MK Chapter 15

Question 1

Retailing

Answer 1

Transactions in which ultimate consumers are the buyers

Question 2

Major Types of Retail Stores

Answer 2

• General-Merchandise Retailers

- Specialty Retailers

Question 3

General Merchandise Retailers

Answer 3

A retail establishment that offers a variety of product lines

• department stores
• discount stores
• supermarkets
• superstores
• hypermarkets
• warehouse clubs
• warehouse showrooms
• convenience stores

Question 4

Department stores

Answer 4

Large retail organizations characterized by wide product mixes and organized into separate departments to facilitate marketing efforts and internal management

Question 5

Discount stores

Answer 5

Self-service, general merchandise stores offering brand name and private brand products at low prices

Question 6

Supermarkets

Answer 6

Large, self-service stores that carry a complete line of food products, along with some nonfood products

Question 7

Superstores

Answer 7

Giant retail outlets that carry food and nonfood products found in supermarkets, as well as most routinely purchased consumer products

Question 8

Hypermarkets

Answer 8

Stores that combine supermarket and discount shopping in one location

Question 9

Warehouse clubs

Answer 9

Large-scale, members-only establishments that combine features of cash-and-carry wholesaling with discount retailing

Question 10

Warehouse showrooms

Answer 10

Retail facilities in large, low-cost buildings with large on-premise inventories and minimal services

Question 11

Convenience stores

Answer 11

Small self-servicestore offering a narrow product assortment in a convenient location.

Question 12

3 types of specialty retailers - ex of each

Answer 12

• Traditional specialty retailers
• off price retailers
• category killers

Question 13

Traditional Specialty Retailers

Answer 13

• Also called “limited-line” and “single-line” retailers
• Carry a narrow product mix with deep product lines (e.g., pet supplies)
• Have higher costs and higher margins
• Provide more product selection (first-line brands), product expertise, and high levels of personal service

Question 14

Off-price Retailers

Answer 14

• Buy manufacturers’ seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts
• Charge less than department stores for comparable merchandise and offer few customer services
• Have established long-term relationships with suppliers for continuing supplies of reduced-price goods

Question 15

Category Killers

Answer 15

Concentrate on a major product category and compete on the basis of low prices and product availability

Question 16

Ex. of Category Killers

Answer 16

• Toys ‘R’ Us
• Home Depot
• Best Buy
• Office Depot
• PETsMart
• Barnes & Noble

Question 17

Strategic Issues in Retailing

Answer 17

• Retail Store Location
• Types of location
• Retail Positioning
• Store Image

Question 18

Retail Store Location

Answer 18

Factors affecting location

- Intended target market
- Kinds of products
- Suitability site for customer access
- Characteristics of existing retail operations

Question 19

Types of Locations

Answer 19

• Free-standing structures

- Traditional business districts

Question 20

Retail Positioning

Answer 20

Identifying an unserved or underserved market segment and serving it through a strategy that distinguishes the retailer from others in the minds of consumers in that segment

Question 21

Store Image

Answer 21

Atmospherics

  - The physical elements in a store’s design that appeal to consumers’ emotions and encourage buying
  - Interior layout, colors, furnishings, and lighting
  - Exterior storefront and entrance design, display windows, and traffic congestion

Question 22

Category management

Answer 22

Managing groups of similar products that may be produced by different manufacturers

Question 23

Direct Marketing

Answer 23

• The use of telephone, internet, and nonpersonal media to introduce products to consumers, who then can purchase them via mail, telephone, or the Internet
• A type of nonstore retailing

Question 24

Direct Response Marketing

Answer 24

A type of marketing that occurs when a retailer advertises a product and makes it available through mail or telephone orders

Question 25

Other Types of Nonstore Retailing

Answer 25

• Direct Selling
• Benefits
• Limitations

Question 26

Franchising

Answer 26

An arrangement in which a supplier (franchiser) grants a dealer (franchisee) the right to sell products in exchange for some type of consideration

• Franchiser furnishes equipment, buildings, management know-how, and marketing assistance.
• Franchisee supplies labor and capital and operates the business by the provisions of the franchise agreement.

Question 27

Wholesaling

Answer 27

Transactions in which products are bought for resale, for making other products, or for general business operations

Question 28

Services Provided by Wholesalers

Answer 28

• Serve as an extension of the producer’s sales force through contact with suppliers and retailers
• Lend financial assistance for the distribution channel
  Transporting and warehousing inventories
  Assuming credit risks of buyers/customers
  Purchasing producers’ entire output: converting producer’s output immediately to working capital
  Channeling information from and to sellers and buyers

Question 29

Franchising Advantages

Answer 29

• Enables startup with limited capital
• Provides developed and proven business to franchisee
• Attracts customers with established brand name
• Allows immediate market entry
• Motivates franchisee to succeed

Question 30

Franchising Disadvantages

Answer 30

• Control over aspects of the business and its operations by franchiser
• Expense of continuing franchise royalties and advertising fees
• Lack of control of franchisees by franchisor

Question 31

Direct Selling

Answer 31

The marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace
- Party plans: hosting groups to view a product demonstration and encouraging participants to purchase the products

Question 32

Benefit

Answer 32

• Personal attention to customer

- Convenience of time and place of presentation

Question 33

Limitations

Answer 33

• High costs make it the most expensive form of selling

- Negative consumer view of direct selling