Retail Strategy
Final Exam
Course Introduction
Retail Strategy explores the principles and practices that underpin successful retail operations and competitive positioning in the dynamic retail landscape. This course provides an in-depth understanding of key concepts such as market segmentation, customer value creation, retail format development, location analysis, merchandise planning, supply chain management, and the integration of digital and physical channels. Students will analyze current trends, technological advancements, and consumer behaviors, gaining the ability to formulate effective strategies that address challenges and opportunities in both established and emerging retail markets. Practical case studies and real-world applications will help students develop the strategic thinking needed to manage retail businesses and drive long-term profitability.
Recommended Textbook
Retail Management 8th Edition by Michael Levy Barton A. Weitz
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18 Chapters
1656 Verified Questions
1656 Flashcards
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Chapter 1: Introduction to the World of Retailing
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Sample Questions
Q1) There are no laws that dictate what is ethical and what is not.
A)True
B)False
Answer: False
Q2) Belinda is a swimwear buyer for a major department store.She will allow vendors to purchase her lunch at the local coffee shop when they visit.One October,she dined with a new vendor to discuss a progressive line of men's swimwear that is popular in resorts throughout the Caribbean.Belinda's goal was to assess the assortments for her company in order to see if the product was a good fit for the company brand.During lunch,the vendor invited Belinda for an all-expense paid weekend trip to Jamaica to see the popularity of the merchandise.His goal was to enable her to make a more educated decision when buying the product.Belinda hesitated to accept because of:
A)personal and professional ethics.
B)the scheduling of the buy for the spring season.
C)the price of the exclusive merchandise would not match the income level of her target market.
D)the manufacturer would be unable to develop the line in time for next spring.
Answer: A
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Page 3
Chapter 2: Types of Retailers
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Sample Questions
Q1) Walmart is classified as an off-price retailer.
A)True
B)False
Answer: False
Q2) Prescription pharmaceuticals account for over half or more of drugstores annual sales.
A)True
B)False
Answer: True
Q3) The North American Industry Classification System (NAICS):
A)was developed by the Federal Trade Commission (FTC)
B)uses an 8-digit classification system
C)was created to collect data on North America's business activity
D)is limited in its use to only retail institutions
E)is used only by the United States
Answer: C
Q4) Discount stores offer both hard and soft goods for sale.
A)True
B)False Answer: True
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Chapter 3: Multi-Channel Retailing
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Sample Questions
Q1) When multilevel direct selling becomes a pyramid scheme ________.
A)annual sales of products often double
B)the salespeople are no longer independent agents
C)the use of the party plan becomes more commonplace
D)the selling format is usually franchised
E)relatively little merchandise is sold to end users
Answer: E
Q2) If L'Oreal cosmetic products wanted to sell exclusively through the Internet channel,it would most likely have a difficult time because:
A)of the competition from other manufacturers.
B)it doesn't have name recognition.
C)the manufacturer doesn't own the rights to the brand name.
D)the manufacturer doesn't have the appropriate systems to fulfill individual orders.
E)the demand would overwhelm the supply.
Answer: D
Q3) Macy's is a multi-channel retailer.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Customer Buying Behavior
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Sample Questions
Q1) Which of the following does NOT describe tactics that retailers use to convert positive evaluations of the merchandises or services to purchases?
A)Making a Website easy to navigate.
B)Offering online reviews to reduce perceived risks.
C)Offering liberal return policies.
D)Offering entertaining graphics on a Web site.
E)Offering more checkout lanes during heavy traffic times.
Q2) Which of the following is NOT true in describing changing performance beliefs after getting into the consideration set?
A)A retailer should improve its performance on all benefits.
B)A change in a performance belief about an important benefit should result in a large change in customers' overall evaluations.
C)It is costly for a retailer to improve its performance on all benefits.
D)Retailers must focus on improving their performance on those benefits that are important to customers in their target markets.
Q3) What are ways retailers can encourage customers to shop at their stores more frequently?
Q4) List five possible retail market segments for athletic shoes.
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Page 6
Chapter 5: Retail Market Strategy
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Sample Questions
Q1) 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
Q2) Since competitive retailers can sell the same popular national brands,retailers should do which of the following to secure a competitive advantage?
A)prevent its customers from comparison shopping
B)limit its store traffic to qualified buyers
C)increase its sales expenses
D)increase its merchandising flexibility
E)develop private label brands
Q3) A retail strategy is a statement that includes all the following EXCEPT _____.
A)the target market
B)the format that the retailer plans to use
C)the employee compensation plan
D)the bases upon which the retailer plans to build a sustainable competitive advantage
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Chapter 6: Financial Strategy
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Sample Questions
Q1) Which of the following can be considered a current asset?
A)net profit percentage
B)accounts receivable
C)selling expenses
D)gross margin
E)operating expenses
Q2) Of the two types of assets,which one can be converted into cash within one year?
A)current assets
B)fixed assets
C)accrued assets
D)accountable assets
E)substantial assets
Q3) A store that sells books,magazines and newspapers has an average inventory of $15,000 at cost.Its cost of goods for last year was $62,000,and its net profit was $9,000.Calculate the retailer's inventory turnover.
