Merchandising Management
Textbook Exam Questions
Course Introduction
Merchandising Management explores the strategies, processes, and decision-making involved in the planning, buying, pricing, and presentation of products within retail and wholesale environments. The course examines the fundamentals of merchandise planning, assortment strategies, inventory control, vendor relations, and the use of data analytics to meet consumer demands effectively. Students will learn how to analyze market trends, manage product lifecycles, and optimize profitability while considering sustainability and ethical practices in merchandising operations. Through real-world case studies and applied projects, the course prepares students for successful careers in retail management and merchandising fields.
Recommended Textbook
Retailing Management 9th Edition by Michael Levy
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Chapter 1: Introduction to the World of Retailing
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Sample Questions
Q1) Retailers use customer transaction data to:
A) identify their best customers.
B) match the needs of a store's local market.
C) create customized promotions.
D) tailor product assortments.
E) all of these.
Answer: E
Q2) The development of information systems is one the forces facilitating the growth of large retail firms.
A)True
B)False
Answer: True
Q3) A retailer's role in a supply chain is to:
A) act as the liaison between manufacturers and suppliers.
B) buy merchandise exclusively from the manufacturers.
C) negotiate with manufacturers to draw contracts for wholesalers.
D) add value to products and services sold to customers.
E) sell goods and services to wholesalers.
Answer: D
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Page 3
Chapter 2: Types of Retailers
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Sample Questions
Q1) Define a retail chain with examples.
Answer: A retail chain is a company that operates multiple retail units under common ownership and usually has centralized decision making for defining and implementing its strategy.Retail chains can range in size from a drugstore with two stores to retailers with thousands of stores,such as Kroger,Walmart,Best Buy,and Macy's.Some retail chains are divisions of larger corporations or holding companies.For example,the Williams Sonoma Corporation actually consists of four brands,Williams Sonoma,Pottery Barn,west elm,and Rejuvenation.Furthermore,its Pottery Barn branch features the PB teen and pottery barn kids lines.Royal Ahold owns 14 retail chains,including Stop and Shop,Giant,and Peapod in the United States and ICA and Albert Heijh in Europe.
Q2) What type of store is Dollar General considered to be?
A) Off-price retailer
B) Department store
C) Full-line discount store
D) Extreme-value retailer
E) Specialty retailer
Answer: D
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Page 4
Chapter 3: Multichannel Retailing
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Sample Questions
Q1) Ryan needs a painkiller.He goes to the nearby drugstore,buys it,and uses it.Which of the following benefits offered by stores can be seen in the given example?
A) Risk reduction
B) Immediate gratification
C) Personal service
D) Entertainment and Social experience
E) Browsing
Answer: B
Q2) Which of the following statements is true of TV home shopping?
A) Goods are automatically dispensed to customers on cash payment.
B) There are two types of advertising: party plan and multilevel.
C) The impact of advertisements on people cannot be determined accurately.
D) Salespeople interact directly with customers.
E) Customers can see the merchandise demonstrations before buying.
Answer: E
Q3) Stores offer immediate gratification to customers.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Customer Buying Behavior
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Q1) An issue of Consumer Reports,a magazine that evaluates brands of table saws,would serve as a source of _____ as it provides Lewis with useful knowledge about available features,convenience of use,and machine quality.
A) rational information
B) primary data
C) selective data
D) motivational data
E) external information
Q2) _____ is a purchase decision process involving a moderate amount of effort and time.
A) Extended problem solving
B) Habitual decision making
C) Utilitarian shopping
D) Limited problem solving
E) Psychological problem solving
Q3) What are ways retailers can encourage customers to shop at their stores more frequently after they enter into consumers' consideration set?
Q4) How does the brand loyalty of customers impact retailers?
Q5) How do reference groups influence the buying decisions of a person?
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Chapter 5: Retail Market Strategy
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Sample Questions
Q1) Define positioning.
Q2) _____ are developed so that the distance between two retailers' positions on the map indicates how similar the stores appear to consumers.
A) Perceptual maps
B) Geographical maps
C) Brand perceptions
D) Product perceptions
E) Demographic maps
Q3) Ashton LLC,a chain of supermarkets,intends to change its pricing policy and promotional mix but intends on catering to the same market segment.Which of the following growth strategies will best suit Ashton LLC?
A) Market penetration growth opportunity
B) Market expansion growth opportunity
C) Retail format growth opportunity
D) Diversification growth opportunity
E) Wholesale format growth opportunity
Q4) List the key opportunities for success in global retailing.
Q5) Describe franchising.
Q6) Why would a retailer desire to have private-label or store brands?
Page 7
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Chapter 6: Financial Strategy
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Sample Questions
Q1) By knowing the return on assets for his bakery shop,Chuck will know:
A) how much profit was generated from his investment in assets.
B) information found only on his balance sheet.
C) information found only on his income statement.
D) total assets divided by net profits.
E) total assets divided by owners' equity.
Q2) The Bookstore Café is a small restaurant located in a downtown business district.It is opened for breakfast and lunch and serves simple yet nutritious meals as well as books from the New York Times bestseller list.How would you categorize the book inventory,cooking equipment,tables,chairs,and the register?
A) As retained earnings
B) As assets
C) As current liabilities
D) As investor capital
E) As owners' equity
Q3) Define debt-to-equity ratio.
Q4) Output measures assess the results of a retailer's investment decisions.
A)True
B)False
Q5) What are the critical assets controlled by a store manager?
Page 8
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Chapter 7: Retail Locations
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Q1) Diana wanted a German shorthaired pointer after seeing it win the Best in Show Award at the dog show.She searched on the Westminster Kennel Club website for a breeder and found one in Greenville,South Carolina.She was sure this was the breed she wanted;she was willing to pay the expense to travel to Greenville and purchase the puppy.This type of shopping is:
A) demand-oriented service-provider.
B) specialty shopping.
C) ultimate provider.
D) internet shopping.
E) supply-oriented service-provider.
Q2) Which of the following does not describe mixed-use developments (MXDs)?
A) Retailers like MXDs because they bring additional shoppers to their stores.
B) Developers avoid MXDs because of unproductive use of space.
C) Urban planners like MXDs because they provide a pleasant,pedestrian environment.
D) Residents like MXDs because they offer an all-inclusive environment.
Q3) When consumers go specialty shopping,they know what they want and will not accept a substitute.
A)True
B)False
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Page 9
Chapter 8: Retail Site Location
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Sample Questions
Q1) Locations in a shopping center affect both sales and occupancy costs.Which of the following statements is not true in describing the relationships?
A) The more expensive locations are closest to the supermarket in a strip shopping center.
B) Shops,like a flower shop,which attract impulse buyers,should be close to the supermarket in a strip shopping center.
C) A destination store,like a shoe repair store,should be located close to supermarket in a strip shopping center.
D) Stores that cater to consumers engaging in comparison shopping are benefited from being located in more expensive locations near the department store anchors.
E) A retailer such as Foot Locker need not be in the most expensive location because customers are in the market for this type of product before they even go shopping.
Q2) List out and define the different terms of leases.
Q3) What factors should be considered in locating stores? Why should retailers consider those factors?
Q4) What are two main issues to consider when negotiating a store's lease?
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Page 10
Chapter 9: Human Resource Management
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Sample Questions
Q1) A retailing chain in which local store managers make most of the retailing decisions instead of the corporate headquarters can be described as:
A) formalized.
B) integrated.
C) generalized.
D) centralized.
E) decentralized.
Q2) Define distributive justice and procedural justice.
Q3) Centralization makes it easy for a retailer to adapt to local market conditions.
A)True
B)False
Q4) What can retailers do to help associates balance careers and family?
A) Offer job sharing opportunities.
B) Offer higher hourly pay.
C) Offer commission based pay.
D) Foster partnering relationships between associate and supervisors.
E) Manage diversity.
Q5) List the five HR management activities that build employee engagement.
Q6) Define organization structure.
Q7) Define engagement.
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Chapter 10: Information Systems and Supply Chain Management
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Sample Questions
Q1) What is the bullwhip effect and what causes it in an uncoordinated supply chain?
Q2) Bloomsberry LLC,a fashion retailer,periodically keeps updating their collection of apparel.Woolen apparels are stocked during winter,and cotton apparels are stocked during summer.Which of the following is this an example of?
A) Stockout
B) B-stock
C) Unique merchandise
D) Tailored assortments
E) Clearance sale
Q3) Which of the following is the primary benefit of tagging individual items to retailers?
A) Increased inventory turnover
B) Reduced product prices
C) Reduced inventory turnover
D) Real-time measure of employee productivity
E) Real-time measure of inventory levels
Q4) What are the activities that take place at a distribution center?
Q5) Compare and contrast the push and pull supply chain methods.
Q6) What are the benefits of RFID technology over traditional bar codes?
Q7) List the three objectives that a supply chain security policy should meet.
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Chapter 11: Customer Relationship Management
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Sample Questions
Q1) A _____ is a group of customers who are bound together by their loyalty to a store and the activities the retailer sponsors and undertakes.
A) frequent shopper community
B) retail brand community
C) consideration set
D) target market
E) customer pyramid
Q2) What are the four factors that limit the effectiveness of frequent-shopping programs?
Q3) What is a customer lifetime value (CLV),and how is it estimated?
Q4) Airlines and credit cards that offer points for each dollar spent are utilizing ____ for effective customer relationship management.
A) a loyalty program
B) cookies
C) share of wallet
D) market baskets
E) communities
Q5) How is the customer pyramid more appropriate than the 80-20 rule when identifying customers?
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Chapter 12: Managing the Merchandise Planning Process
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Sample Questions
Q1) What are the decisions influencing the allocation of merchandise to stores?
Q2) Which of the following analysis techniques compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions are required?
A) Sell-through analysis
B) GMROI
C) ABC analysis
D) Inventory turnover analysis
E) Multiattribute analysis
Q3) The _____ method for evaluating vendors uses a weighted-average score for each vendor.
A) sell-through analysis
B) GMROI
C) ABC analysis
D) inventory turnover analysis
E) multiattribute analysis
Q4) The quantity of merchandise has a bigger impact on profitability than allocation decisions.
A)True
B)False
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Chapter 13: Buying Merchandise
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Sample Questions
Q1) _____ are charges imposed by a retailer to stock a new item.
A) Chargebacks
B) Slotting allowances
C) Additional markup dollars
D) Advertising allowances
E) Markdown allowances
Q2) Why are inventory carrying costs higher for retailers who source internationally?
A) Lead times are longer,and there is a need to maintain higher levels of safety stocks.
B) There is no way to predict the extra tariffs that will be levied by importing countries.
C) Labels of origin are typically put on products and need to be removed upon arrival.
D) Changes in fixed costs result in additional inventory.
E) Foreign distribution centers charge higher storage fees.
Q3) What are the major issues that a buyer discusses during a meeting with a vendor?
Q4) What are some of the costs associated with sourcing merchandise globally?
Q5) Identify and describe the different options that retail buyers of national brands have to see new products and meet with vendors.
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Page 15
Chapter 14: Retail Pricing
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Sample Questions
Q1) _____ are customers who go from one store to another,buying only items that are on special.
A) Innovators
B) Laggards
C) Cherry pickers
D) Whistleblowers
E) Early adapters
Q2) Which of the following is NOT a factor that retailers consider in setting prices?
A) Price sensitivity of consumers
B) The cost of the merchandise and services
C) Competition
D) Legal restrictions
E) Language barriers
Q3) How can working with vendors reduce the amount of markdowns?
Q4) Describe the difference between initial markup and maintained markup.
Q5) The break-even quantity is the quantity at which total revenue equals total cost beyond which profit occurs.
A)True
B)False
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Chapter 15: Retail Communication Mix
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Sample Questions
Q1) Which of the following is classified as in-store marketing?
A) Coupon
B) Rebate
C) Discount
D) Premium
E) Sample
Q2) A co-op (cooperative)program is a promotional program undertaken by a vendor and a retailer working together.
A)True
B)False
Q3) _____ are advertisements printed at the retailer's expense and distributed as an insert in the newspaper.
A) Cogprints
B) Preprints
C) Reprints
D) Postprints
E) Eprints
Q4) What is the major disadvantage associated with using the competitive parity method of determining a retail communication budget?
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Chapter 16: Managing the Store
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Sample Questions
Q1) The _____ allows employees to sue employers that violate employment laws.
A) Equal Employment Opportunity Commission
B) United States Chamber of Commerce
C) Center for Capital Markets Competitiveness
D) Institute for a Competitive Workforce
E) National Chamber Foundation
Q2) Which of the following is a benefit of using realistic job previews to screen job applicants?
A) Decrease in employee turnover
B) Increase in employee turnover
C) Tax benefits from the state government to the employer
D) Tax benefits from the federal government to the employer
E) Tax benefits from the federal government to the employees
Q3) The four major responsibilities of a store manager are managing employees,controlling costs,managing merchandise presentation,and providing customer service.
A)True
B)False
Q4) Discuss the legal aspects retailers must abide by when hiring and employing people fairly.
Page 18
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Chapter 17: Store Layout, Design, and Visual Merchandising
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Sample Questions
Q1) Sam's merchandise is sold in large quantities and stacked high on metal shelving.This merchandising gives the customer a message of low prices.Which of the following merchandising techniques is Sam's using?
A) Tonnage merchandising
B) Price lining
C) Color presentation
D) Frontage presentation
E) Atmospherics
Q2) How does smell impact customers' mood and emotions?
Q3) How does flexibility become an important aspect when controlling costs?
Q4) _____ is a measure of space productivity used by retailers.
A) Price lining
B) Sales per square foot
C) Inventory turnover
D) Tonnage merchandising
E) Asset turnover
Q5) Explain the use of a gondola as a fixture.
Q6) Why are demand and promotional merchandise placed in the back left-hand corner of the store?
Q7) Explain the concept of vertical merchandising.
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Chapter 18: Customer Service
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Sample Questions
Q1) When Donna ordered a refrigerator,she expected the people who delivered it to install the refrigerator.However,the refrigerator was left at her door,and Donna's expectations were not met.Which of the following terms best describes the given scenario?
A) Procedural fairness
B) Distributive fairness
C) Learned response
D) Service gap
E) Services cape
Q2) _____ is to provide customer service personnel and sales associates that really want to help customers and provide prompt service.
A) Reliability
B) Assurance
C) Tangibility
D) Empathy
E) Responsiveness
Q3) Customer expectations are based on a customer's knowledge and experiences.
A)True
B)False
Q4) What are the steps involved in effective service recovery?
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