Question 1

The _____ theory of retail evolution describes retail institutions as evolving from outlets that offer wide assortments to specialized stores that offer narrow assortments,and then return to the wide assortment stores,continuing this pattern again and again.
A) wheel of retailing
B) retail life cycle
C) retail accordion
D) dominant competitive
E) turnover

Accepted Answer

The correct theory is the "retail accordion" theory, which posits that retail institutions cycle between offering wide assortments and narrow assortments over time, much like the expansion and contraction of an accordion.

Question 2

The retail life cycle suggests that firms move from the _____ stage to the _____ stage to the _____ to _____ stage.
A) introduction; growth; maturity; decline
B) introduction; development; maturity; decline
C) entry; development; maturity; decline
D) entry; trading-up; vulnerability; decline
E) innovation; growth; development; decline

Accepted Answer

The retail life cycle model proposes that retail firms go through four stages, namely introduction, growth, maturity, and decline. In the introduction stage, a new retail format is introduced into the market. In the growth stage, the retailer expands and establishes its market position. In the maturity stage, the retailer may face increased competition and saturated market conditions, and in the decline stage, the retailer experiences a decline in sales and profitability. Therefore, the correct sequence based on the model is introduction, growth, maturity, and decline, which is represented in choice letter A.

Question 3

The growth of nonstore retailing growth can be attributed to:
A) Accerelerated communication technology and changing consumer lifestyles.
B) Heightened global competition and increasing use of private labels.
C) The development of off price retailers and supercenters.
D) The rapid growth of qualified sales help in bricks-and-mortar stores and more convenient retail locations.
E) The development of recycled merchandise retailers and liquidators.

Accepted Answer

Accelerated communication technology has made it easier for consumers to shop online and changing consumer lifestyles have led to a preference for convenience, which nonstore retailing provides.

Question 4

According to the wheel of retailing theory,_____ currently appear to be in the vulnerability phase of their evolution.
A) outlet malls
B) warehouse clubs
C) health spas
D) The Internet
E) discount department stores

Accepted Answer

The answer of According to the wheel of retailing theory,_____...

Question 5

According to most retail analysts,as a result of several key forces at work today,which of the following forms of nonstore retailing will experience significant growth over the next decade while the other forms will remain steady or decline?
A) Telemarketing
B) Vending machines
C) Catalog sales
D) Direct selling
E) Internet shopping

Accepted Answer

The internet shopping is expected to experience significant growth over the next decade due to the increasing prevalence and convenience of online shopping. Telemarketing and catalog sales are likely to remain steady, while vending machines and direct selling may decline.

Question 6

According to the text,what is the one important difference between off-price retailers and discounters?
A) Discounters carry only brands that they are able to get on special deals from the manufacturer.
B) Off-price retailers offer better prices
C) Discounters offer greater selection
D) Off-price retailers offer more convenient locations
E) Discounters offer continuity of brands

Accepted Answer

Discounters typically offer continuity of brands, meaning they consistently carry the same brands, allowing customers to find the same products on each visit. Off-price retailers, on the other hand, may not offer the same consistency in brands because they buy overruns, irregulars, or past season merchandise from manufacturers and other retailers, often at a significant discount.

Question 7

As a warehouse club manager,you have noticed that this format's market share has stabilized.As such,you fear severe profit declines as warehouse clubs are now in the _____ stage of the retail life cycle.
A) introduction
B) growth
C) maturity
D) decline
E) vulnerability

Accepted Answer

The stabilization of market share indicates that the warehouse club format has reached its maturity stage in the retail life cycle. This stage is characterized by slower growth and a more stable market share, which can lead to profit declines if not addressed appropriately.

Question 8

The theory of retail competition that states that new retail institutions enter the marketplace as low-price,low-margin operations and eventually begin to offer more services and charge higher prices is the:
A) retail accordion theory.
B) high/low theory.
C) natural selection theory.
D) retail life cycle theory.
E) wheel of retailing theory.

