1
Principles of Marketing, 17e, Global Edition (Kotler/Armstrong)
Chapter 13: Retailing and Wholesaling
1) ________ includes all the activities involved in selling products or services directly to final
consumers for their personal, nonbusiness use.
A) Franchising
B) Retailing
C) Brokering
D) Wholesaling
E) Disintermediation
Answer: B
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
2) Many institutions, including retailers, wholesalers, and ________ do retailing.
A) schools
B) government agencies
C) factory farmers
D) manufacturers
E) defense contractors
Answer: D
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
3) Retailers connect brands with consumers in the ________ phases of the buying process.
A) need identification
B) evaluation of alternatives
C) final
D) information gathering
E) post-purchase
Answer: C
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
Chapter 13: Retailing and Wholesaling
2
4) ________ involves using in-store promotions and advertising to extend brand equity to
"the last mile" and encourage favorable point-of-purchase decisions.
A) Differentiation
B) Shopper marketing
C) Social media marketing
D) Retailer marketing
E) Segmentation
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Easy
5) ________ creates a seamless cross-channel buying experience that integrates in-store,
online, and mobile shopping.
A) Shopper marketing
B) Point-of-purchase marketing
C) Social media marketing
D) Virtual marketing
E) Omni-channel retailing
Answer: E
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
6) Retailers are classified on characteristics including the amount of service they offer, the
breadth and depth of their product lines, how they are organized, and ________.
A) the relative prices they charge
B) the number of locations they have
C) the strength of their Internet presence
D) their sustainability and environmental policies
E) the stability of their financial situation
Answer: A
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
7) At Neiman Marcus, a first-class department store, customers shop for high-end products
and they are assisted in every phase of the shopping process. Neiman Marcus is a ________.
A) full-service retailer
Chapter 13: Retailing and Wholesaling
3
B) limited-service retailer
C) self-service retailer
D) specialty store
E) superstore
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
8) ________ is a type of service offered by those retailers who serve customers that are
willing to perform their own "locate-compare-select" process in order to save money.
A) Limited-service
B) Self-service
C) Full-service
D) Specialty-service
E) Wholesaling
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Easy
9) ________ are retailers that offer sales assistance because they carry more shopping goods
about which customers might need information.
A) Self-service retailers
B) Full-service retailers
C) Off-price retailers
D) Limited-service retailers
E) Specialty-service retailers
Answer: D
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Easy
10) Which type of retailer usually carries more specialty goods at high prices and is more
likely to provide customers with assistance in every phase of the shopping process?
A) self-service retailer
B) limited-service retailer
C) full-service retailer
D) independent retailer
Chapter 13: Retailing and Wholesaling
4
E) off-price retailer
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
11) At JCPenney, a mid-level department store, customers shop for moderately priced
products and they are assisted in some phases of the shopping process. JCPenney is a
________.
A) full-service retailer
B) limited-service retailer
C) self-service retailer
D) specialty store
E) superstore
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
12) Which type of retailer is most likely to require its employees to focus most on assisting
customers as they shop?
A) self-service retailer
B) full-service retailer
C) off-price retailer
D) limited-service retailer
E) convenience retailer
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
13) Today, ________ are flourishing due to the increased use of market segmentation and
market targeting.
A) chain stores
B) specialty stores
C) superstores
D) discount stores
E) off-price stores
Chapter 13: Retailing and Wholesaling
5
Answer: B
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
14) Specialty stores carry ________ with ________ within them.
A) only convenience products; shallow assortments
B) narrow product lines; deep assortments
C) narrow product lines; shallow assortments
D) wide product lines; shallow assortments
E) wide product lines; deep assortments
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
15) Which type of store carries a wide variety of product lines and has been squeezed in
recent years between more focused and flexible specialty stores on the one hand and more
efficient, lower-priced discounters on the other?
A) warehouse clubs
B) department store
C) factory outlet
D) merchant wholesaler
E) category specialist
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
16) ________ are facing slow sales growth because of slower population growth, increased
competition, and the rapid growth of out-of-home eating.
A) Warehouse clubs
B) Off-price retailers
C) Discount stores
D) Supermarkets
E) Factory outlets
Answer: D
Chapter 13: Retailing and Wholesaling
6
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Easy
17) Which of the following is the most frequently visited type of retail store?
A) convenience store
B) department store
C) supermarket
D) superstore
E) off-price retailer
Answer: C
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
18) A ________ is a small store, located near a residential area that is open long hours seven
days a week and carries a limited line of high-turnover goods.
A) convenience store
B) chain store
C) department store
D) supermarket
E) specialty store
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
19) Which type of store is much larger than regular supermarkets and offers a large
assortment of routinely purchased food products, nonfood items, and services?
A) off-price retailer
B) specialty store
C) factory outlet
D) superstore
E) convenience store
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
20) Which type of store carries a deep assortment of a particular product line, has
knowledgeable staff, and can be viewed as a giant specialty store?
Chapter 13: Retailing and Wholesaling
7
A) category killer
B) convenience store
C) factory outlet
D) warehouse club
E) off-price retailer
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
21) Home Depot and PetSmart are examples of ________.
A) factory outlets
B) warehouse clubs
C) superstores
D) off-price retailers
E) category killers
Answer: E
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
22) Which of the following would be considered a service retailer?
A) factory outlets
B) supermarkets
C) jewelry stores
D) restaurants
E) gas stations
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
23) ________ retailers in the United States are growing faster than product retailers.
A) Discount
B) Merchant
C) Service
D) Specialty
E) Off-price
Chapter 13: Retailing and Wholesaling
8
Answer: C
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
24) ________ sell standard merchandise at lower prices by accepting lower margins and
selling higher volume.
