Practice Exam 1
The following test has 50 questions worth 2 points each. Read each question carefully
and select the best answer. Good Luck!
1. In what year did Walmart start the concept of a “People Greeter?”
a. 1993
b. 1989
c. 1983
d. There is no such concept
e. None of the above
2. Sam Walton began his career at which retailer?
a. Walmart
b. Montgomery Ward
c. JC Penney
d. Ben Franklin
e. None of the above
3. Graphics must be approved by the University Athletic Association prior to items
being sold with in stores.
a. True
b. False
4. According to John Cassimus, what is the # 1 thing needed to be successful in the
restaurant business?
a. Awesome food
b. Consistency
c. A good supplier
d. A lot of locations but little control
e. Focus on speed
5. Originally, why did Zoe’s kitchen not do well outside of Birmingham?
a. People didn’t “get the chicken.” Zoe’s kitchen wasn’t a lifestyle brand
outside Birmingham.
b. The restaurant was too modern and didn’t match the targeted consumer.
c. There were too many competitors selling similar products.
d. People don’t enjoy healthy food and friendly service.
e. Every Zoe’s Kitchen location has been a success since its grand opening.
6. Best Buy has created lab stores around different parts of the country. What does
Best Buy hope to accomplish through them?
a. Understand the psyche of different segments of their customer base
b. Allow customers to test different products
c. Train employees
d. Create model stores that appeal to a lot of different customer segments
7. Which of the following is NOT one of the core philosophies of Best Buy?
a. Invite employees to contribute their unique ideas and experiences in
service of customers.
b. Treat customers uniquely and honor their differences.
c. Meet customers’ unique needs, end-to-end.
d. These are all apart of Best Buy’s core philosophies.
8. What is Steve Jamieson’s goal at the Mall at Millennia?
a. Give customers the best experience possible so that they come back.
b. Get as many people through the mall as possible with little regard to
experience.
c. Create a wonderful shopping experience through ambience but give little
regard to types of stores.
d. Find the most unique products and stores but give little regard to the
shopping experience.
9. How is rent determined at the Mall at Millennia?
a. Income per square foot; if a company has more sales, it pays more rent.
b. Fixed rent price for all stores that is pre-determined in their lease
c. Fixed price per square foot, rent based solely on the size of the store
10. As Sandra Soto described, at the end of the day HSN is all about the bottom line.
What does HSN use to evaluate their products?
a. Dollars per minute
b. Amount of product sold overall
c. Customer rating of the product
11. Which of the following product categories does HSN NOT sell?
a. Men’s and Children’s
b. Home appliances
c. Electronics
d. Women’s apparel
12. According to the National Retail Federation study, there are 4
trends forecasted for 2007:
a. Growth & expansion, differentiating merchandise and shopper
experience, focused on customer needs and cost containment.
b. Growth & expansion, advertising, marketing and cost containment.
c. Growth & expansion, differentiating merchandise & shopper
experience, focused on customer needs and additional parking.
d. Growth & expansion, marketing, cost containment & addi8tional
parking.
e. None of the above.
13. According to Terry Lundgren, Chairman, President's CEO, Federated
Department Stores, Inc. the 5 strategies to be successful are: 1) Never
take your eye off the customer, 2)Relentless pursuit of "newness", 3)
Must have the right people in the right jobs, 4) Partnerships and Teams
Win, and 5) Communicate, communicate and communicate.
a. True
b. False
14. Historically, the retail landscape was dominated by:
a. local retailers buying and selling merchandise from local suppliers
b. large national chains
c. multichannel retailers
d. Wal-Mart, Kmart and Target
e. Franchisors
15. Why is it imperative that manufacturers like Apple Computer and Proctor and
Gamble understand how retailers operate?
a. Manufacturers will be able to sell directly on-line.
b. Manufacturers will understand how to get their products on the shelves
and sold to the customer.
c. Manufacturers can better sell merchandise without retailers.
d. Retailers can expect fewer buyouts to occur.
e. Manufacturers can limit multi-channel integration
16. What is retailing?
a. It is the merchandising component of the retail mix.
b. It is the set of business activities that adds value to the products and
services sold to consumers for their personal use.
c. It is the strategy retailers and vendors use to get products into the stores.
d. It is the process of offering products in smaller quantities for consumer
consumption patterns.
e. It is the ability to offer enough variety in a store to encourage one-stop
shopping.
