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



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Chapter 14

1) All of the activities involved in acquiring particular goods and/or services and making them available at the places, times, prices, and quantities that will enable the firm to reach its goals comprise ________.

A) merchandising

B) financial merchandise management

C) retail pricing

D) a centralized buying organization

Answer: A

Diff: 1 Page Ref: 384

Skill: Terminology/Concept
2) A major characteristic of micromerchandising is the ________.

A) lower costs through quantity discounts

B) use of rationalized retailing

C) appeal to local tastes

D) use of the top-down approach to space management

Answer: C

Diff: 2 Page Ref: 386

Skill: Terminology/Concept


3) Which retail merchandising strategy reflects the need to appeal to specific target markets through different product offerings?

A) rationalized retailing

B) micromerchandising

C) battle of the brands

D) cross selling

Answer: B

Diff: 2 Page Ref: 386

Skill: Terminology/Concept


4) Which merchandising strategy is similar to scrambled merchandising?

A) cross-merchandising

B) micromerchandising

C) cross selling

D) rationalized retailing

Answer: A

Diff: 2 Page Ref: 387

Skill: Terminology/Concept

5) A formal buying organization is characterized by ________.

A) the same personnel handling merchandising and other retail functions

B) low organizational costs

C) the merchandising function being a separate department

D) flexibility in organizational design

Answer: C

Diff: 1 Page Ref: 387

Skill: Terminology/Concept


6) Informal buying organizations are most likely to be found in ________.

A) major retail chains

B) franchisors

C) small independents

D) specialty chains

Answer: C

Diff: 1 Page Ref: 387

Skill: Terminology/Concept


7) In a centralized buying organization, ________.

A) all purchases emanate from one office

B) purchase decisions are made at local store units

C) local units have freedom in buying, but must use approved vendors

D) purchase decisions are made at the regional level

Answer: A

Diff: 2 Page Ref: 388

Skill: Terminology/Concept


8) A major advantage of centralized buying for a retailer is ________.

A) the increased role of branch stores

B) greater fit with regional trends

C) faster delivery times

D) greater bargaining power

Answer: D

Diff: 2 Page Ref: 388

Skill: Terminology/Concept


9) A major disadvantage of decentralized buying is ________.

A) excessive uniformity

B) poor morale at local stores

C) inflexibility in decision making

D) an inconsistent image

Answer: D

Diff: 2 Page Ref: 388

Skill: Terminology/Concept

10) Which is an example of a specialized buying organization for a national supermarket chain?

A) a buyer being responsible for purchasing for all stores in the Southwest

B) a buyer having an assistant buyer and an assistant to the buyer report to him or her

C) a buyer purchasing seafood directly from major fishing fleets

D) a buyer having a $2,000,000 budget each month

Answer: C

Diff: 2 Page Ref: 388

Skill: Terminology/Concept


11) Which type of buying organization generally services small noncompeting retailers?

A) specialized buying organization

B) general buying organization

C) inside buying organization

D) outside buying organization

Answer: D

Diff: 1 Page Ref: 389

Skill: Terminology/Concept


12) Which buying organization operates close to the sources of supply?

A) inside buying office

B) outside buying office

C) general buying office

D) resident buying office

Answer: D

Diff: 2 Page Ref: 390

Skill: Terminology/Concept


13) Which buying organization seeks to receive quantity discounts and bargaining power discounts for its members so that they will be better able to compete against larger chain organizations?

A) cooperative buying

B) inside buying organization

C) resident buying office

D) formal buying organization

Answer: A

Diff: 1 Page Ref: 390

Skill: Terminology/Concept


14) Merchandising includes ________.

A) the purchasing of goods and services but not the sale of them

B) display decisions only

C) selling of goods and services but not the purchasing of them

D) activities involved in the buying and selling of goods and services

Answer: D

Diff: 1 Page Ref: 390

Skill: Terminology/Concept

15) A major advantage of a merchandising philosophy is ________.

A) close supervision of selling staff

B) equal treatment of the selling function

C) the buyer is close to consumers via his or her involvement with selling

D) the use of specialists in each area

Answer: C

Diff: 2 Page Ref: 390

Skill: Terminology/Concept


16) A major disadvantage of a merchandising philosophy is that ________.

A) responsibility for success or failure may be unclear

B) functions are combined into one position that require different abilities

C) reporting responsibilities may be unclear

D) coordination of buying and selling may be reduced

Answer: B

Diff: 2 Page Ref: 390

Skill: Terminology/Concept


17) A model stock plan is used for ________.

