desires sooner and respond faster.

Question 41

Walmart has a significant negative effect on the mom-and-pop business sector.

Question 42

Buying is defined as:

A) the career path that involves responsibility for selecting, for selecting,training and
Evaluating personnel.
B) the career path that enables you to select merchandise lines through e-tailing.
C) the career path whereby one use quantitative tools to develop appropriate
Buying plans for the store's merchandise lines.
D) the career path that allows complete independence in ordering merchandise for the store.
E) the career path that will eventually lead to vice president.

Question 43

An environmental orientation will allow retailers to:

A) anticipate and adapt continuously to external forces.
B) adapt systematically to a changing environment.
C) focus on fundamental management of assets, sales revenues and expenses.
D) focus on the need to collect and analyze data.
E) to acquire merchandise from suppliers.

Question 44

Retailing does not include telephone sales,catalog sales,and sales over the Internet.

Question 45

Retailing is responsible for matching the individual demands of the consumer with vast quantities of supplies produced by manufacturers and service providers.

Question 46

In attempting to determine whether a new fast-food restaurant should be opened in a small town,a retailer gathered information on demographics,competitors' sales,and real estate available in that area.The retailer was employing the _____ method of retail decision-making.

A) analytical
B) creative
C) intuitive
D) strategic
E) tactical

Question 47

_____ is the ability to make rapid decisions,to render judgements,take action and commit oneself to a course of action until completion.

A) Flexibility
B) Leadership
C) Initiative
D) Enthusiasm
E) Decisiveness

Question 48

Due to increased corporate responsibilities,the manager of a sporting goods store has asked the assistant manager to take responsibility for screening and hiring new sales associates.The manager is allowing the assistant to make the decisions independently,but has scheduled weekly meetings for the two to discuss any issues of concern and to provide insight,if needed.The manager is demonstrating which desirable retailing attribute?

A) Prioritizing
B) Leadership
C) Creativity
D) Laziness
E) Enthusiasm

Question 49

Given the ever-changing needs of the retail environment,retail managers who possess _____ are highly sought after as these managers have the ability to quickly alter plans to accommodate changes in trends,styles and attitudes.

A) flexibility
B) leadership
C) initiative
D) enthusiasm
E) creativity

Question 50

Due to the ever-changing retail marketplace,the store manager has initiated many novel ideas and solutions to increase overall store sales.The manager is demonstrating which desirable retailing attribute?

A) Prioritizing
B) Leadership
C) Creativity
D) Hard Work
E) Enthusiasm

Question 51

Change is truly the driving force behind retailing.

Question 52

Which of the following characteristics is NOT desirable for a retail manager to possess?

A) Enthusiasm
B) Creativity
C) Analytical skills
D) Indecisiveness
E) Initiative

Question 53

Retailers that practice both analytical and creative management should be consistently more:

A) profitable.
B) vibrant.
C) liquid.
D) successful in terms of market share.
E) stable.

Question 54

A successful retail manager will use the:

A) analytical method only.
B) creative method only.
C) strategic method only.
D) analytical and creative methods.
E) analytical, creative, and strategic methods.

Question 55

Retail managers are often forced to deal with many issues,functions,and projects at the same time.Establishing priorities,plans,and follow through to achieve results demonstrates which prerequisite for success?

A) Initiative
B) Leadership
C) Risk Taking
D) Organization
E) Stress Tolerance

Question 56

Internet sales are considered to be retail sales only if a customer purchases a physical product from the web site.

Question 57

A (an)_____________ perspective can result in a standardized set of procedures,success formulas and guidelines.

A) creative
B) administrative
C) intuitive
D) strategic
E) analytical

Question 58

The nations that have benefited from the greatest economic and social progress have been those with a strong retail sector.

Question 59

Retailing is defined as the final activities and steps involved in the sale of merchandise (but not services)to the final consumer.

Question 60

Rapidly growing chain stores usually find it necessary to transfer store managers for the following reason:

A) to allow managers to live in the geographic location of their choice.
B) to open new stores in new geographic locations.
C) to make it possible for new managers to work in established business locations.
D) to gain additional retail experience.
E) to adhere to the principle of geographic mobility.

Question 61

The decreasing number of immigrants is having a profound effect on the way retailers operate.

Question 62

The Internet has completely destroyed bricks-and-mortar retailers.

Question 63

One of the most dramatic changes e-tailing is creating is a shift in power between retailers and consumers.This shift in power is primarily derived from dissemination of pricing information through the Internet to consumers.

Question 64

JCPenney opened the nation's first discount department store in 1866.

Question 65

Retailers have found out that some consumers prefer smaller stores,since these stores provide the convenience of being able to get in and out more quickly.

Question 66

Retailers need only to pay close attention to the behavior of consumers and not worry about other environmental factors.

Question 67

Department stores are closing their downtown locations,which often were their largest stores,because the downtown areas of many cities have become "ghost towns."

Question 68

Walmart became the world's largest retailer by focusing on its bottom line profits.

Question 69

Retailers are prevented by law from engaging in scrambled merchandising as it would divert business away from the more traditional outlets; even if these older,traditional outlets are inefficient.

Question 70

Successful retailers today are able to look at the changing environment and see opportunities.

Question 71

Category killers carry such a large amount of merchandise in a single category at such good prices that it makes it impossible for the customer to walk out without purchasing what they needed.

Question 72

Market share refers to a retailer's sales compared to the store's sales for the same month in the previous year.

Question 73

Category killers are not allowed to divert business away from traditional wholesale supply houses.They can only compete with other retailers.

Question 74

Convenience stores often employ a scrambled merchandising technique.

Question 75

Same-store sales compare an individual store's sales to its sales for the same day of the week (e.g.,Friday)to that day in the previous two weeks.

Question 76

E-tailing restricts consumers from shopping when they like and from where they like.

Question 77

Retail managers must be skillful at managing changes that occur in their markets.

Question 78

With population growth slowing,retailers are no longer able to sustain their long-term profit projections simply by building new stores to gain additional sales as they did in the past.

Question 79

Since the U.S.population growth has slowed in recent years,successful retailers will be those that take away market share from competitors.

Question 80

Retailing accounts for 20 percent of the worldwide labor force.