Deck 7: Market Selection and Retail Location Analysis

Question 1

Which of the following is an advantage of freestanding retailers?

A) Lack of direct competition
B) Nearness to population
C) Cooperative planning and sharing of costs
D) Heavy traffic resulting from the wide range of product offerings of other retailers in the area
E) Traffic generated by anchor stores

Answer 1

A

Question 2

A _____ business district is smaller than a central business district (CBD)and revolves around at least one department or variety store at a major street intersection.

A) secondary
B) substandard
C) community
D) suburban
E) neighborhood

Answer 2

A

Question 3

_____ data is the most commonly available objective data that a retailer can obtain about a target market(s).

A) Demographic
B) Psychographic
C) Biological
D) Geographic
E) Personality

Answer 3

A

Question 4

A _____ business district usually consists of an unplanned shopping area around the geographic point at which all public transportation systems converge; it is usually in the center of the city and often where the city originated historically.

A) central
B) convenient
C) secondary
D) suburban
E) neighborhood

Question 5

A(n)_____ is the introductory or first material viewers see when they access a retailer's Internet site.It is the equivalent to a retailer's store-front in the physical world.

A) virtual store
B) web presence
C) home page
D) on-line presence
E) virtual reality

Question 6

A _____ business district is a shopping area that evolves to satisfy consumer convenience,and is located on a major artery of a residential area.

A) central
B) community
C) secondary
D) suburban
E) neighborhood

Question 7

_____ stores are stores in a shopping center that are most dominant and are expected to draw customers to the shopping center.

A) Gravitational
B) Power
C) Anchor
D) Mega
E) Critical mass

Question 8

The retailer's first step in developing a cost-effective way for a retailer to reach its customer with either a traditional store or virtual store is:

A) establish its budget.
B) identify its strengths and weaknesses.
C) identify its target market.
D) develop a list of constraining factors.
E) hire a real-estate consultant.

Question 9

_____ centers are primarily general merchandise and convenience that range from 100,000- 350,000 square feet.They may include discount department stores,supermarkets,and home improvement stores.

A) Neighborhood
B) Regional
C) Fashion/Specialty
D) Outlet
E) Community

Question 10

When a retailer speaks of accessibility,within the context of reaching a target market,the retailer is referring to the:

A) access of the store to handicapped persons.
B) access of the store to major traffic arteries.
C) degree to which the retailer can target its promotional or distribution efforts to a particular market segment.
D) ease with which consumers can shop the retailer's location.
E) degree to which the retailer can target its pricing strategy to appeal to a particular market segment.

Question 11

For a retailer to successfully reach its target market using market segmentation,three criteria must be met: the target market should be:

A) measurable, precise, and be motivated to buy
B) measurable, accessible, and substantial enough to be profitable
C) measurable, have money, and be motivated to buy
D) neglected, motivated to buy, and substantial
E) financially attractive, quantifiable, and be motivated to buy

Question 12

Which of the following is NOT true regarding a neighborhood business district (NBD)?

A) It is located at a major artery of a residential area.
B) It is developed around a major department store.
C) Its major retailer is either a supermarket or a variety store.
D) It is developed to satisfy the convenience-oriented shopping needs of a neighborhood.
E) It generally contains several small stores.

Question 13

Which of the following is a store-based retail format?

A) Street peddling
B) Automated merchandising systems
C) Interactive television
D) A shopping mall
E) The Internet

Question 14

One of the major advantages of shopping centers is that they have:

A) cooperative planning and sharing of common costs.
B) cheap rents.
C) flexible store hours for tenants.
D) freedom to set promotion programs without concern for other tenants in the center.
E) very little congestion.

Question 15

The single factor that distinguishes business districts from shopping centers/malls is that business districts:

A) have a more balanced tenancy.
B) tend to dictate to retailers their operating hours.
C) tend to do more cooperative planning and have more sharing of common costs.
D) are usually unplanned.
E) have a greater diversity of retailers.

Question 16

A central business district offers a retailer all of the following advantages EXCEPT:

A) proximity to commercial activities.
B) easy access to public transportation.
C) exposure to a wide product assortment.
D) variety in services and merchandise for sale.
E) inexpensive parking.

Question 17

A(n)_____ is the total collection of all the pages of information on the retailer's Internet site.

A) web presence
B) virtual store
C) on-line presence
D) virtual reality
E) megastore

Question 18

A power center typically has an anchor ratio of:

A) 30-50%.
B) 40-60%.
C) 50-70%.
D) 75-90%.
E) 90-100%.

Question 19

Ease of access refers to:

A) the consumer's ability to easily and quickly find a retailer's Web site in cyberspace.
B) the ease with which a consumer can return merchandise.
C) the consumer's ability to gain credit.
D) the consumer's ability to obtain parking.
E) the amount of time between when an order is placed and when it is delivered to the customer.

Question 20

A neighborhood shopping center generally has a primary trade area of:

A) 1 mile.
B) 3 miles.
C) 8 miles.
D) 15 miles.
E) 25 miles.

Question 21

The growth patterns of communities include all of the following except:

A) initial explosive growth.
B) rapid growth.
C) continuous growth.
D) relatively stable growth.
E) decline.

