Retail Management - Mar3231 - Test 1

Front 1

Benetton, a popular retail chain from Italy, manufactures many of the sweaters it sells in its retail outlets at a textile mill in North Carolina. Benetton is practicing:

Back 1

vertical integration

Front 2

Which of the following does NOT describe how retailers increase the value consumers receive from their purchases?

Back 2

wholesaling

Front 3

Why is providing assortments an advantageous business activity?

Back 3

It enables the customer to choose from a wide selection of brands, designs, sizes and prices all in one store.

Front 4

Which of the following does NOT describe breaking bulk?

Back 4

It hurts manufacturers' profits.

Front 5

Which of the following best describes retailing?

Back 5

It is the set of business activities that adds value to the products and services sold to consumers for their personal use.

Front 6

New types of retailers appear each year. What value-creating function does BagBorroworSteal.com offer that provides jewelry and handbag rental services?

Back 6

providing assortments

Front 7

The competition between retailers that sell similar merchandise using different formats, such as discount and department stores, is called:

Back 7

Intertype competition

Front 8

Which of the following would be an example of intratype competitors?

Back 8

Circuit City and Best Buy

Front 9

DJ owns the Beach Shack, a small souvenir shop on a busy beach boardwalk which specializes in a variety of t-shirts, towels and beach toys. He has identified his customer as a person walking on the boardwalk–mostly vacationers who want something cheap, functional and fun. He located himself close to parking for easy access, unlike some of his competitors. DJ seems to have developed a strong:

Back 9

retail strategy

Front 10

Which of the following is NOT a part of the retail mix for a furniture store?

Back 10

competitive response

Front 11

_________ refers to the number of different items in a merchandise category.

Back 11

Assortment

Assortment refers to the number of different items in a merchandise category. Assortment is also referred to as the depth of merchandise. Variety is the number of merchandise categories a retailer offers. Variety is often referred to as the breadth of merchandise.

Front 12

My Favorite Quilt Shop carries quilting thread of every brand, color, and strength in cotton and poly-cotton blends. With reference to quilting threads, My Favorite Quilt Shop has:

Back 12

deep assortment

Front 13

Sea Bees sells a variety of aquarium maintenance supplies ranging from filters, to chemicals, to lights, to feed and even aquatic toys. Sea Bees can be said to have:

Back 13

deep assortment

Front 14

How can conventional supermarkets differentiate their offerings?

Back 14

They can generate private label merchandise.

Front 15

Convenience stores:

Back 15

are a modern form of the mom-and-pop grocery/general store

Convenient stores provide a limited variety and assortment of merchandise at a convenient location. Their size (2,000 – 3,000 square foot) is smaller than the size of the traditional supermarket. Convenience stores are not in the introductory stage of the retail life cycle with increased competition.

Front 16

How can a convenience store develop a sustainable advantage against the competition?

Back 16

open smaller stores close to where consumers shop and work

To increase convenience, convenience stores are opening smaller stores close to where consumers shop ad work. In addition, they are taking steps to decrease their dependency on gasoline sales, tailoring assortments to local markets, and making their stores even more convenient to shop.

Front 17

Category specialists:

Back 17

offer a narrow variety but deep assortment of merchandise

Category specialists, often called category killers, offer a narrow but deep assortment of merchandise. They do not compete directly with off-price retailers who offer an inconsistent assortment of brand name merchandise at low prices. One of the largest and most successful types of category specialists is the home improvement center. Most category specialists use a self-service approach, they offer assistance to customers and the service level varied from low to high depending on types of stores. Category specialists in improvement centers and pet stores offer extensive customer service.

Front 18

Which of the following statements does NOT describe electronic retailing correctly?

Back 18

It has been realized that the Internet is a revolutionary new retail format that will replace stores and catalogs.

It has been realized that the Internet is not a revolutionary new retail format that will replace stores and catalogs. It is now primarily used by traditional retailers as a tool to complement their store and catalog offerings, grow their revenues, and provide more value for their customers.

Front 19

The waiting room for the law firm had a brocade-covered sofa, a Degas print, a thick Persian rug, and handsomely framed diplomas. This sort of affluent furnishing that signals quality is a way to deal with the _____ of services.

Back 19

intangibility

The decorations emphasize the quality of the servicing offering and are necessary because these offerings are intangible.

