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Exam 12: Retailers, Wholesalers, and Their Strategy Planning

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Question 121

True/False

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In consumer products, single-line wholesalers serve single-line and limited-line retail stores.

A) True
B) False

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Question 122

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Use this information for question that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods-mostly men's and women's clothing-with the upscale Walden's brand name. Walden's primarily relies on its own stores where knowledgeable salespeople offer great service. Walden products are also sold, on a limited basis, in some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances-but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides as well as commissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fifty stores grocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses best fits the definition of a limited-function merchant wholesaler?

A) Games Unlimited
B) Publisher's Helper
C) Reddy and Sons
D) Valu Grocer
E) Cuzco's

F) D) and E)
G) B) and E)

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Question 123

True/False

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Cash-and-carry wholesalers are more common in underdeveloped nations than in the U.S.-where big warehouse clubs have taken much of the business.

Department stores:

The development of new types of retailers can be best explained by applying:

The U.S. Census Bureau defines wholesaling as being concerned with the activities of those persons or establishments that sell

In the U.S. by 2015, Internet retailing is expected to total just over ________ billion-not counting travel and other services.

Retailers and their strategies can easily be classified based on the type of merchandise they sell.

Truck wholesalers:

Use this information for question that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods-mostly men's and women's clothing-with the upscale Walden's brand name. Walden's primarily relies on its own stores where knowledgeable salespeople offer great service. Walden products are also sold, on a limited basis, in some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances-but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides as well as commissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fifty stores grocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses would be classified as a specialty shop?

A good share of total U.S. wholesale sales are made by manufacturers' sales branches because:

Scrambled merchandising is carrying

With auction companies, demand and supply interact to determine the price.

Discount stores offer "soft goods" at substantial price cuts to customers.

The ____________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets.

Wholesaling is concerned with the activities of:

In a franchise operation, the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units.

Use this information for question that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods-mostly men's and women's clothing-with the upscale Walden's brand name. Walden's primarily relies on its own stores where knowledgeable salespeople offer great service. Walden products are also sold, on a limited basis, in some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances-but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides as well as commissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fifty stores grocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses is a voluntary chain?

"Soak" is a retailer with two locations in a major metropolitan area, both of which are in large, popular shopping centers. It carries a unique assortment of high-quality shower and bath products, such as soaps, bubble bath, and bath oils. One of its most popular products is a "bath bomb"-a round ball that fizzes and releases aromatic bath oils when placed in a bathtub filled with warm water. The small staff at the store is very knowledgeable about the store's products and provides a high level of customer service. "Soak" would be classified as a:

Regarding types of wholesalers, which of the following has the HIGHEST costs as a percent of sales?