Consumer Behavior in Retail Final
Test Solutions
Course Introduction
Consumer Behavior in Retail explores the psychological, social, and economic factors that influence how individuals and groups select, purchase, use, and dispose of goods and services in retail settings. The course examines key concepts such as decision-making processes, motivation, perception, attitudes, learning, and cultural influences, emphasizing how these elements impact shopping habits and brand loyalty. Through the analysis of current trends and the application of consumer behavior theories, students gain practical insights into shaping effective retail strategies, enhancing customer experience, and fostering long-term engagement in an increasingly competitive retail environment.
Recommended Textbook
Retailing Management 10th Edition by Michael
Levy
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17 Chapters
1498 Verified Questions
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Page 2
Chapter 1: Introduction to the World of Retailing
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Sample Questions
Q1) Ethical principles can change over time.
A)True
B)False
Answer: True
Q2) The offering of merchandise not typically associated with the store type is called
A) scrambled merchandising.
B) intratype competition.
C) product diversification.
D) channel diversification.
E) vertical differentiation.
Answer: A
Q3) The U.S. retail industry
A) has the lowest concentration of large firms.
B) has the greatest retail density in the world.
C) mostly has small stores operating independently.
D) depends on a single large wholesale industry.
E) consists of a fragmented distribution system.
Answer: B
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Chapter 2: Types of Retailers
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Sample Questions
Q1) Why are category specialists sometimes called category killers?
A) They are often located close to full-line discount stores and discount stores that offer a deep assortment of merchandise.
B) They are located at stand-alone sites.
C) They have a broad merchandise mix and shallow assortment.
D) They can dominate a category of merchandise making it difficult for other retailers to compete.
E) They carry mainly technologically obsolete merchandise.
Answer: D
Q2) What can department stores do to differentiate their merchandise offering and strengthen their image?
A) Increase their pricing
B) Decrease the variety and assortment of merchandise within the store
C) Seek exclusive arrangements with nationally recognized brands
D) Merge with faltering retailers to gain their market share
E) Sell only hard goods
Answer: C
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Chapter 3: Multichannel and Omnichannel Retailing
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Sample Questions
Q1) Which of the following strategies can a retailer utilize to attract shoppers to its website?
A) Persuade investors with positive sales forecasts.
B) Encourage vendors to deliver the assortments.
C) Focus on bankruptcy proceedings to create a trustworthy image.
D) Print the website address on signage, bags, and in advertising.
E) Prime its sales associates to use its website.
Answer: D
Q2) Explain how channel migration poses a challenge to multichannel and omnichannel retailers.
Answer: As long as the store and the Internet channel represent the same retailer, the firm is happy. But if customers gather information from one of its channels, then buy from a channel hosted by a competitor, the retailer suffers from the frustrating problem of channel migration. Modern technologies, including those that allow customers to gather information and buy online or through their mobile devices, also make channel migration very easy. Thus, retaining customers remains a constant challenge for multichannel and omnichannel retailers.
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Page 5
Chapter 4: Customer Buying Behavior
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Sample Questions
Q1) Of the various methods of segmenting, lifestyle is the one that delves the most into how consumers describe themselves.
A)True
B)False
Q2) Ashley's is a clothing retailer. It recently launched a new range of cotton and linen clothing aimed at women in Middle Eastern countries. Light fabrics are preferred in these countries due to the hot climate. The segmentation approach used by Ashley's is
A) lifestyle segmentation.
B) geographic segmentation.
C) demographic segmentation.
D) psychographic segmentation.
E) geodemographic segmentation.
Q3) During the limited problem-solving process, customers tend to rely on
A) personal knowledge.
B) reference groups.
C) promotional advertisements.
D) discount offers.
E) store advocates.
Q4) Briefly explain the consumer buying process.
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Chapter 5: Retail Market Strategy
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Sample Questions
Q1) A(n) ________ is a collaborative relationship between independent firms.
A) strategic alliance
B) joint venture
C) acquisition
D) merger
E) takeover
Q2) Mindy's, a fashion brand, has a significant cost benefit that facilitates success in international markets in which price plays an important role in consumer decision making. Which of the following is most likely a reason for Mindy's success in international markets?
A) A global culture
B) Adaptability
C) Human resources
D) Financial resources
E) Globally sustainable competitive advantage
Q3) Customer relationship management programs collect data about customer shopping behavior to enable retailers to build and maintain customer loyalty.
A)True
B)False
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Page 7
Chapter 6: Financial Strategy
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Sample Questions
Q1) Candle in the Wind is a store for people who enjoy and collect candles to decorate their homes. Last year, its net sales totaled $125,000 with $13,700 in taxes. The cost value of the candles it sold was $42,300. The expenses that the operation has are salaries to the owner and one part-time assistant for $52,000, administrative expenses of $400, and utilities at $900. Calculate the net profit after tax for Candle in the Wind.
A) $29,400
B) $17,000
C) $53,300
D) $15,700
E) $16,100
Q2) Operating profit margin is
A) Gross margin minus operating expenses.
B) Cost of goods sold minus gross margin.
C) Net sales minus gross margin
D) Operating expenses minus gross margin.
E) Operating expenses divided by net sales.
Q3) Identify and describe the two paths of activities that determine return on assets (ROA).
Q4) What is same-store sales growth and how retailers use it?
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Chapter 7: Retail Locations
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Sample
Questions
Q1) Pop-up stores are stores in temporary locations that focus on new products or a limited group of products.
A)True
B)False
Q2) Gross leasable area (GLA) is the real estate industry's term for the total floor area designed for the retailer's occupancy and exclusive use, including any basements, mezzanines, or upper floors.
A)True
B)False
Q3) Bea is a young professional living in the suburbs. She and a friend decide to meet on a Saturday for a day of shopping, dining, and a movie. Since it's a beautiful day outside, they wish to enjoy the weather but also find a place that features upscale apparel shops and boutiques. They will most likely choose to patronize a
A) lifestyle center.
B) central mall.
C) outlet mall.
D) power center.
E) mixed-use development.
Q4) What is a store-within-a-store?
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Chapter 8: Retail Site Location
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Sample Questions
Q1) Which of the following statements does not describe the appropriate use of different approaches for site selection?
A) Large retailers often use the Huff Gravity Model to estimate potential sales for a store site before site selection.
B) Regression analysis can consider the effects of wide range of factors affecting sales in stores.
C) The regression analysis is appropriate for small chains to find the best location.
D) Using the analog approach, the retailer describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics.
E) The analog approach is not recommended for large chain stores like Walmart.
Q2) The ________ of a site is the ease with which customers can get into and out of the site.
A) traffic flow
B) traffic restriction
C) accessibility
D) vehicular traffic bypass
E) macro analysis
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Page 10
Chapter 9: Information Systems and Supply Chain Management
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Sample Questions
Q1) Each time a customer makes a purchase at a Walmart store from the health and beauty area, data is transmitted to the nearest distribution center so the merchandise can be replenished and sent on the next truck delivery. Which of the following strategies does Walmart utilize?
A) Cross check logistic strategy
B) Pull supply chain
C) Cost-efficient logistic strategy
D) Push supply chain
E) Influential logistic strategy
Q2) The pick ticket is a document or display on a screen in a forklift truck that indicates how many cartons to get from specific storage areas.
A)True
B)False
Q3) What is the purpose of the data warehouse and how do retailers use it?
Q4) What are the activities that take place at a distribution center?
Q5) Explain how managing an efficient supply chain and information system can improve the company's return on assets.
Q6) Compare and contrast the push and pull supply chain methods.
Q7) What are the benefits of RFID technology over traditional bar codes?
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Chapter 10: Customer Relationship Management
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Sample Questions
Q1) Which of the following is an inherent limitation associated with asking the customer for identifying information for building a data warehouse?
A) Some customers may feel that the sales associate is violating their privacy.
B) Some identifying information is illegal to use for marketing purposes.
C) If the information provided is inaccurate, the retailer may be held liable.
D) Customer consent is mandatory in the U.S. for using personal information.
E) Customers may give more information than what the sales associate can record.
Q2) Which of the following statements is True of customer loyalty?
A) It refers to customers making repeat visits to a retailer and being satisfied with their experiences.
B) It occurs when customers purchase merchandise and services from a retailer because of its convenient location.
C) It is an emotional connection between a retailer and a customer.
D) It is the state of accumulated transactions that customers build through repeat purchases responding to various promotions.
E) It is the sole result of superior customer service.
Q3) How can retailers enhance customer loyalty?
Q4) What is market basket analysis, and when do retailers utilize it?
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Page 12
Chapter 11: Managing the Merchandise Planning Process
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Sample Questions
Q1) What is the drawback of utilizing category captains?
A) The vendor category captain could take advantage of their position and maximize their own sales.
B) Retailers tend to ignore recommendations of the category captain.
C) Retailers take advantage of the information and misuse it.
D) Retailers can take advantage of their position and minimize competing brands.
E) Vendor category captains are not in a good position when compared to retailers to manage a category.
Q2) Which of the following statements is True of a merchandise category?
A) It is the basic unit of analysis for merchandising decisions.
B) It is the smallest unit available for keeping inventory.
C) It is the unit of inventory least affected by seasonal trends.
D) It is the largest unit available for keeping inventory.
E) It is an assortment of complementary SKUs.
Q3) An open-to-buy system compares
A) a store's perpetual inventory and order point quantity.
B) the amount of merchandise in dollars and the sales forecast.
