Question 1

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
-Refer to D-Tree for Less. What would Joey's store be considered?
A) Convenience store
B) Category killer
C) Department store
D) Catalog store
E) Franchise

Accepted Answer

Joey's store is considered a category killer because it specializes in selling only fishing equipment and keeps its prices significantly lower than the competition to attract volume business.

Question 2

Identify and describe the major types of retailers.

Accepted Answer

There are several major types of retailers, each with its own unique characteristics and business models. These include:

1. Department Stores: These retailers offer a wide range of products across different categories, such as clothing, home goods, and electronics. They often have multiple departments within the store and may carry both national and private label brands.

2. Specialty Stores: These retailers focus on a specific product category or niche market, such as sporting goods, jewelry, or beauty products. They offer a curated selection of merchandise tailored to their target customers.

3. Discount Retailers: These retailers offer low-priced products and often operate on a high-volume, low-margin business model. Examples include dollar stores, off-price retailers, and warehouse clubs.

4. Convenience Stores: These retailers are small, easily accessible stores that offer a limited selection of everyday items such as snacks, beverages, and basic household goods. They are known for their convenient locations and extended operating hours.

5. E-commerce Retailers: These retailers operate primarily online, selling products through their website or mobile app. They may offer a wide range of products or specialize in a specific category, and often provide convenient shipping and return options.

6. Supermarkets and Grocery Stores: These retailers specialize in selling food and household essentials, often with a focus on providing a wide selection of fresh produce, meat, and dairy products.

7. Franchise Retailers: These retailers operate under a franchise agreement with a larger parent company, allowing them to use the parent company's branding, products, and business model in exchange for a fee or royalty.

Each type of retailer has its own unique strengths and challenges, and understanding the differences between them is important for both consumers and businesses looking to enter the retail industry.

Question 3

Compare and contrast intensive, selective, and exclusive distribution. Give an example of a product that normally would be distributed in this way for each type of market coverage.

Accepted Answer

Intensive, selective, and exclusive distribution are three different strategies for how a company chooses to distribute its products to consumers.

Intensive distribution involves making a product available in as many outlets as possible. This strategy is often used for products with high demand and low consumer involvement, such as convenience goods. An example of a product that would be distributed intensively is Coca-Cola. You can find Coca-Cola products in almost every grocery store, convenience store, and vending machine.

Selective distribution involves using a limited number of outlets to sell a product. This strategy is often used for products that require a higher level of customer service or expertise, such as electronics or luxury goods. An example of a product that would be distributed selectively is Apple's iPhone. Apple chooses to sell its products through authorized retailers and its own stores, rather than making them available in every possible outlet.

Exclusive distribution involves granting exclusive rights to sell a product in a specific geographic area or to a specific retailer. This strategy is often used for luxury or specialty products. An example of a product that would be distributed exclusively is Rolex watches. Rolex only sells its watches through authorized dealers and its own stores, maintaining a level of exclusivity and control over the distribution of its products.

In summary, intensive distribution is for products with high demand, selective distribution is for products that require a higher level of customer service, and exclusive distribution is for luxury or specialty products. Each strategy has its own advantages and is chosen based on the specific needs and characteristics of the product and target market.

Question 4

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
-Refer to XYZ & ABC. ABC Distributor can be described as what type of wholesaler?
A) Full-service wholesaler
B) Limited-service wholesaler
C) Specialty-line wholesaler
D) Limited-line wholesaler
E) General-merchandise wholesaler

Accepted Answer

ABC Distributors, which represents many different companies and sells a variety of products to various retailers, fits the description of a general-merchandise wholesaler. This type of wholesaler carries a wide range of products from different manufacturers, as opposed to specializing in a specific product line or offering limited services.

Question 5

How many retail outlets would you expect an independent retailer to own? Why? Would you expect a chain retailer to own more or fewer retail outlets than an independent retailer?

Accepted Answer

The answer of How many retail outlets would you expect...

