Deck 13: Retailers, Wholesalers, and Direct Marketers

Question 1

What does the wheel of retailing attempt to explain?

A) the process by which retailers decide the amount and types of products to be sold in the retail stores
B) the chain of distribution that is followed by a product before it reaches a retail store
C) the process by which prices are set in retailing
D) the patterns of change in retailing

Answer 1

D

Question 2

Which marketing channel member directly determines the prices consumers pay?

A) wholesaler
B) producer or supplier
C) shopping centre
D) retailer

Answer 2

D

Question 3

What are retailers developing when they consider factors such as general product categories, specific product lines, specific products within lines, and the depth and width of its assortments?

A) "geographic fit"
B) target market
C) pricing strategy
D) merchandising strategy

Answer 3

D

Question 4

How has retail activity shifted over the past several decades?

A) away from suburban shopping centres and toward downtown retail districts
B) away from residential neighbourhoods and toward industrial areas
C) away from downtown retail districts and toward suburban shopping centres
D) away from large cities and toward smaller towns

Question 5

What type of shopping centre serves 20,000 to 100,000 people in a trade area extending a few kilometres from its location and contains anywhere from 10 to 30 retail stores, often with a department store serving as the primary tenant?

A) neighbourhood shopping centre
B) regional shopping centre
C) power centre
D) community shopping centre

Question 6

What do the prices charged by a retailer reflect?

A) marketing objectives and policies
B) desire to serve the public
C) approach to mass media
D) location strategy

Question 7

Which term refers to the activities involved in selling merchandise to ultimate consumers?

A) consumer selling
B) B2G marketing
C) retailing
D) wholesaling

Question 8

What does the basic objective of all customer services focus on?

A) reducing operational expenses
B) surpassing competitors' service offerings
C) ensuring employees are happy and motivated
D) attracting and retaining target customers

Question 9

According to the wheel of retailing, how does a new type of retailer gain a competitive foothold?

A) by charging lower prices and offering better service
B) by charging higher prices and offering better service
C) by charging lower prices and offering reduced services
D) by charging higher prices and offering reduced services

Question 10

What results from the combination of all retailing mix components?

A) a store's retail economy
B) a store's projections of sales
C) a store's retail prestige
D) a store's retail image

Question 11

Who are increasingly taking on the role of channel captain within many distribution networks?

A) manufacturers, such as Procter & Gamble
B) large retailers such as Shoppers Drug Mart
C) consumers, who are increasingly Internet savvy
D) suppliers who provide raw materials to large manufacturers

Question 12

Aside from a nonrefundable fee, what do some grocery retailers demand from manufacturers in order to secure shelf space for new products?

A) stockkeeping unit (SKU)
B) merchandise credit
C) slotting allowance
D) promotional allowance

Question 13

What are retailers attempting to do when they practise category management as a merchandising strategy?

A) seek pricing and promotional concessions from manufacturers as conditions for selling their products
B) improve their product group performance through coordinated buying, merchandising, and pricing
C) attract consumers by making shopping easier, faster, and enjoyable
D) decrease its rate of inventory turnover

Question 14

Which of the following will a retailer's customer-service strategy NOT depend on?

A) store size
B) inventory sources
C) customer expectations
D) services offered by competitors

Question 15

When developing a retail strategy, what task should be completed first?

A) determining a merchandising strategy
B) selecting a target market
C) establishing customer-service standards
D) outlining a promotional strategy

Question 16

Aside from the services performed by the retailer, what determines the amount of markup a retailer adds to the product's cost?

A) overhead expenses
B) inventory turnover rate
C) advertising costs
D) return on investment objective

Question 17

What is the amount called that a retailer adds to the product's cost to determine the selling price?

A) overhead expenses
B) markup
C) markdown
D) return on investment objective

Question 18

Which retailer is an exception to the wheel of retailing?

A) discount stores
B) grocery stores
C) online retailers
D) convenience food stores

Question 19

What kind of product lines do department stores favour that has led them to eliminate product categories such as toys, appliances, and furniture from their merchandise assortment?

A) product lines that create a more prestigious image
B) product lines that have greater profitability
C) product lines that directly compete with the competition
D) product lines that cannot be purchased online

Question 20

What must a retailer do after identifying a target market?

A) develop marketing strategies to attract chosen customers to its stores
B) get sufficient funding to change all displays and store décor
C) contact new suppliers to purchase products that fit their target
D) develop new pricing strategies to increase their prestigious image and value

Question 21

Which of the following could retailers NOT be classified by?

A) form of ownership
B) shopping effort expended by customers
C) services provided to customers
D) geographic location

Question 22

What is a department store?

