Retailing Chapter 6
Showing posts with label Retailing Chapter 6. Show all posts
Showing posts with label Retailing Chapter 6. Show all posts

Which of the following statements is FALSE?

Which of the following statements is FALSE?


a. An implicit code of ethics is learned as employees become socialized into the organization and the corporate culture of the retailer

b. Ethics are a set of rules for moral human behavior

c. All retailers must have a written explicit code of ethics

d. When buying merchandise, the retailer can face at least four ethical dilemmas; these relate to product quality, sourcing, slotting fees, and bribery

e. Ethical standards can influence the retailer-employee relationship in three ways: misuse of company assets, job-switching, and employee theft


Answer: C

The specific content of these laws varies, but usually they prohibit the retailer from seeking wrongful advantages from vendors or selling merchandise below cost with the intent of using profits from another geographic area or from cash reserves to destroy or hurt competition.

The specific content of these laws varies, but usually they prohibit the retailer from seeking wrongful advantages from vendors or selling merchandise below cost with the intent of using profits from another geographic area or from cash reserves to destroy or hurt competition.


a. Taxing laws

b. Unfair trade practices laws

c. Zoning laws

d. Franchise laws

e. Blue laws


Answer: B

Green River Ordinances restrict selling:

Green River Ordinances restrict selling:


a. via the Internet.

b. environmentally unsafe products.

c. door-to-door.

d. obscene material.

e. dangerous products.


Answer: C

A tying agreement:

A tying agreement:


a. ties a retailer to multiple wholesalers.

b. is an agreement whereby a retailer forces a seller to offer only their strongest products or have all its products be excluded from the retailer's store.

c. ties one exclusive territory to the sale of one product.

d. requires that a retailer only buy merchandise from a certain group of suppliers.

e. exists when a seller with a strong product or service requires a buyer to purchase a weak product or service as a condition for buying the strong product or service.


Answer: E

When Taco Bell requires its franchisees to purchase all their raw materials and supplies from the franchisor in order for the franchisor to maintain quality control, it is:

When Taco Bell requires its franchisees to purchase all their raw materials and supplies from the franchisor in order for the franchisor to maintain quality control, it is:


a. engaging in an illegal exclusive distribution agreement.

b. enforcing an illegal tying agreement.

c. employing a dual distribution agreement.

d. violating the franchisee's right to fair trade.

e. enforcing a tying agreement, which courts generally consider legal as long as there is sufficient proof that these arrangements are necessary to maintain quality control.


Answer: E

Which of the following statements about dual distribution is incorrect?

Which of the following statements about dual distribution is incorrect?


a. It may have an adverse effect on manufacturer-retailer relationships.

b. It can take place when a manufacturer opens it own retail store in a market area when it feels that the current retailers handling the product line are not doing an adequate job.

c. All dual distribution arrangements are illegal.

d. It is legal for a manufacturer to manage a corporately owned vertical marketing system that competes with independent retailers that the manufacturer also supplies.

e. It occurs when a manufacturer sells to independent retailers and also through its own retail outlets.


Answer: C

Which of the following statements about one-way exclusive-dealing arrangements is true?

Which of the following statements about one-way exclusive-dealing arrangements is true?


a. Truly one-way arrangements are illegal.

b. They occur when a supplier offers a retailer unshared distribution of merchandise if the retailer agrees to do something in return for the manufacturer.

c. These agreements violate the Clayton Act if they substantially lessen competition.

d. The retailer does not agree to do anything in particular for the supplier.

e. They violate the Clayton Act if they tend to create a monopoly.


Answer: D

A _____ agreement exists when the supplier offers the retailer the exclusive distribution of a merchandise line or product, and in return the retailer agrees not to handle competing brands.

A _____ agreement exists when the supplier offers the retailer the exclusive distribution of a merchandise line or product, and in return the retailer agrees not to handle competing brands.


a. one-way exclusive

b. two-way exclusive

c. three-way exclusive

d. tying

e. full-line


Answer: B

The Magnuson-Moss Warranty Act only applies to written warranties on:

The Magnuson-Moss Warranty Act only applies to written warranties on:


a. all products.

b. all products costing more than $5.

c. all products costing more than $15.

d. all products costing more than $50.

e. all products costing more than $100.


Answer: C

Nike engaged in dual distribution when it began:

Nike engaged in dual distribution when it began:


a. to sell through its own retail outlets as well as independent retailers.

b. to sell to retailers competing with its existing retailers.

c. to encourage two different distributors to serve the same retailer.

d. to offer two different prices to retailers, based on volume purchased.

e. to produce private label brands for the retailers currently selling Nike shoes.


Answer: A

Identify the incorrect statement about expressed warranties.

Identify the incorrect statement about expressed warranties.


a. They are the result of the interaction between the retailer and the customer.

b. They may be either written into the contract or verbalized.

c. They are based on custom, norms, or reasonable expectations.

d. They can cover all characteristics or attributes of the merchandise or only one attribute.

e. An expressed warranty can be created without the use of the words warranty or guarantee.


Answer: C

A salesperson tells a customer, "Ninety percent of the people we've sold these tires to over the past five years have gotten at least 25,000 miles of use out of them without any problems. Therefore, I can assume that you should get no less than 30,000 miles with them given the way you drive." The salesperson:

A salesperson tells a customer, "Ninety percent of the people we've sold these tires to over the past five years have gotten at least 25,000 miles of use out of them without any problems. Therefore, I can assume that you should get no less than 30,000 miles with them given the way you drive." The salesperson:


a. may be creating an expressed warranty.

b. is engaging in false advertising.

c. could never be held responsible for the tire's longevity.

d. may be creating an implied warranty of merchantability.

e. is creating a warranty of title.


Answer: A

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