Test Bank for Retailing Management 9th Edition by Levy – Test Bank




Test Bank for Retailing Management 9th Edition by Levy – Test Bank

Sample  Questions



MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) When consumers go shopping for pleasure, they are seeking to satisfy their:
A) Hedonic needs
B) Recognition needs
C) Complexity needs
D) Utilitarian needs
E) Conflicting needs
2) An example of cross-shopping occurs when
A) A shopper buys expensive ski clothing and inexpensive skis
B) A shopper purchases at different stores within the same mall during the same week
C) A customer shops for 2 or more family members at a time
D) The shopper shops for clothing during the week and for food on the weekends
E) A shopper buys several yellow shirts yet only a few black pants
3) Retailers use a variety of approaches to stimulate problem recognition and motivate
customers to visit their stores and buy merchandise including all of the following except:
A) Internet promotions
B) Direct mail
C) Special events
D) Advertising
E) Retailers use all of these
4) Why should retailers understand how families make purchase decisions?
A) Brand choice decisions may be influenced by children and not by the shopper.
B) Family purchase decisions consider the needs of all family members.
C) Retailers can attract customers by satisfying needs of all family members.
D) Children influence family buying decisions.
E) All of these.
5) David is starting his first job out of college with a consulting firm and wants to make a
good impression on his supervisors. He noticed the attire of the associates when he was
interviewed, and decided to mimic them by wearing power suits and Italian shoes. What
social factor most influences David’s wardrobe?
A) culture
B) peer group
C) family
D) reference group
E) subculture
6) In the 1960’s, bands like the Beatles and the Stones exerted a major influence on culture.
Students styled their hair, wore similar clothes, and became socially conscious. Young
people looked upon bands like these for inspiration and encouragement. It can be said
that such rock groups were a form of:
A) family
B) peer group
C) reference group
D) subculture
E) culture
7) Many department stores have teen boards to help the retailer understand the fashions and
fads of teens. This teen board acts as a ________ for other teens to emulate.
A) peer group
B) reference group
C) subculture
D) family
E) culture
8) Tony Hawk is one of many professional skateboarders in the U.S. who compete and
showcase their sport for skateboard enthusiasts. These devoted fans imitate the moves
and jumps of these athletes to the detriment of their own safety. To skateboard
enthusiasts, the Tony Hawk crowd is part of their:
A) culture
B) reference group
C) subculture
D) family
E) peer group
9) Both a weight-loss center and a health club would be pleased to learn that health and
fitness, together with individualism, mastery and control, and self-improvement are
common values in the ________ of Canada.
A) culture
B) environment
C) civilization
D) society
E) experiential base
10) Which of the following is an example of a subculture in Canada?
A) Chinese
B) Asians
C) Acadians
D) Westerners
E) All of these
11) Big and Tall stores select their merchandise assortments for larger men. Men who meet
this criterion compose a:
A) media set
B) demographic set
C) psychosocial segment
D) consideration set
E) retail market segment
12) La Senza Girl is a specialty retailer with assortments that are of interest to young teens.
La Senza Girl is catering to a particular:
A) media set
B) subculture
C) psychosocial segment
D) retail market segment
E) consideration set
13) The Tackle Box is a store that sells anything you may need to catch fish including local
information about what is running, where it’s running and what bait works best. The
fishing enthusiasts who rely on the Tackle Box for reliable equipment and information
are the retailer’s:
A) media set
B) demographic set
C) consideration set
D) psychosocial segment
E) retail market segment
14) A retail market segment that has ________ is able to dictate to a retailer what it needs to
offer to satisfy the needs of the segment.
A) durability
B) flexibility
C) identifiability
D) actionability
E) accessibility
15) Which of the following is not a criterion for evaluating whether a retail market segment
is a viable target market?
A) size of market segment
B) actionability
C) media-adaptability
D) accessibility
E) identifiability
16) Bed and breakfasts that specialize in healthy meals and activities focus on advertising
their offering in health and fitness magazines because through this medium, their
customers are:
A) intransigent
B) flexible
C) stable
D) substantiated
E) accessible
17) Why would a store like The Button Emporium selling only buttons be best located in
A) The market is easier to identify because of the diversity.
B) More people in Ontario use sewing as a hobby, making it more actionable.
C) Toronto is a large city and can support the retailing mix of the store.
D) A retailer like this locates itself where there are designers who will patronize the
E) None of the statements answer the question.
18) A retailer in Winnipeg who wants to open a store that will sell surfboards and surfing
accessories would most likely have trouble with:
A) flexibility
B) media capability
C) competition
D) rationality
E) size of the market
19) Which of the following is not a criterion for evaluating retail market segments?
A) accessibility
B) size
C) identifiability
D) actionability
E) religion
20) Home Depot operates home improvement stores in major Canadian cities. Home Depot
management has learned that different merchandise is needed to satisfy the different
needs of the customers living in different areas of the country. What kind of retail market
segmentation has Home Depot used?
A) Geographic
B) Age
C) Lifestyle
D) Benefit
E) Race
21) The segmentation scheme best described by “birds of a feather flock together” is:
A) buying situation
B) demographic
C) lifestyle
D) geodemographic
E) geographic
22) Kathy’s son started school and brought home the supply list. Among the required
supplies were green ink pens. Kathy thought that finding boxes carrying only green pens
would be difficult until her neighbour informed her that Staples carried packs of twelve.
In turn, Kathy shared this information with yet another mother down the block who was
also perplexed as to where to purchase the pens. Which of the following approaches
should Staples use in defining its market segment?
