Marketing Chapter 8, 9, 10, 11 test 3

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The new product development process usually starts with ________.

idea generation

Which of the following statements is most likely true about the new product development process?

Customers, competitors, and suppliers are major sources of new product ideas.

Which of the following is an internal source of new product ideas for a company?

intrapreneurial programs

Internal sources of new product ideas for a company include its ________.


In which of the following cases is crowdsourcing used for new product development?

A company creates a forum where anyone can contribute new product ideas.

A company’s external sources of new product ideas include its ________.


Kallton is a multinational communications and information technology corporation. Its principal products are mobile telephones and tablets. It recently announced on its Web site that customers can suggest ideas for its upcoming product model. Contributors of short-listed ideas will be adequately rewarded. In this case, Kallton is using ________ to generate new product ideas.


Which statement is most likely true about idea generation in the new product development process?

Idea generation is usually followed by procedures that reduce the total number of ideas.

Quest Inc. recently conducted a brainstorming session that generated a large number of ideas for adding new products and services. Quest managers will most likely use ________ next to arrive at a realistic number of ideas to adopt.

idea screening

Which of the following steps of the new product development process would most likely use an R-W-W framework?

idea screening

A product concept is ________.

a detailed version of a product idea stated in meaningful consumer terms

A ________ is the way consumers perceive an actual or potential product.

product image

The stage in which a product concept is presented to groups of target consumers physically or symbolically is referred to as ________.

concept testing

In a sequential new product development process, concept testing is most likely to be followed by ________.

marketing strategy development

The first part of a marketing strategy statement describes the ________ of a new product.

target market

The second part of a marketing strategy statement describes the ________ of a new product.

planned price

The third part of a marketing strategy statement describes the ________ of a new product.

profit goals

________ involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy a company’s objectives.

Business analysis

Hollingsworth is a retail company that is planning to release a new line of luxury personal care products. Its managers are now reviewing the sales history of similar products and conducting marketing surveys to estimate minimum and maximum sales for the product. In which of the following stages of the new product development process is the product?

business analysis

In a sequential new product development process, which of the following is true of the product development step?

Product development is usually followed by test marketing.

In a sequential new product development process, once a product or service passes the business test, it moves into ________.

product development

In the ________ stage of new product development, products undergo rigorous tests to make sure that they perform safely and effectively, or that consumers will find value in them.

product development

If a product passes both the concept test and the product test, the next step is most likely to be ________.

test marketing

Wayne Industries, a retail and home improvement store, is developing a new lawnmower. The marketing strategy for the product has already been developed and presented. A prototype has also been developed by the company’s R&D team. The prototype is now being tested rigorously to ensure that there are no product liability issues. Once the prototype of the lawnmower passes product tests, the next step is most likely to be ________.

test marketing

In which of the following cases is little or no test marketing most likely recommended for a new product?

when the costs of developing and introducing the product are low

Evans and Hills, a beverages manufacturing company, has developed a new line of specialty teas and is seeking regular input from the test marketing process. To facilitate this process, the firm uses BuyerScan, a software that generates store-by-store, week-by-week reports on the actual sales of tested products and the impact of in-store and in-home marketing efforts. Which of the following approaches does this scenario illustrate?

controlled test markets

________ is the stage where a product and its proposed marketing program are introduced into realistic market settings.

Test marketing

Using ________, researchers measure consumer responses to new products and marketing tactics in laboratory stores or virtual online shopping environments.

simulated test markets

Introducing a new product into the market is called ________.


Which of the following costs is most likely associated with commercialization?

building or renting a manufacturing facility

A company launching a new product must first decide ________.

when to launch the product

Under a ________ new product development approach, company departments work closely together in cross-functional groups, overlapping the steps in the product development process to save time and increase effectiveness.


Under a ________ product development approach, one company department works to complete its stage of the product development process before passing the new product along to the next department and stage.


The team-based new product development approach saves times because departments work closely together in ________.

cross-functional teams

Which of the following is a disadvantage of a team-based approach to new product development?

Organizational confusion and tension are likely to affect the process.

