Principles of Retailing Exam
Bank
Course Introduction
Principles of Retailing offers an in-depth exploration of the retail industry, examining the foundations, strategies, and current trends that shape the modern retail landscape. The course covers key concepts such as retail formats, location decisions, merchandising, supply chain management, pricing strategies, customer service, and the impact of technology on retail operations. Students will analyze the roles of retailers in the supply chain, understand consumer behavior in retail contexts, and study the competitive dynamics influencing retail businesses. Through real-world case studies and practical examples, learners will develop critical skills for effective decision-making and management within the retail sector.
Recommended Textbook
Retail Management A Strategic Approach 13th Edition by Barry R. Berman
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20 Chapters
2240 Verified Questions
2240 Flashcards
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Chapter 1: An Introduction to Retailing
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Sample Questions
Q1) Exclusive distribution decreases price competition among retailers.
A)True
B)False Answer: True
Q2) The placement of in-store displays in high-traffic areas is designed to increase impulse purchases.
A)True
B)False Answer: True
Q3) The sorting process helps manufacturers by ________.
A) paying on the basis of when goods are shipped, not sold
B) offering an assortment of goods that are collected from a large number of suppliers
C) enabling one-stop shopping
D) buying large orders at one time
Answer: D
Q4) The largest retailer in the United States (in terms of sales)is Sears Holding.
A)True
B)False Answer: False
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Chapter 2: Building and Sustaining Relationships in Retailing
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Sample Questions
Q1) The value chain concept relates to a channel of distribution.
A)True
B)False Answer: True
Q2) Developing a description of a retailer's core customers is an important part of developing a target market strategy for a retailer.
A)True
B)False Answer: True
Q3) A customer loyalty program is part of ________.
A) relationship retailing
B) customer satisfaction
C) transactional retailing
D) revolving credit
Answer: A
Q4) Customer loyalty programs are based on the concept of reinforcing a consumer's purchasing activity.
A)True
B)False Answer: True
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Chapter 3: Strategic Planning in Retailing
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Sample Questions
Q1) While a franchise offers a franchisee a well-known company name and a loyal customer following,it also typically specifies rigid operations standards and restricts the choice of suppliers.
A)True
B)False
Answer: True
Q2) Intensive owner participation in a business is most likely to occur when ________.
A) a firm has strong financial controls
B) store hours are long
C) a business cannot be easily automated or mechanized
D) a retailer is well capitalized
Answer: C
Q3) Retailers investing large capital expenditures in land,buildings,and equipment often have sales objectives as a company goal.
A)True
B)False
Answer: False
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Chapter 4: Retail Institutions by Ownership
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Sample Questions
Q1) Decision making is usually centralized and the levels of management personnel are minimized in which retail institution?
A) variety store
B) department store
C) independent
D) chain
Q2) Orderly managerial succession is an advantage of an independent retailer form of organization.
A)True
B)False
Q3) In general,when compared with manufacturing activities,retailing is characterized by relative difficulty of entry.
A)True
B)False
Q4) Due to the Robinson-Patman Act and other antitrust forms of legislation,large retail chains cannot enjoy significant advantages as a result of their high bargaining power.
A)True
B)False
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Page 6
Chapter 5: Retail Institutions by Store-Based Strategy Mix
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Sample Questions
Q1) The rapid initial growth of the warehouse store and the off-price chain can be explained by the wheel of retailing theory.
A)True
B)False
Q2) A merger benefits the affected retailers through ________.
A) increased bargaining power
B) greater store name awareness
C) more efficient ordering systems
D) higher return on investment
Q3) Which food-oriented retailer concentrates on the sale of fill-in items?
A) conventional supermarket
B) food-based superstore
C) box (limited-line) store
D) convenience store
Q4) Fees to customers account for a large proportion of total profits for ________.
A) membership clubs
B) flea markets
C) factory outlets
D) owned-goods service providers
Q5) Discuss the retail strategy mix of a membership club and a flea market.