A) Geographic
B) Occupation
C) Benefit sought
D) Family life cycle
E) Gender
23) ________ segmentation is the primary means for segmenting the aging baby boomer
retail market.
A) Geographic
B) Psychographic
C) Benefit sought
D) Demographic
E) Lifestyle
24) A store that specializes in Asian groceries and produce would use ________
segmentation when marketing to the Asian population in Vancouver?
A) lifestyle
B) benefit sought
C) psychographic
D) demographic
E) geographic
25) A cruise ship specializing in entertaining families with children would most likely be
using ________ segmentation to attract business.
A) lifestyle
B) benefit sought
C) geographic
D) demographic
E) psychographic
26) Harley Davidson dealers sell merchandise that interest men in their forties, who are
financially able to purchase motorcycles, and aspiring bikers in their teens, who are
financially able to purchase sports caps and t-shirts. Harley Davidson would focus on
which of the following segmentations?
A) Geographic
B) Feelings and behaviours
C) Demographics
D) Occupation
E) Psychosocial
27) The retail market segments for licensed World Wrestling Entertainment shirts, jackets,
and hats are 6- to 17-year-old boys, 18- to 24-year-old women, and 18- to 44-year-old
men. This retail market segment is based on ________ segmentation.
A) user status
B) lifestyle
C) demographic
D) geographic
E) psychosocial
28) ________ refers to the way people live, how they spend their time and money, what
activities they pursue, and what their attitudes and opinions are about the world they live
A) Family life cycle
B) Demographics
C) Usage situation
D) Social class
E) Lifestyle
29) Lifestyle refers to:
A) what activities people pursue
B) consumers’ attitudes about the world they live in
C) how people spend their time and money
D) the way people live
E) all of these
30) The Grand Casino has identified 2,000 people it categorizes as high rollers. Since the
casino people contend that there are no unifying demographics that can be used to
identify a high roller, what sort of segmentation must they be using?
A) Occupation, education, and lifestyle
B) Occupation, education, and geographic
C) Occupation, perceived risk, and social class
D) Lifestyle
E) Social class and income
31) The Main Game is a retail store that appeals to people who like role-playing games. The
store has games, books, and a play area where fanatics can meet and play each other.
Since there are no unifying demographics, the store uses ________ segmentation.
A) consumer behaviour
B) demographic
C) lifestyle
D) product perception
E) geographic
32) Do It Again Sports has everything the weekend warrior needs to get back into shape at
reduced prices. They feature an array of treadmills, weights and sporting gear as well as a
friendly, helpful staff. What segmentation method is Do It Again Sports using?
A) Lifestyle
B) Geographic
C) Loyalty status
D) Demographic
E) Attitudes
33) A woman buying perfume for herself and for her granddaughter would have two
different perspectives. These differences allow a retailer to segment according to
A) buying situation
B) personality
C) income
D) education
E) social class
34) Which of the following segmentation methods would be most appropriate for a retailer
selling apparel to wear to the beach?
A) Benefit sought
B) Demographic
C) Buying situation
D) Geographic
E) Personality
35) Which of the following segmentation methods would be most appropriate for a retailer
selling CDs?
A) Personality
B) Benefit sought
C) Geographic
D) Buying situation
E) Demographic
36) Which of the following segmentation methods would be most appropriate for a retailer
selling men’s apparel?
A) Geographic
B) Demographic
C) Buying situation
D) Benefit sought
E) Personality
37) Which of the following segmentation methods would be most appropriate for a
convenience store retailer?
A) Demographic
B) Personality
C) Benefit sought
D) Buying situation
E) Geographic
38) The Sleep Store sells mattresses, pillows, sound machines, and any other item that could
enhance a customer’s sleep. The store is popular because many people are unable to
enjoy a full night’s sleep, and Sleep Store offers products that promise comfortable sleep.
The Sleep Store therefore uses ________ segmentation.
A) geographic
B) benefit sought
C) demographic
D) usage
E) lifestyle
39) Composite segmentation defines target markets in terms of
A) benefit sought
B) demographics
C) lifestyle
D) both demographics and lifestyle
E) all of these
40) Why do retailers use composite segmentation?
A) Benefit segmentation does not identify the customers’ needs.
B) Demographic segmentation makes it impossible to attract people who do not fit into
the demographic categories used.
C) Geographic segmentation creates an unmanageable retail market.
D) Demographic segmentation identifies customers but not their needs.
E) Benefit segmentation requires the application of complex statistical forecasting.
41) Customers who spend 40 minutes in a store are more than twice as likely to:
A) leave the store empty handed as someone who spends 10 minutes
B) buy as someone who spends 30 minutes, and they typically buy twice as many items
C) browse the store and then leave empty handed as someone who spends 10 minutes
D) buy as someone who spends 10 minutes, and they typically buy twice as many items
E) All of these answers are correct
42) This phenomenon known as kidfluence is influence that kids have over the family’s:
A) Choice of vacation
B) Ability to get along
C) Purchase decisions
D) Investment decisions
E) None of these
43) Composite segmentation plans use multiple variables to identify customers in the target
segment and define target customers by: benefits sought, lifestyles, and demographics.
A) benefits sought, lifestyles, and usage
B) benefits sought, IQ, and demographics.
C) benefits sought, geographic, and demographics
D) benefits sought, lifestyles, and demographics.
E) None of these.
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
44) Retailers want to reduce the number of abandoned shopping carts by making it easier to purchase
merchandise. What steps can a retailer take to reduce abandoned carts-both in-store and on-line?
45) Why is it important for retailers to understand how families make purchase decisions?