A) Merchant wholesalers
B) Discount stores
C) Full-service retailers
D) Limited-service retailers
E) Factory outlets
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
25) The early ________ cut expenses by offering few services and operating in warehouselike facilities in low-rent, heavily traveled districts.
A) department stores
B) hypermarkets
C) discount stores
D) supermarkets
E) full-service retailers
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
26) As discount stores traded up, ________ have filled the ultra low-price, high-volume gap
by buying at less-than-regular wholesale prices and charging consumers less than retail.
A) off-price retailers
B) specialty stores
C) convenience stores
D) chain stores
E) supercenters
Answer: A
Chapter 13: Retailing and Wholesaling
9
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
27) Which of the following is NOT a type of off-price retailer?
A) independent
B) factory outlet
C) warehouse club
D) category killer
E) wholesale club
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
28) ________ are manufacturer-owned and operated stores that offer prices as low as 50
percent below retail on a wide range of mostly surplus, discounted, or irregular items.
A) Category killers
B) Factory outlets
C) Specialty stores
D) Superstores
E) Power centers
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
29) Which of the following is an off-price retailer that operates in a huge, warehouse-like
facility and offers few frills?
A) warehouse club
B) service retailer
C) convenience store
D) hypermarket
E) superstore
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
30) ________ are two or more outlets that are commonly owned and controlled.
Chapter 13: Retailing and Wholesaling
10
A) Corporate chains
B) Convenience stores
C) Off-price retailers
D) Independent off-price retailers
E) Power centers
Answer: A
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
31) As a result of the great success of corporate chains, many independent stores choose to
band together in either a voluntary chain or a ________.
A) factory outlet
B) retailer cooperative
C) wholesale club
D) warehouse club
E) convenience cooperative
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
32) A ________ is a wholesaler-sponsored group of independent retailers that engages in
group buying and common merchandising.
A) voluntary chain
B) retailer cooperative
C) franchise
D) wholesale club
E) warehouse club
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
33) McDonald's, Subway, and Jiffy Lube are all examples of ________.
A) voluntary chains
B) retailer cooperatives
C) franchises
D) category killers
Chapter 13: Retailing and Wholesaling
11
E) power centers
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
34) Which of the following kind of organization best represents a contractual association
based on some unique product or service, a method of doing business, or a trade name or
goodwill?
A) corporate chain
B) franchise
C) voluntary chain
D) retailer cooperative
E) warehouse club
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Challenging
35) Sears, Target, and Kroger are examples of ________.
A) voluntary chains
B) retailer cooperatives
C) corporate chains
D) franchise organizations
E) warehouse clubs
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
36) Independent Grocers Alliance, Do-It Best, and Western Auto are examples of ________.
A) franchise organizations
B) warehouse clubs
C) voluntary chains
D) category killers
E) wholesale clubs
Answer: C
Chapter 13: Retailing and Wholesaling
12
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
37) GameStop sells only video games and systems, offering a narrow product line with a
deep assortment within that line. GameStop is a(n) ________.
A) department store
B) convenience store
C) category killer
D) specialty store
E) off-price retailer
Answer: D
AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
38) Stop-N-Go , 7-Eleven, and Circle K are examples of ________.
A) department stores
B) convenience stores
C) category killers
D) specialty stores
E) supermarkets
Answer: B
AACSB: Application of knowledge Skill: Application Objective: LO 13.1: Explain the role
of retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
39) Which of the following terms best describes a large, low-cost, low-margin, high-volume,
self-service store that carries a wide variety of grocery and household products?
A) convenience store
B) supermarket
C) specialty store
D) warehouse club
E) factory outlet
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Easy
Chapter 13: Retailing and Wholesaling
13
40) Overstock.com, a Web seller that buys furniture, clothing, electronics, and more from a
variety of producers at less-than-regular wholesale prices and then charges customers less
than retail, is a(n) ________.
A) specialty store
B) off-price retailer
C) factory outlet
D) wholesale club
E) category killer
Answer: B
AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
Refer to the scenario below to answer the following question(s).
In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe
store, a small restaurant, and a grocery store. Over the next two decades, the small town
transformed into an international tourist attraction, attracting thousands of tourists who were
intrigued by the lifestyle of Shipshewana's largest population—the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their
town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a
small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few
months, the display at Indiana Wood included picnic tables, flower boxes, and small
handmade novelty items. No other shop offers the same variety.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually
hired three Amish friends to sew and embroider napkins and other textiles as customers had
requested such items. In addition, two women from the Amish community sought permission
from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays,
when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
The Millers also hired four more people to help customers throughout the purchasing process
and to provide the required product-related information to the customers.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy
things made in China or Taiwan. They want real, Amish-made goods."
41) Indiana Wood can be best classified as a(n) ________.
A) full-service retailer
B) industrial distributor
C) self-service retailer
D) warehouse club
Chapter 13: Retailing and Wholesaling
14
E) limited-service retailer
Answer: A
AACSB: Application of knowledge Skill: Application Objective: LO 13.1: Explain the role
of retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
42) Retailers can also be classified by the length and breadth of their product assortments. In
terms of product line, what kind of retailer is Indiana Wood?
A) supermarket
B) specialty store
C) category killer
D) department store
E) convenience store
Answer: B
AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
43) Wholesaling includes all the activities involved in selling products or services directly to
final consumers for their personal, nonbusiness use.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
44) Shopper marketing involves focusing the entire marketing process—from product and
brand development to logistics, promotion, and merchandisings—toward turning shoppers
into buyers at the point of sale.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
45) Department stores carry narrow product lines with deep assortments within those lines.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
Chapter 13: Retailing and Wholesaling
15
46) Self-service retailers serve customers who are willing to perform their own locatecompare-select process to save time or money.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
47) Full-service stores usually carry more specialty goods for which customers need or want
assistance or advice.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
48) In recent years, convenience stores have redesigned their stores to closely focus on
serving their primary target market made up of young, blue-collar men.
