Deck 12: Retailers, Wholesalers, and Their Strategy Planning

Question 1

Retailing includes all of the activities involved in reselling goods to final consumers, but it does not include the sale of services to final consumers since services must be produced in the presence of the consumer.

Answer 1

False
Explanation: Retailing covers all of the activities involved in the sale of products to final consumers, whether the product is a physical good, a service, or a blend of both.

Question 2

Internet retailers don't need to develop whole marketing strategies due to their self-service nature.

Answer 2

False
Explanation: Many Internet retailing pioneers have failed because they didn't develop whole marketing strategies.

Question 3

Single-line stores that used to carry anything they could sell in reasonable volume were the main retailers in the United States.

Answer 3

False
Explanation: About 150 years ago, general stores, which carried anything they could sell in reasonable volume, were the main retailers in the United States.

Question 4

Specialty shops are limited-line stores; they aim at a carefully defined target market with a unique product assortment, good service, and knowledgeable salespeople.

Question 5

A consumer's choice of a retail store appears to be based almost entirely on economic needs.

Question 6

Department stores keep growing in numbers, sales, and market share.

Question 7

Department stores are larger stores that are organized into many separate departments and offer many product lines.

Question 8

The marketing strategies for the two shoe retailers Payless and Zappos are very different but both are successful.

Question 9

Mass-merchandisers have proved to be effective competitors in taking away department store customers.

Question 10

The mass-merchandising concept means that retailers can succeed by selling a large volume of merchandise to a target market at low prices.

Question 11

Retailers and their strategies can easily be classified based on the type of merchandise they sell.

Question 12

A consumer's choice of a retail store appears to be based almost entirely on emotional needs-economic needs have almost no influence.

Question 13

In most countries, small limited-line retailers still account for the majority of all retailers.

Question 14

Specialty shops will continue to be a part of the retailing scene as long as customers have varied tastes and the money to satisfy them.

Question 15

Most single-line and limited-line stores apply the retailing philosophy of buying low and selling high.

Question 16

Department stores are stores that usually try to serve customers seeking a variety of convenience products.

Question 17

The marketing strategies for the two shoe retailers Payless and Zappos are very different, and Zappos' strategy is successful while Payless' strategy is not.

Question 18

Most "conventional" retailers are single-line or limited-line stores that have very low expenses relative to sales.

Question 19

In the U.S., about three-fourths of new retailing ventures fail during the first year.

Question 20

It's oversimplified to classify retailers and their strategies on the basis of a single characteristic-such as sales volume, services, product assortment, etc.

Question 21

In addition to food, warehouse clubs emphasize heterogeneous shopping goods.

Question 22

Because of their higher margins, faster turnover, and narrower assortments, convenience food stores have the potential to be more profitable than supermarkets.

Question 23

Warehouse clubs started the move to mass-merchandising.

Question 24

Discount stores offer "soft goods" at substantial price cuts to customers.

Question 25

Today, discount houses are found in low-rent facilities, have poor images with customers, and offer few services and no guarantees.

Question 26

Mass-merchandisers have become the primary place to shop for many frequently purchased consumer products.

Question 27

Retailers who follow a policy of "buy low and sell high" are practicing the "mass-merchandising concept."

Question 28

Large sales volume and efficient operation are usually very important for supermarkets, since net profits usually run 1-2 percent of sales or less.

Question 29

Convenience food stores now compete with supermarkets, gas stations, and fast-food outlets.

Question 30

In addition to food, warehouse clubs carry homogeneous shopping goods.

Question 31

The basic idea for supermarkets developed in the U.S. in the 1960s, when consumers started to move from the cities to the suburbs.

Question 32

Walmart, one of the largest mass-merchandisers in the U.S., handles 30 percent or more of the total national sales for whole categories of products.

Question 33

Mass-merchandisers emphasize "hard goods" while discount houses emphasize "soft goods."

Question 34

Category killers is another name for single-line mass-merchandisers.

Question 35

A discount house is trying to meet all the customer's routine needs at a low price.

Question 36

"Supercenters" are very large stores that specialize in selling a big variety of infrequently purchased products that would otherwise be hard for consumers to find.

Question 37

A consumer who went to shop at a "supercenter" would probably expect not only to be able to buy food and health care products, but also to leave dry-cleaning or have shoes repaired.

Question 38

A "supercenter" carries all the goods and services that a consumer might routinely purchase.

Question 39

The major advantage of vending machine retailing is that the costs are low relative to the volume they sell.

