Chapter 4

Question 1

retail institution

Answer 1

basic format or structure of a business

ex: chain, convenience store, etc.

Question 2

independent retailer

Answer 2

owns one retail unit

Question 3

ease of entry

Answer 3

The high number of independents is associated with the ease of entry into the marketplace, due to low capital requirements and no licensing provisions for many small retail firms

Question 4

chain retailer

Answer 4

operates multiple outlets (store units) under common ownership

Question 5

franchising

Answer 5

contractual arrangement between a franchisor (a manufacturer, wholesaler, or service sponsor) and a retail franchisee

Question 6

product/trademark franchising

Answer 6

franchisee acquires the identity of a franchisor by agreeing to sell the latter’s products and/or operate under the latter’s name

ex: gasoline services

Question 7

business format franchising

Answer 7

more interactive relationship between a franchisor and a franchisee

Question 8

leased department

Answer 8

a department in a retail store—usually a department, discount, or specialty store—that is rented to an outside party

ex: Ulta inside Target

Question 9

dual marketing

Answer 9

a form of multichannel retailing

ex: Dunkin’ Donuts and Baskin-Robbins share facilities in numerous locations, so as to attract more customers and increase the revenue per transaction

Question 10

channel control

Answer 10

one member of a distribution channel dominates the decisions made in that channel due to the power it possesses

Question 11

consumer cooperative

Answer 11

retail firm owned by its customer members

a group of consumers invests, elects officers, manages operations, and shares the profits or savings that accrue

ex: REI