Deck 20: Integrating and Controlling the Retail Strategy

Question 1

Contingency plans should be based directly on ________.

A) gap analysis
B) benchmarking
C) scenario analysis
D) strategic planning

Answer 1

C

Question 2

An advantage of using a company audit specialist in performing the retail audit is ________.

A) high degree of auditor independence
B) high degree of objectivity
C) level of knowledge about the retailer
D) low cost for a small retailer

Answer 2

C

Question 3

Sales per square foot and gross margin per square foot are examples of ________.

A) a retail audit
B) retail objectives
C) specific activities
D) performance measures

Answer 3

D

Question 4

A sales opportunity grid evaluates new opportunities on the basis of ________.

A) net profit in specific time periods
B) retail price
C) operating costs
D) sales revenues

Question 5

A company audit specialist is a(n)________.

A) internal employee whose prime responsibility is the retail audit
B) internal employee who has other responsibilities but may be asked to participate in the retail audit
C) person who works as a consultant on a fee basis
D) employee that conducts audits on an overtime basis

Question 6

A retailer compares its actual performance against potential performance and then determines the areas in which it must improve.This illustrates ________.

A) gap analysis
B) variance analysis
C) benchmarking
D) strategic planning

Question 7

The use of low,moderate,and high interest rates as variables in a retail plan for a major appliance retailer illustrates ________.

A) gap analysis
B) benchmarking
C) strategic planning
D) scenario analysis

Question 8

Which of the following is not a factor in the global retail development index (GRDI)?

A) existence of a large middle class
B) market attractiveness
C) time pressure
D) market saturation

Question 9

An investigation of a retailer's total retailing effort or some aspect of it is a ________.

A) retail audit
B) situation analysis
C) retail strategic plan
D) retail information system

Question 10

The first step in undertaking a retail audit is ________.

A) conducting the audit
B) determining who does the audit
C) determining when and how often the audit is conducted
D) developing audit form(s)

Question 11

The purpose of ________ is to study what a retailer is presently doing,appraise performance,and make recommendations for the future.

A) benchmarking
B) gap analysis
C) scenario analysis
D) a retail audit

Question 12

In benchmarking,a retailer ________.

A) compares its efficiency to those of comparable retailers
B) evaluates its performance relative to its plans
C) studies its customer satisfaction measure using the American Customer Satisfaction Index (ACSI)
D) sets its own standards and measures its performance based on the achievements of its sector of retailing, specific competitors, high-performance firms, and/or the prior actions of the company itself

Question 13

Which is not a component of SERVQUAL?

A) reliability
B) retail image
C) assurance
D) responsiveness

Question 14

"What if" planning,based on alternative scenarios,is called ________.

A) scenario analysis
B) contingency planning
C) strategy planning
D) benchmarking

Question 15

Industry norms for performance measures are important to ________.

A) determine company profitability
B) evaluate company performance on the basis of industry benchmarks
C) assign fixed costs to various departments
D) compute direct product profitability

Question 16

Which statement concerning the American Customer Satisfaction Index (ACSI)is not correct?

A) Fast-food franchises typically receive the highest ACSI scores.
B) The ACSI is based on an ongoing study.
C) The ASCI index is based on a scale of 0 to 100.
D) The retailer with the highest 2015 satisfaction scores was Amazon.com.

Question 17

Which of the following is not a fundamental factor in developing and implementing an integrated retail strategy?

A) reducing costs
B) scenario analysis
C) performance measures
D) defining productivity

Question 18

Which type of retail plan process increases the involvement of retail buyers and sales managers?

A) centralized
B) horizontal
C) top-down
D) bottom-up

Question 19

Which statement concerning benchmarking is not correct?

A) Benchmarking data is available from government, trade magazines, and other sources.
B) A retailer should seek to benchmark its performance against high-performance firms regardless of industry.
C) Benchmarking is only suitable for large retailers.
D) Retailers can benchmark their performance against retailers and nonretailers.

Question 20

To be successful,strategy planning should be ________.

A) conducted on a centralized basis
B) conducted on a decentralized basis
C) conducted on an ongoing basis
D) short run in orientation

Question 21

Which of the following should be audited when a store is open?

A) matching of posted and actual prices for goods
B) waiting time at checkout lines
C) inventory recordkeeping
D) employee records

Question 22

A disadvantage of the use of company audit specialists in conducting a retail audit is the ________.

A) level of knowledge about the retailer
B) ability to see improvement/decline in performance over time
C) ongoing nature of the process
D) cost of the auditing process

Question 23

An advantage of the use of an outside auditor in the auditing process is ________.

A) the level of knowledge about the retailer
B) objectivity in reporting concerns
C) the hourly costs of the auditing process
D) the ongoing nature of auditing

Question 24

An appropriate time to conduct a retail audit of a firm's accounting system is ________.

A) at the time of a complete physical inventory
B) during the peak sales period
C) when top management is unavailable
D) during an off-season

Question 25

A retail audit should be conducted ________.

