marketing test 3 ch 16

Any organization that purchases products for the purpose of reselling them to ultimate consumers is a(n)
a) wholesaler.
b) shopping center.
c) retailer.
d) intermediary.
e) producer.
Wal-Mart, Macy’s, Nordstrom’s, and Toys “R” Us are examples of
a) manufacturers.
b) merchant wholesalers.
c) end-users.
d) agents.
e) retailers.
Direct selling, direct marketing, and vending machines are all examples of
a) producing.
b) advertising.
c) promoting.
d) retailing.
e) wholesaling.
Retailing is best characterized as
a) large organizations that carry wide and deep product mixes.
b) transactions in which the buyer intends to consume the product through personal, family, or household use.
c) arrangements whereby a supplier grants a dealer the right to sell its products.
d) transactions in which the purchaser intends to use the product for resale or for business operations.
e) exchanges that take place only in a store or service establishment.
Who provides the environment in which exchanges with ultimate consumers occur?
a) Retailers
b) Wholesalers
c) Catalogers
d) Telemarketers
e) Producers
A retailer is an organization that purchases products for the purpose of reselling them to
a) other retail organizations.
b) the government.
c) ultimate consumers.
d) wholesalers.
e) nonprofit organizations.
By locating in the same general vicinity as other car dealerships, Hartfield Honda can
a) facilitate comparison shopping.
b) create form utility.
c) facilitate wholesale exchanges.
d) create possession utility.
e) create exchange utility.
A general merchandise retailer offers
a) a single product line that is stocked in depth.
b) few product lines with deep assortments of these lines.
c) few choices of a large variety of product lines.
d) products through the Internet and catalogs only.
e) a variety of product lines that are stocked in depth.
Supermarkets, discount stores, and hypermarkets can all be classified as
a) superstores.
b) general merchandise retailers.
c) department stores.
d) specialty retailers.
e) off-price retailers.
Compared with other types of retailers, department stores compete mainly on the basis of
a) customer services.
b) low prices.
c) a very deep assortment of a few specific products.
d) high sales volume.
e) catalog sales.
Nordstrom’s, Macy’s, and JC Penney’s are all considered
a) department stores.
b) discount stores.
c) off-price retailers.
d) specialty retailers.
e) category killers.
If a store has areas for men’s apparel, women’s apparel, housewares, cosmetics, and jewelry and competes mostly on the basis of service, it is a(n)
a) off-price retailer.
b) department store.
c) discount store.
d) superstore.
e) supermarket.
Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume?
a) Department stores
b) Traditional specialty retailers
c) Warehouse showrooms
d) Direct marketers
e) Discount stores
Self-service, general merchandise stores such as Kmart are known as
a) discount stores.
b) warehouse showrooms.
c) catalog showrooms.
d) superstores.
e) specialty retailers.
Walmart and Target are both examples of
a) department stores.
b) category killers.
c) discount stores.
d) supermarkets.
e) warehouse clubs.
Ollies’ is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Ollies’ is an example of a
a) department store.
b) discount store.
c) warehouse showroom.
d) specialty store.
e) superstore.
As discount stores improve their services and atmosphere as well as raise their prices, the distinction between discount stores and ____ is becoming blurred.
a) superstores
b) supermarkets
c) specialty stores
d) department stores
e) category killers
A small self-service store that is open long hours and carries a narrow product assortment in convenient locations is best described as a
a) discount store.
b) department store.
c) convenience store.
d) supermarket.
e) category killer.
Which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their ice boxes?
a) Supermarkets
b) Convenience stores
c) Discount stores
d) Department stores
e) Specialty stores
Jack Ingalls gets a shopping list from his wife. On the list are a potted plant, fresh salmon, motor oil, bread, milk, and a birthday cake. To make just one stop to save time, Jack should go to a(n)
a) convenience store.
b) off-price retailer.
c) specialty store.
d) franchiser.
e) supermarket.
Large, self-service stores that carry a complete line of food products and some nonfood products are called
a) discount stores.
b) superstores.
c) supermarkets.
d) department stores.
e) warehouse clubs.
Kroger, Safeway, and Publix are all considered
a) superstores.
b) groceries.
c) department stores.
d) supermarkets.
e) food stores.
Which type of retail outlet can have up to 200,000 square feet?
a) Superstores
b) Supermarkets
c) Discount stores
d) Department stores
e) Category killers
Laura goes to Walmart and buys some clothing, a DVD, and all the groceries she needs for her family. What type of retailer is this particular Wal-Mart?
a) Supermarket
b) Superstore
c) Hypermarket
d) Discount store
e) Department store
A large retailer selling food and most routinely purchased consumer products is a
a) hypermarket.
b) supermarket.
c) discount store.
d) Warehouse club
e) Superstore
What is the primary distinction between superstores and hypermarkets?
a) Superstores offer a wider variety of products than hypermarkets.
b) Superstores offer low prices while hypermarkets have moderate to high prices.
c) Hypermarkets have fewer departments but deeper product lines than superstores.
d) Hypermarkets are larger and have more types of products than superstores.
e) These two types of retailers carry very different types of products.
After shopping in the same store for nearly two hours, Chelsea goes to Burger King for a Whopper, while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a
a) superstore.
b) hypermarket.
c) department store.
d) general merchandise retailer.
e) discount store.
