14 Aug 101. In what ways does franchising benefit the franchisor? In what ways does it

101.
In what ways does franchising benefit the
franchisor? In what ways does it benefit
the franchisee?

102.
The trends in retailing include
new retail forms and combinations. List the six other trends in retailing
discussed in the chapter.

103.
Retailers are facing increasing competition from
other manufacturer-to-consumer distribution channels. A retailer must develop a
product-differentiation strategy. The author suggests seven
product-differentiation strategies. List and explain these seven.

104.
Paco Underhill, managing director of the retail
consultancy Envirosell Inc., offers several tips for fine-tuning retail space
in order to keep shoppers spending. List
three of them.

105.
The
growth of house brands has skyrocketed in recent years. Why do intermediaries
bother to sponsor their own brands?

In the confrontation between manufacturers and private brands, retailers have
many advantages and increasing market power. What are some of the other factors
affecting or weakening the national brands?

106.
In general, wholesalers are
efficient in performing specific functions. List these nine functions.

107.
Today,
stronger demands for logistical support from large customers will increase
suppliers costs. What are the demands that retailers are requiring of
manufacturers?

APPLICATION
QUESTIONS

Multiple
Choice

108.
Customers who like to be waited
on prefer to shop in stores that offer ________.
a. limited service
b. self-service
c. full service
d. part-time service
e. events and experiences

109.
You and your best friend are
considering opening a retail store. You have identified your target market and
location. Now you must decide on the format. You are pressing for a store that
offers leftover goods, overruns, and irregular merchandise sold at less than
full retail. This is a description of a(n) _________ retailer.
a.
off-price
b.
self-service
c.
discount
d. limited-service
e. none of the above

110.
You have ideas of owning a
Subway after graduation. In owning a Subway location, you are entering a
________ agreement.
a. voluntary
b. self-service
c. franchise
d. merchandising
e. none of the above

111.
In your restaurant you offer a
wide variety of dishes and are open for breakfast, lunch, and dinner. In terms
of product assortment, you can claim that your restaurant has a product
assortment that has ________.
a. a narrow focus and narrow target market
b. appeal to all consumers
c. location and variety
d. variety and long hours
e. breadth and depth

112.
Using
direct product profitability analysis, many users are learning, to their
surprise, that the gross margin on a product ________ the direct product
profit.
a. is highly correlated with
b. is negligible compared to
c. often bears little relation to
d. is often significantly less than
e. is exactly the same as

113.
Mass
merchandisers and discount stores typically fall into the ________ group with
respect to margins and volume.
a. mixed markup, high-volume
b. low-volume, mixed markup
c. low-volume, low-markup
d. high-volume, low-markup
e. high-markup, lower-volume
\

114.
In
your neighborhood there is a small mens store that has a limited selection of
clothing, but the selection that is carried is of very high quality and price.
Services include free alterations and tailoring, personalized record keeping,
and free dry cleaning. The inside of the store has deep leather chairs and
couches and thick pile carpet. Upon entering the store, one feels special and
rich. In terms of differentiation, what is this retailer trying to communicate
by its decorations and service level?
a. Differentiation based upon services mix and
atmosphere
b. Differentiation based upon prepurchase
services
c. Differentiation based upon postpurchase
services and atmosphere
d. Differentiation based upon ancillary
services and atmosphere
e. None of the above

115.
Natural advantages of
brick-and-mortar over e-commerce retailers include ________.
a.
products that shoppers can
actually see
b.
real-life customer service
c.
no delivery lag time for small
or medium-sized purchases
d.
a shopping experience
e.
all of the above

116.
As a marketing intern, your job
is to hang out at the mall and note the percentage of people who enter a
particular store versus those who pass by it. This is an example of _________
for retailers.
a. measuring advertisement effectiveness
b. measuring foot traffic at the mall
c. measuring consumer shopping patterns
d. measuring retail sales effectiveness
e. measuring retail locations

117.
Wal-Marts
OlRoy dog food has surpassed Nestls Purina brand as the top-selling dog
chow. OlRoy is an example of a
________.
a. generic
b. national brand
c. franchise
d. copy-cat brand
e. private-label brand

118.
As a
sales representative for a major food manufacturer, your largest customer has
asked you to provide him with a product that meets the following definition: It
must not contain any brand name, be plainly packaged, use less expensive
ingredients, use lower-quality raw products in its makeup, and not allocate any
funds for advertising and promotion. What type of product is your buyer
describing that he wants from you?
a. Reseller brand
b. Store brand
c. Private label
d. House brand
e. Generic

119.
Agricultural assemblers,
petroleum bulk plants and terminals, and auction companies are examples of
________.
a.
full-service wholesalers
b.
specialized wholesalers
c.
limited-service wholesalers
d.
merchant wholesalers
e.
brokers

120.
Which of the following is true
of brokers?
a.
Brokers represent buyers or
sellers on a semipermanent basis.
b.
Most brokers are small
businesses with a few skilled salespeople.
c.
Brokers bring buyers and
sellers together and assist in negotiation .
d.
Selling brokers have
contractual authority to sell a manufacturers entire output.
e.
Purchasing brokers make
purchases for buyers and often receive, inspect, warehouse, and ship
merchandise.

121.
You are interviewing for a job
after graduation with a wholesaler. In your preparation for the interview, you
discover that the wholesaler carries over 10,000 stockkeeping units, maintains
a sales force, makes store door deliveries, and provides management and
research assistance to retailers. You are interviewing with a ________
wholesaler.
a. specialized
b. rack jobber
c. full-service
d. cash and carry
e. merchant

122.
The
company that you work for has outlined the following to its customers: Our
on-time deliveries will be set at 95%; ordering and billing accuracy will be at
a minimum of 98%; and we will establish four warehouses to serve the United States.
These policies relate to ________.
a. customer responsiveness
b. targeted marketing
c. integrated logistics systems
d. market logistics
e. supply chain management

123.
________
encompass sales forecasting, production planning, and inbound materials
transportation.
a. Market logistics
b. Containerization
c. Supply chain management
d. Nonstore retailing
e. Wholesaling

124.
A
stock reorder point of 10 means reordering the product ________.
a. every 10 days
b. when stock falls to 10 units
c. every 10 units
d. when stock falls to 9 units
e. none of the above

125.
Companies are reducing
inventory costs by treating inventory items differently. Critical items defined
as high risk, high opportunity and commodities defined as low risk, high
opportunity. Recently, your company has introduced a product that is considered
by the distributor a bottleneck item. What is the risk/reward relationship
for bottleneck items?
a. Low risk, mediocre opportunity
b. Low risk, high opportunity
c. Low risk, low opportunity
d. High risk, high opportunity
e. High risk, low opportunity

126.
Optimal
order quantities exist when the order-processing cost per unit and
inventory-carrying cost per unit curves ________.
a. increase to 1
b. decrease to less than 1
c. intersect
d. equal each other
e. equal zero

127.
The
trucking firm hired by your transportation manager provides service between the
Northeast and the Southeast on a regular schedule. Hiring this shipper is available to all at
standard rates. Your transportation manager has hired a _____________.
a. common carrier
b. contract carrier
c. private carrier
d. piggybacked carrier
e. gypsy carrier

Short
Answer

128.
Direct
marketing has its roots in direct-mail and catalog marketing. What other kinds of direct marketing exist?

129.
Identify
and describe three of the six major types of corporate retail organizations.

130.
Identify
the three characteristics that distinguish franchises from other forms of
corporate retailing.

131.
In the
past, retailers secured customer loyalty by offering convenient locations,
special or unique assortments of goods, greater or better services than
competitors, and store credit cards. How
has this changed?

132.
How
has the growth of giant retailers threatened traditional retailers?

133.
Why
must retailers begin by defining their target market before making any other
marketing decisions?

134.
Identify
the seven steps involved in retail category management.

135.
The
real challenge of retail category management begins after defining the stores
product assortment, and that is to develop a product-differentiation
strategy. Give three possible retailing
product-differentiation strategies.

