Principles of Retailing
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Course Introduction
Principles of Retailing explores the foundational concepts and operations of the retail industry, examining the structure, strategies, and key functions of modern retail organizations. The course covers topics such as the evolution of retail formats, consumer behavior, store layout and design, merchandise planning, pricing strategies, supply chain management, and the influence of technology on retailing. Students will gain insights into the challenges and opportunities retailers face in a dynamic marketplace, and develop an understanding of both traditional brick-and-mortar stores and emerging digital retail environments.
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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Page 2
Chapter 1: An Introduction to Retailing
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Sample Questions
Q1) An institutional approach to the study of retailing concentrates on the activities that retailers must perform.
A)True
B)False
Answer: False
Q2) Which retail strategy focuses on existing customers?
A) the retail concept
B) the functional approach to retailing
C) relationship retailing
D) transactional retailing
Answer: C
Q3) Generally,a manufacturer can maximize its long-run sales potential through the use of intensive distribution.
A)True
B)False
Answer: True
Q4) A retailer uses multiple points of contact in omnichannel retailing.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Building and Sustaining Relationships in Retailing
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Sample Questions
Q1) An important component of the value chain concept is ________.
A) the inevitability of channel conflict
B) dependency of each channel member on one another
C) the need for independence among channel members
D) the need to minimize total channel costs
Answer: B
Q2) The standard of what constitutes ethical behavior is whether the proposed act is legal.
A)True
B)False
Answer: False
Q3) The major difference between value and a value chain is that only ________.
A) value covers tangible benefits
B) value covers intangible benefits
C) the value chain relates to a channel of distribution
D) the value chain covers the total bundle of benefits received by consumers
Answer: B
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Page 4
Chapter 3: Strategic Planning in Retailing
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) An overall framework of action that guides a retailer is its ________.
A) mission statement
B) corporate philosophy
C) retail tactics
D) retail strategy
Answer: D
Q2) A retailer can determine how consumers and others perceive its company through use of ________.
A) control analysis
B) situation analysis
C) target market assessment
D) positioning
Answer: D
Q3) The cost of a business above its tangible asset value is considered goodwill.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Retail Institutions by Ownership
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Sample Questions
Q1) Consumer food cooperative sales have grown to a substantial share of total supermarket sales,due to the ease of planning and implementing a consumer cooperative.
A)True
B)False
Q2) Constrained decision making is used by ________.
A) independents and retail cooperatives
B) independents and chains
C) independents and leased departments
D) franchises and leased departments
Q3) Which of the following has developed because existing retail institutions were perceived by consumers as inadequately fulfilling market needs?
A) independent channel ownership
B) consumer cooperatives
C) leased departments
D) total vertical integration
Q4) Describe the competitive advantages and disadvantages of franchising from the perspective of the franchisee.
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Chapter 5: Retail Institutions by Store-Based Strategy Mix
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Sample Questions
Q1) The use of prototype stores,second-use locations,and the buying of refurbished equipment are all an example of a cost-containment approach.
A)True
B)False
Q2) The use of nontraditional sites is generally associated with which retail institution?
A) retail cooperative
B) flea market
C) factory outlet
D) membership club
Q3) Retail institutions evolving from introduction to growth require a high level of investment to sustain growth.
A)True
B)False
Q4) The growth of scrambled merchandising means that manufacturers will have to increasingly utilize selective distribution.
A)True
B)False
Q5) Discuss the retail strategy mix of a membership club and a flea market.
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Chapter 6: Web, nonstore-Based, and Other Forms of Nontraditional Retailing
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Sample Questions
Q1) A direct marketer determines the goods and services sold as well as its target market in the ________ stage of a direct marketing strategy.
A) order fulfillment
B) generating customers
C) business definition
D) consumer response
Q2) What are the advantages to a store-based retailer adding a direct marketing operation? ...the disadvantages?
Q3) The Web enables a retailer to efficiency reach geographically dispersed customers,including foreign ones.
A)True
B)False
Q4) Unlike traditional marketers,the profitability of direct marketers is highly sensitive to which types of expenses?
A) rental costs
B) postage and paper stock costs
C) energy costs
D) fringe benefit expenses
Page 8
Q5) Differentiate between the Internet and the World Wide Web.
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Chapter 7: Identifying and Understanding Consumers
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Sample Questions
Q1) A retailer,in studying its sales data,has found that 30 percent of its shoppers are outshoppers.These outshoppers account for 40 percent of total retail sales and 50 percent of the store's gross profits.What are the retail strategy implications of this finding?
Q2) A consumer's degree of information search is not based upon his/her perceived risk.
A)True
B)False
Q3) The family life cycle is an updated version of the household life cycle.
A)True
B)False
Q4) The level of risk a consumer believes exists regarding the purchase of a good or service from a specific retailer is his or her ________.