Accepted Answer

The theory described in the question is known as the "wheel of retailing theory." This theory suggests that new retail institutions enter the market as low-price, low-margin operations and gradually add more services, upgrades, and conveniences while charging higher prices. Eventually, these established retailers become vulnerable to new low-cost entrants, and the cycle begins again. The wheel of retailing theory is widely accepted and often used to describe the evolution of retail markets.

Question 9

Dawn needed to drop off a few garments at the dry cleaners.On her way to work,she stopped at the local SuperCenter to pick up pastries for her staff at work.While at the SuperCenter,Dawn noticed that they now offer dry cleaning services.So,instead of going to the dry cleaner's on the corner,Dawn dropped off her garments at the SuperCenter.By offering dry cleaning,SuperCenter successfully engaged in what form of competition?
A) Perfect monopoly
B) Mixed-share
C) Divertive
D) Intratype
E) Interactive

Accepted Answer

The SuperCenter engaged in divertive competition by offering dry cleaning services and diverting customers away from the local dry cleaner's on the corner.

Question 10

Which of the following is NOT a trend shaping the retail landscape today?
A) Decrease in competition from nonstore retailers
B) The advent of new retailing formats
C) Heightened global competition
D) The integration of technology into current operations
E) The increasing use of private labels

Accepted Answer

The decrease in competition from nonstore retailers is not a trend shaping the retail landscape today. In fact, nonstore retailers such as e-commerce companies are increasing in popularity and competition. The other options: advent of new retailing formats, heightened global competition, integration of technology into current operations, and increasing use of private labels, are all current trends shaping the retail industry.

Question 11

Which stage of the retail life cycle is characterized by the entrance of many new competitors and tremendous growth in sales and profits?
A) Vulnerability
B) Maturity
C) Growth
D) Entry
E) Introduction

Accepted Answer

The stage characterized by entrance of many new competitors and tremendous growth in sales and profits is the Growth stage. This is when the market is still expanding, and consumers are adopting the product category rapidly. As a result, there is a lot of room for new entrants and existing players to grow.

Question 12

The _____ is the point where total revenues equal total expanses.
A) break-even point
B) matched point
C) stabilization point
D) profit maximization point
E) point of highest revenue

Accepted Answer

The break-even point is the point at which the total revenue equals total expenses. This means that the company has not made a profit, but has also not incurred a loss.

Question 13

Albertson's Supermarkets recently began offering DVD rentals to compete with Blockbuster.What type of competition is this?
A) Intertype
B) Intratype
C) Scrambled
D) Mixed share
E) Mixed location

Accepted Answer

Intertype competition occurs when retailers of different types compete for the same customers by offering similar products or services, such as a supermarket offering DVD rentals to compete with a video rental store.

Question 14

In 2000,Samantha Toller started a small fast-food restaurant.In order to gain a competitive foothold,Samantha offered low prices with very few extras.As her business grew,Samantha started adding services and gradually had to increase prices to cover the costs of these services.Today,Samantha is vulnerable to new,low-price competitors.This is an example of what theory of retail evolution?
A) High price jinx
B) High/low
C) Retail life cycle
D) Wheel of retailing
E) Retail accordion

Accepted Answer

The scenario described is an example of the Wheel of Retailing theory. This theory suggests that retailers often start as low-price, low-service establishments, then gradually add services and increase prices to cover the costs of those added services. However, eventually, they become vulnerable to new, low-price competitors who follow the same cycle, leading to a "wheel" of retail evolution.

Question 15

The first stage of the retail life cycle is:
A) entry.
B) realignment.
C) introduction.
D) growth.
E) decline.

Accepted Answer

The first stage of the retail life cycle is the introduction stage where a new retailer is introduced to the market. This is the stage where the retailer is trying to establish itself and create awareness among its target market.

Question 16

Divertive competition occurs when:
A) retailer A sends its customer to retailer B to purchase any products that A had "out-of-stock."
B) the customer buys product A rather than product B, which was the one he/she was shopping for.
C) a retailer intercepts and makes a sale to a customer that normally would have purchased the product at another retail store.
D) the retailer tries to entice the customer to buy a more expensive model or brand than wanted.
E) the customer buys a private label instead of his/her usual brand.

