State Skills Test Review – Retailing
Test date ______________________
1. Define Retailing.
It is the selling of goods or services to the customer.
2. What is the difference between goods and services?
Goods are tangible items, but services are intangible
3. Name some types of retailers.
Catalog, internet, goods and services retailers, etc.
4. What is the most important characteristic that all retailers share?
All retailers want to make their products available to customers when they
want them and where they want them.
5. What are three benefits of retailing?
Retailing benefits customers, the community and the local and national
6. Describe at least three tasks that retailers perform.
Some tasks include: buying merchandise and products, determing sales
price, inventory, promotion, display, selling and service of goods.
7. Why is the NAICS Codes important?
NAICS is important because it enables nations to compare business
statistics by industy and get some idea about their competition.
8. How many NAICS categories are there for the retail industry?
9. What are the three types of business organizations?
single proprietorship, partnerships and corporations
10. Identify a store based retailer.
A store based retailer operates and conducts business from a fixed
location including general merchandise retailers, department stores, specialty
stored, discount stores, outlet stores, etc.
11. Name the nine categories of service retailers.
Financial, hospitality & lodging, maintenance and repair, personal services,
recreation & tourism, rental, restaurant and food services, security services &
12. Explain multichannel retailing & e-tailing.
Multichannel retailing is the use of more than one method for reaching
customers. E-tailing is the selling of goods or services to customers by means
of the internet.
13. Identify elements to include on a retail website.
Store’s name, address, phone and fax numbers, hours of operation,
directions to store, and email contact info as well as catalogs of products.
14. What is non-store selling and identify types of non-store
Non store selling is any form of retailing that takes place in areas other
than a fixed location for example, direct selling, vending machine, direct mail,
telephone sales, infomercials, street vendors
15. Why is determining a target market important?
Retailers can focus on the needs of their specific customers
16. What are the four major categories of market segmentation?
demographics, psychographics, geographics & product benefits.
17. Why is it important for retailers to develop a competitive
It makes one retail establishment more desirable to customers than
another that is offering the same merchandise.
18. Why is business credit important for retailers and what are the
5 C’s of credit?
Credit is importand when making purchases for businesses. It allows them
to pay at a later time.
The 5 c’s are
Capacity – ability to pay
Character – reliability
Credit history – amount of past debt and record of payment
Capital – assets owned after debt
Collateral – property or valuables pledged as security
19. What are three types of business expenses?
Operating expenses, interest expenses and cost of goods sold
20. What are the three categories of business risk?
economic, natural and human
21. Explain a merchandise plan.
A merchandise plan is a basic budgeting tool that assists the retailer in
meeting department goals. It uses figures from previous years to create a plan
for the current year.
22. What are the components of a merchandise plan?
23. Identify the four stages of the merchandise life cycle.
Introduction, growth, acceptance and decline
24. What are the four steps in the merchandise receiving process?
Receive the merchandise, check the merchandise for correct quantity &
quality, mark prices, move it to selling area.
25. What are two types of inventory control methods.
Physical inventory – count products manually
Perpetual inventory – computer tracks it
26. Why is stock turnover important?
Stock-turnover rates tell the retailer if his or her merchandise is selling
at a reasonable rate, and it is a tool for comparing to competition.
27. What are the five characteristics of the buyer’s job?
A buyer determines the money available for purchases, what merchandise
the customers will want, the best vendors, negotiates the best terms and
28. How does a buy determine what to buy?
A buyer uses target market information, sales records, customer
preferences and customers requests and often shops the competition to
determine what to buy.
29. Define markup and markdown.
Markup is the term used to express the difference between the cost of
the merchandise or service and the selling price. Markdown is a reduction in
the original selling price.
30. Name three factors that affect the selling price.
Competition, supply & demand, customer acceptance.
31. What are two differences between strip centers and malls?
Strip centers are connected by walkways or sidewalks and parking is in the
front. Malls are enclosed and parking is around the mall building.
32. Explain the importance of traffic for a retail business.
Traffic refers to the number of people who pass a retail location during a
given period of time.
33. What is a business’s trade area?
It is the geographic area from which a store draws most of its customers.