Question 22

Geographic information systems are computerized systems that combine _____ geography with _____ geography.

A) meteorological; spatial
B) physical; cultural
C) physical; sociological
D) spatial; economic
E) physical; economic

Question 23

_____ maps enable the retailer to use visual techniques such as colors,shading,and lines to display cultural characteristics of the physical space.

A) Three-dimensional
B) Dymaxion
C) Geographic
D) Thematic
E) Sociographic

Question 24

Kansas City and Des Moines are 200 miles apart.Kansas City has a population of about 450,000,while the population of Des Moines is 200,000.Given Reilly's law,what is a possible breaking point between these two cities?

A) 138 miles from Kansas City
B) 138 miles from Des Moines
C) 120 miles from Kansas City
D) 120 miles from Des Moines
E) 80 miles from Kansas City

Question 25

According to Reilly,the _____ is the breaking point at which customers would be indifferent to shopping at either of two cities.

A) point of inflection
B) point of gravitational pull
C) point of indifference
D) point of equal case
E) point of saturation

Question 26

Reilly's law is based on two assumptions,one of which is:

A) population is a good indicator of the differences in the goods and services available in different cities.
B) retail competitors are of equal size.
C) the two competing cities are unequally accessible from the major road.
D) smaller cities will attract shoppers from larger communities.
E) price fixing occurs between retailers.

Question 27

As a retail executive you are presented with the following index of retail saturation (IRS)numbers.As such,which of the following would be the least attractive index of retail saturation number?

A) 43.17
B) 99.2
C) 71.77
D) 68.41
E) 25.31

Question 28

GIS can be used by the retailer for all of the following EXCEPT:

A) market selection.
B) site analysis.
C) analyzing the sales of competitors.
D) advertising management.
E) evaluation of store managers.

Question 29

The consensus among retail location experts is that the U.S.is currently:

A) understored.
B) in need of more shopping centers.
C) overstored or highly saturated.
D) lacking in retail growth capital.
E) building too few new retail sites.

Question 30

Which of the following is NOT a major market supply factor?

A) Square feet per store
B) Quality of competition
C) Gross margins maintained by existing competition
D) Growth in stores
E) Square feet per employee

Question 31

Identify the first step in the retail location decision.

A) Evaluation of the trading area's demand and supply density.
B) Identification of the most attractive markets in which to operate.
C) Evaluation of capital constraints facing the retailer.
D) Evaluation of the trading area's supply related factors.
E) Identification of the trading areas that should be ignored.

Question 32

Reilly's law of retail gravitation explains how:

A) shopping centers attract business.
B) large urbanized areas attract customers from smaller rural communities.
C) retail stores attract business from mail-order customers.
D) small stores can survive in a highly competitive environments.
E) a retailer can determine when outshopping can be profitable.

Question 33

Which of the following is NOT a major component used by retailers to determine a market's demand potential?

A) Population characteristics
B) Buyer behavior characteristics
C) Household income
D) Population density
E) Level of retail competition

Question 34

A _____ area is the geographic area from which a retailer,group of retailers,or community draws its customers.

A) market
B) trading
C) shopping
D) merchandising
E) customer drawing

Question 35

_____ is the buffer that people have created between themselves and the raw physical environment and includes the characteristics of the population,humanly created objects,and mobile physical structures.

A) Culture
B) Nationalism
C) Spirit
D) Logic
E) Humanity

Question 36

If average store profitability is high in a trading area,then the trading area is most likely to be:

A) understored.
B) declining.
C) overstored.
D) undersaturated.
E) hypercompetitive.

Question 37

Which of the following is NOT an example of a Buyer Behavior Characteristic?

A) Consumer lifestyle.
B) Store loyalty.
C) Geographic conditions.
D) Climatic conditions.
E) Consumer education.

Question 38

_____ occurs when a resident of a community travels to another community to shop.

A) Trade area shopping
B) Transitory shopping
C) Mobility shopping
D) Impulse shopping
E) Outshopping

Question 39

When there are too many stores in a community to yield a fair return on investment,a community is said to be:

A) retail lacking.
B) understored.
C) unsaturated.
D) overstored.
E) oversaturated.

Question 40

The _____ (IRS)is the ratio of demand for a product divided by the available supply.

A) index of retail stores
B) index of retail sales
C) index of responsible selling
D) index of retail space
E) index of retail saturation

Question 41

A(n)_____ is when there is no better use for a site than the retail store that is being planned for that site.

A) terminal retail location
B) 100-percent location
C) idealized retail site location
D) measured response to retail density
E) freestanding location

Question 42

The central business district (CBD)is usually a unplanned shopping area in the center of a large city where all public transportation systems converge and shoppers can visit on their way to/from work.

Question 43

When selecting a retail site,a retailer should NOT consider the site's:

A) traffic flow and accessibility.
B) retail competition.
C) demographics.
D) level of inflation.
E) lease terms.

Question 44

_____ is the extent to which potential demand for the retailer's goods and services is concentrated in certain census tracts,ZIP code areas,or parts of the community.

