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Retailing Management Fifth Canadian Edition Test Bank

Strengthen your exam preparation with Retailing Management Fifth Canadian Edition Test Bank, featuring a blend of theory, practical examples, and exam-focused exercises.

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    Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The largest sectors in terms of retail sales are: 1) _______ A) Automotive and Building supplies B) Pharmacies and Building supplies C) General merchandise and Clothing D) Food, Beverage, and Automotive E) Furniture and Pharmacies 2) Retail managers must make complex decisions including all of the following except: 2) _______ A) Training and motivating sales associates B) Mission statement C) Target markets D) Retail locations E) Merchandise and services offerings 3) What is retailing? 3) _______ A) It is the merchandising component of the retail mix B) It is the ability to offer enough variety in a store to encourage one - stop shopping C) It is the process of offering products in smaller quantities for consumer consumption patterns D) It is the strategy retailers and vendors use to get products into the stores E) It is the set of business activities that adds value to the products and services sold to consumers for their personal or family use 4) Which of the following businesses would be considered a retailer? 4) _______ A) Canadian Tire B) Your local hair salon C) Air Canada D) Tim Hortons E) Your local hair salon, Air Canada, Tim Hortons, and Canadian Tire 5) Which of the following is most likely to be considered a retailer? 5) _______ A) A university B) The Red Cross C) A radio talk show D) The Better Business Bureau E) All of the choices. 6) A retailer's role in the distribution channel is to: 6) _______ A) act as the liaison between manufacturers and wholesalers B) sell to wholesalers C) negotiate with consumers through a series of focus groups D) satisfy the needs of the consumers E) buy merchandise exclusively from the manufacturers 7) ________ is when a firm performs more than one set of activities in the channel. 7) _______ A) Distribution channel B) Horizontal integration

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    C) Vertical development D) Channel diversification E) Vertical integration 8) Prior Snowboards located in Whistler, B.C. manufactures many of the snowboards it sells in its retail outlet at its own factory in Canada. Prior Snowboards is practicing: 8) _______ A) wholesaling B) product - related marketing C) globalization D) vertical integration E) demographic marketing 9) If a chain of florist shops opened a plant nursery to provide gift plants and cut flowers to all of its outlets within a 300 - mile radius, the chain would be practicing: 9) _______ A) channel expansion B) vertical integration C) horizontal expansion D) service marketing E) vertical retailing 10) What is the primary advantage for retailers to be vertically integrated? 10) ______ A) Retailers have realized that to stay competitive, they must become vertically integrated B) Retailers can develop unique merchandise sold only in their stores; retailers can expand their services easily to the Internet because they can direct orders to the manufacturer; retailers have realized that to stay competitive, they must become vertically integrated; and customers preferring retailers that are vertically integrated are all advantages. C) Retailers can expand their services easily to the Internet because they can direct orders to the manufacturer D) Retailers can develop unique merchandise sold only in their stores E) Customers prefer retailers who are vertically integrated 11) A retailer that is vertically integrated: 11) ______ A) performs more than one function in the chain from manufacturing to sales to end user B) performs only the function to end user C) concentrates on selling to businesses only D) has an excellent vertical relationship between corporate headquarters and stores E) does not have frequent communication between buyers and managers 12) Which of the following statements about retailers holding inventory is false ? 12) ______ A) Holding inventory in a store helps serve the customer's needs B) Retailers keep inventory so that products are available when consumers want them C) Holding inventory reduces consumer's cost of storing products D) By holding inventory, retailers can decrease the visual merchandising expenditure E) By having inventory held in the store, consumers can hold less merchandise at home 13) Grocers purchase bananas from several different tropical countries. When bananas arrive in the distribution centres across Canada, containers are reduced to amounts that are app rop riate for