A) dealer brands

B) fashion items

C) staple merchandise

D) key items

Answer: B

Diff: 1 Page Ref: 392

Skill: Terminology/Concept


18) A never-out list is used for ________.

A) fashion items

B) dealer brands

C) fad items

D) best sellers

Answer: D

Diff: 1 Page Ref: 393

Skill: Terminology/Concept


19) A good or service will be supplied in one basic version in which stage of the product life cycle?

A) introduction

B) growth

C) maturity

D) decline

Answer: A

Diff: 1 Page Ref: 394

Skill: Terminology/Concept

20) The target market expands to include middle-income consumers who are somewhat more innovative than the average consumer in which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

Answer: B

Diff: 2 Page Ref: 395

Skill: Terminology/Concept


21) In the growth stage of the product life cycle, ________.

A) goods or service sales reach their maximum

B) variations in the basic product offering appear

C) distribution is typically very limited

D) a skimming price strategy is used

Answer: B

Diff: 1 Page Ref: 395

Skill: Terminology/Concept


22) In which product life cycle stage do goods or service sales reach their maximum?

A) maturity

B) growth

C) introduction

D) decline

Answer: A

Diff: 1 Page Ref: 395

Skill: Terminology/Concept


23) A retailer primarily appeals to the lowest income consumers and laggards in which stage of the product life cycle?

A) introduction

B) growth

C) maturity

D) decline

Answer: D

Diff: 1 Page Ref: 395

Skill: Terminology/Concept


24) A vertical fashion trend occurs when a fashion ________.

A) is not successful when passed down to the mass market

B) is first accepted by an upscale market segment, but undergoes basic changes as it is sold to the general public

C) is passed from the lower to the upper social classes

D) retains its basic form as it is accepted by the general public

Answer: B

Diff: 1 Page Ref: 396

Skill: Terminology/Concept

25) Which fashion theory assumes that a fashion passes from the upper to the lower social classes?

A) vertical trend theory

B) horizontal trend theory

C) diffusion of innovation theory

D) fashion emulation theory

Answer: A

Diff: 2 Page Ref: 396

Skill: Terminology/Concept


26) Distinctive, emulation, and economic emulation are three stages in the ________.

A) diffusion of innovation theory

B) fashion emulation theory

C) vertical trend theory

D) horizontal trend theory

Answer: C

Diff: 1 Page Ref: 396

Skill: Terminology/Concept


27) Which retail assortment strategy is characterized by a retailer having a broad target market, one-stop shopping, and a large inventory investment?

A) wide and deep

B) wide and shallow

C) narrow and deep

D) narrow and shallow

Answer: A

Diff: 1 Page Ref: 396-397

Skill: Terminology/Concept


28) Which retail assortment strategy is characterized by a retailer seeking an image as a specialist?

A) narrow and shallow

B) narrow and deep

C) wide and shallow

D) wide and deep

Answer: B

Diff: 1 Page Ref: 396-397

Skill: Terminology/Concept


29) A common advantage of scrambled merchandising is that ________.

A) the scrambled goods have high profit margins

B) opportunities for cross-selling decrease

C) customers can be traded-up to more costly goods

D) the sale of substitute goods increases

Answer: A

Diff: 1 Page Ref: 398

Skill: Terminology/Concept

30) ________ brands are somewhat pre-sold to consumers, require limited retailer investment in marketing, and often represent maximum quality to consumers.

A) Manufacturer (national)

B) Private (dealer)

C) Generic

D) Wholesaler

Answer: B

Diff: 1 Page Ref: 400

Skill: Terminology/Concept


31) A major advantage to a retailer's use of private (dealer) brands is ________.

A) less retailer investment

B) support by manufacturer advertising

C) the extent to which they are pre-sold to customers

D) the development of store loyalty among consumers

Answer: D

Diff: 2 Page Ref: 400

Skill: Terminology/Concept


32) Which brands generally receive secondary shelf locations and receive little or no promotion support?

A) generic brands

B) manufacturer brands

C) dealer brands

D) scrambled merchandising

Answer: A

Diff: 1 Page Ref: 402

Skill: Terminology/Concept

33) Increased competition for shelf space among manufacturer, dealer, and generic brands is commonly referred to as ________.

A) channel cooperation

B) the battle of the brands

C) channel conflict

D) slotting allowances

Answer: B

Diff: 1 Page Ref: 402

Skill: Terminology/Concept


34) Category management is a strategy that is used to improve a retailer's ________.

