UARK MKTG 4433 Exam 1 |93 Complete Q’s
and A’s
Retailing - -set of business activities that adds value to products and
services sold to consumers for their personal and family use
- Retailer - -business that sells products/services to consumers for their
personal or family use (to the end customer)
- Supply Chain - -set of firms that make and deliver goods/services to
consumers
- What does a retailer do? - -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? - -Breaking bulk, holding
inventory, providing assortment of products and services
- Breaking Bulk - -retailers offer products in smaller quantities tailored to
individual consumers' and households' consumption patterns
- Cost of Channel - -the costs added from manufacturer to retailer that are
justified by the value added to the customer
- Wholesalers - -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 - -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 - -a retailer performs some of the manufacturing and
wholesaling activities (such as operating warehouses and designing private-
label merchandise)
- Forward Integration - -manufacturer undertakes retailing and wholesaling
activities (such as Apple operating its own retail stores)
- What is the economic impact of retail? - -3.79 million retail
establishments; 42 million jobs; $5.2 trillion in sales
, - Why do firms go global? - -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? - -Economies of
scale and suppliers in a foreign country
- Corporate Social Responsibility - -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? - --consumers are bored with
shopping
-over-saturation
-price cutting wars and low profit margins
-high customer service expectations
- Retail Strategy - -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) - -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? - --mergers and acquisitions
-downsizing
-growth of multi-channel/omni-channel
-bifurcated retailing and blurring of formats
- Bifurcated Retailing - -going from the three tier model of retail to two tiers
- What is the 3 tier system? - -bottom tier - cheap retail
middle tier - middle class america
top tier - luxury retailers
- What is the new tier system? - -the middle tier is dying partially because
incomes in the middle class are not increasing which means they drop a tier
in spending
- What is blurring of formats? - -formats are no longer distinct, stores are
selling more things than they used to
- What is the most concentrated sector in the retail industry? - -home
improvement stores
and A’s
Retailing - -set of business activities that adds value to products and
services sold to consumers for their personal and family use
- Retailer - -business that sells products/services to consumers for their
personal or family use (to the end customer)
- Supply Chain - -set of firms that make and deliver goods/services to
consumers
- What does a retailer do? - -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? - -Breaking bulk, holding
inventory, providing assortment of products and services
- Breaking Bulk - -retailers offer products in smaller quantities tailored to
individual consumers' and households' consumption patterns
- Cost of Channel - -the costs added from manufacturer to retailer that are
justified by the value added to the customer
- Wholesalers - -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 - -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 - -a retailer performs some of the manufacturing and
wholesaling activities (such as operating warehouses and designing private-
label merchandise)
- Forward Integration - -manufacturer undertakes retailing and wholesaling
activities (such as Apple operating its own retail stores)
- What is the economic impact of retail? - -3.79 million retail
establishments; 42 million jobs; $5.2 trillion in sales
, - Why do firms go global? - -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? - -Economies of
scale and suppliers in a foreign country
- Corporate Social Responsibility - -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? - --consumers are bored with
shopping
-over-saturation
-price cutting wars and low profit margins
-high customer service expectations
- Retail Strategy - -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) - -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? - --mergers and acquisitions
-downsizing
-growth of multi-channel/omni-channel
-bifurcated retailing and blurring of formats
- Bifurcated Retailing - -going from the three tier model of retail to two tiers
- What is the 3 tier system? - -bottom tier - cheap retail
middle tier - middle class america
top tier - luxury retailers
- What is the new tier system? - -the middle tier is dying partially because
incomes in the middle class are not increasing which means they drop a tier
in spending
- What is blurring of formats? - -formats are no longer distinct, stores are
selling more things than they used to
- What is the most concentrated sector in the retail industry? - -home
improvement stores