Question 40

The sale of candy from a vending machine at a bus station is not considered retailing since no store is involved.

Question 41

The "wheel of retailing" theory fails to explain some major retailing developments, such as vending machines and convenience food stores, which did not enter the market with a low-price emphasis.

Question 42

The Internet makes it easy to do comparison shopping of products and prices.

Question 43

Electronic shopping, which puts catalogs on cable TV or Internet websites, has not yet succeeded.

Question 44

It's usually possible for a consumer to get much more information about a product in a retail store than on the Web.

Question 45

The "wheel of retailing" theory says that new retailers enter the market as high-status, high-margin, high-price operators and then evolve into discount stores as competition becomes more intense.

Question 46

A consumer's total cost of shopping on the Internet includes delivery costs in addition to purchase price.

Question 47

It's best to think of retailing on the Internet as just another example of how low-margin mass-merchandisers appeal to large target markets with discount prices.

Question 48

To overcome the limitation of not being able to physically inspect a product before purchasing online, many online retailers now provide photos and videos that demonstrate the product.

Question 49

Internationally, door-to-door selling is growing in popularity and, in the U.S., it accounts for more than 15 percent of all retail sales.

Question 50

The development of department stores and supermarkets is explained by the "wheel of retailing" theory.

Question 51

Retailing on the Internet already accounts for about 25 percent of all retail sales.

Question 52

Door-to-door selling now accounts for less than 1 percent of retail sales in the United States.

Question 53

Automatic vending accounts for 15 percent of total U.S. retail sales.

Question 54

Home shopping methods-like cable TV shopping channels and catalogs-now use a multichannel approach by adding a website.

Question 55

Retail sales on the Internet grew very rapidly at first, but now are expected to grow slowly.

Question 56

Many types of retailers are now establishing a presence on the Internet.

Question 57

Today, about half of all computer hardware and software and a quarter of all books are sold online.

Question 58

When RedBox rents DVD movies from vending machines at McDonald's, it is acting as a channel captain, not a retailer.

Question 59

Ace Hardware is a multichannel retailer that integrates online and brick-and-mortar stores (because its customers gather information online and then buy in a store or vice versa).

Question 60

A large chain like Kohl's uses its website to supplement the product assortment in its brick-and-mortar stores.

Question 61

"Voluntary chains" are retailer-sponsored groups-and "cooperative chains" are wholesaler-sponsored groups.

Question 62

Less than 6 percent of all retail sales are made by smaller stores-those with sales of less than $1 million a year.

Question 63

"Scrambled merchandising" refers to the practice of conventional retailers handling many products within a limited-line, even though many of these products have to be sold at a low profit.

Question 64

The majority of all retailers in the U.S. have annual average sales of less than $1 million.

Question 65

Almost 75 percent of all retail sales are made by the largest stores-those with sales of over $5 million a year.

Question 66

In a franchise operation, the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units.

Question 67

Franchise operations, such as Subway, Quiznos, Curves, The UPS Store, Jackson Hewitt Tax Service, Dunkin' Donuts, Jani-King, RE/MAX Int'l, 7-Eleven, and Liberty Tax Service account for about a third of all retail sales.

Question 68

The growth of cooperative chains of retail stores is due to the desire of small retailers to achieve some of the benefits of large-scale corporate chains.

Question 69

The development of vending machines and convenience food stores is not explained by the "wheel of retailing" theory.

Question 70

Retailers who carry any product line that will sell profitably are practicing "scrambled merchandising."

Question 71

"Cooperative chains" like True Value Hardware are retailer-sponsored groups formed by independent retailers to run their own buying organizations.

Question 72

The average retail store is too small to gain economies of scale.

Question 73

Cooperative chains tend to work with independent retailers, not corporate chain retailers.

Question 74

Scrambled merchandising means mixing product lines for higher profits.

Question 75

Voluntary chains like SuperValu in groceries are wholesaler-sponsored groups that work with "independent" retailers.

Question 76

Less than 15 percent of retail stores in the U.S. have annual average sales of $5 million or more.

Question 77

Scrambled merchandising is carrying any product lines a store thinks it can sell profitably.

Question 78

Corporate chains are taking a smaller percentage of retail sales now that consumers are demanding lower prices.

Question 79

Application of the product life cycle concept to retailing suggests that all types of retailers are in early market growth due to continually increasing family income.

Question 80

The product life cycle concept applies to retailers as well as products.