Front 20

backward integration

Back 20

A form of vertical integration in which a retailer owns some or all of its suppliers

Front 21

breaking bulk

Back 21

A function performed by retailers or wholesalers in which they receive large quantities of merchandise and sell them in smaller quantities

Front 22

corporate social responsibility

Back 22

Voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders

Front 23

forward integration

Back 23

A form of vertical integration in which a manufacturer owns wholesalers or retailers

Front 24

intertype competition

Back 24

Competition between retailers that sell similar merchandise using different formats, such as discount and department stores

Front 25

intratype competition

Back 25

Competition between the same type of retailers

-Example: Kroger vs Safeway

Front 26

scrambled merchandising

Back 26

An offering of merchandise not typically associated with the store type, such as clothing in a drugstore

Front 27

variety

Back 27

The number of different merchandise categories within a store or department

Front 28

vertical integration

Back 28

An example of diversification by retailers involving investments by retailers in wholesaling or manufacturing merchandise

Front 29

assortment

Back 29

The number of SKU's within a merchandise category. Also called depth of merchandise

Front 30

breadth of merchandise

Back 30

The number of different merchandise categories within a store or department

Front 31

depth of merchandise

Back 31

The number of SKU's within a merchandise category. Also called depth of merchandise

Front 32

direct-response advertising

Back 32

Advertisements on TV and radio that describe products and provide an opportunity for customers to order them

Front 33

When Donna completed her real estate course she could now apply with Century 21. She celebrated by reserving a 7-day cruise on a Carnival ship. Her satisfied needs can best be described as:

Back 33

hedonic

Hedonic needs are associated with fun, entertainment, emotional, and recreational experience.

Front 34

Which of the following needs are associated with personal gratification that customers can get from shopping or from purchasing and owning a product?

Back 34

Hedonic

Hedonic needs are associated with emotional experience.

Front 35

From a customer's perspective, utilitarian needs are associated with work while hedonic needs are associated with:

Back 35

Pleasure

Front 36

Mary Elizabeth persistently purchases Tommy jeans from Dillard's, and ankle socks from Kmart. Her pattern of buying would be an example of:

Back 36

Cross-shopping

The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers is called cross-shopping.

Front 37

When Nori buys suits, she will only shop at Ann Taylor or Jones New York because she knows that these two stores carry the brands and styles she enjoys wearing. For Nori, the two boutiques make up her:

Back 37

Consideration set

The list of stores represents the set of alternatives Nori evaluates when looking for a place to buy suits.

Front 38

Which of the following requires extended problem solving?

Back 38

Beckham bought his first home

Extended problem solving is a purchase decision process in which customers devote considerable time and effort to analyzing their alternatives.

Front 39

___________ is a post-consumption evaluation of how well a store or product meets or exceeds customer expectation.

Back 39

Satisfaction

Satisfaction is a post-consumption evaluation of how well a store or product meets or exceeds customer expectation.

Front 40

Every morning, Roger drinks chocolate flavored Carnation Instant Breakfast before commuting to work. This morning was his last envelope, so on his way home from work, he stopped at Sam's to replenish his supply. What kind of decision-making process did he engage in when he purchased more Carnation Instant Breakfast?

Back 40

Habitual decision making

The need recognition stage (out of Carnation Instant Breakfast) triggered a "buy the same thing I always buy" response.

Front 41

Which of the following is NOT a criterion for evaluating whether a retail market segment is a viable target market?

Back 41

media-adaptability

Potential market segments should be actionable, identifiable, substantial, and reachable.

Front 42

CRM is based on the philosophy that retailers can increase their profitability by:

Back 42

building relationships with their better customers

CRM is based on the philosophy that retailers can increase their profitability by building relationships with their better customers

Front 43

Neiman Marcus has information about a customer that includes what she has purchased, the colors, sizes and styles, and how she has responded to recent promotions. This information is collectively called:

Back 43

customer database

The customer database contains transactions, customer contacts, customer preferences, descriptive information, such as demographic and psychographic data, and responses to marketing activities.

Front 44

What is the first step in the CRM process?

Back 44

constructing a customer database

The first step in the CRM process is to construct a customer database.

Front 45

When consumers ask a retailer not to use their personal information, they are:

Back 45

opting out

Consumers must explicitly tell retailers not to use their personal information – they must opt out.

Front 46

If a U.S. retailer wants to conform to the European policies concerning how customer information is collected, it should adopt which type of policy?

Back 46

opt in.

American consumers must explicitly tell retailers not to use their personal information (opt-out) because personal information in the US is generally viewed as being in the public domain and retailers can use it in any way they desire. In contrast, EU consumers own their personal information so that retailers must get consumers to agree explicitly to share personal information and consumers must opt in.

Front 47

After Petunia used ____________________ to analyze patterns in her CD sales, she realized that older buyers shopped during the earlier part of the day and younger shoppers visited her shop during the evening.

Back 47

data mining

Data mining is an approach commonly used to identify patterns in data.

Front 48

Since Gina had the opportunity to utilize __________________, she now places pizza cutters next to the pepperoni, refrigerated croissant dough next to the butter, and the birthday candles next to the cards and the cake mixes.

