Deck 6: Retailing Structures and Strategies

Question 1

If a retailer needs to evaluate its performance according to the return it earns on inventory investments,which of the following would be most useful?

A) SPM
B) ECR
C) GMROI
D) GMROL
E) GMROS

Answer 1

C

Question 2

Which term refers to the breadth of the product lines available from a retailer?

A) assortment
B) collection
C) variety
D) range
E) class

Answer 2

C

Question 3

Which service output requires that a retailer keep a product in stock at all times?

A) product and service assortment
B) waiting and delivery time
C) spatial convenience
D) product variety
E) bulk breaking

Answer 3

B

Question 4

Which of the following is most likely a true statement about Zara's retailing strategy?

A) Zara spends significantly on magazine advertising to remind shoppers of store products.
B) Zara's designers bring fewer new designs to market than larger retailers like The Gap.
C) Zara can design and manufacture a product and have it in stores in six days.
D) Zara collects less than the industry average of list price on clothing items.
E) Zara has few inventories in its system because of high turnover rates.

Question 5

Which top-10 retailer does NOT engage in globalization?

A) Home Depot
B) Safeway
C) Best Buy
D) Kroger
E) Tesco

Question 6

In most high-service retailing systems,margins are ________,and turnover is ________.

A) low; high
B) high; low
C) low; low
D) high; high
E) low; non-existent

Question 7

What is the top retailer in the world?

A) Tesco
B) Costco
C) Wal-Mart
D) Walgreen
E) Carrefour

Question 8

At Super Saver,Robin buys a package of four cookies for $1.00 instead of a package of thirty cookies for $3.00.Although she realizes she is paying more per cookie,Robin does not want to eat too many cookies.Which service output offered by Super Saver is most likely illustrated?

A) bulk breaking
B) delivery time
C) customer service
D) product assortment
E) spatial convenience

Question 9

All of the following are strategies used by Zara EXCEPT ________.

A) making small amounts of products at one time
B) owning the firm's logistics and trucking operations
C) maintaining strict reordering and shipping schedules
D) investing in multiple production facilities around the world
E) introducing new styles and product lines on a frequent basis

Question 10

Silver Star is a trendy,upscale jewelry store that sells unique silver earrings,rings,necklaces,and bracelets.Which service output is most likely important to Silver Star's positioning strategy?

A) spatial convenience
B) product variety
C) customer service
D) product assortment
E) bulk breaking

Question 11

Meredith works as a buyer for Famous Footwear,which means she is most likely responsible for ________.

A) hiring sales representatives for shoe outlets
B) responding to customer complaints about shoes
C) designing new shoes for the retail outlets to sell
D) developing marketing promotions for new shoes
E) negotiating trade deals with shoe manufacturers

Question 12

The clothing retailer H&M keeps margins low and turnover high by ________.

A) outsourcing production
B) relying on local suppliers
C) using third-party designers
D) investing in vertical integration
E) managing advertising expenditures

Question 13

Patty's Party Place ordered five cases of Valentine's Day balloons from a Chinese manufacturer.Patty's purchased the balloons at a cost of ten cents per balloon and will sell them at a cost of $.50/each.Which term best describes the transaction between Patty's and the Chinese manufacturer?

A) direct sale
B) retail sale
C) niche sale
D) consumer sale
E) wholesale sale

Question 14

A retailer needs to evaluate performance based on the shelf space it allocates to a manufacturer's brand.Which of the following would be most appropriate?

A) SPM
B) ECR
C) GMROI
D) GMROL
E) GMROS

Question 15

Jiffy Oil Change purposefully seeks locations that are near busy shopping areas so that car owners can shop while waiting for their car repair to be finished.Which service output is most likely a focus of Jiffy's retail strategy?

A) spatial convenience
B) product variety
C) customer service
D) product assortment
E) bulk breaking

Question 16

Which term refers to the activities involved in selling goods and services to ultimate consumers for their personal consumption?

A) segmenting
B) positioning
C) marketing
D) targeting
E) retailing

Question 17

For retailers,SG&A expenses address the service output of ________.

A) spatial convenience
B) product assortment
C) customer service
D) product variety
E) bulk breaking

Question 18

What is the most likely buying motive for a retail sale?

A) personal satisfaction
B) institutional use
C) business profit
D) channel power
E) industrial use

Question 19

Which term refers to the depth of product brands or models offered within each generic product category?

A) assortment
B) collection
C) variety
D) range
E) class

Question 20

Roberto purchased an iPod at Best Buy and plans to download music that will keep him motivated while jogging.Which term best describes Roberto's transaction?

A) resale
B) retail sale
C) niche sale
D) direct sale
E) wholesale sale

Question 21

Tasty Tomato Company temporarily cut the wholesale price of canned tomatoes by 10%.In response to the price cut,Great Groceries purchased a three month supply of canned tomatoes,which is twice the amount the retailer would normally buy.Which term best describes the actions of Great Groceries?

A) forward buying
B) price diverting
C) gray marketing
D) downline marketing
E) continuous replenishment

Question 22

Lisbon Gadgets,a California manufacturer,offers a regional trade promotion to West Coast retailers and wholesalers.Winston Wholesalers purchases large quantities of gadgets from Lisbon and distributes the products to stores on the East Coast where the discount is unavailable.Winston Wholesalers is most likely engaged in ________.

A) slotting
B) diverting
C) price gouging
D) forward buying
E) gray marketing

Question 23

The positioning strategies of convenience stores,such as 7-Eleven,most likely emphasize ________.

A) moderate wait time
B) deep product assortment
C) narrow product variety
D) very high customer service
E) very high spatial convenience

Question 24

The SG&A-to-net sales percentage for Target is 20.1% and 9.9% for Costco.Which statement best explains this difference?