When an end user’s problems and experiences define a new product, the approach is called ________.

customer-centered new product development

At Fantastic Flavors, a large regional chain of candy stores, employees from marketing, design, production, and finance departments work in cross-functional groups to save time and money in the new product development process. From this description, it can be inferred that Fantastic Flavors uses a(n) ________ approach.

team-based new product development

An innovation management system would most likely be used by ________.

brand managers to collect, review, and evaluate new product ideas

39) ________ is used to study the course of a product’s sales and profits for the duration that it is produced and sold in the market.

A product life cycle

Which of the following statements is most likely true about the product life cycle?

Growth is a period of rapid market acceptance and increasing profits.

A product life cycle has five distinct stages: product development, introduction, growth, maturity, and ________.


Which of the following is true of the product life cycle (PLC)?

It is generally difficult to forecast the sales level at each PLC stage.

Some products that have entered the decline stage can be cycled back to the growth stage through ________.


Fads are characterized by their ________.

unusually high sales and rapid decline

Which of the following would most likely have the longest duration in a market and be characterized by several periods of renewed interest?

a style

Flurrbies, a line of winter accessories by a leading fashion label, quickly fell in and out of favor with customers. Flurrbies represents an example of a(n) ________.


When a product hits the ________ stage, profits level off or decline because of increased marketing outlays to defend the product against competition.


In which stage of the product life cycle will promotional expenditures be significantly high in an attempt to create consumer awareness of a product and its features?


Which of the following is true about the introduction stage of a new product?

Sales growth tends to be slow.

In the ________ stage, a firm most likely faces a trade-off between high market share and high current profit.


Which of the following is true of the growth stage of the product life cycle?

Sales start climbing quickly.

Craft Inc.’s Krayons is a multi-color chalk material that was released in the market over a century ago. Since the release, the company has had remarkable sales and Krayons has remained unchanged. However, over the last few years, sales of Krayons have been stagnant. Competitors have begun marking prices down, and increasing their advertising and sales promotions. Craft’s Krayons is most likely in the ________ stage of the PLC.


Tavera, an automobile company, experienced a significant decline in sales over the last 10 months of its flagship car, Tetra. In response, Tavera reduced its R&D, advertising, and sales expenditures for Tetra in an attempt to improve short-run profits. Which term best describes Tavera’s actions with regards to Tetra?

product harvesting

Parvon, a cleaning product, is in the maturity stage of the product life cycle, and Parvon managers have decided to modify the market. Which of the following steps should Parvon managers most likely take to achieve this goal?

find new market segments for the brand

Gershwin, a musical toy for toddlers, is in the maturity stage of the product life cycle, and Gershwin managers have decided to modify the product. What will Gershwin managers most likely do to achieve this goal?

change the packaging of the toy

A product is in the maturity stage of the product life cycle, and the company decides to modify the marketing mix. Which of the following steps is the company most likely to take?

use aggressive sales promotions

Which of the following is most likely true of a product in the maturity stage of the product life cycle?
A) Sales are zero, and the company’s investment costs mount.
B) New competitors enter the market.
C) A slowdown occurs in sales growth.
D) Sales increase with decreasing competition.
E) New distribution channels are acquired.

A slowdown occurs in sales growth.

A product has hit the ________ stage when sales plunge to zero, or they drop to a low level where they continue for many years.


As a result of ________, a company cannot make its product illegally similar to a competitor’s already established product.

patent laws

Some companies are now appointing ________, whose job is to protect consumers from harm and the company from liability by proactively ferreting out potential product problems.

product stewards

1) ________ refers to the amount of money charged for a product or service.


2) ________ is the only element in the marketing mix that produces revenue.


3) Which of the following sets the upper limit for a product’s pricing?

consumer perceptions of value

4) Which of the following sets the lower limit for a product’s pricing?

product costs

5) ________ uses buyers’ perceptions of what a product is worth as the key to pricing.

Customer value-based pricing

6) Value-based pricing is the reverse process of ________ pricing.


7) A value-based pricing strategy most likely begins with ________.

assessing customer needs

8) ________ pricing involves charging a constant low price with few or no temporary price discounts.