Which of the following is a large-scale, members-only, retailer that combines cash-and-carry wholesaling with discount retailing?
a) Warehouse showroom
b) Warehouse club
c) Catalog showroom
d) Category killer
e) Hypermarket
Retailers that sell only to members and feature discount retailing combined with cash-and-carry wholesaling are called
a) hypermarkets.
b) retail groups.
c) warehouse showrooms.
d) discount stores.
e) warehouse clubs.
Which of the following is a common feature of a warehouse club?
a) Concrete floors and wide aisles
b) Wide range of products
c) Good customer service
d) Moderate prices
e) Pleasant atmosphere
Sam’s and Costco are examples of
a) discounters.
b) warehouse clubs.
c) warehouse showrooms.
d) discount clubs.
e) wholesalers.
Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal services are called
a) catalog showrooms.
b) category killers.
c) warehouse showrooms.
d) warehouse clubs.
e) display outlets.
Levitz Furniture locates in huge, low-cost buildings, maintains large, on-premises inventories, and offers minimum service. Levitz is a
a) warehouse showroom.
b) catalog showroom.
c) superstore.
d) warehouse club.
e) department store.
A narrow product mix with a deep product line would most likely be carried by
a) mass merchandisers.
b) supermarkets.
c) discount stores.
d) specialty retailers.
e) warehouse showrooms.
A store that offers a wide variety of shoes for men, women, and children would most likely be considered a(n)
a) department store.
b) specialty retailer.
c) category killer.
d) off-price retailer.
e) warehouse showroom.
Matt’s girlfriend tells him she wants a cashmere sweater for Christmas. Matt decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a________ store.
a) department
b) catalog
c) discount
d) traditional specialty
e) convenience
Off-price retailers and category killers are both
a) specialty retailers.
b) discount stores.
c) showrooms.
d) general merchandisers.
e) department stores.
Specialty stores offer ______ than department stores.
a) greater varieties of product lines and higher prices
b) lower prices and higher quality
c) more product depth and less customer service
d) more sales expertise and better selections
e) more frequent price discounts and less selection
What type of retailers are the primary competitors for specialty retailers?
a) Discount stores
b) Category killers
c) Catalog marketers
d) Department stores
e) Superstores
Off-price retailers feature
a) deep discounts, few customer services, and central checkouts.
b) sales expertise, wide selections, and low prices.
c) overstocks, designer brands, and moderate prices.
d) a narrow product range and enormous product availability.
e) cash only sales and few customer services.
Stores such as T.J. Maxx, Burlington Coat Factory, and Marshalls buy manufacturers’ seconds, overruns, returns, and off-season production runs at below wholesale prices. These firms resell this merchandise to consumers at deep discounts, and are called
a) category killers.
b) off-price retailers.
c) specialty retailers.
d) hypermarkets.
e) discount retailers.
When off-price retailers obtain too much in-season, high-quality merchandise, tension between them and ________ builds.
a) discount stores
b) category killers
c) specialty retailers
d) warehouse clubs
e) department stores
A manufacturers’ outlet mall is most appropriately classified as a(n)
a) discounter.
b) specialty retailer.
c) off-price retailer.
d) category killer.
e) department store.
Category killers compete primarily on the basis of
a) enormous product selection and sales expertise.
b) low prices and enormous product availability.
c) convenient locations and customer services.
d) rock-bottom prices and moderate selections.
e) one-stop shopping and product availability.
Which of the following is an example of a category killer?
a) Sears
b) Kmart
c) Marshalls
d) Lady Foot Locker
e) Toys “R” Us
Michael’s, PetsMart, and Staples are all examples of
a) department stores.
b) off-price retailers.
c) category killers.
d) traditional specialty retailers.
e) superstores.
A(n) ___________ is a very large specialty store that competes on the basis of lower prices and enormous product availability.
a) warehouse club
b) off-price retailer
c) category killer
d) traditional specialty store
e) super center
In contrast to industrial products, consumer products are often purchased because of
a) economic planning.
b) necessity.
c) prior planning.
d) social influences.
e) rational needs.
The kinds of products being sold and the availability of public transportation are both factors that influence a retailer’s decision about
a) store atmosphere.
b) location.
c) retail positioning.
d) store image.
e) the wheel of retailing.
Which of the following is the least flexible of these important retailing strategy issues?
a) Store atmosphere
b) Scrambled merchandising
c) Retail positioning
d) Store image
e) Location
Location is important to a retailer because
a) suppliers charge more to service stores in certain trading areas.
b) a desirable location appeals to consumers’ emotions.
c) location is the major determinant of store image.
d) location determines the trading area from which the store must draw its customers.
e) convenient location is an essential customer service element.