Answer: FALSE
AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers
in the distribution channel and describe the major types of retailers. Difficulty: Moderate
49) Superstores are much larger than regular supermarkets and offer a large assortment of
routinely purchased food products, nonfood items, and services.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
50) Supermarkets sell a limited selection of goods at deep discounts to consumers who pay
membership fees.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
51) Supermarkets are located near residential areas and are open long hours, seven days a
week. They carry a limited line of high-turnover goods.
Answer: FALSE
Chapter 13: Retailing and Wholesaling
16
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
52) Category killers are giant specialty stores that carry a very deep assortment of a particular
line.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
53) Off-price retailers pay regular wholesale prices for their merchandise but maintain low
prices by accepting lower margins and selling higher volume.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
54) A discount store buys at less-than-regular wholesale prices and charges consumers less
than retail.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
55) Independent off-price retailers either are independently owned and run or are divisions of
larger retail corporations.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
56) Corporate chains are two or more outlets that are commonly owned and controlled.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
57) A voluntary chain is a wholesaler-sponsored group of independent retailers that engages
in group buying and common merchandising.
Answer: TRUE
Chapter 13: Retailing and Wholesaling
17
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
58) In a retailer cooperative, independent retailers band together to set up a jointly owned,
central wholesale operation and conduct joint merchandising and promotion efforts.
Answer: TRUE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
59) Franchises constitute only a small portion of all retail sales in the United States.
Answer: FALSE
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
60) Retail stores can be classified in terms of several characteristics. Name four of them.
Answer: Retail stores can be classified based on the amount of service they offer, the breadth
and depth of their product lines, the relative prices they charge, and how they are organized.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
61) Compare and contrast specialty stores and convenience stores.
Answer: Specialty stores carry narrow product lines with deep assortments within those lines.
Convenience stores are small stores that carry a limited line of high-turnover convenience
goods. The majority of their revenues come from sales of gasoline, cigarettes, and beverages.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
62) Describe the differences between discount stores and off-price retailers.
Answer: A discount store buys at regular wholesale prices but sells standard merchandise at
lower prices by accepting lower margins and selling higher volume. Off-price retailers buy at
less-than-regular wholesale prices and charge consumers less than retail.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
63) What types of products do specialty stores carry? Give an example of a specialty store.
Chapter 13: Retailing and Wholesaling
18
Answer: Student answers will vary. Specialty stores carry narrow product lines with deep
assortments within those lines. Today, specialty stores are flourishing. The increasing use of
market segmentation, market targeting, and product specialization has resulted in a greater
need for stores that focus on specific products and segments. Some examples of specialty
stores are Tiffany and REI.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
64) How have department stores responded to increased competition by specialty stores and
lower-priced discounters?
Answer: Many department stores have added promotional pricing to meet the threat; in
addition, they have stepped up the use of store brands and single-brand "designer shops" to
compete with specialty stores. Department stores are also trying mail order, telephone, and
Web selling.
AACSB: Application of knowledge
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Moderate
65) What is a category killer? Provide an example and a description of a category killer.
Answer: Student answers will vary. A category killer is a giant specialty store that carries a
very deep assortment of a particular line. They feature stores the size of airplane hangars that
carry a very deep assortment of a particular line. Category killers are found in a wide range of
categories, including electronics, home-improvement products, books, baby gear, toys, linens
and towels, party goods, sporting goods, and even pet supplies.
AACSB: Application of knowledge
Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel
and describe the major types of retailers. Difficulty: Easy
66) How can discount stores sell merchandise at lower prices?
Answer: Discount stores sell merchandise at lower prices by accepting lower margins and
selling higher volumes.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
67) What are the different types of off-price retailers?
Chapter 13: Retailing and Wholesaling
19
Answer: The three main types of off-price retailers are independents, factory outlets, and
warehouse clubs. Independent off-price retailers either are independently owned and run or
are divisions of larger retail corporations. A factory outlet is an off-price retailing operation
that is owned and operated by a manufacturer and normally carries the manufacturer's
surplus, discontinued, or irregular goods. A warehouse club is an off-price retailer that sells a
limited selection of brand-name grocery items, appliances, clothing, and other goods at deep
discounts to members who pay annual membership fees.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
68) How does a retailer cooperative function?
Answer: A retailer cooperative is a group of retailers that come together to set up a jointly
owned, central wholesale operation, and conduct joint merchandising and promotion efforts.
Through a retailer cooperative, independents can match the buying and promotion economies
of corporate chains.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy
69) Describe the levels of service that retailers can offer. Provide an example of each type of
retailer.
Answer: Student answers will vary. Amount of service can include self-service to serve
customers who are willing to perform their own locate-compare-select process to save time
and money. It is the basis of all discount operations and typically used by retailers selling
convenience goods. Examples include supermarkets, Target, and Kohl's. It can also include
limited-service retailers that provide more sales assistance because they carry more shopping
goods about which customers need information. Examples include Sears and JCPenney. The
third type is full-retailers that assist customers in every phase of the shopping process. These
stores usually carry more specialty goods for which customers need or want assistance or
advice. Examples include Nordstrom or Neiman Marcus.
AACSB: Application of knowledge; Written and oral communication Skill: Concept
Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the
major types of retailers. Difficulty: Easy
70) Identify and describe the different types of retailers, based on their product lines. Provide
an example of each type of retailer.
Answer: Student answers will vary.
-Specialty stores are stores with narrow product lines and deep assortments within those lines.
Examples include REI, Sephora and Williams-Sonoma.
