Retail Strategy and Operations
Chapter Exam Questions
Course Introduction
Retail Strategy and Operations explores the frameworks, tools, and best practices essential for developing and managing successful retail enterprises in today's dynamic and competitive marketplace. The course delves into core topics such as merchandise planning, inventory management, pricing strategy, omnichannel integration, supply chain optimization, and customer experience design. Emphasis is placed on understanding consumer behavior, leveraging technology and data analytics, and crafting sustainable strategies that respond to market trends and disruptions. Students will engage with real-world case studies, industry insights, and hands-on projects to develop the skills necessary to make informed strategic decisions and drive operational excellence in a variety of retail settings.
Recommended Textbook
Retail Management 8th Edition by Michael Levy Barton A. Weitz
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Page 2
Chapter 1: Introduction to the World of Retailing
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Q1) Why is it advantageous for retailers to be vertically integrated?
A)Retailers have the greatest control over its supply chain.
B)Retailers can expand their services easily to the Internet because they can direct orders to the manufacturer.
C)Retailers have realized that to stay competitive,they must become vertically integrated.
D)Customers prefer retailers who are vertically integrated.
E)There is no advantage to being vertically integrated.
Answer: A
Q2) Providing assortments is an advantageous business activity because:
A)it enables the company to create a more informational and entertaining environment that would promote more sales.
B)it enables the company to reinvest for the future of the business.
C)it enables the customer to choose from a wide selection of brands,designs,sizes and prices all in one store.
D)it enables the customer to try more products.
E)it enables the customer to stock up on the assortments because of bulk availability.
Answer: C
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Chapter 2: Types of Retailers
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Q1) Why are category specialists sometimes called category killers?
A)because they are often located in dying shopping malls
B)because they are located at stand-alone sites
C)because of their broad merchandise mix and shallow assortment
D)because they can dominate a category of merchandise making it difficult for other retailers to compete
E)because they carry mainly technologically obsolete merchandise
Answer: D
Q2) What do Delta,Marriott,and Century 21 have in common?
A)These retailers have established long-term relationships with their manufacturers.
B)They are all examples of off-price retailers.
C)They are all examples of service retailers.
D)They sell tangible products.
E)They have high operating margins due to the size of their inventories.
Answer: C
Q3) Subway is a franchise.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Multi-Channel Retailing
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Q1) What is disintermediation;and should a retailer be concerned?
Answer: Disintermediation occurs when a manufacturer sells directly to consumers bypassing retailers.Retailers are sometimes concerned about disintermediation because manufactures may take away business from them if the customer would choose to purchase directly from the manufacturer.However,retailers can most often perform more efficiently in dealing with customers,distribution,providing assortments,collecting information,and offering assistance and services to solve customer problems.Manufacturers are working to improve in these areas,so there is still some concern.
Q2) Which retail channel has the least perceived risk when purchasing products?
A)Internet
B)Stores
C)Catalog
D)Automated
E)Party Plan
Answer: B
Q3) Macy's is a multi-channel retailer.
A)True
B)False
Answer: True
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Chapter 4: Customer Buying Behavior
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Q1) A retailer that uses an everyday low pricing (EDLP)policy:
A)relies upon coupons to persuade customers to return to their stores.
B)creates low prices through the use of sales promotions.
C)will invest more in weekly newspaper advertising than supermarkets that use a hi-lo pricing strategy.
D)is attempting to limit the customer information search to the retailer's offering.
E)uses a fluctuating pricing strategy on nonfood items.
Q2) How can a store like The Lizard Connection which sells only lizards and reptile paraphernalia be found in Chicago?
A)A retailer like this locates itself where there are designers who will patronize the shop.
B)Chicago is a large city and can support the retailing mix of the store.
C)More people in the Midwest have hobbies making it more actionable.
D)The market is easier to identify because of the diversity.
Q3) Habitual decision making occurs when __________.
A)a decision process involved little or no conscious effort
B)a decision requires assistance from sales associates
C)customers have demands upon their time and wallets
D)retailers stimulate sales by suggesting complementary merchandise
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Chapter 5: Retail Market Strategy
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Q1) Which of the following is NOT true in describing positioning?
A)A retailer builds customer loyalty by developing a clear,distinctive image of its retail offering.
B)Positioning reinforces the image in the retail manager's mind.
C)A retailer consistently reinforces its image through merchandise and service.
D)Positioning involves the design and implementation of a retail mix to create an image of the retailer in the customer's mind relative to its competitors.
Q2) Which of the following does NOT indicate conditions that lead to intense rivalry that adversely affect a retailer who wants to enter the market?
A)a large number of retailers with different sizes
B)slow growth
C)high fixed costs
D)a lack of perceived differences between competing retailers
Q3) A retailer expanding their hours to open an additional hour each evening is using the market expansion growth strategy.
A)True
B)False
Q4) How can a retailer use the market penetration opportunity to foster growth?