Jannette Down is planning to open an upscale dress boutique. She is evaluating ease of movement to and from sites, vehicular traffic, types of stores in the area, and transportation networks. Which strategic retailing issue is she concerned with at the time?
a) Location
b) Production depth
c) Product mix
d) Scrambled merchandising
e) Retail positioning
Colin brags to his friend Reid that his new bike shop has lots of parking and great visibility from Harper Avenue, and his nearest business neighbors are several hundred feet away. Colin has selected a ____________ site for his retail business.
a) free-standing
b) traditional business district
c) neighborhood shopping center
d) community shopping center
e) regional shopping center
Greg chooses to have his hunting equipment stored in a location away from the main part of town so that he can have a large parking lot and an outdoor range for customers to test out his merchandise. Greg’s store is
a) in a traditional business district.
b) a rural shopping center.
c) in a neighborhood shopping center.
d) a non-traditional shopping center.
e) a free-standing structure.
Many cities are revitalizing their downtown areas by bringing in new retail establishments. They are building new civic structures, passing ordinances that encourage the restoration of historic buildings, and developing mixed-use structures that include retail, residential, and other uses. These areas are best described as
a) neighborhood shopping centers.
b) community shopping centers.
c) traditional shopping centers.
d) traditional business districts.
e) free-standing structures.
The type of retail location that is commonly being preserved and revitalized in many cities is the
a) traditional business district.
b) free-standing structure.
c) community shopping center.
d) neighborhood shopping center.
e) nontraditional shopping center.
Shopping centers include
a) neighborhood, regional, superregional, power, and strip malls.
b) community, rural, urban, and traditional business districts.
c) outlet, power, lifestyle, superregional, regional, neighborhood, and community.
d) outlet malls, lifestyle, strip malls, and shopping malls.
e) free-standing, convenience, traditional, and regional.
What type of shopping center usually consists of several small convenience and specialty stores?
a) Specialty
b) Regional
c) Neighborhood
d) Convenience
e) Community
In Cara’s hometown, there is a mall with a small Sears store, a Macy’s department store, a couple of fast food restaurants, a few specialty shops, and some convenience stores. The mall features seasonal sidewalks sales and boat shows. This mall is most likely a ______ shopping center.
a) neighborhood
b) national
c) regional
d) community
e) city
Hickory Village Shopping Center has two department stores and some specialty and convenience stores. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory is a _________ shopping center.
a) community
b) regional
c) nontraditional
d) neighborhood
e) power
The target market of a regional shopping center typically includes at least _____ people.
a) 25,000
b) 50,000
c) 100,000
d) 150,000
e) 250,000
Dawn is concerned that there are not enough avid quilters in Centerville to support her Quilts Unlimited store. Her business adviser suggests that she not limit her promotion to the Centerville population but also consider outshoppers. This approach is most likely to work if her store is located in a
a) free-standing location.
b) traditional business district.
c) strip center.
d) community shopping center.
e) regional shopping center.
A shopping center containing a Macy’s, Marshall Fields, and JC Penney’s as well as dozens of specialty shops, restaurants, and entertainment is most likely a
a) regional shopping center.
b) mall of America.
c) community shopping center.
d) complete business district.
e) hypermarket.
Which of the following offers the widest product mixes and the deepest product lines?
a) Category killer
b) Outlet mall
c) Traditional business district
d) Community shopping center
e) Superregional shopping center
Which of the following may include special attractions such as amusement parks or skating rinks
a) Convenience shopping centers
b) Neighborhood shopping centers
c) Community shopping centers
d) Regional shopping centers
e) Superregional shopping centers
An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually owned by national chains, is generally called a(n)
a) regional shopping center.
b) neighborhood shopping center.
c) community shopping center.
d) lifestyle shopping center.
e) outlet shopping center.
An example of an emerging type of power shopping center might contain
a) JC Penney’s, Sears, some specialty shops, McDonalds, and Dairy Queen.
b) Michael’s, Office Depot, T.J. Maxx, and Circuit City.
c) Liz Claiborne, Van Heusen, Corning Ware, and Mikasa outlets.
d) Safeway, CVS, and Subway.
e) a Supercenter Wal-Mart.
A shopping center that contains stores owned by manufacturers who make a special effort not to conflict with traditional retailers is a(n)
a) strip mall.
b) neighborhood shopping center.
c) off-price mall.
d) lifestyle shopping center.
e) outlet shopping center.
________ have been successful because consumers are willing to drive significant distances to save money buying manufacturers’ closeouts and irregulars.
a) Off-price shopping centers
b) Outlet shopping centers
c) Regional shopping centers
d) Power shopping centers
e) Lifestyle shopping centers
Identifying an unserved or underserved market segment and serving it through a strategy that is distinguished in the mind of the consumer is called
a) the marketing concept.
b) the wheel of retailing.
c) retail positioning.
d) targeted retailing.
e) scrambled merchandising.
Josh tells the loan officer at First Bank and Trust that Clarksville really needs a store that offers high-quality fishing gear to enthusiasts and provides the service and advice that many people want. No other store in the area seems to provide this combination. Josh is trying to use ___________ to support his request for a loan to start such a retail operation.
a) scrambled merchandising
b) location analysis
c) the wheel of retailing
d) product mix width
e) retail positioning
Norah operates an upscale shop that does both pet grooming and human manicures and pedicures. She is reaching a market segment with people who place great value on their dogs and are concerned with their own appearance, yet pressed for time. No other businesses meet the needs of these consumers. Which strategic issue in retailing does Norah appear to have addressed?
a) Store image
b) Location
c) The wheel of retailing
d) Retail positioning
e) Scrambled merchandising
Brianna owns and operates a gift and interior store called The Gingerbread House. She works hard to put together beautiful arrangements and displays throughout the store and always features a burning scented candle and light music. She hopes these efforts will encourage her customers to buy more. Brianna is focusing on
a) atmospherics.
b) retail positioning.
c) location.
d) scrambled merchandising.
e) value-pricing.
