Question 1

______________ is when a firm performs more than one set of activities in a marketing channel or supply chain.

Accepted Answer

Vertical integration is when a firm performs more than one set of activities in a marketing channel or supply chain, such as owning or controlling multiple stages of production and distribution. This can help increase efficiency, reduce costs, and improve control over the supply chain.

Question 2

Costco and Home Depot are both retailers and wholesalers.

Accepted Answer

Both Costco and Home Depot operate as both retailers and wholesalers. Costco provides bulk products at wholesale prices to businesses and individuals with membership, while also operating retail stores for individual shoppers. Home Depot supplies materials and equipment to contractors and other businesses, while also selling to retail customers for home improvement projects.

Question 3

If a chain of florist shops opened a plant nursery to provide gift plants and cut flowers to all of its stores within a 300-mile radius,the chain would be practicing

Accepted Answer

Vertical integration refers to expanding the supply chain by owning businesses that are part of the production or distribution process. In this case, the florist shop chain is expanding to include a plant nursery to supply its stores, which is an example of vertical integration.

Question 4

A retailer that is vertically integrated:

Accepted Answer

A retailer that is vertically integrated performs more than one function in the chain from manufacturing to sales to end user. This means that the retailer may have control over the production, distribution, and retailing of its own products, allowing for greater efficiency and control over the supply chain. This type of integration can also lead to cost savings and a more consistent customer experience across all stages of the process.

Question 5

Food retailers experience better financial performance than retailers that focus on hard and soft line products.

Accepted Answer

The financial performance of retailers depends on various factors such as market demand, competition, and operational efficiency, not solely on the type of products they sell.

Question 6

Retailers are the final phase of a distribution channel that link manufacturers to consumers.

Accepted Answer

Retailers are indeed the final phase of a distribution channel, as they sell products directly to consumers.

Question 7

As part of their strategy,the supermarket chain,Whole Foods,utilizes local producers and offers private-label products.

Accepted Answer

Whole Foods' strategy includes using local producers to source their products and offering private-label products under their own brand.

Question 8

Since J.Crew and Victoria's Secret design the merchandise they sell and contract with manufacturers to produce the product for them,they would be considered horizontally integrated.

Accepted Answer

J.Crew and Victoria's Secret are vertically integrated because they control both the design and production processes, rather than expanding across the same level of the supply chain.

Question 9

Ethical principles can change over time.

Accepted Answer

Ethical principles are influenced by cultural, social, and historical contexts, and can change as these contexts change. What was considered ethical behavior in the past may not be considered ethical today, and what is considered ethical today may not be considered ethical in the future. Therefore, ethical principles can change over time.

Question 10

Scrambled merchandising increases intertype competition,which occurs between retailers that sell similar merchandise using different formats,such as specialty and discount stores.

Accepted Answer

Scrambled merchandising leads to retailers selling similar merchandise using different formats, which increases competition between them. This competition is known as intertype competition.

Question 11

Which of the following businesses would NOT be considered a retailer?

Accepted Answer

Procter and Gamble is a manufacturer and supplier of consumer goods, not a retailer.

Question 12

Victoria's Secret,a popular retail chain in women's lingerie and perfume,designs the merchandise they sell,and then contracts with manufacturers to produce it exclusively for them.Victoria's Secret is practicing:

Accepted Answer

Victoria's Secret is practicing vertical integration, which means that the company is involved in multiple aspects of the production process, from designing the merchandise to contracting with manufacturers to produce it exclusively for the company. Vertical integration helps the company maintain control over the quality of the merchandise and the production process while also reducing costs.

Question 13

Why is it imperative that manufacturers like HP and Procter and Gamble understand how retailers operate?

Accepted Answer

Understanding how retailers operate is essential for manufacturers like HP and Procter and Gamble to ensure that their products are stocked on shelves and sold to customers. This knowledge helps manufacturers to create pricing and marketing strategies that work in a retail environment and develop products that are attractive to retailers and their customers. Ultimately, manufacturers need retailers to sell their products, so understanding how retailers operate is essential for success in the market.

Question 14

Why is it advantageous for retailers to be vertically integrated?

Accepted Answer

Being vertically integrated allows retailers to have control over their supply chain by owning and managing the different stages of production and distribution. This can lead to cost savings, quality control, and better responsiveness to changes in the market.

Answer: B 
 Being vertically integrated can also allow retailers to easily expand their services to the Internet since they can direct orders to the manufacturer. This can lead to faster delivery times, cost savings, and increased customer satisfaction.

Answer: C, D, and E 
 Choice C is debatable as not all retailers may see the need to become vertically integrated to stay competitive. Choice D may also not always be true as customers may not be aware or concerned about a retailer's vertical integration. Choice E is incorrect as being vertically integrated can provide various advantages.

Question 15

A ______________ is a business that sells products and/or services to consumers for their personal or family use.

Accepted Answer

Retailers are businesses that sell products and/or services directly to consumers for their personal or family use. Manufacturers create products, wholesalers distribute products in bulk to retailers or other businesses, and distributors facilitate the movement of goods between manufacturers and retailers.

Question 16

A retailer's role in a supply chain is to:

Accepted Answer

A retailer's main role in a supply chain is to satisfy the needs of the consumers by providing the right products, at the right place, and at the right time. While retailers may also work with manufacturers, they typically do not act as the liaison between manufacturers and wholesalers, exclusively buy merchandise from manufacturers, negotiate to eliminate a wholesaler, or sell to wholesalers. These activities may be part of a retailer's operations, but they do not constitute their primary role in a supply chain.

Question 17

A(n)______________ is a set of firms that make and deliver a given set of goods and services to the ultimate consumer.

Accepted Answer

A supply chain is a network of firms that work together to produce and deliver a specific set of goods or services to the end consumer. It involves all activities and processes that transform raw materials into final products and deliver them to the customer. Firms in the supply chain can be manufacturers, distributors, retailers, wholesalers, and logistics companies that work together to provide a seamless flow of goods and information.

Question 18

What is retailing?

Accepted Answer

Retailing refers to the set of business activities that add value to the products and services sold to consumers for their personal use. This includes activities such as merchandising, marketing, advertising, and creating an enjoyable shopping experience. Retailers play an important role in the distribution channel by bridging the gap between manufacturers and consumers.

Question 19

Drycleaners,hair salons and auto repair businesses are considered retailers.

Accepted Answer

Retailers are businesses that sell products or services directly to consumers, and drycleaners, hair salons, and auto repair shops all fit that definition.

Question 20

There are no laws that dictate what is ethical and what is not.

Accepted Answer

Laws often reflect societal standards of ethics, establishing legal guidelines for what is considered right or wrong behavior.

Quiz 1: Introduction to the World of Retailing