chapter 11 - quiz

Chapter 11Retailing and Wholesaling

GENERAL CONTENT: Multiple-Choice Questions

1. _____ includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.a. Franchisingb. Retailingc. Brokeringd. Wholesalinge. Disintermediation

(Answer: b; p. 333; Easy)

2. In recent years, _____ has(have) been growing fast. This includes selling to final consumers through direct mail, catalogs, telephone, and the Internet.a. specialty storesb. shopping centersc. superstoresd. nonstore retailinge. e-commerce

(Answer: d; p. 333; Easy)

3. Different products require different amounts of service. Which is one level of service offered?a. Self-service.b. Limited service.c. Full service.d. A, B, and Ce. None of the above.


4. A _____ is the basis of all discount operations and is typically used by sellers of convenience goods. These retailers serve customers who perform their own “locate-compare-select” process to save money.a. limited-service retailerb. self-service retailerc. full-service retailerd. specialty-service retailere. convenience retailer

(Answer: b; p. 334; Moderate)

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5. _____, such as Sears, provide more sales assistance because they carry more shopping goods about which customers need information. Their increased operating costs result in higher prices.a. Self-service retailersb. Full-service retailersc. Off-price retailersd. Limited-service retailerse. Specialty-service retailers


6. Some retailers, such as _____, carry narrow product lines with deep assortments within those lines.a. chain storesb. specialty storesc. convenience storesd. discount storese. off-price stores


7. This type of stores carries a wide variety of product lines. They have been squeezed between more focused and flexible specialty stores on the one hand and more efficient, lower-priced discounters on the other. Service remains the key differentiating factor. What type is it?a. Chain stores.b. Department stores.c. Factory outlet stores.d. Merchant wholesaler stores.e. Independents.

(Answer: b; p. 334; Challenging)

8. _____ are the most frequently shopped type of retail store. They are facing slow sales growth because of slower population growth and the rapid growth of out-of-home eating.a. Convenience storesb. Department storesc. Chain storesd. Supermarketse. Hypermarkets


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9. These stores are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. They are a combination food and discount store. What type is it?a. Category killer stores.b. Chain stores.c. Factory outlet stores.d. Superstores.e. Off-price retailers.


10. These stores are actually superstores that are giant specialty stores. What are they called?a. Category killer stores.b. Chain stores.c. Factory outlet stores.d. Shopping center stores.e. Mom-and-pop stores.

(Answer: a; p. 336; Moderate)

11. Another superstore variation, _____, are huge superstores, perhaps as large as six football fields. They have been very successful in Europe.a. category killer storesb. shopping centerc. hypermarketsd. chain storese. off-price retailers

(Answer: c; p. 336; Moderate)

12. _____ retailers in the United States are growing faster than product retailers.a. Discountb. Merchantc. Serviced. Specialtye. Off-price

(Answer: c; p. 336; Challenging)

13. _____ sell standard merchandise at lower prices by accepting lower margins and selling higher volume.a. Merchant wholesalersb. Discount storesc. Full-service retailersd. Limited-service retailerse. None of the above


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14. The early _____ cut expenses by offering few services and operating in warehouse-like facilities in low-rent, heavily traveled districts.a. chain storesb. department storesc. discount storesd. off-price retailerse. full-service retailers


15. _____ moved in to fill the low-priced, high-volume gap. They buy at less than regular wholesale prices and charge consumers less than retail.a. Off-price retailersb. Discount storesc. Convenience storesd. Chain storee. Limited-service retailers

(Answer: a; p. 338; Easy)

16. Which is not one of the three main types of off-price retailers?a. Independents.b. Factory outlets.c. Warehouse clubs.d. Category killers.e. B and C

(Answer: d; p. 338; Challenging)

17. _____ either are owned and run by entrepreneurs or are divisions of larger retail corporations. They buy at less than regular wholesale prices and charge consumers less than retail.a. Discount storesb. Warehouse clubsc. Superstoresd. Independent off-price retailerse. Full-service retailers

(Answer: d; p. 338; Moderate)

18. _____ are sometimes several stores grouped together. These stores offer prices as low as 50 percent below retail on a wide range of items.a. Category killersb. Factory outletsc. Specialty storesd. Superstorese. Power centers


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19. Manufacturers send last year’s merchandise and seconds to the _____, while they send new merchandise to the department stores.a. convenience storesb. chain storesc. factory outletsd. retailerse. power centers

(Answer: c; p. 338; Easy)

20. _____ operate in huge, drafty, warehouse-like facilities and offer few frills. Customers have to carry large items to the checkout line.a. Warehouse clubsb. Independent off-price retailersc. Factory outletsd. Discount storese. Superstores


21. This type of store offers no home deliveries and often accepts no credit cards; however, this type of store does offer ultralow prices and deals on selected branded merchandise. What is it called?a. A superstore.b. A specialty store.c. A warehouse club.d. A chain store.e. A premium.


