retail management 1

Student ID: 21993147

Exam: 080619RR - The World of Retailing

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Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer.

1. Whereas conventional supermarkets carry about 30,000 SKUs, limited assortment supermarkets or extreme value food retailers only stock 2,000 SKUs. Which of the following is not the advantage of stocking lesser SKUs? A. Less inventory holding costs

B. Lower transportation costs

C. Less inventory investments

D. Less backup stocks

2. Which of the following describes an advantage that independent, single-store establishments have over other forms of ownership? A. React quickly to market changes

B. Very low set-up costs

C. Bureaucratic operation

D. Economies of scale

3. A retail store can use certain criteria for evaluating whether a retail market segment is a viable target market. A health food store wants to use benefit segmentation. Which criterion is it most likely to meet if it follows this segmentation strategy? A. Actionability

B. Flexibility

C. Accessibility

D. Identifiability

4. Stocking a deep and broad assortment is appealing to customers, but costly for retailers. What option does a small specialty store owner have to offset costs, and make a profit? A. Offer less expensive assortments

B. Charge higher prices

C. Offer less hours of operation

D. Hire less staff

5. Which of the following statements about the U.S. distribution system is true? A. The small specialty store is the fastest growing type of U.S. retailer.

B. Many U.S. retailers are large enough to have their own warehouses and have eliminated their need for wholesalers.

C. Many people think the United States is understored.

D. When compared to retail density in Europe, the United States is very low.

6. Which of the following statements about Internet retailing is true? A. The electronic channel offers a less satisfying shopping experience than catalogs.

B. Electronic retailing can offer superior benefits in comparison to those of which other channels offer because it has the ability to personalize information to each customer economically.

C. E-retailers have lower prices.

D. Retail sales through the electronic channel are growing at the same rate of sales growth as through the catalog channel.

7. Why do category specialists call themselves "category killers"? A. To keep costs low, employee assistance is nonexistent, thus has "killed" off customer service.

B. Because they have a lock on the competition, they can demand higher prices.

C. As they edit their product assortments, they narrow down and drop off classifications.

D. By offering a complete assortment in a category at low prices, category specialists can "kill" a category of merchandise for other retailers.

8. Why is it advantageous for retailers to be vertically integrated? A. Retailers can expand their services easily to the Internet because they can direct orders to the manufacturer.

B. Customers prefer retailers who are vertically integrated.

C. Retailers have the greatest control over its supply chain.

D. Retailers have realized that to stay competitive, they must become vertically integrated.

9. Which of the following does not describe tactics that retailers use to convert positive evaluations of the merchandises or services to purchases? A. Making a website easy to navigate

B. Offering online reviews to reduce perceived risks

C. Offering liberal return policies

D. Offering entertaining graphics on a website

10. Office Depot offers customers a huge selection of office supply merchandise. As a result, inventory investment A. increases because of the value of the assortment.

B. increases because of the increase in demand.

C. increases because they have to carry back up stock for each SKU.

D. decreases because of the increase of the customer base.

11. If a chain of florist shops opened a plant nursery to provide gift plants and cut flowers to all of its stores within a 300-mile radius, the chain would be practicing A. channel expansion.

B. vertical integration.

C. horizontal expansion.

D. opportunity incrementing.

12. If L'Oreal cosmetic products wanted to sell exclusively through the Internet channel, it would most likely have a difficult time because A. of the competition from other manufacturers.

B. the manufacturer doesn't own the rights to the brand name.

C. the manufacturer doesn't have the appropriate systems to fulfill individual orders.

D. it doesn't have name recognition.

13. Which of the following statements describing distribution systems within major international markets is false?

A. With the population density in France, most stores throughout France are open 24 hours, seven days a week.

B. The U.S. distribution system has the greatest retail density and the greatest concentration of large retail firms.

C. In the Chinese distribution system, the merchandise often passes through several levels of distribution to make the daily deliveries to the small retailers efficient.

D. The Indian distribution systems are characterized by small stores operated by small firms and a large independent wholesale industry.

14. Ken operates a furniture store suited for a market of young military families. When young couples come in to his store to shop, they bring their children, who distract their parents from making a purchasing decision. How can Ken help these couples make a purchase? A. Provide in-store child-care

B. Lower the prices of the furniture

C. Extend the store hours until after the children's bedtime

D. Offer extensive credit

15. Both a weight-loss center and a health club would be pleased to learn that health and fitness, together with individualism, mastery and control, and self-improvement are core values common in the _______ of the U.S. A. experiential base

B. environment

C. culture

D. civilization

16. The percentage of total purchases made by a customer in your store is called A. worth of wallet.

B. share of value.

C. profit logic.

D. share of wallet.

17. Why do movie theaters sell tickets for an afternoon showing of a movie at a lower price than the 7:00 p.m. showing of the same movie? A. To deal with the incompatibility characteristic of services

B. To deal with the intangible characteristic of services

C. To deal with the perishability of services

D. To make sure the service offered is consistent

End of exam

18. The multiattribute attitude model is designed to A. segment the target market by examining customers' attributes and determine the store's or product's position in the market.

B. predict how a customer will evaluate a store based on its attributes and how important these attributes are to the customer.

C. forecast inventory needs based on a multiple regression model.

D. modify preexisting attitudes by providing customers with a list of benefits (attributes) for shopping at a particular store or buying a particular product.

19. McKenna was shopping for a new electric mixer. Online she found the perfect one at williams- sonoma.com, but when she went to the Williams-Sonoma store, she found the same mixer for $15 more. The retailer has a problem with A. a corporate problem between channels.

B. price inconsistency across channels.

C. depth of merchandise prices.

D. product inconsistency.

20. The intensity of competition is greatest among retailers when A. they're located far from each other and offer similar retail offerings.

B. they're located near each other and offer similar retail offerings.

C. they're located near each other and have different target customers.

D. price dominates the retail mix.