A) shelf-space productivity

B) point-of-sale displays

C) capital costs

D) overall productivity through the use of computerization

Answer: A

Diff: 1 Page Ref: 403-405

Skill: Terminology/Concept

35) Direct product profitability equals an item's ________.

A) annual sales divided by the total linear footage devoted to a product category

B) gross profit less its direct retailing costs (but not including general overhead)

C) annual gross profit divided by the total linear footage devoted to the item

D) number of days of supply on the shelf

Answer: B

Diff: 1 Page Ref: 404

Skill: Terminology/Concept


36) The opposite strategy to rationalized retailing is ________.

A) micromerchandising

B) centralized management

C) risk-minimization retailing

D) category management

Answer: A

Diff: 2 Page Ref: 386

Skill: Applied/Comprehensive/Integrative


37) Decentralized buying is often associated with ________.

A) category management

B) micromerchandising

C) risk-minimization retailing

D) electronic data interchange (EDI)

Answer: B

Diff: 2 Page Ref: 386

Skill: Applied/Comprehensive/Integrative


38) A major retailer desires to use specialists to plan, implement, and control the merchandising function. The most appropriate buying organization is a(n) ________.

A) decentralized buying organization

B) inside buying organization

C) informal buying organization

D) formal buying organization

Answer: D

Diff: 1 Page Ref: 387

Skill: Applied/Comprehensive/Integrative


39) A furniture retailer with three branch stores has an owner that handles store operations, buying, advertising, and finance responsibilities. Which buying organization does the retailer use?

A) formal buying organization

B) informal buying organization

C) decentralized buying organization

D) centralized buying organization

Answer: B

Diff: 2 Page Ref: 387

Skill: Applied/Comprehensive/Integrative

40) A chain retailer with a national representation can optimize its use of national advertising media through use of a(n) ________.

A) informal buying organization

B) resident buying office

C) decentralized buying organization

D) centralized buying organization

Answer: D

Diff: 1 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


41) Specialized regional buying preferences are best served through which buying organization?

A) decentralized buying organization

B) inside buying organization

C) informal buying organization

D) formal buying organization

Answer: A

Diff: 1 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


42) Which buying organization format for department stores is centralized?

A) main store control

B) equal store

C) separate store

D) diversified retailer

Answer: A

Diff: 2 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


43) A separate store organization used by a department store chain is an example of a(n) ________.

A) decentralized buying organization

B) centralized buying organization

C) informal buying organization

D) resident buying office

Answer: A

Diff: 2 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


44) The benefits of an outside buying organization are especially important to ________.

A) large retailers located near an important merchandise center

B) large retailers located far from an important merchandise center

C) small retailers located near an important merchandise center

D) small retailers located far from an important merchandise center

Answer: D

Diff: 1 Page Ref: 388-389

Skill: Applied/Comprehensive/Integrative

45) A department store chain, based in western Pennsylvania, can best keep in touch with developments in the ladies clothing market, based in New York City, through a(n) ________.

A) informal buying organization

B) cooperative buying organization

C) resident buying office

D) inside buying organization

Answer: C

Diff: 1 Page Ref: 390

Skill: Applied/Comprehensive/Integrative


46) Small retailers seeking to match the same bargaining power as major chains should seek to utilize ________.

A) an inside buying organization

B) a decentralized buying organization

C) resident buying offices

D) cooperative buying

Answer: D

Diff: 2 Page Ref: 390

Skill: Applied/Comprehensive/Integrative

47) A retailer is concerned that its current organization does not provide adequate attention to the recruitment, motivation, and training of its sales personnel. The retailer needs to consider reorganizing to ________.

A) a centralized buying organization

B) a decentralized buying organization

C) having separate buying and selling responsibilities

D) a merchandising organization

Answer: C

Diff: 2 Page Ref: 390

Skill: Applied/Comprehensive/Integrative


48) A retailer's descriptions of goods to be stocked in its assortment plan are constant over a five-year period. The assortment plan analyzed is a(n) ________.

A) never-out list

B) model stock plan

C) basic stock list

D) extended merchandise assortment plan

Answer: C

Diff: 1 Page Ref: 392

Skill: Applied/Comprehensive/Integrative


49) The preparation of descriptions of merchandise to be stocked is easiest in a(n) ________.

