Final exam pool items (Chs. 9, 11, 12, 13, 14, 15 & 17 not 18)



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Diaz
John Diaz immigrated to Tallahassee from Cuba in the 1980s. He set up a coffee shop called Diaz in a small upper-middle-class neighborhood. It rapidly became popular because of the wonderful coffee it brewed. Soon Diaz was selling the finest coffees from around the world, plus coffee-making necessities such as grinders and brewers. Within ten years, Diaz was operating a lucrative mail-order business in addition to his coffee shop.
Upon entering the shop, the first thing the customer sees is a countertop crowded with all of the machinery needed for making a perfect cup of coffee. Marble-topped tables are set in cozy nooks with overstuffed chairs. Bookshelves on one wall hold books about coffee for patrons to read while they sip. The smell is intoxicating to a real coffee lover. Coffee drinkers can take home a pound when they leave. The store carries all types of coffee from $300 per pound Kopi Luwak from Sumatra to Brazilian Cerrado for $8 a pound.

113. Refer to Diaz. In terms of ownership, Diaz's coffee shop would be classified as a(n):

a.

franchise

b.

wholesaler

c.

independent retail operation

d.

agency

e.

chain store


ANS: C

It is owned by a single person.

PTS: 1 REF: 191 OBJ: 13-2

TOP: AACSB Reflective Thinking | TB&E Model Distribution

114. Refer to Diaz. Which of the following would NOT be a typical method of classifying Diaz's coffee shop?

a.

ownership

b.

service

c.

product assortment

d.

price

e.

level of profit


ANS: E

A retail establishment can be classified according to its ownership, service, product assortment, and price.

PTS: 1 REF: 190 OBJ: 13-2

TOP: AACSB Reflective Thinking | TB&E Model Pricing

115. Refer to Diaz. The type of merchandise carried by Diaz is deep but with a narrow assortment. The store would most likely be classified as a:

a.

convenience store

b.

mass merchandiser

c.

specialty store

d.

category killer

e.

membership club


ANS: C

A specialty store specializes in a given type of merchandise with a deep but narrow assortment.

PTS: 1 REF: 191 OBJ: 13-3

TOP: AACSB Reflective Thinking | TB&E Model Distribution

116. Refer to Diaz. Diaz is competing directly with:

a.

specialty stores

b.

convenience stores

c.

supermarkets

d.

restaurants

e.

all of these


ANS: E

Diaz sells brewed coffee as do restaurants and convenience stores. It also sells a line of coffee-related merchandise, which makes it a specialty store. Because it sells specialty coffee, it also competes with supermarkets.

PTS: 1 REF: 191-195 OBJ: 13-3

TOP: AACSB Reflective Thinking | TB&E Model Distribution

117. Refer to Diaz. The smell of fresh coffee, the fact it is made where drinkers can watch the process, and the comfortable chairs all are used to create the store's:

a.

atmosphere

b.

cultural impact

c.

target strategy

d.

merchandise mix

e.

promotional strategy


ANS: A

The main element of a store's presentation is its atmosphere, how the store's physical layout, decor, and surroundings convey an overall impression.

PTS: 1 REF: 202-203 OBJ: 13-6

TOP: AACSB Reflective Thinking | TB&E Model Creativity

118. Refer to Diaz. What pricing strategy would you expect Diaz to use?

a.

single pricing

b.

EDLP

c.

discount pricing

d.

prestige pricing

e.

cannot tell from the information provided


ANS: D

Prestige pricing would best suit its positioning image as an upscale shop.

PTS: 1 REF: 202 OBJ: 13-6

TOP: AACSB Reflective Thinking | TB&E Model Strategy | TB&E Model Pricing

Golden Video
When Golden Video opened ten years ago in Long Island's Suffolk County, it competed with only one or two other video stores within a five-mile radius. Today, there are eight stores within that radius, including two Blockbusters, each a half-mile away in different directions.
There is little doubt that independently owned video stores are having a tough time competing with chains like Blockbuster, but many are finding their own special ways of surviving. Part of the solution has been in supplementary merchandise and services such as sports cards and camcorder rentals, or renting and selling the X-rated titles shunned by many chains. Lower rental fees also are prevalent among independents, but the key to success in the mom-and-pop businesses appears to be personalized service. Golden Video provides services like holding videos for its customers upon request, recommending titles, and helping parents to choose G-rated movies that they can watch with their children. To add value, Golden Video also sells comic books, sports cards, candy, and video accessories and provides repairs for VCR and DVD players at the store. With friendly and value-added services, Golden Video has boosted business in spite of the stiff competition.

119. Refer to Golden Video. Golden Video can best be described as a:

a.

franchise

b.

wholesaler

c.

distributor

d.

retailer

e.

department


ANS: D

Golden Video sells directly to the consumer and is therefore a retailer

PTS: 1 REF: 189 OBJ: 13-1

TOP: AACSB Reflective Thinking | TB&E Model Distribution

120. Refer to Golden Video. Stores in the video industry, such as Golden Video and Blockbuster, can be classified on each of the following bases EXCEPT:

a.

ownership

b.

location

c.

price levels

d.

level of service

e.

product assortment


ANS: B

Retailers can be classified according to ownership, level of service, product assortment, and price levels.

