Flexible element of a retailer's strategy mix is. A merchandise assortment



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Chapter 9

1) The least flexible element of a retailer's strategy mix is ________.

A) merchandise assortment

B) human resources

C) pricing

D) location

Answer: D

Diff: 1 Page Ref: 250

Skill: Terminology/Concept
2) The first step in choosing a store location is to ________.

A) determine whether to locate as an isolated store, in an unplanned business district, or in a planned shopping center

B) evaluate alternate geographic (trading areas) in terms of the characteristics of residents and existing retailers

C) select the general isolated business district or planned shopping-center location

D) analyze alternate sites contained in the specified retail location type

Answer: B

Diff: 1 Page Ref: 251

Skill: Terminology/Concept


3) A trading area can best be defined as ________.

A) those competitive stores that interchange customers

B) stores that are located in the same shopping center or district

C) a geographic area containing customers of a particular firm or group of firms for specific goods and services

D) a designation of a retail area by the U.S. Census Bureau

Answer: C

Diff: 1 Page Ref: 252

Skill: Terminology/Concept


4) A major benefit of a trading-area analysis is that it allows a retailer to determine ________.

A) the demographic and socioeconomic characteristics of consumers

B) a store's image

C) the psychographics of shoppers versus nonshoppers

D) the response of shoppers to promotional pricing

Answer: A

Diff: 2 Page Ref: 252

Skill: Terminology/Concept

5) A major benefit of a thorough trading-area analysis is that it allows a retailer to ________.

A) increase sales at branch stores with high trading-area overlap

B) better match its target market profile with a medium's circulation

C) increase the degree of trading overlap among branch units

D) better understanding of an area's lifestyles

Answer: B

Diff: 2 Page Ref: 252

Skill: Terminology/Concept


6) The determination of trading-area overlap is most important for ________.

A) regional shopping centers

B) shopping districts

C) chain retailers

D) independent retailers

Answer: C

Diff: 2 Page Ref: 253

Skill: Terminology/Concept


7) A proposed location for a supermarket chain is within three miles of a current store. What is the major factor that management should study relative to both locations?

A) the trading area of the current location

B) the trading area of the proposed location

C) the trading-area overlap of both locations

D) the demographics of the trading area of each location

Answer: C

Diff: 2 Page Ref: 253

Skill: Terminology/Concept


8) Which technique graphically depicts a trading area's characteristics?

A) geographic mapping

B) geographic information analysis

C) trading-area overlap analysis

D) semantic differential

Answer: B

Diff: 1 Page Ref: 253

Skill: Terminology/Concept


9) Digitized mapping with key locational data are combined with

A) trading area analysis.

B) trading area overlap analysis.

C) geographic information systems.

D) TIGER maps.

Answer: C

Diff: 1 Page Ref: 253

Skill: Terminology/Concept

10) Which statement concerning the U.S. Census Bureau's national digital map, TIGER, is not correct?

A) TIGER incorporates all streets and highways in the United States.

B) TIGER files are available free-of-charge.

C) TIGER maps include retail facilities and population characteristics.

D) Enhancements to TIGER are available from independent software firms.

Answer: C

Diff: 2 Page Ref: 253

Skill: Terminology/Concept


11) Between 50 and 80 percent of a store's customers come from its ________ trading area.

A) secondary

B) primary

C) fringe

D) tertiary

Answer: B

Diff: 1 Page Ref: 257

Skill: Terminology/Concept


12) The area that has the highest density of store customers to population is the ________ trading area.

A) secondary

B) primary

C) fringe

D) tertiary

Answer: B

Diff: 1 Page Ref: 257

Skill: Terminology/Concept


13) The trading area with the highest average purchase by a customer is the ________.

A) primary trading area

B) parasite trading area

C) fringe trading area

D) secondary trading area

Answer: A

Diff: 1 Page Ref: 257

Skill: Terminology/Concept


14) A retailer should concentrate the bulk of its promotional activity in its ________.

A) fringe trading area

B) secondary trading area

C) primary trading area

D) satellite trading area

Answer: C

Diff: 2 Page Ref: 257

Skill: Terminology/Concept

15) A retailer's outshoppers come from its ________.