46) What does it mean when a retailer says that she wants to find a retail market segment that has
47) What does it mean when a retailer says that she wants to find a retail market segment that is
48) List five possible retail market segments for athletic shoes.
49) Why are retailers not always able to use demographics for market segmentation?
50) What kind of segmentation would the merchandising department at Disney World use when
stocking merchandise in their Main Street stores? Why?
51) How do reference groups affect buying decisions?
52) What are four criteria for evaluating whether a retail segment is a viable target market?
53) What segmentation method would a national retail chain use to sell paints custom designed for the
various regions of the Canada?
54) What type of segmentation is being used by a 24-hour pharmacy?
55) Sears sells Craftsman tools which come with a lifetime warranty. If you break one, just return it to
the store, and Sears will replace the broken tool with a new one. What kind of segmentation is Sears

44) They reduce the actual wait time to buy merchandise by having more checkout lanes open and placing
them conveniently inside the store. To reduce perceived wait times, they install digital displays and other
methods to entertain customers waiting in line. On a Web site, the ease of navigation is critical for
decreasing the number of abandoned virtual carts.
Answer Key
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45) Retailers should understand how families make purchase decisions because when families make purchase
decisions they often consider the needs of all the family members.
In some cases, all participate in the decision making while in other situations, one assumes the role of
decision maker, but is highly influenced by the others. Children especially can influence family decisions.
Also, retailers can attract consumers who shop with other family members by satisfying the needs of all
family members. Examples of this can include babysitting services in hotels, play areas in stores, and pubs
in department stores for men who shop with their wives.
46) Actionability means that the definition of a segment must clearly indicate what the retailer should do to
satisfy its needs.
47) A retail market segment is accessible if the retailer is able to deliver the appropriate retail mix to the
customers in the segment.
48) Possible answers to this question include (1) joggers, (2) people who do aerobic exercises, (3) teenagers,
(4) people who place high value on comfortable shoes, (5) people who want to look like they exercise, (6)
parents of elementary school children (as a way to protect their feet during their growing years), (7) people
who spend all day standing because of their jobs, (8) basketball players, (9) people who walk for exercise,
(10) tennis players, and (11) people whose feet hurt because they have worn incorrect shoes all their lives.
49) Demographics may not always be related to the needs and buying behaviours of customers, and therefore
may not be actionable.
50) Benefit segmentation because visitors are all searching for the same benefits as they buy souvenirs.
Customers at Disney World want to purchase a memory of the fun they had at the park.
51) Reference groups affect buying decisions by (1) offering information, (2) providing rewards for specific
purchasing behaviours, and (3) enhancing a consumer’s self-image.
52) The criteria are (1) actionability, (2) identifiability, (3) accessibility, and (4) size.
53) Geographic
54) Benefit sought
55) Benefit segmentation


MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Factors to consider in an accessibility analysis include:
A) road pattern
B) congestion
C) ingress/egress
D) amount of parking facilities
E) All of these
2) Ingress/egress refers to:
A) the renewal and rebuilding of offices, housing, and retailers in deteriorating areas
B) the ease of entering and exiting a site’s parking lot
C) ability to see the store and enter the parking lot safely
D) the amount of crowding of either cars or people
E) None of these
3) A geographic area encompassing most of the customers who would patronize a specific
retail site and that accounts for the majority of a store’s sales and customers is called a:
A) site
B) target market
C) trade area
E) region
4) Location decisions can be divided into four levels: country, region, trade area, and:
A) neighbourhood
B) specific site
C) province
E) district
5) A store that sold sheet music, band instruments, and offered in-store lessons for the
instruments would be most interested in ________ when an analysis of the trade area
was conducted for the new store.
A) lifestyles of the trade area population
B) the business climate
C) income and occupations of trade area population
D) the span of managerial control
E) size and composition of households in the trade area
6) Retail promotion and distribution economies of scale can be achieved with:
A) a sound business climate
B) supportive lifestyle demographics
C) a saturated trade area
D) little competition
E) multiple locations
7) The owner of a store that sold New Age music, aromatherapy candles, and herbal
supplements would be most interested in ________ when he did an analysis of the trade
area for his new store.
A) lifestyles of the trade area population
B) income and occupations of trade area population
C) the business climate
D) size and composition of households in the trade area
E) the span of managerial control
8) Which of the following would be considered when assessing demographic
A) Incomes
B) Education
C) Size of households
D) Population growth
E) All of these
9) When Dale was considering establishing a used record and CD shop, he looked at the
average household incomes of the local residents, their education level, and the growth
of the area. Which of the following factors was Dale considering?
A) Business climate
B) Span of managerial control
C) Demographics
D) Competition
E) Economies of scale
10) A trade area that offers customers a good selection of goods and services while allowing
competing retailers to make good profits is said to be:
A) saturated
B) understored
C) market developed
D) competitively depleted
E) overstored
11) Burger King seeks locations where their major competitor is McDonald’s because they
believe it’s important to have a strong competitor so Burger King can develop methods to
allow them to successfully compete with them. These locations could be considered as:
A) competitive trade areas
B) trade specific locations
C) saturated trade areas
D) overstored trade areas
E) understored trade areas
12) To satisfy the needs of people living in small towns, the president of a department store
chain located her stores away from the larger cities. It could be said that the president had
a strategy to locate in:
A) understored trade areas
B) overstored trade areas
C) urban trade areas
D) abundant trade areas
E) undersaturated trade areas
13) An area that has too few stores selling a specific good or service to satisfy the needs of
the population is said to be an:
A) overstored trade area
B) underutilized trade area
C) underpopulated trade area
D) overpopulated trade area
E) understored trade area
14) Hardee’s fast food restaurant chain located its restaurants in small towns that the larger
chains had ignored because they believed the market was too small to be profitable.
Hardee’s was the first fast-food operation in many small towns, and the chain was
successful. Hardee’s management looked for regions that were ________ in terms of
fast-food establishments.
A) understored
B) market-depleted
C) unsaturated
D) underpromoted
E) underutilized
15) Three types of shopping situations are convenience shopping, comparison shopping, and
A) specialty shopping
B) advantage shopping
C) strategy shopping
D) unique shopping
E) off-price shopping
16) When Jordan’s Furniture, The Couch Potato (furniture store), The Bombay Furniture
Company and Urban Barn all locate close to each other in the city they are allowing
consumers to
A) specialty shop
B) category shop
C) comparison shop
D) convenience shop
E) destination shop
17) Category specialists consumers will go to even if it is inconvenient are called
A) dealers
B) outlet centres
C) malls
D) destination stores
E) unique merchandisers
18) Why have suburban shopping centres grown between 1950 and 1980?
A) Municipal shopping became difficult after business hours.
B) Downtown shopping centres became unkempt and crime ridden.
C) During this time, the population shifted to the suburbs.
D) Local governments mandated the growth to attract urbanites.
E) Urban dwellers found it easier to shop in the suburbs.
19) On his way home from work Barnard stopped at a shopping centre. He parked right in
front of the dry cleaners where he could pick up his suit. He did not have to move his car
because right next door was a gift shop where he could pick up a baby gift for his new
niece. Conveniently enough, next door to that was a Mac’s Milk where he purchased
essentials like milk and cereal. Barnard was shopping in what type of shopping centre?
A) Strip centre
B) Central business district
C) Power centre
D) Mall
E) Fashion/specialty centre
20) Cathy needed new jeans for the cool change in the weather. She decided to drive 20
minutes to a shopping centre. Once there, she had to search for a parking spot and walk
to get to the stores, but when she got inside, she was warm and could leisurely walk to a
variety of stores that carried the assortments she was seeking. Cathy was shopping in
what type of shopping centre?
A) Power centre
B) Mall
C) Central business district
D) Strip centre
E) Fashion/specialty centre
21) The two major configurations of shopping centres are:
A) Freestanding and enclosed
B) Downtown and suburban
C) Staple and fashion
D) Outlet centres and theme centres
E) Strip centres and enclosed malls
22) Which of the following retailers would most likely be found in a power centre?
A) An independent toy store, a women’s apparel store, a dry cleaner, and a shoe store
B) A liquor store, a convenience store, and a hair salon
C) Home Depot, Winners, and Best Buy
D) Starbucks Coffee and an independent retail bookstore
E) A Shoppers Drug Mart, a Sears, and a Loblaws Grocery
23) Which of the following statements about shopping malls is true?
A) Managers of shopping malls either want to have all specialty stores or all shopping
goods stores–never a mix of the two.
B) The tenant mix in a shopping mall is not planned.
C) Each retailer is responsible for the external environment outside its store.
D) Shopping malls have lower rents than central business districts.
E) None of these statements about shopping malls are true.
24) Even though planned shopping centres are an excellent site option for retailers, they have
their disadvantages. Which of the following describes one of these disadvantages?
A) Rents in malls are often higher than at other locations
B) The developer has no control over exterior signs
C) Competition is kept to a minimum because developers try not to have more than
one specialty store for each product category
D) Each retailer is allowed to establish his/her own hours of operation
E) All of these are disadvantages
25) What are some of the challenges being faced by malls?
A) Malls are being challenged as competition from other retail locations (like power
and lifestyle centres, etc.).
B) Many malls are old and unappealing to shoppers.
C) The apparel business continues to be weak, causing some specialty stores to close.
D) Shoppers are looking for “value” alternatives to stores found in malls.
E) All of these are challenges being faced by malls.
26) Shopping centres that focus on posh neighbourhoods, high-income areas with an
outdoor, traditional streetscape can be considered as:
A) convenience centres
B) lifestyle centres
C) regional malls
D) off-price centres
E) outlet centres
27) Hazelton Lanes in Toronto is a shopping centre composed of upscale apparel stores, gift
shops, and many high-quality boutiques. It is an example of a/an:
A) fashion/specialty centre
B) convenience centre
C) off-price centre
D) outlet centre
E) price-oriented centre
28) Beatrice has been sporting a new diamond ring for some time and finally decided to shop
for the wardrobe to match. She selected a shopping centre featuring upscale apparel
shops and boutiques that was two hours away from her home, but according to Beatrice,
it was “well worth the drive”. Beatrice was probably going to shop in a/an:
A) outlet mall
B) convenience centre
C) fashion/specialty centre
D) regional mall
E) power centre
29) Where would you most likely find a fashion/specialty centre?
A) At highway interchanges
B) In small towns
C) In high-income trade areas
D) Near discount store malls
E) In middle-class neighbourhoods
30) Which of the following best describes outlet centres?
A) They are typically located near traditional regional malls
B) They never offer first-quality, full-line merchandise
C) They may have a trade area of 100 kilometres or more
D) They are generally near regional shopping centres
E) They are usually enclosed
31) Why has the number of outlet centres declined?
A) Customers are not satisfied with broken assortments and damaged products
B) Customers can buy below full retail prices elsewhere
C) Traditional retailing has become more price-competitive
D) Customer demand has declined
E) All of these are true.
