Deck 5: Retail Market Strategy

Question 1

Fingerhut,a catalog and Internet retailer,sells a variety of merchandise.Their reach is over 500 million homes with a target market of households with annual incomes between $15,000 and $35,000.Fingerhut offers a unique payment plans in order to meet their customers' needs.They also have a sophisticated database management technique which targets marketing activities and minimizes credit risks.This is an example of a:

A)Retail strategy
B)Merchandise assortment pan
C)Mission statement
D)Retail classification
E)Marketing segmentation

Answer 1

A
Explanation: The retail strategy identifies the retail format,the target market,and the basis for the retailer's competitive advantage.

Question 2

The position description is a broad depiction of a retailer's objective and the scope of activities it plans to undertake.

Answer 2

False
Explanation: The mission statement is a broad description of a retailer's objective and the scope of the activities it plans to undertake.

Question 3

A retail market is a group of consumers with similar needs that a group of retailers can service using a similar retail format to satisfy them.

Answer 3

True
Explanation: A retail market is a group of consumers within a market segment and a group of retailers that satisfy those needs using a similar retail format.

Question 4

Positioning is the design and implantation of a retail mix to create an image of the retailer in the customer's mind relative to its competitors.

Question 5

Brain Drain appeals to the over-30 parents who have children under the age of 10,and who have annual incomes of more than $50,000.These parents are the store's ____.

A)marketing mix
B)marketing objective
C)retail format
D)target market
E)retail mix

Question 6

Customer loyalty means that customers are committed to buying merchandise from a retailer.

Question 7

You are about to loan a friend $10,000 to start a candy store in a central business district.Where can you find information about how he plans to build a sustainable advantage?

A)the objective part of the retail plan
B)the organizational chart
C)the organizational mission statement
D)the retail market strategy
E)the situation audit

Question 8

A retail strategy is a statement that includes all the following EXCEPT _____.

A)the target market
B)the format that the retailer plans to use
C)the employee compensation plan
D)the bases upon which the retailer plans to build a sustainable competitive advantage

Question 9

Private label brands are products developed and marketed by a retailer and only available from that retailer.

Question 10

A retailer expanding their hours to open an additional hour each evening is using the market expansion growth strategy.

Question 11

The mixed-market format is the market segment toward which the retailer plans to focus its resources and retail mix.

Question 12

A retailer's format uses the ___________ to satisfy the needs of the target market.

A)buying plan
B)demographic information
C)positioning statement
D)retail mix
E)sustainable competitive advantage

Question 13

The Knotty Question is a tie store chain that may be found in several airport concourses.Its _____ is business travelers who have either forgotten to pack a tie or spilled something on their tie and need a replacement.

A)retail format
B)target market
C)retail mix
D)marketing mix
E)marketing objective

Question 14

The strategic retail planning process is the set of steps a retailer goes through to determine its target market,to locate the appropriate retail format for itself,and to build its sustainable competitive advantage.

Question 15

A retail format is the retailer's mix including merchandise and services,pricing,advertising,store design and location.

Question 16

Hot Topic appeals to tweens and teens through their Gothic frocks,fad movie gear,piercing paraphernalia,and popular t-shirts and posters.All Hot Topic staff wear the merchandise.Also,they are active in helping their young customers choose between the hip merchandise.The teens and tweens can be considered the _____.

A)target market
B)marketing mix
C)marketing objective
D)retail format
E)retail mix

Question 17

Chico's is a national catalog and a specialty store retailer.Its target market is 35-to-55-year-old women.Sixty percent of its customers are college-educated with moderate to high family incomes.Chico's offers private brands,moderate to better-priced women's classic apparel,shoes,and accessories.Its stores are located within village locations,and upscale regional malls.Synergies among the store,catalog,and website operations provide a competitive advantage over other retailers.This is a description of Chico's:

A)Retail strategy
B)Marketing objective
C)Merchandise budget plan
D)Mission statement
E)Organizational structure

Question 18

Which of the following provides the direction that the retailer plans to take in order to deal effectively with environmental factors?

A)Merchandise budget plan
B)Mission statement
C)Marketing objective
D)Organizational structure
E)Retail strategy

Question 19

Starbucks is a national chain of gourmet cafes,which caters to coffee-drinkers.Many of their customers commute from the suburbs,and several of the stores are located in business districts so they may better accommodate the commuters' needs.Starbucks sells their private brand of coffees,and also accompanies them with fresh baked goods.They have a synergy between their stores and their website,both of which help to maintain an advantage over competing local coffee shops.This is a description of Starbuck's:

A)Marketing objective
B)Merchandise budget plan
C)Mission statement
D)Retail strategy
E)Organizational structure

Question 20

All business activities can be used to create a sustainable competitive advantage.

