Retail Buying and Merchandising Exam Review
Course Introduction
This course explores the fundamental principles and strategic processes involved in retail buying and merchandising. Students will examine the roles and responsibilities of retail buyers, including merchandise planning, sourcing, financial analysis, and vendor relations. The course covers the selection and procurement of merchandise, market analysis, assortment planning, inventory control, pricing strategies, and merchandising techniques to maximize profitability and meet consumer demands. Case studies and practical assignments provide insights into the latest trends, technologies, and ethical considerations shaping the retail industry, preparing students for successful careers in a dynamic retail environment.
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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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Channel cooperation and control is greatest when ________.
A) intensive distribution is utilized
B) selective distribution is utilized
C) exclusive distribution is utilized
D) manufacturers own and operate their own retailing facilities
Answer: D
Q2) A retailer often must limit its selection of brands in ________ distribution.
A) wide
B) intensive
C) selective
D) exclusive
Answer: D
Q3) Retailers purchase goods in large quantities and sell them in small quantities.This represents an important aspect of the retailing concept.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Building and Sustaining Relationships in Retailing
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112 Flashcards
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Sample Questions
Q1) A customer must pay his/her full bill when it is due in a(n)________.
A) debit account
B) open credit account
C) revolving credit account
D) option credit account
Answer: B
Q2) A retailer has a consumer advisory committee which meets monthly with a vice-president of operations.The committee reflects which element of the consumer's bill of rights?
A) the right to be heard
B) the right to safety
C) the right to choose
D) the right to be informed
Answer: A
Q3) The value delivery system concept suggests that each channel member must retain its standard retail tasks.
A)True
B)False
Answer: False
Page 4
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Chapter 3: Strategic Planning in Retailing
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112 Flashcards
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Sample Questions
Q1) A retailer has a sales efficiency rating of 20 percent.This means that ________.
A) 20 percent of every sales dollar is comprised of operating costs
B) 20 percent of every sales dollar contributes to nonoperating costs and profits
C) 80 percent of every sales dollar contributes to nonoperating costs and profits
D) its operating expense ratio has improved by 20 percent over the previous year
Answer: B
Q2) 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
Q3) Which objective is the most difficult to quantify?
A) sales
B) profit
C) satisfaction of publics
D) market share
Answer: C
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5
Chapter 4: Retail Institutions by Ownership
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112 Flashcards
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Sample Questions
Q1) 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
Q2) An independent can increase its bargaining power with a supplier by ________.
A) buying substantially larger quantities than needed to take advantage of all discounts
B) insisting on quantity discounts from vendors
C) belonging to buying groups with other independents
D) focusing increased attention on closeouts, irregulars, and the purchase of merchandise off-season
Q3) A major disadvantage of independent retailing is ________.
A) latitude in selecting customer markets
B) low bargaining power with suppliers
C) inflexibility in developing strategy
D) high investment requirements
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6
Chapter 5: Retail Institutions by Store-Based Strategy Mix
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112 Flashcards
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Sample Questions
Q1) The food-oriented retailer with the narrowest width and depth of assortment is the
A) conventional supermarket
B) food-based superstore
C) box (limited-line) store
D) convenience store
Q2) A fundamental assumption of the wheel of retailing theory is high customer loyalty.
A)True
B)False
Q3) Which theory asserts that retail institutions pass identifiable stages ranging from innovation to decline?
A) scrambled merchandising
B) the wheel of retailing
C) rationalized retailing
D) the retail life cycle
Q4) Two extreme cases of the wheel of retailing are the low-end and the high-end strategy.
A)True
B)False
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Chapter 6: Web, nonstore-Based, and
Other
Forms of Nontraditional Retailing
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112 Flashcards
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Sample Questions
Q1) Which statement concerning the World Wide Web and the Internet is not correct?
A) The World Wide Web is one way of accessing the Internet.
B) The World Wide Web accounts for five percent of overall U.S. retail sales.
C) The World Wide Web has graphics, sound, video, and audio capability.
D) Almost all online interactive retailing is conducted on the World Wide Web.
Q2) Direct marketing is forecast to grow based on ________.
A) greater product standardization and the prominence of well-known brands
B) the growth of private label brands
C) direct marketing clutter
D) reduced postal rates and paper stock costs
Q3) Direct marketing is increasingly used by store-based retailers.This illustrates
A) multichannel retailing
B) downsizing
C) diversification
D) vertical integration
Q4) A direct marketer can reduce its catalog costs to selected target markets by using specialogs and selective bindings.
A)True
B)False
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Chapter 7: Identifying and Understanding Consumers
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Sample Questions
Q1) 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
Q2) 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
Q3) Price,brand name,or store name are often used as cues in the ________ stage of the consumer decision process.
A) information search
B) purchase
C) evaluation of alternatives
D) problem awareness
Q4) Contrast the study of consumer behavior from the perspective of consumer demographics and consumer lifestyles.
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Chapter 8: Information Gathering and Processing in Retailing
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Sample Questions
Q1) Both small and large retailers can outsource their retail information system.
A)True
B)False
Q2) The major difference between marketing research in retailing and a retail information system is that ________.
A) the retail information system stores data
B) the retail information system is continuous
C) marketing research in retailing includes the retail information system process
D) marketing research in retailing does not include inventory-related data
Q3) 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
Q4) Design a survey instrument to be completed by a mystery shopper investigating the quality of an appliance retailer's sales force.
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Chapter 9: Trading-Area Analysis
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Sample Questions
Q1) A supermarket has developed a model to aid in its site selection process.The model contains variables such as trading area population in the primary trading area and expected market share.This illustrates a(n)________ model.
A) regression
B) historical analogy
C) gravity
D) analog
Q2) Huff's law is an example of a(n)________ computer site selection model.
A) regression
B) analog
C) gravity
D) historical analogy
Q3) Which computer-based system classifies and describes communities by lifestyle clusters?
A) American Community Survey
B) Editor & Publisher Market Guide
C) Nielsen Researcher
D) Nielsen's PRIZM
Q4) a.How can a retailer make its location strategy more flexible?
b.Identify the risks associated with these strategies.
Page 11
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Chapter 10: Site Selection
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Sample Questions
Q1) The major difference between unplanned business districts and planned shopping centers is based upon ________.
A) composition of stores
B) ownership
C) size in square footage
D) shopper demographics
Q2) A retailer's sales must be audited by the property owner in which type of lease?
A) percentage lease
B) straight lease
C) net lease
D) graduated lease
Q3) Prepare a list of five knockout factors that would disqualify an otherwise satisfactory retail location.Describe why each factor is important.
Q4) A string location is most appropriate for ________.
A) a chain retailer
B) a destination store
C) retailers that sell shopping goods
D) a category killer
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Chapter 11: Retail Organization and Human Resource Management
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112 Flashcards
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Sample Questions
Q1) In the main store control organization,________.
A) decentralization is practiced
B) centralization is practiced
C) merchandise managers are placed in branch stores
D) each branch has autonomy for merchandising and operations
Q2) Compensation cafeterias are used to provide flexibility in compensation for low-level employees,as well as top management.
A)True
B)False
Q3) A retailer can determine which criteria are best correlated with job success through the use of a(n)________.
A) application blank
B) weighted application blank
C) goal-oriented job description
D) job analysis
Q4) Which retail institution type has the simplest organization structure?
A) branch location
B) diversified retailer
C) independent
D) variety store
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Chapter 12: Operations Management: Financial Dimensions
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) A retailer will have low asset turnover when it has ________.
A) a high proportion of slow-selling inventory
B) high financial leverage
C) a high profit margin
D) high debt relative to assets
Q2) A firm can increase its asset turnover performance by ________.
A) lowering rental costs through use of low-cost warehouse-type locations
B) reducing labor expense through centralized operations
C) increasing liabilities to lower the asset base
D) stocking inventory that is fast-moving
Q3) A retailer typically has half of its sales on credit.Credit sales are payable in full within 30 days of the merchandise's sales.The retailer's collection period (based on total net sales)is 15 days.The retailer has ________.
A) slow-turning accounts receivable
B) average-turning accounts receivable
C) fast-turning accounts receivable
D) high financial leverage
Q4) A firm's quick and current ratios are both measures of long-term debt levels.
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) Almost all electronic point-of-sale systems rely on ________.
A) videoconferencing
B) customer databases
C) Universal Product Codes (UPC)
D) electronic data interchange (EDI)
Q3) Which of these is not a characteristic of a rationalized retailing strategy?
A) the use of prototype stores
B) the use of rigorous operating procedures for every phase of the business
C) decentralized management
D) a common store layout to all store units
Q4) The use of a third-party firm handling a retailer's payroll illustrates ________.
A) outsourcing.
B) electronic article surveillance
C) self-scanning.
D) crisis management.
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Chapter 14: Developing Merchandise Plans
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Sample Questions
Q1) Price competition by retailers is most intense in which product life cycle stage?
A) introduction
B) growth
C) maturity
D) decline
Q2) Decentralized buying is often associated with ________.
A) category management
B) micromerchandising
C) risk-minimization retailing
D) electronic data interchange (EDI)
Q3) Develop a merchandising plan for fad merchandise.