Chapter 13: Retailing and Wholesaling
20
-Department stores carry a wide variety of product lines, each operated as a separate
department. Examples include Macy's and Neiman Marcus.
-Supermarkets are large, low-cost, self-service stores that carry a wide variety of grocery and
household products. Examples include Safeway and Kroger.
-Convenience stores are small stores, open long hours, that carry a limited line of highturnover convenience goods. Examples include 7-Eleven, Stop-N-Go, and Circle K.
-Superstores are much larger than supermarkets and offer a large assortment of routinely
purchased food products, nonfood items, and services. Examples include Walmart and
Target.
-Category killers are giant specialty stores that carry a very deep assortment of a specific
product line. Examples include Best Buy, Home Depot, and PetSmart.
-Service retailers are retailers whose product line is actually a service; examples include
hotels, airlines, banks, colleges, and many others. Specific examples include Holiday Inn,
Southwest Airlines, and SuperCuts.
AACSB: Application of knowledge; Written and oral communication Skill: Concept
Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the
major types of retailers. Difficulty: Moderate
71) Describe the different types of off-price retailers. Provide examples of each type.
Answer: Student answers will vary.
-A discount store is a retail operation that sells standard merchandise at lower prices by
accepting lower margins and selling at higher volume. Examples include Walmart, Costco,
Dollar General and Target.
-An off-price retailer is a retailer that buys at less-than-regular wholesale prices and sells at
less than retail. Off-price retailers can be found in all areas, from food, clothing, and
electronics to no-frills banking and discount brokerages.
-An independent off-price retailer is an off-price retailer that is independently owned and
operated or a division of a larger retail corporation. Examples include TJ Maxx and
Marshalls.
-A factory outlet is an off-price retailing operation that is owned and operated by a
manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular
goods. Examples include J. Crew, Gap, Coach and Mikasa.
-A warehouse club is an off-price retailer that sells a limited selection of brand name grocery
items, appliances, clothing, and other goods at deep discounts to members who pay annual
membership fees. Examples include Costco, Sam's Club, and BJ's.
AACSB: Application of knowledge; Written and oral communication Skill: Concept
Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the
major types of retailers. Difficulty: Moderate
72) Although many retail stores are independently owned, others band together under some
form of corporate or contractual organization. Describe the four kinds of corporate or
contractual organizations.
Chapter 13: Retailing and Wholesaling
21
Answer:
-Corporate chains are two or more outlets that are commonly owned and controlled. Their
size allows them to buy in large quantities at lower prices and gain promotional economies.
They can hire specialists to deal with areas such as pricing, promotion, merchandising,
inventory control, and sales forecasting. Examples include Macy's, Target, and CVS.
-The voluntary chain is a wholesaler-sponsored group of independent retailers that engages in
group buying and common merchandising. Examples include the Independent Grocers
Alliance, Western Auto, and Do-It Best hardware stores.
-The other type of contractual association is the retailer cooperative, a group of independent
retailers that band together to set up a jointly owned, central wholesale operation and conduct
joint merchandising and promotion efforts. Examples are Associated Grocers and Ace
Hardware. These organizations give independents the buying and promotion economies they
need to meet the prices of corporate chains.
-Another form of contractual retail organization is a franchise. The main difference between
franchise organizations and other contractual systems (voluntary chains and retail
cooperatives) is that franchise systems are normally based on some unique product or service;
a method of doing business; or the trade name, goodwill, or patent that the franchisor has
developed. Franchising has been prominent in fast-food restaurants, motels, health and fitness
centers, auto sales and service dealerships, and real estate agencies. Examples include
McDonald's, Subway, and Jiffy Lube.
AACSB: Application of knowledge; Written and oral communication Skill: Concept
Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the
major types of retailers. Difficulty: Moderate
73) Describe the differences between chain stores and franchises.
Answer: Chain stores consist of two or more outlets that are commonly owned and
controlled. Chain stores have the advantage of buying in larger quantities at lower prices and
sharing resources to hire specialists to help with decisions in pricing, promotion,
merchandising, inventory, and sales forecasting. Franchises are not commonly owned and
controlled; instead, a franchise is a contractual association between a manufacturer,
wholesaler, or service organization and an independent businessperson. The system is
normally based on some unique product or service; a method of doing business; or a trade
name, goodwill, or patent that the franchisor has developed.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of
retailers in the distribution channel and describe the major types of retailers. Difficulty:
Moderate
74) In recent years, service differentiation among retailers has ________.
A) increased at a steady rate
B) decreased
C) stayed the same
D) increased exponentially
Chapter 13: Retailing and Wholesaling
22
E) tripled
Answer: B
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
75) Changes to service differentiation include all of the following EXCEPT ________.
A) smarter customers
B) decreased services at department stores
C) more price-sensitive consumers
D) customers' willingness to pay more for identical brands
E) increased services from discounters
Answer: D
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
76) Daizy's is a shop that carries only plus-size clothing. According to this information,
Daizy's differentiates itself from its competitors based on ________.
A) service mix
B) pricing
C) product assortment
D) store atmosphere
E) distribution strategy
Answer: C
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
77) ________ were the main form of retail clusters until the 1950s.
A) Strip malls
B) Discount stores
C) Independent off-price retailers
D) Central business districts
E) Regional shopping malls
Answer: D
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
Chapter 13: Retailing and Wholesaling
23
78) A large retailer of home improvement and construction products offers "how-to" classes
for do-it-yourselfers, featuring instructions on how to complete home improvement projects
using products sold at its stores. This is an example of how the retailer has differentiated
itself through its ________.
A) product assortment
B) services mix
C) segmentation
D) atmosphere
E) pricing
Answer: B
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
79) Until retailers ________ their markets, they cannot make consistent decisions about
product assortment, services, pricing, or advertising.