Question 21

Which of the following would NOT be an effective way for a jewelry store to develop a sustainable competitive advantage?

A)Develop an excellent relationship with the jewelry vendor.
B)Customer database to manage their customer service.
C)Sell gold watches at lower prices than anywhere else in town.
D)Secure a good location.
E)Develop a frequent buyer plan.

Question 22

How could a fitness center develop a sustainable competitive advantage over a national chain like Gold's Gym?

A)advertise to health and fitness magazines
B)offer more classes
C)develop relationships with members offering unique work-out programs with assigned instructors recommending specific routines to suit their needs
D)reduce membership fees
E)utilize a computerized database management system to track visitors and out of town guests

Question 23

__________ is the design and implementation of a retail mix in order to create an image of the retailer within the customer's mind relative to its competitors.

A)Retail perception
B)Positioning
C)Imaging
D)Detailing
E)Competitive feedback

Question 24

A department store can foster customer loyalty through:

A)accepting all major credit cards
B)using single sourcing
C)having a sales-oriented mission statement
D)positioning itself as a store that cares more about its customers
E)offering free gift wrap with a $50 purchase

Question 25

A dry cleaner can develop a sustainable competitive advantage by all of these EXCEPT:

A)securing a good location
B)developing a customer database to offer special promotions
C)developing a coupon offering with some of the local department stores
D)develop a patented chemical that removes wine stains without harming the fabric
E)lowering prices

Question 26

Although Rosa considers several retailers when shopping for suits,she always buys suits at Bloomingdales given that their customer service is second to none.Her affinity for Bloomingdales best demonstrates which of the following?

A)Customer loyalty
B)Brand familiarity
C)Brand awareness
D)Unique merchandise assortment
E)Good vendor relations

Question 27

Which of the following is NOT an opportunity for a retailer to develop a sustainable competitive advantage?

A)carry private label brands
B)customer service
C)distribution systems
D)unique merchandise
E)lower prices

Question 28

Customers who shop at Books-A-Million find that it has a large selection of books,in addition to a helpful and friendly staff.Furthermore,they can enjoy a peaceful place to read while sipping a cappuccino at the in-store Joe Muggs Café.This intimate perception of the store indicates its ______________ strategy.

A)perceptual retailing
B)imaging
C)positioning
D)visual merchandising
E)retail feedback

Question 29

Myra wanted to purchase a vase as a wedding gift.Pier 1 Imports offers a better assortment and slightly lower prices,but she immediately went to her local gift shop instead and passed the Pier 1.This example is an example of:

A)A situation audit
B)Strategic controls
C)Direct competition
D)Retail perception
E)Customer loyalty

Question 30

Which of the following is NOT true in describing positioning?

A)A retailer builds customer loyalty by developing a clear,distinctive image of its retail offering.
B)Positioning reinforces the image in the retail manager's mind.
C)A retailer consistently reinforces its image through merchandise and service.
D)Positioning involves the design and implementation of a retail mix to create an image of the retailer in the customer's mind relative to its competitors.

Question 31

Which of the following is an area in which a retailer can develop a long-term competitive advantage?

A)Loss prevention
B)Advertising
C)Vendor relations
D)Carry national brands
E)Visual merchandising

Question 32

How can a small town quilting supply store compete against Walmart,and still thrive?

A)The shop can extend its hours.
B)The store can hire less staff or cut hours.
C)The store can lower prices.
D)The shop can offer classes on quilting.
E)The shop can invest in a new inventory control system.

Question 33

Which of the following is a group of consumers with similar needs,as well as a group of retailers using a similar format to satisfy those consumers' needs?

A)Retail market
B)Marketing format
C)Retail mix
D)Target market
E)Target audience

Question 34

Retailers can foster customer loyalty by:

A)having a generalized organizational mission statement
B)providing good customer service
C)having no one distinct image
D)trying to attain qualitative objectives rather than quantitative ones
E)using a mass advertising strategy

Question 35

Which of the following is an opportunity for retailers to develop a sustainable competitive advantage?