.
\

136.
Retailers
examining their product mix find that a third of their products are not profitable or do not make economic sense. Yet
these products still take up retail shelf space. Why does this continue and
what techniques are retailers using to tighten this process?

137.
The
services mix afforded to retailers is a key tool for differentiating one store
from another. Briefly explain the three services mixes available to retailers.

138.
Explain
what is meant by the term store atmosphere and why it is important for
retailers to have a distinctive atmosphere.

139.
Retailers
can place their stores in a variety of locations. Give three examples of shopping venues in
which retailers can place their stores.

140.
As
part of your internship with a marketing research firm, you have been asked to
evaluate the relationship between high traffic and high rents for a retailer
client who is thinking about moving his location. What methods for evaluating
this relationship are available to you?

141.
How do
generics differ from private-label brands?

Manufacturers typically do not sell directly
to retailers or final consumers. They
choose to use wholesalers because wholesalers are more efficient at certain
functions. What functions are these?

142.
Supply chain management is the
broader concept of physical distribution. Explain the concept of supply chain
management.

.

143.
Your
division has a new general manager. As part of his stated tasks, he believes in
getting the right goods to the right places at the right time for the least
cost. As your companys logistics manager, you know that this objective
provides little practical guidance and could in fact be detrimental to the
company objectives. How would you formulate a response to the new general
manager to convince him to change his position regarding customer service?

144.
Your companys order-to-payment
cycle is 50 days. The average for your industry is 45 days. Your boss has asked
you to reduce this cycle to the industrys average. To accomplish this goal,
you begin to outline the processes in the order-to-payment cycle to find out
where improvements can be made. List the processes that make up the
order-to-payment cycle.

Suggested
Answer: The
order-to-payment cycle is the elapsed time between an orders receipt,
delivery, and its payment. This cycle involves many steps, including order
transmission by the salesperson, order entry, and customer credit check,
inventory and production scheduling, order and invoice shipment, and receipt of
payment.

145.
As a brand manager why should
you be concerned with the transportation decisions regarding your product?

.

146.
Explain
why the market-logistics strategies must be derived from business strategies,
rather than solely from cost considerations.