A) Costco has greater gross sales than Target.
B) Target provides less bulk breaking than Costco.
C) Costco pays sales representatives less than Target.
D) Target invests more in customer service than Costco.
E) Costco balances low prices with less customer service than Target.

Question 25

Which product category most likely relies on e-commerce sales the LEAST?

A) clothing
B) health and beauty aids
C) computer hardware
D) books and magazines
E) appliances and electronics

Question 26

By implementing a continuous replenishment program,retailers will most likely correct problems associated with ________.

A) diverting
B) channel power
C) price gouging
D) forward buying
E) gray marketing

Question 27

Great Groceries and Tasty Tomato Company maintain an electronic link that lets Tasty Tomato Company know when Great Groceries is running low on spaghetti sauce.The information triggers an automatic reorder in the electronic system.Which of the following is most likely being used by Great Groceries and Tasty Tomato Company?

A) corporate intranet
B) benchmarking system
C) automatic marketing system
D) inventory management program
E) continuous replenishment program

Question 28

Which term refers to the sale of a consumer product or service in a face to face manner away from a fixed retail location?

A) e-commerce
B) retailing
C) direct selling
D) telemarketing
E) cold calling

Question 29

Which statement best explains the increasing power of major retailers over manufacturers?

A) Grocery stores are growing faster than warehouse clubs due to the push to eat locally.
B) Today's retail buyers rely on CRP systems to purchase and maintain balanced inventories.
C) Manufacturers have the ability to threaten retailers with insufficient quantities of name brand products.
D) Suppliers introduce numerous products each year and have to offer promotional allowances to gain shelf space.
E) Online retailers are commonly involved in the illegal act of diverting products to out-of-channel distributors.

Question 30

All of the following most likely indicate that a direct selling organization is legitimate EXCEPT ________.

A) having low entry barriers
B) clarifying the firm's code of ethics
C) paying for the recruitment of downline members
D) basing rewards mostly on product and service sales
E) accepting any unsold merchandise for a partial refund

Question 31

Why are pyramid schemes illegal?

A) Firms engage in the online sale of products and services.
B) Firms receive customer payments without selling products.
C) Individuals are actively recruited to fill direct sales positions.
D) Salespeople are overly persistent when trying to gain big sales.
E) Sales recruits lack the business knowledge and skills to be ethical.

Question 32

Which type of retailer most likely has a positioning strategy characterized by extremely high spatial convenience,moderate product assortment,and narrow product variety?

A) mail order/catalog
B) department store
C) category killer
D) specialty store
E) hypermarket

Question 33

Hybrid channel shoppers are most likely to ________.

A) ignore the bricks-and-mortar channel
B) overlook the online service output channel
C) gather product information before making a purchase
D) negotiate with online retailers to gain the best prices
E) obtain some service outputs online and others offline

Question 34

All of the following are tools that suggest the growing channel power of retailers EXCEPT _______.

A) failure fees
B) service outputs
C) forward buying
D) private branding
E) slotting allowances

Question 35

The illegal practice of distributing authorized,branded goods through unauthorized channels overseas is known as ________.

A) slotting
B) diverting
C) price gouging
D) forward buying
E) gray marketing

Question 36

Which of the following is most likely a true statement about failure fees?

A) Failure fees are an indication of the manufacturer's control of the channel.
B) Failure fees have been deemed illegal by the Federal Trade Commission.
C) Collecting failure fees is more difficult than collecting slotting fees.
D) Improper promotion leads manufacturers to impose failing fees.
E) Failure fees must be paid upfront like slotting fees.

Question 37

What should most likely be the main focus of a retail positioning strategy?

A) annual average sales ratios
B) target market demands
C) inventory turnover
D) service output
E) retailer type

Question 38

What is most likely suggested by the significant increase in retail e-commerce sales?

A) Retailers are able to conduct efficient bulk breaking.
B) Cost-side factors are consistent across markets.
C) High profits stem from customer service.
D) Consumers demand spatial convenience.
E) Positioning relies on product assortment.

Question 39

Leah is holding a party at her home for the purpose of demonstrating and selling Mary Kay cosmetics.Leah receives a 10% commission from Mary Kay for every sale she makes.Leah is most likely engaged in ________.

A) targeting
B) positioning
C) cold calling
D) direct selling
E) grey marketing

Question 40

What is the LEAST likely problem faced by retailers that intend to expand globally?

A) a lack of quality real estate locations for building retail stores
B) the ability to develop effective supplier relationships in new markets
C) the need to offer locally and culturally appropriate products and packaging
D) variations in zoning regulations, taxation, labor practices, and hours of operation
E) the virtuous cycle of fast-changing infrastructures and technological communication

Question 41

What are the three primary routes to market? What challenges does a retailer or manufacturer face when using multiple retail routes?

Question 42

In most low-price retailing systems,both margins and inventory turnover rates are typically high.

Question 43

What information can a retailer gain by calculating GMROI,GMROL,and GMROS? Briefly describe each.

Question 44

Superstores,supermarkets,hypermarkets,and warehouse clubs are represented in the world's top 10 retailers.

Question 45

Temporary wholesale price cuts cause many retailers to engage in forward buying,which involves buying more product than needed and creating stockpiles.

Question 46

Discuss the reasons that major retailers have increasingly more channel power than manufacturers.

Question 47

What are the challenges associated with globalizing a retail operation? Given these difficulties,why do retailers continue to attempt globalization?

Question 48

When determining a retail positioning strategy,what are the cost-side and demand-side decisions that must be made?

Question 49

When developing the best combination of waiting and delivery service outputs,a retailer must determine how damaging an out-of-stock situation would be.

Question 50

The increased use of home shopping technologies,such as catalogs,Web sites,and television channels,indicates the growing demand for the service output of bulk breaking.