32) The Homer Laughlin China Company in the U.S. state of West Virginia manufactures
Fiesta china in a variety of colours. The factory has a store where they feature Fiesta
products that are discounted or distressed. This type of centre is called a/an:
A) demalling centre
B) outlet centre
C) regional centre
D) lifestyle centre
E) fashion/specialty centre
33) Which of the following statements about outlet centres is true?
A) Outlet centres have the no-frills look of warehouse stores
B) It is predicted that the number of outlet centres will double over the next decade
C) Outlet centres sell only irregulars and overruns
D) Outlet centres are not found outside of the United States
E) Outlet centres are often located some distance from regional shopping centres
34) Why would a small retailer be interested in opening a shop in a mall kiosk?
A) The retailer can offer seasonal merchandise and then close after the season.
B) Kiosks can be in prime locations.
C) A kiosk is relatively inexpensive compared to a regular store.
D) The short-term leases can be helpful if the business fails.
E) All of these.
35) Scott wants to open a holistic medicine shop with merchandise he claims will cure the
common cold. He has $26,000 to invest in the business. How might a kiosk satisfy his
A) Kiosks are located outside of freestanding sites.
B) Kiosks are much less expensive to rent than a store.
C) Mall managers typically have a no-compete clause in the contracts for store space
D) He would be given a long-term lease.
E) All of these describe reasons why he would like to begin his business in a kiosk.
36) Where is a central business district located?
A) Airports, hotel lobbies and convention centres
B) Malls
C) Downtown business areas
D) Regional centres
E) Freestanding sites
37) Water Street in St. John’s houses many professional services, as well as specialty stores,
apparel boutiques, restaurants, and gift shops. The street has a high volume of pedestrian
traffic. Water Street can be considered as an example of a:
A) regional centre
B) power centre
C) neighbourhood business district
D) central business district
E) shopping centre
38) Why would a retailer choose not to expand to a central business district?
A) Business is slow in the evening
B) Limited parking
C) High security may be necessary
D) Shoppers are subjected to weather conditions
E) All of these
39) Which of the following statements about the central business district (CBD) is true?
A) Shopping at CBDs is heaviest on weekends and at night
B) The most successful CBDs for retail trade are those with a large number of residents
living in the area
C) CBDs have not experienced any gentrification
D) Like modern shopping centres, CBDs are typically well planned
E) All of these statements about CBDs are true
40) Downtown locations usually offer:
A) fewer shoppers than CBDs
B) supermarkets as anchors
C) full-line department stores
D) entertainment and recreational activities
E) higher rents than traditional central business districts
41) Which of the following statements about downtown locations (“Main Streets”) is true?
A) Occupancy costs are generally lower than the primary CBDs
B) Main Streets tend to attract more people than central business districts
C) As a group, retailers are avoiding Main Streets because it is such a new concept
D) Main Streets typically offer more recreation and entertainment activities than CBDs
E) All of these statements about Main Streets are true
42) Tearing down old buildings or restoring them into new offices, housing developments,
and retailers is an example of:
A) commercialization
B) trade area expansion
C) modernization
D) retail segmentation
E) gentrification
43) When a city’s old buildings have been modernized, cracked sidewalks have been
replaced with wide brick walks, and new multipurpose office buildings have opened, this
is an example of:
A) retail segmentation
B) trade zone expansion
C) gentrification
D) modernization
E) commercialization
44) Costco requires a tremendous amount of operating space; therefore, you are most likely
to find them located in a/an:
A) off-price centre
B) discount-anchored centre
C) neighbourhood centre
D) central business district
E) freestanding site
45) What are the advantages gained from locating in a freestanding site?
A) High rent, but visible location
B) Ample parking for customers
C) Restrictive hours
D) Synergistic neighbours
E) All of these
46) The most serious disadvantage inherent in a freestanding site is:
A) lack of restrictions on merchandise sold
B) loss of the ability to restrict hours of operation
C) lack of synergy with other stores
D) high rent
E) loss of direct competition
47) ________ are shopping centres that include office towers, hotels, residential complexes,
civic centres, and convention complexes on top of or attached to the shopping centre.
A) Mixed-use developments
B) Central business districts
C) Convention centres
D) Multilevel marketing centres
E) Shopping malls
48) Mixed-use developments (MXDs) are popular with retailers because they:
A) offer low rent
B) have high security
C) bring additional shoppers to the store
D) offer short-term leasing agreements
E) provide free storage facilities to attract retailers
49) Why are airports such a profitable place to have a retail business?
A) Airport leases are lower
B) International tourists and local residents like to shop in Canadian airports
C) Waiting time allows people to spend money in airport shops
D) Wages are lower than in cities
E) Sales per square foot are similar to shopping malls
50) When Lonnie took her kids to Walmart, she noticed a McDonald’s restaurant near the
entrance, which prompted her to stop for lunch. This restaurant is a great example of
A) power centre
B) store within a store
C) freestanding site
D) merchandise kiosk
E) mixed-use development
51) A ________ is one in which the merchandise, selection, presentation, pricing, or other
unique factor act as a magnet for customers.
A) destination store
B) theme/festival centre
C) service centre
D) shopping goods store
E) freestanding site
52) Bob finally got the nerve to tattoo his girlfriend’s name on his arm. The tattoo parlour,
Tattoo On You is located 10 kilometres away. For Bob, that parlour is an example of
A) shopping goods store
B) theme/festival centre
C) destination store
D) freestanding site
E) service centre
53) How would you classify products you would most likely find at 7-Eleven or Sobeys?