Q4) The battle of the brands is an example of channel conflict.
A)True
B)False
Q5) Most goods and services are at what stage of the traditional product life cycle?
A) introduction
B) growth
C) decline
D) maturity
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Chapter 15: Implementing Merchandise Plans
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Sample Questions
Q1) Electronic article surveillance seeks to directly reduce inventory shrinkage by
A) using cameras to monitor dressing room activity
B) reducing theft on specific items that have been targeted by management
C) setting up strict rules on the number of goods that can be tried on in dressing rooms at one time
D) chaining expensive clothes together to reduce theft
Q2) An important source of information about consumer demand is the want book or want slip.
A)True
B)False
Q3) A major difficulty with preventing theft of costly items by chaining items together (as with leather coats)is that these strategies ________.
A) have a negative effect on employee morale
B) impede sales of the affected items
C) do not reduce insurance costs
D) have limited effectiveness in reducing theft rates
Q4) What are the overall retail strategy implications for the use of quick response (QR)inventory planning by a retailer?
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Chapter 16: Financial Merchandise Management
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Sample Questions
Q1) A firm's planned purchases for a given month are $70,000 and its purchase commitments are $10,000.If its merchandise costs as a percent of selling price are .70,its open-to-buy at cost is $4,200.
A)True
B)False
Q2) Stock shortages may be due to bookkeeping errors such as unrecorded markdowns.
A)True
B)False
Q3) An electronics store estimates that it can sell 2,000 memory cards each year.Each card costs the store $7.00; holding costs equal 20 percent of unit costs and order costs are $10 per order.The economic order quantity is ________.
A) 12 cards
B) 122 cards
C) 140 cards
D) 169 cards
Q4) a.Describe how a retailer can implement a sales forecast using the monthly sales index.
b.What are the advantages and limitations of this technique?
Q5) Explain the advantages and disadvantages of cost-based inventory systems.
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Chapter 17: Pricing in Retailing
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Sample Questions
Q1) A retailer's planned operating expenses are 29 percent of its planned net sales.Its planned profit is 5 percent of sales and its planned retail reductions are 8 percent of sales.Its planned markup percent at retail is 42 percent of sales.
A)True
B)False
Q2) In vertical price fixing,________.
A) channel members conspire to set retail prices at given levels
B) channel members agree not to sell merchandise below their cost
C) retailers have no intention of selling advertised goods
D) manufacturers or wholesalers are able to control the retail prices of their goods and services
Q3) High brand loyalty,an excellent location,and strong customer service allow a retailer to utilize market pricing.
A)True
B)False
Q4) A 100 percent markup at retail is equivalent to a 45 percent markup at cost.
A)True
B)False
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) a.Distinguish among selling space,merchandise space,personnel space,and customer space.
b.Describe how the allocation of these space components vary by low-end versus high-end retailers.
Q2) A straight traffic-flow pattern is most appropriate for self-service retailing.
A)True
B)False
Q3) Perishable items are categorized and displayed on the basis of ________ product groupings.
A) end use
B) target market appeal
C) purchase motivation
D) storability
Q4) Sales productivity is generally computed on the basis of sales per square foot of merchandise space.
A)True
B)False
Q5) Develop a plan to reduce the number of Web-based shoppers who enter the checkout,but who do not purchase anything.
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Chapter 19: Promotional Strategy
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Sample Questions
Q1) What are the advantages and disadvantages of a reliance on advertising as a promotional type from the perspective of a small,local retail chain?
Q2) Institutional advertising seeks to increase a retailer's short-run sales.
A)True
B)False
Q3) Advertising is characterized based on payment for media,a nonpersonal presentation,and an identified sponsor.
A)True
B)False
Q4) The creation of regional or zoned editions,superior graphics,and the availability of color have increased retailers' use of ________.
A) telephone directories
B) magazines
C) outdoor advertising
D) direct mail
Q5) Sales promotion has a short-run orientation.
A)True
B)False
Q6) How can a retailer determine the effectiveness of its public relations program?
Page 21
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Chapter 20: Integrating and Controlling the Retail Strategy
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Sample Questions
Q1) A sales opportunity grid evaluates a product's profitability over several time periods.
A)True
B)False
Q2) What type of auditor is most appropriate for a small independent retailer?
A) outside auditor
B) company audit specialist
C) company department manager
D) team auditor
Q3) The occurrence of an optimistic,pessimistic,and most likely event is part of
A) feedback
B) control
C) scenario analysis
D) gap analysis
Q4) Top-down planning can also be described as ________ planning.
A) centralized
B) decentralized
C) short-term
D) long-term
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