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    store delivery . Once delivere d to the stores, associat es open the cartons and arrange the bananas for the consum er to select. Grocers are performi ng what function ? 13) ___ ___ A) Holding inventory B) Providing services C) Distribution D) Vertical integration E) Breaking bulk 14) Providing assortments is an advantageous business activity because it: 14) ______ A) enables the company to create a more informational and entertaining environment which would promote more sales B) enables the company to reinvest savings C) enables the customer to save money by being able to shop in one store D) enables the customer to stock up on the assortments because of their availability E) enables the customer to choose from a wide selection of brands, designs, sizes, and prices all in one store 15) One of the functions retailers undertake to increase the customer's perception of value is providing services. Which of the following would be an example of that activity? 15) ______ A) Payment by debit cards B) Trained salespeople to answer questions C) Well - lit parking lots D) Clean washrooms E) Clean washrooms, payment by debit cards, trained salespeople, and well - lit parking lots are all appropriate examples. 16) One of the functions retailers undertake to increase the customer's perception of value is providing services. Which of the following would be an example of that activity? 16) ______ A) Ignoring the competition

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    B) Selling on the Internet as an additional channel C) Increasing employee pilferage D) Performing a situation analysis E) None of the available answers are correct. 17) A credit union holds and maintains detailed records of the banking activities of its members. Each quarter, the credit union provides its members a printout of banking activities, information about low rate loans and pre - owned automobiles. By contacting its members on a regular basis, the credit union is engaging in the business function of: 17) ______ A) financing B) holding inventory C) providing services D) breaking bulk E) providing assortments 18) Retailing is the nation's largest industry in terms of: 18) ______ A) promotions B) community involvement C) variety D) competition E) employment 19) Provinces with the highest retail sales in order are: 19) ______ A) Alberta, Atlantic Canada, Ontario, British Columbia, and Quebec B) Ontario, British Columbia, Quebec, and Alberta C) Quebec, British Columbia, Prairies, Ontario, and Atlantic Canada D) Ontario, Alberta, Quebec, and British Columbia E) Ontario, Quebec, Alberta, and British Columbia 20) 72 percent of all retail businesses employ fewer than ________ persons. 20) ______ A) 10 B) 100 C) 5 D) 50 E) 25 21) The competition between the same types of retailers is called: 21) ______ A) scrambled merchandising B) intertype competition C) vertical integration D) indirect competition E) intratype competition 22) Which of the following would be an example of intratype competitors? 22) ______ A) IGA and Shoppers Drug Mart B) Loblaws and Amazon.ca C) Sears and La Senza D) Walmart and Target E) Future Shop and eBay 23) Best Buy (electronics) and Future Shop (electronics) are what type of competitors? 23) ______ A) intratype B) vertical C) horizontal D) indirect

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    E) intertype 24) Which of the following would be an intratype competitor for an IGA supermarket? 24) ______ A) Walmart B) Subway C) Shoppers Drug Mart D) Old Navy E) Loblaws 25) What is Variety? 25) ______ A) Variety is the number of different items in a category B) Variety is the number of different facets of the business plan C) Variety is the number of different SKU's within a merchandise category D) Variety is another term for scrambled merchandising E) Variety is the number of different merchandise categories within a store 26) When McDonald's opened its first restaurant, a hungry patron could order a hamburger, French fries and a shake. In those early years, McDonald's did not offer much: 26) ______ A) product depth B) assortment C) quantity D) value E) variety 27) Chapters stores sell Godiva chocolates. By selling such products, Chapters is: 27) ______ A) offering what the market demands B) offering a good merchandise mix C) practicing scrambled merchandising D) practicing intratype competition E) offering deep product assortments 28) The offering of merchandise not typically associated with the store type is called: 28) ______ A) channel conflict B) product diversification C) intratype competition D) vertical differentiation E) scrambled merchandising 29) Delia was delighted to see that the local Shoppers Drug Mart carried milk, bread, and snacking crackers. Her delight indicates she has never seen: 29) ______ A) a deep product assortment B) scrambled merchandising C) a n acceptable merchandising mix D) this type of intratype competition E) a retail mix 30) Scrambled merchandising increases: 30) ______ A) concentric diversification B) horizontal integration C) intratype competition D) vertical integration

