Retail Management Exam #2

Front 1

Four Different Market Structures

Back 1

Pure Competition

Pure Monopoly

Monopolistic Competition

Oligopolistic Competition

Front 2

Pure Competition

Back 2

occurs when a market has homogeneous products and many buyers and sellers, all having perfect knowledge of the market, and ease of entry for both buyers and sellers

-rare

-doing extensive research to know all the prices everywhere of similar products

Front 3

Pure Monopoly

Back 3

Occurs when there's is only one seller for a product of service

-does not occur very often

-law of diminishing returns/declining marginal utility

Front 4

Monopolistic Competition

Back 4

Occurs when the products offered are different, yet viewed as substitutable for each other and the sellers of these different products

-ex. gas stations

Front 5

Oligopolistic Competition

Back 5

Occurs when relatively few sellers, or many small firms who follow the lead of a few larger firms, offer essentially homogeneous products and any action by one seller is expected to be noticed and reacted to by the other sellers

-ex. airlines

Front 6

Intratype Competition

Back 6

Two or more retailers of same type compete directly with each other for the same households

Front 7

Intertype Competition

Back 7

Two or more retailers of different type compete directly by attempting to sell the same merchandise lines to the same households

Front 8

Divertive Competition

Back 8

Retailers intercept or divert customers from competing retailers.

- Can be intratype or intertype

- Operate very closely to their breakeven point

Front 9

Wheel of Retailing

Back 9

New types of retailers enter the market as low-status, low-margin, and low-price operators then gradually enter a trading-up phase and acquire more sophisticated and elaborate facilities.

High: High prices, excellent facilities, excellent service, declining ROI

Front 10

Retail Life Cycle

Back 10

Intro: simple, low profit, new

Growth: sales and profits explode, market share reaches max levels

Maturity: market shares stabilizes and profits decline

Decline: major loss of market share, profits fall

Front 11

Primary Marketing Institutions

Back 11

Channel members that take title to the goods as they move through the marketing channel

Front 12

Facilitating Marketing Institutions

Back 12

Channel members that do not actually take title but assist in the marketing process by specializing in the performance of certain marketing functions

Front 13

Intensive Distribution

Back 13

All possible retailers are used in a trade area

Front 14

Selective Distribution

Back 14

Moderate number of retailers are used in a trade area

Front 15

Exclusive Distribution

Back 15

Only one retailers is used to cover a trading area

Front 16

Vertical Marketing Channel

Back 16

Capital intensive networks of several levels, professionally managed and centrally programmed to realize the technological, managerial, and promotional economies of long-term relationships

Front 17

Conventional Marketing Channel

Back 17

Each channel member is loosely aligned with the others and takes a short-term orientation

Front 18

ETHICAL AND LEGAL CONSTRAINTS INFLUENCING RETAILERS

Back 18

Major Federal Laws: pricing constraints, promotion constraints, product constraints, supply-chain constraints

Other Federal Laws: mergers, trade agreements, human resources, tax, SEC regulations

State and Local Laws: zoning, unfair trade, building codes, blue laws, franchise laws, green river ordinance, state licenses

Ethical Behavior: buying merchandise, selling merchandise, retailer-employee relationship

Front 19

DISCUSS THE RETAILER'S ROLE AS A MEMBER OF A LARGER SUPPLY CHAIN. TYPES OF SUPPLY CHAINS. HOW TO FACILITATE SUPPLY CHAIN COLLABORATIONS

Back 19

The retailer is in charge of making sure the product is seen by potential consumers, then to manufacture that product following all legal standards, then to get it to the storage buildings, then to the retailers who will sell the product.

Manufacturers, Retailers, and Wholesalers.

Manufacturer can sell right to consumers, or to retailer, or to wholesaler.

Front 20

To be successful in retailing today, given the slower population growth rate, retailers will grow by:

Back 20

taking away sales from competitors

Front 21

A retailer who has already done a great job of developing a strategy:

Back 21

must always remember that no retailer can ever design a strategy that will totally insulate it from the actions of competitors

Front 22

What type of competive environment is characterized by a horizontal demand curve, where the retailer must sell all of its merchandise at the going "market" or equilibrium price?

Back 22

Pure Competition

Front 23

When the seller is the only one selling a particular product, it is known as:

Back 23

Pure Monopoly

Front 24

When Gap Stores get an exclusive contact to sell uniforms to your old high school, it is an example of:

Back 24

Pure Monopoly

Front 25

The competition between American Airlines and Delta Airlines is an example of:

Back 25

Oligopolistic Competition

Front 26

Retail experts would agree that a certain marketplace is_____ if the number of stores in relation to the number of households is so large that to engage in retailing is unprofitable or marginally profitable.

Back 26

Overstored

Front 27

Divertive competition occurs when:

Back 27

a retailer intercepts and makes a sale to a customer that normally would have purchased the product at another retail store.

Front 28

The ____ is the point where total revenues equal total expenses.

Back 28

Break Even Point

Front 29

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?

Back 29

Wheel of Retailing

Front 30

The first stage of the retail life cycle is:

Back 30

Introduction

Front 31

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

Back 31

Growth

Front 32

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

Back 32

Internet Shopping

Front 33

A _____ is defined as a set of institutions that moves goods from the point of production to the point of consumption.