Everyday low

9) Providing extra amenities to differentiate and support high-priced products is referred to as ________ pricing.


10) ________ pricing involves setting prices based on the expenses involved in producing, distributing, and selling a product plus a fair rate of return for a company’s effort and risk.


11) Rent, electricity, and executive salaries that do not vary with production level are referred to as ________ costs.


12) ________ costs are also known as overhead.


13) Costs that change directly with the level of production are referred to as ________ costs.


14) ________ costs refer to the sum of the fixed and variable costs for any given level of production.


15) A company designs what it considers to be a good product, calculates the expenses of making the product, and sets a price that adds a standard markup to the cost of the product. This approach to pricing is called ________ pricing.


16) ________ pricing is when a firm tries to determine the price at which it will break even or make the profit it is seeking.

Target return

17) The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as ________ pricing.

target return

18) Which of the following statements about break-even analysis is most likely true?

It fails to consider customer value and the relationship between price and demand.

19) Which of the following is an external factor that affects pricing decisions?


20) Radox, a luxury watch brand, identifies a market segment that is willing to pay premium prices for its watches, and Radox managers select an ideal selling price. Managers then determine the costs to create watches that meet the ideal selling price. The company’s pricing approach is referred to as ________.

target costing

21) In ________, the market consists of many buyers and sellers trading in a uniform commodity, such as wheat, copper, or financial securities.

a pure competition

22) There are more than 20 stores on a street in Sao Paulo that specialize in selling the same quality and brand of wheat products. An individual seller cannot charge more than the going market price without the risk of losing business to the other stores. What type of market does this example represent?

a pure competition

23) Under ________, the market consists of many buyers and sellers trading over a range of prices rather than a single market price.

monopolistic competition

24) Under ________, the market consists of a few large sellers who are highly sensitive to each other’s pricing and marketing strategies.

oligopolistic competition

25) The relationship between the price charged for a product and the resulting demand level can be shown in a ________.

demand curve

26) When demand hardly changes with a small change in the price of a product, then the demand for the product is best described as ________.


28) A firm uses ________ when it charges a high, premium price for a new product with the intention of reducing the price in the future.

a market-skimming pricing

29) The strategy of setting a low initial price to attract a large number of buyers quickly and win a large market share is referred to as ________.

market-penetration pricing

Which of the following is an economic factor that affects the pricing decisions of a company?

interest rates

30) Which of the following conditions is most likely essential for implementing a successful market-skimming pricing strategy for a product?

The product’s quality and image support its high price.

Which of the following conditions is most likely essential for implementing a successful market-penetration pricing strategy for a product?

The market for the product is highly price sensitive.

Qriosity Inc. released a new antivirus program at half-price to attract buyers. This is most likely an example of ________.

market-penetration pricing

NerdHerd Electronics sells three different sizes of televisions at three different prices. In this case, the company’s pricing strategy is referred to as ________ pricing.

product line

Selling accessory products along with the main product is referred to as ________ pricing.


Setting a price for products that must be used along with a main product is known as ________ pricing.


How do firms that use captive-product pricing make up for the low prices of their main products?

They set high markups on the captive products.

Netcorp, an Internet service provider, charges its users a fixed rental fee for its basic package, which has a download limit. If a user exceeds this download limit, an additional fee is charged for every download. In this case, the firm’s pricing strategy is referred to as ________ pricing.


Combining several products and offering the collection at a reduced price is referred to as ________ pricing.

product bundle

Which group is most likely offered functional discounts by manufacturers?

a trade-channel members that perform sales tasks

Glow, a gift card store, offers a price reduction to customers who buy Christmas cards the week after Christmas. In this case, the store offers a ________.

seasonal discount

Vac "N" Sew, a consumer electronics outlet, offers a price reduction of $100 when customers bring in a used vacuum cleaner and exchange it for a new vacuum cleaner or sewing machine. This is an example of a ________.

trade-in allowance

42) When Luxury Motors gives price reductions to its new car dealers to reward them for participating in advertising and sales support programs, the firm is granting ________.

promotional allowances

Metro Museum has different admission prices for students, adults, and seniors. All three groups are entitled to the same services. This form of pricing is called ________ pricing.