34. What are nine site selection criteria?
Trade area, traffic, ease of access, parking, visibility, competition, zoning,
lease terms and merchandise sold.
35. Explain the importance of store image.
Store image can be described as the personality of the store. It affects
how customers feel about the store.
36. Why is store design so important?
Store design is so important that may hire professionals. It creates the
impression that their customers have.
37. What is store layout.
Store layout is the arrangement of the stores merchandise, fixtures and
38. What are the goals of an effective store layout?
To present the store’s merchandise to its best advantage and to help sell
39. Define visual merchandising.
Visual merchandising is the integrated look of the entire store and is
composed of all the visual aspects of the store.
40. What are the five styles of interior store display.
Open display – setting which allows customers to touch and handle product
Closed display – product is in closed case and need to ask for assistance
Room setting display – items are assembled to allow customers to see how
certain merchandise will look in their homes.
Point- of – sale display – used for impulse buying near the cash register
Store decoration display- used to promote seasonal or holiday items
41. What are the four types of promotion?
sales promotion, public relations, advertising & personal selling
42. Define promotional mix.
Promotional mix is the way the retailer combines the four types of
43. What are five SALES promotion techniques a retailer might use?
contests, sales events, premiums, free samples & email
44. What is publicity?
Publicity is any unpaid mention of a retail business
45. What are the two major categories of advertising?
Product advertising – is a paid message used by business to promote a
product or group of products.
Institutional advertising – is a paid message used to promote the
business’s image or to create goodwill for the business.
46. What are the three types of advertising?
retail, vendor & cooperative
47. What are the four types of advertising media?
print media, broadcast media, online media & specialty media
48. Identify characteristics of an effective retail sales associate.
Must have good people skills, want to help customers, have good personal
49. What are the two categories of a sales associates job tasks?
Non selling tasks – straightening stock, restock of selves
Selling tasks – handles merchandise returns, service to customers
50. Why is it important for sales associates to have good product
A knowledgeable sales associate can provide the information a customer
needs to make an informed buying decision.
51. What are two types of customer buying motives?
rational & emotional
52. What are the seven steps of a sale?
Open the sale
determine customer needs
present the merchandise
close the sale
perform suggestion selling
53. What are the three types of customer greetings?
social – “Hello, or good afternoon”
service – “May I help you”
merchandise – “Have you seen our new DVD players?”
54. What are four ways a sales associate can use suggestion selling?
Suggest a greater quantity, suggest new merchandise or new product,
inform customers about special sales in store.
55. Define customer service.
Customer service is the set of enhancements that retailers offer
customers to make shopping more convenient or more rewarding. (Ex. child
care, coat check, bridal registry, credit terms, lay away, extended store hours,
dressing rooms, gift certificates.
56. Why is word-of-mouth communication so important?
Positve word of mouth communication means customers will keep coming
back and encourage friends and relative to frequent store.
57. What is the most important part of a sales associates job?
Providing customer service
58. Why is employee retention important in the delivery of
outstanding customer service?
Long-term employees are happy and happy employees pass along their good
feelings to customers.
59. What are two ways management can help employees provide
excellent customer service.
training and empowerment
60. What are some important characteristics of a store manager.
delegating, mulit-tasking, ability to get along with people, responsible,
reliable, trustworthiness, punctual, leadership potential
61. What are the three areas in which a store manager can control
Watching for waste, managing selling expenses, minimizing losses due to
shoplifting and employee pilferage.
62. What are four parts of a store managers job of managing store
Hiring, training, supervising and evaluating personnel
63. What are some questions you should answer when gathering
Ask about education required, job forecast, work day hours, salary range.
64. What are two things to keep in mind when making a career plan?
Be realistic & specific
65. What type of information should be included on your resume?
contact information, objectives, skills, education, activities & honors
66. Why is it important to list offices and memberships on your
To demonstrate leadership & teamwork ability
67. What are three things you should remember when completing a
use blue or black ink, answer completely and truthfully, write neatly and
68. What are the two purposes of a follow-up letter after a job
To say thank you for the interview and to restate your interest and
69. Why is punctuality important at work?
Employers need to make schedule to ensure adequate coverage.