Question 6

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
-Refer to D-Tree for Less. Allison's business can be described as which of the following?
A) Chain retailer
B) Generic retailer
C) Convenience retailer
D) Promotion retailer
E) Independent retailer

Accepted Answer

D-Tree for Less is an independent retailer, as it is not a franchise or part of a chain.

Question 7

What is supply chain management, and what are its benefits?

Accepted Answer

The answer of What is supply chain management, and what...

Question 8

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
-Refer to D-Tree for Less. D-Tree for Less can be described as which of the following?
A) Discount store
B) Convenience store
C) Department store
D) Warehouse store
E) Chain store

Accepted Answer

D-Tree for Less sells a variety of items in different parts of the store, making it a department store. It is not a discount store (although it may have discounted items), convenience store, warehouse store, or chain store.

Question 9

What is the fastest and most expensive means of transportation? What types of products would you most likely ship by this method?

Accepted Answer

The answer of What is the fastest and most expensive...

Question 10

What services do wholesalers provide to retailers?

Accepted Answer

The answer of What services do wholesalers provide to retailers?...

Question 11

What channels of distribution are used to sell business products? Why?

Accepted Answer

The answer of What channels of distribution are used to...

Question 12

When the warehouse is full of finished products, would you expect stock-out costs or holding costs to be higher? Why?

Accepted Answer

The answer of When the warehouse is full of finished...

Question 13

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
-Refer to XYZ & ABC. When the XYZ management feels that it should use all available outlets for its furniture, what type of distribution is the company interested in using?
A) Exclusive distribution
B) Intensive distribution
C) Internal distribution
D) Selective distribution
E) Inclusive distribution

Accepted Answer

Intensive distribution aims to use as many outlets as possible to sell a product, which aligns with XYZ management's interest in using all available outlets for its furniture.

Question 14

How do full-service wholesalers and limited-service wholesalers differ? How do general-merchandise wholesalers, limited-line wholesalers, and specialty-line wholesalers differ in the products they carry?

Accepted Answer

The answer of How do full-service wholesalers and limited-service wholesalers...

Question 15

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
-Refer to XYZ & ABC. As a wholesaler, ABC would provide all of the following services for XYZ Furniture except
A) providing an instant sales force.
B) reducing inventory cost.
C) providing manufacturing labor.
D) assuming credit risk.
E) furnishing market information.

Accepted Answer

As a wholesaler, ABC is not responsible for providing manufacturing labor. The other options are services that a wholesaler typically provides, such as an instant sales force, inventory cost reduction, assuming credit risk, and furnishing market information.

Question 16

Compare and contrast a neighborhood shopping center, a community shopping center, and a regional shopping center.

Accepted Answer

The answer of Compare and contrast a neighborhood shopping center,...

Question 17

What are the components of the direct marketing channel for consumer products?

Accepted Answer

The answer of What are the components of the direct...

Question 18

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
-Refer to XYZ & ABC. Which of the following is not an option for channels of distribution for XYZ?
A) Producer―wholesaler―retailer―consumer
B) Producer―agent―wholesaler―retailer―consumer
C) Producer―consumer
D) Producer―retailer―consumer
E) Producer―wholesaler―consumer―agent

Accepted Answer

Option E is not a typical channel of distribution because it suggests that the product goes from the producer to the wholesaler, then to the consumer, and finally to an agent, which does not align with the conventional flow of goods. Normally, an agent would be involved earlier in the process to facilitate transactions between producers and wholesalers or retailers, not after the consumer.

Question 19

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
-Refer to XYZ & ABC. XYZ uses middlemen that take title to products; thus they would be referred to as
A) merchant middlemen.
B) transport middlemen.
C) selective middlemen.
D) functional middlemen.
E) direct middlemen.

Accepted Answer

Merchant middlemen take title to products and assume the risk of ownership until they can sell the products to the final customers, which fits the description given in the case study of ABC Distributors.

Question 20

How does an administered vertical marketing system (VMS) provide direction and guidance for its members?

Accepted Answer

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Quiz 14: Wholesaling, Retailing, and Physical Distribution