Busch Stadium in St. Louis charges different prices for seats in different areas of the ball park, even though each seat costs the same for the owners of the stadium. What is this form of pricing called?

location-based pricing

45) When a firm varies the price of a product by the season, month, day, or even hour, without changing product features, it is using ________ pricing.


46) Pricing a product based on consumers’ reference prices is referred to as ________ pricing.


47) Consumers rely less on price to judge the quality of a product when they ________.

have prior experience with the product

48) ________ prices are carried in buyers’ minds and used when looking at a given product.


49) What type of pricing is being used when a company temporarily prices its products below the list price to create buying excitement and urgency?

promotional pricing

50) When a manufacturer offers a ________, a customer buys a product from a manufacturer’s dealer within a specified time period, and the manufacturer sends the customer a check.

cash rebate

51) Which of the following pricing strategies charges the same price plus freight to all customers, regardless of their location?

uniform-delivered pricing

52) Which of the following pricing strategies is the opposite of FOB-origin pricing?

uniform-delivered pricing

53) Wilkinson & Company sells plumbing supplies across the United States. Wilkinson uses Chicago as its central location for determining freight costs regardless of the city from which products are actually shipped. For example, a Dallas customer pays the freight cost from Chicago to Dallas even if the goods are shipped from Dallas. Wilkinson most likely uses ________ pricing.


54) Computer Works is a computer accessories manufacturer based in Brazil. All customers in South America pay the same freight charge, $20, when they order products from the company. All customers in North America pay a freight charge of $50. The company’s pricing strategy is referred to as ________ pricing.


55) Chef Brown’s Health Food Store sells nutritional, energy-producing foods. Product prices are adjusted frequently to meet the needs of individual customers and situations. For example, long-time customers receive discounts. This strategy is most likely an example of ________ pricing.

c dynamic

Which of the following would be considered an upstream partner in a company’s supply chain?

a firm that provides technical expertise in the production of a product

Which of the following is true of downstream channels in a company’s supply chain?

They form an intermediary link between the company and its customers

A ________ is made up of a company, its suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system.

value delivery network

________ are sets of interdependent organizations that help make the product or service of a company available for use by consumers or business users.

Marketing channels

Producers use marketing intermediaries because they ________.

create greater efficiency in making goods available to target markets

From the economic system’s point of view, the role of marketing intermediaries is to ________.

transform the assortments of products made by producers into the assortments wanted by consumers

Which of the following is true of a direct marketing channel?

It does not use any intermediaries.

Which of the following creates the shortest distribution channel between a producer and a customer?

direct marketing

In which of the following situations is a producer guaranteed full control over product sales?

a direct marketing channel

A firm that uses direct marketing would most likely sell its products through ________.

the company Web site

Crowbar Records used to sell its music CDs through a network of retail outlets, record stores, and music dealers but stopped using these agents with the advent of MP3 technology. Crowbar now sells its music independently on its Web site, through personal mail, and on social networking sites. Which type of marketing system has Crowbar most likely adopted?

a direct marketing channel

Which of the following is a marketing intermediary?


Kevin Pinker is a freelance computer programmer who writes computer algorithms for companies such as SoftStar and BlueHill. SoftStar and BlueHill use these algorithms to make specific programs based on online market research. These programs are then sold to the online retailer, Abundon, which then sells them to individual consumers and businesses. Which of the following is a marketing intermediary in this chain?