A) real risk
B) purchase risk
C) perceived risk
D) cognitive dissonance
Q5) a.Differentiate among social cues,commercial cues,and physical cues as stimuli.
b.Evaluate the level of retailer control for each type of stimulus.
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Chapter 8: Information Gathering and Processing in Retailing
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Sample Questions
Q1) Examples of the effective use of retail research are the use of focus groups to test hypotheses and the use of nonprobability samples.
A)True
B)False
Q2) A retailer can generate data on sales by cash versus credit,the average sale,and number of items purchased on the average shopping trip by examining ________.
A) inventory records
B) purchase orders
C) merchandise purchases
D) sales invoices
Q3) The issue (problem)definition stage of the marketing research process seeks to isolate specific problem/opportunity areas for further study.
A)True
B)False
Q4) Micromarketing is an application of data mining.
A)True
B)False
Q5) Develop a semantic differential scale to determine Starbuck's retail image.
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Chapter 9: Trading-Area Analysis
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Sample Questions
Q1) Store location is generally considered the least flexible element in a retailer's strategy mix.
A)True
B)False
Q2) A retailer with a higher than average profitability is most likely to have which level of saturation?
A) overstored
B) understored
C) oversaturated
D) saturated
Q3) Data on an area's economic base are available from ________.
A) American Community Survey
B) Editor & Publisher Market Guide
C) Census of Population
D) Census of Retail Trade
Q4) The simplest computerized site selection model is the gravity model.
A)True
B)False
Q5) Under what conditions should a retailer have high trading-area overlap among its branches? Explain your answer.
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Chapter 10: Site Selection
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Sample Questions
Q1) Ownership of retail facilities is most common in what location type?
A) community shopping center
B) neighborhood shopping center
C) string
D) regional shopping center
Q2) A major advantage of leasing over ownership is the ________.
A) ability to plan on using a location over the long term
B) freedom from restrictive leasing clauses
C) ability to depreciate a property's building
D) freedom from tying up capital in real-estate
Q3) Describe the pros and cons of a location in a planned shopping center versus a shopping district location.
Q4) Which business district is located in the part of a city or town with the greatest concentration of office buildings and retail stores?
A) string
B) central business district
C) neighborhood business district
D) secondary business district
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Chapter 11: Retail Organization and Human Resource Management
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Sample Questions
Q1) The retailer most likely to have a tall organization is a ________.
A) small independent retailer
B) centralized retailer
C) decentralized retailer
D) main store control-format retailer
Q2) Low experience of retail personnel,long store hours,and high variations in customer demand all contribute to the difficulty in managing retail personnel.
A)True
B)False
Q3) A problem with extreme specialization of tasks in retailing is ________.
A) high training costs
B) difficulty in hiring personnel with necessary skills
C) employees not being aware of the importance of their tasks to the retailer's overall goals
D) the difficulty of clearly defining job-related tasks
Q4) Retail training techniques such as role playing and behavior modeling are particularly well suited for store operations personnel.
A)True
B)False
Page 13
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Chapter 12: Operations Management: Financial Dimensions
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Sample Questions
Q1) Top-down budgeting reflects a style of supervising retail employees that assumes that employees lack ambition and dislike responsibility.
A)True
B)False
Q2) The major difference between the top-down and the bottom-up budgeting process is ________.
A) whether the budget request is raised or lowered
B) the degree of centralization in the budgetary process
C) whether zero or incremental budgeting is used
D) the time interval between initial budget setting and the end of the budgetary process
Q3) A retailer's planned expenditures for a given time period,based on its expected performance,is its ________.
A) budget
B) financing needs
C) sales forecast
D) forecast
Q4) Describe the relationship among each of the components of the strategic profit model.
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Chapter 13: Operations Management: Operational Dimensions
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Sample Questions
Q1) A major difficulty with the use of prototype stores is the ________.
A) inconsistent store image
B) higher purchase costs for fixtures
C) inflexibility in dealing with special site characteristics
D) difficulty in applying standardized operating cost controls to different locations
Q2) Centralized decision making is generally associated with ________.
A) micro-merchandising
B) risk-maximization retailing
C) rationalized retailing
D) category management
Q3) Ordering costs,holding costs,and loss in profits due to stockouts are effectively controlled in ________.
A) prototype stores
B) incremental budgeting
C) zero-based budgeting
D) inventory management
Q4) Develop an energy management checklist for an off-price independent retailer which utilizes an isolated retail location.Be sure to focus on lighting,heating,and air-conditioning.
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Chapter 14: Developing Merchandise Plans
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Sample Questions
Q1) Which buying organization seeks to receive quantity discounts and bargaining power discounts for its members so that they will be better able to compete against larger chain organizations?
