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Retail Management > Test 3 > Flashcards

Test 3 Flashcards

chapter 9, 11, 12 and 13

1
Q

In the United States, retailers often focus their analysis on a ________Blank because consumers tend to shop within this area

A

metropolitan statistical area

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2
Q

When evaluating store locations, which factor is found to have no effect on the long-term profit generated by a store?

A

level of corporate centralization

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3
Q

What factor has little effect on the operating costs of a store?

A

proximity to competition

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4
Q

Although retailers gain economies of scale from opening multiple locations in an area, they also suffer diminishing returns associated with locating too many additional stores in an area. This is called

A

sales cannibalization

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5
Q

What refers to a notable population center removed from larger U.S. cities, often by up to 100 miles?

A

micropolitan statistical area

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6
Q

Which statement is true when considering and evaluating store locations?

A

The best areas for locating stores are those that generate the highest return on investment in the short term

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7
Q

Retailers must consider the trade-offs between lower operating costs and potential ________Blank from having multiple stores in an area

A

sales cannibalization

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8
Q

A city of 50,000 or more inhabitants, or an urbanized area of at least 50,000 inhabitants, with adjacent communities having a high degree of economic and social integration with the core community is called a

A

metropolitan statistical area

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9
Q

Retailers try to locate their stores close to other retailers that appeal to similar target markets. Which statement is true in explaining how and why retailers do this?

A

Retailers must avoid locating close to other retailers that compete directly

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10
Q

What can be used to determine how many people are in a trade area and where they live?

A

customer spotting

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11
Q

What describes the analog method and regression analysis?

A

approaches for using information about the trade area to estimate the potential sales for a store at the location

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12
Q

Which statement describes the appropriate use of different approaches for site selection?

A

The regression analysis is appropriate for small chains to find the best location

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13
Q

With regression analysis used in location analysis, predictor variables are selected. Which predictor variables would be more useful for a retailer who is contemplating opening a day care center than for a retailer of used books?

A

number of households with children not attending school

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14
Q

What is the difference between multiple regression analysis and the analog approach?

A

Multiple regression analysis uses statistics rather than judgment to predict sales at existing store locations

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15
Q

When using the ________Blank, the retailer simply describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics

A

analog model

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16
Q

What is typically the step after conducting a competitive analysis during site selection?

A

Define present trade area

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17
Q

What is typically the last step in site selection using the analog approach?

A

Determine average consumer spending potential

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18
Q

A shopping center landlord who has the agreement to increase the rent by a fixed amount over a specified period of time has negotiated a

A

graduated lease

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19
Q

A(n) ________Blank prohibits the landlord from leasing to retailers that sell competing products

A

exclusive-use clause

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20
Q

A(n) ________Blank limits the shopping center management from leasing to certain kinds of tenants

A

prohibited-use clause

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21
Q

Bobby finally received financial backing from his wealthy aunt in order to open a pool hall. He contacted the landlord of a nearby shopping center since he had his eye on a vacant storefront. To his surprise, his request for a lease was denied. What most likely prevented the landlord from leasing to Bobby?

A

a prohibited-use clause

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22
Q

What are the two basic types of leases?

A

percentage lease and the fixed-rate lease

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23
Q

Which lease type is commonly used by malls?

A

percentage lease

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24
Q

The objective of the CRM process is to

A

develop loyalty and repeat-purchase behavior

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25
Q

Wilbur uses a Books-A-Million customer card, Kash-N-Karry customer card, Jerry’s Cleaners customer card, and Sandwich Shop customer card when he shops at any of these retailers. Each time he uses them, he gets rewarded with reduced price, free merchandise, or a credit. These cards illustrate

A

frequent-shopper programs

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26
Q

Based on the following customer purchase data, which customer would have a higher lifetime value to the retailer?

A

Jalene

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27
Q

Rangsey loves books and often shops at a local bookstore. At the beginning of the year, he enrolled in a program that cost him five dollars, and now he gets a percentage off on the purchases he makes throughout the year. Which term best demonstrates this type of approach toward customer retention?

A

frequent-shopper program

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28
Q

Which statement is true of a tiered frequent-shopper reward structure?

A

It provides an incentive for customers to consolidate their purchases with one retailer to reach the higher tiers

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29
Q

Which statement is true of frequent-shopper programs?

A

It is hard to gain competitive advantage with frequent-shopper programs as they can be duplicated

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30
Q

Which statement is true of frequent-shopper programs?

A

The discounts offered appeal mostly to price-conscious customers

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31
Q

Juliet flies for business purposes twice a month. She always tries to fly United Airlines because she is saving up miles in its Skymiles program for a vacation. One more trip and she can fly first class! This best demonstrates how ________Blank can incentivize customers to buy more

A

tiered rewards

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32
Q

The release of the new Harry Potter book brought excitement in Meena’s neighborhood. The local Book Universe store sold thousands of vouchers for the night of the release. The store invited Harry Potter enthusiasts to come for a party at the store that lasted until midnight when the book would be available for purchase. Book Universe developed a customer retention program based on

A

creating a sense of community among its customers

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33
Q

What is customer alchemy?