A) every 3 months
B) at least annually
C) every 3 years
D) every 5 years

Question 26

Which planning process is most in accord with a human resource philosophy that stresses employee creativity?

A) bottom-up planning
B) top-down planning
C) scenario-based planning
D) centralized planning

Question 27

The opposite of a consumerism-based strategy is a retail strategy based on ________.

A) specializing in the sale of private labels to reduce price competition
B) pricing above the market level based on providing consumer convenience
C) caveat emptor
D) high levels of customer service at a high price

Question 28

Which of the following should be audited when a store is closed?

A) employee records
B) waiting time on checkout lines
C) vertical transportation adequacy
D) parking lot adequacy

Question 29

A horizontal retail audit ________.

A) evaluates the interrelationship of each retail strategy element
B) is specialized in nature
C) evaluates the overall environment facing a retailer
D) specializes in evaluating support services such as retail information systems

Question 30

Morale of staff is generally improved by the use of ________ planning.

A) top-down
B) bottom-up
C) centralized
D) scenario-based

Question 31

A retail audit that focuses on one area of a retailer's strategy mix is a ________ retail audit.

A) disguised
B) nondisguised
C) horizontal
D) vertical

Question 32

An advantage of using company department managers in conducting a retail audit involves the ________.

A) amount of time that can be committed to the auditing process
B) objectivity in reporting concerns
C) direct cost of the auditing process
D) full-time commitment to the auditing responsibility

Question 33

Outside auditors are ________.

A) internal personnel who specialize in conducting retail audits
B) internal employees who have other responsibilities but may be asked to participate in the retail audit
C) people who work as consultants on a fee basis
D) employees of an accounting firm

Question 34

A company department manager is a(n)________.

A) internal employee who specializes in conducting retail audits
B) internal employee whose prime job is operations management but also may be asked to participate in the retail audit
C) person who works as a consultant on a fee basis
D) auditing specialist hired by the retailer

Question 35

Which planning process is most participative?

A) scenario-based planning
B) centralized planning
C) bottom-up planning
D) top-down planning

Question 36

A retail strategy audit is also referred to as a ________ audit.

A) disguised
B) nondisguised
C) horizontal
D) vertical

Question 37

A vertical retail audit ________.

A) evaluates the interrelationship of each retail strategy element
B) is specialized in nature
C) evaluates the overall environment facing a retailer
D) specializes in evaluating support services such as retail information systems

Question 38

To be effective,strategic planning needs to be ________.

A) integrated and ongoing
B) centralized
C) decentralized
D) short term in orientation

Question 39

Audit forms generally resemble ________.

A) management reports
B) questionnaires
C) computer printouts
D) survey research data

Question 40

In a nondisguised audit,________.

A) consumers are aware an audit is taking place
B) results of the audit are not given to management
C) the real purpose of the audit is told to employees, but not customers
D) store employees are aware that an audit is taking place

Question 41

Which planning process is most in accord with a human resource philosophy that believes that employees are basically lazy and need constant direction?

A) bottom-up planning
B) top-down planning
C) scenario-based planning
D) centralized planning

Question 42

A difficulty in using sales per square foot as a performance measure for a rapidly growing retailer is that it ________.

A) will underestimate performance since a large number of stores will not be open for an entire year
B) will overestimate performance since a large number of stores will not be open for an entire year
C) does not take into account the different performance levels of older versus newer stores
D) does not take into account the different performance levels of existing versus acquired stores

Question 43

Scenarios analysis always involves ________.

A) controllable variables
B) uncontrollable variables
C) direct costs
D) indirect costs

Question 44

Which performance measure is generally not used by small retailers?

A) sales per square foot
B) inventory turnover
C) market share
D) markdown percentage

Question 45

A chain with 100 stores is currently opening between 10 and 12 new stores per year.What performance measure most accurately reflects continuing sales productivity?

A) total sales
B) sales per store
C) sales per square foot
D) sales per square foot in stores open one year or more

Question 46

Top-down planning can also be described as ________ planning.

A) centralized
B) decentralized
C) short-term
D) long-term

Question 47

A service retailer prides itself as always being on time.This most closely resembles which SERVQUAL area of performance?

A) assurance
B) reliability
C) empathy
D) tangibles

Question 48

Which statement concerning the American Customer Satisfaction Index is correct?

A) The study is not an accurate representation of U.S. consumers.
B) The total sample size is too low.
C) The ratings of retailers are based on at least 250 interviews with current customers.
D) Department store chains are excluded from the sample of retailers studied.

Question 49

A sales opportunity grid evaluates retail good/service alternatives on the basis of ________.

A) sales per square feet
B) gross margin return on inventory investment (GMROI)
C) net profit estimates over short-run time periods
D) net profit estimates over short-, moderate-, and long-term time periods

Question 50

Sales per square foot is a poor performance measure for a ________.

A) traditional department store
B) direct marketer
C) supermarket
D) membership club

Question 51

The study of "best practices" in retailing is an example of ________.