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Chapter 6: Financial Strategy
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Q1) The Bookstore Café is a small restaurant located in a downtown business district.It is opened for breakfast and lunch and serves simple yet nutritious meals as well as books from the New York Times bestseller list.How would you categorize the book inventory,cooking equipment,tables,chairs and the register?
A)as retained earnings
B)as assets
C)as current liabilities
D)as investor capital
E)as owners' equity
Q2) What is net profit?
A)Operating profit less interest and taxes.
B)COGS less operating expenses.
C)Gross sales minus net sales.
D)A measurement of the liquidity of the firm.
E)Net sales minus the cost of goods sold.
Q3) Buildings,display fixtures,shopping carts,and cash registers would be classified as fixed assets.
A)True
B)False
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Page 8
Chapter 7: Retail Locations
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Q1) What are three advantages that shopping malls have over alternative locations?
Q2) The retailers that attract a significant number of consumers and make the center more appealing for other retailers are ___________ stores.
A)parasite
B)anchor
C)location rival
D)leader
E)alpha
Q3) What type of shopping center is composed of upscale apparel shops,boutiques,and gift shops carrying selected fashions or unique merchandise of high quality and price?
A)downtown business areas
B)power centers
C)shopping strips
D)marketing complexes
E)shopping malls
Q4) There are seven different identifiable disadvantages that shopping malls have as compared to other locations.Describe at least four of these disadvantages.
Q5) Why is choosing a good location such an important decision for a retailer?
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Chapter 8: Retail Site Location
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Q1) A shopping center landlord that has the agreement to increase the rent by a fixed amount over a specified period of time has negotiated a ______________.
A)sliding scale lease
B)graduated lease
C)maintenance-increase-recoupment lease
D)fixed-rate leases
E)percentage increase lease
Q2) Which of the following is TRUE about the spending potential index?
A)It compares average expenditure in a particular area for a product and compares it to the amount spent on that product nationally.
B)It compares sales predictions based on various retail locations.
C)It is an index that provides retailers who are thinking of expanding into international markets with data on what consumers spend.
D)It compares what retailers spend on real estate in a given market and compares it to the national average.
E)It offers retailers information on property values as well as local tax information so they are better able to compare prior to purchasing.
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Chapter 9: Human Resource Management
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Q1) Which of the following HR activities can build a competitive advantage for retailers?
A)compensation and work-life balance program
B)selective hiring and training
C)policies and compensation
D)compensation and incentives
E)incentives and benefit programs
Q2) What are the three reasons human resource management can be the basis of a competitive advantage?
Q3) Tony's company puts a huge emphasis on taking care of the associates.The store manager knows all employees by name and takes the time to talk with them about their lives.The human resources policies allow for liberal time off.Department supervisors support all breaks and work to vary schedules to fit the associates' needs.This focus on keeping the associates happy and supported can be considered part of the
A)corporate procedure
B)corporate structure
C)organizational culture
D)decentralization
E)human resource planning
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Page 11
Chapter 10: Information Systems and Supply Chain Management
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Q1) What type of retailer would most likely benefit from the use of direct store delivery?
A)A big box electronics retailer
B)A supermarket
C)A big box discount store
D)A large department store
E)A mall specialty store
Q2) Ali supervises the conveyor belts in a distribution center.Her job is to make sure the merchandise moves quickly from the receiving docks to the staging area in order for the trucks to load and deliver.No merchandise is stored as the vendors already prepared it specifically for the stores.Ali works in ______________________ at the distribution center.
A)cross examination
B)cross-docking
C)cataloging
D)cross-checking
E)reverse logistics
Q3) What is the purpose of the data warehouse and how do retailers use it?
Q4) What are the benefits of RFID technology and what are the drawbacks?
Q5) What activities take place at a distribution center?
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Chapter 11: Customer Relationship Management
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Q1) Many products in a supermarket can be found in more than one place throughout the stores.What type of retail analytics is used to decide where to place products in a store?
A)supermarket analysis
B)market basket analysis
C)location analysis
D)shopping cart analysis
E)merchandising analysis
Q2) Wilbur uses a Books-A-Million customer card,a Kash-N-Karry customer card,a Blockbuster customer card,and a Sandwich Shop customer card when he shops at any of these retailers.Each time he uses them,they reward him with reduced cost,free merchandise or a credit.These cards are examples of:
A)store credit cards
B)identification cards
C)frequent shopper cards
D)third-party credit cards
E)frequent membership cards
Q3) It is clear that CRM programs increase customer spending and loyalty.
A)True
B)False
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Chapter 12: Managing the Merchandise Planning Process
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Q1) Which of the following statements does NOT describe the approach which deals with cycle (base)stock?
A)A retailer tries to reduce the base stock to keep its inventory investment low.
B)One approach for reducing the base stock is to reorder and receive merchandise from the vendor more often.
C)More frequent orderings with smaller quantities will reduce transportation costs.
D)Shorter delivery time from the vendor will reduce the level of base stock.
