Test 1: Terminology

Question 1

Variety

Answer 1

Number of merchandise categories a retailer offers

Question 2

Assortment

Answer 2

Number of different items offered in a merchandise category

Question 3

Breadth of Merchandise

Answer 3

Variety of merchandise

Question 4

Depth of Merchandise

Answer 4

Assortment of merchandise

Question 5

Stock-Keeping Unit (SKU)

Answer 5

Each different item of merchandise

Question 6

Conventional Supermarket

Answer 6

Large, self-service retail food store offering groceries, meat, and produce as well as some nonfood items, such as health and beauty aids and general merchandise (30,000 SKUs)

Question 7

Limited-Assortment Supermarkets/ Extreme-Value Food Retailers

Answer 7

Save-A-Lot, ALDI only stocks about 2,000 SKUs. Only offer one or two brands and sizes to maximize efficiency and reduce costs.

Question 8

“Power Perimeter”

Answer 8

The fresh-merchandise categories around the outer walls of a supermarket (includes dairy, bakery, meat, produce, deli…) they attract consumers and are very profitable

Question 9

Fresh Supermarkets

Answer 9

Smaller stores that are more convenient than traditional supermarkets and have less space devoted to packaged goods (more fresh merchandise)

Question 10

Fair trade

Answer 10

The practice of purchasing from factories that pay workers a living wage and offer other benefits

Question 11

Locavore Movement

Answer 11

Focuses on reducing the carbon footprint caused by the transportation of food throughout the world (buying locally)

Question 12

Supercenters

Answer 12

Larger stores (185,000 sqft) that combine a supermarket with a full-line discount store (super Walmart)

Question 13

Hypermarkets

Answer 13

(100K - 300K sqft) combination food and general merchandise stores (Carrefour, stocks fewer units than supercenters)

Question 14

Big-Box Stores

Answer 14

Large, limited-service stores

Question 15

Warehouse clubs

Answer 15

Retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses

Question 16

Convenience Stores

Answer 16

Limited variety and assortment of merchandise at a convenient location in 3 - 5,000 sqft stores with speedy checkout

Question 17

Department stores

Answer 17

Retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct departments for displaying merchandise

Question 18

Full-line discount stores

Answer 18

Retailers that offer a broad variety of merchandise, limited service, and low prices

Question 19

Specialty stores

Answer 19

Concentrate on a limited number of complementary merchandise categories and provide a high level of service

Question 20

Drugstores

Answer 20

Specialty stores that concentrate on health and personal grooming merchandise

Question 21

Category specialists

Answer 21

Big-box stores that offer a narrow but deep assortment of merchandise

Question 22

Category killers

Answer 22

Offering complete assortment in a category, category specialists can “kill” a category of merchandise for other retailers (Lowes v. Home Depot, Staples v. Office Depot)

Question 23

Extreme-value reatilers

Answer 23

Small discount stores that offer a limited merchandise assortment at very low prices

Question 24

Off-price retailers (Closeout retailers)

Answer 24

Offer an inconsistent assortment of brand-name merchandise at a significant dsicount to the MSRP (TJ Maxx)

Question 25

Closeouts

Answer 25

End-of-season merchandise that will not be used in following seasons

Question 26

Irregulars

Answer 26

Merchandise that has minor mistakes in construction

Question 27

Outlet stores

Answer 27

Off-price retailers owned by manufacturers or retailers

Question 28

Factory outlets

Answer 28

Outlets that are owned by manufacturers

Question 29

Services retailers

Answer 29

Firms that primarily sell services rather than merchandise (airliners, banks, fast food, health care, etc)

Question 30

Wholesale-sponsored voluntary cooperative group

Answer 30

Organization operated by a wholesaler offering a merchandising program to small, independent retailers on a voluntary basis

Question 31

Retail Chain

Answer 31

A company that operates multiple retail units under common ownership and usually has centralized decision making for defining and implementing its strategy

Question 32

Franchising

Answer 32

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchisor

Question 33

Multichannel retailers

Answer 33

Retailers that sell merchandise or services through more than one channel

Question 34

Internet retailing/ online retailing/electronic retailing/ e-tailing

Answer 34

Retail channel in which the offering of products and services for sale is communicated to customers over the internet

Question 35

Catalog channel

Answer 35

Nonstore retail channel in which the retail offering is communicated to customers through a catalog mailed to customers

Question 36

Direct selling

Answer 36

Retail channel in which salespeople interact with customers face-to-face in a convenient location (customer's home or work)

Question 37

Party plan system

Answer 37

Salespeople encourage customers to act as hosts and invite friends or coworkers to a "party"

Question 38

Multilevel system

Answer 38

Independent businesspeople serve as master distributors, recruiting other people to become distributors in their network

Question 39

Pyramid scheme

Answer 39

Develops when the firm and its program are designed to sell merchandise and services to other distributors rather than to end users

Question 40

Television home shopping

Answer 40

Retail channel in which customers watch a TV program demo and then place orders (usually by telephone)

Question 41

Infomercials

Answer 41

Programs that mix entertainment with product demonstrations

Question 42

Direct-response advertising

Answer 42

Consists of one to two minute advertisements that describe the product and provide an opportunity to order

Question 43

Automated retailing

Answer 43

Retail channel in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card

Question 44

Share of customers' wallet

Answer 44

The percentage of purchases a customer makes from a specific retailer

Question 45

M-commerce

Answer 45

The purchase of products and services through mobile devices

Question 46

Disintermediation

Answer 46

Occurs when a manufacturer sells directly to consumers, bypassing retailers

Question 46

Channel migration

Answer 46

Consumers' collecting information about products on their channels and then buying the product from a competitor