Mintel Agro provides raw materials in the form of agricultural products to Kiltmark Food Company. Kiltmark produces flour-based edible products, which it distributes to a wholesale company called Yellowstar Trading. Yellowstar Trading then sells Kiltmark products to the discount retailer, Stroos. Stroos sells the products to consumers. Which of the following is considered a marketing intermediary in these transactions?

both Yellowstar Trading and Stroos

Which of the following is an example of a horizontal conflict in a distribution channel?

a Ford car dealer complaining that another Ford dealer is underpricing the same models

Vertical conflicts in distribution channels are conflicts that occur between ________.

different levels of the same channel

Orion Steel is the chief provider of metals to Accline Cars, which manufactures two models of vehicles-cars and large buses. Accline dealers sell the firm’s cars to individual citizens, but buses are sold directly to government entities. In such a distribution channel, which of the following would be considered a vertical conflict?

a conflict between Accline Cars and its dealers

Jupiter Steel is the chief provider of metals to Greystone Motors. Greystone Motors has two models of cars-one for commercial and ordinary consumers and another for professional car racing teams. Greystone Motors has designated dealers to sell its commercial cars to consumers, while racing cars are sold directly to the racing teams. In such a distribution channel, which of the following would be considered a horizontal conflict?

a conflict between two Greystone Motors car dealerships

Which of the following is true of a conventional distribution channel?

It has each channel member acting as a separate business unit trying to maximize its own profits.

In a ________, producers, wholesalers, and retailers act as a unified system. In such a structure, one channel member owns the others, has contracts with them, or has so much power that they all cooperate.

vertical marketing system

Which of the following is true of a vertical marketing system?

It has one channel member owning all the other channel members or has contracts with all other channel members.

A(n) ________ marketing system combines successive stages of production and distribution under single ownership, where channel leadership is established through common ownership.

corporate vertical

A(n) ________ marketing system is a marketing system in which independent firms at different levels of production and distribution join together through binding agreements.

contractual vertical

Which type of channel arrangement does a franchise organization most likely follow?

contractual vertical marketing system

Rage, a leading motor vehicle manufacturer, introduces a new superbike model. It invites proposals from independent dealers who are willing to set up exclusive showrooms that only sell Rage’s superbikes. Chosen dealers will sell and service the superbikes, and Rage will oversee national advertising. This is most likely an example of a(n) ________.

manufacturer-sponsored retailer franchise system

Pastaliano is a restaurant based in Illinois that exclusively sells Italian food. Pastaliano sells the rights to its recipes to a British firm, Clover Trading, which then opens an outlet in London under the Pastaliano brand name. Which kind of channel arrangement does Pastaliano most likely have with Clover Trading?

a contractual vertical marketing system

In a(n) ________ marketing system, leadership over production and distribution is assumed through the size and power of one or a few dominant channel members.

administered vertical

Sonic Shack, an audio equipment retailer, signs an agreement with PineWire, a renowned electronics company, to sell PineWire products. The deal requires Sonic Shack to provide PineWire products with superior displays, shelf space, and promotion compared to competing products. Sonic agrees to these terms as PineWire products command a huge share in the market. Which of the following types of channel arrangements do PineWire and Sonic Shack most likely have?

administered vertical marketing system

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity is referred to as a(n) ________.

horizontal marketing system

TruMart, a leading retail chain, decides to open a restaurant inside its stores, so the firm partners with MeatMe, a popular burger chain. MeatMe opens a restaurant inside TruMart. The MeatMe chain of restaurants also has a deal with Westman Cola to serve only Westman soft drinks at its outlets. This arrangement will benefit all three companies. What kind of channel arrangement is being followed in this case?

horizontal marketing system

GreatWords is a book retailer. Due to the increasing demand for audiobooks, the firm decides to sell audiobooks in its stores. GreatWords signs a deal with Carpem, a leading producer of educational audiobooks. According to the deal, GreatWords will sell only Carpem’s audio titles in its stores, while Carpem will not sell its books through other retailer stores. GreatWords profits from Carpem’s popularity while Carpem, in return, enjoys better sales. This is most likely an example of a(n) ________ marketing system.


Faber Motors manufactures three lines of cars: high-end security cars for government agencies, commercial cars for consumers and individuals, and professional racing cars. The high-end security cars are sold directly to government buyers by the company. The consumer cars are sold through dedicated dealers who only sell Faber’s lines at their outlets. For its professional racing cars, Faber collaborates with Radium Tires, an innovative and renowned tire manufacturer. Faber provides the engine and body, while Radium provides the tires and its expertise on the racing industry. Which term best describes Faber’s channel arrangements?

multichannel distribution system

Clara’s, a cosmetics manufacturer, sells many of its products through retail outlets. However, the firm sells a few expensive, popular products only through direct selling methods. What kind of channel arrangement does Clara’s follow for all of its products together?

multichannel distribution system

For over ten years, Erudite, a publishing and educational company that produces college textbooks, has been selling its books online through, a popular online retailer that sells textbooks published by different companies. Recently, Erudite stopped selling its books through and set up its own website for selling its books. This change in channel organization is called ________.


________ distribution is a product distribution strategy that involves stocking a product in as many outlets as possible.


Which of the following is true of an intensive distribution strategy?

It strives to make products available where and when consumers want them.

________ distribution gives a limited number of dealers the sole rights to distribute a company’s products in their territories.


Selective distribution is a strategy in which ________.

more than one but fewer than all willing intermediaries are used by a seller

________ distribution gives producers good market coverage with more control and less cost than does intensive distribution.


When a seller requires that only certain dealers carry its products, its strategy is known as ________.

exclusive distribution

Which of the following is an advantage of exclusive dealing between a seller and a dealer?

The dealer obtains a steady source of supply and more support from the seller.

________ is a practice whereby a producer agrees to sell a brand to a dealer only if the dealer agrees to sell some or all of the rest of its products.

Full-line forcing

Which of the following is true of an exclusive dealing arrangement between a producer and a dealer?

It does not allow other producers to sell to that dealer.

The Memphis Rock chain of restaurants has a deal with WestEnd Cola, according to which it will serve only WestEnd sodas at its restaurants. What strategy has most likely been adopted by WestEnd Cola?

exclusive dealing

Bateman Gray Motors sells the cars it produces using dedicated dealers who only sell Bateman Gray’s products at their outlets. What kind of marketing strategy has Bateman Gray adopted with its car dealers?

exclusive dealing

PinWheel, a renowned electronics company, has an arrangement with SoundBite, an audio equipment retailer. Through the agreement, Soundbite is to promote and sell PinWheel’s audio electronics and give PinWheel products better shelf space than competitors’ products. The agreement also requires that SoundBite sell additional non-audio PinWheel products at all SoundBite stores. Which term best describes PinWheel’s strategy?

full-line forcing

In supply chain management, moving products and materials from suppliers to the factory is known as ________ logistics.


Outbound logistics refers to moving ________.

products from the factory to resellers

Reverse logistics refers to moving ________.

unwanted, excess products from resellers to producers

In a logistics system, minimizing distribution costs most likely involves ________.

large shipping lots

A ________ is highly automated and designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.

distribution center

Which of the following is a difference between storage warehouses and distribution centers?

Storage warehouses store goods for moderate to long periods, while distribution centers are used to move goods rather than just store them.

In a just-in-time logistics system, ________.

retailers carry small inventories of merchandise to last for only a few days

Which of the following is true of RFID or "smart tag" technology?

"Smart shelves" can tell when it is time to reorder and can place orders automatically.

Which of the following is a cost-effective mode for shipping large amounts of bulk products-coal, sand, minerals, and forest products-over long distances?


Which of the following is most efficient for short hauls of high-value merchandise and is highly flexible in its routing and time schedules?


Which mode of transportation is best for carrying perishable goods to distant markets?

air carriers

________ involves combining two or more systems of transportation to move products.

Multimodal transportation

The use of both rail and trucks for transporting goods is called ________.


Under ________, a customer shares real-time data on sales and current inventory levels with a supplier, and the supplier then takes full responsibility for managing inventories and deliveries.

vendor-managed inventory systems

________ refers to the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.


________ refers to using point-of-purchase promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decisions.

Shopper marketing

Which of the following conditions increases the chances of a retailer opting to be categorized as a self-service retailer?

when customers are willing to conduct their own locate-compare-select process

Stores that provide moderate sales assistance because they carry shopping goods about which customers need a moderate level of information are called ________ retailers.


