1. C HAPTER 11 RETAILING AND WHOLESALING CRS Questions & Answers

2. 11-2©2011 Pearson Education, Inc. publishing as Prentice Hall Wal-Mart, Toys ‘R Us, and Best Buy are examples of stores that would be classified as: 1.Specialty retailers 2.Self-service retailers 3.Limited-service retailers 4.Full-service retailers

3. 11-3©2011 Pearson Education, Inc. publishing as Prentice Hall Wal-Mart, Toys ‘R Us, and Best Buy are examples of stores that would be classified as: 1.Specialty retailers 2.Self-service retailers 3.Limited-service retailers 4.Full-service retailers Discount and convenience stores are self-service retailers. Customers who shop at these locations perform their own “locate-compare-select” process to save money.

4. 11-4©2011 Pearson Education, Inc. publishing as Prentice Hall A store that is open 24 hours a day and offers a limited line of frequently purchased products is called a: 1.Specialty store 2.Convenience store 3.Superstore 4.Department store

5. 11-5©2011 Pearson Education, Inc. publishing as Prentice Hall A store that is open 24 hours a day and offers a limited line of frequently purchased products is called a: 1.Specialty store 2.Convenience store 3.Superstore 4.Department store Convenience stores are typically located near residential areas, open long hours every day of the week, and carry convenience products such as diapers, milk, beer, etc.

6. 11-6©2011 Pearson Education, Inc. publishing as Prentice Hall Kroger grocery stores frequently use price promotions on products normally sold at higher prices to encourage customers to visit the store. Which pricing strategy does this represent? 1.Vertical pricing 2.High-low pricing 3.EDLP 4.Low-high pricing

7. 11-7©2011 Pearson Education, Inc. publishing as Prentice Hall Kroger grocery stores frequently use price promotions on products normally sold at higher prices to encourage customers to visit the store. Which pricing strategy does this represent? 1.Vertical pricing 2.High-low pricing 3.EDLP 4.Low-high pricing Retailers using high-low pricing charge higher prices on an everyday basis, coupled with frequent sales and price promotions to increase store traffic, clear out unsold merchandise, or attract customers who will buy other goods at full prices.

8. 11-8©2011 Pearson Education, Inc. publishing as Prentice Hall Ace Hardware is a group of independent retailers who set up a central buying organization and conduct joint promotion efforts. Which organizational approach is this? 1.Warehouse club 2.Franchise 3.Retailer cooperative 4.Contract chain

9. 11-9©2011 Pearson Education, Inc. publishing as Prentice Hall Ace Hardware is a group of independent retailers who set up a central buying organization and conduct joint promotion efforts. Which organizational approach is this? 1.Warehouse club 2.Franchise 3.Retailer cooperative 4.Contract chain A retailer cooperative is a group of independent retailers who set up a central buying organization and conduct joint promotion efforts.

10. 11-10©2011 Pearson Education, Inc. publishing as Prentice Hall Abercrombie & Fitch stores include loud music, dark interiors, and large graphics of young people in provocative poses. Which retail marketing mix element does this represent? 1.Service mix 2.Store atmosphere 3.Product assortment 4.Pricing

11. 11-11©2011 Pearson Education, Inc. publishing as Prentice Hall Abercrombie & Fitch stores include loud music, dark interiors, and large graphics of young people in provocative poses. Which retail marketing mix element does this represent? 1.Service mix 2.Store atmosphere 3.Product assortment 4.Country range Through store atmosphere, the retailer wants to create a unique store experience, one that suits the target market and moves customers to buy.

12. 11-12©2011 Pearson Education, Inc. publishing as Prentice Hall Many communities are building shopping centers that include upscale stores, dining, and entertainment situated around a conveniently located “town square.” What type of shopping center is this? 1.Lifestyle centers 2.Power centers 3.Mini-malls 4.Category killers

13. 11-13©2011 Pearson Education, Inc. publishing as Prentice Hall Many communities are building shopping centers that include upscale stores, dining, and entertainment situated around a conveniently located “town square.” What type of shopping center is this? 1.Lifestyle centers 2.Power centers 3.Mini-malls 4.Category killers Lifestyle centers are smaller malls with upscale stores, convenient locations, and nonretail activities, such as dining and entertainment.

14. 11-14©2011 Pearson Education, Inc. publishing as Prentice Hall The ______ concept suggests that many new forms of retailing begin as low-margin, low- price, low-status operations, which take the place of other such retailers who have, over time, added services and moved upscale. 1.Retail life cycle 2.Merchant wholesaling 3.Scrambled merchandising 4.Wheel-of-retailing

15. 11-15©2011 Pearson Education, Inc. publishing as Prentice Hall The ______ concept suggests that many new forms of retailing begin as low-margin, low- price, low-status operations, which take the place of other such retailers who have, over time, added services and moved upscale. 1.Retail life cycle 2.Merchant wholesaling 3.Scrambled merchandising 4.Wheel-of-retailing This concept explains the initial success and later problems of department stores and supermarkets.

16. 11-16©2011 Pearson Education, Inc. publishing as Prentice Hall Wholesalers perform all of the following functions EXCEPT: 1.Selling and promoting 2.Manufacturing 3.Financing 4.Warehousing

17. 11-17©2011 Pearson Education, Inc. publishing as Prentice Hall Wholesalers perform all of the following functions EXCEPT: 1.Selling and promoting 2.Manufacturing 3.Financing 4.Warehousing Wholesalers perform many functions for manufacturers, such as those listed plus risk bearing, information management, etc., but manufacturing is not one of them.

18. 11-18©2011 Pearson Education, Inc. publishing as Prentice Hall Sheri represents several small wineries in the Napa Valley. She has contractual authority to sell the wineries’ entire output but never takes title to or possession the wines. Sheri is a(n): 1.Agent 2.Broker 3.Merchant wholesaler 4.Cash-and-carry wholesaler

19. 11-19©2011 Pearson Education, Inc. publishing as Prentice Hall Copyright 2009, Prentice-Hall Inc. Sheri represents several small wineries in the Napa Valley. She has contractual authority to sell the wineries’ entire output but never takes title to or possession the wines. Sheri is a(n): 1.Agent 2.Broker 3.Merchant wholesaler 4.Cash-and-carry wholesaler Specifically, Sheri would most likely be considered a manufacturer’s agent. Contracts with each winery would dictate pricing, order-handling, commission rates, etc.

20. 11-20©2011 Pearson Education, Inc. publishing as Prentice Hall Truck wholesalers (truck jobbers) are a type of limited service wholesaler that does NOT: 1.Assume title and risk 2.Warehouse products or carry inventory 3.Offer delivery and transportation 4.Offer credit or financing

21. 11-21©2011 Pearson Education, Inc. publishing as Prentice Hall Truck wholesalers (truck jobbers) are a type of limited service wholesaler that does NOT: 1.Assume title and risk 2.Warehouse products or carry inventory 3.Offer delivery and transportation 4.Offer credit or financing Truck wholesalers carry and deliver semi-perishable merchandise — often food-related — that they sell for cash.

22. 11-22©2011 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall