Retailing Management Chapter 7: Retail Locations
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Questions and Answers

What is the primary reason why location is important for a retailer?

  • To increase employee morale
  • To reduce inventory costs
  • To develop a marketing strategy
  • To create a sustainable competitive advantage (correct)

    • What type of location does not have centralized management?

  • Planned locations
  • Shopping centers
  • Urban sites
  • Freestanding sites (correct)

    • What is a key benefit of planned locations?

  • Enforced policies for store operations (correct)
  • Lower rent costs
  • No centralized management
  • More flexibility with store operations

    • What is a major disadvantage of freestanding retail locations?

    <p>Lack of synergy with other stores</p> Signup and view all the answers

    What is a factor that retailers consider when evaluating a location type?

    <p>The size of the trade area</p> Signup and view all the answers

    What is a characteristic of urban retail locations?

    <p>Hub for public transportation</p> Signup and view all the answers

    What type of retailers often occupy freestanding sites?

    <p>Retailers with large space requirements</p> Signup and view all the answers

    Why are location decisions considered risky?

    <p>They require substantial investments</p> Signup and view all the answers

    What is a disadvantage of urban locations in central business districts?

    <p>High security required</p> Signup and view all the answers

    What is a key consideration for retailers when choosing a location type?

    <p>The cost versus the value to customers</p> Signup and view all the answers

    What is a characteristic of inner-city areas in the United States?

    <p>Higher unemployment and lower median incomes</p> Signup and view all the answers

    What is an advantage of freestanding sites?

    <p>Greater convenience for customers</p> Signup and view all the answers

    What type of retail spaces are typically located in walkways of enclosed malls, airports, or college campuses?

    <p>Merchandise kiosks</p> Signup and view all the answers

    What is a critical factor in selecting a location for a retailer?

    <p>The shopping behavior of the target market</p> Signup and view all the answers

    What type of shopping situation is most likely to involve a consumer seeking a specific product or service?

    <p>Specialty shopping</p> Signup and view all the answers

    What is a key consideration for retailers with unique offerings when selecting a location?

    <p>The uniqueness of the retailing offering</p> Signup and view all the answers

    What is the ultimate goal of evaluating specific areas for locations?

    <p>To generate the highest long-term profits</p> Signup and view all the answers

    What characteristic of a location is most important for retailers with similar offerings?

    <p>Convenience of the location</p> Signup and view all the answers

    What is a key factor to consider when evaluating the long-term profit of a store?

    <p>The strategic fit with the target market</p> Signup and view all the answers

    Why do retail chains attempt to achieve promotion and distribution economies of scale?

    <p>To justify the cost of building a new distribution center</p> Signup and view all the answers

    What is a potential drawback of having multiple stores in an area?

    <p>Potential sales cannibalization</p> Signup and view all the answers

    Under what condition will a retailer continue to open new stores in an area?

    <p>When the marginal revenues are greater than the marginal costs</p> Signup and view all the answers

    What happens when there are too many stores in an area?

    <p>Diminishing returns occur due to cannibalization</p> Signup and view all the answers

    Why do retailers aim to have multiple stores in an area?

    <p>To achieve economies of scale and reduce costs</p> Signup and view all the answers

    What is a primary factor in determining the boundaries of a trade area?

    <p>Accessibility and natural barriers</p> Signup and view all the answers

    What is the primary purpose of defining a trade area?

    <p>To estimate the demand for a new location</p> Signup and view all the answers

    What is a characteristic of a destination store?

    <p>It has unique features that attract customers</p> Signup and view all the answers

    What is the primary zone of a trade area?

    <p>The area closest to the store's location</p> Signup and view all the answers

    What is a factor that affects the size of a trade area?

    <p>Level of competition in the area</p> Signup and view all the answers

    What is the purpose of dividing a trade area into three zones?

    <p>To better understand the trade area's characteristics</p> Signup and view all the answers

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    This quiz covers the importance of store location for retailers, including how it can be a sustainable competitive advantage. Learn about retail location planning and decision-making.

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