A)Reduced prices
B)Deeper assortment
C)Longer hours of operation
D)Good customer service
E)Coupons

Question 36

Positioning is the process of:

A)acquiring a lease for a retail store in a region.
B)creating and supporting a clear and distinct image.
C)finding a retail location site.
D)mall negotiating the percentage-of-sales payment to the mall owners.
E)performing a situation audit.

Question 37

Why should a retailer be concerned with building a sustainable competitive advantage?

A)It could affect merchandise planning.
B)They should not as other retailers would just duplicate the efforts.
C)The competition's advantage will stimulate the retailer's market.
D)It is the final step in developing the retail strategy.
E)It could result in long-term profitability.

Question 38

A management orientation that focuses a retailer on determining its target market's needs and satisfying those needs more effectively than its competitors is called:

A)the retail mix
B)the retailing concept
C)a merchandise assortment plan
D)a management style
E)communication management

Question 39

My Favorite Quilt Shop offers members of their Fabric Lovers Club $20 in merchandise for every $200 they purchase plus additional discounts on classes and new fabric lines.The Fabric Lovers Club is a good way to develop:

A)a following.
B)store awareness.
C)good customer service.
D)customer loyalty.
E)brand acceptance.

Question 40

Even though there are several garages in town,Tara gets her oil changed only at Tires Plus.This commitment to Tires Plus illustrates:

A)brand acceptance.
B)store awareness.
C)good customer service.
D)customer loyalty.
E)price competitiveness.

Question 41

After Sassie spent $500 at Chico's,she became an instant member of the Chico's Passport Club.Passport members receive an additional 5% off on any future purchases.Chico's keeps Sassie updated by providing information about sales and store events to entice her future visits.The Passport club is an example of a:

A)Marketing tool
B)Customer service strategy
C)Warehouse club
D)Clothing club
E)Loyalty program

Question 42

Lila loves to stop into Filene's Basement once a week.Filene's purchases overruns,or out-of-season merchandise,from vendors and retailers.Then she sells them in their stores for less.With each visit,she never knows what she will find,but she feels assured it will be a bargain.Filene's is ____________ in Lila's mind as a retailer with varied assortments with reasonable prices.

A)positioned
B)perceived
C)solidified
D)sustained
E)visualized

Question 43

By using the information provided from the data warehouse,a retailer can:

A)advertise to a more marketable demographic
B)determine whether moving to a new location would attract more business
C)easily gauge price points to meet the competitor's prices
D)offer more services like gift wrap,lower interest rate credit and same-day delivery
E)tailor offerings to better meet the needs of their customers

Question 44

It is difficult for retailers to develop a sustainable competitive advantage only through merchandise because:

A)distribution centers are unreliable on shipping dates.
B)designers specify which retailers can sell their brands.
C)different regions of the country carry different merchandise.
D)competitors can purchase and sell the same national brands.
E)vendors favor the larger retailers since they buy more volume.

Question 45

Select the growth strategy that best supports this description: Russell Athletic harvesting their own cotton and manufacturing their own fabric for producing their apparel goods.

A)Market Penetration
B)Related Diversification
C)Market Expansion
D)Vertical Integration
E)Retail Format Development

Question 46

The Atlantic Inn is located on Block Island,Rhode Island.It has a 100-year history of visitors and vacationers from all over the world.The Inn exudes luxury from the moment you walk in until the moment you savor the fine cuisine in its restaurant.The rooms are decorated with furniture from the early 20^th century.Visitors at the Atlantic Inn are served beverages on the porch as they rock in chairs,and watch the port.This model of luxury is part of The Atlantic Inn's ___________.

A)culture
B)marketing program
C)perception
D)positioning
E)strategy

Question 47

Since competitive retailers can sell the same popular national brands,retailers should do which of the following to secure a competitive advantage?

A)prevent its customers from comparison shopping
B)limit its store traffic to qualified buyers
C)increase its sales expenses
D)increase its merchandising flexibility
E)develop private label brands

Question 48

Select the growth strategy that best supports this description: Target stores having over 20 locations in the Minneapolis and St.Paul Minnesota,"Twin Cities" area.

A)Market Penetration
B)Related Diversification
C)Market Expansion
D)Vertical Integration
E)Retail Format Development

Question 49

When Starbucks opened in Seattle,it permitted store density to promote the business.Sometimes,the storefronts occupied two corners of an intersection.Only when the Seattle market was saturated did Starbucks move into other markets.Starbucks understands the value of building a competitive advantage through securing ____.

