Question 1

The use of franchising and the designation of suggested retail selling prices are channel control strategies of _____.

Accepted Answer

A)  consumer cooperatives
B)  wholesalers
C)  retailers
D)  manufacturersE) A) and B)
F) A) and C)

Question 2

An example of a chain retailer performing a wholesaling function is _____.

Accepted Answer

A)  gaining exclusive rights to sell certain items
B)  introducing private brands,such as Sears' Kenmore
C)  using point-of-sale equipment to determine inventory levels
D)  buying directly from suppliersE) C) and D)
F) All of the above

Question 3

Which of the following has the greatest flexibility in developing and implementing a retail strategy?

Accepted Answer

A)  independent retailer
B)  franchisee
C)  chain store manager
D)  leased department operatorE) A) and C)
F) All of the above

Question 4

The growth of consumer cooperatives has been limited due to _____.

Accepted Answer

A)  fair practice legislation
B)  required consumer/member initiative and drive
C)  competitive actions by full-service retailers
D)  wholesaler use of full-time forcingE) B) and D)
F) All of the above

Question 5

In a typical franchise arrangement,a franchisee pays an initial fee and a monthly percentage of gross sales in exchange for the exclusive rights to sell goods and services in a specified geographic area.

Accepted Answer

A) True 
 B)False

Question 6

Avon and Sherwin-Williams utilize _____.

Accepted Answer

A)  an independent vertical marketing system
B)  a partially integrated vertical marketing system
C)  a fully integrated vertical marketing system
D)  franchisingE) B) and C)
F) C) and D)

Question 7

Exclusive distribution,fully integrated vertical marketing systems,and franchising are used by manufacturers to increase their channel control.

Accepted Answer

A) True 
 B)False

Question 8

Auto dealer and gasoline station franchises represent what type of structural arrangement?

Accepted Answer

A)  voluntary wholesaler-retailer
B)  service sponsor-retailer
C)  cooperative wholesaler-retailer
D)  manufacturer-retailerE) A) and D)
F) B) and C)

Question 9

A retailer can generate channel control through each of the following strategies except _____.

Accepted Answer

A)  bargaining power due to many purchases from a manufacturer
B)  private brands
C)  the threat of switching vendors
D)  franchisingE) A) and B)
F) B) and C)

Question 10

The overall process whereby one member of a channel can impose its will on other independent channel members is referred to as _____.

Accepted Answer

A)  channel control
B)  vertical integration
C)  franchising
D)  private brandingE) C) and D)
F) B) and D)

Question 11

Business format franchisees operate in a relatively autonomous manner from their franchisors.

Accepted Answer

A) True 
 B)False

Question 12

Decision making is usually centralized and the levels of management personnel are minimized in which retail institution?

Accepted Answer

A)  department store
B)  chain
C)  variety store
D)  independentE) A) and D)
F) B) and C)

Question 13

Which of the following has developed because existing retail institutions are inadequately fulfilling market needs?

Accepted Answer

A)  consumer cooperatives
B)  independent channel ownership
C)  leased departments
D)  total vertical integrationE) All of the above
F) None of the above

Question 14

Fair practice laws are designed to prevent a franchisor from _____.

Accepted Answer

A)  enforcing a tying agreement
B)  terminating,canceling,or failing to renew a franchise without sufficient cause
C)  incorrectly reporting franchise profits and investments
D)  selling additional franchises in a protected territoryE) B) and C)
F) None of the above

Question 15

FTC rulings,fair practice laws,and franchise-member organizations have the effect of _____.

Accepted Answer

A)  shifting some channel power back to franchisees
B)  limiting franchisor "right-to-purchase" laws
C)  promoting service-sponsor versus manufacturer franchises
D)  further constraining decision making relative to franchiseesE) All of the above
F) A) and C)

Question 16

As a result of constrained decision making in franchising,_____.

Accepted Answer

A)  oversaturation of outlets can occur
B)  royalties are based on sales,not profits
C)  the franchisor can limit franchisee input into planning
D)  the franchisor uses short-duration leasesE) None of the above
F) B) and D)

Question 17

Which of the following is not a benefit to a department or discount store using leased departments instead of company-operated units?

Accepted Answer

A)  a one-stop shopping environment
B)  low investment requirements
C)  high control of operations
D)  payment based on sales,not profitsE) None of the above
F) B) and D)

Question 18

An example of a product/trademark franchise is a _____ franchise.

Accepted Answer

A)  McDonald's fast-food
B)  Wendy's fast-food
C)  Super 8 hotel
D)  Chevrolet auto dealershipE) A) and B)
F) C) and D)

Question 19

A franchisee operating at one retail location can be classified as an independent,as well as a franchise.

Accepted Answer

A) True 
 B)False

Question 20

Three types of structural arrangements involving retail franchises exist: manufacturer-retailer,wholesaler-retailer,and service sponsor-retailer.

Accepted Answer

A) True 
 B)False

Exam 4: Retail Institutions by Ownership

The overall process whereby one member of a channel can impose its will on other independent channel members is referred to as _____.

Correct AnswerverifiedShow Answer

Which of the following is not a benefit to a department or discount store using leased departments instead of company-operated units?

Correct AnswerverifiedShow Answer

The use of franchising and the designation of suggested retail selling prices are channel control strategies of _____.

Correct AnswerverifiedShow Answer

Decision making is usually centralized and the levels of management personnel are minimized in which retail institution?

Correct AnswerverifiedShow Answer

A retailer can generate channel control through each of the following strategies except _____.

Correct AnswerverifiedShow Answer

FTC rulings,fair practice laws,and franchise-member organizations have the effect of _____.

Correct AnswerverifiedShow Answer

In a typical franchise arrangement,a franchisee pays an initial fee and a monthly percentage of gross sales in exchange for the exclusive rights to sell goods and services in a specified geographic area.

Correct AnswerverifiedShow Answer

Which of the following has the greatest flexibility in developing and implementing a retail strategy?

Correct AnswerverifiedShow Answer

An example of a chain retailer performing a wholesaling function is _____.

Correct AnswerverifiedShow Answer

Auto dealer and gasoline station franchises represent what type of structural arrangement?

Correct AnswerverifiedShow Answer

Fair practice laws are designed to prevent a franchisor from _____.

Correct AnswerverifiedShow Answer

As a result of constrained decision making in franchising,_____.

Correct AnswerverifiedShow Answer

Which of the following has developed because existing retail institutions are inadequately fulfilling market needs?

Correct AnswerverifiedShow Answer

Business format franchisees operate in a relatively autonomous manner from their franchisors.

Correct AnswerverifiedShow Answer

The growth of consumer cooperatives has been limited due to _____.

Correct AnswerverifiedShow Answer

An example of a product/trademark franchise is a _____ franchise.

Correct AnswerverifiedShow Answer

Exclusive distribution,fully integrated vertical marketing systems,and franchising are used by manufacturers to increase their channel control.

Correct AnswerverifiedShow Answer

Avon and Sherwin-Williams utilize _____.

Correct AnswerverifiedShow Answer

A franchisee operating at one retail location can be classified as an independent,as well as a franchise.

Correct AnswerverifiedShow Answer

Three types of structural arrangements involving retail franchises exist: manufacturer-retailer,wholesaler-retailer,and service sponsor-retailer.

Correct AnswerverifiedShow Answer

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