A) fringe trading area

B) secondary trading area

C) primary trading area

D) satellite trading area

Answer: A

Diff: 2 Page Ref: 257

Skill: Terminology/Concept


16) Which trading area covers the greatest distance?

A) fringe trading area

B) secondary trading area

C) primary trading area

D) satellite trading area

Answer: A

Diff: 2 Page Ref: 257

Skill: Terminology/Concept


17) The most widely dispersed group of customers can be found in which trading area segment?

A) trading area overlap

B) primary trading area

C) secondary trading area

D) fringe trading area

Answer: D

Diff: 1 Page Ref: 257

Skill: Terminology/Concept


18) Primary, secondary, and fringe trading areas can be described on the basis of ________.

A) outshopping by consumers

B) the frequency with which people from various geographic localities shop at a particular store

C) customer store loyalty

D) the probability of large orders based upon customer residence

Answer: B

Diff: 2 Page Ref: 257

Skill: Terminology/Concept


19) A store with a wide assortment of merchandise and a strong image in a particular merchandise category is a ________ store.

A) variety

B) department

C) destination

D) parasite

Answer: C

Diff: 1 Page Ref: 257

Skill: Terminology/Concept

20) A store which does not have a real trading area of its own is a ________ store.

A) fringe

B) parasite

C) destination

D) convenience

Answer: B

Diff: 2 Page Ref: 258

Skill: Terminology/Concept


21) A newspaper stand in a hotel lobby can best be described as a ________ store.

A) fringe

B) parasite

C) destination

D) convenience

Answer: B

Diff: 2 Page Ref: 258

Skill: Terminology/Concept


22) In a regional shopping center, the store with the largest trading area is the ________ store.

A) department

B) variety

C) supermarket

D) gift

Answer: A

Diff: 1 Page Ref: 259

Skill: Terminology/Concept


23) Which computer-based system classifies and describes communities by ZIP code, as well as census tracts?

A) American Community Survey

B) Editor & Publisher Market Guide

C) Nielsen Researcher

D) Claritas Corporation's PRIZM NE

Answer: D

Diff: 1 Page Ref: 260

Skill: Terminology/Concept


24) The simplest and most popular form of computerized site selection model is ________.

A) corner influence

B) gravity

C) regression

D) analog

Answer: D

Diff: 1 Page Ref: 261

Skill: Terminology/Concept

25) The regression computer site selection model ________.

A) utilizes a series of mathematical equations

B) evaluates store distance and image

C) analyzes competition, market share, and market size

D) studies population and driving distance

Answer: A

Diff: 1 Page Ref: 261

Skill: Terminology/Concept


26) In Reilly's law of retail gravitation, the point of indifference is the ________.

A) customer's perceived similarity between two competing retailers

B) geographic breaking point area at which shoppers are indifferent to shopping at either of two cities

C) limit of a city's trading area in estimated driving time

D) limit of a city's primary trading area in driving distance

Answer: B

Diff: 1 Page Ref: 261-262

Skill: Terminology/Concept


27) The major assumptions of Reilly's law are that two competing areas are equally accessible from a major road and that ________.

A) each city has an equal population

B) each city is equally distant from shoppers at the point of indifference

C) merchants in the two cities are equally effective

D) consumers are willing to travel for lower prices

Answer: C

Diff: 1 Page Ref: 261-262

Skill: Terminology/Concept


28) Huff improved Reilly's law by adding which variable to the estimation of trading areas?

A) economic barriers

B) the effect of travel time on different kinds of shopping trips

C) median disposable income in each city

D) the existence of primary, secondary, and fringe trading areas

Answer: B

Diff: 2 Page Ref: 262

Skill: Terminology/Concept


29) A major advantage of the Census of Population for use by retailers in trading-area analysis is ________.

A) its currency

B) its five-year projections of key economic data

C) the availability of retail sales data by merchandise classification

D) the availability of information on small geographic units

Answer: D

Diff: 2 Page Ref: 266

Skill: Terminology/Concept

30) An important advantage to the use of American Community Survey data in trading-area analysis is its ________.

A) availability on the Web

B) annually updated data

C) computation of economic base characteristics

D) small size of census blocks and tracks

Answer: B

Diff: 2 Page Ref: 269

Skill: Terminology/Concept


31) 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

Answer: B

Diff: 1 Page Ref: 271

Skill: Terminology/Concept


32) What type of economic base is preferred by most retailers?

A) upper-income economic base

B) service-oriented economic base

C) single-industry economic base

D) diversified economic base

Answer: D

Diff: 2 Page Ref: 271

Skill: Terminology/Concept


33) Data on an area's economic base are available from ________.

A) American Community Survey

B) Editor & Publisher Market Guide

C) Census of Population

D) Census of Retail Trade

Answer: B

Diff: 1 Page Ref: 234

Skill: Terminology/Concept


34) A retailer with a higher than average profitability is most likely to have which level of saturation?

A) overstored

B) understored

C) oversaturated

D) saturated

Answer: B

Diff: 2 Page Ref: 271

Skill: Terminology/Concept

35) An area which has the proper amount of stores to satisfy the needs of its population for a specific good or service is a(n) ________ trading area.

A) saturated

B) supersaturated

C) overstored

D) understored

Answer: A

Diff: 1 Page Ref: 271

Skill: Terminology/Concept


36) A retailer's location strategy can be made more flexible through ________.

A) sale and leaseback arrangements with financial institutions

B) ownership versus long-term leasing

C) the use of short-term leases with multiple renewal options versus a long-term lease

D) the use of a maintenance-increase-recoupment provision

Answer: C

Diff: 2 Page Ref: 251

Skill: Applied/Comprehensive/Integrative


37) Which type of customers are generally not studied in a trading-area analysis?

A) direct-selling customers

B) fringe trading area customers

C) branch customers of retail chains

D) outshoppers

Answer: A

Diff: 2 Page Ref: 252

Skill: Applied/Comprehensive/Integrative


38) A retailer with three retail stores located within a 10-mile radius wishes to advertise in a county-based daily newspaper which covers a very large geographic area. The retailer should ________.

A) use small ads to minimize waste

B) use horizontal cooperative advertising to reduce waste

C) use a regional edition to minimize waste

D) seek to reduce the trading-area overlap to minimize waste with this medium

Answer: C

Diff: 2 Page Ref: 253

Skill: Applied/Comprehensive/Integrative


39) High trading-area overlap is preferable for a retailer that seeks to ________.

A) receive high incremental sales from new store units

B) saturate a geographic area and keep out potential new retailers

C) appeal to niche markets

D) become a destination store

Answer: B

Diff: 2 Page Ref: 252, 253

Skill: Applied/Comprehensive/Integrative

40) Under what condition would it be rational for the trading areas of two branch locations to completely overlap?

A) when each store has the same target market

B) when the retailer desires cost economics in promotion

C) when a retailer pursues a mass marketing strategy

D) when the retailer decides to switch store locations due to loss of a lease on the first store location

Answer: D

Diff: 2 Page Ref: 252, 253

Skill: Applied/Comprehensive/Integrative


41) Which software products enable retailers to graphically evaluate the characteristics of alternate locations?

A) data warehousing

B) data mining

C) geographic information systems

D) geographic mapping

Answer: C

Diff: 1 Page Ref: 253

Skill: Applied/Comprehensive/Integrative


42) The most important trading area to a retailer is the ________.

A) primary trading area

B) secondary trading area

C) fringe trading area

D) parasite area overlap

Answer: A

Diff: 2 Page Ref: 257

Skill: Applied/Comprehensive/Integrative


43) A retailer's core shoppers come from which trading area?

A) secondary trading area

B) primary trading area

C) parasite trading area

D) fringe trading area

Answer: A

Diff: 2 Page Ref: 257

Skill: Applied/Comprehensive/Integrative


44) Loyal customers who shop at a store despite very long travel requirements constitute the store's ________.

A) trading-area overlap

B) primary trading area

C) secondary trading area

D) fringe trading area

Answer: D

Diff: 2 Page Ref: 257

Skill: Applied/Comprehensive/Integrative

45) A store has a disproportionately large primary, secondary, and fringe trading area. This situation can be caused by ________.

A) a high level of prices

B) its being a destination store

C) physical barriers

D) high competition in each trading area

Answer: B

Diff: 2 Page Ref: 257

Skill: Applied/Comprehensive/Integrative


46) What type of retailer has a very large primary trading area?

A) impulse retailer

B) convenience retailer

C) destination retailer

D) parasite store

Answer: C

Diff: 2 Page Ref: 257

Skill: Applied/Comprehensive/Integrative


47) Which of the following retailers is most likely to be a parasite in a major shopping center?

A) coffee shop

B) electronic repair facility

C) department store

D) clothing specialty retailer

Answer: A

Diff: 2 Page Ref: 258

Skill: Applied/Comprehensive/Integrative


48) Which statement about the trading area of a parasite store in a regional shopping center is correct?

A) A parasite store has its own unique trading area.

B) The trading area of the parasite store approximates that of the shopping center.

C) The parasite store has a larger trading area than the center's department store.

D) The parasite store is a destination store.

Answer: B

Diff: 2 Page Ref: 258

Skill: Applied/Comprehensive/Integrative


49) "A grouping of stores may actually increase the trading area for each store." This statement especially applies to ________.

A) convenience products

B) emergency products

C) impulse products

D) shopping products

Answer: D

Diff: 2 Page Ref: 259

Skill: Applied/Comprehensive/Integrative

50) A supermarket has developed a model to aid in its site selection process. The model contains variables such as trading area population in the primary trading area and expected market share. This illustrates a(n) ________ model.

A) regression

B) historical analogy

C) gravity

D) analog

Answer: D

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


51) A department store uses a(n) ________ computer site selection model. This model contains a series of equations linking variables such as traffic patterns, population size, average income, and transportation adequacy to estimated sales.

A) regression

B) analog

C) gravity

D) historical analogy

Answer: A

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


52) Which computer-based site selection model generally allows a researcher to study the effect of one of several variables on expected sales?

A) analog

B) gravity

C) regression

D) interactive

Answer: C

Diff: 1 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


53) Reilly's law is an example of a(n) ________ computer site selection model.

A) regression

B) analog

C) gravity

D) historical analogy

Answer: A

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


54) Huff's law is an example of a(n) ________ computer site selection model.

A) regression

B) analog

C) gravity

D) historical analogy

Answer: C

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative

55) The distance between city A and city B is 30 miles; city A's population is 1,000,000 and city B's is 16,000,000. The point of indifference between the two cities is ________.

A) 6 miles from A, 24 miles from B

B) 12 miles from A, 18 miles from B

C) 18 miles from A, 12 miles from B

D) 24 miles from A, 6 miles from B

Answer: A

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


56) Based on Reilly's law, a city with a population of 90,000 would draw people from about how many times the distance as a city with 10,000 population?

A) 1.5 times

B) 2 times

C) 3 times

D) 4 times

Answer: C

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


57) Based on Reilly's law, two cities have populations of 1,000,000 and 25,000,000. The point of indifference is 10 miles from the larger city. What is the total distance between the two cities?

A) 40 miles

B) 45 miles

C) 50 miles

D) 60 miles

Answer: D

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


58) Based on Reilly's law, two cities that have equal populations are 100 miles apart. The point of indifference ________.

A) is 10 miles from the first city

B) is 15 miles from the first city

C) is midway between each city

D) cannot be determined from the information provided

Answer: C

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


59) The point of indifference between two cities or communities in Reilly's law most closely corresponds to ________.

A) Huff's law based on 50 percent probability of consumer shopping

B) a 50 percent index of retail saturation

C) a saturated retail trading area

D) a 0.50 economic base index for an area

Answer: A

Diff: 2 Page Ref: 261-262

Skill: Applied/Comprehensive/Integrative

60) Assume that there are three shopping locations with 500, 1,000, and 3,000 square feet of space allocated to outdoor lighting fixtures. A group of potential customers lives 5 minutes from the first location, 10 minutes from the second location, and 15 minutes from the third location. The retailer estimates the effect of travel time to be 1. The probability of consumers' shopping at location one is ________.