Page 7
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Chapter 6: Web,
and Other Forms of Nontraditional Retailing
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Sample Questions
Q1) What are the advantages to a store-based retailer adding a direct marketing operation? ...the disadvantages?
Q2) Which lifestyle trend increased the desirability of direct marketing for consumers?
A) increased consumer sophistication
B) poverty-of-time
C) component lifestyle
D) increased ecological awareness
Q3) Which of the following is a not a disadvantage to a catalog-based direct marketer?
A) the inability to pinpoint specific customer segments through mailing lists
B) the effect of increases in postal rates and paper stock costs on profits
C) high clutter due to the large number of catalogs that are mailed
D) the inability to revise prices when catalogs are prepared months in advance of distribution
Q4) Even though it is a nonstore retailer,vending machine operators need to pay rent (often as a percent of sales)for the use of a given location.
A)True
B)False
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Chapter 7: Identifying and Understanding Consumers
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Sample Questions
Q1) What type of consumer decision making accompanies a situation where consumers have purchased the product before,but do not purchase the product on a regular basis?
A) extended decision making
B) limited decision making
C) routine decision making
D) brand loyalty
Q2) Outshoppers are often consumers who live in rural areas that shop in larger cities for important purchases.
A)True
B)False
Q3) Consumers can evaluate alternatives on the basis of specific criteria and the importance of criteria and on the basis of such cues as price,brand name,and store name.
A)True
B)False
Q4) Distinguish between "determining the alternative goods or services" and "ascertaining the characteristics of each alternative" stage in the information search stage of the consumer decision process.
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Chapter 8: Information Gathering and Processing in Retailing
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Sample Questions
Q1) A retailer has a database of past sales by season,by store,and by merchandise classification.This database is used as a guide in planning and control.The database is an example of ________.
A) internal secondary data
B) external secondary data
C) a survey
D) observation
Q2) An example of nonsystematic research in retailing,relating to the effect of a price rise on projected sales,is ________.
A) evaluating sales of sweaters at different price levels in prior years
B) developing an educated "guess" as to demand for sweaters based on current weather conditions
C) interviewing consumers to determine their probability of purchasing sweaters at different prices
D) experimentation with different price levels in matched-pairs of stores
Q3) a.Describe the importance of the problem definition process in retail research.
b.Apply the problem definition process to the question of whether a new product has added to a supermarket's overall sales.
Q4) Develop a semantic differential scale to determine Starbuck's retail image.
Page 10
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Chapter 9: Trading-Area Analysis
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Sample Questions
Q1) Loyal customers who shop at a store despite very long travel requirements constitute the store's ________.
A) trading-area overlap
B) primary trading area
C) secondary trading area
D) fringe trading area
Q2) In Reilly's law of retail gravitation,the point of indifference is the ________.
A) customer's perceived similarity between two competing retailers
B) geographic breaking point area at which shoppers are indifferent to shopping at either of two cities
C) limit of a city's trading area in estimated driving time
D) limit of a city's primary trading area in driving distance
Q3) Digitized mapping with key locational data are combined with ________.
A) trading area analysis
B) trading-area overlap analysis
C) geographic information systems.
D) TIGER maps.
Q4) The American Community Survey is updated yearly.
A)True
B)False
Page 11
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Chapter 10: Site Selection
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Sample Questions
Q1) A one-hundred percent location for one retailer may not be a one-hundred percent location for another retailer,due to the need for different affinities or different target market customers.
A)True
B)False
Q2) Generally,which tenant in a community shopping center has the largest primary trading area?
A) convenience store
B) pharmacy
C) supermarket
D) variety store
Q3) What factors need to be considered in the computation of pedestrian traffic counts for a children's clothing chain? ...vehicular traffic counts?
Q4) The retailers in a string have low affinities with one another.
