DescriptionRetailing Management 10Th Edition By Michael Levy – Test Bank Show
Sample Questions Instant Download With Answers Retailing Management, 10e (Levy) Chapter 2 Types of Retailers 1) The most basic characteristic used to describe the different types of retailers is their retail mix, or the elements retailers use to satisfy their customers’ needs. Answer: TRUE Explanation: The most basic characteristic used to describe the different types of retailers is their retail mix, or the elements retailers use to satisfy their customers’ needs. Four elements of the retail mix are particularly useful for classifying retailers: the type of merchandise and/or services offered, the variety and assortment of merchandise offered, the level of customer service, and the price of the merchandise. Difficulty: 1 Easy Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 2) Walmart is classified as an off-price retailer. Answer: FALSE Explanation: Walmart is a full-line discount store. Off-price retailers offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers’ suggested retail price (MSRP), and Walmart has consistent assortments. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 3) To be competitive in today’s marketplace, supermarkets are focusing on offering fresh perishables and providing better value with private-label merchandise. Answer: TRUE Explanation: To compete successfully against intrusions by other food retailing formats, conventional supermarkets are differentiating their offerings by emphasizing fresh perishables, targeting green and ethnic consumers, providing better value with private-label merchandise, and providing a better shopping experience. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 4) Supermarkets gain higher profit margins from private-label merchandise than national brands. Answer: TRUE Explanation: The benefits of private-label brands to retailers include increased store loyalty, the ability to differentiate themselves from the competition, lower promotional costs, and higher gross margins compared with national brands. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 5) Private-label brands benefit retailers but not customers. Answer: FALSE Explanation: Private-label brands benefit both customers and retailers. The benefits to customers include having more choices and finding the same ingredients and quality as in national brands at a lower price or higher quality at a similar price to the national brands. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 6) Assortment is the number of different merchandise categories a retailer offers, also known as the breadth of merchandise. Answer: FALSE Explanation: Variety (also called breadth) is the number of merchandise categories a retailer offers. Assortment (also called depth) is the number of different items offered in a merchandise category Difficulty: 2 Medium Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 7) Extreme-value retailers primarily target low-income consumers. Answer: TRUE Explanation: Extreme-value retailers primarily target low-income consumers. These customers want well-known brands but cannot afford to buy the large-size packages offered by full-line discount stores or warehouse clubs. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 8) Due to the intangibility of their offerings, services retailers often use tangible symbols to inform customers about the quality of their services. Answer: TRUE Explanation: Due to the intangibility of their offerings, services retailers often use tangible symbols to inform customers about the quality of their services. For example, lawyers frequently have elegant, carpeted offices with expensive antique furniture. Difficulty: 1 Easy Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 9) The biggest difference between service retailers and merchandise retailers is their profits. Answer: FALSE Explanation: Profit doesn’t play a role in comparing the differences between service retailers and merchandise retailers. Differences are intangibility, simultaneous production and consumption, perishability, and inconsistency of the offering to customers. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 10) Whereas corporate chains can tailor their offerings to their customers’ needs, single-store retailers can more effectively negotiate lower prices for merchandise and advertising because of their larger size. Answer: FALSE Explanation: Whereas single-store retailers can tailor their offerings to their customers’ needs, corporate chains can more effectively negotiate lower prices for merchandise and advertising because of their larger size. Corporate chains can and do invest in sophisticated analytical systems to help them buy and price merchandise. Difficulty: 2 Medium Topic: Types of Ownership for Retail Firms Learning Objective: 02-05 Explain the types of ownership for retail firms. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 11) Which of the following statements is true of the North American Industry Classification System (NAICS)?
Answer: C Explanation: The United States, Canada, and Mexico developed the NAICS as a classification scheme to collect data on business activity in each country. Difficulty: 2 Medium Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 12) With respect to retailing, which of the following best defines assortment of merchandise?
Answer: B Explanation: Assortment is the number of different items offered in a merchandise category. It is referred to as the depth of merchandise. Difficulty: 3 Hard Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 13) With respect to retailing, which of the following best defines variety?
Answer: D Explanation: Variety is the number of different merchandise categories a retailer offers, also known as the breadth of merchandise. Difficulty: 1 Easy Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 14) Because the only merchandise categories at the University Futon Shop are double-sized futons, the Futon Shop can be said to have no
Answer: C Explanation: Variety is the number of different merchandise categories a retailer offers, also known as the breadth of merchandise. Since this store only carries one stock-keeping unit (SKU), double-sized futons, it has very little variety. It may have good product depth if it offers the double-sized futons in many different colors and fabrications, but we don’t have any information on that. Difficulty: 2 Medium Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 15) Which of the following best defines a stock-keeping unit?