A) cooperative buying
B) inside buying organization
C) resident buying office
D) formal buying organization
Q2) Resident buying offices are used by retailers that have main stores nearby important market centers.
A)True
B)False
Q3) A major retailer desires to use specialists to plan,implement,and control the merchandising function.The most appropriate buying organization is a(n)________.
A) decentralized buying organization
B) inside buying organization
C) informal buying organization
D) formal buying organization
Q4) Under what conditions should a retailer consider using a decentralized buying organization?
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Chapter 15: Implementing Merchandise Plans
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Sample Questions
Q1) Opportunistic buying generally relies upon negotiated contracts.
A)True
B)False
Q2) Efficient consumer response (ECR)incorporates quick response (QR)inventory planning,electronic data interchange (EDI),and logistics planning.
A)True
B)False
Q3) RFID is a similar concept to the UPC in identifying and keeping track of inventory.
A)True
B)False
Q4) Efficient consumer response (ECR)seeks to reduce inventory levels at manufacturers,wholesalers,and retailers using collaboration among these channel members.
A)True
B)False
Q5) A retailer's risk is minimized in a consignment purchase.
A)True
B)False
Q6) Develop a 10-item store security checklist aimed at reducing employee theft.
Page 17
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Chapter 16: Financial Merchandise Management
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Sample Questions
Q1) Merchandise categories used by a retailer in forecasting and budgeting are commonly referred to as ________.
A) strategic business units (SBUs)
B) SIC classifications
C) UPC classifications
D) control units
Q2) Automatic reorder systems can best be used for ________.
A) goods with high seasonality
B) staples
C) goods purchased using negotiation
D) goods with uncertain fashion cycles
Q3) A retailer's sales for October are 70 percent of its average monthly sales level.Its monthly sales index is -0.30.
A)True
B)False
Q4) The cost of goods sold equals the cost of merchandise available for sale less operating expenses.
A)True
B)False
Q5) Explain the advantages and disadvantages of cost-based inventory systems.
Page 18
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Chapter 17: Pricing in Retailing
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Sample Questions
Q1) 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
Q2) The difference between loss leaders and bait-and-switch advertising is that with loss leaders,the retailer stocks the good in sufficient quantities to meet anticipated demand.
A)True
B)False
Q3) A 25 percent markup at cost equals what markup at retail?
A) 10 percent
B) 15 percent
C) 20 percent
D) 40 percent
Q4) a.Define loss leaders,bait-and-switch advertising,trading up,and leader pricing.
b.Explain the differences among each.Use an example.
Q5) What is the role of demand-,cost-,and competition-oriented pricing in developing and implementing a price strategy?
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Chapter 18: Establishing and Maintaining a Retail Image
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Sample Questions
Q1) Bookstores utilize closed assortments.
A)True
B)False
Q2) Under the model stock approach,a retailer determines selling space needs by ________.
A) dividing merchandise into impulse and specific intent categories
B) computing the amount of floor space necessary to display a given assortment of merchandise
C) increasing space for complementary goods and decreasing space for substitute goods
D) determining which products will maximize sales or profit per square foot
Q3) A small appliance retailer has in-store cooking demonstrations,offers free samples,and lets consumers try out selected new appliances in an environment that resembles a small kitchen.This retailer ________.
A) has a theme-setting display
B) practices experiential merchandising
C) utilizes the model stock approach
D) employs functional product groupings
Q4) 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) The promotion form that focuses on short-run sales performance is ________.
A) advertising
B) public relations
C) sales promotion
D) personal selling
Q2) Media charges are generally lower for manufacturers than for retailers.
A)True
B)False
Q3) Which promotional forms are most appropriate for the earliest stages of the hierarchy of effects?
A) advertising and public relations
B) advertising and sales promotion
C) public relations and sales promotion
D) public relations and personal selling
Q4) A difficulty associated with the use of national magazines by an independent retailer with a narrow trading area is ________.
A) high waste in geographic coverage
B) low control over timing and placement of advertisements
C) long lead time
D) absence of discounts based on the number of insertions
Page 21
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Chapter 20: Integrating and Controlling the Retail Strategy
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Sample Questions
Q1) Sales per square foot is a poor performance measure for a ________.
A) traditional department store
B) direct marketer
C) supermarket
D) membership club
Q2) A difficulty in using sales per square foot as a performance measure for a rapidly growing retailer is that it ________.
A) will underestimate performance since a large number of stores will not be open for an entire year
B) will overestimate performance since a large number of stores will not be open for an entire year
C) does not take into account the different performance levels of older versus newer stores
D) does not take into account the different performance levels of existing versus acquired stores
Q3) A good retail audit is conducted on a regular basis,comprehensive,systematic,and conducted in an independent manner.
A)True
B)False
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Page 22