A)customer loyalty
B)database warehouses
C)trained baristas
D)positioning
E)good locations

Question 50

Developing programs to motivate and coordinate,providing incentives,fostering an organizational culture and managing diversity are functions of the ________.

A)human resource management
B)district management
C)general store manager
D)chief executive officer
E)marketing manager

Question 51

Satchel's is a pizza parlor located in a run-down industrial side of town.Its brightly colored decor,coupled with local art,wind chimes,and hanging mobiles compliment the mismatched dishes,wobbly chairs,and alternative music.The staff is relaxed,warm,and tattooed.The pizza is delicious,while the menu provides interest by including stories and comedic commentary.However,Satchel's is a drive for the average resident.Why is there a two-hour wait on Saturday nights?

A)Satchels' filled a void in a normally dead part of the city.
B)Satchel's chose a rare cuisine.
C)Satchel's competitive advantage is the location.
D)Satchel's focused on a high end bracket to travel across town.
E)Satchel's offers alternative décor and comfort food in a unique environment.

Question 52

Which of the following is NOT true in describing loyalty programs?

A)Using information collected through loyalty programs,retailers try to tailor their offerings to better meet the needs of their loyal customers
B)Customer loyalty programs work with Customer Relationship Management (CRM)
C)Members of loyalty programs are identified when they buy because they use some type of loyalty card
D)Purchase information of members of loyalty programs is stored in a data warehouse and analyzed to determine what types of merchandise and services certain groups of customers buying
E)Information of customers obtained from loyalty programs is mainly used in order to identify deal-sensitive groups and plan promotions for them

Question 53

Select the growth strategy that best supports this description: A retailer using "cross-selling" or "add-on" sales strategy to increase their average sales per customer.

A)Market Penetration
B)Related Diversification
C)Market Expansion
D)Vertical Integration
E)Retail Format Development

Question 54

Which of the following is an example of a private label brand?

A)Kenmore dishwashers
B)Kellogg's cornflakes
C)Kodak film
D)Levi's jeans
E)Sony DVD player

Question 55

Since Walmart has efficient distribution and information systems,it is better able to offer its customers ___________.

A)lower prices
B)better customer service
C)better locations
D)complementary services and merchandise
E)a greater depth of merchandise

Question 56

Building store loyalty by targeting customers,and better meeting their needs can:

A)annoy occasional shoppers
B)improve customer satisfaction
C)attract new shoppers
D)inhibit customer growth
E)prohibit the variety of assortments in a category

Question 57

Another name for store brands is _________ brands.

A)national
B)generic
C)inclusive
D)private-label
E)unique

Question 58

Catarina shops at the Publix nearest to her home because it's easy to shop there along the way home.Publix's competitive advantage is based on _______.

A)price
B)location
C)database warehouse results
D)hours of operation
E)assortment

Question 59

Good human resource management is important to retailers because:

A)employees manipulate the system when there is no training
B)employees who are motivated and feel a part of a culture are more likely to build customer loyalty
C)management is not trained in labor laws
D)management does not have the time to develop training programs because of their other responsibilities
E)the goal is to develop long-term relationships with employees

Question 60

When given a choice between selling a national brand of makeup and a private-label brand,a mall-based specialty store retailer may choose to develop a private-label brand:

A)to prevent its customers from comparison shopping.
B)to limit its store traffic to qualified buyers.
C)to increase its sales expenses.
D)to increase its merchandising flexibility.

Question 61

After Ted and Alice purchased a leather couch from Rhode's Furniture,the sales associate took them to see end tables,coffee tables,and lounge chairs which could compliment their new couch.The sales associate engaged in:

A)Intradepartmental selling
B)Bait and switch
C)Customer crossover
D)Transfer purchasing
E)Cross-selling

Question 62

Which of the following is NOT true in describing market penetration growth strategy?

A)It involves realizing growth by directing efforts toward existing customers using the retailer's present retailing format.
B)It includes opening more stores in the target market.
C)It includes keeping existing stores open for longer hours.
D)It involves displaying merchandise to increase impulse purchases and training salespeople to cross-sell.
E)It involves using the existing retail format in new market segments.

Question 63

A ________ opportunity involves directing efforts towards existing customers by using its present retailing format.

A)retail format development
B)diversification
C)market penetration
D)market expansion
E)market divestment

Question 64

Which of the following describes the market expansion growth strategy?