A) unsought goods
B) fabricated merchandise
C) specialty goods
D) convenience goods
E) grocery goods
54) Why are grocery stores located in strip centres?
A) Better hours of operation as opposed to regional shopping centres
B) The synergy between grocery and specialty shops is lucrative
C) Supermarkets are price competitive, and strip centres have inexpensive rent
D) Marketing costs can be shared within the strip centre
E) All of these
55) Which of the following is an issue that affects the site decision?
A) Environmental issues
B) Signs
C) Condition of building
D) Zoning
E) All of these
56) Simon is planning to open a store for hockey enthusiasts, and has found an affordable
location in a small strip centre off a major highway. What concerns should he have when
he considers the accessibility of the site?
A) Visibility
B) Traffic flow
C) Road patterns
D) Artificial barriers, such as railroads tracks
E) All of these
57) If Wally wanted to analyze accessibility factors in the immediate vicinity of a retail site
for a pro-golf shop, he should evaluate:
A) the general state of the roads near the site
B) whether there are enough on and off ramps for the highway that passes through the
C) the natural barriers in the community, such as rivers and mountains
D) how visible the site signs are from the roads surrounding the site
E) all of these
58) In an accessibility analysis of a retail location in Niagara Falls, which type of retailer
would be most concerned about visibility?
A) A retailer of do-it-yourself merchandise
B) A retailer who depended on tourist dollars for its success
C) A large nursery
D) A restaurant with a four-star rating
E) An established bookstore with a loyal following
59) Which of the following refers to the customer’s ability to see the store and enter the
parking lot safely?
A) Congestion
B) Micro analysis
C) Visibility
D) Road condition
E) Natural barriers
60) In terms of trade areas, the owner of Bubba’s Bar and Grille defines his ________ as the
geographic area in which 65 percent of his customers live.
A) tertiary zone
B) primary zone
C) secondary zone
D) geographic zone
E) macro zone
61) When considering the trade area zone, Dillon should realize the ________ for his
grocery store includes all the people within a five minute drive of his store.
A) geographic zone
B) macro zone
C) secondary zone
D) primary zone
E) tertiary zone
62) In determining its trade zone areas, the owner of the local FTD florist, has identified the
geographic area that is within a ten minute drive of the store as the store’s:
A) micro zone
B) macro zone
C) tertiary zone
D) secondary zone
E) primary zone
63) Which of the following retailers might customers consider as a destination store?
A) The only shoe store in town that will dye shoes to match dresses
B) The store in town with the largest selection of computer games
C) The store in town with the lowest priced pharmaceuticals
D) The only store in town that carries CCM skates
E) Any of these could be an example of a destination store
64) Clark needed shoes for his child who had extra wide feet. The only shoe store in town
that carried them required a trip of three buses followed by a two block walk. To Clark,
that shoe store is a:
A) symbiotic store
B) drawing store
C) destination store
D) discount retailer
E) magnet store
65) Sherry is an armchair tourist inhibited from the real thing by a lousy job, but she makes
up for it by indulging in foreign films. This Friday, she plans to drive into the city, about
20 kilometres away, to check out a shop specializing in foreign films. To Sherry, this
shop is a:
A) shopping goods store
B) magnet store
C) primary zone store
D) destination store
E) symbiotic store
66) Which of the following is least likely to be a destination store?
A) An IMAX cinema
B) A building supplies store
C) A new car dealership
D) A home electronics store
E) A convenience shop in a hotel
67) A store that does not create its own traffic and whose trade area is determined by the
dominant retailer in the shopping centre is considered a:
A) tertiary store
B) destination store
C) symbiotic store
D) primary store
E) secondary store
68) The Coffee Cup is a small town donut shop located in the heart of the central business
district. Hundreds of people pass the entrance on their way to the shops and offices and
feel compelled to stop and satiate their cravings. The Coffee Cup is an example of a:
A) destination store
B) freeloading store
C) primary store
D) symbiotic store
E) secondary store
69) Why do retailers use Statistics Canada Census data?
A) They provide retailers with demographic information.
B) The literature provides retailers with quarterly economic trends that are easily
C) Retailers use the information provided when entering international markets.
D) The information provides updates and descriptions of current fads.
E) All of these are true.
70) Which of the following can be used to determine how many customers are in a trade area
and where they live?
A) primary research
B) customer spotting
C) geographic research
D) customer clustering
E) None of these.
71) The Village Green, a woman’s clothing store, took a map of the city and the cheques
written by its customers during the last quarter. The store’s owner then marked the
address of each customer on the map with a map pin. By looking at where the pins
clustered on the map, she could determine her trade area. She was engaged in:
A) customer clustering
B) residential research
C) customer spotting
D) geographic research
E) primary research
72) A ________ is a computerized system that enables retail analysts to visualize
information about their customers’ demographics, buying behaviour, and other data in a
map format.
A) Geographic Information System (GIS)
B) Projection Map (PM)
C) Gravitational Model
D) Trade Area Topographical Map (TATM)
E) Retail Information System (RIS)
73) A Geographic Information System (GIS):
A) is a spatial database
B) is used to isolate target customer groups
C) contains data that are collected at the point of sale
D) identifies the boundaries of a trade area
E) is accurately described by all of these
74) Inga will be opening her futon store in Regina, but she’s concerned about competition.
Where should she look to understand about potential competition?
A) The local newspaper advertising
B) The chambers of commerce
C) The Internet
D) The Yellow Pages
E) All of these
75) What is the difference between multiple regression analysis and the analogue approach?