Answer: D Explanation: Each different item of merchandise is called a stock-keeping unit (SKU). Some examples of SKUs include an original scent, 33-ounce box of Tide laundry detergent with bleach, or a blue, long-sleeve, button-down-collar Ralph Lauren shirt, size medium. Difficulty: 1 Easy Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 16) With respect to retailing, variety is often referred to as the
Answer: D Explanation: Variety is the number of different merchandise categories a retailer offers. Variety is often referred to as the breadth of merchandise. Difficulty: 1 Easy Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 17) With respect to retailing, assortment is often referred to as the
Answer: B Explanation: Assortment is the number of different items offered in a merchandise category. Assortment is referred to as the depth of merchandise. Difficulty: 1 Easy Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 18) The Men’s Wearhouse stocks over 350 different styles and colors of ties. This assortment of ties can be referred to as the store’s
Answer: E Explanation: The depth of merchandise refers to the different items offered in a merchandise category. “Ties” would be the category with many different colors and styles giving great depth for the customer. Difficulty: 2 Medium Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 19) Limited-assortment supermarkets are referred to as
Answer: A Explanation: Limited-assortment supermarkets are also called extreme-value food retailers. They stock only about 1,500 SKUs, whereas conventional supermarkets stock about 30,000 SKUs. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 20) What type of retailer is Save-A-Lot considered to be?
Answer: E Explanation: The two largest limited-assortment supermarket chains in the United States are Save-A-Lot and ALDI. Limited-assortment supermarkets stock about 1,500 SKUs. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 21) The area around the outer walls of a supermarket that stock fresh-merchandise categories such as dairy, bakery, meat, produce, etc. is referred to as the
Answer: A Explanation: Fresh-merchandise categories are located in the areas around the outer walls of a supermarket, known as the “power perimeter,” and include the dairy, bakery, meat, florist, produce, deli, and coffee bar. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 22) The ________ focuses on reducing the carbon footprint caused by the transportation of food throughout the world.
Answer: B Explanation: The locavore movement focuses on reducing the carbon footprint caused by the transportation of food throughout the world. Food miles are calculated using the distance that foods travel from the farm to the plate. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 23) Purchasing from factories that pay workers a living wage (more than the minimum wage) and offer other benefits to the employees is called
Answer: E Explanation: Fair trade is the practice of purchasing from factories that pay workers a living wage, considerably more than the prevailing minimum wage, and offer other benefits such as onsite medical treatment. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 24) What type of retailer is Meijer considered to be?
Answer: A Explanation: Meijer is considered to be a supercenter. Supercenters are large stores (160,000 to 200,000 square feet) that combine a supermarket with a full-line discount store. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 25) Which of the following is a similarity between hypermarkets and supercenters?
Answer: B Explanation: Hypermarkets are not common in the United States. Both hypermarkets and supercenters carry grocery and general merchandise categories, offer self-service, and are located in warehouse-type structures with large parking facilities. However, hypermarkets carry a larger proportion of food items than do supercenters and have a greater emphasis on perishables. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 26) Which of the following differentiates a hypermarket from a supercenter?
Answer: B Explanation: Hypermarkets carry a larger proportion of food items than do supercenters. Supercenters have a larger percentage of nonfood items. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 27) What type of retail store is Costco considered to be?
Answer: D Explanation: Costco is considered to be a warehouse club. Warehouse clubs are retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 28) Which of these is not a relevant challenge for big-box stores while developing locations in Europe, Japan, and the United States?
Answer: E Explanation: Supermarket and large format stores have a difficult time finding land in the European, Japanese, and American markets. There are also additional operating costs, restrictions on how big the building can be, and a culture that is not receptive to big-box retailing. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 29) Which of the following statements best defines a warehouse club?
Answer: D Explanation: Warehouse clubs are retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 30) Convenience stores ________ than supermarkets.
Answer: E Explanation: Convenience stores generally charge higher prices for similar products like milk, eggs, and bread. Convenience stores provide a limited variety and assortment of merchandise at a convenient location in 3,000- to 5,000-square-foot stores with speedy checkout. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 31) Which of the following statements is true about warehouse clubs?
Answer: C Explanation: Warehouse clubs keep inventory holding costs low by carrying a limited assortment of fast-selling items. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 32) Which of the following statements is true of department stores?
Answer: B Explanation: The department store often resembles a collection of specialty shops. Each department within the store has a specific selling space allocated to it, as well as sales people to assist customers. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 33) A retailer that carries a broad variety and deep assortment, offers customer services, and is organized into distinct sections for displaying merchandise is called a(n)
Answer: B Explanation: A retailer that carries a broad variety and deep assortment, offers customer services, and is organized into distinct sections for displaying merchandise is called a department store. The largest department store chains in the United States include Sears, Macy’s, Kohl’s, JCPenney, and Nordstrom. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 34) What type of retailer is Kohl’s considered to be?
Answer: B Explanation: Kohl’s is one of the largest department store chains in the United States. Department stores are retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 35) Which of the following is a first-tier department store?
Answer: B Explanation: First-tier department stores include upscale, high-fashion chains with exclusive designer merchandise and excellent customer service. Nordstrom, Neiman Marcus, Bloomingdale’s, and Saks Fifth Avenue are first-tier department stores. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 36) Which of the following is a second-tier department store?
Answer: A Explanation: Second-tier department stores are retailers who sell more modestly priced merchandise with less customer service than first-tier stores. Dillards is an example of a second-tier department store. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 37) Which of the following is a third-tier department store?