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    E) intertype competition 31) Which of the following would be an example of intertype competition? 31) ______ A) A supermarket and a fresh flower stand B) A department store and a pharmacy C) A convenience store and a fast food restaurant D) A specialty store and a department store E) All answers provided are correct. 32) Walmart, Loblaws, and Future Shop are in what kind of competition? 32) ______ A) horizontal B) channel C) indirect D) intertype E) intratype 33) Increasing intertype competition has made it harder for retailers to identify their: 33) ______ A) target market B) merchandise mix C) retail mix D) competition E) none of the answers provided are correct. 34) The intensity of competition is greatest among retailers when: 34) ______ A) they are located far from each other and target the same customer B) price dominates the retail mix C) they are located far from each other and offer similar retail offerings D) they are located near each other and target the same customer E) they are located near each other and offer similar retail offerings 35) As part of a retailing strategy, a retailer looks to changes in demographics and responds to these changes with their retail mix. The following are examples of demographic trends except : 35) ______ A) the growth of minority segments B) the increased emphasis on customer service C) the growth of the elderly population D) the retirement of the Baby Boomers E) the rising number of two - income families 36) Once a retailer understands its environment, it needs to develop and implement a(n): 36) ______ A) competitive strategy B) retail strategy C) advertising plan D) customer base E) functional strategy 37) Lydia owns the Shake Shack, a small ice cream shop on a busy beach boardwalk that specializes in a variety of milkshakes, malts and cones. She has identified her customer as a person walking on the boardwalk mostly vacationers who want something cool and quick with no frills. She located herself close to parking for easy access, unlike some of her competitors. Lydia seems to have developed a strong: 37) ______

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    A) retail strategy B) business plan C) business concept D) location strategy E) selling strategy 38) When developing the ________ for his new salon, George decided to obtain a long - term competitive advantage over other salons by offering longer hours, better prices, a well trained staff and half - price perm day every Thursday to attract customers. 38) ______ A) marketing concept B) selling concept C) focal point orientation D) business cycle E) retail strategy 39) As the owner of a store specializing in men's suits, Isabella can use a retail strategy statement to identify all of the following except : 39) ______ A) what types of suits the store will stock B) the shop's target market C) how the store will build a competitive advantage D) the advertising campaign developed to sell last season's merchandise E) what services the shop will offer its customers 40) How are retailers using point - of - sale (POS) terminals and Universal Product Codes (UPCs) affixed to merchandise? As a way to: 40) ______ A) check its location strategy B) target the distribution plan C) gain a strategic advantage D) set its retailing objectives E) create an advertising plan 41) A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty with a firm's most - valued customers is called: 41) ______ A) strategizing B) intratype competition C) customer loyalty D) customer relationship management E) customer decision area 42) Which of the following statements about location strategy is true? 42) ______ A) Location can never be used to gain any kind of long - term advantage over competitors due to retailing's low entry barriers B) Location is the second most important characteristic that consumers examine when selecting a store C) Location offers an opportunity to gain a long - term advantage over competitors D) Consumers do not use convenience as a basis for selecting where to shop E) The only two characteristics more important than location in the selection process of where to shop are price and sales promotions 43) The key strategic elements of the retail strategy are: 43) ______ A) market strategies

