UARK MKTG 4433 EXAM 1 QUESTIONS WITH
CORRECT ANSWERS
Retailing - ANSWER set of business activities that adds value to products and services
sold to consumers for their personal and family use
Retailer - ANSWER business that sells products/services to consumers for their personal
or family use (to the end customer)
Supply Chain - ANSWER set of firms that make and deliver goods/services to consumers
What does a retailer do? - ANSWER typically buy products from the wholesalers and/or
manufacturers and resell them to the consumers
-satisfy consumer needs by offering the right products at the right place and the right
price when the customers want them
What are some ways retailers add value? - ANSWER Breaking bulk, holding inventory,
providing assortment of products and services
Breaking Bulk - ANSWER retailers offer products in smaller quantities tailored to
individual consumers' and households' consumption patterns
Cost of Channel - ANSWER the costs added from manufacturer to retailer that are
justified by the value added to the customer
,Wholesalers - ANSWER a firm that buys and stores merchandise in large quantities from
manufacturers then resells that merchandise to both retailers and final customers
- a retailer and a manufacturer
Vertical Integration - ANSWER the firm performs more than one set of activities in the
channel; occurs when a retailer engages in wholesaling activities by operating its own
distribution centers to supply its stores
Backward Integration - ANSWER a retailer performs some of the manufacturing and
wholesaling activities (such as operating warehouses and designing private-label
merchandise)
Forward Integration - ANSWER manufacturer undertakes retailing and wholesaling
activities (such as Apple operating its own retail stores)
What is the economic impact of retail? - ANSWER 3.79 million retail establishments; 42
million jobs; $5.2 trillion in sales
Why do firms go global? - ANSWER leverage existing assets, restrictions in home market,
saturation of home markets, and foreign markets are low hanging fruit
What are two ways firms can leverage existing assets? - ANSWER Economies of scale and
suppliers in a foreign country
, Corporate Social Responsibility - ANSWER an organization voluntarily engaging in
business practices that meet or exceed the ethical and legal expectations of stakeholders
- its employees, customers, community and society in general
What are the challenges faced by retailers? - ANSWER -consumers are bored with
shopping
-over-saturation
-price cutting wars and low profit margins
-high customer service expectations
Retail Strategy - ANSWER an overall plan for guiding a retail firm
-influences the firm's business activities and the firm's response to market forces
Base/Bottom of Pyramid (BoP) - ANSWER consumers in the low income consumer
segment, have a potential spending power of more than $5 trillion
What are the long-term shifts in retail? - ANSWER -mergers and acquisitions
-downsizing
-growth of multi-channel/omni-channel
-bifurcated retailing and blurring of formats
Bifurcated Retailing - ANSWER going from the three tier model of retail to two tiers
CORRECT ANSWERS
Retailing - ANSWER set of business activities that adds value to products and services
sold to consumers for their personal and family use
Retailer - ANSWER business that sells products/services to consumers for their personal
or family use (to the end customer)
Supply Chain - ANSWER set of firms that make and deliver goods/services to consumers
What does a retailer do? - ANSWER typically buy products from the wholesalers and/or
manufacturers and resell them to the consumers
-satisfy consumer needs by offering the right products at the right place and the right
price when the customers want them
What are some ways retailers add value? - ANSWER Breaking bulk, holding inventory,
providing assortment of products and services
Breaking Bulk - ANSWER retailers offer products in smaller quantities tailored to
individual consumers' and households' consumption patterns
Cost of Channel - ANSWER the costs added from manufacturer to retailer that are
justified by the value added to the customer
,Wholesalers - ANSWER a firm that buys and stores merchandise in large quantities from
manufacturers then resells that merchandise to both retailers and final customers
- a retailer and a manufacturer
Vertical Integration - ANSWER the firm performs more than one set of activities in the
channel; occurs when a retailer engages in wholesaling activities by operating its own
distribution centers to supply its stores
Backward Integration - ANSWER a retailer performs some of the manufacturing and
wholesaling activities (such as operating warehouses and designing private-label
merchandise)
Forward Integration - ANSWER manufacturer undertakes retailing and wholesaling
activities (such as Apple operating its own retail stores)
What is the economic impact of retail? - ANSWER 3.79 million retail establishments; 42
million jobs; $5.2 trillion in sales
Why do firms go global? - ANSWER leverage existing assets, restrictions in home market,
saturation of home markets, and foreign markets are low hanging fruit
What are two ways firms can leverage existing assets? - ANSWER Economies of scale and
suppliers in a foreign country
, Corporate Social Responsibility - ANSWER an organization voluntarily engaging in
business practices that meet or exceed the ethical and legal expectations of stakeholders
- its employees, customers, community and society in general
What are the challenges faced by retailers? - ANSWER -consumers are bored with
shopping
-over-saturation
-price cutting wars and low profit margins
-high customer service expectations
Retail Strategy - ANSWER an overall plan for guiding a retail firm
-influences the firm's business activities and the firm's response to market forces
Base/Bottom of Pyramid (BoP) - ANSWER consumers in the low income consumer
segment, have a potential spending power of more than $5 trillion
What are the long-term shifts in retail? - ANSWER -mergers and acquisitions
-downsizing
-growth of multi-channel/omni-channel
-bifurcated retailing and blurring of formats
Bifurcated Retailing - ANSWER going from the three tier model of retail to two tiers