101.
In what ways does franchising benefit the
franchisor? In what ways does it benefit
the franchisee? 102.
The trends in retailing include
new retail forms and combinations. List the six other trends in retailing
discussed in the chapter. 103.
Retailers are facing increasing competition from
other manufacturer-to-consumer distribution channels. A retailer must develop a
product-differentiation strategy. The author suggests seven
product-differentiation strategies. List and explain these seven. 104.
Paco Underhill, managing director of the retail
consultancy Envirosell Inc., offers several tips for fine-tuning retail space
in order to keep shoppers spending. List
three of them. 105.
The
growth of house brands has skyrocketed in recent years. Why do intermediaries
bother to sponsor their own brands?
In the confrontation between manufacturers and private brands, retailers have
many advantages and increasing market power. What are some of the other factors
affecting or weakening the national brands? 106.
In general, wholesalers are
efficient in performing specific functions. List these nine functions. 107.
Today,
stronger demands for logistical support from large customers will increase
suppliers costs. What are the demands that retailers are requiring of
manufacturers? APPLICATION
QUESTIONSMultiple
Choice108.
Customers who like to be waited
on prefer to shop in stores that offer ________. a. limited service b. self-servicec. full service d. part-time service e. events and experiences109.
You and your best friend are
considering opening a retail store. You have identified your target market and
location. Now you must decide on the format. You are pressing for a store that
offers leftover goods, overruns, and irregular merchandise sold at less than
full retail. This is a description of a(n) _________ retailer.a.
off-price b.
self-servicec.
discount d. limited-servicee. none of the above 110.
You have ideas of owning a
Subway after graduation. In owning a Subway location, you are entering a
________ agreement. a. voluntaryb. self-servicec. franchised. merchandising e. none of the above
111.
In your restaurant you offer a
wide variety of dishes and are open for breakfast, lunch, and dinner. In terms
of product assortment, you can claim that your restaurant has a product
assortment that has ________. a. a narrow focus and narrow target market b. appeal to all consumersc. location and variety d. variety and long hourse. breadth and depth 112.
Using
direct product profitability analysis, many users are learning, to their
surprise, that the gross margin on a product ________ the direct product
profit.a. is highly correlated withb. is negligible compared toc. often bears little relation tod. is often significantly less thane. is exactly the same as 113.
Mass
merchandisers and discount stores typically fall into the ________ group with
respect to margins and volume.a. mixed markup, high-volume b. low-volume, mixed markupc. low-volume, low-markupd. high-volume, low-markupe. high-markup, lower-volume \114.
In
your neighborhood there is a small mens store that has a limited selection of
clothing, but the selection that is carried is of very high quality and price.
Services include free alterations and tailoring, personalized record keeping,
and free dry cleaning. The inside of the store has deep leather chairs and
couches and thick pile carpet. Upon entering the store, one feels special and
rich. In terms of differentiation, what is this retailer trying to communicate
by its decorations and service level? a. Differentiation based upon services mix and
atmosphereb. Differentiation based upon prepurchase
servicesc. Differentiation based upon postpurchase
services and atmosphered. Differentiation based upon ancillary
services and atmospheree. None of the above 115.
Natural advantages of
brick-and-mortar over e-commerce retailers include ________.a.
products that shoppers can
actually seeb.
real-life customer servicec.
no delivery lag time for small
or medium-sized purchasesd.
a shopping experiencee.
all of the above
116.
As a marketing intern, your job
is to hang out at the mall and note the percentage of people who enter a
particular store versus those who pass by it. This is an example of _________
for retailers. a. measuring advertisement effectiveness b. measuring foot traffic at the mall c. measuring consumer shopping patterns d. measuring retail sales effectiveness e. measuring retail locations 117.
Wal-Marts
OlRoy dog food has surpassed Nestls Purina brand as the top-selling dog
chow. OlRoy is an example of a
________.a. genericb. national brandc. franchised. copy-cat brande. private-label brand118.
As a
sales representative for a major food manufacturer, your largest customer has
asked you to provide him with a product that meets the following definition: It
must not contain any brand name, be plainly packaged, use less expensive
ingredients, use lower-quality raw products in its makeup, and not allocate any
funds for advertising and promotion. What type of product is your buyer
describing that he wants from you? a. Reseller brand b. Store brandc. Private labeld. House brande. Generic 119.
Agricultural assemblers,
petroleum bulk plants and terminals, and auction companies are examples of
________.a.
full-service wholesalersb.
specialized wholesalersc.
limited-service wholesalersd.
merchant wholesalerse.
brokers120.
Which of the following is true
of brokers?a.
Brokers represent buyers or
sellers on a semipermanent basis.b.
Most brokers are small
businesses with a few skilled salespeople.c.
Brokers bring buyers and
sellers together and assist in negotiation .d.
Selling brokers have
contractual authority to sell a manufacturers entire output.e.
Purchasing brokers make
purchases for buyers and often receive, inspect, warehouse, and ship
merchandise.121.
You are interviewing for a job
after graduation with a wholesaler. In your preparation for the interview, you
discover that the wholesaler carries over 10,000 stockkeeping units, maintains