A) a series of limited-line retail stores that benefit from close proximity to one another
B) a supermarket of product lines offering the lowest price possible
C) a large display of rooms that contain samples of products stored in a warehouse
D) a series of limited-line or specialty stores gathered under one roof

Question 23

From the retailer point of view, which statement best describes a store's exterior appearance, including architectural design, window displays, signs, and entryways?

A) It is a major cost factor in the pricing of the goods sold by a store.
B) It helps to identify the retailer and attract its target market.
C) It generally has little effect on the retailer's image.
D) It should be different from one store of the same chain to another to provide variety.

Question 24

How are independent retailers able to compete with other types of retailers?

A) through individual and specialized buying power
B) through retail cooperatives
C) through limited numbers
D) through inflexible operating hours

Question 25

Where do consumers usually compare prices, assortments, and quality levels of competing outlets before making purchase decisions?

A) department stores
B) mass merchandisers
C) specialty stores
D) shopping stores

Question 26

What type of shopping centre serves at least 250,000 people within a 30-minute driving-time radius and usually houses several major department stores in addition to as many as 200 smaller stores?

A) neighbourhood shopping centre
B) regional shopping centre
C) power centre
D) community shopping centre

Question 27

What are the physical characteristics and amenities of a retail store called that attract customers and satisfy their shopping needs?

A) atmospherics
B) point-of-sale closure
C) environmental psychographics
D) elements of place satisfaction

Question 28

What do chain stores often benefit from?

A) economies of scale
B) decentralized ownership
C) highly variable product lines
D) limited media selection

Question 29

A retailer informs a customer that the flashlight he just purchased requires batteries, which the store has available for sale. What is this an example of?

A) cross-selling
B) reminding
C) customer service
D) suggestion selling

Question 30

What is the easiest method for classifying retailers?

A) form of ownership
B) shopping effort expended by customers
C) services provided to customers
D) geographic location

Question 31

What is IKEA (home furnishings and housewares) an example of?

A) superstore
B) limited-line store
C) regional shopping store
D) anchor store

Question 32

What is the unique type of limited-line retailer that offers wide selection and low prices in a single product line?

A) value store
B) price killer
C) category killer
D) scrambled retailer

Question 33

What term refers to a retail establishment that carries a wide variety of product lines, all stocked in some depth?

A) general-merchandise retailer
B) mass merchandiser
C) specialty store
D) shopping store

Question 34

What is it called when a retailer tries to convince a customer to buy a higher-priced item than he or she had originally intended?

A) personal promotion
B) one-on-one persuasion
C) selling up
D) value-added selling

Question 35

Which of the following is NOT considered to be a category killer?

A) Best Buy electronics stores
B) Walmart department stores
C) Chapters bookstores
D) Home Depot home improvement stores

Question 36

The Running Room carries footwear and athletic gear aimed at the runner or outdoor enthusiast. What is this retail store classified as?

A) shopping store
B) specialty store
C) lifestyle store
D) image store

Question 37

Which of the following provides a combination of product lines, services, and reputation that result in consumers' willingness to expend considerable effort to shop there?

A) specialty retailers
B) shopping stores
C) superstores
D) discount stores

Question 38

Which statement best describes a convenience retailer?

A) It offers huge selections and low prices in single product lines.
B) It appeals to customers by having an accessible location, rapid checkout, extended store hours, and adequate parking.
C) It combines carefully defined product lines, services, and reputations in attempts to persuade consumers to expend considerable effort to shop at their stores.
D) It offers a complete array of services to its customers.

Question 39

What type of store is identified by having a wide variety of services, such as charge accounts, delivery, gift wrapping, and generous return policies?

A) department
B) variety
C) service
D) convenience

Question 40

What type of shopping centre averages 300,000 square feet and seeks to offer a combination of shopping, entertainment, and restaurants in an attractive environment preserving the intimacy of neighbourhood retailing?

A) power centre
B) lifestyle centre
C) local mall
D) downtown boutique

Question 41

Which of the following types of utility do wholesalers NOT create?

A) form
B) ownership
C) place
D) time

Question 42

What type of retailer requires you to become a member?

A) warehouse club
B) scrambled merchandiser
C) catalogue retailer
D) hypermarket

Question 43

Which of the following stocks only designer labels or well-known, brand-name clothing at prices equal to or below regular wholesale?

A) supercentre
B) off-price retailer
C) department store
D) variety store

Question 44

What is scrambled merchandising?

A) increasing the number of dissimilar product lines
B) offering a mixed set of retail price levels
C) offering a variety of alternative methods of payment
D) providing mixed hours of operation at different outlets

Question 45

Which of the following is an example of scrambled merchandising?