A) The analogue approach uses statistics rather than judgement to predict sales
B) Multiple regression analysis uses statistics rather than judgement to predict sales for
a new store
C) Multiple regression analysis cannot be used to determine potential sales like the
analogue approach
D) Multiple regression analysis uses geodemographic segmentation systems to
determine potential sales in a new market
E) The analogue approach gathers its information through nationwide customer
76) The objective of Huff’s Gravity Model is to:
A) create a comparative model that allows the retailer to determine the ideal location
B) determine the hierarchy of retailing activities according to the assortment of
merchandise available
C) determine the probability that a customer residing in a particular area will shop at a
particular shopping centre
D) define the relationship between the size of a shopping area and the area’s income
E) define the relative ability of two cities to attract customers from the area between
77) Why is it important to use the Huff’s Gravity Model in conjunction with the analogue
and regression methods?
A) The analogue and regression methods consider too many variables other than
B) The Huff’s model only offers comparative data and is unable to assist in choosing
specific sites
C) The Huff’s model does not utilize demographic variables
D) The Huff’s model only offers information about income levels in comparison to the
size of the shopping area
E) There has been additional supportive research since the Huff’s model that can
supplement the findings of the Huff’s model
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
78) Why have location decisions become more important in recent years?
79) What demographic characteristics would affect the location of a McDonald’s?
80) What should a retail analyst consider when assessing overall demand for a particular region or trade
81) Why did suburban shopping centres grow between the 1950s and 1980s?
82) What are the advantages and disadvantages of strip shopping centres?
83) Why have power centres become so popular?
84) What are three advantages that shopping malls have over alternative locations? Give examples for
each advantage.
85) If you were a mall manager of an old mall that was losing business, what could you do to revitalize
your mall?
86) Why are Toys “R” Us stores found as freestanding sites or in power centres?
87) How do Main Streets differ from central business districts (CBDs)?
88) What are the two stages of assessing accessibility in a trade area analysis? Briefly describe them.
89) Why do retailers consider tertiary zones as part of their trade area when these customers only
occasionally shop at the store or shopping centre?
90) Some people think that Walmart can be a destructive force to competition and therefore a detriment
to have in a trade area, yet many retailers continue to be lucrative and exist as Walmart’s neighbour
in a shopping centre. Comment on how this is possible.
91) What are some of the ways retailers obtain information when customer spotting?
92) What are the four steps of the analogue approach to estimating demand?
93) On what premise are the gravitation models that are used to measure trade areas based?
94) A number of complementary analytical methods are used to estimate the demand for a new store.
One of the most widely used techniques is known as the analogue approach. Discuss the 4-steps that
one would undertake using the analogue method.
95) Why is store location often the most important decision made by a retailer? Give an example of a
firm that has made a mistake with choosing it’s location.
96) What are the two primary trade-offs when deciding where to locate a store?
97) What is a trade area?
98) A bakery that wanted to distinguish itself from its competition by being open 24 hours a day would
probably not be found in a shopping mall. Why?
99) What are the advantages of malls?
100) What are some of the challenges faced by malls?
101) In the face of problems and declining business, what are malls doing to combat the problem?
102) What type of shopping centre is composed of upscale apparel shops, boutiques, and gift shops
carrying selected fashions or unique merchandise of high quality and price?
103) Where are “Main Street” shopping districts located?
104) What is the renewal and rebuilding of offices, housing, and retailers in deteriorating areas, coupled
with the influx of affluent people that usually displaces earlier, poorer residents?
105) What type of a site would Canadian Tire, a category specialist, most likely select?
106) What is the most serious disadvantage of locating in a freestanding location?
107) Why do real estate developers like Mixed-Use Developments?
108) What concept are retailers utilizing when a shopper can do his/her banking while grocery shopping?
109) The Hobby Shop features handicrafts, model trains, model cars and planes, as well as classes. It
doesn’t matter where it is located because it seems to have a natural draw. What type of store is it?
110) What is the difference between road pattern and road condition?
111) Why are trade areas that are divided into two or three zones called polygons?
112) What are the three types of information required to define a trade area?
113) What are three methods of estimating demand for a new store?
114) Which of the approaches to determining the retail potential of a trade area uses a statistical model
that predicts sales at existing store locations?
115) Discuss why outlet centres are declining as a consumer preferred place to shop. Explain what outlet
centres are doing to combat this?

78) Location decisions have become more important in recent years because (1) there are more retailers
opening new locations, (2) there has been a slowdown in population and new shopping centre
construction, (3) a retailer may find a suitable location, but high rent, complicated leases or expensive
fixturing, (4) the best locations are already taken.
79) The retailer would be concerned about the size and composition of the households in its market areas as
well as the age of the household members, the income-level of the households, culture and diversity.
Students may suggest other important variables.
80) To assess overall demand in a particular region, market or trade area, the retail location analyst should
consider economies of scale versus cannibalization, the populations demographic and lifestyle
characteristics, the business climate, competition from other retailers and the retailer’s propensity to
manage multiple stores.
81) The population moved into the suburbs, this population shift caused a need for stores located close to
home, large shopping centres providing large assortments, and combining many stores under one roof
creating a synergy that attracts more customers, than if the stores were located separately.
82) The advantages of strip shopping centres are that they offer customers convenient locations, easy parking
and relatively low rent for the retailers. Their disadvantages are that there is no protection from the
weather, and they offer less assortment and entertainment options for the customers than the malls.
Answer Key
Testname: UNTITLED5
83) The retailers that are part of the power centres (1) have experienced tremendous growth and prosperity
during the 1990s, (2) the power centres are natural locations for these big stores as they do not want to pay
the high rents of regional shopping malls, (3) retailers benefit from the synergy of being with other big-box
retailers, and (4) shoppers are seeking “value” alternatives to the stores found in malls.