C) the planned and actual end-of-month inventory.
D) annual sales and backup stock required for merchandise categories.
E) the assortment plan and the projected sales volume.
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Chapter 12: Buying Merchandise
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Sample Questions
Q1) ________ target a price-sensitive segment by offering a no-frills product at a discount price.
A) Generic brands
B) Store brands
C) National brands
D) Family brands
E) Diverted merchandise
Q2) What is counterfeit merchandise? How can it negatively impact the market, and what are the ethical aspects?
Q3) Which of the following is a drawback of selling private-label merchandise?
A) National brands are far superior to private-label brands.
B) National brands are produced with better quality.
C) Significant investment is needed to develop, manage, and market private-label brands.
D) Gross margins are lower with private-label brands than with national brands.
E) Designing private-label merchandise is only possible for department store retailers.
Q4) If there are so many advantages to carrying private brands, why do retailers even bother to sell national brands?
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Chapter 13: Retail Pricing
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Sample Questions
Q1) Which of the following statements is a limitation of the rule-based approach to taking markdowns?
A) The rule-based approach is based upon gross margin.
B) The approach prohibits input from the vendor.
C) The approach does not follow a fixed schedule.
D) It does not consider the demand for merchandise at different price points.
E) The approach assumes that items in a category do not exhibit the same behavior.
Q2) Some retailers liquidate end-of-season merchandise to retailers like TJ Maxx, who in return sell it at a deep discount. What is the benefit to the retailer who liquidates merchandise using this strategy?
A) The retailer is able to replace the merchandise with other markdowns.
B) It helps retailers recoup a percentage of the merchandise cost.
C) It is a profitable way for retailers to get rid of undesirable merchandise.
D) The retailer can consolidate the merchandise.
E) It lowers the reputation of the company who purchases the liquidated merchandise.
Q3) Buyers generally do not plan for markdowns.
A)True
B)False
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Chapter 14: Retail Communication Mix
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Sample Questions
Q1) Similar to the other rule-of-thumb methods, the ________ doesn't allow retailers to exploit the unique opportunities or problems they confront in the market.
A) percentage-of-sales method
B) competitive parity method
C) objective-and-task method
D) marginal analysis method
E) affordable budgeting method
Q2) When retailers and vendors use product placement, they pay to have their product included in nontraditional situations, such as in a scene in a movie or television program.
A)True
B)False
Q3) Which among the following is the largest group of national advertisers in the United States?
A) Real estate industry
B) Retail industry
C) Consumer electronics industry
D) Health care industry
E) Automobile industry
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16
Chapter 15: Human Resources and Managing the Store
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Sample Questions
Q1) Craig works for a retailer deciding what merchandise will be in the assortments, setting prices, negotiating with vendors, and planning advertising and marketing for accessories. He attends fashion trade shows and travels to market in New York City nearly every month. What position in the organizational structure of a retailing firm does Craig have?
A) Merchandise planner
B) Divisional merchandise manager
C) Store manager
D) Buyer
E) Department manager
Q2) Which of the following is an example of extrinsic reward?
A) Meaningful work
B) Promotion
C) Team spirit
D) Positive environment
E) Open communication
Q3) Discuss the legal aspects retailers must abide by when hiring and employing people fairly.
Q4) What are extrinsic rewards?
Q5) What is a behavioral interview?
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Chapter 16: Store Layout, Design, and Visual Merchandising
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Sample Questions
Q1) The grid layout is well suited for customers who are primarily interested in the hedonic benefits offered by a store.
A)True
B)False
Q2) A diagram that shows how and where specific products should be placed on retail shelves or displays to increase customer purchases is called a(n)
A) hologram.
B) allocation plan.
C) placement plan.
D) planogram.
E) assortment plan.
Q3) Which colors would be best suited to produce emotional, vibrant, hot, and active responses from customers?
A) Blue and green tones
B) All the colors of the rainbow
C) White, eggshell, ecru, and other white hues
D) Red, gold, and yellow tones
E) Pink, red, and magenta tones
Q4) How does smell impact customers' mood and emotions?
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Chapter 17: Customer Service
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Sample Questions
Q1) Six weeks after Samuel purchased six portable computers for his realty business, he was called by the retailer who sold him the computers and asked if he was satisfied with the purchase and if there was anything that he would change about the way the store does business. In this scenario, the retailer is trying to reduce its
A) delivery gap.
B) standards gap.
C) production gap.
D) knowledge gap.
E) communication gap.
Q2) An electronic retailer surveys its customers to understand the factors that they consider before making a purchase decision. The retailer is trying to bridge the ________ by using customer research.
A) delivery gap
B) standards gap
C) performance gap
D) knowledge gap
E) communication gap
Q3) What are the ways in which the use of technology is reducing the delivery gap?
Q4) How can retailers reduce the knowledge gap?
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