Which types of stores are characterized by specialty goods for which customers need assistance and higher operating costs that are passed along to customers as higher prices?

full-service stores

Flax is a chain of stores that carries several product lines including clothing, home furnishings, and household appliances. Each line is operated as a separate department, and employees are available to assist and advise customers in every phase of the shopping process. Flax is most likely a ________.

full-service retailer

Customers at Carat, a premium jewelry store, are encouraged to make an appointment before a visit so that a customer service representative is assigned to them. These representatives help every customer make a purchase that meets his or her needs and budget after considering numerous options. The different styles and special features of the jewelry are explained to each customer to aid the purchase decision. In this case, Carat is an example of a(n) ________.

full-service retailer

Which type of retailer typically carries deep product assortments of narrow product lines?

specialty stores

GameStop, a video game retailer, offers a deep assortment of video games and video game consoles. GameStop is best described as a(n) ________.

specialty store

Specialty stores are characterized by ________.

narrow product lines with deep assortments

Department stores are most likely characterized by ________.

wide varieties of product lines

Jones & Company, a major retail chain across the United States, offers a wide range of consumer goods such as clothing, furniture, home appliances, cosmetics, jewelry, and food. Jones & Company is best described as a ________.

department store

A convenience store ________.

carries a limited line of high-turnover goods for consumer self-service

Which type of store is much larger than a regular supermarket and offers a large assortment of routinely purchased food products, nonfood items, and services?


Which term refers to a giant specialty store with a very deep assortment of a particular product line?

category killer

Pawz is a larger retailer that specializes in pet products and services such as pet food, accessories, grooming, toys, and medical treatment. Pawz also has animals available for adoption at all of its many stores located across the nation. Pawz is most likely an example of a ________.

category killer

Which of the following statements is true of retailing?

Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed.

________ refer to retailers that sell standard merchandise at lower prices by accepting lower margins and selling higher volume.

Discount stores

________ have filled the ultralow-price, high-volume gap by buying at less-than-regular wholesale prices and charging consumers less than retail.

Off-price retailers

Which of the following is a type of off-price retailer?

warehouse club is an online retailer that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices. Allstocks then charges customers less than retail. Allstocks is an example of a(n) ________.

independent off-price retailer

An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer’s surplus, discontinued, or irregular goods is called a ________.

factory outlet

Dina loves branded apparel and accessories but cannot afford to buy them too often. Fortunately, Dina lives close to an off-price retail store that is owned and operated by a famous brand. The company utilizes this store to sell its surplus, discontinued, or irregular goods at significantly lower costs. The retail store is best referred to as a ________.

factory outlet

________ are off-price retailers that operate in huge facilities offering few frills but ultra-low prices and surprise deals on selected branded merchandise.

Warehouse clubs

________ refer to two or more outlets that are commonly owned and controlled.

Corporate chains

Which term refers to a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising?

voluntary chain

Which contractual system is distinguished by the fact that it is normally based on some unique product or service?


McPherson’s, an ice cream retailer, recently entered into an agreement that allows independent businesspeople at select stores and locations across the country to sell its famous ice creams and milk shakes for a monetary consideration. Which type of contractual retail association is described in the above example?

franchise organization

Rhonda recently entered into a contractual agreement with StellarCutz, a national chain of affordable, walk-in hair salons. Under the agreement, Rhonda uses the StellarCutz trade name and receives support from StellarCutz in terms of business methods and processes. Rhonda paid a start-up fee to StellarCutz and will pay annual licensing fees for the use of the StellarCutz brand. Which of the following best describes Rhonda’s business?


What is most likely the first major marketing decision that a retailer must take?


For a retailer to be able to differentiate from competitors and match target shoppers’ expectations, the retailer’s product assortment should most likely be ________.

constituted by national brands on which the store holds exclusive rights

Campbell is one of the oldest retailers in the country. While the service offered at Campbell is fairly mediocre, the retailer is famous for its surprise offerings of seconds, overstocks, and closeouts-occasionally including expensive gadgets and jewelry. Posco, a new chain of retail stores, offers products that are similar to Campbell’s offerings; however, Posco is known for encouraging customers to ask questions and for providing service representatives to assist customers in the purchasing decision process. From this scenario, which of the following statements is most likely true?