Exterior and interior characteristics such as layout, displays, color, and lighting are all elements of a store’s
a) services.
b) atmospherics.
c) location.
d) environment.
e) decor.
A functional and psychological picture in the consumer’s mind of a retail store is called
a) retail positioning.
b) atmospherics.
c) store image.
d) interior location.
e) retail persona.
Which retail store invests the most in atmospherics?
a) Kmart
b) Sears
c) Neiman Marcus
d) Wal-Mart
e) Walgreens
A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers is called
a) category management.
b) scrambled merchandising.
c) line extensions.
d) aggregate management.
e) wheel of retailing.
Through the years, drugstores have added more unrelated products to their product mix, such as lawn care supplies, food items, housewares, and small appliances. This illustrates which of the following retail strategy issues?
a) Tumbled product assortment
b) Product line combination
c) Scrambled merchandising
d) Wheel of retailing
e) Direct marketing
The use of the telephone and other nonpersonal media to introduce products to consumers, who then can purchase the products through the mail, telephone, or the Internet is called
a) direct marketing.
b) telemarketing.
c) remote purchasing.
d) direct-response marketing.
e) direct selling.
The selling of merchandise outside the confines of actual facilities is generally called
a) nonstore retailing.
b) direct selling.
c) direct marketing.
d) Internet marketing.
e) store-front sales.
The three major types of nonstore retailing are
a) direct marketing, direct selling, and automatic vending.
b) direct selling, automatic vending, and catalog retailing.
c) direct marketing, direct selling, and mail-order.
d) automatic vending, direct selling, and telemarketing.
e) telemarketing, door-to-door, and mail-order.
Direct marketing, direct selling, and automatic vending are all examples of _________ retailing.
a) off-premise
b) portfolio
c) nonstore
d) off-price
e) direct
Chadwick’s sends its customers booklets containing its product offerings and allows them to place orders on the telephone, through the mail, or online. Chadwick’s is primarily a(n)
a) online retailer.
b) direct seller.
c) catalog marketer.
d) direct-response marketer.
e) specialty retailer.
What type of retailing began with Montgomery Ward in the late 1800s?
a) Catalog marketing
b) Department stores
c) Direct selling
d) Discount retailing
e) Franchising
All of the following are types of direct marketing except
a) catalog marketing.
b) direct-response marketing.
c) direct selling.
d) television home shopping.
e) online retailing.
When a retailer advertises a product and makes it available for purchase through telephone or mail orders, the retailer is using
a) direct selling.
b) television home shopping.
c) telemarketing.
d) automatic vending.
e) direct-response marketing.
Advo Systems is an organization that mails product brochures and coupons to potential consumers who can then purchase these products by mail or by phone. Advo Systems illustrates which of the following methods of selling retail products?
a) Direct-response marketing
b) Party plan
c) Catalog marketing
d) Specialty retailing
e) Direct selling
In order to justify direct-response marketing, a product really needs to be priced above
a) $50.
b) $10.
c) $5.
d) $20.
e) $100.
In the Sunday paper, Caitlin sees a flyer for a collector’s edition Thomas Kinkade plate that is available to purchase by filling out and mailing in a form or by calling a 1-800 number. This is an example of
a) telemarketing.
b) direct-response marketing.
c) television home shopping.
d) direct selling.
e) catalog marketing.
The performance of marketing-related activities conducted on the telephone is called
a) e-marketing.
b) direct-response marketing.
c) telemarketing.
d) phone retailing.
e) tel-selling.
When products are presented to television viewers, who can purchase them by calling a toll-free number and paying with a credit card, ________ is being used.
a) telemarketing
b) television marketing
c) direct-response marketing
d) e-marketing
e) television home shopping
A retailer engaged in direct marketing would probably select television home shopping over online retailing to sell a new kitchen device because of
a) lower costs of selling.
b) easier financial transactions.
c) superior ability to demonstrate the product.
d) superior ability to offer the product at a lower price.
e) decreased cycle time.
What is the most popular type of product sold through television home shopping?
a) Electronics
b) Clothing
c) Jewelry
d) Kitchen appliances
e) Cosmetics
Kelly Cramer sees a lovely pair of earrings on a television network and calls a toll-free number to order them, paying with her credit card. This is an example of
a) online retailing.
b) television home shopping.
c) telemarketing.
d) direct-response marketing.
e) catalog marketing.
Brad accesses Borders Books and Prints’ site on the World Wide Web and purchases a copy of a new best seller. This is an example of
a) telemarketing.
b) catalog retailing.
c) direct-response marketing.
d) online retailing.
e) WWW retailing.
The marketing of products to ultimate consumers through face-to-face sales presentations either at home or the workplace is called
a) direct marketing.
b) direct-response marketing.
c) telemarketing.
d) personal selling.
e) direct selling.