A) 10 percent

B) 15 percent

C) 25 percent

D) 33 percent

Answer: C

Diff: 2 Page Ref: 262

Skill: Applied/Comprehensive/Integrative


61) Assume that there are three shopping locations with 500, 1,000, and 3,000 square feet of space allocated to outdoor lighting fixtures. A group of potential customers lives 5 minutes from the first location, 10 minutes from the second location, and 15 minutes from the third location. The retailer estimates the effect of travel time to be 1. The probability of consumers' shopping at location two is ________.

A) 10 percent

B) 15 percent

C) 25 percent

D) 33 percent

Answer: C

Diff: 2 Page Ref: 262

Skill: Applied/Comprehensive/Integrative


62) Assume that there are three shopping locations with 500, 1,000, and 3,000 square feet of space allocated to outdoor lighting fixtures. A group of potential customers lives 5 minutes from the first location, 10 minutes from the second location, and 15 minutes from the third location. The retailer estimates the effect of travel time to be 2. The probability of consumers' shopping at location two is ________.

A) 7 percent

B) 10 percent

C) 15 percent

D) 23 percent

Answer: D

Diff: 2 Page Ref: 262

Skill: Applied/Comprehensive/Integrative


63) A major refinement in Huff's law versus Reilly's law is Huff's use of ________.

A) mileage versus driving time estimates

B) a point of indifference between two areas

C) actual population figures versus population estimates

D) separate trading-area calculations for different product categories

Answer: D

Diff: 2 Page Ref: 262

Skill: Applied/Comprehensive/Integrative

64) Blocks and census tracts are important units in the Census of Population to retailers because ________.

A) online computer tapes are available

B) these can be combined to fit a retailer's trading area

C) these blocks and tracks contain important data on retail sales by location

D) these blocks and tracks contain forecasts on population changes over a 5-year period

Answer: B

Diff: 1 Page Ref: 267

Skill: Applied/Comprehensive/Integrative


65) A retailer seeking to study the population characteristics of residents within its primary trading area (a 2-mile radius around its store) should utilize ________.

A) American Demographics

B) Editor & Publisher Market Guide

C) American Community Survey

D) the Census of Population

Answer: D

Diff: 1 Page Ref: 267

Skill: Applied/Comprehensive/Integrative


66) The optimal economic base for a department store chain is ________.

A) retired persons

B) military personnel

C) diversified

D) based on one industry

Answer: C

Diff: 2 Page Ref: 271

Skill: Applied/Comprehensive/Integrative


67) A retailer seeking a stable economic environment should seek a trading area with a ________.

A) large retired population

B) diversified economic base

C) large government facility

D) booming economy

Answer: B

Diff: 1 Page Ref: 271

Skill: Applied/Comprehensive/Integrative


68) An area with a relatively large number of consumers per square foot of available store space is ________.

A) understored

B) overstored

C) saturated

D) oversaturated

Answer: A

Diff: 1 Page Ref: 271

Skill: Applied/Comprehensive/Integrative

69) The trading area overlap between two shoe stores of the same chain is significant. What conclusion can we make about the level of saturation in this geographic area?

A) It is overstored

B) It is understored

C) It is saturated

D) Both stores are parasite stores

Answer: A

Diff: 2 Page Ref: 271, 253

Skill: Applied/Comprehensive/Integrative


70) Areas A, B, and C have similar demographic profiles. The sales per square foot for A, B, and C are $350, $500, and $600, respectively. On the basis of this data, area C is ________.

A) understored

B) overstored

C) saturated

D) in equilibrium

Answer: A

Diff: 2 Page Ref: 271-272

Skill: Applied/Comprehensive/Integrative


71) Leases in good shopping center locations are generally for 5 years or less.

Answer: FALSE

Diff: 1 Page Ref: 251

Skill: Terminology/Concept


72) The first step in choosing a store location is to select the general isolated store, unplanned business district, or planned shopping center location.