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    B) location strategies C) organizational structures D) financial strategies E) all of these 44) To implement a retail strategy, a retailer must develop a ________ that satisfies the needs of its target market better than its competitors. 44) ______ A) retail mix B) production orientation C) situation analysis D) horizontal integration E) sales orientation 45) Once a well - articulated retail strategy has been developed, the next step is to: 45) ______ A) evaluate the results of the strategy B) forecast future environmental trends C) implement the strategy D) override the control mechanism E) confirm that environmental conditions have not changed 46) To implement a retail strategy, management must: 46) ______ A) develop a retail mix that satisfies the needs of its target market better than its competitors B) locate the ideal location C) determine its target market and set retail objectives D) develop budgets and acquire merchandise E) set pricing strategies and determine promotions 47) The combination of factors retailers use to satisfy customer needs and influence their purchase decisions is called the firm's: 47) ______ A) marketing concept B) retailing concept C) target market D) retail mix E) none of these 48) Which of the following is part of a retailer's retail mix? 48) ______ A) Advertising B) Trained salespeople C) Services offered D) Displays E) All of these 49) Which of the following is not an element in the retail mix? 49) ______ A) Competitive response B) Advertising and promotion C) Merchandise assortments D) Location E) Customer service 50) Which of the following parts of the retail mix can be utilized by a small hardware store? 50) ______

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    A) Store location next door to a hospital B) Attractive point - of - purchase displays at the ends of the store's aisles C) A new ad campaign that uses both radio and newspaper media D) Bright lighting in the store, which makes it easier to read the messages E) All of these 51) Which of the following is not a part of the retail mix for a furniture store? 51) ______ A) Store credit card B) Furniture assortments C) Competitive response D) Television commercials E) The location of the store 52) Retailers face ethical issues on a regular basis. The following are all TRUE except : 52) ______ A) Some years ago, doctors and lawyers who advertised their services in Canada were considered unethical. B) Ethics are the principles governing the behaviour of individuals and companies to establish appropriate behaviour and indicate what is right and wrong. C) Offering bribes to overcome bureaucratic roadblocks is illegal in Canada. D) Offering bribes to overcome bureaucratic roadblocks is globally recognized as an unaccepted practice. E) Today, advertising by doctors and lawyers in Canada is considered legal. 53) Retailing offers today's graduates opportunities for careers in management as well as entrepreneurial opportunities. The following are all Canadian entrepreneurs and their Canadian originated retail outlets except: 53) ______ A) Samuel Cost and Sharon Conner - Costco B) Eddie Black - Black's Cameras C) Tim Horton - Tim Hortons D) John Holt and G.R. Renfrew - Holt Renfrew E) John Forzani - Forzani Group - Sport Chek ESSAY. Write your answer in the space provided or on a separate sheet of paper. 54) Best Buy purchases many of the CDs, PlayStation 2 games, DVDs and DVD players by the truckload, then sells them in smaller quantities to its stores where consumers are allowed to buy them one at a time. What business function is Best Buy performing? 55) When is the intensity of competition between retail stores the greatest? 56) What type of merchandising increases intertype competition? 57) The Reptile Shop is a pet shop that focuses on reptiles and their accoutrements for reptile lovers. The shop carries aquariums, warming rocks, toys and even live mice and crickets. It sponsors a reptile club where members can bring their pet to share with other reptile lovers. The store provides an inexpensive veterinary service. It even has a 3 - month guarantee when you purchase a baby reptile. The Reptile Shop has created loyalty from its customers and continuously attracts new ones because of the services offered. What does this describe? 58) Why do retailers use point - of - sale (POS) terminals to read Universal Product Codes (UPCs) and electronic data interchange (EDI) to send sales and inventory information from computer to computer?

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    59) What is the retailer's role in the distribution channel? 60) List the four functions performed by retailers. 61) How do retailers increase the value consumers receive from their purchases? 62) With manufacturers legally able to sell direct from the factories, why should retailers exist? 63) Distinguish between intratype competition and intertype competition. Give an example of each. 64) Why would a drug store add novelty gifts, fresh bread, pre - wrapped sandwiches and milk to its product mix? 65) A chef wants to open a Chinese restaurant in the suburbs of a large city. How should she identify the competition? 66) Why do retailers consider customers as important when developing a retail strategy? 67) What are the three things identified by a retail strategy statement? 68) Why is location strategy important for both consumers and for competitive reasons?

