Name: 
 

Chapter 16:  The Many Faces of Retailing: In-Store, Direct, and Internet



True/False
Indicate whether the statement is true or false.
 

 1. 

Retail stores are generally the only part of the distribution channel seen by consumers since most consumers have little contact with manufacturers and almost none with wholesaling intermediaries.
 

 2. 

The first form of retailing in Canada was the general store.
 

 3. 

The wheel of retailing concept explains the patterns of change in retailing as a process of evolution among institutions in which a new retailer enters the market as a low-price competitor and evolves as the result of reaction by competitors.
 

 4. 

Suburban shopping centres, convenience food stores, and vending machines are considered exceptions to the wheel of retailing concept because they were not founded on the basis of low-price appeals.
 

 5. 

After identifying a target market, the next step in a retailer’s decision-making process is to develop marketing strategies to attract its target market into its store(s).
 

 6. 

The retail mix is comprised of decisions related to the goods and/or services that a retail operation will offer, the prices that will be charged for these goods and/or services, the retail operation’s location and distribution, and the retailer’s intended use of the Internet.
 

 7. 

The variable in the retail mix that continually drives the establishment of new types of retail operations is price.
 

 8. 

Retail trade area analysis and the law of retail gravitation are tools that have been developed to help retailers determine the number of retail outlets they should operate in a given region of the country.
 

 9. 

Retail image does not refer to the retailer’s perception of how the store is positioned relative to competition.  Rather, it refers to the consumer’s perception of the store and the shopping experience it provides.
 

 10. 

The differentiation triangle refers to the three elements that retailers typically use to differentiate themselves from their competitors.  Changes in these elements can give the customer reasons to choose one store over another.
 

 11. 

When Tim Hortons expanded its menu beyond donuts and coffee to include soups and sandwiches, it was using product line-up, one of the three elements in the differentiation triangle, to differentiate itself from other donut shops (such as Country Style).
 

 12. 

This is no universal system for classifying retailers, but the most commonly used method of categorizing retailers is by the product lines they handle.
 

 13. 

Grouping retailers by product lines produces three major categories: limited-line retailers, full-line retailers, and mass merchandisers.
 

 14. 

Department stores are general-merchandise retailers that serve their customers as one-stop shopping destinations for almost all personal and household items.
 

 15. 

Membership and warehouse clubs and large-format specialty stores are also known as “big-box retailers” because of their size and warehouse-type facility.
 

 16. 

A grouping of two or more large-format retailers in the same area is known as a hypermarket.
 

 17. 

E-tailing is slow in developing in Canada.  A recent study showed that less than half of Canadian Internet users have bought goods or services from a retail Web site in the last six months.
 

 18. 

The benefits to consumers of Internet retailing include convenience, price competition, comparison shopping, product selection, and customization.
 

 19. 

Scrambled merchandising, which eases the consumer’s need to shop at multiple locations, simplifies manufacturers’ channel decisions.
 

 20. 

The drugstore is a classic example of scrambled merchandising in that prescription and over-the-counter medications are only a small portion of what it offers for sale.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 21. 

H & R Block prepares tax returns for individuals at convenient locations throughout Canada.  H & R Block is a(n)
a.
category killer.
b.
mass merchandiser.
c.
retailer.
d.
electronic data interchange.
 

 22. 

A major determinant of success in retailing is the development of
a.
a sustainable differential advantage over competition.
b.
a process to make almost daily changes in the store’s operations.
c.
a means to offer effective and efficient self-service to customers.
d.
a wheel of retailing mentality.
 

 23. 

Retail operations illustrate the marketing concept because
a.
retail innovations often develop as attempts to better satisfy particular customer needs.
b.
retail innovations often develop to make the retailer more competitive.
c.
both of the above.
d.
none of the above.
 

 24. 

When McDonald’s first appeared on the Canadian scene, the restaurants offered a very limited menu, very low prices, and no dining rooms, playgrounds, or public restrooms.  Today the chain has an expanded menu, moderate prices, and a number of services including dining rooms, playgrounds, etc.  These changes can be explained by
a.
the retail image.
b.
mass merchandising.
c.
selling up.
d.
the wheel of retailing.
 

 25. 