Answer: E Explanation: Third-tier department stores focus on value and price-conscious customers. Retailers in this category are Sears, JCPenney, and Kohl’s. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 38) What can department stores do to differentiate their merchandise offering and strengthen their image?
Answer: C Explanation: To differentiate their merchandise offerings and strengthen their image, department stores are aggressively seeking exclusive brands in which national brand vendors sell them merchandise that is not available elsewhere. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 39) Attempting to combat losing market share, department stores are doing all of the following except
Answer: E Explanation: Department stores are trying hard to not lose market share. Therefore, they are expanding omnichannel retailing, adding exclusive merchandise, developing stronger marketing campaigns, and placing more emphasis on developing their own private-label brands. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 40) Private-label brands are also called
Answer: E Explanation: Private-label brands are also called store brands. These items are developed and marketed by the retailer, available only in its stores. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 41) Alfani (women’s fashion), Hotel Collection (luxury fabrics), and Tools of the Trade (housewares) are examples of Macy’s
Answer: B Explanation: Alfani (women’s fashion), Hotel Collection (luxury fabrics), and Tools of the Trade (housewares) are examples of Macy’s store brands. These items are developed and marketed by the retailer, available only in Macy’s. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 42) What type of retailer is Target considered to be?
Answer: C Explanation: Target is one of the largest full-line discount store chains. Full-line discount stores are retailers that offer a broad variety of merchandise, limited service, and low prices. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 43) To respond to a competitive environment, one thing that Walmart is doing is
Answer: A Explanation: Walmart is converting many of its discount stores into supercenters. Supercenters are more efficient than traditional discount stores because of the economies of scale that result from the high traffic generated by the food offering. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 44) Which of the following statements about full-line discount stores is true?
Answer: E Explanation: Full-line discount stores confront intense competition from category specialists that focus on a single category of merchandise. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 45) Why are category specialists sometimes called category killers?
Answer: D Explanation: By offering a complete assortment in a category, category specialists can “kill” a category of merchandise for other retailers and thus are frequently called category killers. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 46) Best Buy is a category specialist for the electronics industry. This means the stores
Answer: E Explanation: Category specialists are big-box stores that offer a narrow but deep assortment of merchandise. Most category specialists predominantly use a self-service approach, but they offer assistance to customers in some areas of the stores. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 47) What type of retail store is Victoria’s Secret considered to be?
Answer: D Explanation: Victoria’s Secret is the leading specialty retailer of lingerie and beauty products in the United States. Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 48) Which of the following statements is true about specialty stores?
Answer: A Explanation: Specialty stores tailor their retail strategy toward very specific market segments by offering deep but narrow assortments and sales associate expertise. Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 49) A special type of resale store where merchandise is donated and proceeds go to charity is called a(n)
Answer: B Explanation: A special type of resale store where merchandise is donated and proceeds go to charity is called a thrift store. Resale stores are retailers that sell secondhand or used merchandise. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 50) A type of resale store that accepts used merchandise from people and pays them after it is sold is called a(n)
Answer: B Explanation: A type of resale store that accepts used merchandise from people and pays them after it is sold is called a consignment shop. Resale stores are retailers that sell secondhand or used merchandise. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 51) Which of the following types of general merchandise retailers is also sometimes referred to as dollar stores?
Answer: A Explanation: Extreme-value retailers are also called dollar stores. They are small discount stores that offer a broad variety but shallow assortment of household goods, health and beauty care (HBC) products, and groceries. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 52) What type of a retail store is Walgreens considered to be?
Answer: B Explanation: Walgreens is one of the largest drugstores in the United States. Drugstores are specialty stores that concentrate on health and beauty care (HBC) products. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 53) What type of retail store is Dollar General considered to be?
Answer: D Explanation: Dollar General is one of the largest extreme-value retailers. Extreme-value retailers, also called dollar stores, are small discount stores that offer a broad variety but shallow assortment of household goods, health and beauty care (HBC) products, and groceries. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 54) The drugstore industry has seen a decrease in their annual sales mainly due to
Answer: B Explanation: Customers drawn to the “one-stop” shopping idea may prefer getting their groceries, paper products, and prescriptions to be filled all in one stop at a discount store. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 55) ________ offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers’ suggested retail price.
Answer: A Explanation: Off-price retailers offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers’ suggested retail price (MSRP). America’s largest off-price retail chains are TJX Companies (which operates TJ Maxx, Marshalls, Winners [Canada], HomeGoods, HomeSense [Canada], Ross Stores, Burlington Coat Factory, Big Lots, and Overstock.com. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 56) What type of store is TJ Maxx considered to be?
Answer: A Explanation: TJ Maxx is one of America’s largest off-price retail chains. Off-price retailers offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers’ suggested retail price (MSRP). Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 57) Which of the following is true of off-price retailers?
Answer: B Explanation: Off-price retailers offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturers’ suggested retail price (MSRP). Off-price retailers are able to sell brand-name and even designer-label merchandise at 20 to 60 percent lower than the manufacturer’s suggested retail price. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 58) Off-price retailers will often sell merchandise for less than the MSRP, which means
Answer: B Explanation: MSRP is an acronym for manufacturer’s suggested retail price. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 59) ________ are products that have minor blemishes to the fabric or errors in the construction.