Accepted Answer

Divertive competition occurs when a retailer intercepts and makes a sale to a customer that normally would have purchased the product at another retail store. This can be done through various means such as offering a lower price, better promotions, or more personalized service. This type of competition is focused on taking market share away from competitors, rather than simply attracting new customers.

Question 17

When two discount department stores such as Sears and JCPenney compete for the same customer,what type of competition is occurring?
A) Intertype
B) Conceptual
C) Divertive
D) Intercept
E) Intratype

Accepted Answer

Intratype competition is occurring as both Sears and JCPenney are discount department stores competing for the same type of customers in the same market segment.

Question 18

The _____ theory suggests that all firms seek superior financial performance in an ever-changing environment,and as a result,firms are forced to change the elements of their retail mix to match changing consumer preferences.
A) wheel of retailing
B) retail accordion
C) retail life cycle
D) resource-advantage
E) monopolistic competitive

Accepted Answer

The resource-advantage theory suggests that firms seek to achieve superior financial performance by acquiring and utilizing unique resources and capabilities. As the environment changes, firms must adapt their retail mix to match changing consumer preferences in order to maintain their resource advantage and continue to generate superior financial performance. The other options (A, B, C, and E) are either unrelated or focus on different aspects of retailing.

Question 19

_____ sell products at a discount but do not carry certain brands on a continuous basis and carry those brands they can buy from manufacturers at closeout or deep one-time discount prices.
A) Full-price stores
B) Department stores
C) Specialty retailers
D) Discounters
E) Off-price retailers

Accepted Answer

Off-price retailers sell products at a discount and often do not carry certain brands on a continuous basis. They typically buy overstock or closeout items from manufacturers at a deep discount and are able to offer lower prices to customers.

Question 20

Retail historians have observed that,in the United States,retail trade was dominated by _____ until 1860; this type of store carried a broad assortment of merchandise ranging from farm implements to textiles to food.
A) mail order
B) general stores
C) door-to-door sales
D) corner stores
E) family owned business

Accepted Answer

Retail historians have observed that general stores dominated retail trade in the United States until 1860. These stores carried a broad assortment of merchandise ranging from farm implements to textiles to food.

Quiz 4: Evaluating the Competition in Retailing

The _____ theory of retail evolution describes retail institutions as evolving from outlets that offer wide assortments to specialized stores that offer narrow assortments,and then return to the wide assortment stores,continuing this pattern again and again.

The retail life cycle suggests that firms move from the ___ stage to the _ stage to the _ to ___ stage.

The growth of nonstore retailing growth can be attributed to:

According to the wheel of retailing theory,_____ currently appear to be in the vulnerability phase of their evolution.

According to most retail analysts,as a result of several key forces at work today,which of the following forms of nonstore retailing will experience significant growth over the next decade while the other forms will remain steady or decline?

According to the text,what is the one important difference between off-price retailers and discounters?

As a warehouse club manager,you have noticed that this format's market share has stabilized.As such,you fear severe profit declines as warehouse clubs are now in the _____ stage of the retail life cycle.

The theory of retail competition that states that new retail institutions enter the marketplace as low-price,low-margin operations and eventually begin to offer more services and charge higher prices is the:

Which of the following is NOT a trend shaping the retail landscape today?

Which stage of the retail life cycle is characterized by the entrance of many new competitors and tremendous growth in sales and profits?

The _____ is the point where total revenues equal total expanses.

Albertson's Supermarkets recently began offering DVD rentals to compete with Blockbuster.What type of competition is this?

The first stage of the retail life cycle is:

Divertive competition occurs when:

When two discount department stores such as Sears and JCPenney compete for the same customer,what type of competition is occurring?

The _____ theory suggests that all firms seek superior financial performance in an ever-changing environment,and as a result,firms are forced to change the elements of their retail mix to match changing consumer preferences.

_____ sell products at a discount but do not carry certain brands on a continuous basis and carry those brands they can buy from manufacturers at closeout or deep one-time discount prices.

Retail historians have observed that,in the United States,retail trade was dominated by _____ until 1860; this type of store carried a broad assortment of merchandise ranging from farm implements to textiles to food.