17. Benetton, a popular retail chain from Italy, manufactures many of the sweaters it
sells in its retail outlets at a textile mill in North Carolina. Benetton is practicing:
a. demographic marketing
b. globalization
c. product-related marketing
d. vertical integration
e. wholesaling
18. Retailing is one of the nation’s largest industries in terms of:
a. community involvement
b. employment
c. competition
d. promotions
e. variety
19. The competition between the same types of retailers is called:
a. intertype competition
b. indirect competition
c. intratype competition
d. scrambled merchandising
e. vertical integration
20. What is variety?
a. Variety is the number of different items in a category.
b. Variety is the number of different SKU’s within a merchandise category.
c. Variety is the number of different merchandise categories within a store.
d. Variety is another term for scrambled merchandising.
e. Variety is the number of different facets of the business plan.
21. What is one way a convenience store can develop a sustainable advantage against
competition?
a. close less convenient locations
b. extend hours of operation
c. nothing…convenience stores are becoming extinct
d. open smaller stores close to where consumers shop and work
e. sell impulse merchandise
22. Department stores are developing strong images for their private branded
merchandise to:
a. attract the attention of women ages 25-45
b. gain competitive advantage over competitors
c. keep price points lower
d. reduce the number of markdowns at the end of a season
e. sever relationships with low profit vendors
23. How did Target become a major competitor in the discount retailer arena?
a. They developed the EDLP strategy.
b. They utilize promotions unlike Wal-Mart.
c. Target researched and reacted to broad consumer trends by offering stylish
merchandise at low prices that is unavailable elsewhere.
d. Target targets the stay-at-home-mom segment of the population.
e. Kmart filed for Chapter 11 bankruptcy.
24. Category specialists:
a. compete directly with off-price retailers
b. are limited to clothing, office supply, pet supplies, and toy retailing
c. rely on warranty sales to promote loyalty
d. offer a narrow variety but deep assortment of merchandise
e. have little customer service
25. The fastest growing segment of retailers are:
a. category killers
b. department stores
c. direct mail retailers
d. extreme value retailers
e. vending machines
26. Which of the following can be classified as a general merchandise catalog
retailer?
a. Eddie Bauer
b. JCPenney
c. Lands’ End
d. PC Connection
e. Swiss Colony
27. Direct-mail and catalog retailing are challenging business opportunities because:
a. the costs of paper has been increasing
b. it is increasingly hard to capture consumers' attention
c. it is difficult for smaller catalogs to compete against the larger firms
d. the length of time required to develop new catalogs makes it difficult to
respond quickly to new trends
e. of all of the above reasons
28. Martina was watching a made-for-television movie on the Lifetime Channel when
she saw an ad for a series of books for people who want to save money on home
repairs. She called and ordered the book on plumbing that was first in the series.
Martina responded to:
a. direct selling
b. an infomercial
c. direct-response advertising
d. outbound telemarketing
e. interactive electronic retailing
29. Why are single-channel retailers evolving into multi-channel retailers?
a. Credit card fraud continues to be an issue for single-channel retailers.
b. More than 60 percent of sales are made through single-channel retailers.
c. Multi-channel retailing creates immediate possession utility.
d. Multi-channel retailers can attract and satisfy more customers.
e. The growth of catalog sales is declining.
30. Which of the following ways offers Internet retailers a way of offering
personalized customer service?
a. FAQ page
b. a 1-800 number
c. an email address for answering questions
d. on-line chat room
e. all of the above
31. Ayesha went to Amazon.com to see the latest book by her favorite author. When
she opened the website, Amazon.com greeted her by name and recommended
books based upon the purchases she had made in the past. Amazon.com was
utilizing:
a. a shopping bot
b. an electronic agent
c. broad-band Internet access
d. limited information
e. repeat customer service strategy
32. By obtaining information about customer preferences and past purchase behavior,
retailers operating an electronic channel are able to:
a. design more secure sites for credit card users
b. develop faster download times
c. offer lower prices
d. respond immediately to consumer inquiries
e. tailor merchandise and recommendations
33. If manufacturers begin to sell direct to consumers, they can be viewed as:
a. Competitors
b. wholesalers
c. multi-channel users
d. entrepreneurs
e. electronic agents
34. After enjoying 17 years of her Chevy Citation, Tracey was told by her mechanic
that it would cost more to fix the transmission than the car was worth. She
decided it was time for a new car. In which stage of the buying process is Tracey
involved?
a. product selection
b. need recognition
c. information search
d. product examination
e. product purchase
35. What kind of need can be satisfied by shopping and purchasing designer label
merchandise?
a. physiological
b. hedonic
c. functional
d. social
e. rational
36. What is the set of alternatives the customer evaluates when making a selection?
a. store demeanor
b. consideration set
c. store prerequisites
d. consumer attitudinal set
e. performance criteria
37. Habitual decision making occurs when:
a. a decision process involved little or no conscious effort
b. a decision requires assistance from sales associates
c. customers have demands on their time and wallets
d. retailers stimulate sales by suggesting complementary merchandise.
e. all of the above
38. Bob Burnquist is one of many professional skateboarders in the U.S. who
compete and showcase their sport for skateboard enthusiasts. These devoted fans
imitate the moves and jumps of these athletes to the detriment of their own safety.
