Download RETAIL MANAGEMENT TWO MARKS QUESTIONS AND

RETAIL MANAGEMENT
TWO MARKS QUESTIONS AND ANSWERS
UNIT-3
1. Define retailing.
Retailing involves all activities in selling goods or services to the final customers for
personal, non business use.
2. Define retail management.
The management of all the retailing activities in a effective way is called as retail
management.
3. What is the meaning of the word retaillier?
Retaillier-is a French word meaning “To cut a piece or To break bulk”.
4. What are the characteristics of retailing?
i.
It offers direct interaction with customers or end customers.
ii.
Sales volume is comparatively large in quantities but less in monitory value as
compared to exporting / manufacturing.
iii. Customer service plays a vital role in success of retail business
iv.
Sales promotions are offered at this point only.
v.
In almost all countries, retail outlets are more than any other form of business.
vi.
Location and layout are critical factors in retail business.
vii.
It offers employment, opportunity to all age groups irrespective of age and
gender, qualification or religion etc.
5. What are the functions of retailing ?
 Utility as a form
 Time utility
 Place utility
 Ownership utility
6. What are the drivers of retail change in India?
 Socio economic factors
 Changing income profiles
 Consumer pull –population
 Young population
 Generators of wealth
 Explosion of media
 Change in consumer behavior
 The rural market wake up
 Building chains around brand



Technological changes
Changing role of women and the evolving family structure
Increased credit friendliness
7. Describe the five forces theory of Michael Porter.
 Bargaining power of buyers
 Bargaining power of suppliers
 Bargaining power of competitors
 New entrants
 Substitutes
8. What are the factors that affect a retailer’s choice of market?
 Proximity to the domestic market
 Similarity in culture
 The size of the market
 The laws and regulation of the land
 Trade relations between the countries
 Strength of the local players in the market
9. What are the four important principles of retailing?
 Customer orientation
 Coordinated effort
 Value driven
 Goal orientation
10. What are the two tie-ups TATA has made with international retailers?
Mothercare and Tesco
11. List down the international retailers that M& M has its tie-up.
a. Startrite of UK
b. Brainy baby of US
c. Mary Meyer of US
d. CAM of Italy
e. Avado of Australia
12. What is the New’U’ store specialised for?
Dabur’s beauty store
13. Name the retailer brand that has evolved from the MOU of Spencer and Dubai based
Landmark group.
Spar Brand
14. What is the permitted means of FDI by India for the foreign retailers?



Tie-ups
Joint venture
Franchising
15. What are the opportunities in retailing?
 Management opportunities
 Entrepreneurial opportunities
16. Which part of the customers named as “Real customers” in retailing.
300 million middle class customers are called as the real customers.
17. What is MLM?
Multi –level - marketing
18. Why is MLM picking up in India?
 Expanding market presence
 Increasing share of wallet
 Insights into customer shopping behaviour
19. Write the meaning of disintermediation?
Disintermediation occurs when a manufacturer sells directly to consumers, bypassing
retailers.
20. What are the real issues in MLM?
 Integrated shopping experience
 Brand image
 Merchandise assortment
 Pricing
21. What is a corporate retail chains?
A retail chain is a company that operates multiple retail units under common
ownership and usually has centralized decision making for defining and implementing
its strategy.
22. What is franchising?
Franchising is a contractual agreement between a franchisor and a franchisee that
allows the franchisee to operate a retail outlet using a name and format developed and
supported by the franchisor.
23. Define category specialists.
Category specialists are big box discount stores that offer a narrow but deep
assortment of merchandise.
24. What is meant by category killers?
By offering a complete assortment in a category at low prices, category specialists can
kill a category of merchandise for other retailers and thus are frequently called
category killers.
25. Define Haats.
Haats are periodic markets that form a major part of the rural market system in India.
26. Define Melas.
Melas are fairs, and they can range from commodity fairs t religious fairs.
27. Define Mandis.
Mandis are agricultural markets set up by state governments to produce agricultural
produce from farmers.
28. What are the two forms of franchises in retailing?
Product and trade franchising and business format franchising.
29. Define Product and Trade Name Franchising.
Dealer agrees to sell certain products provided by a manufacturer, but can use any sales
tactics he chooses.
Ex-Next,DAMRO
30. Define business format franchising.
Dealer must sell the franchiser’s product in the exact way the franchiser prescribes.
Ex – McDonalds, Wendy's
31. Name the types of store format defined by ownership.