E)Shorter order lead time from the vendor will reduce the level of base stock.
Q2) __________ is the amount of time between the recognition that an order needs to be placed and the point at which the merchandise arrives in the store and is ready for sale.
A)Lead time
B)Order time
C)Fill rate
D)Service level
E)Delivery rate
Q3) What is a potential problem with establishing a category captain?
Q4) Describe both the staple merchandise and fashion merchandise categories.
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Page 14
Chapter 13: Buying Merchandise
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Q1) Retailers achieve lower gross margins from selling national brands because of
A)poor customer service
B)the distinctive identity national brands have assumed
C)the popularity of private label brands
D)the higher costs incurred by the vendors due to promoting their national brands
E)the cost of quality control
Q2) What exists when a vendor and a retailer enter into an agreement that requires the retailer to take a product it doesn't necessarily desire to ensure that it can buy a product that it does desire?
A)exclusive dealing agreement
B)functional discount
C)competition
D)better selection
E)tying contract
Q3) There is a growing trend for retail chains to stock more national brand rather than private label brands.
A)True
B)False
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Page 15
Chapter 14: Retail Pricing
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Q1) Charging each individual customer a different price based on their willingness to pay is called _________.
A)first-degree price discrimination
B)second-degree price discrimination
C)self-selected variable pricing
D)price bundling
E)rebate
Q2) What is NOT a benefit of markdowns for a retailer?
A)Markdowns generate cash flow to pay for new merchandise.
B)It's a way to make room for new merchandise.
C)It rids the store of obsolete merchandise.
D)It increases customer traffic.
E)It's a way to gain more gross margin percent.
Q3) Which of the following channels can work well with first degree price discrimination?
A)the Internet
B)catalogs
C)big box retailers
D)drug stores
E)grocery stores
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Page 16
Chapter 15: Retail Communication Mix
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Q1) When customers mention a specific brand name first when they are asked about the type of retailer,category or type of service it is referred to as ______________.
A)brand awareness
B)aided recall
C)top-of-mind awareness
D)brand association
E)brand publicity
Q2) What is a brand?
A)a set of associations usually organized around meaningful themes
B)the ability of a potential customer to recognize or recall a name of a retailer,product or service
C)anything linked to or connected with the name in a consumer's memory
D)when consumers indicate they know the name
E)a distinguishing name or symbol that identifies the products offered by a seller
Q3) Why is it problematic for retailers to spend about the same on communication programs for each geographic region?
Q4) How can having strong brands benefit a retailer?
Q5) How can brands benefit the consumer?
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Chapter 16: Managing the Store
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Q1) Which of the following is NOT a step that managers take that will affect a store employee's productivity?
A)motivate employees to perform at higher levels
B)evaluate and reward employees
C)improve employees' skills through socialization and training
D)encourage employees' communication with buyers
E)recruit and select effective people
Q2) What type of leader gets people to transcend their personal needs for the sake of the group or the organization?
A)transformational
B)transcendental
C)relationship-oriented
D)transactional
E)task-oriented
Q3) Which of the following is an example of a task performance leader behavior?
A)holding meeting to build team morale
B)offering to help an employee with personal problems
C)sending an employee who is hospitalized a get-well card
D)determining next week's work schedule
Q4) Describe the difference between employee intrinsic and extrinsic rewards.
Page 18
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Chapter 17: Store Layout, Design, and Visual Merchandising
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Q1) As you enter Yesteryear,a vintage clothing boutique,you're aware of how inviting the store is for browsers.All of the lighting is from floor and table lamps.The music plays Benny Goodman serenades,and the air smells like powder.The walls are covered in vintage floral wallpaper.This environment has (an)attractive ____.
A)sensory merchandising
B)ecological design
C)behavior-oriented design
D)atmospherics
E)lifestyle merchandising
Q2) ________ are located on aisles and are designed primarily to get customers' attention and bring them into or down the aisle.
A)End caps
B)Gondola displays
C)Promotional areas
D)Consumer motivators Point-of-sale areas
E)Freestanding fixtures
Q3) What are the advantages and disadvantages of a grid layout?
Q4) How does inventory turnover effect space allocation?
Q5) What is the rational for locating the photo department at the back of a store?
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Chapter 18: Customer Service
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Q1) _______ is the set of activities and programs undertaken by retailers to make the shopping experience more rewarding for their customers.
A)Customer satisfaction
B)The retailing mission
C)Retailing strategy
D)Customer service
E)The retailing concept
Q2) Customers evaluate retailer's customer service and compare their expectations with the services they actually receive.What are the five customer service characteristics that affect customer's opinions of service quality and what constitutes customer satisfaction?
Q3) A sales associate who is confronted by a customer whose newly purchased DVD player would not play his DVDs should _______.
A)tell the customer to relate her complaint to a manager
B)avoid placing any blame on the store or its employees for the customer's inconvenience
C)not interrupt the customer's complaint
D)take action only after the customer has requested her system be replaced for the second time
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