A) model stock plan

B) basic stock list

C) never out list

D) assortment plan

Answer: B

Diff: 1 Page Ref: 392

Skill: Applied/Comprehensive/Integrative

50) A retailer should require that an inventory of goods on hand be updated daily for goods that are on its ________.

A) never-out list

B) model stock plan

C) basic stock list

D) extended merchandise assortment plan

Answer: A

Diff: 2 Page Ref: 393

Skill: Applied/Comprehensive/Integrative


51) The use of a perpetual inventory system to monitor inventory levels per unit based on initial inventory levels, purchases, and sales is most common with a ________.

A) never-out list

B) model stock plan

C) basic stock list

D) extended merchandise assortment plan

Answer: A

Diff: 2 Page Ref: 393

Skill: Applied/Comprehensive/Integrative


52) Merchandise planning is most problematic for ________.

A) staple merchandise

B) seasonal merchandise

C) impulse merchandise

D) fad merchandise

Answer: D

Diff: 2 Page Ref: 393

Skill: Applied/Comprehensive/Integrative


53) The target market consists of the smallest number of consumers in which traditional product life cycle stage?

A) growth

B) introduction

C) maturity

D) decline

Answer: B

Diff: 2 Page Ref: 394-395

Skill: Applied/Comprehensive/Integrative


54) The use of explanatory advertising by retailers and limited distribution by manufacturers are characteristics of which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

Answer: A

Diff: 1 Page Ref: 394-395

Skill: Applied/Comprehensive/Integrative

55) Most goods and services are at what stage of the traditional product life cycle?

A) introduction

B) growth

C) decline

D) maturity

Answer: D

Diff: 1 Page Ref: 395

Skill: Applied/Comprehensive/Integrative

56) Price competition by retailers is most intense in which product life cycle stage?

A) introduction

B) growth

C) maturity

D) decline

Answer: C

Diff: 1 Page Ref: 395

Skill: Applied/Comprehensive/Integrative


57) A retailer believing in the vertical trend theory would sell a distinctive fashion to which target market when the design first appears?

A) upper social class

B) mass market

C) lower social class

D) working class

Answer: A

Diff: 2 Page Ref: 396

Skill: Applied/Comprehensive/Integrative


58) A major difference between a vertical and a horizontal fashion trend is based on the ________.

A) ultimate sales level achieved for the fashion

B) speed of diffusion of the fashion

C) social class of the initial group which accepts the trend

D) degree of fashion innovativeness

Answer: C

Diff: 2 Page Ref: 396

Skill: Applied/Comprehensive/Integrative


59) Which retail assortment strategy requires the greatest inventory investment for a retailer?

A) wide and deep

B) wide and shallow

C) narrow and shallow

D) narrow and deep

Answer: A

Diff: 2 Page Ref: 396-397

Skill: Applied/Comprehensive/Integrative

60) Which retail assortment strategy is used by a department store?

A) narrow and deep

B) narrow and shallow

C) wide and shallow

D) wide and deep

Answer: D

Diff: 2 Page Ref: 396-397

Skill: Applied/Comprehensive/Integrative


61) Which retail assortment strategy is used by a specialty store?

A) narrow and deep

B) narrow and shallow

C) wide and shallow

D) wide and deep

Answer: A

Diff: 1 Page Ref: 396-397

Skill: Applied/Comprehensive/Integrative


62) In general, as a retailer moves from a narrow and shallow strategy toward a wide and deep strategy, ________.

A) customer disappointment with selection increases

B) one-stop shopping appeals are lost

C) inventory turnover decreases

D) a specialist image is received

Answer: C

Diff: 2 Page Ref: 396-397

Skill: Applied/Comprehensive/Integrative


63) A conventional supermarket's adding a line of gas barbecues and summer furniture during the summer season illustrates which merchandising strategy?

A) scrambled merchandising

B) trading up

C) handling substitute products

D) selling complementary goods

Answer: A

Diff: 1 Page Ref: 398

Skill: Applied/Comprehensive/Integrative


64) The selling of car mats, burglar alarms, and extended warranties by a new car dealer illustrates ________.

A) scrambled merchandising

B) trading up

C) selling substitute goods and services

D) selling complementary goods and services

Answer: D

Diff: 1 Page Ref: 398

Skill: Applied/Comprehensive/Integrative

65) A retailer seeks to minimize direct price competition among its goods and services. Which branding philosophy should the retailer utilize?