A) Demand gravity
B) Demand growth
C) Demand concentration
D) Demand density
E) Demand elasticity

Question 45

When a community has a high amount of square feet per employee,it potentially indicates:

A) that a low level of retail technology exists in the community.
B) a low level of self-service retailing.
C) a desire for more service.
D) that a low level of service technology exists in the community.
E) a high level of self-service retailing.

Question 46

A retailer must identify its location before it decides how best to reach its target market.

Question 47

In terms of location,retailers can be classified as store-based and nonstore-based.

Question 48

Which of the following does NOT result in a larger trade area for a retail store?

A) Sale of specialty products
B) Higher consumer mobility
C) Larger store size in terms of square feet of space
D) A larger distance between competing stores
E) Sale of convenience goods

Question 49

A retailer uses a _____ to graphically illustrate the extent to which potential demand for the retailer's goods and services is concentrated in certain census tracts,ZIP codes,or parts of the community.

A) boundary density typography
B) demand density map
C) census tract concentration statistics
D) demand analysis graphing
E) neighborhood size visuals

Question 50

Although traditional stores are constrained by geographic factors,a "virtual store" does not face these geographic constraints.

Question 51

Site analysis begins by evaluating the:

A) traffic flow, land cost per square foot, and type of neighbor within the chosen market.
B) density of demand and supply of various areas within the chosen market.
C) demand density, site availability, and type of neighbors within a trading area.
D) type of neighbor, traffic flow, and demand density within a trading area.
E) demand density, supply density, and average sales per square feet.

Question 52

The extent to which retailers are concentrated in different geographic areas of a community is referred to as:

A) overstorage.
B) store saturation.
C) supply metrics.
D) supply density.
E) supply leverage.

Question 53

Which of the following questions should NOT be used to assess the quality of retail competition in a particular geographic market?

A) What is their market share?
B) How promotion oriented are they?
C) How price oriented are they?
D) How customer oriented are they?
E) How long they have been in business?

Question 54

Which of the following are examples of compatible businesses?

A) A home improvement store and a beauty shop
B) A drugstore and a restaurant
C) A post office and a hair salon
D) A hardware store and a fast-food restaurant
E) A furniture store and a leather store specializing in recliners

Question 55

The final step in site selection is:

A) assessing the neighboring stores.
B) obtaining financing.
C) construction of a pro forma return on asset model for each possible site.
D) conducting an analysis of demand density.
E) conducting an analysis of supply density.

Question 56

A retailer's home page on the Internet is equivalent to a local retailer's storefront.

Question 57

For purposes of evaluating sites,the_____ is not relevant.

A) Expected net profit margin
B) Expected annual sales
C) Expected market share
D) Expected return on assets
E) Expected return on equity

Question 58

Store-based retailers operate from a fixed store location that requires customers to travel to the store to view and select merchandise or services.

Question 59

Many retailers develop checklists for site evaluation.Which general category would NOT be found on such a list?

A) Local demographics
B) Traffic flow and accessibility
C) Retail competition
D) Site characteristics
E) Identification of target markets

Question 60

For a target market to be reached successfully by a retailer,the market should be measurable,accessible,and accessible.

Question 61

A secondary business district (SBD)is a shopping area that evolves to satisfy the convenience-oriented shopping needs of the trading area; such locations usually have a supermarket as their anchor store.

Question 62

The single factor that distinguishes business districts from shopping centers or malls is that business districts are unplanned.

Question 63

Service retailers,such as a plumbers or house painters,may not be concerned about the convenience of their locations.

Question 64

Anchor stores are the stores in a shopping center that are most dominant and are expected to draw customers to the shopping center.

Question 65

A community shopping center will typically offer general merchandise and convenience goods.

Question 66

A neighborhood business district (NBD)generally contains several small stores,with a major retailer being either a supermarket or a variety store.

Question 67

Freestanding retailers generally experience lower rent than those operating in a central business district.

Question 68

A key disadvantage of a small retailer locating in a shopping center is that it may be dominated by the anchor tenant.

Question 69

Thematic maps use visual techniques such as colors,shading,and lines to display cultural characteristics of physical space.

Question 70

A neighborhood shopping center typically has over 500,000 square feet in gross leaseable space.

Question 71

A GIS is a computerized system that combines physical and spatial geography.

Question 72

Shopping centers and malls account for one-half of all retail sales,excluding automotive,in the United States.

Question 73

A GIS can help develop an optimal mix of merchandise,but is not useful in site analysis.

Question 74

A community shopping center generally has a 30-50 percent anchor ratio.

Question 75

Culture is the buffer that humankind has created between itself and the raw physical environment.

Question 76

A retailer's location decision making process begins with an evaluation of supply and demand densities.

Question 77

A major advantage of a freestanding location is that such locations are generally free of any zoning regulations.

Question 78

A freestanding retailer generally locates along major traffic arteries and does not have any adjacent retailers to share traffic.

Question 79

Physical geography is the latitude and longitude of a specific point in physical space and its related physical characteristics.

Question 80

A GIS can help the retailer evaluate how the addition of another store in a trading area could cannibalize sales of its existing store(s).