A)Realizing growth by directing efforts toward existing customers using the retailer's present retailing format.
B)Cross-selling.
C)Keeping existing stores open for longer hours.
D)Displaying merchandise to increase impulse purchases and training salespeople to cross-sell.
E)Opening stores of the same retail format in new market segments.

Question 65

A _________ opportunity involves offering a new retail format to present customers.

A)diversification
B)retail format development
C)market expansion
D)market penetration
E)market divestment

Question 66

Which of the following describes the competitive advantage of McDonald's?

A)providing customers with a good value that meets their expectations
B)having a strong brand name with very high levels of awareness and favorable brand associations
C)having a large number of great locations
D)reducing customers' waiting time by developing a system for producing its food and using extensive training for its employees
E)All of the above.

Question 67

Walgreens' rapid growth has resulted in a store opening every 17 hours.Many times,they are within a few blocks of each other.Walgreens is said to have:

A)retail format development
B)diversification
C)market penetration
D)market expansion
E)market divestment

Question 68

Why would a retail chain like Victoria's Secret want to develop private brand labels to be sold exclusively at its stores?

A)to foster customer loyalty.
B)to gain publicity for the chain.
C)to upgrade its reputation as a lingerie boutique.
D)to develop effective distribution strategies.
E)to take advantage of its mall locations.

Question 69

The best way for a retailer to develop a sustainable competitive advantage is to:

A)concentrate on finding the best location
B)concentrate on having the lowest prices in town
C)develop a good distribution system
D)rely on multiple approaches to build as high a wall around its position as possible
E)maintain good vendor relations

Question 70

In order to offer consistent customer service,retailers must:

A)instill its importance to their employees.
B)demand it from their employees.
C)invest more in information systems.
D)offer incentives for employees who offer consistent services.
E)offer lower prices than their competitors.

Question 71

___________ means that sales associates in one department attempt to sell complementary merchandise from other departments to their customers.

A)Bait and switch
B)Cross-selling
C)Customer crossover
D)Intradepartmental selling
E)Transfer purchasing

Question 72

Gleason's Sporting Goods is a single sporting goods store thriving in the shadows of the town's Walmart.Gleason's staff is attentive -- offering advice on merchandise,local team discounts,as well as follow-up support calls from sales associates.Gleason's can be said to offer:

A)excellent customer service.
B)a consistent retail approval rating.
C)good value.
D)strong assortments.
E)desirable sporting goods to offer the community.

Question 73

Market expansion opportunities help retailers grow by using:

A)existing retail formats in new market segments.
B)existing retail formats in existing market segments.
C)new formats in new market segments.
D)new retail formats in existing market segments.
E)proven formats in experimental markets.

Question 74

During football season at the University of Florida,the university bookstore rents a canopy and sets it up outside the stadium in order to sell Gator merchandise to fans.This strategy is an example of _________ opportunity.

A)market penetration
B)market divestment
C)retail format development
D)market depletion
E)diversification

Question 75

After Jennifer purchased a swimsuit for her cruise,the sales associate took her to the cosmetics department to sell her a water-resistant sunscreen that would allow her to have fun showing wearing her suit without having to worry about a sunburn.This is an example of:

A)Customer crossover
B)Bait and switch
C)Intradepartmental selling
D)Cross-selling
E)Transfer purchasing

Question 76

A bagel shop which decides to open up an hour earlier every morning is taking advantage of a ______ opportunity.

A)market penetration
B)diversification
C)retail format development
D)market depletion
E)market divestment

Question 77

When Blockbuster moved its stores into other countries,it increased the company's international market share.Blockbuster took advantage of a ______ opportunity.

A)diversification
B)market expansion
C)market divestment
D)retail format development
E)market penetration

Question 78

Which type of retail growth strategy is most closely associated to cross-selling?

A)market penetration
B)market divestment
C)market depletion
D)retail format development
E)diversification

Question 79

When Disney opened mall-based specialty stores to sell the theme park merchandise,it was exercising __________________ as its growth strategy.

A)diversification
B)market divestment
C)market penetration
D)market expansion
E)retail format development

Question 80

What is a benefit of building long-term,beneficial relations with a vendor?

A)Strong relations mean better profits for shareholders.
B)It is easier to return to a solid relationship with a vendor when private labels fail.
C)A retailer could receive popular merchandise in short supply.
D)Vendors supply complementary merchandise to their most profitable supporters.
E)Vendors determine which retailers will receive the better prices.