A) create
B) communicate with
C) divide up
D) define and profile
E) design products for
Answer: D
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
80) A ________ contains from 50 to 100 stores, is like a covered mini-downtown, and
attracts customers from a wide area.
A) community shopping center
B) neighborhood shopping center
C) central business district
D) regional shopping center
E) strip mall
Answer: D
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
Chapter 13: Retailing and Wholesaling
24
81) Upon determining who will want the product, retailers must determine in more detail how
to ________ in those markets.
A) differentiate and position themselves
B) market themselves
C) entice customers to them
D) offer the correct products
E) properly price the product offerings
Answer: A
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
82) A ________ contains between 15 and 50 retail stores, including a department or variety
store, a supermarket, specialty stores, professional offices, and sometimes a bank.
A) community shopping center
B) neighborhood shopping center
C) strip mall
D) regional shopping center
E) power center
Answer: A
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
83) In addition to segmenting and targeting the correct market, which of the following is
NOT an area in which marketers must make decisions?
A) product assortment
B) services mix
C) store's atmosphere
D) using experiential retailing
E) manufacturing schedules
Answer: E
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
84) A ________ generally contains between 5 and 15 stores. It is close and convenient for
consumers, usually contains a supermarket, perhaps a discount store, and several service
stores such as a dry cleaner, a drugstore, and a hardware store.
Chapter 13: Retailing and Wholesaling
25
A) regional shopping center
B) community shopping center
C) neighborhood shopping center
D) warehouse club
E) factory outlet
Answer: C
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
85) An ideal price policy scenario for retailers would be to achieve ________ while earning
________.
A) low volume; high markups
B) low volume; low markups
C) high volume; high markups
D) high volume; low markups
E) high volume; zero markups
Answer: C
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Moderate
86) In-store demonstrations, displays, sales, and loyalty programs are examples of ________.
A) direct marketing
B) sales promotion
C) public relations
D) personal selling
E) affinity marketing
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Easy
87) Neighborhood shopping centers are also known as ________.
A) power centers
B) lifestyle centers
C) warehouse clubs
D) strip malls
E) regional shopping centers
Chapter 13: Retailing and Wholesaling
26
Answer: D
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
88) Press conferences, speeches, store openings, special events, newsletters, and store
magazines are examples of ________ activities used by retailers to promote themselves.
A) public relations
B) sales promotions
C) personal selling
D) affinity marketing
E) social marketing
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
89) Digital promotions have grown in usage and include e-mail, social media, Web sites, and
________.
A) demonstrations
B) displays
C) store flyers
D) newsletters
E) online ads and video
Answer: E
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
90) Which of the following is most likely gained by stores that cluster together?
A) decreased competition
B) increased customer pulling power
C) compliance with franchise agreements
D) creation of retailer cooperatives
E) standardization of the service mix
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Describe the major retailer
marketing decisions. Difficulty: Challenging
Chapter 13: Retailing and Wholesaling
27
91) A ________ is a group of retail businesses built on a site that is planned, developed,
owned, and managed as a unit.
A) warehouse club
B) franchise
C) shopping center
D) supermarket
E) hypermarket
Answer: C
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
92) Most shopping centers are ________.
A) strip malls
B) regional shopping malls
C) community shopping centers
D) lifestyle centers
E) power centers
Answer: A
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Moderate
93) ________ are huge unenclosed shopping centers consisting of a long strip of retail stores,
including at least one large, freestanding anchor store like Walmart. Each store has its own
entrance with parking directly in front for shoppers who wish to visit only one store.
A) Shopping malls
B) Power centers
C) Superstores
D) Chain stores
E) Regional shopping centers
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Describe the major retailer
marketing decisions. Difficulty: Easy
94) A small, open-air mall with upscale stores, convenient locations, and nonretail activities,
such as a playground, skating rink, hotel, dining establishments, and a movie theater, is an
example of a ________.
Chapter 13: Retailing and Wholesaling
28
A) regional shopping center
B) lifestyle center
C) community shopping center
D) franchise
E) power center
Answer: B
AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Describe the major retailer
marketing decisions. Difficulty: Easy
95) Springfield, a convenience store, has recently begun to redesign and restock its stores to
offer a more upscale environment with products such as house wines and fresh foods. This
information indicates that Springfield has most likely changed its ________.
A) positioning
B) price strategy
C) service level
D) corporate identity
E) organizational structure
Answer: A
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
96) Cabela's stores are as much natural history museums for outdoor enthusiasts as they are
retail outlets. This information indicates that Cabela's is practicing ________.
A) wholesaling
B) nonstore retailing
C) shopper marketing
D) experiential retailing
E) showrooming
Answer: D
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
97) Big and Tall Men's Shop carries men's clothing in larger sizes; this allows the store to
________ other stores.
A) align itself with
B) differentiate itself from
C) cluster with
Chapter 13: Retailing and Wholesaling
29
D) affect the store atmosphere of
E) converge with
Answer: B
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
98) The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each
table is covered with a white linen cloth. The colors are limited to earth tones with an
occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that
seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description
of the restaurant's ________.
A) promotions
B) target
C) atmosphere
D) services mix
E) product assortment
Answer: C
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Challenging
99) Which of the following best describes a similarity between Costco and Walmart?
A) Both are warehouse clubs.
B) Both target the same affluent market.
C) Both are specialty stores.
D) Both use everyday low pricing.
E) Both are examples of merchant wholesalers.
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
100) Macy's department stores carry a wide range of product lines, including clothing,
jewelry, kitchenware, and home furnishings. Macy's typically charges a relatively high
markup, but also holds frequent sales and price promotions, in particular offering discounts to
customers who use a Macy's credit card. Macy's uses ________.
