,CHAPTER 1—PERSPECTIVES ON RETAILING
MULTIPLE CHOICE
1. Retailing is defined as:
a. any exchange of cash and/or credit for goods or services between channel members.
b. a fairly stable and unchanging industry that has a major impact on society.
c. the final activities and steps needed to place merchandise made elsewhere into the hands
of the consumer or to provide services to the consumer.
d. the sale of any good or service by the producer to a channel member.
e. the activities and steps needed to transfer goods and/or services between channel
members.
ANS: C PTS: 1 REF: p. 9 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
2. Which of the following is an example of a retail transaction?
a. A firm pays a printer for printing business cards.
b. A supermarket purchases eggs from a local farmer for resale.
c. A student purchases a magazine subscription from a door-to-door salesperson.
d. A manager of a college bookstore purchases extra copies of your Retailing text from the
publisher.
e. A department store purchases cosmetics from a manufacturer for sale in its stores.
ANS: C PTS: 1 REF: p. 10 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
3. An operator of which of the following establishments is NOT a retailer?
a. A catering service specializing in weddings.
b. A computer firm selling software to households via the Internet.
c. A student going door-to-door selling magazine subscriptions.
d. A corporate property management firm.
e. An ice cream shop in the student union.
ANS: D PTS: 1 REF: p. 10 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
4. Identify the incorrect statement about e-tailing.
a. It enables consumers to shop when they like and from where they like.
b. It provides access to vast amounts of information, ranging from a product’s attributes to
who has the lowest price.
c. Many e-tailers offer personalized help online.
d. With some Internet websites, individuals can band together for group buying.
e. Some e-tailers may have to discontinue some product categories as consumers engage in
outshopping.
ANS: E PTS: 1 REF: p. 11-12 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
5. The fastest growing form of e-tailing or e-commerce is
, a. texting
b. m-tailing or m-commerce
c. social network advertising
d. personalized on line help
e. on-line auctions
ANS: B PTS: 1 REF: p. 11 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
6. One of the most dramatic changes created by e-tailing is a shift in power between retailers and
consumers. This shift in power is derived from:
a. the ability of consumers to purchase from retailers in other countries as a result of the
Internet.
b. the inability of Internet retailers to compete with more traditional bricks-and-mortar
retailers.
c. the loss of control of pricing information by retailers due to the information dissemination
capabilities of the Internet.
d. the lack of competition in e-tailing.
e. the decreased power of consumers when transacting and negotiating with retailers.
ANS: C PTS: 1 REF: p. 13 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Application
7. _____ occurs when the customer gets needed information in the store and then orders it online for a
lower price and to avoid paying state sales tax.
a. Channel Surfing
b. Same-store retailing
c. Bricks-and-mortar retailing
d. Social shopping
e. Outshopping
ANS: A PTS: 1 REF: p. 13 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
8. The dominance of Walmart can be attributed to Sam Walton's realization that:
a. most of any product's cost gets added after the item is produced.
b. consumers desire great selection and are willing to pay higher prices to obtain that
selection.
c. most consumers prefer to complete all of their shopping in one store to minimize their
overall shopping time.
d. most consumers would prefer to shop in large stores rather than small stores as they
believe that larger stores offer higher customer service.
e. the company’s primary focus should be on its profits.
ANS: A PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
9. A product sold at or below cost is known as:
a. freebie marketing.
b. a loss leader.
c. product bundling.
, d. a bait and switch.
e. product churning.
ANS: B PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
10. Walmart became the world’s largest retailer by:
a. offering better value in price and quality.
b. cutting unnecessary costs.
c. concentrating only on profits.
d. selling products at low prices.
e. becoming more service oriented.
ANS: B PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
11. Which of the following demographic factors have been significant sources of change over the last
decade?
a. Fluctuating birth rate, the increasing number of immigrants, the growing importance of
Generation-Y consumers, the fact that Generation-Xers are starting to reach middle age
and that baby boomers are nearing retirement age.
b. Aging of baby boomers, declining household incomes, decline in part-time workers,
redistribution of income levels, and the rise in the number of college graduates.
c. Increasing number of women in the workplace, declining household incomes, rise in part-
time workers, rise in teenage suicide, and redistribution of income levels.
d. Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that
Generation-Yers are starting to reach middle age, and the increasing number of women in
the workforce.
e. Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that
Generation-Yers are starting to reach middle age, and the decline in household incomes.
ANS: A PTS: 1 REF: p. 15-16 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
12. Same-store sales compare:
a. an individual store’s sales to its sales for the same month in the previous year.
b. clearance efforts with holiday mark-downs.
c. two stores in the same district to one another.
d. advertising circulars with in-store promotions.
e. revenue with expenses.
ANS: A PTS: 1 REF: p. 16-18 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
13. Market share refers to:
a. the number of competitors a retailer must contend with.
b. a retailer's total sales divided by total market sales.
c. agreements whereby retailers attempt to "share" certain costs.
d. the total sales a retailer has generated from the target market.
e. the portion of a retailer's sales that represent profit.