What is a potential disadvantage of direct selling?
a) Commissions for salespeople are usually low.
b) Some customers view direct selling negatively.
c) Personal attention tends to be lacking.
d) Product demonstrations are difficult in this type of selling.
e) Consumers must go out of their way.
With respect to retailing, what is the “party plan”?
a) A sales representative has a party at her home to demonstrate products to a group of friends and associates.
b) A party is set up that demonstrates a product and provides free samples of the product to all in attendance.
c) An individual is asked to tell two friends about a product, who are in turn each asked to tell two friends, etc. until a sufficient number of people are reached.
d) A store has a special sale that resembles a party, and those who come are asked to buy the featured products.
e) A consumer acts as a host and invites friends to view merchandise in a group setting, where a salesperson demonstrates the products.
Alison asks ten of her friends over to her home to learn about exciting new cosmetic products. A salesperson from Angel Products makes a presentation and takes the women’s orders. This is an example of
a) a party plan.
b) telemarketing.
c) a warehouse club.
d) direct marketing.
e) a catalog showroom.
What is a potential disadvantage of direct selling?
a) Commissions for salespeople are usually low.
b) Some customers view direct selling in a negative light.
c) Personal attention is lacking.
d) Product demonstrations are difficult in this type of selling.
e) Consumers must go out of their way.
The primary advantage of automatic vending as a form of retailing is that
a) it offers a low-cost, personal method of selling products.
b) it provides a continuous service to consumers.
c) since vending machines must be serviced frequently, the products they sell are always fresh.
d) vending machines require very few repairs.
e) it eliminates the need for sales personnel.
Automatic vending is
a) a type of nonstore retailing.
b) a specialty line retailer.
c) not considered a form of retailing.
d) a type of direct selling.
e) a form of franchising.
Tupperware, Sarah Coventry, Amway, and Avon sell products outside the confines of retail facilities. They are _________ retailers.
a) discount
b) traditional
c) specialty
d) non-store
e) home-delivery
While on their family vacation, the Millers realize they left their camera at home. They purchase a disposable camera at an amusement park using their credit card, but never interact with a person. What type of retailing did this transaction most likely involve?
a) Franchising
b) Online retailing
c) Direct-response marketing
d) Automatic vending
e) Machine marketing
An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of consideration is
a) selling products on consignment.
b) retailing.
c) wholesaling.
d) licensing.
e) franchising.
Victor knows that if he decides to buy a franchise, he will most likely have to supply
a) management know-how and labor.
b) buildings and daily operations.
c) marketing assistance and management know-how.
d) a percentage of total sales and expertise.
e) labor and daily operations.
Malcolm Lewis has come up with the idea of a system for picking up people’s cars while they are at work, washing and waxing them, and returning them for a fee. Having been a big success in his home city, Malcolm plans to expand his operation into other cities. The service described here seems best suited to
a) party-plan retailing.
b) franchising.
c) vending.
d) corporate chain retailing.
e) off-price retailing.
Kevin is talking with Peter about purchasing a Wendy’s franchise. Peter tells Kevin that one of the major advantages of franchising for him to consider is the
a) higher start-up costs.
b) greater freedom it provides.
c) individuality it offers.
d) higher success rate for franchises.
e) gross margin it provides.
Which of the following is not one of the basic types of franchising arrangements?
a) A producer franchising a number of stores to sell a particular brand of product
b) A wholesaler franchising a number of producers
c) A producer franchising a number of wholesalers to sell to retailers
d) The franchising of brand names, techniques, procedures, or services
e) All of these are basic types of franchising.
Which type of franchising is most popular in the soft-drink industry?
a) The manufacturer authorizes a number of retail stores to sell a certain brand name item.
b) Several manufacturers authorize one retail chain to sell a variety of brand name items.
c) A franchiser supplies techniques, brand names, or other services besides complete products.
d) A manufacturer licenses distributors to sell a given product to retailers.
e) A distributor provides a brand name product and marketing assistance to one retailer.
Which of the following is not an advantage of franchising for the franchisee?
a) The franchisee can capitalize on the business experience of others.
b) When problems arise, the franchisee can obtain guidance and advice from the franchiser.
c) Franchised outlets are usually more successful than independently owned businesses with respect to long-term survival.
d) The franchisee can participate in national promotional campaigns sponsored by the franchiser.
e) The franchisee gives up a certain amount of control when participating in a franchise agreement.
In franchising, which of the following is not a benefit that the franchiser gains?
a) The franchiser can gain more rapid product distribution.
b) The franchiser can acquire capital more quickly for expanding production.
c) The franchiser gains more control over how the franchisees operate the establishments.
d) The franchiser benefits from the fact that franchisees tend to be highly motivated to succeed, which in turn leads to higher sales and higher royalties.
e) All of these are benefits for the franchiser.
Which of the following best describes wholesalers?
a) Organizations that buy products from producers and sell them to retailers.
b) Individuals or organizations that purchase products and then resell them to other businesses and consumers.
c) Organizations or individuals who buy products for resale to government, reseller, producer, and institutional users.
d) Organizations or entities that buy products from government, reseller, and producer users and sell them to customers in bulk.
e) Companies that make products that have a general appeal and are resold to retailers for a profit.
