Retailing Management 5Th Canadian Edition By Levy – Test Bank

Complete Test Bank With Answers

 

 

Sample Questions Posted Below

 

Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

Chapter 05

Retail Locations Strategy-Trade Area Decisions and Site Assessment

Multiple Choice Questions

1. Factors to consider in an accessibility analysis include:

A. ingress/egress

B. congestion

C. amount of parking facilities

D. road pattern

E. All of these

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

2. Ingress/egress refers to:

A. the amount of crowding of either cars or people

B. the renewal and rebuilding of offices, housing, and retailers in deteriorating areas

C. ability to see the store and enter the parking lot safely

D. the ease of entering and exiting a site’s parking lot

E. None of these

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

5-1Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. CMA

B. region

C. site

D. target market

E. trade area

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-01 Evaluating Specific Areas for Locations

4. Location decisions can be divided into four levels: country, region, trade area, and:

A. district

B. neighbourhood

C. specific site

D. CMA

E. province

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-01 Evaluating Specific Areas for Locations

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. the business climate

B. lifestyles of the trade area population

C. income and occupations of trade area population

D. size and composition of households in the trade area

E. the span of managerial control

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-02 Economic conditions

5-2Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

6. Retail promotion and distribution economies of scale can be achieved with:

A. a saturated trade area

B. little competition

C. multiple locations

D. a sound business climate

E. supportive lifestyle demographics

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-02 Economic conditions

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. the business climate

B. lifestyles of the trade area population

C. income and occupations of trade area population

D. size and composition of households in the trade area

E. the span of managerial control

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-02 Economic conditions

8. Which of the following would be considered when assessing demographic characteristics?

A. Population growth

B. Size of households

C. Incomes

D. Education

E. All of these

Blooms: Understand

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

5-3Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. Competition

C. Demographics

D. Economies of scale

E. Span of managerial control

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-14 Methods of estimating demand

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. competitively depleted

B. market developed

C. overstored

D. saturated

E. understored

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-03 Competition

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. overstored trade areas

C. saturated trade areas

D. understored trade areas

E. trade specific locations

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-03 Competition

5-4Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-5Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. abundant trade areas

B. overstored trade areas

C. urban trade areas

D. understored trade areas

E. undersaturated trade areas

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-03 Competition

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. overpopulated trade area

B. overstored trade area

C. underutilized trade area

D. underpopulated trade area

E. understored trade area

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-03 Competition

5-6Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. underpromoted

B. market-depleted

C. understored

D. unsaturated

E. underutilized

An understored trading area is one that has too few stores selling a specific good to satisfy the needs of the population.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-03 Competition

15. Three types of shopping situations are convenience shopping, comparison shopping, and

A. unique shopping

B. specialty shopping

C. advantage shopping

D. off-price shopping

E. strategy shopping

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

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. comparison shop

C. convenience shop

D. destination shop

E. category shop

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

5-7Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-8Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

17. Category specialists consumers will go to even if it is inconvenient are called

A. malls

B. dealers

C. unique merchandisers

D. destination stores

E. outlet centres

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

18. Why have suburban shopping centres grown between 1950 and 1980?

A. Downtown shopping centres became unkempt and crime ridden.

B. During this time, the population shifted to the suburbs.

C. Local governments mandated the growth to attract urbanites.

D. Municipal shopping became difficult after business hours.

E. Urban dwellers found it easier to shop in the suburbs.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

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. Central business district

B. Fashion/specialty centre

C. Mall

D. Power centre

E. Strip centre

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

5-9Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-10Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. Central business district

B. Fashion/specialty centre

C. Mall

D. Power centre

E. Strip centre

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

21. The two major configurations of shopping centres are:

A. Downtown and suburban

B. Freestanding and enclosed

C. Outlet centres and theme centres

D. Staple and fashion

E. Strip centres and enclosed malls

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

22. Which of the following retailers would most likely be found in a power centre?

A. Home Depot, Winners, and Best Buy

B. Starbucks Coffee and an independent retail bookstore

C. A liquor store, a convenience store, and a hair salon

D. A Shoppers Drug Mart, a Sears, and a Loblaws Grocery

E. An independent toy store, a women’s apparel store, a dry cleaner, and a shoe store

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

5-11Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-12Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

23. Which of the following statements about shopping malls is true?

A. Each retailer is responsible for the external environment outside its store.

B. Shopping malls have lower rents than central business districts.

C. Managers of shopping malls either want to have all specialty stores or all shopping goods

stores-never a mix of the two.