Franchise format
Independent store format
Corporate Chains
Leased departments
Consumer corporatives
32. Define hypermarket.
Hypermarket is a combination of supermarket and a department store, derived from a
French word hypermarche.
33. What is the other name of piggy back store?
Stop over format or parasite format
34. What are the demographical factors affecting the shoppers?
Market size, Gender, Age , Household size, Marital and family status, Income, Birth
rates, Mobility, Where people live, Employment status, Occupation, Education,
Ethnic / Racial background .
35. Define culture.
Culture is the fundamental determinant of a person’s wants and behaviors acquired
through socialization processes with family and other key institutions.
36. What are the different group s under the reference groups?
Aspirational group, primary groups, secondary group, membership group and the
disassociative group.
37. What is meant by aspirational group?
Groups to which a person would like to belong are called aspirational group.
38. What is meant by membership group?
Groups having direct influence on a person are called membership group.
39. What is meant by dissociative group?
A disassociate group is one whose values or behaviour an individual rejects.
40. What are primary group?
The groups to which a person belongs and interacts fairly continuously such as family
friends, neighbours and co-workers .
41. What are secondary group?
A person also belongs to secondary groups such as religious, professional, and tradeunion groups which tend to be formal and require less continuous interaction.
42. What are the different types of perceived risks?
Functional, Physical, Financial, Social , Psychological, and Time .
43. What are the factors affecting perceived risks?
Retailer’s newness, Consumer’s budget, Consumer experience, Alternatives,
Visibility, Information, and price.
44. What are the different consumer profiles?
Generation Y: 6-24, Generation X: 25-36, Baby Boomers: 37-55, and Seniors: 56 and
older
45. Define social class.
Social class involves an informal ranking of the people based on income, occupation,
education, and other factors.
46. Define personality.
A personality is the sum of total of an individuals traits which make that individual
unique.
47. Define impulse purchases.
Impulse purchases arise when consumers buy products they had not planned on
buying before entering a store.
48. What are the types of impulse purchases?
Completely unplanned, Partially unplanned, unplanned substituions.
49. What are the types of consumer decision making?
Extended decision making, Limited decision making, Routine decision making,
Impulse purchases: Completely unplanned , Partially unplanned, Unplanned
substitution
50. What is the meaning of Gap analysis?
Gap analysis enables a retail store to compare present performance against its
potential performance and helps in determining the areas in which productivity needs
t be improved.
51. What is EDLP?
EDLP is a pricing practice in retailing where goods and services are offered to
customers at consistently low prices throughout the year.
52. What is meant by knowledge gap?
Knowing what the Customer Wants
53. Define planogram.
Planogram is the store’s layout that has description of store’s products by the way of
drawings, diagrams or other visual objects.
54. Define trade area analysis.
A geographical area containing the customers of a particular firm or group of firms
for specific goods or services.
55. What are the factors necessary for attraction of a site?
Accessibility, Macro Analysis
a. Road pattern
b. Natural Barriers
c. Artificial Barriers
Micro Analysis
d.
e.
f.
g.
Visibility
Traffic Flow
Parking Facility
Congestion
56. What is primary zone?
The primary trading area or zone is the first layer of any trading area that provides 6065% of its customers.
57. What is called as secondary zone?
The secondary trading area or zone is an area that contains around 20% of the total
customers of the respective store in terms of customer sales and merchandise
demanded.
58. What is meant by tertiary zone?
The tertiary zone contains the remaining 10-15% customers, who occasionally visit
the store to shop.
59. What is the other name for tertiary zone?
Fringe trade area.
60. Write the formula for Reilly’s law of retail gravitation.
(Ba/Bb)=(Pa/Pb) (Db/Da)
Where:
Ba=the business which the city a draws from the immediate place
Bb=The business which city b draws from the immediate place
Pa= population of city a
Pb= population of city b
Da=Distance of city a to the immediate place
Db= Distance of city b to the immediate place
61. Write the formula for Huff’s model of location.
62. Write the formula for The Index of Retail saturation
IRS=H* RE/RF
where:
IRS= Index of Retail saturation
H=No. of Households in that area
RE= Annual retail expenditures for a particular line of trade per household in that area
RT= the total square footage of that particular line of trade in that area including the
proposed store
63. Define Herfindahl- Herschman Index.
It is found by adding squares of the competitors market shares within the relevant
product and geographic market.
64. Define supply chain in retail.
A supply chain is a network of retailers, distributors, transporters, storage facilities,
and suppliers who take part in the production, delivery and sale of a product that
convert and move the goods from raw materials to end users.
65. What is meant by the upstream activities in retail supply chain?
The activities close to the raw material stage are known as upstream activities.
66. What is meant by the down stream activities in retail supply chain?
The activities between the manufacturer and the end consumer are known as
downstream activities.
67. What are the objectives of a retail supply chain?
 To provide an uninterrupted flow of goods and services
 To meet quality criteria.
 To reduce the inventory investment to the extent possible
 To offer high customer service , low inventory management and low unit cost
 To ensure quick responsiveness to customer’s changes
 To select and maintain competent suppliers
 To ensure purchasing at lower total cost throughout the supply chain process
68. What are the major drivers of supply chain?
Merchandise management, store location, transportation, and information
69. What are the components of the retail supply chain?
Planning, source, procurement, sell, and return or exchange.
70. Define retail image.
Image refers to how a retailer is perceived by customers and others.
71. Define retail positioning.
Positioning refers how a firm devices its strategy so as to project an image relative to
its retail category and its competitors- and to elicit a positive customer response.
72. What are the meaning for mark up and mark down?
The increase in the retail price of an item after the initial markup percentage has been
applied but before the item is placed on the selling floor is called as mark up pricing.
The percentage reduction in the initial retail price is called as the mark down pricing.
73. Write down the meaning of customer service.
A set of activities and programs undertaken by retailers to make the shopping
experience more rewarding for their customers.
74. What are the different pricing policies?
 Cost oriented pricing
◦
Markup pricing (Policy)/Mark down pricing
 Demand oriented pricing
 Competition oriented pricing
75. List down the different pricing strategies.
 Market Skimming
 Market penetration/Expansionistic pricing
 Price bundling
 Leader pricing
 Multi-unit pricing
 Every day low pricing
 Odd pricing
 Single pricing
 Multiple pricing
 Bait and switch
76. What are the reasons for taking markdown?
 Get Rid of Slow-Moving, obsolete, Uncompetitive Priced Merchandise
 Increase Sales and Profits through Price
Discrimination
 Generate Cash to Buy
 Better Selling Merchandise
 Increase Traffic Flow and Sale of Complementary Products
 Generate Excitement through a Sale
77. What are the objectives of retail sales promotion?
 To create awareness about product
 To create interest among customers
 Sources of information