A) self-service retailing
B) experiential retailing
C) high-low pricing
Chapter 13: Retailing and Wholesaling
30
D) everyday low pricing
E) retail convergence
Answer: C
AACSB: Application of knowledge Skill: Application Objective: LO 13.2: Describe the
major retailer marketing decisions. Difficulty: Moderate
101) Which of the following is most likely true about shoppers who prefer to shop at
"lifestyle centers"?
A) They use coupons.
B) They prefer upscale stores.
C) They prefer indoor shopping locations.
D) They rarely dine out in expensive restaurants.
E) They are motivated by deals on last year's merchandise.
Answer: B
AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
Refer to the scenario below to answer the following question(s).
In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe
store, a small restaurant, and a grocery store. Over the next two decades, the small town
transformed into an international tourist attraction, attracting thousands of tourists who were
intrigued by the lifestyle of Shipshewana's largest population—the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their
town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a
small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few
months, the display at Indiana Wood included picnic tables, flower boxes, and small
handmade novelty items. No other shop offers the same variety.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually
hired three Amish friends to sew and embroider napkins and other textiles as customers had
requested such items. In addition, two women from the Amish community sought permission
from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays,
when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
The Millers also hired four more people to help customers throughout the purchasing process
and to provide the required product-related information to the customers.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy
things made in China or Taiwan. They want real, Amish-made goods."
Chapter 13: Retailing and Wholesaling
31
102) The authentic Amish décor of Indiana Wood's contributes to the store's ________.
A) product assortment
B) services mix
C) atmosphere
D) segmentation
E) retail convergence
Answer: C
AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Easy
103) Retailers first must position themselves in a market and then decide how they will
define the target customers in these markets.
Answer: FALSE
AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Describe the major retailer
marketing decisions. Difficulty: Moderate
104) Retailers must work to ensure customers identify with their products. Differentiation
and positioning are vital to communicating this message.
Answer: TRUE
AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Describe the major retailer
marketing decisions. Difficulty: Moderate
105) The colors, layout, and music in a store or a product package are only minor aspects of
the shopping experience and marketers spend little time making decisions about them.
Answer: FALSE
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Moderate
106) A neighborhood shopping center has from 50 to more than 100 stores.
Answer: FALSE
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Moderate
107) A strip mall contains between 5 and 15 retail stores.
Chapter 13: Retailing and Wholesaling
32
Answer: TRUE
Skill: Concept Objective: LO 13.2: Describe the major retailer marketing decisions.
Difficulty: Easy
108) Explain how Whole Foods is able to compete against Walmart.
Answer: Walmart owns the low-price position, so other grocery chains such as Whole Foods
must position themselves differently. Rather than try to compete directly with Walmart,
Whole Foods is positioned away from Walmart. It targets a smaller group of upscale
customers and offers them organic, gourmet foods in a cheerful, aesthetically pleasing
environment.
AACSB: Application of knowledge Skill: Application Objective: LO 13.2: Describe the
major retailer marketing decisions. Difficulty: Challenging
109) What attracts shoppers to a power center?
Answer: Power centers are unenclosed shopping centers that consist of a long strip of retail
stores, each store with its own entrance with parking directly in front for shoppers who wish
to visit only one store. A power center offers convenience and variety for shoppers.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Easy
110) Explain how Whole Foods is able to compete against Walmart.
Answer: Walmart owns the low-price position, so other grocery chains such as Whole Foods
must position themselves differently. Rather than try to compete directly with Walmart,
Whole Foods is positioned away from Walmart. It targets a smaller group of upscale
customers and offers them organic, gourmet foods in a cheerful, aesthetically pleasing
environment.
AACSB: Application of knowledge Skill: Application Objective: LO 13.2: Describe the
major retailer marketing decisions. Difficulty: Challenging
111) What elements comprise a store's atmosphere?
Answer: A store's atmosphere includes the sights, sounds, and smells that customers typically
associate with the store.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Easy
112) How do the practices of high-low pricing and everyday low pricing differ?
Chapter 13: Retailing and Wholesaling
33
Answer: With high-low pricing, a retailer charges higher prices on an everyday basis but also
has frequent sales and other price promotions; with everyday low pricing, a retailer for the
most part avoids sales and instead delivers constant, everyday low prices.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.2: Describe the major
retailer marketing decisions. Difficulty: Moderate
113) How have shopping centers changed in the past few decades?
Answer: Central business districts were the main form of retail cluster until the 1950s. Every
large city and town had a central business district with department stores, specialty stores,
banks, and movie theaters. When people began moving to the suburbs, however, these central
business districts, with their traffic, parking, and crime problems, began to lose business. In
recent years, many cities have joined with merchants to revive downtown shopping areas,
generally with only mixed success. Currently, shopping centers are described as a group of
retail businesses built on a site that is planned, developed, owned, and managed as a unit.
They are not generally located in the central business districts.
AACSB: Written and oral communication Skill: Concept Objective: LO 13.2: Describe the
major retailer marketing decisions. Difficulty: Moderate
114) The three types of shopping centers are regional shopping centers, community shopping
centers, and neighborhood shopping centers/strip malls. Describe how they are different from
each other.
Answer: Regional shopping centers are the largest shopping centers and they contain
anywhere from 40 to more than 200 stores. They attract customers from a wide area. Smaller
than regional shopping centers, community shopping centers contain between 15 and 40
stores. They normally contain a branch of a department store or variety store, a supermarket,
specialty stores, professional offices, and sometimes a bank. Smaller still are neighborhood
shopping centers/strip malls, which generally contain five to 15 stores. They are close and
convenient for consumers, usually containing a supermarket, a discount store, and several
service stores.