A) manufacturer branding

B) private (dealer) branding

C) generic branding

D) mixed branding

Answer: B

Diff: 2 Page Ref: 400

Skill: Applied/Comprehensive/Integrative


66) A retailer has the greatest control over the pricing, image, and promotion of ________ brands.

A) private (dealer)

B) generic

C) national

D) manufacturer

Answer: A

Diff: 1 Page Ref: 400

Skill: Applied/Comprehensive/Integrative


67) It takes a retailer three days to process an order and the supplier an additional five days to deliver ordered merchandise. The retailer should begin to order new merchandise ________.

A) when the current inventory is at 15 units

B) at least two days before the old inventory runs out

C) at least eight days before the old inventory runs out

D) at least ten days before the old inventory runs out

Answer: C

Diff: 2 Page Ref: 402-403

Skill: Applied/Comprehensive/Integrative


68) In category management, a grouping of products is viewed as a ________.

A) boutique

B) strategic business unit

C) functional unit

D) vendor responsibility unit

Answer: B

Diff: 2 Page Ref: 403-405

Skill: Applied/Comprehensive/Integrative


69) Which category management measure is most similar to inventory turnover?

A) reorder point

B) days' supply

C) direct product profitability

D) return on inventory investment

Answer: B

Diff: 1 Page Ref: 404

Skill: Applied/Comprehensive/Integrative

70) A retailer can purchase a national brand of canned corn for $.39. The canned corn sells for $.52. Total direct retailing costs for the corn (warehouse costs and direct labor) equal $.03 per can. In addition, $.05 per can is charged for administrative overhead. What is the direct product profitability per can?

A) $.05


B) $.10

C) $.13


D) The answer cannot be determined from the information provided.

Answer: B

Diff: 2 Page Ref: 404

Skill: Applied/Comprehensive/Integrative


71) An informal buying organization is most likely to be found in a small, independent retailer.

Answer: TRUE

Diff: 1 Page Ref: 387

Skill: Terminology/Concept


72) Decentralized buying organizations are most likely to secure favorable purchase terms from vendors.

Answer: FALSE

Diff: 1 Page Ref: 388

Skill: Terminology/Concept


73) A retail chain can seek to combine the benefits of centralized and decentralized organizations by using a centralized buying organization and a decentralized selling organization.

Answer: TRUE

Diff: 2 Page Ref: 388

Skill: Terminology/Concept


74) Resident buying offices are used by retailers that have main stores nearby important market centers.

Answer: FALSE

Diff: 1 Page Ref: 390

Skill: Terminology/Concept


75) Cooperative buying organizations generally are comprised of franchisees.

Answer: FALSE

Diff: 1 Page Ref: 390

Skill: Terminology/Concept


76) Retailers with a merchandising viewpoint are more likely to employ separate buyers and sales managers.

Answer: FALSE

Diff: 1 Page Ref: 390

Skill: Terminology/Concept

77) For fashion merchandise, merchandise assortment planning is conducted with the use of a basic stock list.

Answer: FALSE

Diff: 1 Page Ref: 392

Skill: Terminology/Concept


78) Fads and seasonality are part of the traditional product life cycle.

Answer: FALSE

Diff: 2 Page Ref: 394-395

Skill: Terminology/Concept


79) Product obsolescence characterizes the decline stage of the traditional product life cycle.

Answer: TRUE

Diff: 2 Page Ref: 394-395

Skill: Terminology/Concept


80) In the horizontal trend theory, a new fashion is accepted by a broad range of consumers when first introduced.

Answer: TRUE

Diff: 1 Page Ref: 396

Skill: Terminology/Concept


81) The store type with the greatest depth of assortment is a specialty store.

Answer: TRUE

Diff: 2 Page Ref: 396-397

Skill: Terminology/Concept


82) The battle of the brands relates to a battle for shelf space and promotional emphasis between manufacturer and private brands.

Answer: TRUE

Diff: 1 Page Ref: 402

Skill: Terminology/Concept


83) If it takes a retailer three days to process an order and the supplier an additional five days to deliver the merchandise, the retailer should begin to order the merchandise at least 15 days before the old inventory runs out.

Answer: FALSE

Diff: 2 Page Ref: 402-403

Skill: Terminology/Concept


84) Through category management, an item's performance is ranked only on the basis of gross profit as a percent of sales.

Answer: FALSE

Diff: 1 Page Ref: 403-405

Skill: Terminology/Concept


85) Direct product profitability corresponds to a product's gross profit.

Answer: FALSE

Diff: 2 Page Ref: 404

Skill: Terminology/Concept

86) The effectiveness of a micromerchandising strategy can best be judged through category management.