22. _____ are two or more outlets that are commonly owned and controlled.a. Chain storesb. Convenience storesc. Off-price retailersd. Independent off-price retailerse. Power centers


23. The great success of _____ caused many independents to band together in one of two forms of contractual associations.a. factory outletsb. corporate chainsc. independent off-price retailersd. warehouse clubse. convenience stores


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24. The main difference between _____ organizations and other contractual systems is that these systems are normally based on some unique product or service.a. voluntary chainb. retailer cooperativec. franchised. agente. warehouse-club

(Answer: c; p. 340; Easy

25. Merchandising _____ are corporations that combine several different retailing forms under central ownership. a. conglomeratesb. agentsc. brokersd. franchisese. independents

(Answer: a; p. 340; Challenging)

26. Until retailers _____ and _____ their markets, they cannot make consistent decisions about product assortment, services, pricing, advertising, store décor, or any of the other decisions that must support their positions.a. compete with; positionb. target; compete withc. define; profiled. limit; servee. divest; eliminate


27. Too many retailers fail because they try to have “something for everyone” and end up satisfying no market well. Successful retailers _____ their target markets well and position themselves strongly.a. increaseb. franchisec. wholesaled. definee. position


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28. Each store has a “feel”; one store is cluttered, another cheerful, a third plush, a fourth somber. The store must plan a(n) _____ that suits the target market and moves customers to buy.a. agentb. brokerc. atmosphered. shopping centere. none of the above


29. The Mall of America near Minneapolis is one of the most dramatic conversions of stores into a(n) _____.a. merchant wholesalerb. off-price retailerc. factory outletd. theatere. restaurant


30. Stores that carry narrow product lines with deep assortments within those lines are called _____.a. category killer storesb. specialty storesc. merchant storesd. discount storese. power centers


31. Stores that have low markups on higher volume are called _____.a. category killer storesb. specialty storesc. merchant storesd. discount storese. factory outlets


32. What is the most important point in retailing success?a. Fair prices.b. Good atmosphere.c. Helpful employees.d. Location.e. Service.


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33. _____ were the main form of retail cluster until the 1950s.a. Department storesb. Discount storesc. Independent off-price retailersd. Central business districtse. Mom-and-pop stores

(Answer: d; pp. 345–346; Moderate)

34. In recent years, many cities have joined with merchants to try to revive downtown shopping areas. What is one thing they do not do?a. Build malls.b. Provide underground parking.c. Advertise.d. Discourage police in the business area.e. Add restaurants.


35. A _____ is a group of retail businesses planned, developed, owned, and managed as a unit.a. merchant wholesalerb. franchisec. shopping centerd. supermarkete. hypermarket


36. A _____, the largest and most dramatic of its kind, contains from 40 to 200 stores. It is like a covered mini-downtown and attracts customers from a wide area.a. community shopping centerb. neighborhood shopping centerc. strip malld. regional shopping centere. power center


37. A _____ contains between 15 and 40 retail stores. It normally contains a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.a. community shopping enterb. neighborhood shopping centerc. strip malld. regional shopping centere. power center


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38. Most shopping centers are _____ that generally contain between 5 and 15 stores. They are close and convenient for consumers.a. community shopping centersb. neighborhood shopping centersc. strip mallsd. regional shopping centerse. factory outlets


39. A recent addition to the shopping center scene is the ______. These huge unenclosed shopping centers consist of a long strip of retail stores, including large, freestanding anchors such as Wal-Mart. Each store has its own entrance with parking directly in front for shoppers who wish to visit only one store.a. shopping mallb. power centerc. superstored. chain storee. regional shopping center


40. _____ have increased rapidly during the past few years to challenge traditional indoor malls.a. Power centersb. Superstoresc. Warehouse clubsd. Chain storese. Franchises


41. Combined, all shopping centers now account for about _____ of all retail sales.a. one-halfb. three-fourthsc. one-quarterd. one-sixthe. one-tenth


42. A _____ is a smaller mall with upscale stores, convenient locations, and expensive atmosphere. Think of it as part of Main Street and part Fifth Avenue.a. regional shopping centerb. lifestyle centerc. community shopping centerd. franchisee. upscale shopping center


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43. Of the top 10 discount retailers in 1962, how many exist today?a. Five.b. Four.c. Three.d. Two.e. None.