A

increasing the sales made to good customers

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34
Q

A ________Blank is a group of customers who are bound together by their loyalty to a retailer and the activities the retailer sponsors and undertakes

A

retail brand community

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35
Q

Which statement describes an approach that is used to deal with unprofitable customers?

A

retailers charging a restocking fee for returned merchandise

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36
Q

Developing retail programs for small groups or individual customers is referred to as

A

1-to-1 retailing

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37
Q

Which statement is true of the customer pyramid?

A

Customers in the lead segment buy merchandise on sale or abuse return privileges

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38
Q

The Bird of Paradise is one of the world’s most attractive tropical flowers. When Kareem, who owns Kareem’s Flower Shop, knows he’s receiving these flowers from Hawaii, he emails all his customers whom he knows will like the flower and informs them of the expected shipment. Kareem’s program is an example of

A

1-to-1 retailing

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39
Q

Which approach toward retaining customers has retailers offering unique benefits and targeted messages to individuals?

A

personalization

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40
Q

CRM programs directed toward customers in the high-value segment

A

are focused on maintaining loyalty

41
Q

Eddie Baker stores train their sales associates to pay attention to what customers are buying and make suggestions for other related purchases. This is called

A

add-on selling

42
Q

The Marathon Store sells high-end running shoes. It sponsors a 10K run every year and gives out t-shirts to its customers with every purchase in the preceding month. It also partners with a fitness center to help the runners prepare for the race. After the race, it holds a celebration in a tent near the finish line. The Marathon Store is developing a

A

retail brand community

43
Q

What does the 80–20 rule mean?

A

80% of the sales or profits come from 20% of the customers

44
Q

Which statement is true of the gold segment members in the customer pyramid?

A

Price plays a greater role in their decision-making process

44
Q

At The Running Company, there is a certain customer who regularly makes large purchases and returns everything two weeks later. In response, the manager created a policy stating that all tags must be intact; the clothing must not have been worn; and it must be returned within seven days to receive credit. What terminology best describes the retailer’s actions?

A

getting the lead out

45
Q

Depending on the amount of money you have in Citizens bank, you will receive a variety of different services. The lower-tiered customers are charged $5 to use a teller but can receive the same services for free if they use an ATM. Charging low-tiered customers for using live tellers is Citizen’s approach to

A

getting the lead out

45
Q

Why would the customer pyramid be more appropriate in identifying a customer’s lifetime value than utilizing the traditional 80–20 rule?

A

The 80–20 rule does not consider important differences among the 80% of customers in the “rest” segment

46
Q

In the customer pyramid, which segment consists of customers with the top 25% CLVs?

A

platinum

47
Q

What is a drawback in utilizing vendors as category captains?

A

The vendor could take advantage of its position and maximize its own sales

48
Q

________Blank merchandise categories consist of items whose sales fluctuate dramatically depending on the time of year

A

seasonal

49
Q

What is the first step in merchandise management planning?

A

developing a forecast for category sales

50
Q

A(n) ________Blank is a small group of respondents interviewed by a moderator using a loosely structured format in which participants are encouraged to express their views and comment on the views of others in the group

A

focus group

51
Q

When forecasting demand for staple merchandise categories,

A

forecasts are typically based on extrapolating historical sales

52
Q

Which process is an unstructured form of personal questioning used in market research and involves extensive probing to get individual respondents to talk in detail about a subject?

A

in-depth interview

53
Q

When P&G brought out its Swiffer brand of floor cleaning supplies, it brought various consumers to its site and had them mop an area of floor. Then the consumers sat down with others and a moderator and discussed which scents they preferred and how the product compared to the one they used at home. This is an example of a(n)

A

focus group

54
Q

What is the best description of variety in merchandise planning?

A

the number of different merchandising subcategories within a store

55
Q

________Blank of a retailer’s merchandise is the number of SKUs within a subcategory

A

assortment

56
Q

Which term is defined as the percentage of demand for a particular SKU that is satisfied?

A

product availability

57
Q

The merchandise budget plan

A

specifies the level of inventory needed to support the sales

58
Q

Which factor is considered by retailers in making merchandise allocation and promotion decisions specific to difficult economic times?

A

paycheck cycle

59
Q

Retail chains typically classify each of their stores on the basis of annual sales. According to this classification,

A

A stores would have the largest sales volume

60
Q

Horace owns a small convenience store in a low-income neighborhood. He restocks his shelves every Thursday to prepare for his usual rush on Friday afternoons. What is Horace most likely experiencing?

A

the paycheck cycle

61
Q

Two stores are located in two different neighborhoods in a city. One is in a newly gentrified area with lots of young, single professionals, and the other is in a neighborhood with older people who have been in their homes for a generation. What factor will most influence the allocation decisions at these stores?

A

the geodemographics of the trading areas

62
Q

After developing a plan and allocating the merchandise, the next step in the merchandise planning process involves

A

replenishing the inventory levels

63
Q

Which statement is true of the ABC analysis?