a sales force, makes store door deliveries, and provides management and
research assistance to retailers. You are interviewing with a ________
wholesaler. a. specializedb. rack jobberc. full-serviced. cash and carry e. merchant 122.
The
company that you work for has outlined the following to its customers: Our
on-time deliveries will be set at 95%; ordering and billing accuracy will be at
a minimum of 98%; and we will establish four warehouses to serve the United States.
These policies relate to ________. a. customer responsiveness b. targeted marketing c. integrated logistics systemsd. market logistics e. supply chain management 123.
________
encompass sales forecasting, production planning, and inbound materials
transportation.a. Market logisticsb. Containerizationc. Supply chain managementd. Nonstore retailinge. Wholesaling124.
A
stock reorder point of 10 means reordering the product ________. a. every 10 days b. when stock falls to 10 units c. every 10 units d. when stock falls to 9 units e. none of the above 125.
Companies are reducing
inventory costs by treating inventory items differently. Critical items defined
as high risk, high opportunity and commodities defined as low risk, high
opportunity. Recently, your company has introduced a product that is considered
by the distributor a bottleneck item. What is the risk/reward relationship
for bottleneck items? a. Low risk, mediocre opportunity b. Low risk, high opportunity c. Low risk, low opportunityd. High risk, high opportunity e. High risk, low opportunity 126.
Optimal
order quantities exist when the order-processing cost per unit and
inventory-carrying cost per unit curves ________. a. increase to 1 b. decrease to less than 1c. intersectd. equal each other e. equal zero 127.
The
trucking firm hired by your transportation manager provides service between the
Northeast and the Southeast on a regular schedule. Hiring this shipper is available to all at
standard rates. Your transportation manager has hired a _____________.a. common carrier b. contract carrierc. private carrierd. piggybacked carriere. gypsy carrier Short
Answer128.
Direct
marketing has its roots in direct-mail and catalog marketing. What other kinds of direct marketing exist?129.
Identify
and describe three of the six major types of corporate retail organizations.130.
Identify
the three characteristics that distinguish franchises from other forms of
corporate retailing. 131.
In the
past, retailers secured customer loyalty by offering convenient locations,
special or unique assortments of goods, greater or better services than
competitors, and store credit cards. How
has this changed?132.
How
has the growth of giant retailers threatened traditional retailers?133.
Why
must retailers begin by defining their target market before making any other
marketing decisions? 134.
Identify
the seven steps involved in retail category management. 135.
The
real challenge of retail category management begins after defining the stores
product assortment, and that is to develop a product-differentiation
strategy. Give three possible retailing
product-differentiation strategies.. \ 136.
Retailers
examining their product mix find that a third of their products are not profitable or do not make economic sense. Yet
these products still take up retail shelf space. Why does this continue and
what techniques are retailers using to tighten this process? 137.
The
services mix afforded to retailers is a key tool for differentiating one store
from another. Briefly explain the three services mixes available to retailers. 138.
Explain
what is meant by the term store atmosphere and why it is important for
retailers to have a distinctive atmosphere. 139.
Retailers
can place their stores in a variety of locations. Give three examples of shopping venues in
which retailers can place their stores.140.
As
part of your internship with a marketing research firm, you have been asked to
evaluate the relationship between high traffic and high rents for a retailer
client who is thinking about moving his location. What methods for evaluating
this relationship are available to you? 141.
How do
generics differ from private-label brands?Manufacturers typically do not sell directly
to retailers or final consumers. They
choose to use wholesalers because wholesalers are more efficient at certain
functions. What functions are these?142.
Supply chain management is the
broader concept of physical distribution. Explain the concept of supply chain
management. . 143.
Your
division has a new general manager. As part of his stated tasks, he believes in
getting the right goods to the right places at the right time for the least
cost. As your companys logistics manager, you know that this objective
provides little practical guidance and could in fact be detrimental to the
company objectives. How would you formulate a response to the new general
manager to convince him to change his position regarding customer service? 144.
Your companys order-to-payment
cycle is 50 days. The average for your industry is 45 days. Your boss has asked
you to reduce this cycle to the industrys average. To accomplish this goal,
you begin to outline the processes in the order-to-payment cycle to find out
where improvements can be made. List the processes that make up the
order-to-payment cycle. Suggested
Answer: The
order-to-payment cycle is the elapsed time between an orders receipt,
delivery, and its payment. This cycle involves many steps, including order
transmission by the salesperson, order entry, and customer credit check,
inventory and production scheduling, order and invoice shipment, and receipt of
payment. 145.
As a brand manager why should
you be concerned with the transportation decisions regarding your product? . 146.
Explain
why the market-logistics strategies must be derived from business strategies,
rather than solely from cost considerations.

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