Answer: B Explanation: Irregulars are merchandise with minor mistakes in construction. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 60) ________ are end-of-season merchandise that will not be in the manufacturer’s offerings going forward.
Answer: A Explanation: Closeouts are end-of-season merchandise that will not be used in following seasons. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 61) ________ are off-price retailers owned by manufacturers or retailers.
Answer: D Explanation: A special type of off-price retailer is the outlet store. Outlet stores are off-price retailers owned by manufacturers or retailers. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 62) With respect to off-price retailing, in a ________ sale, each day at the same time, members receive an e-mail that announces the deals available.
Answer: E Explanation: With respect to off-price retailing, in a flash sale, each day at the same time, members receive an e-mail that announces the deals available. An online twist to off-price retailing comes from flash sale sites such as Gilt, Rue La La, and HauteLook. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 63) A special type of off-price retailer owned by manufacturers is called a
Answer: E Explanation: A special type of off-price retailer owned by manufacturers is called a factory outlet. Outlet stores are off-price retailers owned by manufacturers or retailers. Difficulty: 1 Easy Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 64) Merrill Lynch, Marriott, and Century 21 are examples of
Answer: C Explanation: Merrill Lynch, Marriott, and Century 21 are examples of service retailers. Service retailers are firms that primarily sell services rather than merchandise. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Remember AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 65) Services are difficult to be evaluated before customers buy or even after they buy and consume them. Which of the following characteristics of service causes this challenge for service retailers?
Answer: A Explanation: Since customers cannot see, touch, or feel what is being sold, the intangibility of the service can sometimes be a concern for customers in trying to decide whether to buy or not. Difficulty: 3 Hard Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 66) How can a service retailer best cope with the problems associated with the intangibility of service?
Answer: D Explanation: Services retailers often solicit customer evaluations and scrutinize complaints to cope with the problems associated with the intangibility of service. Services are less tangible than products—customers cannot see, touch, or feel them. They are performances or actions rather than objects. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 67) A dermatologist has her diplomas prominently displayed above her large desk, which sits on a Persian rug in an office filled with tasteful, yet expensive furnishings. Which of the following service characteristics is the doctor trying to handle with her office décor?
Answer: A Explanation: Since customers cannot see, touch, or feel what is being sold, the intangibility of the service can sometimes be a concern for customers in trying to decide whether to buy or not. Having tangible symbols, such as the earned degrees on the wall, helps to give confidence to the customer about the dermatologist’s credentials. The elaborate furnishings are a subtle way of exuding success and accomplishments, giving the customers additional confidence in the services they are about to purchase. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 68) A therapeutic massage service requires its therapists to keep a database on each customer and include in that database what was done on each visit for the customer’s aches and pains. Which of the following service characteristics is the massage service trying to cope with?
Answer: C Explanation: In order to provide quality customer service, service retailers will keep a database on each customer to provide consistent high-quality service upon their return. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 69) Due to the ________ of services, service retailers like Six Flags, Delta, and Applebee’s restaurants, sometimes find it difficult to match supply and demand.
Answer: B Explanation: Due to the perishability of services, service retailers like Six Flags, Delta, and Applebee’s restaurants, sometimes find it difficult to match supply and demand. Services are perishable. They cannot be saved, stored, or resold. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 70) Why do movie theaters sell tickets for an afternoon showing of a movie at a lower price than the 7 p.m. showing of the same movie?
Answer: A Explanation: Services retailers use a variety of programs to match demand and supply. Movie theaters set lower prices when they have excess capacity. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 71) How can a service retailer best cope with the problems associated with the inconsistency of service?
Answer: D Explanation: A service retailer can best cope with the problem associated with the inconsistency of service by training and motivating the service providers. Because services are performances produced by people (employees and customers), no two services will be identical. Difficulty: 2 Medium Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 72) Which of the following is true of single-store retailers?
Answer: B Explanation: Single-store retailers are not bound by the bureaucracies inherent in large retail organizations. Many retail start-ups are owner-managed, which means management has direct contact with customers and can respond quickly to their needs. Difficulty: 2 Medium Topic: Types of Ownership for Retail Firms Learning Objective: 02-05 Explain the types of ownership for retail firms. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 73) Which of the following is a drawback of the franchise ownership?