A) benchmarking
B) scenario analysis
C) gap analysis
D) variance analysis

Question 52

While a retailer planned to have a 20 percent return on its net worth,actual return on net worth was only 15 percent.An analysis of this performance measure revealed that the firm's operating costs were much higher than expected.The analysis performed by the retailer is ________.

A) scenario analysis
B) gap analysis
C) benchmarking
D) variance analysis

Question 53

A traditional department store with a small catalog division has decided to set performance standards for its telephone-based order takers based on intensively studying the operations of L.L.Bean and Lands' End.This strategy is an example of ________.

A) scenario analysis
B) gap analysis
C) benchmarking
D) variance analysis

Question 54

Complex assumptions about the economy,population forecasts,and competition are best handled in ________ planning.

A) scenario-based
B) decentralized
C) bottom-up
D) top-down

Question 55

Which of the following is generally not part of a sales opportunity grid?

A) markup
B) floor space needed
C) sales estimate
D) cooperative-advertising allowance

Question 56

A sneaker retailer is concerned about rumors of a major competitor opening as many as five stores in its overall trading area.In response to these rumors,the retailer has developed competitive response plans.These plans are an example of ________.

A) trigger points
B) gap analysis
C) scenario analysis
D) benchmarking

Question 57

Which statement concerning the global retail development index (GRDI)is not correct?

A) The GRDI is limited to emerging economies.
B) The GRDI examines political risk.
C) The GRDI evaluates a country's distribution system.
D) The GRDI gives the most weight to market attractiveness.

Question 58

In developing performance measures for a retail operation,it is important to ________.

A) use the same measure over time to allow trends to be ascertained
B) use a measure that cannot be directly compared to widely respected secondary data sources
C) develop measures unique to the firm
D) focus on short-run measures

Question 59

Slotting allowance fees for a new product can be assessed through ________.

A) computation of a product's markup
B) use of a sales opportunity grid
C) assessing a product's sales potential
D) estimating holding costs

Question 60

A sales opportunity grid is generally used in conjunction with ________.

A) strategic profit model evaluation
B) scenario analysis
C) direct product profitability analysis
D) gap analysis

Question 61

Top-down plans involve a more participative management style than bottom-up plans.

Question 62

A retailer is concerned about how well integrated his or her overall strategy is coordinated.While customer service is excellent and merchandise within the store is distinctive,parking adequacy is poor and merchandise selection is narrow.What type of retail audit should the retailer pursue?

A) nondisguised retail audit
B) disguised retail audit
C) vertical retail audit
D) horizontal retail audit

Question 63

A good retail audit is conducted on a regular basis,comprehensive,systematic,and conducted in an independent manner.

Question 64

Which retail audit needs to be conducted when the store is open?

A) efficiency of point-of-sales system in handling markdowns
B) shortage/overage determination
C) assessment of the condition of building and grounds
D) analysis of employee records for completeness

Question 65

What type of auditor is most appropriate for a small independent retailer?

A) outside auditor
B) company audit specialist
C) company department manager
D) team auditor

Question 66

It is important to use similar-sized retailers as part of benchmarking.

Question 67

The retail audit is an example of which stage of the retail planning process?

A) setting objectives
B) situation analysis
C) control
D) feedback

Question 68

A retailer systematically reviews its planning process,as well as how it implements its plans.This review process is called ________.

A) scenario analysis
B) the sales opportunity grid
C) benchmarking
D) the retail audit

Question 69

A retailer that would not conduct an audit unless it will involve the lowest incremental cost possible should consider what form of auditing organization?

A) outside auditor
B) disguised auditor
C) company department manager
D) company specialist

Question 70

To be successful,a retail plan needs to be conducted as an integrated and ongoing process.

Question 71

The occurrence of an optimistic,pessimistic,and most likely event is part of ________.

A) feedback
B) control
C) scenario analysis
D) gap analysis

Question 72

A retailer should develop its retail categories independent of well-known and respected secondary sources.

Question 73

Scenario analysis always involves controllable variables.

Question 74

A retail planning organization can be conducted on either a top-down or bottom-up basis.

Question 75

Typically,the most productive strategy is the most expensive strategy.

Question 76

An evaluation of the extent to which salespeople engage in cross-selling can be best measured through a ________ retail audit.

A) companywide
B) horizontal
C) disguised
D) nondisguised

Question 77

An accepted measure of customer satisfaction is the American Customer Satisfaction Index (ACSI).

Question 78

The use of mystery shoppers to evaluate a retailer's sales force is an example of a ________.

A) disguised, horizontal retail audit
B) disguised, vertical retail audit
C) nondisguised, horizontal retail audit
D) nondisguised, vertical retail audit

Question 79

A sales opportunity grid evaluates a product's profitability over several time periods.

Question 80

A retailer requires that an auditor have the greatest level of objectivity due to possible litigation involving wrong termination of an employee.Which type of auditor should be used?

A) company audit specialist
B) outside auditor
C) company department manager
D) team auditor