A) a grocery store carrying canned goods, fresh fish, tropical fruits, and bulk grains
B) a jewellery store carrying rings, watches, TVs, electronic games, and DVDs
C) a drug store carrying prescription drugs, over-the-counter medications, and health care items
D) a shoe store carrying shoes, shoe polish, socks, and leather bags

Question 46

Which of the following retailers follows scrambled merchandising to the greatest degree?

A) Home Depot
B) Best Buy
C) Shoppers Drug Mart
D) The Brick

Question 47

What type of retailer experiences relatively high operating costs, averaging in the range of 45 to 60 percent of sales?

A) department stores
B) hypermarkets
C) customized specialty shops
D) convenience stores

Question 48

How do wholesalers create place utility?

A) by providing prompt delivery
B) by extending credit to product manufacturers
C) by providing a sales force to call upon potential suppliers
D) by undertaking free product design and customization

Question 49

What purpose does the sales branch of a manufacturer-owned facility have?

A) It provides space for permanent showrooms and exhibits, which manufactures rent to market their goods.
B) It does not carry inventory, but serves as a regional office for a manufacturer's sales personnel.
C) It manufactures and packages goods to the order of its customers.
D) It carries inventory and processes orders from customers from available stock.

Question 50

What term refers to the innovative retailer that offers its customer the greatest selection of grocery and general merchandise products at discount prices?

A) hypermarket
B) supermarket
C) warehouse club
D) specialty store

Question 51

What has made classifying retailers increasingly difficult?

A) direct selling
B) mass merchandising
C) retail convergence
D) TV home selling

Question 52

Where are a growing number of off-price retailers concentrating in?

A) outlet malls
B) stand-alone superstores
C) suburban malls
D) small specialty shops

Question 53

What is the phenomenon in retailing in which similar merchandise is available from multiple retail outlets, distinguished by price more than any other factor, known as?

A) scrambled merchandising
B) wholesale concentration
C) mail-order proliferation
D) retail convergence

Question 54

Which of the following is an example of possession utility?

A) vending machine transaction
B) beauty salon service
C) auto rental
D) college education

Question 55

What type of store, facing high operating costs, has fought back against increasing competition by closing certain departments and becoming more decentralized?

A) extended supermarkets
B) catalogue retailers
C) hypermarkets
D) department stores

Question 56

What is the basic distinction between a company's sales branches and its sales offices?

A) Sales branches carry inventory and process orders to customers from available stock.
B) Sales branches are manufacturer-owned, whereas sales offices are not.
C) Sales branches are always national, whereas sales offices are always local.
D) Sales branches are used only for services, whereas sales offices are used only for physical goods.

Question 57

Which of the following is NOT a characteristic of discount houses?

A) less customer service
B) lower prices
C) deeper product lines
D) less atmospherics

Question 58

Customers that cannot afford to pay cash for purchases made directly from the manufacturer are granted credit from a wholesale intermediary to purchase those same products from its warehouse. What marketing function is the wholesaler performing?

A) production
B) selling
C) risk taking
D) financing

Question 59

What types of utility are wholesaling intermediaries creating when they make a product available at a convenient location at the moment it is needed?

A) possession and location
B) ownership and form
C) place and time
D) time and possession

Question 60

What are hypermarkets?

A) smaller versions of supercentres-they average 180,000 square feet to the supercentres' 245,000 square feet
B) stores that began their history selling mostly appliances but now sell soft goods, foods, and furniture
C) giant, one-stop shopping facilities that offer wide selections of grocery and general merchandise at discount prices
D) stores that promote to their customers using direct mail and sell from showrooms that display samples

Question 61

What are the wholesale intermediaries that deliver Frito-Lay snack products to stores called?

A) retail specialists
B) rack jobbers
C) truck wholesalers
D) cash-and-carry wholesalers

Question 62

Why might retailer-owned buying groups perform wholesale functions?

A) to disband cooperative chains
B) in order to develop a shortage of wholesalers of all types
C) to boost lack of support received by merchant wholesalers
D) to reduce their costs

Question 63

Who is the wholesaling intermediary that operates on a one-time basis for either sellers or buyers of such products as real estate, frozen foods, and used machinery?

A) selling agent
B) broker
C) auction house
D) drop shipper

Question 64

What are independent wholesaling intermediaries called that take title to the goods they sell?

A) buying offices
B) merchant wholesalers
C) manufacturer-owned sales offices
D) retailer-owned cooperatives

Question 65

Why do selling agents act as independent marketing departments?

