Marketing Final Exam

Merchandise and closeouts most manufacturers place

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Unformatted text preview: . Factory outlets are owned and operated by manufacturers and carry only their own line of merchandise. Outlets are used to sell surplus goods, factory seconds, return merchandise, and closeouts. Most manufacturers place these outlets in locations that do not conflict with their normal retailer. Manufacturers with factory outlets include Liz Claiborne, J. Crew, Calvin Klein, West Point Pepperel, Oneida, and Lands’ End. PTS: 1 REF: 235-236 Communication KEY: CB&E Model Distribution OBJ: 15-3 TOP: AACSB MSC: BLOOMS Synthesis 7. Retailing opportunities can take place without customers shopping at a store. Name and briefly discuss four forms of nonstore retailing. ANS: AUTOMATIC VENDING. Vending machines for items such as soft drinks, snacks, and coffee are an important form of nonstore retailing. Vending is the most pervasive retail business in the United States, with about 11.5 million vending machines selling billions of dollars worth of goods annually. Consumers are willing to pay higher prices for products from a vending machine than for the same products in a traditional retail setting. DIRECT RETAILING. This form of nonstore retailing is characterized by sales transactions in a home setting. This includes door-to-door selling and party plan selling. Direct retailers are also using the Internet as a channel to reach more customers and increase sales. DIRECT MARKETING. In this case, consumers buy from their homes. Direct marketing (sometimes called direct response marketing) refers to a variety of techniques such as telemarketing, direct mail, and catalogs and mail order. ELECTRONIC RETAILING. This form of nonstore retailing includes the 24-hour, shop-at-home television networks and online retailing, which is also called e-tailing. The best-known television networks are HSN and QVC. PTS: 1 REF: 237-239 Communication KEY: CB&E Model Distribution OBJ: 15-4 TOP: AACSB MSC: BLOOMS Synthesis 8. Define franchising and discuss its two basic forms. Give an example of each form. ANS: A franchise is a continuing relationship in which a franchisor grants operating rights to a franchisee. The franchisor originates the trade name, product, and methods of operation, and grants franchisees the right to operate and sell the product or service in return for revenue. Two basic forms of franchising are product and trade name franchising and business format franchising. In product and trade name franchising, a dealer agrees to sell certain products provided by a manufacturer or wholesaler. A Michelin tire dealership and a Coca-Cola bottler are examples. In business format franchising, the franchisor “sells” a franchisee the right to use the franchisor’s approach to doing business. Fast-food restaurants such as McDonald’s and Wendy’s are examples of this type of franchising. PTS: 1 REF: 241 Communication KEY: CB&E Model Distribution OBJ: 15-5 TOP: AACSB MSC: BLOOMS Synthesis 9. What is the first task of developing a retail strategy? What is involve...
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