To skateboard enthusiasts, the Bob Burnquist crowd is part of their:
a. Culture
b. Family
c. peer group
d. reference group
e. subculture
39. A store that specializes in Middle Eastern groceries and produce would use
______________ segmentation when marketing to the Arab population in Tulsa,
Oklahoma?
a. Lifestyle
b. Geographic
c. Benefit
d. Psychographic
e. Demographic
40. You are about to loan a friend $10,000 to start a candy store in a central business
district. Where can you find information about how he plans to build a sustainable
advantage?
a. A. in the objective part of the retail plan
b. in the organizational chart
c. in the organizational mission statement
d. in the retail market strategy
e. in the situation audit
41. . Which of the following is an opportunity for a retailer to develop a sustainable
competitive advantage?
a. carry private label brands
b. customer service
c. distribution systems
d. unique merchandise
e. all of the above are opportunities for the retailer
42. Having efficient distribution and information systems is vital to retailers to sustain
a competitive advantage because:
a. they are able to get the merchandise to the customer quickly and
efficiently
b. they are able to get the assortments to the customer that she wants
c. they are able to deliver merchandise at lower costs and apply the margin to
lower prices or better services
d. the flow between vendors and stores is seamless enabling rapid
replenishment
e. all of the above
43. Zara has a strong sustainable competitive advantage on the global market because
it has a strong:
a. category dominance
b. culture
c. distribution system
d. expansion plan
e. fashion reputation
44. . After developing a mission statement and setting objectives, the next step in the
strategic planning process is to:
a. evaluate the process and be willing to make adjustments
b. contemplate competitive factors
c. allocate resources
d. do a situation audit
e. implement the strategy
45. Which of the following ratios is included as an integral part of the strategic profit
model?
a. retained earnings
b. net profit margin
c. net profit
d. current liabilities
e. all of the above
46. Which of the following summarizes a firm’s financial performance over as period
of time?
a. balance sheet
b. income statement
c. profitability statement
d. strategic profit model
e. financial leverage statement
47. Which of the following calculations leads to gross margin?
a. subtract cost of goods sold from net sales
b. add operating and interest expenses together and subtract that total from
gross sales
c. subtract cost of goods sold from gross sales
d. add customer returns and customer allowances, then subtract the total
from net sales
e. subtract net profit from net sales
48. Why would retailers offer their customers credit when proceeds of the sales are
tied up as accounts receivable?
a. offering credit is a service for the customer making purchases possible for
the consumer.
b. Accounts receivable is not a current asset and has no effect on what is
owed to the retailer.
c. By accepting only cash, assets would generate a low ROI.
d. Retailers offer credit to increase their average gross margin.
e. none of the above
49. The retail strategy for Walt Disney World that Jane Tabbe-Shemelya described in
her presentation includes:
a. Know who your guest is, align with company vision
b. Identify product assortment
c. Identify organization structure
d. Managing the strategy workflow
e. All of the above
50. Yum Brands include the following restaurants:
a. Taco Bell, Dunkin Donuts, KFC, A&W and Pizza Hut
b. Taco Bell, KFC, A&W, Pizza Hut and Long John Silvers
c. Taco Bell, Domino’s, KFC, A&W and Long John Silvers
d. Taco Bell, Papa John’s, KFC, A&W and Long John Silvers
e. None of the Above
Answer Key:
1
2
3
4
5
6
7
8
9
10
C
C
A
B
A
A
D
A
A
A
11
12
13
14
15
16
17
18
19
20
A
A
A
A
B
B
D
B
C
C
21
22
23
24
25
26
27
28
29
30
D
B
C
D
D
B
E
C
D
E
31
32
33
34
35
36
37
38
39
40
B
E
A
B
B
B
A
D
E
D
41
42
43
44
45
46
47
48
49
50
E
E
E
D
B
B
A
A
E
B