Back 33

Supply Chain

Front 34

The eight marketing functions are buying, selling, storing, transporting, information gathering, financing, risk taking, and:

Back 34

sorting

Front 35

There are three types of promary marketing institutions: manufacturers, retailers, and

Back 35

wholesalers

Front 36

_____ are primarily used by retailers starting a new operation of format.

Back 36

Venture-Capital Firms

Front 37

Selective Distribution

Back 37

means that a smaller number of retailers are used to reach that target market

Front 38

Exclusive Distribution

Back 38

means only one retailer is used in the trading area.

Front 39

What type of vertical marketing channel has a well established authority structure?

Back 39

Corporate Vertical Marketing Systems

Front 40

The Clayton Act:

Back 40

adds to the Sherman Act by prohibiting specific practices.

Front 41

The Sherman Antitrust Act sought to:

Back 41

prevent monopolies or conspiracies that are in restraint of trade

Front 42

The _____ Act requires companies to notify the government of their intent to merge.

Back 42

Hart-Scott Rodino

Front 43

The Equal Credit Opportunity Act:

Back 43

prohibits discrimination in credit transactions because of gender, marital status ,race, national origin, religion, age, or receipt of public assistance.

Front 44

_____ occurs when two retailers buy an identical amount of "like grade and quality" merchandise from the same supplier but pay different prices.

Back 44

Price Discrimination

Front 45

WHEN STRUCTURING A CHANNEL, WHAT RELEVANT FACTORS SHOULD BE CONSIDERED WHEN SELECTING FACILITATING INSTITUTIONS?

Back 45

Conventional Marketing Channel, Vertical Marketing Channel, Corporate Channels, Contractual Channels, Wholesaler-Sponsored Voluntary Groups, Retailer-Owned Cooperatives, Franchises, Administered Channels

Front 46

RELATIONSHIP BETWEEN PRIMARY AND FACILITATING MARKETING INSTITUTIONS

Back 46

Dependency, Power, Conflict

Front 47

EXAMPLES AND HOW TO DEFEND AGAINST PRICE CONSTRAINTS.

PRODUCT CONSTRAINTS.

SUPPLY CHAIN CONSTRAINTS.

Back 47

Horizontal Price Fixing, Vertical Price Fixing, Price Discrimination, Deceptive Pricing, Predatory Laws.

Product Safety, Product Liability, Warranties.

Territorial Restrictions, Dual Distribution, Exclusive Dealing, Tying Agreements.

Front 48

PROMOTIONAL CONSTRAINTS

Back 48

Deceitful Diversion of Patronage: retailer represents that merchandise is made by a firm other than the true manufacturer.

Deceptive Advertising: retailer makes false or misleading advertising claims about the makeup of a product.

Deceptive Sales Practices: failing to be honest or omitting key facts in advertising. using deceptive credit contracts.

Front 49

WHICH LAWS, FEDERAL, STATE, OR LOCAL, ARE THE MOST IMPORTANT FOR A RETAILER TO UNDERSTAND.

Back 49

Local laws are the most important laws to pay attention to because they may different from federal and state laws depending on the community where the retailer is.

Front 50

WHAT ARE THE LAWS THAT:

PRIMARY LAWS THAT AFFECT RETAILING

Back 50

Sherman Act, 1890: bans monopolies or attempts to monopolize.

Clayton Act, 1914: adds to Sherman by prohibiting specific practices

federal Trade Commission, 1914: group to investigate unfair methods of competition in commerce are unlawful.

Robinson-Patman, 1936: to injure, destroy, or prevent competition.

Wheeler-Lea Amendment, 1938: prohibits unfair acts and practices regardless of whether competition is injured.

Lanham Act, 1946: establishes protection for trademarks

Celler-Kefauver Act, 1950: broadening the power to prevent corporate acquisitions

Hart Scott Rodino, 1976: requires large companies to notify the government of their intent to merge.

Front 51

WHAT ARE THE LAWS THAT:

PRIMARY LAWS THAT PROTECT CONSUMERS

Back 51

Mail Fraud Act, 1872

Pure Food and Drug Act, 1906: regulates interstate commerce in misbranded and adulterated foods, drinks, and drugs.

Flammable Fabrics Act, 1953: prohibits interstate shipments of flammable apparel or material

Automobile Info Disclosure Act, 1958: requires auto manufacturers to post suggested retail prices on new cars.

Fair Packaging and Labeling Act, 1966

Child Safety Act, 1966: prevents the marketing and selling of harmful toys

Truth in Lending Act, 1968: requires lenders to state the true costs of a credit transactions

Fair Credit Report, 1970: regulates the reporting and use of credit info.

Consumer Product safety, 1972: created the consumer product safety commission

Magnuson-Moss Warranty/FTC Improvement ACT, 1975: Empowers the FTC to determine rules concerning consumer warranties.

Equal Credit Opportunity, 1975: prohibits discrimination in credit transactions because of gender, marital status, race, etc.

Consumer Product Safety Improvement Act of 2008: enhances CPSC

Credit Card Act of 2009: prohibits arbitrary rate increases and use of misleading credit terms.