AACSB: Written and oral communication Skill: Concept Objective: LO 13.2: Describe the
major retailer marketing decisions. Difficulty: Moderate
115) Many retailers are now experimenting with limited-time shops that allow them to
promote their brands to seasonal shoppers and create buzz in busy areas. Which of the
following terms best represents such shops?
A) power centers
B) strip malls
C) pop-up stores
D) category killers
E) lifestyle centers
Chapter 13: Retailing and Wholesaling
34
Answer: C
AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Discuss the major trends
and developments in retailing. Difficulty: Easy
116) Target recently opened temporary shops to celebrate limited-run collections by Jason
Wu in Toronto and Missoni in New York. These temporary shops are examples of ________.
A) lifestyle centers
B) pop-up stores
C) warehouse clubs
D) strip malls
E) category killers
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Easy
117) The online and mobile equivalent of a pop-up store is ________.
A) door buster deals
B) Black Friday specials
C) high-low pricing
D) flash sales sites
E) everyday low pricing
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Easy
118) When different types of retailers sell the same products at the same prices to the same
customers, thanks in part to the price transparency of the Internet, the retail forms appear to
be ________.
A) converging
B) differentiating
C) repositioning
D) adapting
E) declining
Answer: A
Chapter 13: Retailing and Wholesaling
35
AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
119) With their size and buying power, ________ can offer better merchandise selections,
good service, and strong price savings to consumers.
A) convenience stores
B) franchises
C) megaretailers
D) power centers
E) lifestyle centers
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
120) ________ is known as the merging of consumers, products, prices, and retailers.
A) Retail conglomeration
B) Consumer convergence
C) Price merging
D) Retail convergence
E) Retail clustering
Answer: D
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Easy
121) Which term refers to looking at merchandise at a traditional store and then purchasing
the merchandise online?
A) pop-up shopping
B) wheel-of-retailing
C) off-price retailing
D) showrooming
E) wholesaling
Answer: D
AACSB: Information technology Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Easy
122) Retail online sites, mobile apps, and social media influence ________.
Chapter 13: Retailing and Wholesaling
36
A) overall retail sales
B) in-store buying
C) the number of likes and subscribers companies earn
D) customers and their followers
E) the number of products a company manufactures
Answer: B
AACSB: Information technology Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Easy
123) Touchscreen kiosks, handheld shopping assistants, interactive dressing-room mirrors
and virtual sales associates are all examples of how retailers use technology to ________.
A) maintain inventory costs
B) send information between stores
C) meet consumers' expectations
D) produce more accurate forecasts
E) interact with suppliers
Answer: C
AACSB: Information technology Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
124) Store retailers must master ________, integrating store and online channels into a single
shopper experience.
A) showrooming
B) single-channel retailing
C) omni-channel retailing
D) webrooming
E) dual-channel retailing
Answer: C
AACSB: Information technology Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
125) Today's retailers increasingly adopt environmentally sustainable practices. Which of the
following is NOT one of these practices?
A) working with channel partners to reduce their environmental impact
B) cutting back on recycling programs
C) greening up their stores and operations
D) launching programs to help customers be more responsible
Chapter 13: Retailing and Wholesaling
37
E) promoting more environmentally responsible products
Answer: B
AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 13.3: Discuss the
major trends and developments in retailing. Difficulty: Moderate
Refer to the scenario below to answer the following question(s).
In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe
store, a small restaurant, and a grocery store. Over the next two decades, the small town
transformed into an international tourist attraction, attracting thousands of tourists who were
intrigued by the lifestyle of Shipshewana's largest population—the Amish.
Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their
town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a
small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few
months, the display at Indiana Wood included picnic tables, flower boxes, and small
handmade novelty items. No other shop offers the same variety.
Mary Miller decorated the shop's display room with authentic Amish décor and eventually
hired three Amish friends to sew and embroider napkins and other textiles as customers had
requested such items. In addition, two women from the Amish community sought permission
from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays,
when Shipshewana attracts swarms of visitors to its flea market on the south edge of town.
The Millers also hired four more people to help customers throughout the purchasing process
and to provide the required product-related information to the customers.
"Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy
things made in China or Taiwan. They want real, Amish-made goods."
126) Which of the following would be the most logical way for Indiana Wood to expand?
A) establishing an online presence
B) pursuing retail convergence
C) implementing RFID inventory tracking
D) establishing a community-gathering environment in the store
E) joining a producers' cooperative
Answer: A
AACSB: Information technology Skill: Critical Thinking Objective: LO 13.3: Discuss the
major trends and developments in retailing. Difficulty: Moderate
127) Power centers tend to be smaller than lifestyle centers.
Chapter 13: Retailing and Wholesaling
38
Answer: FALSE
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Moderate
128) The life cycle of new retail forms is getting longer.
Answer: FALSE
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Easy
129) Retail convergence means lower competition for retailers and lower difficulty in
differentiating the product assortments of different types of retailers.
Answer: FALSE
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Moderate
130) Megaretailers have shifted the balance of power between retailers and producers, giving
retailers more power.
Answer: TRUE
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Easy
131) Many shoppers now check out merchandise in-store and then buy it online. This process
is called webrooming.
Answer: TRUE
AACSB: Information technology Skill: Application Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
132) While the process of showrooming can hurt in-store sales of merchandise, retailers can
make it a positive by enhancing the in-store shopping experience.
Answer: TRUE
AACSB: Information technology Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
133) Green retailing yields both top- and bottom-line benefits.
Chapter 13: Retailing and Wholesaling
39
Answer: TRUE
AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 13.3: Discuss the
major trends and developments in retailing. Difficulty: Moderate
134) What are pop-up stores? Provide an example to illustrate your answer.