MULTIPLE CHOICE
1. Retailing is defined as:
a. any exchange of cash and/or credit for goods or services between channel members.
b. a fairly stable and unchanging industry that has a major impact on society.
c. the final activities and steps needed to place merchandise made elsewhere into the hands
of the consumer or to provide services to the consumer.
d. the sale of any good or service by the producer to a channel member.
e. the activities and steps needed to transfer goods and/or services between channel
members.
ANS: C PTS: 1 REF: p. 9 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
2. Which of the following is an example of a retail transaction?
a. A firm pays a printer for printing business cards.
b. A supermarket purchases eggs from a local farmer for resale.
c. A student purchases a magazine subscription from a door-to-door salesperson.
d. A manager of a college bookstore purchases extra copies of your Retailing text from the
publisher.
e. A department store purchases cosmetics from a manufacturer for sale in its stores.
ANS: C PTS: 1 REF: p. 10 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
3. An operator of which of the following establishments is NOT a retailer?
a. A catering service specializing in weddings.
b. A computer firm selling software to households via the Internet.
c. A student going door-to-door selling magazine subscriptions.
d. A corporate property management firm.
e. An ice cream shop in the student union.
ANS: D PTS: 1 REF: p. 10 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
4. Identify the incorrect statement about e-tailing.
a. It enables consumers to shop when they like and from where they like.
b. It provides access to vast amounts of information, ranging from a product’s attributes to
who has the lowest price.
c. Many e-tailers offer personalized help online.
d. With some Internet websites, individuals can band together for group buying.
e. Some e-tailers may have to discontinue some product categories as consumers engage in
outshopping.
ANS: E PTS: 1 REF: p. 11-12 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
5. The fastest growing form of e-tailing or e-commerce is
, a. texting
b. m-tailing or m-commerce
c. social network advertising
d. personalized on line help
e. on-line auctions
ANS: B PTS: 1 REF: p. 11 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
6. One of the most dramatic changes created by e-tailing is a shift in power between retailers and
consumers. This shift in power is derived from:
a. the ability of consumers to purchase from retailers in other countries as a result of the
Internet.
b. the inability of Internet retailers to compete with more traditional bricks-and-mortar
retailers.
c. the loss of control of pricing information by retailers due to the information dissemination
capabilities of the Internet.
d. the lack of competition in e-tailing.
e. the decreased power of consumers when transacting and negotiating with retailers.
ANS: C PTS: 1 REF: p. 13 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Application
7. _____ occurs when the customer gets needed information in the store and then orders it online for a
lower price and to avoid paying state sales tax.
a. Channel Surfing
b. Same-store retailing
c. Bricks-and-mortar retailing
d. Social shopping
e. Outshopping
ANS: A PTS: 1 REF: p. 13 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
8. The dominance of Walmart can be attributed to Sam Walton's realization that:
a. most of any product's cost gets added after the item is produced.
b. consumers desire great selection and are willing to pay higher prices to obtain that
selection.
c. most consumers prefer to complete all of their shopping in one store to minimize their
overall shopping time.
d. most consumers would prefer to shop in large stores rather than small stores as they
believe that larger stores offer higher customer service.
e. the company’s primary focus should be on its profits.
ANS: A PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
9. A product sold at or below cost is known as:
a. freebie marketing.
b. a loss leader.
c. product bundling.
, d. a bait and switch.
e. product churning.
ANS: B PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
10. Walmart became the world’s largest retailer by:
a. offering better value in price and quality.
b. cutting unnecessary costs.
c. concentrating only on profits.
d. selling products at low prices.
e. becoming more service oriented.
ANS: B PTS: 1 REF: p. 14 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Comprehension
11. Which of the following demographic factors have been significant sources of change over the last
decade?
a. Fluctuating birth rate, the increasing number of immigrants, the growing importance of
Generation-Y consumers, the fact that Generation-Xers are starting to reach middle age
and that baby boomers are nearing retirement age.
b. Aging of baby boomers, declining household incomes, decline in part-time workers,
redistribution of income levels, and the rise in the number of college graduates.
c. Increasing number of women in the workplace, declining household incomes, rise in part-
time workers, rise in teenage suicide, and redistribution of income levels.
d. Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that
Generation-Yers are starting to reach middle age, and the increasing number of women in
the workforce.
e. Fluctuating birth rate, the growing importance of Generation-X consumers, the fact that
Generation-Yers are starting to reach middle age, and the decline in household incomes.
ANS: A PTS: 1 REF: p. 15-16 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
12. Same-store sales compare:
a. an individual store’s sales to its sales for the same month in the previous year.
b. clearance efforts with holiday mark-downs.
c. two stores in the same district to one another.
d. advertising circulars with in-store promotions.
e. revenue with expenses.
ANS: A PTS: 1 REF: p. 16-18 OBJ: LO 1-1
STA: MBA: Knowledge of general business functions
LOC: MBA: Knowledge of general business functions KEY: Bloom's: Knowledge
13. Market share refers to:
a. the number of competitors a retailer must contend with.
b. a retailer's total sales divided by total market sales.
c. agreements whereby retailers attempt to "share" certain costs.
d. the total sales a retailer has generated from the target market.
e. the portion of a retailer's sales that represent profit.
