Retailing Management Fifth Canadian Edition Test Bank

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ExamName___________________________________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 suppliesB)Pharmacies and Building suppliesC)General merchandise and ClothingD)Food, Beverage, and AutomotiveE)Furniture and Pharmacies2)Retail managers must make complex decisions including all of the following except:2)_______A)Training and motivating sales associatesB)Mission statementC)Target marketsD)Retail locationsE)Merchandise and services offerings3)What is retailing?3)_______A)It is the merchandising component of the retail mixB)It is the ability to offer enough variety in a store to encourage one-stop shoppingC)It is the process of offering products in smaller quantities for consumerconsumption patternsD)It is the strategy retailers and vendors use to get products into the storesE)It is the set of business activities that adds value to the products and services sold toconsumers for their personal or family use4)Which of the following businesses would be considered a retailer?4)_______A)Canadian TireB)Your local hair salonC)Air CanadaD)Tim HortonsE)Your local hair salon, Air Canada, Tim Hortons, and Canadian Tire5)Which of the following is most likely to be considered a retailer?5)_______A)A universityB)The Red CrossC)A radio talk showD)The Better Business BureauE)All of the choices.6)A retailer's role in the distribution channel is to:6)_______A)act as the liaison between manufacturers and wholesalersB)sell to wholesalersC)negotiate with consumers through a series of focus groupsD)satisfy the needs of the consumersE)buy merchandise exclusively from the manufacturers7)________ is when a firm performs more than one set of activities in the channel.7)_______A)Distribution channelB)Horizontal integration

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C)Vertical developmentD)Channel diversificationE)Vertical integration8)Prior Snowboards located in Whistler, B.C. manufactures many of the snowboards itsells in its retail outlet at its own factory in Canada. Prior Snowboards is practicing:8)_______A)wholesalingB)product-related marketingC)globalizationD)vertical integrationE)demographic marketing9)If a chain of florist shops opened a plant nursery to provide gift plants and cut flowers toall of its outlets within a 300-mile radius, the chain would be practicing:9)_______A)channel expansionB)vertical integrationC)horizontal expansionD)service marketingE)vertical retailing10)What is the primary advantage for retailers to be vertically integrated?10)______A)Retailers have realized that to stay competitive, they must become verticallyintegratedB)Retailers can develop unique merchandise sold only in their stores; retailers canexpand their services easily to the Internet because they can direct orders to themanufacturer; retailers have realized that to stay competitive, they must becomevertically integrated; and customers preferring retailers that are vertically integratedare all advantages.C)Retailers can expand their services easily to the Internet because they can directorders to the manufacturerD)Retailers can develop unique merchandise sold only in their storesE)Customers prefer retailers who are vertically integrated11)A retailer that is vertically integrated:11)______A)performs more than one function in the chain from manufacturing to sales to enduserB)performs only the function to end userC)concentrates on selling to businesses onlyD)has an excellent vertical relationship between corporate headquarters and storesE)does not have frequent communication between buyers and managers12)Which of the following statements about retailers holding inventory isfalse?12)______A)Holding inventory in a store helps serve the customer's needsB)Retailers keep inventory so that products are available when consumers want themC)Holding inventory reduces consumer's cost of storing productsD)By holding inventory, retailers can decrease the visual merchandising expenditureE)By having inventory held in the store, consumers can hold less merchandise athome13)Grocers purchase bananas from several different tropical countries. When bananas arrivein the distribution centres across Canada, containers are reduced to amounts that areappropriatefor

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storedelivery. Oncedelivered to thestores,associates openthecartonsandarrangethebananasfor theconsumer toselect.Grocersareperforming whatfunction?13)______A)Holding inventoryB)Providing servicesC)DistributionD)Vertical integrationE)Breaking bulk14)Providing assortments is an advantageous business activity because it:14)______A)enables the company to create a more informational and entertaining environmentwhich would promote more salesB)enables the company to reinvest savingsC)enables the customer to save money by being able to shop in one storeD)enables the customer to stock up on the assortments because of their availabilityE)enables the customer to choose from a wide selection of brands, designs, sizes, andprices all in one store15)One of the functions retailers undertake to increase the customer's perception of value isproviding services. Which of the following would be an example of that activity?15)______A)Payment by debit cardsB)Trained salespeople to answer questionsC)Well-lit parking lotsD)Clean washroomsE)Clean washrooms, payment by debit cards, trained salespeople, and well-lit parkinglots are all appropriate examples.16)One of the functions retailers undertake to increase the customer's perception of value isproviding 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 channelC)Increasing employee pilferageD)Performing a situation analysisE)None of the available answers are correct.17)A credit union holds and maintains detailed records of the banking activities of itsmembers. Each quarter, the credit union provides its members a printout of bankingactivities, information about low rate loans and pre-owned automobiles. By contactingits members on a regular basis, the credit union is engaging in the business function of:17)______A)financingB)holding inventoryC)providing servicesD)breaking bulkE)providing assortments18)Retailing is the nation's largest industry in terms of:18)______A)promotionsB)community involvementC)varietyD)competitionE)employment19)Provinces with the highest retail sales in order are:19)______A)Alberta, Atlantic Canada, Ontario, British Columbia, and QuebecB)Ontario, British Columbia, Quebec, and AlbertaC)Quebec, British Columbia, Prairies, Ontario, and Atlantic CanadaD)Ontario, Alberta, Quebec, and British ColumbiaE)Ontario, Quebec, Alberta, and British Columbia20)72 percent of all retail businesses employ fewer than ________ persons.20)______A)10B)100C)5D)50E)2521)The competition between the same types of retailers is called:21)______A)scrambled merchandisingB)intertype competitionC)vertical integrationD)indirect competitionE)intratype competition22)Which of the following would be an example of intratype competitors?22)______A)IGA and Shoppers Drug MartB)Loblaws and Amazon.caC)Sears and La SenzaD)Walmart and TargetE)Future Shop and eBay23)Best Buy (electronics) and Future Shop (electronics) are what type of competitors?23)______A)intratypeB)verticalC)horizontalD)indirect