Answer: C Explanation: There are also several drawbacks to franchise ownership. In addition to incurring the capital costs, the franchisee must adhere to the franchisor’s rules and operating guidelines. Difficulty: 2 Medium Topic: Types of Ownership for Retail Firms Learning Objective: 02-05 Explain the types of ownership for retail firms. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 74) Differentiate between variety and assortment of merchandise offered by a retailer. Answer: Variety is the number of merchandise categories a retailer offers. Assortment is the number of different items offered in a merchandise category. Variety is often referred to as the breadth of merchandise, and assortment is referred to as the depth of merchandise. Difficulty: 2 Medium Topic: Characteristics of Retailers Learning Objective: 02-01 List the different characteristics that define retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 75) Explain the strategies that limited-assortment supermarkets (extreme-value food retailers) use in order to provide customers with high-quality merchandise at low prices to compete against other food retailing formats. Answer: Limited-assortment supermarkets only stock about 1,500 SKUs, but conventional supermarkets carry about 30,000 SKUs. Limited-assortment supermarkets offer one or two brands and sizes, one of which is a store brand. Stores are designed to maximize efficiency and reduce costs. For example, merchandise is shipped in cartons on crates that can serve as displays so that no unloading is needed. Some costly services that consumers take for granted, such as free bags and paying with credit cards, are not provided. Stores are typically located in second- or third-tier shopping centers with low rents. By trimming costs, limited-assortment supermarkets can offer merchandise at prices 40 percent lower than those at conventional supermarkets. These features have supported the substantial growth of such retailers, which appeal strongly to customers who are not loyal to national brands and more willing to try a store brand, especially if it means they pay lower prices. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-02 Categorize the various types of food retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 76) How are department stores categorized into tiers? How do the tiers differ? Give examples of each tier. Answer: Department store chains are categorized into three tiers. The first tier includes upscale, high-fashion chains with exclusive designer merchandise and excellent customer service, such as Neiman Marcus, Nordstrom, Saks Fifth Avenue, and Bloomingdale’s. Macy’s and Dillards are in the second tier of traditional department stores, in which retailers sell more modestly priced merchandise with less customer service. The third is the value-oriented tier, Sears, JCPenney, and Kohl’s, which caters to more price-conscious consumers. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 77) Discuss the reasons that department stores are losing their market share to discount stores, and list the steps taken by department stores to deal with their eroding market share. Answer: Many consumers view department stores as not as convenient as discount stores, such as Target, because they are located in large regional malls rather than local neighborhoods. Customer service has diminished in the second- and third-tier stores because of the retailers’ desire to increase profits by reducing labor costs. To deal with their eroding market share, department stores are (1) increasing the amount of exclusive merchandise they sell, (2) increasing their use of private-label merchandise, and (3) expanding their omnichannel presence. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 78) Describe what category specialist retailers are while providing specific examples of category specialist retailers and how they differentiate themselves from their competitors. Answer: Category specialists are big-box stores that offer a narrow but deep assortment of merchandise. Most category specialists predominantly use a self-service approach, but they offer assistance to customers in some areas of the stores. For example, Staples stores have a warehouse atmosphere, with cartons of copy paper stacked on pallets, plus equipment in boxes on shelves. But in some departments, such as computers and other high-tech products, it provides salespeople in the display area to answer questions and make suggestions. By offering a complete assortment in a category, category specialists can “kill” a category of merchandise for other retailers and thus are frequently called category killers. Using their category dominance and buying power, they buy products at low prices and are ensured of supply when items are scarce. Department stores and full-line discount stores located near category specialists often have to reduce their offerings in the category because consumers are drawn to the deep assortment and competitive prices at the category killer. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication; Diversity Accessibility: Keyboard Navigation 79) Explain what drugstores do to remain competitive in the marketplace. Answer: Drugstores face competition from pharmacies in discount stores and from pressure to reduce health care costs. In response, the major drugstore chains are offering a wider assortment of merchandise, including more frequently purchased food items, as well as new services, such as the convenience of drive-through windows for picking up prescriptions, in-store medical clinics, and even makeovers and spa treatments. Difficulty: 3 Hard Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 80) Discuss how off-price retailers opportunistically obtain their merchandise and the different types of merchandise found at off-price retailers. Answer: Off-price retailers are able to sell brand-name and even designer-label merchandise at 20 to 60 percent lower than the manufacturer’s suggested retail price because of their unique buying and merchandising practices. Much of the merchandise is bought opportunistically from manufacturers that have overruns, canceled orders, forecasting mistakes causing excess inventory, closeouts, and irregulars. They also buy excess inventory from other retailers. Closeouts are end-of-season merchandise that will not be used in following seasons. Irregulars are merchandise with minor mistakes in construction. Off-price retailers can buy at low prices because they do not ask suppliers for advertising allowances, return privileges, markdown adjustments, or delayed payments. Difficulty: 2 Medium Topic: Categories of Food and General Merchandise Retailers Learning Objective: 02-03 Identify the various types of general merchandise retailers. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 81) Describe the four important differences in the nature of the offerings provided by services and merchandise retailers. Answer: Four important differences in the nature of the offerings provided by services and merchandise retailers are (1) intangibility, (2) simultaneous production and consumption, (3) perishability, and (4) inconsistency of the offering to customers. (1) Intangibility Services are less tangible than products—customers cannot see or touch them. They are performances or actions rather than objects. For example, health care services cannot be seen or touched by a patient. Intangibility introduces several challenges for services retailers. Because customers cannot touch and feel services, it is difficult for them to evaluate services before they buy them or even after they buy and consume them. (2) Simultaneous production and consumption Products are typically made in a factory, stored and sold by a retailer, and then used by consumers in their homes. Service providers, however, create and deliver the service as the customer is consuming it. For example, when you eat at a restaurant, the meal is prepared and consumed almost at the same time. (3) Perishability Services are perishable. They cannot be saved, stored, or resold. Once an airplane takes off with an empty seat, the sale is lost forever. In contrast, merchandise can be held in inventory until a customer is ready to buy it. Due to the perishability of services, services retailing must match supply and demand. (4) Inconsistency of the offering to customers Products can be produced by machines with very tight quality control, so customers are reasonably assured that all boxes of Cheerios will be identical. But because services are performances produced by people (employees and customers), no two services will be identical. Difficulty: 3 Hard Topic: Differences Between Service and Merchandise Retailers Learning Objective: 02-04 Explain the differences between service and merchandise retailers. Bloom’s: Apply AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation 82) What is franchising? What does a franchisor offer its franchisees to get the franchisees off to a good start? Answer: Franchising is a contractual agreement in which the franchisor (the company) sells the rights to use its business trademark, service mark, or trade name, or another commercial symbol of the company, to the franchisee for a one-time franchise fee and an ongoing royalty fee, typically expressed as a percentage of gross monthly sales. To get franchisees off to a good start, most franchisors provide off- and onsite training, location analysis assistance, advertising, and sometimes a protected territory (i.e., no other franchise may open a store within a certain radius of the first store). Some franchisors even provide financing or offer third-party financing opportunities. Difficulty: 2 Medium Topic: Types of Ownership for Retail Firms Learning Objective: 02-05 Explain the types of ownership for retail firms. Bloom’s: Understand AACSB: Reflective Thinking; Communication Accessibility: Keyboard Navigation Retailing Management, 10e (Levy) Chapter 4 Customer Buying Behavior 1) When consumers go shopping for pleasure, they are seeking to satisfy their hedonic needs. Answer: TRUE Explanation: From the consumer’s perspective, utilitarian needs are associated with work, whereas hedonic needs are associated with pleasure. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 2) Retailers need to provide adequate information and an effortless shopping experience for hedonic shoppers. Answer: FALSE Explanation: Retailers need to provide adequate information and an effortless shopping experience for utilitarian shoppers. On the other hand, shoppers with hedonic needs desire excitement, stimulation, status and power, recreation, and adventure. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 3) The pattern of buying both premium and low-priced merchandise or patronizing both status-oriented retailers and price-oriented retailers is referred to as multichannel retailing. Answer: FALSE Explanation: The pattern of buying both premium and low-priced merchandise or patronizing both expensive, status-oriented retailers and price-oriented retailers is called cross-shopping. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 4) Customers have two sources of information: internal and external. Answer: TRUE Explanation: Internal sources are information in a customer’s memory. External sources consist of information provided by a host of sources. Difficulty: 1 Easy Topic: Consumer Decision Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Communication Accessibility: Keyboard Navigation 5) Customers engage in extended problem solving when they have a large amount of information on the product they plan to buy. Answer: FALSE Explanation: Consumers engage in extended problem solving when they are making a buying decision to satisfy an important need or when they have little knowledge about the product or service. Difficulty: 2 Medium Topic: Consumer Decision Process Learning Objective: 04-02 Identify the different types of buying processes. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 6) Making an unplanned purchase is an example of limited problem solving. Answer: TRUE Explanation: One common type of limited problem solving is impulse buying, or unplanned purchasing, which is a buying decision made by customers on the spot after seeing the merchandise. Difficulty: 2 Medium Topic: Consumer Decision Process Learning Objective: 04-02 Identify the different types of buying processes. Bloom’s: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation 7) Many purchase decisions involve products that the entire family will consume or use. Answer: TRUE Explanation: When families make purchase decisions, they often consider the needs of all family members. Difficulty: 1 Easy Topic: Consumer Decision Process Learning Objective: 04-03 Summarize how the economy and social factors affect customer purchase decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 8) A reference group includes one or more people whom a person uses as a basis of comparison for beliefs, feelings, and behaviors. Answer: TRUE Explanation: A reference group includes one or more people whom a person uses as a basis of comparison for beliefs, feelings, and behaviors. Difficulty: 2 Medium Topic: Consumer Decision Process Learning Objective: 04-03 Summarize how the economy and social factors affect customer purchase decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 9) A retail market segment is a group of customers who are attracted to the same retail mix because they have similar needs. Answer: TRUE Explanation: A retail market segment is a group of customers who are attracted to the same retail mix because they have similar needs. Difficulty: 1 Easy Topic: Selecting Market Segments Learning Objective: 04-04 Determine why and how retailers group customers into market segments. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 10) Of the various methods of segmenting, lifestyle is the one that delves the most into how consumers describe themselves. Answer: TRUE Explanation: Lifestyle refers to how people live, how they spend their time and money, what activities they pursue. Difficulty: 2 Medium Topic: Selecting Market Segments Learning Objective: 04-04 Determine why and how retailers group customers into market segments. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 11) Which of the following is not a stage in the buying process?
Answer: E Explanation: The buying process starts with need recognition, followed by information search, evaluation of alternatives, purchasing, and postpurchase. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Analytic Accessibility: Keyboard Navigation 12) After using her same car for 17 years, Tracey’s mechanic told her that it would cost more to fix the transmission than what the car was worth. She decided it was time for a new car. In which stage of the buying process is Tracey involved?