Wholesaling can be defined as
a) transactions in which products are bought for resale.
b) transactions made at a discount.
c) sales made to retailers only.
d) transactions in which purchases are for production of other goods only.
e) marketing activities necessary to conduct exchanges with consumers.
Select the true statement about wholesaling.
a) Wholesaling activities must be performed during distribution of all goods, whether or not a wholesaling institution is involved.
b) Warehouses are necessary in order for the wholesaling function to be completed.
c) Only wholesaling establishments can perform wholesaling activities.
d) Wholesaling is an inefficient process that should be eliminated from the marketing channel.
e) The biggest problem with the wholesaling process is that inefficient wholesalers can thrive, at the expense of consumers.
The primary function of most wholesalers is to
a) support the needs of the manufacturers and provide them with market information.
b) provide for the unique needs of the individual retailers buying their merchandise.
c) provide information system tracking of inventory for the ultimate consumer.
d) perform physical distribution of products from manufacturers to retailers.
e) develop and share database information about customers.
By using Johnson Wholesale Co. for its distribution needs, the Apex Production has a distinct competitive advantage because the services performed by Johnson allow Apex to
a) provide quality merchandise to consumers.
b) focus on increasing production capacity.
c) focus on increasing working capital.
d) reduce manufacturing costs to retailers.
e) focus on producing products that meet consumers’ needs.
Which of the following services would a wholesaler least likely provide to a manufacturer?
a) Assume the risks of selling to poor credit customers
b) Look for and coordinate supply sources
c) Pay the costs of transporting goods
d) Provide up-to-date information on market developments
e) Serve as an extension of the manufacturer’s sales force
Which of the following is not a factor used to classify wholesalers?
a) Whether the wholesaler is owned by the producer
b) Whether the wholesaler takes title to the products it handles
c) The range of services offered by the wholesaler
d) The price range of the products carried by the wholesaler
e) The breadth and depth of the product lines carried by the wholesaler
Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to the _____ component of the marketing mix.
a) distribution
b) promotion
c) product
d) price
e) channel
By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the following physical distribution activities except
a) inventory planning.
b) transportation.
c) materials handling.
d) unit pricing.
e) communication.
With respect to inventory, wholesalers can help retailers with all of the following except
a) selection.
b) storage.
c) inventory control.
d) transportation.
e) production.
A merchant wholesaler
a) arranges for transfer of goods directly to business and retail customers.
b) takes title to goods, assumes risk associated with ownership, and buys and resells products.
c) takes title and possession of goods and sells only to retailers.
d) does not take title or possession of goods but facilitates exchanges between any parties.
e) deals exclusively with business products.
Wal-Mart has its own fleet of trucks and works directly with producers to take care of the ordering, delivery, and handling of goods. In addition, Wal-Mart works directly with suppliers through its advanced system of inventory control and data processing. Wal-Mart is
a) able to eliminate many of the functions typically performed by wholesalers.
b) performing many of the critical functions of wholesalers through its own system.
c) successfully using wholesalers to run its venerable chain of discount stores.
d) using information technology to eliminate the need to perform typical wholesale functions.
e) vertically integrated in order to produce and distribute all products itself.
Sherri McRae wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid obsolescence of high-fashion items, Sherri does not want to establish an organization in which she has title to the garments. Which of the following types of wholesale establishments has she ruled out?
a) Merchant wholesaler
b) Agent
c) Broker
d) Functional middleman
e) Commission merchant
Martin owns and operates a wholesale hardware business that supplies small hardware parts to various manufacturers in the area. He takes title to the hardware and assumes all risks associated with ownership. Martin is a
a) rack jobber.
b) merchant wholesaler.
c) wholesaler agent.
d) drop shipper.
e) sales branch.
Merchant wholesalers can be divided into two basic categories:
a) general merchandise and general-line.
b) rack jobbers and cash-and-carry.
c) commission and fee-based.
d) goods and services.
e) full-service and limited service.
Cigarette manufacturer Philip Morris uses the services of Universal Corporation, the world’s largest buyer and processor of leaf tobacco, which provides financing for its customers. This means that Universal is a
a) cash-and-carry wholesaler.
b) general merchandise wholesaler.
c) limited-service wholesaler.
d) rack jobber.
e) full-service wholesaler.
Customers rely on ______ for product availability, breaking larger quantities into smaller ones, technical advice and service, financial assistance, and suitable assortments.
a) full-line retailers
b) limited-service wholesalers
c) full-service wholesalers
d) commission merchants
e) cash-and-carry wholesalers
If a retailer needed help with store design and training sales personnel, it would most likely use the services of a
a) full-service wholesaler.
b) full-price wholesaler.
c) rack jobber.
d) cash-and-carry wholesaler.
e) technical wholesaler.
A wholesaler that carries a wide product mix but offers only limited depth within product lines is called a
a) specialty-line wholesaler.
b) limited-service wholesaler.
c) rack jobber.
d) general merchandise wholesaler.
e) general-line wholesaler.
All of the following are examples of full-service wholesalers except
a) general merchandise wholesalers.
b) mail-order wholesalers.
c) rack jobbers.
d) general-line wholesalers.
e) specialty-line wholesalers.
