Question 1

Overstock.com, a Web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________.

Accepted Answer

Overstock.com fits the definition of an off-price retailer as it acquires merchandise from various sources at a reduced cost and sells it to customers below the regular retail price.

Question 2

________ are wholesalers who serve grocery and drug retailers, mostly in nonfood items. They price the goods, keep them fresh, set up point-of-purchase displays, and keep inventory records.

Accepted Answer

Rack jobbers specialize in distributing non-food items to grocery and drug retailers. They handle tasks such as pricing, setting up displays, inventory management, and ensuring that the goods are fresh. Purchasing agents, drop shippers, cash-and-carry wholesalers, and manufacturers' agents perform different roles in the wholesale industry.

Question 3

Which of the following wholesaler's channel functions is exemplified by buying in carload lots and then dividing these lots into small quantities?

Accepted Answer

Buying in carload lots and dividing them into small quantities is known as bulk breaking, which is a channel function performed by wholesalers.

Question 4

A(n) ________ does not take title to goods and represents buyers or sellers on a more permanent basis than a broker.

Accepted Answer

A C) agent is a representative who does not take title to goods and represents buyers or sellers on a more permanent basis than a broker. The other choices are types of wholesalers or retailers who may take title to goods.

Question 5

________ are a type of limited-service wholesalers who carry a limited line of semiperishable merchandise (such as milk, bread, snack foods), which is sold for cash as deliveries are made to supermarkets, small groceries, or hotels.

Accepted Answer

Truck jobbers are a type of limited-service wholesalers who carry semiperishable merchandise and sell it for cash while making deliveries to supermarkets, small groceries, or hotels. They carry a limited line of products and offer a convenient way for buyers to quickly and easily restock their inventory. Industrial distributors specialize in distributing industrial products, wholesale merchants carry a broad range of products, full-service wholesalers provide a wide range of services to buyers, and purchasing agents work directly for the buying organization and are responsible for procuring goods and services. None of these options fit the description of a truck jobber.

Question 6

Springfield, a convenience store, has recently begun to redesign and restock its stores to offer a more upscale environment with products such as house wines and fresh foods. This information indicates that Springfield has most likely changed its ________.

Accepted Answer

By redesigning and restocking its stores to offer a more upscale environment with products such as house wines and fresh foods, Springfield has changed its positioning in the market. It is now positioning itself as a higher-end convenience store, offering more upscale products and an improved shopping experience.

Question 7

GameStop sells only video games and systems, offering a narrow product line with a deep assortment within that line. GameStop is a(n) ________.

Accepted Answer

GameStop fits the definition of a specialty store as it sells a narrow product line (only video games and systems) but offers a deep assortment within that line. Department stores typically sell a wide variety of product categories, convenience stores offer small and convenient items, category killers dominate a specific category and off-price retailers sell discounted merchandise.

Question 8

________ are the largest group of wholesalers. They include two broad types: full-service wholesalers and limited-service wholesalers.

Accepted Answer

Merchant wholesalers are the largest group of wholesalers and they can be broadly classified into full-service wholesalers and limited-service wholesalers.

Question 9

7-Eleven, Stop-N-Go, and Circle K are examples of ________.

Accepted Answer

7-Eleven, Stop-N-Go, and Circle K are all examples of convenience stores, which typically offer a limited selection of basic necessities and convenience items for purchase.

Question 10

Cabela's stores are as much natural history museums for outdoor enthusiasts as they are retail outlets. This information indicates that Cabela's is practicing ________.

Accepted Answer

Experiential shopping involves providing customers with an immersive and memorable shopping experience, often by incorporating entertainment or educational elements. Cabela's stores are known for their elaborate displays of taxidermy animals, aquariums, and other exhibits that give customers a taste of the natural world. This aligns with the concept of experiential shopping.

Question 11

Which of the following terms best describes a large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products?

Accepted Answer

The term "supermarket" fits the description given of a large store that carries a wide variety of grocery and household products, operates on low margins and high volume, and allows customers to self-serve. The other options (convenience store, specialty store, warehouse club, and factory outlet) do not accurately describe all of these characteristics.

Question 12

The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________.

Accepted Answer

The passage describes the atmosphere of the restaurant, including details about the lighting, furniture, colors, sounds, and smells.

Question 13

Big and Tall Men's Shop carries men's clothing in larger sizes; this allows the store to ________ other stores.

Accepted Answer

By carrying clothing in larger sizes, the Big and Tall Men's Shop is setting itself apart from other stores that may not offer clothing options for men who require larger sizes. This differentiation allows the store to appeal to a specific niche market and potentially attract customers who may not be able to find suitable clothing options elsewhere.

Question 14

A(n) ________ brings buyers and sellers together and assists in negotiations.

Accepted Answer

A broker is a person or firm that brings buyers and sellers together and helps in the negotiation of transactions. Agents typically work for a specific party and represent their interests, whereas brokers are intermediaries who work for both parties to facilitate a transaction. Retailers, wholesalers, and industrial distributors all involve the sale of goods, but do not necessarily act as intermediaries bringing buyers and sellers together.

Question 15

________ are a type of limited-service wholesalers who do not carry inventory or handle a product. They typically operate in bulk industries, such as coal, lumber, and heavy equipment.

Accepted Answer

Drop shippers are wholesalers who do not carry inventory or handle the product. They take orders from customers and have the producer ship the product directly to the customer.

Question 16

What is the most common type of agent wholesaler?

Accepted Answer

The answer of What is the most common type of...

Question 17

Which type of wholesaler sells to manufacturers rather than to retailers?

Accepted Answer

An industrial distributor is a type of wholesaler that sells to manufacturers rather than retailers. They specialize in selling industrial goods and components to other businesses.

Question 18

Today's large, progressive wholesalers have successfully reacted to rising costs by ________.

Accepted Answer

Investing in information technology systems can help wholesalers increase efficiency and reduce costs in areas such as inventory management, order processing, and logistics. This can lead to better cost control and potentially lower prices for customers. Relocating to low-rent, low-tax areas or reducing promotional activities may not address underlying cost issues and could potentially have negative effects on the business. Investing less in expensive machinery may not be a viable option for wholesalers who need specialized equipment to handle their products. Reducing markup rates may not be feasible if profit margins are already tight.

Question 19

________ are agents who take physical possession of products and negotiate sales. They deal mostly with agricultural marketing.

Accepted Answer

Commission merchants are agents who take physical possession of products and negotiate sales, particularly in agricultural marketing. They earn a commission on the price of the products they sell. Industrial distributors sell to businesses, cash-and-carry wholesalers sell to small retailers, purchasing officers work for organizations and are responsible for buying goods and services, and rack jobbers provide and maintain store displays for retailers. None of these options deal primarily with agricultural marketing.

Question 20

________ and ________ do not take title to goods, and they perform only a few channel functions.

Accepted Answer

Brokers and agents do not take title to goods, and they typically perform only a few channel functions such as facilitating transactions and providing market information. Full-service and limited-service wholesalers, industrial distributors, cash-and-carry wholesalers, rack jobbers, and off-price retailers all take title to goods and perform additional channel functions such as inventory management, promotion, and customer service.

Quiz 13: Retailing and Wholesaling