Retailers, Wholesalers, and Direct Marketers
Match each item with the correct statement below.
a. stock-keeping unit (SKU) l. auction house
b. markup m. limited-line store
c. markdown n. retailing
d. retail convergence o. mass merchandiser
e. scrambled merchandising p. wholesaler
f. atmospherics q. direct marketing
g. selling agent r. discount houses
h. general-merchandise retailer s. planned shopping center
i. category killer t. wheel of retailing
j. rack jobber u. drop shipper
k. merchant wholesaler v. supercenter
1. The predominant distribution channel for interacting directly with the consumer is the _____ channel.
2. The _____ refers to the hypothesis that each new type of retailer gains a competitive foothold by offering
lower prices than current suppliers charge; the result of reducing or eliminating services.
3. To identify varying items within a product line, retailers refer to a specific product offering as a(n) _____.
4. The _____ is the amount a retailer adds to the cost of a product.
5. The amount by which a retailer reduces the original selling price is called the _____.
6. A group of retail stores planned, coordinated, and marketed as a unit is known as a(n) _____.
7. _____ describe a store’s physical characteristics and amenities that attract customers and satisfy their
8. Best Buy is an example of a(n) _____.
9. Customers find a large assortment of products within one product line or a few related lines in a(n) _____.
10. A(n) _____ emphasizes lower prices for well-known brand-name products, high product turnover, and
11. A retailer that carries a large number and variety of product lines stocked in depth is called a(n) _____.
12. Stores that charge low prices but may not offer services such as credit are called _____.
13. A(n) _____ is a large store, usually smaller than a hypermarket, that combines groceries with discount
14. _____ describes a situation in which similar merchandise is available from multiple retailers.
15. _____ is a retailing practice of combining dissimilar product lines.
16. A(n) _____ takes title to the goods it handles and sells those products primarily to retailers or business
17. A(n) _____ takes title to the goods it handles.
18. A(n) _____ is a wholesaler who markets specialized lines of merchandise to retailers.
19. _____ is a limited-function merchant wholesaler that accepts orders from customers and forwards these
orders to producers, which then ship directly to the customers who placed the orders.
20. A(n) _____ gathers buyers and sellers in one location and allows potential buyers to inspect merchandise
before submitting competing purchase offers.
21. A(n) _____ typically exerts full authority over pricing decisions and promotional outlays.
22. Internet marketing, vending machines, and telemarketing are examples of _____.
1. Which of the following is one of the fundamental steps in the marketing strategy process on which a retailer
bases its key decisions?
a. Selecting a target market
b. Stipulating a minimum profit margin
c. Determining the store location and atmosphere
d. Populating its inventory
2. After identifying a target market, a retailer must:
a. develop marketing strategies to attract chosen customers to its stores.
b. apply a standardized marketing strategy to attract customers from outside the target
c. concentrate on determining the ideal levels of inventory to be maintained.
d. segment the market based on factors such as family income and customer lifetime value.
3. General product categories, specific product lines, specific products within lines, and the depth and width of
its assortment are considerations retailers must bear in mind when developing their:
a. store layout.
b. interactive marketing policy.
c. customer care program.
d. merchandising strategy.
4. _____ are increasingly taking on the role of channel captain within many distribution networks.
b. Large-scale retailers
5. _____ represent nonrefundable fees grocery retailers receive from manufacturers to secure shelf space for
a. Switching costs
b. Franchise fees
c. Carrying costs
d. Slotting allowances
6. When a retailer tries to convince a customer to buy a higher-priced item than he or she had originally
intended, it is called:
b. value-added selling.
c. selling up.
7. The combination of physical characteristics and amenities that contribute to a store’s image is called:
8. _____ are groups of retail outlets that operate under central ownership and management and
handle the same product lines.
a. Specialty stores
b. Chain stores
c. Variety stores
d. Department stores
9. A new kind of limited-line retailer has emerged over the past 15 years. These stores combine wide selection
and low prices in a single product line and are known as:
a. specialty stores.
b. predatory retailers.
c. category killers.
d. smorgasbord retailers.