Answer: TRUE

Diff: 2 Page Ref: 386, 403-405

Skill: Applied/Comprehensive/Integrative


87) A retailer with homogenous demand patterns throughout its branches should use a decentralized buying organization.

Answer: FALSE

Diff: 2 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


88) Micromerchandising is generally associated with centralized buying organizations.

Answer: FALSE

Diff: 2 Page Ref: 388, 386

Skill: Applied/Comprehensive/Integrative


89) Decentralized buying organizations generally secure the best merchandise fit with each specific geographic area where a retailer has stores.

Answer: TRUE

Diff: 2 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


90) Outside buying organizations are typically used by large retail chains.

Answer: FALSE

Diff: 1 Page Ref: 388

Skill: Applied/Comprehensive/Integrative


91) Much of the benefit of resident buying offices can be achieved by a retailer using an outside buying organization.

Answer: TRUE

Diff: 2 Page Ref: 390

Skill: Applied/Comprehensive/Integrative


92) Orders for staples are generally made using negotiated contracts.

Answer: FALSE

Diff: 2 Page Ref: 392

Skill: Applied/Comprehensive/Integrative


93) A basic stock list changes less on a year-to-year basis than either a never-out list or a model stock plan.

Answer: TRUE

Diff: 2 Page Ref: 392, 393

Skill: Applied/Comprehensive/Integrative


94) The traditional product life cycle curve is bell-shaped.

Answer: TRUE

Diff: 2 Page Ref: 394-395

Skill: Applied/Comprehensive/Integrative

95) A new fashion costing $15,000 in Paris is copied in a $1,000 version in emulation, and in a $75 version in economic emulation.

Answer: TRUE

Diff: 2 Page Ref: 396

Skill: Applied/Comprehensive/Integrative


96) In the vertical trend theory, fashion innovators are opinion leaders within any social class; in the horizontal trend theory, fashion innovators are the upper social classes.

Answer: FALSE

Diff: 2 Page Ref: 396

Skill: Applied/Comprehensive/Integrative


97) A narrow and shallow retail assortment strategy requires the lowest inventory investment.

Answer: TRUE

Diff: 1 Page Ref: 396-397

Skill: Applied/Comprehensive/Integrative


98) The battle of the brands is an example of channel conflict.

Answer: TRUE

Diff: 2 Page Ref: 402

Skill: Applied/Comprehensive/Integrative


99) Stressing the sales of private brands at the expense of manufacturer brands by retailers is an example of channel power.

Answer: FALSE

Diff: 2 Page Ref: 402

Skill: Applied/Comprehensive/Integrative


100) The computation of direct product profitability includes an item's share of allocated overhead costs.

Answer: FALSE

Diff: 2 Page Ref: 404

Skill: Applied/Comprehensive/Integrative


101) What are the advantages and disadvantages of micromerchandising programs?

Diff: 1 Page Ref: 386


102) Under what conditions should a retailer consider using an informal buying organization?

Diff: 2 Page Ref: 387-388


103) Under what conditions should a retailer consider using a decentralized buying organization?

Diff: 2 Page Ref: 388


104) What are the pros and cons of the use of cooperative buying among noncompeting major appliance stores that are independently-owned?

Diff: 1 Page Ref: 390


105) Develop a model stock plan for men's dress shoes. List the assumptions in your plan.

Diff: 2 Page Ref: 392

106) Develop a merchandising pan for fad merchandise.

Diff: 2 Page Ref: 392


107) Under what circumstances would you utilize a basic stock list for bath towels? ...a model stock list? ...a never-out list? Explain your answers.

Diff: 2 Page Ref: 392-393


108) Show how a retailer's merchandising strategy would change as a good/service shifted from growth to maturity in the traditional product life cycle.

Diff: 1 Page Ref: 394-395


109) a. Differentiate between the vertical and horizontal trend theories.

b. Develop a merchandising plan for a new fashion on the basis of the vertical trend theory. ...the horizontal trend theory.

Diff: 1 Page Ref: 396
110) Distinguish among scrambled merchandising, complementary goods and services, and substitute goods and services.

Diff: 1 Page Ref: 398


111) Describe the significance of the battle of the brands for a major supermarket chain.

Diff: 1 Page Ref: 400


112) a. Explain the pros and cons of the use of category management.

b. List and describe five performance measures used in category management.

Diff: 2 Page Ref: 403-405



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