A)1.67
B)2.14
C)6.89
D)4.13
E)14.5
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Chapter 7: Retail Locations
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Sample Questions
Q1) The major retailers,typically a large department store or big box store in a shopping center is referred to as the __________ store.
A)parasite
B)anchor
C)location rival
D)leader
E)alpha
Q2) __________ can be defined as shopping centers that employ a unifying theme that is carried out by the individual shops in their architectural design and,to an extent,in their merchandise.They are typically designed to appeal to tourists.
A)Center replicas
B)Price-oriented centers
C)Regional centers
D)Specialty centers
E)Theme/festival centers
Q3) What are three advantages that shopping malls have over alternative locations?
Q4) Tourists are the biggest group of customers that go to theme/festival centers.
A)True
B)False
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Chapter 8: Retail Site Location
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Sample Questions
Q1) With a percentage lease,retailers pay a percentage of sales as well as a(n)______________ which is based on a percentage of their square footage of leased space.
A)maintenance fee
B)inflation surcharge
C)space charge
D)minimum fee
E)cushion fee
Q2) Which retailer would be the LEAST dependent on traffic counts?
A)7-Eleven
B)Macy's
C)Home Depot
D)Old Navy
E)Hot Wings
Q3) One premise of the Huff gravity model is that the probability of a customer shopping at a particular store becomes greater as the size of the store increases.
A)True
B)False
Q4) What are two main issues to consider when negotiating a store's lease?
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Chapter 9: Human Resource Management
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Sample Questions
Q1) Which of the following could be a problem for a retail chain with a decentralized organizational structure?
A)high employee turnover at the local store level due to lack of sense of empowerment
B)the inability to respond quickly to a local competitor who is trying to gain a price advantage
C)missed sales because the merchandise mix does not appeal to the local tastes
D)inconsistency in assortments and prices from one store to another within the same company
Q2) _________ is an invisible barrier that makes it difficult for minorities and women to be promoted beyond a certain level.
A)A glass ceiling
B)Outsourcing
C)Too much empowerment
D)An entry barrier
E)Economy of scale
Q3) What are four current human resource challenges in the industry of retail?
Q4) What are the age demographics challenges for human resources in retailing?
Q5) What are the challenges for human resources in international settings?
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Chapter 10: Information Systems and Supply Chain Management
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Sample Questions
Q1) Which of the following is an advantage of using distribution centers over direct store delivery?
A)Individual stores that forecast and draw from a DC are more cost efficient.
B)The DCs have the advantage of keeping backup stock in the store.
C)Direct store delivery is always more expensive.
D)The DCs enable the retailer to carry less overall inventory.
E)The DC can always deliver faster than a vendor.
Q2) What is the bullwhip effect and what causes it?
Q3) What are the rules that apply to activities in the computer and communication resources that belong to an organization?
A)security policy
B)investigation policy
C)corporate security
D)policing
E)corporate policy
Q4) Compare and contrast the push and pull supply chain methods.
Q5) Identify and describe the three objectives that a supply chain security policy should meet.
12
Q6) Identify what cross-docking is and the advantages and disadvantages of this system.
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Chapter 11: Customer Relationship Management
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Sample Questions
Q1) Which of the following describes an approach that retailers use to deal with unprofitable customers?
A)Retailers charging a restocking fee for returned merchandise.
B)Retailers offering frequent buyer cards.
C)Supermarkets giving away free samples of a new product introduction.
D)Retailers having special events outside of regular store hours.
E)Retailers only allow certain merchandise to be viewed by qualified customers.
Q2) When Lana went to Amazon.com to see if they had any new books about health and wellness,the first thing she saw was a personalized greeting.Which of the following best describes how Amazon.com knew it was Lana?
A)She ordered before and told them her name.
B)Her name is on all of her shipments as well as her address.
C)She used a password.
D)Another retailer sold her private information to Amazon.com.
E)Amazon.com placed cookies on her hard drive to identify her when she visits.
Q3) Describe approaches that retailers use in dealing with unprofitable customers.
Q4) What factors affect the degree to which consumers feel their privacy has been violated?
Q5) What are the benefits of frequent shopper programs?
Q6) What is a customer lifetime value (CLV)and how is it estimated?
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Chapter 12: Managing the Merchandise Planning Process
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Sample Questions
Q1) What information would a planner use to make an allocation decision?
A)store hours
B)geodemographics
C)geocensus
D)exocensus
E)service region per distribution center
Q2) Allocating merchandise to stores is based upon all BUT the following decisions:
A)how much merchandise to allocate to each store
B)what type of merchandise to allocate
C)when to allocate the merchandise to different stores
D)where the merchandise was produced
Q3) What is a potential problem with establishing a category captain?
Q4) Assortment is breadth of a retailer's merchandise and the number of different merchandising categories within a store or department.
A)True
B)False
Q5) In terms of merchandise,what is the difference between a classification and a category?
Q6) Certain advantages are inherent in rapid inventory turnover.List at least four of these advantages.