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E)intertype24)Which of the following would be an intratype competitor for an IGA supermarket?24)______A)WalmartB)SubwayC)Shoppers Drug MartD)Old NavyE)Loblaws25)What is Variety?25)______A)Variety is the number of different items in a categoryB)Variety is the number of different facets of the business planC)Variety is the number of different SKU's within a merchandise categoryD)Variety is another term for scrambled merchandisingE)Variety is the number of different merchandise categories within a store26)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 depthB)assortmentC)quantityD)valueE)variety27)Chapters stores sell Godiva chocolates. By selling such products, Chapters is:27)______A)offering what the market demandsB)offering a good merchandise mixC)practicing scrambled merchandisingD)practicing intratype competitionE)offering deep product assortments28)The offering of merchandise not typically associated with the store type is called:28)______A)channel conflictB)product diversificationC)intratype competitionD)vertical differentiationE)scrambled merchandising29)Delia was delighted to see that the local Shoppers Drug Mart carried milk, bread, andsnacking crackers. Her delight indicates she has never seen:29)______A)a deep product assortmentB)scrambled merchandisingC)an acceptable merchandising mixD)this type of intratype competitionE)a retail mix30)Scrambled merchandising increases:30)______A)concentric diversificationB)horizontal integrationC)intratype competitionD)vertical integration

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E)intertype competition31)Which of the following would be an example of intertype competition?31)______A)A supermarket and a fresh flower standB)A department store and a pharmacyC)A convenience store and a fast food restaurantD)A specialty store and a department storeE)All answers provided are correct.32)Walmart, Loblaws, and Future Shop are in what kind of competition?32)______A)horizontalB)channelC)indirectD)intertypeE)intratype33)Increasing intertype competition has made it harder for retailers to identify their:33)______A)target marketB)merchandise mixC)retail mixD)competitionE)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 customerB)price dominates the retail mixC)they are located far from each other and offer similar retail offeringsD)they are located near each other and target the same customerE)they are located near each other and offer similar retail offerings35)As part of a retailing strategy, a retailer looks to changes in demographics and respondsto these changes with their retail mix. The following are examples of demographic trendsexcept:35)______A)the growth of minority segmentsB)the increased emphasis on customer serviceC)the growth of the elderly populationD)the retirement of the Baby BoomersE)the rising number of two-income families36)Once a retailer understands its environment, it needs to develop and implement a(n):36)______A)competitive strategyB)retail strategyC)advertising planD)customer baseE)functional strategy37)Lydia owns the Shake Shack, a small ice cream shop on a busy beach boardwalk thatspecializes in a variety of milkshakes, malts and cones. She has identified her customeras a person walking on the boardwalkmostly vacationers who want something cool andquick with no frills. She located herself close to parking for easy access, unlike some ofher competitors. Lydia seems to have developed a strong:37)______