PTS: 1 REF: 189-190 OBJ: 13-2

TOP: AACSB Reflective Thinking | TB&E Model Distribution

121. Refer to Golden Video. Golden Video and Blockbuster represent which type of retailers?

a.

membership club

b.

convenience store

c.

factory outlet

d.

specialty store

e.

mass merchandiser


ANS: D

These stores are specialty stores because they specialize in a given type of merchandise with a deep but narrow assortment.

PTS: 1 REF: 191 OBJ: 13-3

TOP: AACSB Reflective Thinking | TB&E Model Distribution

122. Refer to Golden Video. Blockbuster Video grants individuals the right to open a Blockbuster store through the use of a contractual arrangement. This suggests that Blockbuster is a:

a.

freestanding store

b.

franchise

c.

cooperative

d.

licensed outlet

e.

chain with one ownership


ANS: B

A franchise is a continuing relationship in which an individual or business grants the business rights to operate or sell a product to another individual or business.

PTS: 1 REF: 198 OBJ: 13-5

TOP: AACSB Reflective Thinking | TB&E Model Distribution

123. Refer to Golden Video. The type of site location you would expect Golden Video to utilize is a:

a.

shopping center

b.

strip center

c.

factory outlet

d.

regional mall

e.

freestanding store


ANS: B

Golden Video is a specialty store. The customers demand convenience and the ability to get in and out quickly. As such, the store is most likely to locate in a strip center.

PTS: 1 REF: 201 OBJ: 13-6

TOP: AACSB Reflective Thinking | TB&E Model Distribution

Wawa
The first Wawa store was opened in 1964. Today the company has 15,000 employees and owns and operates more than 550 units in southeastern Pennsylvania, New Jersey, Delaware, Maryland, and northern Virginia. The chain's sales topped $2 billion in 2002. Wawa began as a store for distributing Wawa dairy products. Since then it has gotten into the gasoline business to increase store traffic, but its primary draw is hot meals and cold sandwiches in a quick-service restaurant format that mimics a shopping mall food court. Personalization is a fundamental part of the store concept and is built into things like coffee and sandwiches. The stores have an eight-head cappuccino machine where customers can mix and match whatever flavors they want and add steamed milk or cream, all for the same price as a regular cup of coffee. In addition to being restaurants, Wawa stores also do a big business in a limited line of high-turnover convenience products and can accurately be described as mini-supermarkets.

124. Refer to Wawa. Who buys most of the merchandise sold in the individual stores?

a.

a franchisee

b.

the home office

c.

a store manager

d.

a licensee

e.

cannot be determined from the information provided


ANS: B

According to the case, the chain stores are owned and operated as a single organization.

PTS: 1 REF: 190 OBJ: 13-2

TOP: AACSB Reflective Thinking | TB&E Model Distribution

125. Refer to Wawa. In terms of types of retail operations, Wawa stores could be categorized as:

a.

mass merchandisers

b.

franchises

c.

department stores

d.

convenience stores

e.

discount stores


ANS: D PTS: 1 REF: 192 OBJ: 13-3

TOP: AACSB Reflective Thinking | TB&E Model Distribution

126. Refer to Wawa. In a newspaper article about Wawa stores, the stores were described as a living example of the transformation of retailing from a prizefight to a bar fight. This description means that:

a.

price is no longer as important an issue as it once was

b.

the competition has gotten fiercer

c.

Wawa stores are easily beating the competition

d.

Wawa stores have no competition

e.

Wawa stores use a less sophisticated retailing mix


ANS: B

Students will need to be aware that prizefights have referees and rules, whereas bar fights do not. The point is that retailing often involves fierce competition, which may give rise to no-rules fighting and an every-retailer-for-itself attitude. See discussion of restaurants in text.

PTS: 1 REF: 194 OBJ: 13-3

TOP: AACSB Reflective Thinking | TB&E Model Strategy

127. Refer to Wawa. The decision to allow customers to create their own coffee drinks would be a part of Wawa's:

a.

retailing mix

b.

promotion strategy

c.

production activities

d.

presentation effects

e.

customer mix


ANS: A

The retailing mix would include decisions about product offerings.

PTS: 1 REF: 199-200 OBJ: 13-6

TOP: AACSB Reflective Thinking | TB&E Model Customer | TB&E Model Product

128. Refer to Wawa. Its restaurant format that mimics a shopping mall food court would be a factor in which element of the retailing mix?

a.

product

b.

personnel

c.

presentation

d.

promotion

e.

place


ANS: C

The mall food court look would be part of a store's atmosphere.

PTS: 1 REF: 202-203 OBJ: 13-6

TOP: AACSB Reflective Thinking | TB&E Model Distribution

129. Refer to Wawa. The ability to personalize your coffee yourself is consistent with which new development in retailing?

a.

interactivity

b.

m-commerce

c.

atmosphere extension

d.

market-basket analysis

e.

data mining


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