A)True
B)False
Q5) Prepare a list of five knockout factors that would disqualify an otherwise satisfactory retail location.Describe why each factor is important.
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Chapter 11: Retail Organization and Human Resource Management
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Sample Questions
Q1) A major disadvantage with the modern version of the Mazur plan is that ________.
A) the distinction between functional areas may be unclear
B) the distinction between line and staff executives may be unclear
C) salespeople report to a buyer who is not on the selling floor
D) it is generally implemented through a tall organization
Q2) The most complex organization forms are found in diversified retailers.
A)True
B)False
Q3) Centralization of management is practiced in which retail organization form?
A) chain store
B) separate store
C) equal store
D) main store control
Q4) A retailer can overcome problems with extreme task specialization by ________.
A) job rotation and job enlargement
B) raising employee salaries
C) developing a child care center
D) reprimanding employees for lateness
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Q5) Discuss how role playing and behavior modeling can be used to teach and reinforce effective personal selling techniques.
Chapter 12: Operations Management: Financial Dimensions
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Sample Questions
Q1) A retailer's net worth is computed as its assets less its fixed liabilities.
A)True
B)False
Q2) The relationship among asset turnover,net profit margin,and financial leverage is known as ________.
A) asset turnover
B) return on assets
C) the strategic profit model
D) zero-based budgeting
Q3) Leveraged buyouts (LBOs)are characterized by high debt.
A)True
B)False
Q4) a.Differentiate between the current ratio and the quick ratio.
b.Why is a 1 to 1 ratio acceptable for a quick ratio,yet a 2 to 1 ratio is considered satisfactory for the current ratio?
Q5) a.Why have so many leveraged buyouts (LBOs)involved retailers?
b.What has been the impact of LBOs on retailing?
Q6) A leveraged buyout (LBO)retailer has high assets relative to net worth.
A)True
B)False
Page 14
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Chapter 13: Operations Management: Operational Dimensions
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Sample
Questions
Q1) a.Under what circumstances should a retailer maintain its own credit card operation?
b.Under what circumstances should a retailer outsource credit management to a third party?
Q2) A retailer lists all of its operations to be performed,its characteristics,and its timing in a(n)________.
A) prototype arrangement
B) standardized plan
C) operations blueprint
D) rationalized retailing arrangement
Q3) All of the activities involved in managing the retailer's physical facilities comprise
A) merchandising
B) operations management
C) energy management
D) store maintenance
Q4) a.What is the relationship among job standardization,cross-training,and workload forecasting?
b.Under what conditions should cross-training be used by a retailer?
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Q5) What are the advantages and disadvantages of rationalized retailing programs?
Chapter 14: Developing Merchandise Plans
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Sample Questions
Q1) A retail chain can seek to combine the benefits of centralized and decentralized organizations by using a centralized buying organization and a decentralized selling organization.
A)True
B)False
Q2) Which buying organization format for department stores is centralized?
A) main store control
B) equal store
C) separate store
D) diversified retailer
Q3) A retailer with homogeneous demand patterns throughout its branches should use a decentralized buying organization.
A)True
B)False
Q4) A separate store organization used by a department store chain is an example of a(n)________.
A) decentralized buying organization
B) centralized buying organization
C) informal buying organization
D) resident buying office
Page 16
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Chapter 15: Implementing Merchandise Plans
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Sample Questions
Q1) A major cost advantage associated with direct store delivery for a retailer is the
A) mechanized processing of goods
B) reduction in warehouse expenses
C) efficient marking of merchandise
D) ease of returns
Q2) Which inventory management system in retailing corresponds to a just-in-time inventory management system?
A) computer-based UPC scanning
B) quick response (QR) inventory planning
C) automatic reordering
D) economic order quantity
Q3) Unlike other methods of inventory management,logistics ________.