(Answer: e; p. 347; Moderate)

44. What was the first warehouse store chain?a. Sam’s Clubb. Price Clubc. T G & Yd. Ben Franklin’se. Costco


45. The _____ is used/depicted when new types of retailing forms begin as low-margin, low-price, low-status operations. These new retailers challenge established retailers and eventually take their place.a. agentb. brokerc. wheel-of-retailing conceptd. warehousinge. product life cycle


46. _____ seems to explain the initial success and later troubles of department stores, supermarkets, and discount stores, and the recent success of off-price retailers.a. Franchisingb. Merchant wholesalingc. Wheel-of-retailing conceptd. Warehousinge. Retail convergence


47. More online retailing is conducted by _____ retailers than by other retail types.a. click-and-brickb. click-onlyc. brick-and-mortard. B or Ce. none of the above


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48. The merging of consumers, products, prices, and retailers is called _____.a. retail conglomerationb. consumer convergencec. price mergingd. retail convergencee. none of the above


49. Convergence means greater _____ for retailers and greater difficulty in _____ offerings.a. differentiating; competitionb. sales; differentiatingc. product; salesd. competition; differentiatinge. integrating; differentiating


50. The rise of huge mass merchandisers and specialty superstores has created a core of _____.a. category killersb. franchisesc. superpower megaretailersd. power centerse. none of the above


51. Perhaps the most startling advances in retailing technology concern the ways in which today’s retailers are connecting with _____.a. other businessesb. their employeesc. other countriesd. customerse. the Internet


52. _____ retailers are still significantly behind _____ when it comes to global expansion.a. African; Perub. European; the United Statesc. U.S.; Europe and Asiad. Asian; the United Statese. Asian; African


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53. _____, the world’s second largest retailer after Wal-Mart, has embarked on an aggressive mission to extend its role as a leading international retailer.a. McDonald’sb. The Gapc. Carrefourd. Toys “R” Use. Costco


54. _____ includes all activities involved in selling goods and services to those buying for resale or business use.a. Wholesalingb. Retailingc. Franchisingd. Discountinge. Disintermediation


55. _____ buy mostly from producers and sell mostly to retailers and industrial consumers.a. Independentsb. Factory outletsc. Wholesalersd. Discount storese. None of the above


56. Wholesalers add value by performing channel functions. Which is a channel function?a. Selling and promoting.b. Buying and assortment building.c. Bulking-breaking.d. All of the above.e. A and C


57. Which of the following is not one of the wholesaler’s channel functions?a. Financing.b. Risk bearing.c. Market information.d. Off-price retailing.e. Bulk-breaking.


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58. Wholesalers fall into three major groups. Which is not one of these groups?a. Merchant wholesalers.b. Agents and brokers.c. Manufacturers’ sales branches and offices.d. Specialty wholesalers.e. B and C


59. _____ are the largest group of wholesalers. Two broad types are full-service and limited-service.a. Brokersb. Manufacturer salesc. Agentsd. Merchant wholesalerse. Specialty wholesalers


60. _____ and _____ differ from merchant wholesalers in two ways: They do not take title to goods, and they perform only a few functions.a. Full-service; limited-serviceb. Brokers; agentsc. Branches; officed. Power centers; independent wholesalerse. none of the above


61. The _____ brings buyers and sellers together and assists in negotiations.a. agentb. brokerc. retailerd. wholesalere. retail convergence


62. _____ represent buyers or sellers on a more permanent basis. Another name for them is manufacturers’ representatives.a. Brokersb. Franchisesc. Agentsd. Retailerse. Intermediaries


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63. A major type of wholesaling is that done in manufacturers’ sales branches and offices. Who does the wholesaling in these?a. Brokers.b. Agents.c. Sellers or buyers.d. Category buyers.e. The main office.


64. Like retailers, wholesalers must _____ their target markets and _____ themselves effectively—they cannot serve everyone.a. define; positionb. position; definec. discount; franchised. franchise; discounte. identify; align


65. _____ are under great pressure to carry a full line and to stock enough for immediate delivery.a. Convenience storesb. Factory outletsc. Wholesalersd. Category killer storese. None of the above


66. Wholesalers are always rethinking which _____ count most in building strong customer relationships and which should be dropped or charged for.a. productsb. servicesc. franchisesd. agentse. brokers

(Answer: b; p.354; Easy)

67. Most wholesalers are not _____-minded. Many are behind the times in personal selling—they still see selling as a single salesperson talking to a single customer instead of as a team effort.a. absentb. promotionc. managementd. franchisee. customer