Answer: FALSE

Diff: 1 Page Ref: 251

Skill: Terminology/Concept


73) Trading overlap analysis is particularly important for retail chains and franchises.

Answer: TRUE

Diff: 2 Page Ref: 253

Skill: Terminology/Concept


74) Trading-area analysis is useful in determining waste in specific media.

Answer: TRUE

Diff: 1 Page Ref: 253

Skill: Terminology/Concept


75) The secondary trading area has the highest density of customers to population.

Answer: FALSE

Diff: 1 Page Ref: 257

Skill: Terminology/Concept

76) Two shoe stores can have different trading areas even though they are located within three stores of each other in the same shopping center.

Answer: TRUE

Diff: 2 Page Ref: 257

Skill: Terminology/Concept


77) The trading area of a parasite store located within a shopping center closely approximates the trading area of the overall shopping center.

Answer: TRUE

Diff: 2 Page Ref: 257, 258

Skill: Terminology/Concept

78) If the use of credit cards varies among different geographic areas, a determination of trading areas on the basis of credit card analysis will not accurately reflect a store's trading area.

Answer: TRUE

Diff: 2 Page Ref: 260

Skill: Terminology/Concept


79) An analysis of a store's customers reveals that area A has twice the concentration of customers as area B. Area C has one-quarter the customers of area A. Area A represents the store's primary trading area.

Answer: TRUE

Diff: 2 Page Ref: 260, 257

Skill: Terminology/Concept


80) The simplest computerized site selection model is the gravity model.

Answer: FALSE

Diff: 1 Page Ref: 261

Skill: Terminology/Concept


81) Reilly's law of retail gravitation assumes that trading areas will vary depending on the good or service sought by a retail customer.

Answer: FALSE

Diff: 1 Page Ref: 261

Skill: Terminology/Concept


82) The point of indifference is a critical statistic in a gravity model.

Answer: TRUE

Diff: 2 Page Ref: 261

Skill: Terminology/Concept


83) The American Community Survey is updated yearly.

Answer: TRUE

Diff: 1 Page Ref: 269

Skill: Terminology/Concept

84) In general, retailers prefer an area to have a diversified (as opposed to a specialized) economic base.

Answer: TRUE

Diff: 2 Page Ref: 271

Skill: Terminology/Concept


85) Each retailer is able to earn an adequate return on his/her investment when an area is overstored.

Answer: FALSE

Diff: 1 Page Ref: 271

Skill: Terminology/Concept


86) Store location is generally considered the least flexible element in a retailer's strategy mix.

Answer: TRUE

Diff: 1 Page Ref: 216

Skill: Applied/Comprehensive/Integrative


87) A destination store has a large fringe trading area.

Answer: TRUE

Diff: 2 Page Ref: 220, 222

Skill: Applied/Comprehensive/Integrative


88) A store with a large fringe trading area has a small percent of outshoppers.

Answer: FALSE

Diff: 2 Page Ref: 220

Skill: Applied/Comprehensive/Integrative


89) 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.

Answer: TRUE

Diff: 2 Page Ref: 258, 259

Skill: Applied/Comprehensive/Integrative


90) Trading-area delineation is more precise for existing retail store locations than for new retail store locations.

Answer: TRUE

Diff: 2 Page Ref: 259-261

Skill: Applied/Comprehensive/Integrative


91) PRIZM NE describes a geographic area via lifestyle market segments.

Answer: TRUE

Diff: 1 Page Ref: 260)

Skill: Applied/Comprehensive/Integrative


92) A regression model is a form of simulation.

Answer: TRUE

Diff: 1 Page Ref: 261

Skill: Applied/Comprehensive/Integrative

93) Reilly's law of retail gravitation and Huff's law are examples of analog models.

Answer: FALSE

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative


94) City A is nine times greater in population than city B. If the cities are 30 miles apart, the point of indifference is 22.5 miles from city A and 7.5 miles from city B, based on Reilly's law.

Answer: TRUE

Diff: 2 Page Ref: 261

Skill: Applied/Comprehensive/Integrative

95) Huff's law of shopper attraction uses less sophisticated assumptions about consumer behavior than Reilly's law of retail gravitation.