Answer: B Explanation: The buying process is triggered when consumers recognize they have an unsatisfied need. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 13) Retailers use stimulation to
Answer: E Explanation: Retailers and mall managers use background music, visual displays, scents, and demonstrations in stores and malls to create a carnival-like, stimulating experience for their customers. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Communication Accessibility: Keyboard Navigation 14) When customers go shopping to accomplish a specific task, they are seeking to satisfy
Answer: C Explanation: When customers go shopping to accomplish a specific task, they are seeking to satisfy utilitarian needs. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 15) When consumers go shopping for pleasure, they are seeking to satisfy their
Answer: B Explanation: When consumers go shopping for pleasure, they are seeking to satisfy their hedonic needs—their needs for entertaining, emotional, and recreational experiences. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 16) Parents shopping for their children’s school uniforms and stationery are motivated by ________, which involve accomplishing a specific task.
Answer: C Explanation: From the consumer’s perspective, utilitarian needs are associated with work, whereas hedonic needs are associated with pleasure. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 17) A retailer that sells designer clothes and accessories has a pop-up ad on Facebook that features their new collection. Which method for satisfying customers’ hedonic needs has been used?
Answer: B Explanation: Retailers attempt to stimulate customers with exciting graphics and photography in their catalogs and on their websites. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 18) Catherine enjoys relaxing while getting a manicure and pedicure at the Mystique Resort and Spa. She enjoys the attention and respect given to her by the staff. Hence, Catherine’s hedonic needs are satisfied by a sense of ________ at the spa.
Answer: C Explanation: A store or a service facility can provide customers with attention and respect, which satisfies the customer’s hedonic needs. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 19) After many years of doing his laundry at a public laundromat, Brett was glad to move into an apartment with washer and dryer hookups. He planned to buy a washer and dryer to save time and money. Which of the following needs would the purchase satisfy?
Answer: A Explanation: When consumers go shopping to accomplish a specific task, they are seeking to satisfy utilitarian needs. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 20) Which of the following types of needs is satisfied by shopping for designer label merchandise?
Answer: B Explanation: Shoppers with hedonic needs desire excitement, stimulation, status and power, recreation, and adventure. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Analytic Accessibility: Keyboard Navigation 21) While eating may satisfy a functional need, Lucia’s Italian Restaurant features gurgling fountains, live music, Baroque paintings, and lush gardens to stroll while you wait. Which of the following needs is also satisfied while eating at Lucia’s?
Answer: C Explanation: This describes how retailers create a stimulating experience to encourage consumers to take a break and enjoy their experience at the place of business which supports the hedonic need. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 22) Amanda considers shopping to be like a game. She goes shopping because she enjoys finding bargains and discounts. Amanda is always on the lookout for special offers and discounts. Hence, Amanda’s hedonic needs are satisfied by a sense of
Answer: A Explanation: Often, consumers go shopping because they enjoy finding bargains, looking for sales, and finding discounts or low prices. They treat shopping as a game to be “won.” Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Communication Accessibility: Keyboard Navigation 23) Which of the following statements does not hold true for cross-shopping?
Answer: D Explanation: Because customers have multiple yet conflicting needs, needs cannot be satisfied by one store or one type of store. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 24) The pattern of buying both premium and low-priced merchandise or patronizing both status-oriented retailers and price-oriented retailers is called
Answer: E Explanation: This is the definition of cross-shopping, which is also a conflicting need. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 25) Calvin enjoys dining at Dawson’s, a fast food restaurant. He feels that they make the best French fries for a low price. However, when it comes to dessert, he feels he’s a cake connoisseur. He prefers to have cake only at Marina’s Patisserie, even though a piece of cake costs $7.00. Calvin’s patronizing of Dawson’s and Marina’s demonstrates a behavior called
Answer: A Explanation: Having conflicting needs and purchasing both premium and budget products or services describes cross-shopping. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 26) The imminent approach of Halloween pushes millions of homeowners to go out and purchase candy corn. Halloween stimulates a(n) ________, which forms a part of the buying process.
Answer: B Explanation: Customers must first recognize unsatisfied needs before they are motivated to visit a store or go online to buy merchandise. Sometimes these needs are stimulated by an event in a person’s life. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 27) Which of the following steps follows the recognition of a need?
Answer: B Explanation: Once customers identify a need, they typically seek information about retailers, channels, or products to help them satisfy that need. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 28) Which of the following is not true of the amount of information searched by customers?
Answer: B Explanation: Customers who have prior experience purchasing and using the product or service tend to search less. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 29) Which of the following is an internal source of product information for a customer?
Answer: A Explanation: Internal sources are information in a customer’s memory, such as names, images, and past experiences with different stores. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Communication Accessibility: Keyboard Navigation 30) Which of the following statements is true of the information search carried out by customers?
Answer: B Explanation: The amount of information search is affected by (1) characteristics of the individual customer and (2) aspects of the market and buying situation in which the purchase is made. Some people search more than others. Shoppers seeking hedonic benefits typically spend more time collecting information and shopping because they enjoy the process. Customers who have prior experience purchasing and using the product or service tend to search less. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 31) Consumer Reports, a nonprofit organization that evaluates products, would serve as a source of ________ as it provides Lewis with useful knowledge about available features, convenience of use, and machine quality of various table saws.