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A)retail strategyB)business planC)business conceptD)location strategyE)selling strategy38)When developing the ________ for his new salon, George decided to obtain a long-termcompetitive advantage over other salons by offering longer hours, better prices, a welltrained staff and half-price perm day every Thursday to attract customers.38)______A)marketing conceptB)selling conceptC)focal point orientationD)business cycleE)retail strategy39)As the owner of a store specializing in men's suits, Isabella can use a retail strategystatement to identify all of the followingexcept:39)______A)what types of suits the store will stockB)the shop's target marketC)how the store will build a competitive advantageD)the advertising campaign developed to sell last season's merchandiseE)what services the shop will offer its customers40)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 strategyB)target the distribution planC)gain a strategic advantageD)set its retailing objectivesE)create an advertising plan41)A business philosophy and set of strategies, programs, and systems that focus onidentifying and building loyalty with a firm's most-valued customers is called:41)______A)strategizingB)intratype competitionC)customer loyaltyD)customer relationship managementE)customer decision area42)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 overcompetitors due to retailing's low entry barriersB)Location is the second most important characteristic that consumers examine whenselecting a storeC)Location offers an opportunity to gain a long-term advantage over competitorsD)Consumers do not use convenience as a basis for selecting where to shopE)The only two characteristics more important than location in the selection processof where to shop are price and sales promotions43)The key strategic elements of the retail strategy are:43)______A)market strategies

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B)location strategiesC)organizational structuresD)financial strategiesE)all of these44)To implement a retail strategy, a retailer must develop a ________ that satisfies theneeds of its target market better than its competitors.44)______A)retail mixB)production orientationC)situation analysisD)horizontal integrationE)sales orientation45)Once a well-articulated retail strategy has been developed, the next step is to:45)______A)evaluate the results of the strategyB)forecast future environmental trendsC)implement the strategyD)override the control mechanismE)confirm that environmental conditions have not changed46)To implement a retail strategy, management must:46)______A)develop a retail mix that satisfies the needs of its target market better than itscompetitorsB)locate the ideal locationC)determine its target market and set retail objectivesD)develop budgets and acquire merchandiseE)set pricing strategies and determine promotions47)The combination of factors retailers use to satisfy customer needs and influence theirpurchase decisions is called the firm's:47)______A)marketing conceptB)retailing conceptC)target marketD)retail mixE)none of these48)Which of the following is part of a retailer's retail mix?48)______A)AdvertisingB)Trained salespeopleC)Services offeredD)DisplaysE)All of these49)Which of the following isnotan element in the retail mix?49)______A)Competitive responseB)Advertising and promotionC)Merchandise assortmentsD)LocationE)Customer service50)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 hospitalB)Attractive point-of-purchase displays at the ends of the store's aislesC)A new ad campaign that uses both radio and newspaper mediaD)Bright lighting in the store, which makes it easier to read the messagesE)All of these51)Which of the following isnota part of the retail mix for a furniture store?51)______A)Store credit cardB)Furniture assortmentsC)Competitive responseD)Television commercialsE)The location of the store52)Retailers face ethical issues on a regular basis. The following are all TRUEexcept:52)______A)Some years ago, doctors and lawyers who advertised their services in Canada wereconsidered unethical.B)Ethics are the principles governing the behaviour of individuals and companies toestablish 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 anunaccepted 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 asentrepreneurial opportunities. The following are all Canadian entrepreneurs and theirCanadian originated retail outlets except:53)______A)Samuel Cost and Sharon Conner-CostcoB)Eddie Black-Black's CamerasC)Tim Horton-Tim HortonsD)John Holt and G.R. Renfrew-Holt RenfrewE)John Forzani-Forzani Group-Sport ChekESSAY.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 thetruckload, then sells them in smaller quantities to its stores where consumers are allowed to buythem 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 areptile club where members can bring their pet to share with other reptile lovers. The store providesan inexpensive veterinary service. It even has a 3-month guarantee when you purchase a babyreptile. The Reptile Shop has created loyalty from its customers and continuously attracts new onesbecause of the services offered. What does this describe?58)Why do retailers use point-of-sale (POS) terminals to read Universal Product Codes (UPCs) andelectronic data interchange (EDI) to send sales and inventory information from computer tocomputer?

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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 itsproduct mix?65)A chef wants to open a Chinese restaurant in the suburbs of a large city. How should she identifythe 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)D2)B3)E4)E5)A6)D7)E8)D9)B10)D11)A12)D13)E14)E15)E16)B17)C18)E19)E20)C21)E22)D23)A24)E25)E26)E27)C28)E29)B30)E31)E32)D33)D34)E35)B36)B37)A38)E39)D40)C41)D42)C43)E44)A45)C46)A47)D48)E49)A50)E51)C