A) is concerned with the flow of information via paperless means
B) regards order processing and fulfillment, transportation, warehousing, customer service, and inventory management as interdependent
C) seeks to minimize inventory accumulations in the whole channel system
D) seeks to trade off the lower inventory levels with lower levels of customer service
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Chapter 16: Financial Merchandise Management
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Sample Questions
Q1) A retailer's total merchandise available for sale (at cost)is $245,000; the total merchandise available for sale at retail equals $300,000.Its cost complement is 0.82.
A)True
B)False
Q2) Merchandise cost is typically coded on packages in the ________.
A) FIFO method of inventory valuation
B) LIFO method of inventory valuation
C) cost method of retail accounting
D) retail method of accounting
Q3) A firm's ending retail book value of inventory is $300,000; its stock shortages are $15,000.If its cost complement is 0.70,what is its ending inventory at cost?
A) $199,500
B) $210,000
C) $213,100
D) $220,500
Q4) GMROI combines gross profit and financial leverage measures.
A)True
B)False
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18
Chapter 17: Pricing in Retailing
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Sample Questions
Q1) A negatively-sloped demand curve means that ________.
A) the price elasticity of demand is negative
B) demand is elastic
C) demand is inelastic
D) demand is unitary
Q2) Horizontal price fixing involves an agreement ________.
A) to charge retail firms lower prices in areas with an undesirable competitor
B) by any channel member not to sell merchandise below cost
C) among manufacturers, among wholesalers, or among retailers to set prices
D) by retailers to charge the price level suggested by manufacturers or wholesalers
Q3) An aggressive low-price strategy designed to sell a high volume of goods is ________.
A) market skimming pricing
B) market penetration pricing
C) the price-quality association
D) markup pricing
Q4) What is the role of demand-,cost-,and competition-oriented pricing in developing and implementing a price strategy?
Q5) Explain how markup pricing can include a demand and a cost component.
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Chapter 18: Establishing and Maintaining a Retail Image
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Sample Questions
Q1) The area set aside for merchandise displays,interactions between sales personnel and customers,and demonstrations is ________ space.
A) customer
B) selling
C) merchandise
D) personnel
Q2) A Starbucks coffee shop in a Barnes & Noble store best illustrates ________.
A) impulse sales
B) co-branding
C) experiential shopping
D) an ensemble display
Q3) Point-of-purchase displays may be developed by the retailer or provided by manufacturers or wholesalers.
A)True
B)False
Q4) Bookstores utilize closed assortments.
A)True
B)False
Q5) a.What special problems do chains have with respect to retail image?
b.What special problems do franchisors have with respect to retail image?
Page 20
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Chapter 19: Promotional Strategy
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Sample Questions
Q1) Describe the major differences between retailers' and manufacturers' advertising strategies.
Q2) Image-related advertising illustrates a(n)________ advertisement.
A) pioneer
B) reminder
C) competitive
D) institutional
Q3) "Is this your first purchase of a digital single lens reflex camera?" and "What types of lenses and flash equipment do you own? are examples of questions asked in the
A) canned sales presentation
B) need-satisfaction approach
C) order-taking approach
D) promotional money approach
Q4) The overall stages in a consumer's purchase process from awareness to purchase is depicted in the ________.
A) consumer brand choice model
B) hierarchy of effects model
C) brand loyalty model
D) Howard-Sheth model
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Chapter 20: Integrating and Controlling the Retail Strategy
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Sample Questions
Q1) Outline the principles of benchmarking for a retailer.
Q2) The use of low,moderate,and high interest rates as variables in a retail plan for a major appliance retailer illustrates ________.
A) gap analysis
B) benchmarking
C) strategic planning
D) scenario analysis
Q3) A sales opportunity grid evaluates a product's profitability over several time periods.
A)True
B)False
Q4) Morale of staff is generally improved by the use of ________ planning.
A) top-down
B) bottom-up
C) centralized
D) scenario-based
Q5) A retail audit can cause poor employee morale.
A)True
B)False
Q6) Develop a horizontal audit form for a new car dealer.
Page 22
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