Question 1

Ruth's Fashions is a popular boutique in Atlanta.It has a Web site that answers customer queries and also provides information on new arrivals and discounts.Customers also receive product information on their mobile phones.From the given example,it can be seen that Ruth's Fashions is involved in _____,which is a value-creating activity.
A) breaking bulk
B) holding inventory
C) providing assortments
D) exclusive distribution
E) providing services

Accepted Answer

Retailers provide services that make it easier for customers to buy and use products.Some retailers employ salespeople in stores or maintain Web sites to answer questions and provide additional information about the products they sell.

Question 2

Jenson's is a large retail store in Chicago.It offers credit so that consumers can buy a product and pay for it later.Which of the following value-creating activities is Jenson's undertaking in the given example?
A) Exclusive dealing
B) Breaking bulk
C) Holding inventory
D) Offering assortments
E) Providing services

Accepted Answer

Retailers provide services that make it easier for customers to buy and use products.For example,retailers offer credit so that consumers can have a product now and pay for it later.

Question 3

Florals is a popular retail chain specializing in women's lingerie and perfume.It designs the merchandise being sold in the store.Therefore,Florals is practicing _____.
A) channel expansion
B) scrambled merchandising
C) backward integration
D) horizontal integration
E) product diversification

Accepted Answer

Backward integration arises when a retailer performs some wholesaling and manufacturing activities,such as operating warehouses or designing private-label merchandise.

Question 4

Retailers function as wholesalers when:
A) they hold inventory.
B) they perform manufacturing activities.
C) they practice scrambled merchandising.
D) they sell to other businesses.
E) there is an intratype competition.

Accepted Answer

Some large retailers,like Costco and Home Depot,function as both retailers and wholesalers: They perform retailing activities when they sell to consumers,but they engage in wholesaling activities when they sell to other businesses,such as restaurants or building contractors.

Question 5

Fresh n Fragrant is a chain of flower shops offering a variety of flowers and ornamental plants.It recently opened a distribution center to supply ornamental plants and cut flowers to all its stores within a 300-mile radius.From the given scenario,it can be seen that Fresh n Fragrant is practicing _____.
A) vertical integration
B) channel expansion
C) horizontal expansion
D) horizontal integration
E) channel diversification

Accepted Answer

Vertical integration means that a firm performs more than one set of activities in the channel,as occurs when a retailer engages in wholesaling activities by operating its own distribution centers to supply its stores.

Question 6

Dailies is a large retail chain in New Jersey.Apart from selling to customers,Dailies supplies bread and vegetables to a large number of restaurants in and around New Jersey.Therefore,Dailies is engaged in _____ when selling to restaurants.
A) wholesaling
B) retailing
C) merchandising
D) breaking bulk
E) channel expansion

Accepted Answer

Some large retailers,like Costco and Home Depot,function as both retailers and wholesalers: They perform retailing activities when they sell to consumers,but they engage in wholesaling activities when they sell to other businesses,such as restaurants or building contractors.

Question 7

_____ is the value-creating activity in which a retailer makes available a wide range of products of different brands and prices at a single location.
A) Providing services
B) Breaking bulk
C) Providing assortments
D) Holding inventory
E) Exclusive dealing

Accepted Answer

Offering assortments enables customers to choose from a wide selection of products,brands,sizes,and prices at one location.

Question 8

The U.S.retail industry has:
A) the greatest concentration of large firms.
B) the lowest retail density in the world.
C) mostly small stores which operate independently.
D) a single large wholesale industry supplying to all retailers.
E) a fragmented distribution system.

Accepted Answer

The U.S.retail industry has the greatest retail density (retail stores per person)and concentration of large retail firms.

Question 9

Shades n Hues is a company producing cosmetics.It supplies products to stores and beauty salons and also manages its own retail outlets.Therefore,Shades n Hues is engaged in _____.
A) forward integration
B) scrambled merchandising
C) backward integration
D) horizontal integration
E) cross-selling

Accepted Answer

Forward integration occurs when a manufacturer undertakes retailing and wholesaling activities,such as Apple operating its own retail stores.

Question 10

Which of the following statements about the U.S.distribution system is TRUE?
A) The U.S.retail industry is mostly composed of many small and medium-sized firms.
B) Many U.S.retailers are large enough to have their own warehouses.
C) The retail density in the U.S.is lower than that found in Europe.
D) A large independent wholesale industry supplies goods to all retailers.
E) The U.S.retail industry has a fragmented distribution system.

Accepted Answer

Many U.S.retailers have stores with more than 20,000 square feet.Due to their size,they have the scale economies to operate their own warehouses,eliminating the need for wholesalers.

Question 11

A retailer that is vertically integrated:
A) concentrates on selling only to businesses.
B) outsources all supply chain activities to independent firms.
C) has limited control on the activities of the supply chain.
D) performs more than one activity in the distribution channel.
E) concentrates only on operating its own retail stores.

Accepted Answer

Vertical integration means that a firm performs more than one set of activities in the channel,as occurs when a retailer engages in wholesaling activities by operating its own distribution centers to supply its stores.

Question 12

A major value-providing activity performed by retailers is _____,so that products will be available when consumers want them.
A) breaking bulk
B) holding inventory
C) scrambled merchandising
D) backward integration
E) providing assortments

Accepted Answer

A major value-providing activity performed by retailers is holding inventory so that products will be available when consumers want them.