Posco better utilizes the services mix to differentiate itself from Campbell.

Venture Zone, a hiking and climbing equipment retailer, has a rock climbing wall inside the store so that consumers can test products prior to purchase. Venture Zone most likely differentiates itself from its competitors through ________.

experiential retailing

The Toby’s chain of first-class department stores carries a wide range of product lines, including clothing, jewelry, kitchenware, and home furnishings. Toby’s typically charge higher prices on an everyday basis and then holds frequent sales and price promotions to increase store traffic. Toby’s most likely uses ________.

high-low pricing

Barry’s is a chain of retail stores that stocks a large variety of goods and practices high-low pricing. This means that Barry’s is likely to ________.

offer numerous sales or discounts

A ________ refers to a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

shopping center

Which of the following statements is true of shopping centers?

Shopping centers are groups of retail businesses built on a site that is planned, developed, owned, and managed as a unit.

A ________ contains between 15 and 50 retail stores, including a department or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.

community shopping center

Power centers are characterized by the ________.

provision of individual entrances to each store

A ________ is a small open-air mall with upscale stores, convenient locations, and nonretail activities such as a playground, dining establishments, and a movie theater.

lifestyle center

Which of the following is an impact of the Great Recession on retailing trends?

tighter consumer spending patterns

Carleese, a leading fashion brand, sets up small temporary boutiques across numerous locations during its year-end sale, promoting its outdated products at half the price. These temporary boutiques are referred to as ________.

pop-up stores

Retail convergence most likely leads to ________.

reduced differentiation

Checking out products in traditional stores and purchasing them online is referred to as ________.


________ includes all the activities involved in selling goods and services to those buying them for resale or business use.


Which wholesaler channel function is demonstrated when a wholesaler’s sales force helps a manufacturer reach many small customers at a low cost?

selling and promoting

Which wholesaler channel function helps reduce the inventory holding costs and risks of suppliers and customers?


Which of the following channel functions of wholesalers is demonstrated when a buyer receives quicker delivery because wholesalers are located closer than are producers?


Wayne Wholesaling fulfills many channel functions for its customers. The company mainly focuses on helping retailers to train their salespeople, improve store layouts, and set up inventory control systems. Based on this description, which channel function is provided by Wayne Wholesaling?

management services and advice

________ are the largest group of wholesalers and can be divided into two broad types of wholesalers: full-service and limited-service.

Merchant wholesalers

When compared to merchant wholesalers, brokers and agents ________.

do not take title to goods

A ________ brings buyers and sellers together and assists in negotiations.


________ represent buyers or sellers on a more permanent basis than brokers.


C & G Retail, a chain of local supermarkets, procures all its goods directly from the producers’ factories. This type of wholesaling is usually done in ________.

manufacturers’ offices

Jacob Kendler works in a wholesale business which specializes in industrial goods needed in automobile industries. Jacob’s job involves locating and contacting potential buyers and sellers and facilitating the negotiation process. Which of the following, if true, would strengthen the argument that Jacob works as an agent and not as a merchant wholesaler?

Jacob represents his company but is not liable for any damaged or low-quality goods.

Hamilton Wholesaling, an electronics wholesaling firm, provides many services to customers including buying, storing, and transporting expensive and delicate electronics equipment. Hamilton takes title of ownership to all goods that the firm handles. Hamilton is most likely a(n) ________.

merchant wholesaler

Wholesalers most likely discourage less-profitable customers by ________.

adding service charges to small purchase orders

According to the text, today’s large and progressive wholesalers have successfully reacted to rising costs by ________.

investing in information technology systems

Which of the following is true about trends in wholesaling?

The demand for lower prices and higher quality has increased.

JP Wholesalers is one of the largest wholesalers of wooden furnishings in the country. Recently, the company opened a chain of stores called JP Designer Homes that has become popular due to the good reputation the company has as a wholesaler. The company has now started acquiring smaller retail chains and consolidating its position in the market. Which of the following trends is reflected in this scenario?

the blurring of distinctions between retailers and wholesalers

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