Back 48

market basket analysis

Market basket analysis is a type of data analysis that focuses on the composition of the basket, or bundle, of products purchased by a household during a single shopping occasion.

Front 49

What is wrong with the 80-20 scheme?

Back 49

It doesn't consider the differences among the 80% of customers in the "rest" segment.

The 80-20 rule demonstrates that 80 percent of the sales or profits come from 20 percent of the customers. The two-segment scheme, "best" and "rest", does not consider important differences among the 80 percent of customers in the "rest" segment.

Front 50

Which of the following does NOT describe customer relationship management programs?

Back 50

It helps retailers to convert unprofitable customers to the best customers.

CRM programs help retailers to identify unprofitable customers and get rid of them, rather than converting them to best customers. Retailers lose money on every sale they make to these customers.

Front 51

Dean consistently shops for his clothes through catalogs and always finds the ideal fit because he orders two of the same product in different sizes and returns the item that does not fit. He's been doing this for free for years, but recently he noticed he was being charged for the many returns. Which of the following best describes what the catalog retailer is doing?

Back 51

getting the lead out

In many cases, the bottom tier of customers actually has a negative LTV. Retailers lose money on every sale they make to these customers. Retailers often implement the process of not selling to these unprofitable customers.

Front 52

category killers

Back 52

A discount retailer that offers a narrow but deep assortment of merchandise in a category and thus dominates the category from the customers' perspective. Also called a category specialist

Front 53

close-out retailers

Back 53

Off-price retailer that sells a broad but inconsistent assortment of general merchandise as well as apparel and soft home goods, obtained through retail liquidations and bankruptcy proceedings

Front 54

close-outs

Back 54

1: offer at a reduced price to sell a group of slow-moving or incomplete stock

2: an incomplete assortment, the remainder of a line of merchandise that is to be discontinued and so is offered at a low price to ensure immediate sale

Front 55

convenience store

Back 55

A store that provides a limited variety and assortment of merchandise at a convenient location in a 2000 to 3000 square foot store with speedy checkout

Front 56

conventional supermarket

Back 56

A self service food store that offers groceries, meat, and produce with limited sales of nonfood items, such as health and beauty aids and general merchandise

Front 57

department store

Back 57

A retailer that carries a wide variety and deep assortment, offers considerable customer services, and is organized into separate departments for displaying merchandise

Front 58

direct-mail retailer

Back 58

A nonstore retailer that communicates directly with customers using mail brochures and pamphlets to sell a specific product or service to customers at one point in time

Front 59

direct-response advertising

Back 59

Advertisements on TV and radio that describe products and provide an opportunity for customers to order them

Front 60

drugstore

Back 60

Specialty retail store that concentrates on pharmaceuticals and health and personal grooming merchandise

Front 61

extreme value food retailers

Back 61

A supermarket offering a limited number of SKU's

Front 62

extreme value retailers

Back 62

Small, full-line discount stores that offer a limited merchandise assortment at very low prices

Front 63

factory outlet

Back 63

Outlet store owned by a manufacturer

Front 64

Fair trade

Back 64

purchasing practices that require producers to pay workers a living wage, well more than the prevailing minimum wage, and offer other benefits, like onsite medical treatment

Front 65

full-line discount store

Back 65

Retailers that offer a broad variety of merchandise, limited service, and low prices

Front 66

general merchandise catalog retailer

Back 66

Nonstore retailers that offer a broad variety of merchandise in catalogs that are periodically mailed to their customers

Front 67

home improvement center

Back 67

A category specialist offering equipment and material used by do-it-yourselfers and construction contractors to make home improvements.

Front 68

hypermarket

Back 68

Large (100,000-300,000 sq ft) combination food (60-70%) and general merchandise (30-40%) retailer

Front 69

limited assortment supermarket

Back 69

A supermarket offering a limited number of SKUs

Front 70

multilevel network

Back 70

A retail format in which people serve as master distributors, recruiting other people to become distributors in their network

Front 71

NAICS (North American Industry Classification System)

Back 71

Classification of retail firms into a hierarchical set of six-digit codes based on the types of products and services they produce and sell

Front 72

off-price retailer

Back 72

A retailer that offers an inconsistent assortment of brand-name, fashion-oriented soft goods at low prices

Front 73

Outlet Store

Back 73

Off-price retailer owned by a manufacturer or a department or specialty store chain

Front 74

SKU (stockkeeping unit)

Back 74

The smallest unit available for keeping inventory control. In soft goods merchandise, an SKU usually means a size, color, and style

Front 75

specialty store

Back 75

A type of store concentrating on a limited number of complementary merchandise categories and providing a high level of service

Front 76

supercenter

Back 76

Large store (150,000 to 220,000 sq ft) combining a discount store with a supermarket

Front 77

variety

Back 77

The number of different merchandise categories within a store or department