84) Three advantages include (1) because of the many types of stores, merchandise assortments and
entertainment, malls have become the Main Street for shoppers, (2) the tenant mix is planned so that
customers can have a one-stop shopping experience with a well-balanced assortment of merchandise, and
(3) retailers and their customers don’t have to worry about the external environment as the mall’s
management takes care of maintenance, hours of operation, and it provides protection from the weather.
85) Answers could vary, but the text suggests the following: (1) turn the mall into a traditional town square
with entertainment and nontraditional mall tenants like doctors and dry cleaners to make it seem like a
town square in the 1950s. (2) Provide links to the communities by opening wellness centres, libraries, city
halls and family entertainment centres. (3) Demalling is a radical approach, but an option. It involves
demolishing a mall’s small shops and common areas, enlarging the sites occupied by department stores,
and adding entrances into the parking lot.
86) Category Specialists like Toys “R” Us are found freestanding or in power centres because (1) these
locations are cheaper than CBDs or malls, (2) easy access to parking is important because purchases are
often large and difficult to carry, and (3) category specialists are destination stores and people will shop
there regardless of the location.
87) Main Streets are types of CBDs. They are located in the traditional area of smaller towns, or a secondary
business district in a suburb or within a larger city. Main Streets and primary CBDs share many
characteristics, but their occupancy costs are generally lower; they do not draw as many people; and they
don’t offer the entertainment and recreational activities of primary CBDs.
88) The two stages of assessing accessibility in a trade area analysis are macro analysis and micro analysis.
Macro analysis considers the primary trade area and considers road patterns, road conditions and barriers.
Micro analysis concentrates on issues in the immediate vicinity of the site, such as visibility, traffic flow,
parking, congestion and ingress/egress.
89) There are several reasons retailers consider tertiary zones as a part of their trade areas. First, these
customers may lack adequate retail facilities close to home. Second, there may be excellent highway
systems to the store or centre so customers can get there easily. Third, customers may drive near the store
on their way home from work. Finally, customers are drawn to the store or centre because it is in or near a
tourist area.
90) Some symbiotic stores have learned to survive against the giant by providing products and services that
complement rather than compete with Walmart, and many actually benefit from its presence. Other
retailers compete directly with Walmart in certain categories, but have learned to provide either a more
interesting assortment or better service.
91) Retailers gain residence information from customer spotting by (1) credit card or cheque purchases, (2)
customer loyalty programs, (3) manually at the checkout, and (4) sometimes by collecting information
about automobile license plates and tracing them to the owner through purchased information from the
governments or private research companies.
Answer Key
Testname: UNTITLED5
92) The analogue approach is divided into four steps: (1) conduct a competitive analysis to estimate potential
sales, (2) the current trade area is determined by using spotting techniques, (3) determine the trade area
characteristics based on demographic research and psychographic profiles, and (4) the characteristics of
the current store are matched with the potential new stores’ locations to determine the best site.
93) They are based on the premise that the probability that a given customer will shop in a particular store or
shopping centre becomes larger as the size of the store or centre grows and the distance or travel time to
the store decreases.
94) Step 1: Conduct a competitive analysis to estimate potential sales; Step 2: Define the current trade area;
Step 3: Determine trade area characteristics; Step 4: Match characteristics of current store with the
potential new store’s location to determine the best site
95) (1) Store location is typically the prime consideration in a customer’s store choice, and (2) locations have
strategic importance because they can be used to develop a sustainable competitive advantage.
96) The trade-offs have to do with the cost of the location versus its value to customers.
97) A geographic area encompassing most of the customers who would patronize a specific retail site, and that
accounts for the majority of the store’s sales and customers. It may be part of a city, or several
communities, depending on the type of store and products.
98) Shopping malls restrict the hours of operation for their tenants.
99) Malls can provide (1) shopping and entertainment, (2) the tenant mix is planned, and (3) retailers and their
customers do not have to worry about the external environment, because the mall management takes care
of the maintenance, and customers are protected from the weather.
100) Malls are competing with other retail locations, shoppers are seeking other value alternatives to malls, the
apparel business is weak, and many malls are old and unappealing to shoppers.
101) Malls are bringing in more entertainment to encourage shoppers to stay longer, they are bringing in
nontraditional mall tenants, they are linking to their communities by opening wellness centres and
libraries, and some are demalling.
102) Fashion/specialty centres
103) They are located in the traditional shopping areas of small towns, or secondary business districts in
suburbs or within a larger city.
104) Gentrification
105) A freestanding site
106) The most serious disadvantage is lack of synergy with other stores.
107) Developers like MXDs because they use space productively. Land costs the same whether a developer
builds a shopping mall by itself or builds an office tower over the mall.
108) Store within a store
109) Destination store
110) Road patterns refer to whether there are major arteries or highways in the primary trade area. Road
conditions include the age of the road, number of lanes, stoplights, congestion, and general state of repair
of roads in the primary trade area.
111) They are called polygons because their boundaries conform to streets and other map features.
112) The three types of information are (1) how many people are in the trade area and where they live, (2) how
much these people in the trade area will buy, and (3) competition in the trade area.
113) A retailer can use the analogue approach, regression analysis or Huff’s gravity model.
Answer Key
Testname: UNTITLED5
114) Multiple regression analysis
115) At outlet centres, consumers have to deal with broken assortments, distressed or damaged goods, and less
convenient locations. Additionally, traditional retailing has become more price-competitive.