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68. _____ typically locate in low-rent, low-tax areas and tend to invest little money in their buildings, equipment, and systems.a. Retailersb. Agentsc. Brokers d. Wholesalerse. Factory outlets


69. Because _____ invest little money in their equipment, their materials-handling and order-processing systems are often outdated.a. retailersb. agentsc. wholesalersd. brokerse. industrial consumers


70. Specialty stores carry _____ with _____ within them.a. convenience items; mostly staplesb. narrow product lines; deep assortmentsc. narrow product lines; shallow assortmentsd. wide product lines; shallow assortmentse. wide product lines; deep assortments


71. Which of the following retailers likely require more emphasis on salespeople to assist customers?a. Limited-service retailers.b. Full-service retailers.c. Self-service retailers.d. Retailers that carry specialty goods.e. A and D

(Answer: e; p. 334; Challenging)

72. Which type of retailer tends to be the most frequently shopped?a. Department stores.b. Convenience stores.c. Supermarkets.d. Superstores.e. Off-price retailers.


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73. Which type of retail store is most similar to a hypermarket?a. Department store.b. Convenience store.c. Supermarkets.d. Superstores.e. Off-price retailers.


74. Which of the following represent a type of sales promotion?a. TV ads.b. In-store demonstrations.c. Displays.d. Publicity.e. B and C.

(Answer: e; p. 345; Easy)

75. Which of the following is not true about the so-called power center?a. They are enclosed shopping centers.b. They likely do not include Wal-Mart.c. The power center has one main entrance.d. Power centers have decreased in number in recent years.e. All of the above.

(Answer: e; p. 346; Challenging)

True/False

76. Wholesaling includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

(False; p. 333; Easy)

77. Retailers can be classified in terms of several characteristics, including the amount of service they offer, the breadth and depth of their product lines, the relative prices they charge, and how they are organized.

(True; p. 333; Moderate)

78. Full-service retailers, such as Sears or JC Penney, provide more sales assistance because they carry more shopping goods about which customers need information.

(False; p. 334; Challenging)

79. In limited-service retailers, such as specialty stores and first-class department stores, salespeople assist customers in every phase of the shopping process.

(False; p. 334; Moderate)

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80. Department stores carry narrow product lines with deep assortments within those lines.


81. Department stores have been squeezed between more focused and flexible specialty stores on the one hand, and more efficient, lower-priced discounters on the other. Service remains the key differentiating factor.


82. Supermarkets are the most frequently shopped type of retail store.(True; p. 334; Moderate)

83. Supercenters are a combination of food and discount stores that emphasize cross-merchandising.

(True; p. 335; Easy)

84. Category killers carry a deep assortment of a particular line with a knowledgeable staff.


85. Off-price retailers sell standard merchandise at lower prices by accepting lower margins and selling higher volume.


86. A discount store buys at less than regular wholesale prices and charges consumers less than retail.


87. Independent off-price retailers are either owned and run by entrepreneurs or are divisions of larger retail corporations.


88. Factory outlets, independents, and warehouse clubs buy their merchandise in a similar fashion.

(True; p. 338; Challenging)

89. Department stores are protesting to the manufacturers because factory outlet malls are being built at an alarming rate.


90. In warehouse clubs, customers must wrestle furniture and other large items to the checkout line.


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91. Chain stores are located near a residential area, are open long hours, seven days a week, and carry a limited line of high-turnover goods.


92. The main difference between franchise organizations and other contractual systems is that franchise systems are not normally based on some unique product or service.


93. Merchandising conglomerates are corporations that combine several different retailing forms under different ownership.


94. Retailers first must define their target markets and then decide how they will position themselves in these markets.


95. Target’s ability to position itself as an upscale alternative really has affected many stores, but Wal-Mart still sells much more products.


96. Each store has a “feel”; one store is cluttered, another cheerful, a third plush, a fourth somber. This is referring to each store’s franchise.


97. The Mall of America near Minneapolis is perhaps the most dramatic conversion of stores into theater.


98. The undisputed winner in the “place race” has been Target, whose strategy of being the first mass merchandiser to locate in small and rural markets was one of the key factors in its phenomenal early success.


99. A community shopping center usually contains 5 to 15 stores, including a supermarket, a discount store, and several service stores.


100. Shopping centers now account for about three-fourths of all retail sales.(True; p. 346; Moderate)

101. The wheel-of-retailing concept deals mainly with wholesalers trying to replace higher prices with lower costs.


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102. The merging of wholesalers, retailers, products, and prices is called retail convergence.