Which of the following is a full-service merchant wholesaler?
a) Cash-and-carry wholesaler
b) General merchandise wholesaler
c) Drop shipper
d) Mail-order wholesaler
e) Truck wholesaler
Brad operates a wholesale company that specializes in providing a wide variety of services to its customers, which are all restaurants. He carries a wide assortment of restaurant equipment and cookware. Brad’s business is a
a) general merchandise wholesaler.
b) rack jobber.
c) general-line wholesaler.
d) specialty-line wholesaler.
e) limited-service wholesaler.
A general-line wholesaler would be expected to carry a ___________ product mix.
a) wide and deep
b) wide and shallow
c) narrow and shallow
d) wide
e) narrow and deep
Based on what he has heard regarding the profitability of such items, Paul Goldstein is considering adding a fresh shellfish case in his grocery store. Paul knows very little about this product or the concerns of shoppers who buy shellfish. He is looking for help in display set-up and merchandising ideas. He should contact which of the following types of wholesalers?
a) General-line
b) Specialty-line
c) General merchandise
d) Rack jobber
e) Limited-service merchant
Full-service, specialty-line wholesalers that own and maintain displays in discount stores and supermarkets are called
a) specialty-line wholesalers.
b) full-service stockers.
c) in-store maintainers.
d) assemblers.
e) rack jobbers.
Angela Barton approaches David Hughes, owner of Hughes Auto Parts, to talk about the possibility of adding a new line of products to his store. Angela tells David that the product is a line of high-quality driving sunglasses. She offers to set up the display, service and restock it weekly, and maintain billing and inventory records. She tells David that all she needs is a couple of square feet of space. Angela is in the business of serving retailers as a
a) general-line wholesaler.
b) specialty-line wholesaler.
c) rack jobber.
d) full-service merchant wholesaler.
e) cash-and-carry wholesaler.
Lynn Taylor sells Revlon cosmetics on consignment to grocery stores, maintains the display racks, and restocks when necessary. Lynn’s job is best described as a
a) rack jobber.
b) drop shipper.
c) general merchandise wholesaler.
d) cash-and-carry wholesaler.
e) truck jobber.
Merchant wholesalers who specialize in just a few functions and pass others along to other intermediaries or customers are called
a) limited-service wholesalers.
b) wholesale service specialists.
c) general-line wholesalers.
d) specialty-line wholesalers.
e) specialty-service wholesalers.
All of the following are types of limited-service merchant wholesalers except
a) cash-and-carry wholesalers.
b) truck wholesalers.
c) mail-order wholesalers.
d) specialty-line wholesalers.
e) drop shippers.
Laura Lucas and Marie Clark own and operate a small restaurant. On a weekly basis, they go to their local Sam’s Wholesale Club to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they purchase and the items’ intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery store. Sam’s is serving as a ___________ wholesaler for these entrepreneurs.
a) general-line
b) specialty-line
c) full-service merchant
d) truck
e) cash-and-carry
What type of wholesaler transports a limited line of products directly to customers for immediate inspection and selection?
a) On-site wholesalers
b) Cash-and-carry wholesalers
c) Rack jobbers
d) Truck jobbers
e) Drop shippers
Greg Prakash works with a group of farmers who provide him with a regular supply of a variety of fresh vegetables. He picks up their produce and has a regular route of grocers and restaurants who purchase quantities of the items he has on any given day. Greg’s operation is which type of wholesaler?
a) Drop shipper
b) General-line
c) Truck
d) Cash-and-carry
e) Specialty-line
Andrea owns and operates a small novelty store that sells home décor, gifts, jewelry, and gourmet snacks. Because her business is very small, many wholesalers will not deal with her, so she relies primarily on _____ for the survival of her business.
a) drop shippers
b) truck wholesalers
c) rack jobbers
d) specialty-line wholesalers
e) cash-and-carry wholesalers
Drop shippers
a) take title to but not physical possession of the goods.
b) do not take title to or physical possession of the goods.
c) take title to and physical possession of the goods.
d) do not take title to but take physical possession of the goods.
e) are similar to truck wholesalers but provide the extra service of placing products on retailers’ shelves.
Which of the following wholesalers never take actual possession of the goods?
a) Drop shippers
b) Cash-and-carry wholesalers
c) Truck jobbers
d) Mail-order wholesalers
e) Rack jobbers
Mark Bradley’s company takes orders from its collection of retail customers and arranges the shipment of goods directly from manufacturers or other wholesalers to its customers’ businesses. Mark is operating as a
a) mail-order wholesaler.
b) drop shipper.
c) desk wholesaler.
d) truck jobber.
e) specialty-line wholesaler.
Alison lives in a remote area of Montana, where few good roads exist. She runs a small retail store specializing in western attire. Due to her remote location, Alison is most likely to obtain the merchandise for her store from
a) rack jobbers.
b) general-line wholesalers.
c) mail-order wholesalers.
d) truck wholesalers.
e) specialty-line wholesalers.
___________ provide an effective method of selling small items to customers in remote areas that other wholesalers might find unprofitable to serve.
a) Desk jobbers
b) Specialty-line wholesalers
c) Cash-and-carry wholesalers
d) Truck wholesalers
e) Mail-order wholesalers
Agents and brokers that facilitate and negotiate purchases but do not actually take title to products are also known as
a) functional wholesalers.
b) commission wholesalers.
c) hands-off intermediaries.
d) contract negotiators.
e) functional middlemen.
