Retail Entrepreneurship
Question Bank
Course Introduction
Retail Entrepreneurship explores the principles and practices involved in starting, managing, and growing a retail business. The course covers key topics such as identifying market opportunities, developing a retail business plan, choosing store formats, sourcing products, merchandising, marketing, and customer relationship management. Students learn about the challenges and innovations facing modern retailers, including e-commerce, omnichannel strategies, and the use of technology in retail operations. Through case studies and practical projects, students gain hands-on experience in creating sustainable and competitive retail ventures.
Recommended Textbook
Retail Management A Strategic Approach 13th Edition by Barry
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Page 2
R. Berman
Chapter 1: An Introduction to Retailing
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) While close cooperation between manufacturers and retailers is fostered in intensive distribution,this form of distribution generally does not allow a manufacturer to achieve maximum sales for a product.
A)True
B)False
Answer: False
Q2) Which statement concerning strategic planning is correct?
A) Strategic plans can be best used by large retailers.
B) Strategic planning should be conducted on an annual basis.
C) Strategic plans should emphasize attracting customers via price-oriented promotions.
D) Strategic planning is a continuous process.
Answer: D
Q3) The largest retailer in the United States (in terms of sales)is Sears Holding.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Building and Sustaining Relationships in Retailing
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Sample Questions
Q1) Lawn care and house painting are examples of ________ services.
A) repair
B) owned-goods
C) nongoods
D) rented-goods
Answer: B
Q2) A retailer seeking to minimize bad debts should utilize what type of credit?
A) revolving credit account
B) commercial credit card
C) option credit account
D) open credit account
Answer: B
Q3) The bundle of benefits offered to consumers through a channel of distribution is
A) a value chain
B) customer service
C) a value delivery system
D) relationship retailing
Answer: A
Page 4
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Chapter 3: Strategic Planning in Retailing
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112 Flashcards
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Sample Questions
Q1) A retailer can determine how consumers and others perceive its company through use of ________.
A) control analysis
B) situation analysis
C) target market assessment
D) positioning
Answer: D
Q2) With a professional manager system,planning tends to be less formal and more intuitive than with an owner-manager system.
A)True
B)False
Answer: False
Q3) A retailer aims efforts at two or more distinct consumer groups,with different retailing approaches for each group,in ________.
A) market segmentation
B) concentrated marketing
C) mass marketing
D) differentiated marketing
Answer: D
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Page 5
Chapter 4: Retail Institutions by Ownership
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Sample Questions
Q1) Which of the following has developed because existing retail institutions were perceived by consumers as inadequately fulfilling market needs?
A) independent channel ownership
B) consumer cooperatives
C) leased departments
D) total vertical integration
Q2) A unique disadvantage for independent retailers is ________.
A) a lack of competitive advantages
B) a lack of independence
C) a lack of control over strategy
D) overdependence on the owner
Q3) Specialization of personnel by functional area and/or geographic region is most likely to occur in what type of retail institution?
A) independent
B) chain
C) leased department
D) consumer cooperative
Q4) a.Develop a series of steps to organize a consumer cooperative. b.What factors account for the lack of consumer cooperatives?
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Chapter 5: Retail Institutions by Store-Based Strategy Mix
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Sample Questions
Q1) Scrambled merchandising is most similar to which retail institution format?
A) retail cooperative
B) chain
C) franchising
D) leased department
Q2) a.Differentiate between an off-price chain and a factory outlet.
b.Why do many manufacturers favor the use of factory outlets in contrast to off-price chains to sell retailers' canceled orders,end-of-season merchandise,and so on?
Q3) Conventional supermarkets,food-based superstores,combination stores,box (limited-line)stores,and warehouse stores are all included in the general definition of a supermarket.
A)True
B)False
Q4) Which retail institution has the most selection of any general merchandise retailer?
A) full-line discount store
B) factory outlet
C) variety store
D) department store
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7
Chapter 6: Web, nonstore-Based, and Other Forms of Nontraditional Retailing
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112 Flashcards
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Sample Questions
Q1) An ethical issue that affects direct marketers relates to ________.
A) the sale of mailing lists
B) different prices charged in store and catalog operations
C) the distribution of overstocked goods to factory outlets
D) the cancellation of orders from suppliers that cannot deliver goods on time
Q2) A major factor contributing to the low level of sales on the Web is ________.
A) consumer concern for credit card security on the Web
B) the need to constantly update each Web site
C) the poor demographics of Web users
D) the need for a Web master to be available during the hours the site is available for viewing
Q3) Rent (or a percent of sales)has to be paid for each location with ________.
A) video kiosks and vending machines
B) the World Wide Web and the Internet
C) the Internet and video catalogs
D) video catalogs and video kiosks
Q4) What are the relative advantages and disadvantages of airport retailing as compared to a traditional retail site?
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Q5) Why are direct selling and conventional vending machines not generally considered part of direct marketing?
Chapter 7: Identifying and Understanding Consumers
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Sample Questions
Q1) If a consumer perceives a purchase to be important,the purchase has a high degree of perceived risk.
A)True
B)False
Q2) Cognitive dissonance can occur both before and after a purchase.
A)True
B)False
Q3) The family life cycle has been updated in which version?
A) updated family life cycle
B) family life cycle II
C) VALS 2
D) household life cycle
Q4) A ________ seeks to convert a ________ into a purchase of a specific brand.
A) social cue; commercial cue
B) physical drive; social cue
C) physical drive; commercial cue
D) commercial cue; physical drive
Q5) Class conscious consumers generally have high social perceived risk.
A)True
B)False
9
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Chapter 8: Information Gathering and Processing in Retailing
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Sample Questions
Q1) Large surveys to geographically scattered consumers can be handled most economically by mail.
A)True
B)False
Q2) The use of point-of-sale cash registers to study the number of products purchased in the average transaction illustrates ________.
A) internal secondary data
B) external secondary data
C) a survey
D) observation
Q3) The findings in nonprobability samples are more generalizable than those from probability samples.
A)True
B)False
Q4) A major advantage of secondary data is the ________.
A) fit with the research topic to be studied
B) immediate availability of data for analysis
C) ability to control the use of questions and the sequence of questions
D) known source and control over data collection
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Chapter 9: Trading-Area Analysis
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Sample Questions
Q1) Parasite stores do not have to delineate their trading area.They can use the trading-area analysis of other retailers in the same shopping district or shopping center.
A)True
B)False
Q2) The least flexible element of a retailer's strategy mix is ________.
A) merchandise assortment
B) human resources
C) pricing
D) location
Q3) Under what conditions should a retailer have high trading-area overlap among its branches? Explain your answer.
Q4) a.Differentiate among a primary,secondary,and fringe trading area.
b.What are the benefits of having a large fringe trading area? ...the limitations?
Q5) An area's commercial and industrial structure is referred to as its ________.
A) lambda coefficient
B) economic base
C) trading area
D) industrial diversification base
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Chapter 10: Site Selection
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Sample Questions
Q1) Many CBDs have been revitalized based on modernization programs by merchants.
A)True
B)False
Q2) A megamall is a form of a ________.
A) central business district
B) string
C) community shopping center
D) regional shopping center
Q3) A power center is a form of regional shopping center.
A)True
B)False
Q4) A compromise in terms of occupancy between ownership and leasing is the sale-leaseback.
A)True
B)False
Q5) The kinds of goods and services sold in a secondary business district are similar to those found in a neighborhood business district.
A)True
B)False
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Chapter 11: Retail Organization and Human Resource Management
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Sample Questions
Q1) The modern version of the Mazur plan reflects the importance of store branch locations.
A)True
B)False
Q2) A major disadvantage of a straight commission plan in comparison to a straight salary plan to the retailer is the ________.
A) lack of management control over an employee's performance of nonselling tasks
B) higher possible overall compensation costs
C) greater incentive to increase productivity
D) ability to attract better employees due to security
Q3) Which of these factors is a form of dissatisfier (minimum expectations)?
A) achievement
B) work conditions
C) responsibility
D) advancement
Q4) A major advantage of specialization is ________.
A) the need for fewer employees
B) the generation of broad-based potential managers
C) less employee boredom
D) reduced training
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Chapter 12: Operations Management: Financial Dimensions
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Sample Questions
Q1) The relationship between a retailer's net profits and net sales is its ________.
A) asset turnover
B) net profit margin
C) operating costs
D) cost of goods sold
Q2) A retailer can increase its financial leverage through ________.
A) selling common stock
B) leasing rather than purchasing assets
C) reducing operating expenses
D) increasing short- and long-term debt
Q3) Annual cash flow planning is especially difficult when a retailer ________.
A) uses quick response (QR) inventory planning
B) has high depreciation expense
C) buys merchandise on a consignment basis
D) has a highly seasonal business
Q4) a.Explain the difficulties of determining the profitability of a retail division with a high proportion of indirect expenses.
b.Explain the relationship of natural account expenses and functional account expenses.
Q5) Discuss three important financial trends that relate to retailing.
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Chapter 13: Operations Management: Operational Dimensions
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Sample Questions
Q1) A listing and sequencing of interrelated tasks that must be performed by several retail personnel to assure that a retail service is efficiently and effectively performed is an important part of a(n)________.
A) operations blueprint
B) workload forecast
C) job standardization analysis
D) cross-training analysis
Q2) Rigid control and standardization for each phase of business characterize
A) mass merchandising
B) rationalized retailing
C) positioned retailing
D) risk-minimization retailing
Q3) A characteristic associated with the bottom-up space management approach is
A) retail space costs may be high
B) the total space available may be less than that required by the plan
C) planning is centralized
D) that the needs of scrambled merchandising may not be met
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Q4) What are the advantages and disadvantages of rationalized retailing programs?
Chapter 14: Developing Merchandise Plans
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Sample Questions
Q1) Direct product profitability corresponds to a product's gross profit.
A)True
B)False
Q2) In which product life cycle stage do goods or service sales reach their maximum?
A) maturity
B) growth
C) introduction
D) decline
Q3) A major retailer desires to use specialists to plan,implement,and control the merchandising function.The most appropriate buying organization is a(n)________.
A) decentralized buying organization
B) inside buying organization
C) informal buying organization
D) formal buying organization
Q4) A new fashion costing $15,000 in Paris is copied in a $1,000 version in emulation,and in a $75 version in economic emulation.
A)True
B)False
Q5) Develop a merchandising plan for fad merchandise.
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Chapter 15: Implementing Merchandise Plans
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Sample Questions
Q1) The purchase of out-of-season goods,manufacturer overruns,or cancelled orders by a closeout retailer illustrates ________.
A) inspection buying
B) channel power
C) opportunistic buying
D) scrambled merchandising
Q2) Items with rather high pilferage should receive electronic product tags in addition to overall store security measures.
A)True
B)False
Q3) Opportunistic buying generally relies upon negotiated contracts.
A)True
B)False
Q4) What are the pros and cons of direct store distribution from the perspective of the retailer?
Q5) Generally,costly one-of-a-kind merchandise is evaluated via inspection.
A)True
B)False
Q6) Develop a 10-item store security checklist aimed at reducing customer theft.
Page 17
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Chapter 16: Financial Merchandise Management
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Sample Questions
Q1) A retailer uses a stock counting-based physical inventory system.Its beginning inventory on January 1,2017 is 600 units; total purchases in January were 252 units.Sales for January were 325 units.A physical count of goods as of February 1,2017 revealed 500 units.Stock shortages for the period equal ________.
A) 27 units
B) 63 units
C) 155 units
D) 235 units
Q2) A tire retailer plans to sell $100,000 worth of tires in January.Planned reductions are $15,000; planned inventory for January 1st is $300,000 and for January 31st is $350,000.As of January 8th,the retailer has ordered $15,000 for January delivery.What is the open-to-buy for the rest of the month?
A) $ 50,000
B) $ 65,000
C) $150,000
D) $165,000
Q3) Describe how a retailer should engage in reduction planning.Discuss each reduction source in your analysis.
Q4) Explain the advantages and disadvantages of cost-based inventory systems.
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Chapter 17: Pricing in Retailing
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Sample Questions
Q1) When the price elasticity of demand is unitary and prices go down,total ________.
A) revenues stay the same
B) revenues decline
C) revenues increase
D) profits increase
Q2) Direct product profitability allows retailers to take into account differences in the costs of installation,delivery,customer service,and merchandise handling in setting markups for categories of merchandise.
A)True
B)False
Q3) A retailer has planned operating expenses of 44 percent of planned sales and a planned profit of 6 percent of sales.What markup percentage at retail does the retailer require?
A) 38 percent
B) 44 percent
C) 50 percent
D) The answer cannot be determined based on the information provided.
Q4) a.Define loss leaders,bait-and-switch advertising,trading up,and leader pricing. b.Explain the differences among each.Use an example.
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Chapter 18: Establishing and Maintaining a Retail Image
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Sample Questions
Q1) A straight (gridiron)traffic pattern is typically used by ________.
A) stores with large customer space
B) specialty stores
C) food retailers
D) nonfood retailers
Q2) Lounge areas,dressing rooms,wide aisles,and a restaurant are components of ________ space.
A) personnel
B) merchandise
C) selling
D) customer
Q3) Atmosphere is not a valid consideration in retail strategy planning for a nonstore retailer.
A)True
B)False
Q4) In disguised building height,________.
A) climate-controlled entrances are used to increase interior visibility
B) part of the store is beneath ground level
C) all floors are at ground level or higher
D) a store has no display windows
Page 20
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Chapter 19: Promotional Strategy
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Sample Questions
Q1) Extensive media coverage refers to ________.
A) low reach with high frequency
B) low reach with low frequency
C) high reach with low frequency
D) high reach with high frequency
Q2) The most appropriate promotional schedule for a pioneer ad is ________.
A) peaked advertising
B) the hierarchy-of-effects schedule
C) massed promotion effort
D) distributed advertising effort
Q3) While a computer retailer engages in extensive advertising and many consumers come to the store knowing what camera to purchase,it is concerned that salespeople do not effectively cross-sell.The retailer wants to encourage its salespersons to sell software,extra memory,tape-backup devices,and extended warranties at the same time as the computer purchase.The retailer needs to attract and motivate ________.
A) order-taking salespersons
B) order-getting salespersons
C) sales engineers
D) sales managers
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Chapter 20: Integrating and Controlling the Retail Strategy
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Sample Questions
Q1) Outline five performance measures used by supermarket retailers.Describe the importance of each measure.
Q2) A company department manager is a(n)________.
A) internal employee who specializes in conducting retail audits
B) internal employee whose prime job is operations management but also may be asked to participate in the retail audit
C) person who works as a consultant on a fee basis
D) auditing specialist hired by the retailer
Q3) Typically,the most productive strategy is the most expensive strategy.
A)True
B)False
Q4) A retailer systematically reviews its planning process,as well as how it implements its plans.This review process is called ________.
A) scenario analysis
B) the sales opportunity grid
C) benchmarking
D) the retail audit
Q5) Explain why an effective retail strategy needs to be both integrated and ongoing.
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