Page 15
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Chapter 13: Buying Merchandise
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Sample Questions
Q1) ____________ offers the consumer a private label that is comparable to,or even superior to,a manufacturer's brand quality,sometimes with modest price savings.
A)Premium branding
B)Exclusive branding
C)Copycat branding
D)Exclusive co-branding
E)Licensed branding
Q2) When contemplating sourcing products internationally,which of the following would NOT be an additional costs associated with global sourcing?
A)foreign currency fluctuations
B)tariffs
C)lesser lead times
D)larger inventory carrying costs
E)increased transportation costs
Q3) Why do manufacturer brands often generate lower gross margins for retailers than do private label brands?
Q4) What are some of the drawbacks of using a private label brands?
Q5) What are some of the costs associated with sourcing merchandise globally?
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Chapter 14: Retail Pricing
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Sample Questions
Q1) Cliff struggled with the price of produce at his well-established produce markets.The reputation of the markets has attracted repeat customers from a 50-mile radius.Recently,local farmers have been increasing produce prices for him due to the upsurge in gas prices.Now Cliff feels it is time to pass the costs onto his customers.What should Cliff predict in regards to how his customers will respond?
A)Sales may decrease.
B)The customers will think the produce quality is worth the price.
C)Increasing prices will increase sales because the produce will be perceived as better quality.
D)Nothing will keep sales down and business will continue as usual.
Q2) Giant offered two 6-packs of any Pepsi product for $5 last week,and the price for a single carton was $2.69.What pricing strategy was Giant using?
A)price lining
B)multiple-unit pricing
C)psychological pricing
D)price bundling
E)conjoint pricing
Q3) What are the limits of the rule-based approach of taking markdowns?
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17
Chapter 15: Retail Communication Mix
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Sample Questions
Q1) Aided recall is the highest level of brand awareness.
A)True
B)False
Q2) Despite the difference in price,Mark would go out of his way to purchase donut holes at Dunkin' Donuts on his way to work even though there were donut shops within a block of his office.It can be said that Dunkin' Donuts ___________.
A)should probably lower their prices to avoid losing such a loyal customer
B)will put the competing donut shops out of business
C)price their donuts based on a cost-oriented method
D)has a strong brand loyalty from Mark
E)motivates its shoppers differently than other donut shops
Q3) How can having strong brands benefit a retailer?
Q4) When customers indicate they know the brand when the name is presented to them it is referred to as ______________.
A)brand awareness
B)aided recall
C)top-of-mind awareness
D)brand association
E)brand publicity
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Chapter 16: Managing the Store
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Sample Questions
Q1) The turnover for the custodial host position at the local department store was high and the department managers were beginning to complain to Gina,the store manager.There was no lack of applications,and the pay was comparable to other stores,yet those who took the position stayed no longer than a week.Exit interviews revealed that employees felt the job's responsibilities were not what they expected.Which of the following would you suggest Gina do to reduce the turnover?
A)accept more applications by reducing the standards
B)insist that each applicant takes a drug test within 48 hours of applying
C)check references
D)show a video about the responsibilities of the custodial host
E)ask if they have plans to stay at the job for a brief time during the interview
Q2) A quota-bonus plan is for when ___________.
A)an employee performance exceeds the quota
B)employees receive a weekly check based on their annual income
C)an employee has a salary plan based solely upon performance
D)productivity is poor
E)there is no other incentive
Q3) What are the benefits of a job analysis?
Q4) Explain the differences between an autocratic leader and a democratic leader.
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Chapter 17: Store Layout, Design, and Visual Merchandising
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Sample Questions
Q1) Which of the following has the LEAST consideration when a retailer is deciding how much floor or shelf space to allocate to merchandise categories and brands?
A)the productivity of the allocated space
B)impact on store sales
C)the display needs for the merchandise
D)the merchandise's inventory turnover
E)the price of the merchandise
Q2) A retailer considering florescent lighting versus LED lighting,solar power versus standard electricity and local grasses versus typical grasses for landscaping would mostly be considering which design objective?
A)legal requirements
B)retail strategy
C)controlling costs
D)flexibility
E)buying behavior
Q3) Planograms are maps that prescribe the location of merchandise based on profitability and other factors.
A)True
B)False
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Page 20
Chapter 18: Customer Service
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Sample
Questions
Q1) An electronic retailer promised a customer that if he or she is dissatisfied with a purchase,returns are quick and easy,but when the purchase is received,there is no information on the electronic retailer's return policies or any return instructions.This is an example of a _____ gap.
A)performance
B)delivery
C)communications
D)research
E)knowledge
Q2) Addressing a customer by name is demonstrating the customer service characteristic of empathy.
A)True
B)False
Q3) What is the standards gap and how can retailers effectively decrease this gap?
Q4) Mystery shoppers gather information about all EXCEPT _________.
A)the attitude the sales clerk used with the shopper
B)how long it took the salesperson to greet the incoming shopper
C)how knowledgeable the sales clerk was about merchandise he or she was selling
D)the actions of the sales clerk after the shopper entered the store
E)the price of the merchandise
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