What is the primary difference between an agent and a broker?
a) An agent gets compensated based on commission while a broker generally charges fees for his services.
b) A broker works only for a seller whereas an agent can represent a buyer or a seller.
c) An agent represents a company on a permanent basis while a broker is employed temporarily.
d) An agent has much more extensive knowledge about the products he deals with than a broker does.
e) Brokers have long-term relationships with their customers while an agent’s relationships are generally short-lived.
The difference between an agent and a broker is that an agent
a) seeks profit, whereas a broker does not.
b) is an intermediary, whereas a broker is not.
c) represents the seller and a broker represents the buyer.
d) determines who the consumers are, whereas the broker does not determine the customers.
e) usually represents people on a permanent basis, whereas a broker usually does so on a temporary basis.
Independent intermediaries that represent two or more sellers and usually offer customers complete product lines in a restricted territory are called
a) commission merchants.
b) manufacturers’ agents.
c) selling agents.
d) truck wholesalers.
e) brokers.
Because Gem Supply’s sales have continued to decline, the jewelry manufacturer has found that the costs associated with maintaining its own five-person sales force are prohibitive. The firm’s marketing director begins to look for a small company or individual willing to perform the sales function for Gem Supply in its least productive region, the Far West. The ideal entity would carry complementary but non-competing lines. Such a firm or individual would be classified as a
a) rack jobber.
b) manufacturers’ agent.
c) specialty-line wholesaler.
d) selling agent.
e) commission merchant.
Manufacturers’ agents offer products that are both
a) noncompeting and complementary.
b) competing and specialized.
c) unrelated and noncompeting.
d) complementary and competing.
e) unrelated and competing.
Karen Shapiro has been a buyer for Ocean Mist, a large cranberry processor, for several years. Believing that she knows a great deal about cranberries, their growers, and processors, she decides to go into business for herself. Karen wants to assume no risks of spoilage or price fluctuations. She sees herself as simply bringing the growers and processors together. Her new company would be a
a) sales agent.
b) commission merchant.
c) broker.
d) sales branch.
e) sales office.
A difference between manufacturers’ agents and selling agents is that
a) selling agents have little control over the marketing mix of the manufacturers they represent.
b) selling agents represent retailers.
c) manufacturers’ agents do not offer retailers aid in advertising or promotional material.
d) selling agents do not have the territorial restrictions that manufacturers’ agents do.
e) selling agents represent wholesalers.
Selling agents perform every wholesaling activity except
a) transporting goods.
b) setting prices.
c) financing the products.
d) taking title to products.
e) inventory control.
A channel member that markets all of a manufacturer’s goods, has authority over price, promotion, and distribution, but does not take title to the product is a
a) general-line wholesaler.
b) selling agent.
c) commission merchant.
d) manufacturers’ agent.
e) broker.
Thad Rather works for a company that markets all of Celetron’s products. Thad’s company acts as the marketing department for Celetron, performing all marketing functions without actually taking title to the goods. Thad’s company is a
a) commission merchant.
b) manufacturers’ agent.
c) sales branch.
d) selling agent.
e) full-service wholesaler.
An agent that receives goods on consignment from local sellers and negotiates sales in large, central markets is called a
a) commission merchant.
b) sales branch agent.
c) selling agent.
d) manufacturers’ agent.
e) broker-agent.
Calhoun Produce, a ___________, takes possession of truckloads of tomatoes, arranges for storage, and transports them to auctions to be sold.
a) manufacturer’s agent
b) selling agent
c) commission broker
d) commission merchant
e) selling broker
The primary purpose of a(n) _____ is to bring buyers and sellers together.
a) commission merchant
b) selling agent
c) manufacturers’ agent
d) intermediary
e) broker
Chelsea has extensive contacts in the real estate business and brings together buyers and sellers. Although she assumes no risks, she can offer specialized knowledge about real estate. Chelsea is a
a) commission merchant.
b) selling agent.
c) broker.
d) specialty-line wholesaler.
e) sales branch agent.
Intermediaries owned by manufacturers that sell products and provide support services to the manufacturers’ sales forces are known as
a) manufacturers’ agents.
b) sales branches.
c) selling agents.
d) sales offices.
e) commission merchants.
The management at Kohler Inc., a manufacturer of sinks, tubs, and other plumbing products, thinks that there will soon be a major growth in home remodeling due to rising interest rates. The management decides to use ___________ in several key cities to provide support services for its sales force in those areas, carry inventory, and offer credit and other services to its retail plumbing customers.
a) sales agents
b) commission merchants
c) broker offices
d) sales branches
e) facilitating agencies
A manufacturer-owned operation that provides services usually associated with agents is a
a) facilitating agency.
b) wholesaler.
c) sales office.
d) sales branch.
e) public warehouse.
Veronica Montez works for Bicardi at a location away from the manufacturing plants. She provides wholesale services to wholesale and retail customers, but her facility does not carry inventory. Veronica works at a
a) sales branch.
b) manufacturers’ agency.
c) sales office.
d) retail outlet.
e) commission brokerage.

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