103. Convergence means greater competition for retailers and greater difficulty in differentiating offerings.


104. A broker brings buyers and sellers together and assists in negotiation.(True; p. 352; Easy)

105. Power centers are decreasing in number.(False; p. 346; Easy)

APPLICATION CONTENT: Multiple-Choice Questions

106. These stores usually carry more specialty goods for which customers like to be “waited on.” They have much higher operating costs, which are passed along to the customer.a. Self-service stores.b. Category killer stores.c. Full-service stores.d. Independent stores.e. Off-price stores.


107. These stores are small stores that carry a limited line of high-turnover convenience goods. Most of the store’s revenues are from cigarette, beverage, and gasoline sales.a. Convenience stores.b. Department stores.c. Chain stores.d. Supermarkets.e. Hypermarkets.


108. A growing number of outlet malls now feature brands such as Coach, Polo Ralph Lauren, Dolce & Gabbana, and Giorgio Armani, causing _____ to protest to the manufacturers of these brands.a. the wheel-of-retailing conceptb. agentsc. brokersd. department storese. factory outlets


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109. Service differentiation among retailers has _____. National brands are found not only in department stores but also in mass-merchandise, off-price discount stores, and on the Web.a. increasedb. erodedc. stayed the samed. franchisede. tripled


110. How can any discounter hope to compete with the likes of huge and dominating Wal-Mart? The answer is _____.a. good targetingb. being very competitivec. good positioningd. A and Ce. none of the above


111. The retailer’s _____ should differentiate the retailer while matching target shoppers’ expectations. One strategy is to offer merchandise that no other competitor carries.a. agentb. brokerc. product assortmentd. chain storese. distribution strategy


112. Lane Bryant carries goods in larger sizes; this allows this store to _____ from other stores.a. be off-pricedb. differentiate itselfc. franchised. retaile. none of the above


113. _____ may include in-store demonstrations, displays, contests, and visiting celebrities.

a. Franchises

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b. Sales promotionsc. Agent promotionsd. Publicitye. None of the above


114. Press conferences and speeches, store openings, special events, newsletters, magazines, and public service activities are examples of ways that retailers promote _____.a. public relationsb. sales promotionsc. high markupsd. the wheel-of-retailing concepte. retail convergence


115. Retailers operate in a fast-changing environment. What is one way that consumers are not changing? a. Demographics.b. Lifestyles.c. Shopping patterns.d. Competitive strategies.e. Marketing mixes.


116. _____ downfall occurred because it refused to expand beyond its California base.a. 7-11’sb. Price Club’sc. Ben Franklin’sd. T G & Y’se. K-Mart’s


117. 7-Eleven, Stop-N-Go, and Circle K are examples of _____. a. specialty storesb. department storesc. convenience storesd. supermarketse. category killers


118. Which wholesaler’s channel is this describing? The wholesaler’s sales forces help manufacturers reach many small customers at a low cost. The wholesaler has more contacts and is often more trusted by the buyer than the distant manufacturer.a. Bulk-breaking.b. Selling and promoting.

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c. Buying and assortment building.d. Warehousing.e. Rack jobber.


119. Which wholesaler’s channel is this describing? Wholesalers hold inventories, thereby reducing the inventory costs and risk of suppliers and customers.a. Bulk-breaking.b. Buying and assorting building.c. Warehousing.d. Financing.e. Transporting.


120. Which wholesaler’s channel is this describing? Wholesalers can provide quicker delivery to buyers because they are closer than the producers. a. Buying and assortment building.b. Financing.c. Transportation.d. Risk bearing.e. Warehousing.


121. What might a retailer do to “trade up”?a. Reduce prices.b. Add new product lines.c. Change the target market.d. A and Ce. None of the above.


122. Which of the following may be true about shoppers who prefer to shop at “lifestyle centers”?a. They prefer inexpensive atmospheres.b. They prefer upscale stores.c. They prefer out-of-the-way locations.d. All of the above.e. None of the above.


123. Wal-Mart attracts consumers of all demographic, psychographic, and geographic segments with many varieties and prices. This depicts _____.a. positioningb. a change in target marketc. trading upd. retail convergence

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e. the marketing mix(Answer: d; p. 349; Moderate)

124. You own a local mom-and-pop store in your neighborhood. You still like to offer fresh seafood in your meat display case. Which type of wholesaler might best serve you?a. Cash-and-carry wholesaler.b. Rack jobber.c. Drop shipper.d. Mail-order wholesaler.e. Agents and brokers.


125. To change your store’s atmosphere, you may change the store’s _____.a. lightingb. scentc. overhead musicd. product assortmente. all of the above

(Answer: e; p. 342; Easy)

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