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    1) D 2) B 3) E 4) E 5) A 6) D 7) E 8) D 9) B 10) D 11) A 12) D 13) E 14) E 15) E 16) B 17) C 18) E 19) E 20) C 21) E 22) D 23) A 24) E 25) E 26) E 27) C 28) E 29) B 30) E 31) E 32) D 33) D 34) E 35) B 36) B 37) A 38) E 39) D 40) C 41) D 42) C 43) E 44) A 45) C 46) A 47) D 48) E 49) A 50) E 51) C

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    52) D 53) A 54) Breaking bulk 55) When they are involved in intratype competition that is close to each other with similar retail offerings, such as in a shopping mall. 56) Scrambled merchandising 57) The store's retailing strategy. The paragraph describes the target market, the merchandise and services offered, and how it maintains a strategic advantage over competitors 58) These technologies allow retailers to have a better idea of what is selling and a way to quickly communicate that information to vendors so that replenishment can quickly occur. Additionally it gives the retailer a competitive advantage over retailers that do not work with current supply chain management systems. 59) The retailer's role in the distribution channel is to link manufacturers to consumers by directing their efforts to satisfying the needs of the ultimate consumers. 60) The four functions performed by retailers are (1) providing an assortment of products and services, (2) breaking bulk, (3) holding inventory, and (4) providing service and services. 61) Retailers increase the value consumers receive by (1) offering assortments of products and services, (2) breaking bulk, (3) holding inventory, and (4) providing service and services 62) In the retailing distribution channel, there are occasions when manufacturers sell directly to the ultimate consumer. While occasionally doing so, manufacturers mainly exist to manufacture products to satisfy the needs of wholesalers or retailers. Retailers exist because they direct their efforts and specialize in satisfying only the customer's needs. 63) Intratype competition refers to the competition between retailers with the same format. An example would be the competition between Loblaws and Sobeys for sale of fresh salmon. Intertype competition refers to the competition between retailers that sell similar merchandise using different formats. An example would be the sale of Maybelline mascara between Walmart and Shoppers Drug Mart. 64) The drug store is engaging in scrambled merchandising and has added these products and more, to appeal to a broader group of customers and to provide one - stop shopping for our time - starved society. 65) This question can have a variety of responses, but she could first look at the obvious and identify other Chinese restaurants near her location. Is her location the best? She should consider frozen Chinese entrees at nearby grocery stores. She should also consider the prices of the entrees she offers and compare them to the prices of other types of restaurants. 66) Retailers need to understand customers and how they are changing so that they can better satisfy their needs. Retailers need to know and understand why customers shop, how they select a store, and how they select from that store's merchandise. 67) A retail strategy statement identifies (1) the target market toward which the retailer will direct its efforts, (2) the nature of the merchandise and services the retailer will offer to satisfy the needs of the target market, and (3) how the retailer will build a long - term advantage over its competitors. 68) (1) Location is typically the most important characteristic consumers consider when selecting a store. (2) A good location creates a long - term advantage over the competition.

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    Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Compared to other food retailers, convenience stores 1) _______ A) Have less than 30% of their store devoted to food B) Have higher food prices C) Benefit from the high margins of gasoline sales D) Are experiencing slow growth in Asia E) Have a wide breadth and depth of merchandise 2) NAICS: 2) _______ A) Is a classification scheme where every North American business is assigned a 6 - digit code B) Is an on - package series of thick and thin lines readable by check - out scanners C) Is a classification scheme used by retailers in Canada to monitor after - tax profits D) Is a number used to identify an item in a company's inventory E) None of these 3) To compete against intrusions by other food retailing formats, conventional supermarkets are: 3) _______ A) Offering more private - label products B) Providing a better in - store experience C) Emphasizing fresh perishables D) Targeting health - conscious consumers E) All answers provided are correct. 4) Mark's Work Wearhouse (clothing retailer) carries sizes for small, average, and big men, but all sizes are not available in all their stores. What should Mark's do to communicate this message to their customers? 4) _______ A) They should train their sales associates to mention this when closing sales with each customer B) Mark's should actively advertise these assortments to competitors C) Mark's should advertise this by featuring big men on their Holiday Catalogue D) They should advertise big men's merchandise on all of their newspaper supplements and commercials E) A database should be developed of those who purchase merchandise for big men and then Mark's should market specifically to those shoppers 5) Frank was shopping for electric fuses for his fuse box. Flash Hardware sold them for $3.99 for a box of six, but when he went to the same retailer's website, he found the same set for $2.99. Flash Hardware has a problem with: 5) _______ A) depth of merchandise B) price consistency across channels C) a pricing mistake by the store manager D) product consistency E) a communication problem between channels 6) Which of the following trends are changing the retail industry? 6) _______ A) Discriminating consumers B) Blurring boundaries among channels and formats