10. A retailer that offers a large assortment within a single product line or within a few related product lines is
known as a:
a. limited-line store.
b. self-selection store.
c. specialty store.
d. convenience store.
11. A department store is a:
a. retail outlet offering huge selections and low prices in single product lines.
b. supermarket offering product lines at the lowest prices possible.
c. large display of rooms that contain samples of products stored in a warehouse.
d. series of limited-line or specialty stores gathered under one roof.
12. Discount houses have all of the following characteristics except:
a. less customer service.
b. lower prices.
c. wider and deeper product lines.
d. less atmospherics.
13. _____ are no-frills, cash-and-carry outlets that offer consumers access to name-brand products at deeply
a. Outlet malls
d. Warehouse clubs
14. The type of retail store that stocks only designer labels or well-known, brand-name clothing at prices equal
to or below regular wholesale is the:
a. super center.
b. off-price retailer.
c. department store.
d. variety store.
15. A growing number of off-price retailers are concentrating in:
a. outlet malls.
c. regional shopping centers.
d. warehouse clubs.
16. Hypermarkets are:
a. somewhat smaller than the similar supercenters, averaging 180,000 square feet to the
supercenters’ 245,000 square feet.
b. stores that began their history selling mostly appliances but now sell soft goods, foods, and
c. giant one-stop shopping facilities that offer wide selections of grocery and general
merchandise products at discount prices.
d. stores that promote to their customers using direct mail, and sell from showrooms that
17. An example of scrambled merchandising is a:
a. supermarket carrying canned goods, fresh fish, tropical fruits, and bulk grains.
b. jewelry store carrying rings, watches, TVs, electronic games, and DVDs.
c. drug store carrying prescription drugs, over-the-counter medications, and health care
d. shoe store carrying shoes, shoe polish, socks, and leather bags.
18. Wholesalers create place utility by:
a. helping deliver goods and services for purchase at convenient locations.
b. extending credit to product manufacturers.
c. providing a sales force to call upon potential suppliers.
d. offering their services round the clock and at customers’ convenience.
19. Possession utility can occur, even if title is not transferred, as in the case of:
a. vending machine transactions.
b. beauty salon services.
c. auto rentals.
d. college education.
20. Customers who cannot afford to pay cash for purchases made directly from the manufacturer are granted
credit from a wholesale intermediary to purchase those same products from its warehouse. The wholesaler
is performing the marketing function of:
21. The sales branch is a manufacturer-owned facility that:
a. provides space for permanent showrooms and exhibits, which manufactures rent to market
b. does not carry inventory but serves as a regional office for a manufacturer's sales
c. manufactures and packages goods to the order of its customers.
d. carries inventory and processes orders from customers from available stock.
22. A _____ provides space for permanent showrooms and exhibits, which manufacturers
rent to market their goods.
a. merchandise mart
b. trade fair
c. drop ship
d. clearing house
23. The mail-order wholesaler is a limited-function merchant wholesaler who:
a. distributes catalogs instead of sending sales representatives to contact retail, business, and
b. exerts full authority over pricing decisions and promotional outlays, and even provides
financial assistance for the manufacturer.
c. performs most wholesaling functions via the Internet.
d. accepts orders from customers and forwards these to manufacturers who ship the products
direct to the customer.
24. Which of the following independent wholesaling intermediaries does not take title to the goods they handle?
a. Truck jobbers
b. Mail-order wholesalers
c. Selling agents
d. Drop shippers
25. The major difference between a selling agent and a manufacturer’s agent is:
a. a selling agent represents several manufacturers, but a manufacturer’s agent represents
only one manufacturer.
b. a selling agent is paid on a commission basis, but a manufacturer’s agent is remunerated
on an annual basis.
c. a selling agent serves as an independent marketing department for a manufacturer, but a
manufacturer’s agent may represent several manufacturers of non-competing products.
d. a selling agent is paid on an annual basis, but a manufacturer’s agent is paid on a
26. Which of the following is the most frequently used form of direct marketing?
a. Direct response retailing
b. Online retailing
d. Direct mail