A) because they can assume responsibility for pricing, promotional outlays, and financing
B) because they typically operate in industries such as real estate, frozen foods, and used machinery
C) because they are common on the Internet
D) because they typically function as departments within regular full-service wholesalers

Question 66

What are the two broad categories of independent wholesaling intermediaries?

A) contract agents and wholesalers
B) full-function intermediaries and exclusive-function intermediaries
C) brokers and agents
D) merchant wholesalers, and agents and brokers

Question 67

Who is the agent that predominates in agricultural marketing?

A) truck wholesaler
B) broker
C) selling agent
D) commission merchant

Question 68

Which of the following is an example of an agent or broker?

A) an intermediary that creates a centralized location where manufacturers can exhibit their products full-time
B) an intermediary that provides small quantities of products in a self-service manner
C) an intermediary that takes freight cars of soy beans to a central market to negotiate sales
D) an intermediary that delivers snack products to grocery and convenience stores, restaurants, hotel chains, and warehouse clubs

Question 69

Which of the following are NOT ways that wholesaling intermediaries can impact the marketing of products?

A) buying, creating utility, and lowering marketing costs for producers
B) production, quality assurance, and legal liability
C) storing, transporting, selling, and title transfer
D) market information, financing, and risk taking

Question 70

Which of the following is NOT one of the four categories of limited-function merchant wholesalers?

A) cash-and-carry wholesaler
B) truck jobber
C) mail-order wholesaler
D) rack jobber

Question 71

What is the purpose of a merchandise mart?

A) to provide space for permanent showrooms and exhibits, which manufacturers rent to market their goods
B) to gather buyers and sellers in one location and allow potential buyers to inspect merchandise before submitting competitive purchase offers
C) to accept orders from customers and forward those orders to manufacturers that ship the goods directly to the customers
D) to distribute physical or online catalogues to retail, business, and institutional customers

Question 72

What is the major difference between a selling agent and a manufacturer's representative?

A) A selling agent represents several manufacturers, but a manufacturer's representative represents only one manufacturer.
B) A selling agent is paid on a commission basis, but a manufacturer's representative is remunerated on an annual basis.
C) A selling agent serves as an independent marketing department for a manufacturer, while a manufacturer may hire several manufacturers' representatives.
D) A selling agent is paid on an annual basis, but a manufacturer's representative is paid on a commission basis.

Question 73

Why has the importance of selling agents been declining in many markets?

A) Many firms are increasingly turning to financial institutions for financial assistance.
B) Manufacturers want better control of their marketing programs than selling agents allow.
C) Profit margins for selling agents have been steadily eroding in perishable foods and processing industries.
D) Manufacturers prefer to contract out exclusive rights to market a product while selling agents operate in specific territories.

Question 74

Advantage Sales & Marketing (ASM), a wholesale intermediary, represents national food manufacturers and is mainly responsible for sales and merchandising at the retail level, as well as providing feedback to the manufacturers. ASM does NOT take title, nor does it deliver products. How can this company best be described?

A) manufacturer's representative
B) commission merchant
C) selling agent
D) drop shipper

Question 75

What is a mail-order wholesaler?

A) a limited-function merchant wholesaler that distributes catalogues instead of sending sales representatives to contact customers
B) an agent that exerts full authority over pricing decisions and promotional outlays, and even provides financial assistance for the manufacturer
C) a limited-function merchant wholesaler that performs most wholesaling functions via the Internet
D) a limited-function wholesaler that accepts orders from customers and forwards these to manufacturers that ship the products direct to the customer

Question 76

What term refers to direct-response retailing that runs promotions on TV networks to sell merchandise through telephone orders?

A) automatic selling
B) computerized selling
C) home shopping
D) out-of-home selling

Question 77

Which of the following is NOT an example of a merchant wholesaler?

A) a food broker calling on mass merchandisers
B) a truck jobber restocking the snack aisle in a grocery store
C) an industrial distributor selling accessory equipment
D) a rack jobber servicing a truck stop with inexpensive impulse items

Question 78

Which statement best describes a characteristic of mail-order wholesalers?

A) They are involved in bringing buyers and sellers together.
B) They use catalogues to contact retail or industrial customers.
C) They carry no inventory, provide no credit, and do not take title to the goods.
D) They comprise a very small percentage of full-scale merchant wholesalers.

Question 79

Which of the following are independent wholesaling intermediaries?

A) agents and brokers that take title for the goods
B) intermediaries that may or may not take title
C) producers that retain title after the sale of the goods
D) sales branches that sell directly to the end user

Question 80

Who is the intermediary most commonly used in the distribution of such products as tobacco, used cars, artwork, fur, livestock, and fruit?

A) broker
B) auction house
C) commission merchant
D) selling agent