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    C) Growing retailer concentration and power D) Growth in consumer data E) All answers provided are correct. 7) The spawning of new categories and retailers from supercentres to the Internet best demonstrates the: 7) _______ A) necessity to focus on competition B) tremendous need for better customer services C) necessity to go global with domestic retailers D) need for training and development programs E) growing diversity of retail formats 8) The Canadian retail marketplace is dominated by a small number of large retailers – which term does this describe? 8) _______ A) globalization B) concentration C) diversity D) development E) Americanization 9) Because the only merchandise category at the Futon Shop is double - sized futons, the Futon Shop can be said to have no: 9) _______ A) need for customer service B) variety C) product depth D) inventory control E) shrinkage 10) Each different item of merchandise in a retail store is called a/an: 10) ______ A) consumer offering B) store counted item (SCI) C) economic unit D) stock keeping unit (SKU) E) stored and keyed unit (SKU) 11) Pinch - A - Penny sells a variety of pool maintenance supplies including filters, chemicals, lights, skimmers, and pool toys. Pinch - A - Penny can be said to have: 11) ______ A) breadth of merchandise B) retail mix C) complete retail offering D) depth of merchandise E) supply standard 12) Variety is often referred to as the: 12) ______ A) depth of merchandise B) complete retail offering C) store's supply standard D) breadth of merchandise E) retail mix 13) Depth of merchandise is often referred to as the: 13) ______

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    A) complete retail offering B) variety C) number of items within each product line D) retail mix E) object of the buy 14) My Favourite Quilt Shop carries quilting thread of every brand, colour and strength in cotton and poly - cotton blends. With reference to quilting threads, My Favourite Quilt Shop has: 14) ______ A) deep assortment B) broad variety C) good customer base D) few SKU's E) little shrinkage 15) Isaac's Men's Store stocks 322 different styles and colours of ties. This assortment of ties can be referred to as Isaac's: 15) ______ A) breadth of merchandise B) store's supply standard C) depth of merchandise D) complete retail offering E) retailer mix 16) The Home Depot offers customers a huge selection of home improvement merchandise. As a result inventory investment: 16) ______ A) increases because they have to carry backup stock for each SKU B) increases because of the value of the assortment C) decreases because of the introduction of backup stock D) increases because of the increase in demand in the home improvement industry E) decreases because of the increase of the customer base 17) Which of the following is a self - service food store offering groceries, meat, and produce with limited sales of nonfood items? 17) ______ A) Convenience store B) Conventional supermarket C) Superstore D) Big - box food retailer E) All answers provided are correct. 18) Which of the following can be purchased at a hypermarket? 18) ______ A) Hotdogs and luncheon meat B) Electronics C) Photographic film development D) Sports equipment E) All answers provided are correct. 19) Al is the office manager for a large travel agency. He is responsible for maintaining the office supplies and works within a budget. This month, he needs to restock the agency's #10 envelopes, ball - point pens, coffee, sweetener and plastic spoons. Where's the best place for him to shop? 19) ______ A) Loblaws

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