Missouri State University, Springfield

MKT 772

Chapter 17-2-Retailing and Wholesaling

True/ Questions

1)Retailing is the sale of goods and services from individuals or organizations to consumers who are the end users.

2. A broad product assortment means that a retailer features many products of a certain type.

3. Time convenience refers to a retailer’s hours of operation.

4. Place convenience refers to the effort consumers must make to reach a store from residences and workplaces.

5. Direct-marketing retail stores is one of the oldest forms of retail.

6. Product examination and time delay are the two main categorical differences between direct-marketing retailers and the traveling retail store.

7. The critical difference between Internet retailing and physical store retailers is the inability for customers to see and handle products from Internet sellers.

8. Main Street retail infrastructures combine the benefits of ease of access and retail concentration.

9. Product assortment for direct-marketing retailers is much larger than for most Internet retailers.

10. An evolving trend in retailing is the self-managed Internet shopping experience with real- time personal interaction.

11. An example of retail arbitrage is when an independent merchant purchases a product for a lower price at a physical-store sale and sells it at a higher price on the Internet.

12. Inventory turnover is an especially important control measure in retailing and wholesaling

13. The formula for Return on Investment is Investment/Profit

14. Return on Investment is the fundamental profitability measure for any business.

15. Retail Margin times Inventory Turns is the formula for Return on Investment.

Multiple Choice Questions

16. Which of the following is NOT one of the three broad types of value that retailers offer to consumers?

a.) Product assortment

b.) Lower prices  c.) Customer experience

d.) Accessibility

17. When a retailer’s product assortment encompasses many products per product form/class of a particular type, it is considered to be a                                                               product assortment.

a.) broad

b.) deep

c.) shallow d.) narrow

18. All of the following represents ways in which fixed-location retail stores vary EXCEPT: a.) Establishment size

b.) Assortment

c.) Number of stores

d.) All selections represent ways fixed-location retail stores vary

19. Based on the                                     , large concentrations of stores attract greater numbers of shoppers than smaller concentrations.

a.) Law of Customer Concentration

b.) Law of Retail Gravitation

c.) Law of Retail Productivity d.) Law of Customer Gravitation

20. Retailers typically express margins as a percentage of their                                             .

a.) selling price

b.) cost

c.) inventory value d.) current asset value

21. Which of the following is NOT recognized as an intermediate measure? a.) Number of shoppers

b.) Length of visit

c.) Average purchases per customer visit

d.) Sales per square foot (difficult)

22. All of the following are examples of output measures EXCEPT: a.) Sales per linear foot

b.) Same store sales growth

c.) Number of customers per day (difficult)

d.) Sales per average inventory

23. Which of the following is an INCORRECT formula to calculate inventory turnover? a.) Cost of goods sold/average inventory at cost

b.) Net profit/sales (difficult)

c.) Net sales/average inventory at retail selling price d.) Sales (in units)/average inventory (in units)

24.                                  primarily buy, take title to, and physically handle goods in large quantities. a.) Agents

b.) Brokers

c.) Warehouse operators

d.) Wholesalers

25. Which of the following distribution entities generally sell products but do not take title or physically handle goods.

a.) Agents

b.) Distributors c.) Retailers

d.) Wholesalers

26.                                  provide promotional support for suppliers, especially for selective or exclusive distribution.

a.) Agents

b.) Distributors

c.) Warehouse operators d.) Brokers

27. The core value wholesalers provide suppliers is                                            .

a.) enhanced assortments

b.) information on customer requirements

c.) market access  d.) one-stop shopping

28. All of the following represent values which wholesalers offer to retailers/end users EXCEPT:

a.) information on customer requirements  b.) one-stop shopping

c.) more effective procurement

d.) enhanced assortments

29. When a firm chooses between many or a few product forms/classes, it is making a decision on    .

a.) Inventory turns of product assortment

b.) value of product assortment

c.) depth of product assortment

d.) breadth of product assortment

30. All of the following are elements that a retailer should include when constructing a well- defined positioning statement EXCEPT: