MKT 320 - RETAIL MANAGEMENT
EXAM 1 QUESTIONS & UPDATED
CORRECT ANSWERS
Retailing - Correct Answer ✔✔ - Rapid change
- Adds value to products and services sold to the consumers
- Not always in store
Retailer Role in Supply Chain - Correct Answer ✔✔ - Business activities that add value
to products and services sold to consumers
- Manufacturing -> wholesaler -> retailer -> consumer
Retailers create value by: - Correct Answer ✔✔ 1. Providing an assortment
2. Breaking bulk
3. Holding inventory
4. Providing services
Cost of channel activites - Correct Answer ✔✔ - Increases cost of product and services
- but is justified by the values provided
Backwards integration - Correct Answer ✔✔ upstream, a bakery buying a grain
processor, retailer moves backwards and does the manufacturing or obtains the raw
materials - automotive company owns a tire company
Foreword integration - Correct Answer ✔✔ Downstream, Manufacturers make and sell
merchandise
What percentage of retail sales are made in store? - Correct Answer ✔✔ 90%
Role of Information Systems in retailing - Correct Answer ✔✔ Caused shift from small
and local to large and multinational chains, convert raw data to usable information, point
of scale information
Critical environmental factors - Correct Answer ✔✔ - The macroenvironment
•Technological, social, and ethical/legal/political
- The microenvironment
Competitors and customers
Competitors - Correct Answer ✔✔ intratype competition (same format), scrambled
(offers products not associated with them), Merchandising (increase intertype
competition) (not the same format, but the same product)
, Customers - Correct Answer ✔✔ understand changes and trends
Retail strategy identities: - Correct Answer ✔✔ - target market
- Nature of merchandise and services
- How to develop unique asserts for long term advantage
Define target market - Correct Answer ✔✔ analyze the environment/firm's strengths and
weaknesses
Financial objectives - Correct Answer ✔✔ return on investment, inventory turnover, and
profit margin
Development of critical assets - Correct Answer ✔✔ Location, human resource,
information and supply chain systems, supply chain organization, and customer loyalty
Retail mix - Correct Answer ✔✔ Types of merchandise and services, merchandise
pricing, advertising and promotional programs, store design, merchandise display,
assistance to customers provided by salespeople, and convenience of the store's
location
NAICS - Correct Answer ✔✔ North American Industry Classification System - 6 digit
codes, more details inside of codes such as clothing and accessories
Variety - Correct Answer ✔✔ Breadth, categories
Assortment - Correct Answer ✔✔ Depth, # of items in a category
Service expectations - Correct Answer ✔✔ display merchandise, accept credit cards,
provide parking, convenient hours
Cost of stocking deep and broad assortment and SKUS - Correct Answer ✔✔ costly,
back up for every SKU, increase in inventory and investment cost
broader variety and deeper assortment = increase price to make a profit
Types of food retailers - Correct Answer ✔✔ conventional supermarkets (less than 45%
of food sales), supercenters, warehouse clubs, convenience stores
Supermarkets - Correct Answer ✔✔ Conventional: perishables are 54% and 40,000
SKU
Limited Assortment Supermarkets: extreme value retailers, 1400 skus, 1 or 2 brands
and sizes, maximize efficiency to lower prices, 40% less than conventional
supermarkets
Supermarket trends - Correct Answer ✔✔ - increased space devoted to food
- Encourage sales of more profitable nonfood items
- State of the art supply chains
EXAM 1 QUESTIONS & UPDATED
CORRECT ANSWERS
Retailing - Correct Answer ✔✔ - Rapid change
- Adds value to products and services sold to the consumers
- Not always in store
Retailer Role in Supply Chain - Correct Answer ✔✔ - Business activities that add value
to products and services sold to consumers
- Manufacturing -> wholesaler -> retailer -> consumer
Retailers create value by: - Correct Answer ✔✔ 1. Providing an assortment
2. Breaking bulk
3. Holding inventory
4. Providing services
Cost of channel activites - Correct Answer ✔✔ - Increases cost of product and services
- but is justified by the values provided
Backwards integration - Correct Answer ✔✔ upstream, a bakery buying a grain
processor, retailer moves backwards and does the manufacturing or obtains the raw
materials - automotive company owns a tire company
Foreword integration - Correct Answer ✔✔ Downstream, Manufacturers make and sell
merchandise
What percentage of retail sales are made in store? - Correct Answer ✔✔ 90%
Role of Information Systems in retailing - Correct Answer ✔✔ Caused shift from small
and local to large and multinational chains, convert raw data to usable information, point
of scale information
Critical environmental factors - Correct Answer ✔✔ - The macroenvironment
•Technological, social, and ethical/legal/political
- The microenvironment
Competitors and customers
Competitors - Correct Answer ✔✔ intratype competition (same format), scrambled
(offers products not associated with them), Merchandising (increase intertype
competition) (not the same format, but the same product)
, Customers - Correct Answer ✔✔ understand changes and trends
Retail strategy identities: - Correct Answer ✔✔ - target market
- Nature of merchandise and services
- How to develop unique asserts for long term advantage
Define target market - Correct Answer ✔✔ analyze the environment/firm's strengths and
weaknesses
Financial objectives - Correct Answer ✔✔ return on investment, inventory turnover, and
profit margin
Development of critical assets - Correct Answer ✔✔ Location, human resource,
information and supply chain systems, supply chain organization, and customer loyalty
Retail mix - Correct Answer ✔✔ Types of merchandise and services, merchandise
pricing, advertising and promotional programs, store design, merchandise display,
assistance to customers provided by salespeople, and convenience of the store's
location
NAICS - Correct Answer ✔✔ North American Industry Classification System - 6 digit
codes, more details inside of codes such as clothing and accessories
Variety - Correct Answer ✔✔ Breadth, categories
Assortment - Correct Answer ✔✔ Depth, # of items in a category
Service expectations - Correct Answer ✔✔ display merchandise, accept credit cards,
provide parking, convenient hours
Cost of stocking deep and broad assortment and SKUS - Correct Answer ✔✔ costly,
back up for every SKU, increase in inventory and investment cost
broader variety and deeper assortment = increase price to make a profit
Types of food retailers - Correct Answer ✔✔ conventional supermarkets (less than 45%
of food sales), supercenters, warehouse clubs, convenience stores
Supermarkets - Correct Answer ✔✔ Conventional: perishables are 54% and 40,000
SKU
Limited Assortment Supermarkets: extreme value retailers, 1400 skus, 1 or 2 brands
and sizes, maximize efficiency to lower prices, 40% less than conventional
supermarkets
Supermarket trends - Correct Answer ✔✔ - increased space devoted to food
- Encourage sales of more profitable nonfood items
- State of the art supply chains