Question 13

Grocers,a large food retailer,purchases fruits from several different tropical countries.When the fruits arrive in distribution centers across the United States,the quantities are reduced to amounts that are appropriate for store delivery.The stores,in turn,offer the fruits in quantities that depend on the consumption pattern of the customers.This act of offering products in smaller quantities based on consumption patterns is known as _____.
A) holding inventory
B) breaking bulk
C) forward integration
D) intensive distribution
E) consumerization

Accepted Answer

Breaking bulk allows manufacturers to efficiently make and ship merchandise in larger quantities at one time and enables consumers to purchase merchandise in smaller,more useful quantities.

Question 14

The Chinese distribution system:
A) has a combination of large stores and large firms resulting in an efficient distribution system.
B) is characterized by many small and medium-sized firms.
C) has the most number of large retailers operating their own warehouses.
D) is characterized by a high retail density.

Accepted Answer

The Chinese distribution system is highly fragmented like the retail industry in India.The number of national and even regional chains is limited.

Question 15

The U.S.retail industry:
A) has the lowest concentration of large firms.
B) has the greatest retail density in the world.
C) mostly has small stores operating independently.
D) depends on a single large wholesale industry.
E) consists of a fragmented distribution system.

Accepted Answer

The U.S.retail industry has the greatest retail density (retail stores per person)and concentration of large retail firms.

Question 16

Tech Games,a retailer,purchases many of the video games DVDs,Wii games,and game consoles on a large scale.It then offers the products to customers in small quantities based on their requirements.The value-creating function performed by Tech Games in the given scenario is _____.
A) providing assortments
B) breaking bulk
C) holding inventory
D) providing services
E) creating a retail mix

Accepted Answer

Breaking bulk enables manufacturers to efficiently make and ship merchandise in large quantities and enables consumers to purchase merchandise in smaller,more useful quantities.

Question 17

_____ means that a firm performs more than one set of activities in the channel,as occurs when a retailer engages in wholesaling activities by operating its own distribution centers to supply its stores.
A) Channel diversification
B) Horizontal development
C) Horizontal integration
D) Vertical expansion
E) Vertical integration

Accepted Answer

Vertical integration means that a firm performs more than one set of activities in the channel,as occurs when a retailer engages in wholesaling activities by operating its own distribution centers to supply its stores.

Question 18

_____ arises when a retailer performs some distribution and manufacturing activities,such as operating warehouses or designing private-label merchandise.
A) Exclusive dealing
B) Merchandising
C) Backward integration
D) Horizontal integration
E) Forward integration

Accepted Answer

Backward integration arises when a retailer performs some wholesaling and manufacturing activities,such as operating warehouses or designing private-label merchandise.

Question 19

Essentials,a retail store,manages its own warehouse.It also owns a manufacturing facility where it produces private-label food products.Therefore,Essentials is practicing _____.
A) scrambled merchandising
B) backward integration
C) cross-selling
D) horizontal integration
E) forward integration

Accepted Answer

Backward integration arises when a retailer performs some wholesaling and manufacturing activities,such as operating warehouses or designing private-label merchandise.

Question 20

_____ occurs when a manufacturer undertakes retailing and wholesaling activities.
A) Merchandising
B) Exclusive dealing
C) Backward integration
D) Horizontal integration
E) Forward integration

Accepted Answer

Forward integration occurs when a manufacturer undertakes retailing and wholesaling activities,such as Apple operating its own retail stores.

Quiz 1: Introduction to the World of Retailing

Jenson's is a large retail store in Chicago.It offers credit so that consumers can buy a product and pay for it later.Which of the following value-creating activities is Jenson's undertaking in the given example?

Florals is a popular retail chain specializing in women's lingerie and perfume.It designs the merchandise being sold in the store.Therefore,Florals is practicing _____.

Retailers function as wholesalers when:

Dailies is a large retail chain in New Jersey.Apart from selling to customers,Dailies supplies bread and vegetables to a large number of restaurants in and around New Jersey.Therefore,Dailies is engaged in _____ when selling to restaurants.

_____ is the value-creating activity in which a retailer makes available a wide range of products of different brands and prices at a single location.

The U.S.retail industry has:

Shades n Hues is a company producing cosmetics.It supplies products to stores and beauty salons and also manages its own retail outlets.Therefore,Shades n Hues is engaged in _____.

Which of the following statements about the U.S.distribution system is TRUE?

A retailer that is vertically integrated:

A major value-providing activity performed by retailers is _____,so that products will be available when consumers want them.

The Chinese distribution system:

The U.S.retail industry:

Tech Games,a retailer,purchases many of the video games DVDs,Wii games,and game consoles on a large scale.It then offers the products to customers in small quantities based on their requirements.The value-creating function performed by Tech Games in the given scenario is _____.

_____ means that a firm performs more than one set of activities in the channel,as occurs when a retailer engages in wholesaling activities by operating its own distribution centers to supply its stores.

_____ arises when a retailer performs some distribution and manufacturing activities,such as operating warehouses or designing private-label merchandise.

Essentials,a retail store,manages its own warehouse.It also owns a manufacturing facility where it produces private-label food products.Therefore,Essentials is practicing _____.

_____ occurs when a manufacturer undertakes retailing and wholesaling activities.