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52)D53)A54)Breaking bulk55)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 merchandising57)The store's retailing strategy. The paragraph describes the target market, the merchandise and servicesoffered, and how it maintains a strategic advantage over competitors58)These technologies allow retailers to have a better idea of what is selling and a way to quicklycommunicate that information to vendors so that replenishment can quickly occur. Additionally it givesthe retailer a competitive advantage over retailers that do not work with current supply chain managementsystems.59)The retailer's role in the distribution channel is to link manufacturers to consumers by directing theirefforts 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 services62)In the retailing distribution channel, there are occasions when manufacturers sell directly to the ultimateconsumer. While occasionally doing so, manufacturers mainly exist to manufacture products to satisfy theneeds of wholesalers or retailers. Retailers exist because they direct their efforts and specialize insatisfying only the customer's needs.63)Intratype competition refers to the competition between retailers with the same format. An example wouldbe the competition between Loblaws and Sobeys for sale of fresh salmon. Intertype competition refers tothe competition between retailers that sell similar merchandise using different formats. An example wouldbe 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 appealto 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 otherChinese restaurants near her location. Is her location the best? She should consider frozen Chinese entreesat nearby grocery stores. She should also consider the prices of the entrees she offers and compare them tothe prices of other types of restaurants.66)Retailers need to understand customers and how they are changing so that they can better satisfy theirneeds. Retailers need to know and understand why customers shop, how they select a store, and how theyselect 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 targetmarket, 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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ExamName___________________________________MULTIPLE CHOICE.Choose the one alternative that best completes the statement or answers the question.1)Compared to other food retailers, convenience stores1)_______A)Have less than 30% of their store devoted to foodB)Have higher food pricesC)Benefit from the high margins of gasoline salesD)Are experiencing slow growth in AsiaE)Have a wide breadth and depth of merchandise2)NAICS:2)_______A)Is a classification scheme where every North American business is assigned a6-digit codeB)Is an on-package series of thick and thin lines readable by check-out scannersC)Is a classification scheme used by retailers in Canada to monitor after-tax profitsD)Is a number used to identify an item in a company's inventoryE)None of these3)To compete against intrusions by other food retailing formats, conventionalsupermarkets are:3)_______A)Offering more private-label productsB)Providing a better in-store experienceC)Emphasizing fresh perishablesD)Targeting health-conscious consumersE)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 communicatethis message to their customers?4)_______A)They should train their sales associates to mention this when closing sales with eachcustomerB)Mark's should actively advertise these assortments to competitorsC)Mark's should advertise this by featuring big men on their Holiday CatalogueD)They should advertise big men's merchandise on all of their newspaper supplementsand commercialsE)A database should be developed of those who purchase merchandise for big menand then Mark's should market specifically to those shoppers5)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 thesame set for $2.99. Flash Hardware has a problem with:5)_______A)depth of merchandiseB)price consistency across channelsC)a pricing mistake by the store managerD)product consistencyE)a communication problem between channels6)Which of the following trends are changing the retail industry?6)_______A)Discriminating consumersB)Blurring boundaries among channels and formats

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C)Growing retailer concentration and powerD)Growth in consumer dataE)All answers provided are correct.7)The spawning of new categories and retailers from supercentres to the Internet bestdemonstrates the:7)_______A)necessity to focus on competitionB)tremendous need for better customer servicesC)necessity to go global with domestic retailersD)need for training and development programsE)growing diversity of retail formats8)The Canadian retail marketplace is dominated by a small number of largeretailers–which term does this describe?8)_______A)globalizationB)concentrationC)diversityD)developmentE)Americanization9)Because the only merchandise category at the Futon Shop is double-sized futons, theFuton Shop can be said to have no:9)_______A)need for customer serviceB)varietyC)product depthD)inventory controlE)shrinkage10)Each different item of merchandise in a retail store is called a/an:10)______A)consumer offeringB)store counted item (SCI)C)economic unitD)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 merchandiseB)retail mixC)complete retail offeringD)depth of merchandiseE)supply standard12)Variety is often referred to as the:12)______A)depth of merchandiseB)complete retail offeringC)store's supply standardD)breadth of merchandiseE)retail mix13)Depth of merchandise is often referred to as the:13)______

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A)complete retail offeringB)varietyC)number of items within each product lineD)retail mixE)object of the buy14)My Favourite Quilt Shop carries quilting thread of every brand, colour and strength incotton and poly-cotton blends. With reference to quilting threads, My Favourite QuiltShop has:14)______A)deep assortmentB)broad varietyC)good customer baseD)few SKU'sE)little shrinkage15)Isaac's Men's Store stocks 322 different styles and colours of ties. This assortment of tiescan be referred to as Isaac's:15)______A)breadth of merchandiseB)store's supply standardC)depth of merchandiseD)complete retail offeringE)retailer mix16)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 SKUB)increases because of the value of the assortmentC)decreases because of the introduction of backup stockD)increases because of the increase in demand in the home improvement industryE)decreases because of the increase of the customer base17)Which of the following is a self-service food store offering groceries, meat, and producewith limited sales of nonfood items?17)______A)Convenience storeB)Conventional supermarketC)SuperstoreD)Big-box food retailerE)All answers provided are correct.18)Which of the following can be purchased at a hypermarket?18)______A)Hotdogs and luncheon meatB)ElectronicsC)Photographic film developmentD)Sports equipmentE)All answers provided are correct.19)Al is the office manager for a large travel agency. He is responsible for maintaining theoffice 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 bestplace for him to shop?19)______A)Loblaws

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