Answer: E Explanation: External sources consist of information provided by a host of sources. People search for products and information using search engines such as Google, visit the websites maintained by manufacturers and retailers, acquire information from traditional media (e.g., advertising), read blogs, watch product demonstrations on YouTube, and ask friends, in person and through social media. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Communication Accessibility: Keyboard Navigation 32) Gabriella needs copper wire to make hanging candle lanterns out of antique glass canisters. Based on her previous craft projects, she feels she would find this particular type of wire at Michael’s, a large arts and crafts store. Gabriella is relying on a(n) ________ source for her buying situation.
Answer: B Explanation: Internal sources are information in a customer’s memory, such as names, images, and past experiences with different stores. The major source of internal information here is the customer’s past shopping experience. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Communication Accessibility: Keyboard Navigation 33) Conversion rate can be described as
Answer: D Explanation: Conversion rate is the percentage of customers who enter a store or access a website and then buy a product from that same store or website. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 34) A retailer that uses an everyday low pricing (EDLP) strategy
Answer: D Explanation: Everyday low pricing policies tend to limit the customer information search to the retailer’s offering. The Everyday Low Price strategy reduces information search, because it helps assure customers that they won’t find a lower price for these products any other time at this retailer. This pricing policy tends to limit the customer information search to the retailer’s offering. Difficulty: 1 Easy Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) The multiattribute attitude model is designed to
Answer: A Explanation: The multiattribute model is based on the notion that customers see a retailer, a product, or a channel as a collection of attributes or characteristics. The model is designed to predict a customer’s evaluation of a product, retailer, or channel on the basis of (1) its performance on relevant attributes and (2) the importance of those attributes to the customer. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 36) In order to develop a multiattribute attitude model of its customers, a retailer should gather information about all of the following except
Answer: E Explanation: All of these are collected by market research when developing a multiattribute attitude model except the information of age, income, and education. The model focuses on attitudes, not demographic information. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Communication Accessibility: Keyboard Navigation 37) In order to get into a customer’s consideration set, a retailer should
Answer: A Explanation: To be included in the consideration set, retailers develop programs to increase the likelihood that customers will remember them when they’re about to go shopping. Retailers can increase customer awareness through communication and location decisions. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Communication Accessibility: Keyboard Navigation 38) Which of the following is used by a customer when making a choice of a retailer to patronize?
Answer: B Explanation: The consideration set is the set of alternatives the customer evaluates when making a choice of a retailer to patronize. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Remember AACSB: Analytic Accessibility: Keyboard Navigation 39) Before purchasing his son’s shoes, Lamar evaluated the following stores: Boot World, Terence’s Shoe Palace, Imperial Collection, Royal Shoe Store, and Leather World. Which is the term used to describe these stores that are being evaluated by Lamar?
Answer: C Explanation: Retailers need to be included in the customer’s consideration set, or the set of alternatives the customer evaluates when making a choice of a retailer to patronize. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 40) If you were to ask Roland to recommend a restaurant in Charleston, South Carolina, he would tell you to go to Brendon’s, The Paradise Hotel, or Linda’s Dinner Bar. There are obviously many restaurants in Charleston, but these form a part of Roland’s
Answer: D Explanation: Retailers need to be included in the customer’s consideration set, or the set of alternatives the customer evaluates when making a choice of a retailer to patronize. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Apply AACSB: Communication Accessibility: Keyboard Navigation 41) Which of the following is not true of changing performance beliefs after a retailer gets into the customers’ consideration set?
Answer: A Explanation: Because it can get costly for a retailer to improve its performance on all benefits, retailers must focus on improving their performance on those benefits that are important to customers in their target market. Difficulty: 2 Medium Topic: Consumer Attitudes, Shopping Behavior and the Buying Process Learning Objective: 04-01 Describe the process that consumers go through when making retail patronage and buying decisions. Bloom’s: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation How can a service retailer Best cope with some of the problems associated with the intangibility of services?The correct option is D) Train and motivate employees.
To tackle this problem, a service provider can train and motivate their personnel to operate at maximum efficiency and build specialization, resulting in consistent service.
How can retailers reduce the delivery gap?To reduce the delivery gap and to be consistent, retailers require employees get approval from managers before providing any compensation for customer service. Empowerment means allowing employees at the lowest level of the firm to make decisions on how service is provided to customers.
How can supermarkets differentiate themselves from other food retailing formats?How can supermarkets differentiate themselves from other food retailing formats? E. Whereas conventional supermarkets carry about 30,000 SKUs, limited assortment supermarkets or extreme value food retailers only stock 2000 SKUs.
What word is used to describe a retailer's merchandise breadth group of answer choices?Assortment is the number of different items in a merchandise category. Each different item of merchandise is called and SKU ( stock keeping unit). Variety is often referred to as the breadth of merchandise and assortment is referred to as the depth of merchandise.
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How can a service retailer best cope with the problems associated with the inconsistency?
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