Answer: Many retailers are now experimenting with limited-time pop-up stores that let them
promote their brands to seasonal shoppers and create buzz in busy areas. During the last
holiday season, for instance, Toys"R"Us set up approximately 150 temporary pop-up toy
boutiques, many located in malls that formerly housed recently bankrupt KB Toys stores.
AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Discuss the major
trends and developments in retailing. Difficulty: Moderate
135) What constitutes retail convergence?
Answer: Retail convergence is the coming together of shoppers, goods, and prices.
Customers of all income levels are shopping at the same stores, often for the same goods.
Distinctions such as discount store, specialty store, and department store are losing
significance.
AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Discuss the major trends
and developments in retailing. Difficulty: Moderate
136) Describe how nonstore retailing has grown in the past decade.
Answer: Though most purchases are still made in stores, more and more consumers are now
shopping using a broad range of nonstore alternatives, including mail-order, television,
phone, and online shopping. Easy-to-use Web sites, improved online service, mobile apps
and sophisticated search engines have all helped online business grow at a faster rate than
retail buying. All types of retailers now use direct and online channels, with traditional brickand-mortar retailers selling online, along with online-only retailers such as Amazon.com and
eBay. Much of the growth in online sales will go to multichannel retailers who provide
service both in stores and online. While the total percentage of nonstore retail sales is still
small, it is growing at a much faster rate than retail buying as a whole.
AACSB: Information technology
Skill: Concept Objective: LO 13.3: Discuss the major trends and developments in retailing.
Difficulty: Moderate
137) ________ includes all activities involved in selling goods and services to those buying
for resale or business use.
A) Wholesaling
Chapter 13: Retailing and Wholesaling
40
B) Retailing
C) Franchising
D) Discounting
E) Showrooming
Answer: A
Skill: Concept Objective: LO 13.4: Explain the major types of wholesalers and their
marketing decisions. Difficulty: Easy
138) ________ buy mostly from producers and sell to retailers and industrial consumers.
A) Warehouse clubs
B) Factory outlets
C) Wholesalers
D) Discount stores
E) Megaretailers
Answer: C
Skill: Concept Objective: LO 13.4: Explain the major types of wholesalers and their
marketing decisions. Difficulty: Easy
139) Which of the following wholesaler's channel functions is demonstrated when a
wholesaler's sales force helps a manufacturer to reach many small customers at a low cost?
A) bulk-breaking
B) selling and promoting
C) buying and assortment building
D) risk bearing
E) rack jobbing
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Moderate
140) Which of the following is NOT one of a wholesaler's channel functions?
A) financing
B) risk bearing
C) transportation
D) off-price retailing
E) bulk breaking
Answer: D
Chapter 13: Retailing and Wholesaling
41
AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Explain the major types of
wholesalers and their marketing decisions. Difficulty: Moderate
141) Which of the following wholesaler's channel functions is demonstrated when a
wholesaler holds inventories and thereby reduces inventory holding costs and risks of
suppliers and customers?
A) financing
B) transporting
C) buying and assortment building
D) warehousing
E) bulk breaking
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Moderate
142) Which of the following wholesaler's channel functions is demonstrated when a buyer
receives quicker delivery because wholesalers are located closer than producers?
A) financing
B) transportation
C) buying and assortment building
D) warehousing
E) risk bearing
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Easy
143) Which of the following wholesaler's channel functions is exemplified by buying in
carload lots and then dividing these lots into small quantities?
A) warehousing
B) transportation
C) risk bearing
D) bulk breaking
E) selling and promoting
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Easy
Chapter 13: Retailing and Wholesaling
42
144) ________ are the largest group of wholesalers. They include two broad types: fullservice wholesalers and limited-service wholesalers.
A) Brokers
B) Manufacturer sellers
C) Manufacturers' agents
D) Merchant wholesalers
E) Selling agents
Answer: D
Skill: Concept Objective: LO 13.4: Explain the major types of wholesalers and their
marketing decisions. Difficulty: Easy
145) What is the most common type of agent wholesaler?
A) wholesale merchant
B) industrial distributor
C) limited-service wholesaler
D) manufacturers' representative
E) truck jobber
Answer: D
Skill: Concept Objective: LO 13.4: Explain the major types of wholesalers and their
marketing decisions. Difficulty: Moderate
146) ________ and ________ do not take title to goods, and they perform only a few channel
functions.
A) Full-service wholesalers; limited-service wholesalers
B) Brokers; agents
C) Industrial distributors; cash-and-carry wholesalers
D) Cash-and-carry wholesalers; industrial distributors
E) Rack jobbers; off-price retailers
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Moderate
147) A(n) ________ brings buyers and sellers together and assists in negotiations.
A) agent
B) broker
Chapter 13: Retailing and Wholesaling
43
C) retailer
D) wholesaler
E) industrial distributor
Answer: B
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Easy
148) A(n) ________ does not take title to goods and represents buyers or sellers on a more
permanent basis than a broker.
A) full-service wholesaler
B) industrial distributor
C) agent
D) retailer
E) cash-and-carry wholesaler
Answer: C
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Easy
149) Which type of wholesaler sells to manufacturers rather than to retailers?
A) industrial distributor
B) full-service wholesaler
C) cash-and-carry wholesaler
D) wholesale merchant
E) limited-service wholesaler
Answer: A
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Moderate
150) ________ are a type of limited-service wholesaler who carries a limited line of
semiperishable merchandise (such as milk, bread, and snack foods), which is sold for cash as
deliveries are made to supermarkets, small groceries, or hotels.
A) Industrial distributors
B) Wholesale merchants
C) Full-service wholesalers
D) Truck jobbers
E) Purchasing agents
Chapter 13: Retailing and Wholesaling
44
Answer: D
AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Explain the major
types of wholesalers and their marketing decisions. Difficulty: Easy
Chapter 13: Retailing and Wholesaling