To stimulate customers’ demand
Brand building
78. What are the objectives of retail advertising?
 Short term sales increase
 Greater customer traffic
 Developing/reinforcing store image
 Easing the job for sales personnel
 Developing demand for private brands
79. What are the differences between retailers and manufacturers advertising?
 Geographically concentrated target markets –retailer than manu.
 Retail ads stress immediacy
 Retailers stress prices in ads, manu. emphasise several product attributes
 Media rates tends to be lower for retailers
80. List down the different compensation plans?
 Extrinsic rewards
 Intrinsic rewards
 Straight salary compensation plan
 Group incentive
 Quota bonus plans
81. What is a retail information system?
Retail Information System anticipates the information needs of retail managers;
collects , organises, and stores relevant data on a continuous basis; and directs the
flow of information to the proper decision makers.
82. What are the different tools employed in retail by the information technology?
 Electronic Data Interchange(EDI)
 Universal Product Code(UPC)
 Database Management
 Data Warehousing
 Data Mining
 Radio-Frequency Identification(RFID)
 E-tailing
83. Define merchandise management.
It is the process by which a retailer attempts to offer the right quantity of the right
merchandise in the right place at the right time while meeting the company’s financial
goal.
84. Define category management.
It is the process of managing a retail business with the objective of maximizing the
sales and profits of a category.
85. Define assortment plan.
It is a list of merchandise that indicates in very general terms what should be carried
in a particular merchandise category.
86. What is micro merchandising?
Retail firm adjusting its shelf - space allocation to just respond to its customers
87. What is cross merchandising?
Retail firm carries complementary goods and services so that shoppers are encouraged
to buy more.
Eg: Apparel store with accessories
88. List down the types of merchandise.
 Staple Merchandising
 Assortment Merchandising: Projected/model stock plan
 Fashion Merchandise
 Seasonal Merchandise
 Fad Merchandise
89. What are the different types of graphics?
 Theme graphics
 Campaign Graphics
 Promotional graphics
90. What are the different signages used?
 Merchandise related
 Directional signs
 Instructional signs
 Courtesy signs
 Store directory
91. Mention the different types of layouts in retail store.
 The grid layout
 The racetrack layout
 Freeform layout
92. What are the different presentation techniques in practice?
 Idea oriented presentation
 Style/item presentation
 Color prEsentation
 Price lining
 Vertical merchandising
 Tonnage merchandising
 Frontage presentation
93. Define retail branding.
The name of the retailer will work as a brand communicating to consumers the type of
merchandise and services offered by the retailers.
94. Mention few non-store retailing.
 Electronic Retailing
 Catalog retailing
 Catalog and direct –mail Retailing
 Direct selling
 Television home shopping
 Vending machine retailing
95. What are the benefits of shopping on the internet?
 Entertainment and social Experience
 Safety
 Ordering and getting merchandise
 Number of alternatives
 Assistance in screening alternatives
 Provides information to evaluate merchandise
 Cost of merchandise
96. What are the primary inputs for the success of e-tailing?
 Strong brand name and image
 Customer information
 Complementary merchandise and services
 Unique merchandise
 Presentation in electronic format
 Efficient distribution
97. Define retail audit.
Retail audit is an evaluation tool to systematically examine and evaluate a firm’s
total retailing effort or a specific aspect of it.
98. What are the components of retail audit?
 Audits to be conducted regularly
 In-depth analysis is involved
 Data are amassed and analysed in a systematic way
 An open-minded, unbiased perspective is maintained
 Decision makers are responsive to the recommendations
99. What is slotting fee?
Slotting fee is the shelve space fee charged by the retailer when the product is newly
introduced in the market.
100.
What are considered as the pricing constraints?
 Horizontal price fixing
 Vertical price fixing
 Price discrimination
 Deceptive pricing
 Predatory pricing