Answer: FALSE

Diff: 2 Page Ref: 261-262

Skill: Applied/Comprehensive/Integrative


96) Three shopping locations devote 500, 1,000, and 2,000 square feet to bathroom vanities. A group of potential customers live 5 minutes from the first location, 10 minutes from the second, and 20 minutes from the third. A luggage retailer estimates the effect of travel time to be 2. The probability of consumers shopping at location one is 57 percent.

Answer: TRUE

Diff: 2 Page Ref: 262

Skill: Applied/Comprehensive/Integrative


97) In comparison to the American Community Survey, the major advantage of the Census of Population is its currency.

Answer: FALSE

Diff: 2 Page Ref: 263, 266-267

Skill: Applied/Comprehensive/Integrative


98) A diversified economic base protects retailers from risks inherent in a single-industry town.

Answer: TRUE

Diff: 1 Page Ref: 271

Skill: Applied/Comprehensive/Integrative


99) Data on the economic base of an area can be found in the American Community Survey.

Answer: FALSE

Diff: 2 Page Ref: 271

Skill: Applied/Comprehensive/Integrative


100) Sales per square foot for shoes for area A are $150; the comparable measure for neighboring area B is $95. The population of both areas is similar in terms of demographics and life-styles. Area A is understored relative to area B.

Answer: FALSE

Diff: 2 Page Ref: 271

Skill: Applied/Comprehensive/Integrative

101) a. Why is retail location the least flexible element of a retailer's strategy?

b. Is this an advantage or a disadvantage to a retailer? Explain your answer.

Diff: 2 Page Ref: 25
102) a. How can a retailer make its location strategy more flexible?

b. Identify the risks associated with these strategies.

Diff: 2 Page Ref: 251
103) Under what conditions should a retailer have high trading-area overlap among its branches? Explain your answer.

Diff: 2 Page Ref: 252, 253


104) a. Differentiate among a primary, secondary, and fringe trading area.

b. What are the benefits of having a large fringe trading area? ...the limitations?

Diff: 1 Page Ref: 257
105) a. Which trading area (primary, secondary, or fringe) is most important for a destination store? Explain.

b. Is trading area analysis relevant to a direct marketer? Explain your answer.

Diff: 2 Page Ref: 257
106) a. Explain how an existing appliance retailer can delineate its trading area using primary data.

b. Explain how an existing appliance retailer can delineate its trading area using secondary data.

Diff: 1 Page Ref: 259-263
107) Differentiate among the three types of computer site selection models: analog, regression, and gravity.

Diff: 1 Page Ref: 261


108) a. Using Reilly's law, compute the point of indifference when the population of city A equals 10,000, the population of city B equals 90,000, and the distance between A and B equals 30 miles.

b. Three shopping locations have 1,000, 1,500, and 3,000 square feet of space devoted to personal computer books. A group of potential customers live 7 minutes from the first location, 10 minutes from the second location, and 15 minutes from the third location. A retailer estimates the effect of travel time to be 2. Compute the probability of consumers shopping at each location using Huff's law.

Diff: 2 Page Ref: 261, 262
109) How can Reilly's law and Huff's law be improved (in terms of introducing additional factors) so as to better delineate trading areas for new retailers?

Diff: 1 Page Ref: 261, 262


110) What kind of data on population characteristics can a retailer obtain from the Census of Population? ...American Community Survey? ...Editor & Publisher Market Guide?

Diff: 1 Page Ref: 266, 269, 271

111) a. Develop a statement describing an optimal economic base for a major ladies' clothing specialty store seeking an aggressive expansion strategy.

b. Is the study of an area's economic base still important when 15 percent of an area's population is tourists on vacation? Explain.

Diff: 2 Page Ref: 271
112) a. Explain how a supermarket retailer can estimate the degree of market saturation for a given location. Refer to specific measures of trading-area saturation.

b. Why have most studies of retail saturation been conducted on supermarkets? Explain your answer.

Diff: 2 Page Ref: 271-272



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