A

The SKUs in a merchandise category are rank-ordered by several performance measures

64
Q

Brenda’s Groceries ordered too many contactless thermometers and put them on sale to reduce the inventory. The vender likely sent them ________Blank to cover the lost gross margin dollars that resulted

A

markdown money

65
Q

Bradley wanted to analyze the performance of his merchandise planning process, so he compared planned sales to actual sales. After doing this, he determined that he needed to mark down some items to reduce inventory of those items. Which analysis did Bradley perform?

A

sell-through analysis

66
Q

Retailers often find the 80–20 principle evident within the ABC analysis. What does the 80–20 principle imply?

A

Approximately 80% of a retailer’s sales come from 20% of its products

67
Q

A(n) ________Blank identifies the performance of individual SKUs in the assortment plan

A

ABC analysis

68
Q

The ________Blank method for evaluating vendors uses a weighted-average score for each vendor

A

multiattribute analysis

69
Q

Which analysis technique compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions are required?

A

sell-through analysis

70
Q

When a grocery retailer develops its own high-quality private-label organic food product, this would be a(n)

A

store brand

71
Q

If there are so many advantages to selling national brands, why do retailers still carry private-label brands?

A

Private-label brands yield higher profits to retailers

72
Q

What is an advantage of selling private-label brands for a national retailer?

A

Customers can’t compare prices for private-label products because of their exclusivity

73
Q

________Blank are products developed by retailers

A

store brands

74
Q

Techno Comp is a national brand of computer and electronic products and accessories. Their brand of tablet computer would be considered a(n)

A

subbrand

75
Q

________Blank target a price-sensitive segment by offering a no-frills product at a discount price

A

generic brands

76
Q

What is a drawback for a retailer offering national brands?

A

Retailers have to discount some national brands in order to attract customers to their stores

77
Q

Tide detergent, Ralph Lauren polo shirts, and Hewlett-Packard printers are all examples of

A

national brands

78
Q

The premium option in the multiple price tiers created for store brands offers

A

consumers quality that is comparable to that of national brands

79
Q

National brands

A

can limit a retailers flexibility

80
Q

How does a national retailer benefit from selling private-label brands?

A

By selling private-label brands, a national retailer can differentiate its assortment

81
Q

Which statement about store brands is accurate?

A

Retailers often develop the design and specifications for these products

82
Q

National brands are also called ________Blank brands

A

manufacturer’s

83
Q

Walgreens sells an allergy medicine called Wal-Dryl. It is typically placed on the shelves next to Benadryl and has the same ingredients but is less expensive. This is a(n)

A

copycat brand

84
Q

Popular national brands are placed next to a manufacturer’s brands in a store and look like them. This kind of brand is called a(n)

A

copycat brand

85
Q

The only retailer that offers Fresh Sun organic food products is Daily Needs. Therefore, Fresh Sun is an example of a(n)

A

exclusive brand

86
Q

A(n) ________Blank is a brand that is developed by a national-brand vendor, often in conjunction with a retailer, and sold solely by the retailer

A

exclusive brand

87
Q

A(n) ________Blank developed by a retailer is comparable with national brands on quality rather than price

A

premium store brand

88
Q

Grocers Square is a large supermarket. It recently launched its own brand of cereal called Morning Bites, which is equivalent to most national brands but priced slightly lower. Morning Bites is an example of a

A

premium store brand

89
Q

Which of these is neither a store brand nor a national brand?

A

generic brand

90
Q

Spring Clean, Sparkle Glass, and Dazzle Floor are various cleaning liquids marketed under the brand name Clean Homes. Therefore, Clean Homes is a(n)

A

umbrella brand

91
Q

When identifying national brands, vendors sometimes use a(n) ________Blank associated with their company

A

umbrella brand

92
Q

What is a drawback of selling private-label merchandise?

A

Significant investment is needed to develop, manage, and market private-label brands

93
Q

A ________Blank for retail buyers is a concentration of vendors within a specific geographic location, perhaps even under one roof or over the Internet

A

wholesale market

94
Q

________Blank are imposed by governments to shield domestic manufacturers from foreign competition

A

import tariffs

95
Q

What is a negotiation issue that is often used in fashion merchandise categories?

A

exclusivity arrangement

96
Q

Eileen works as a senior jewelry buyer for a department store chain. On a recent visit to a trade show, she noticed a new vendor selling unique earrings, necklaces, and bracelets made of glass. She had seen such pieces in trade magazines, but initially ignored them because of the exorbitant price. She thought her affluent customers would appreciate the look, so she decided to talk with the sales representative to learn more about the possibility of a trial in only a few of her top stores. Eileen is in the ________Blank phase of building strategic relationships

A

exploration

97
Q

Jolene buys swimwear for a chain of apparel stores. At a recent trade show, she took the opportunity to meet with a few vendors. During a meeting with the vendor that she normally purchased from each season, he proposed a weekend in the Cayman Islands to view the swimwear that European tourists were wearing. Jolene knows that it would be beneficial to see what European tourists are wearing and then translate what she is seeing into her assortment for her target customers. Before continuing her discussions with the vendor, what should she do?

A

She should inform her manager of the proposal to get approval

Retail Management (4 decks)

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