Retailers base their marketing decisions on three fundamental steps in the marketing strategy process.  The first step is to
a.
take an audit of financial resources.
b.
pick a target market.
c.
decide on products and services.
d.
set customer service standards.
 

 26. 

It is necessary for retailers to understand the strengths and weaknesses of their competitors because this understanding
a.
will help point out opportunities for meeting customer needs better than competition.
b.
will allow a retailer to time price specials better .
c.
will result in improved sales and profitability.
d.
all of the above.
 

 27. 

All of the following are part of the retailing mix except
a.
promotion.
b.
store atmospherics.
c.
pricing.
d.
target market.
 

 28. 

The key elements used by retailers to differentiate themselves versus competition are:
a.
price, location, and store atmosphere and location.
b.
location, location, location.
c.
location, image, and product selection.
d.
product selection, supplementary services, and image.
 

 29. 

The bases for categorizing retailers includes all of the following except
a.
shopping effort expended by customers.
b.
level of markups charged.
c.
services provided for customers.
d.
form of ownership.
 

 30. 

Most furniture stores, appliance retailers, clothing outlets, and sporting goods stores would be classified as
a.
convenience retailers.
b.
shopping stores.
c.
limited-line retailers.
d.
self-service retailers.
 

 31. 

Supermarkets carry nonfood products like detergents and cleaning aids because
a.
consumers are willing to buy these products in a supermarket, and nonfood items have a higher profit margin than food products.
b.
consumers demand one-stop shopping.
c.
they can provide a better selection of nonfood products than most other types of retailers.
d.
consumers prefer supermarket pricing policies.
 

 32. 

Which, if any, of the following statements is false?
a.
Most specialty stores are independent, small-scale operations.
b.
Specialty stores typically carry specialty goods.
c.
Specialty stores typically handle only part of a single product line.
d.
None of the above.
 

 33. 

Discount houses, off-price retailers, hypermarkets, and catalogue retailers are all examples of
a.
direct marketers.
b.
category killers.
c.
mass merchandisers.
d.
none of the above.
 

 34. 

Which of the following statements is true with regard to house-to-house retailing?
a.
House-to-house retailing is a form of nonstore or direct retailing.
b.
House-to-house retailing accounts for less than 1 percent of all retail sales.
c.
House-to-house retailing is a high-cost method of distributing products and services.
d.
All of the above statements are true.
 

 35. 

Automatic merchandising
a.
had its major growth prior to World War II.
b.
has limited future growth potential due to the cost of vending machines and the necessity for regular maintenance and repair.
c.
provides a whole range of shopping and specialty goods.
d.
is a type of direct-response retailing.
 

 36. 

Recent studies have shown that the biggest advantage to consumers of shopping online is
a.
its 24/7 convenience.
b.
transaction security.
c.
product selection.
d.
product quality.
 

 37. 

In order for an e-tailer to replace a traditional bricks-and-mortar retailer as a consumer’s preferred shopping venue, the Internet operation must
a.
be easy to use.
b.
provide better performance than a traditional retailer in terms of factors like service, entertainment, and experience with the product.
c.
both of the above.
d.
none of the above.
 

 38. 

The shopping centre that is most often composed of a supermarket and a group of smaller stores such as a drugstore, laundry, dry cleaner, and perhaps a beauty parlour or barber shop is the
a.
regional shopping centre.
b.
community shopping centre.
c.
neighbourhood shopping centre.
d.
downtown shopping centre.
 

 39. 

Differences between a community shopping centre and a regional shopping centre include all of the following except
a.
a regional shopping centre is typically much larger than a community shopping centre in terms of square footage and number of stores.
b.
a regional shopping centre requires a trade area with at least 150,000 people residing within 30 minutes’ drive time; a community shopping centre serves a smaller number of potential shoppers.
c.
branch department stores are found in regional shopping centres and not in community shopping centres.
d.
a regional shopping centre would probably have more specialty stores than would a community shopping centre.
 

 40. 

Scrambled merchandising developed as a retailer product strategy because
a.
retailers needed to add more high-profit lines.
b.
retailers wanted to complicate manufacturers’ distribution channel decisions.
c.
retailers wanted to return to general store formats.
d.
none of the above.
 



 
Check Your Work     Start Over