D. The tenant mix in a shopping mall is not planned.

E. None of these statements about shopping malls are true.

The mall management takes care of the external environment. Rents at shopping malls are high. Managers of shopping malls

try to have a mix of specialty and shopping goods stores. The tenant mix is very much planned.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

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. Each retailer is allowed to establish his/her own hours of operation

B. Competition is kept to a minimum because developers try not to have more than one

specialty store for each product category

C. Rents in malls are often higher than at other locations

D. The developer has no control over exterior signs

E. All of these are disadvantages

Shopping centres managers control hours and exterior signs. Competition within shopping centres is often intense.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

5-13Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. Shoppers are looking for “value” alternatives to stores found in malls.

C. The apparel business continues to be weak, causing some specialty stores to close.

D. Many malls are old and unappealing to shoppers.

E. All of these are challenges being faced by malls.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-14Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. off-price centres

D. outlet centres

E. regional malls

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

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. convenience centre

B. fashion/specialty centre

C. outlet centre

D. off-price centre

E. price-oriented centre

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

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. convenience centre

B. fashion/specialty centre

C. outlet mall

D. power centre

E. regional mall

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-15Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-16Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

29. Where would you most likely find a fashion/specialty centre?

A. At highway interchanges

B. In high-income trade areas

C. In middle-class neighbourhoods

D. In small towns

E. Near discount store malls

Fashion/specialty centres usually are found in trade areas having high income levels, in tourist areas, or in some central

business districts.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

30. Which of the following best describes outlet centres?

A. They are generally near regional shopping centres

B. They are typically located near traditional regional malls

C. They may have a trade area of 100 kilometres or more

D. They never offer first-quality, full-line merchandise

E. They are usually enclosed

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

31. Why has the number of outlet centres declined?

A. Customer demand has declined

B. Customers can buy below full retail prices elsewhere

C. Customers are not satisfied with broken assortments and damaged products

D. Traditional retailing has become more price-competitive

E. All of these are true.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-17Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. outlet centre

B. fashion/specialty centre

C. lifestyle centre

D. regional centre

E. demalling centre

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

33. Which of the following statements about outlet centres is true?

A. It is predicted that the number of outlet centres will double over the next decade

B. Outlet centres are not found outside of the United States

C. Outlet centres have the no-frills look of warehouse stores

D. Outlet centres are often located some distance from regional shopping centres

E. Outlet centres sell only irregulars and overruns

There are so many outlet malls that many now carry first-run quality merchandise and are as upscale as mall stores. Because

there are so many in the U.S., the number is declining here, but growing in the rest of the world.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

34. Why would a small retailer be interested in opening a shop in a mall kiosk?

A. Kiosks can be in prime locations.

B. A kiosk is relatively inexpensive compared to a regular store.

C. The short-term leases can be helpful if the business fails.

D. The retailer can offer seasonal merchandise and then close after the season.

E. All of these.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

5-18Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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 needs?

A. He would be given a long-term lease.

B. Kiosks are located outside of freestanding sites.

C. Kiosks are much less expensive to rent than a store.

D. Mall managers typically have a no-compete clause in the contracts for store space rentals.

E. All of these describe reasons why he would like to begin his business in a kiosk.

Short-term leases are common with kiosks. Kiosks are found in shopping centres and are less expensive to rent than stores.

There is no such thing as a standard no-compete clause for mall leases.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

36. Where is a central business district located?

A. Airports, hotel lobbies and convention centres

B. Downtown business areas

C. Malls

D. Freestanding sites

E. Regional centres

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-24 Central business districts

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. central business district

C. power centre

D. neighbourhood business district

E. shopping centre

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-24 Central business districts

5-19Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-20Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

38. Why would a retailer choose not to expand to a central business district?

A. High security may be necessary

B. Limited parking

C. Business is slow in the evening

D. Shoppers are subjected to weather conditions

E. All of these

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-24 Central business districts

39. Which of the following statements about the central business district (CBD) is true?

A. CBDs have not experienced any gentrification

B. Like modern shopping centres, CBDs are typically well planned

C. The most successful CBDs for retail trade are those with a large number of residents living

in the area

D. Shopping at CBDs is heaviest on weekends and at night

E. All of these statements about CBDs are true

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-24 Central business districts

40. Downtown locations usually offer:

A. entertainment and recreational activities

B. fewer shoppers than CBDs

C. full-line department stores

D. higher rents than traditional central business districts

E. supermarkets as anchors

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-25 Downtown locations

5-21Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

41. Which of the following statements about downtown locations (“Main Streets”) is true?

A. Main Streets tend to attract more people than central business districts

B. Main Streets typically offer more recreation and entertainment activities than CBDs

C. Occupancy costs are generally lower than the primary CBDs

D. As a group, retailers are avoiding Main Streets because it is such a new concept

E. All of these statements about Main Streets are true

CBDs attract more people. Main Streets offer fewer recreational and entertainment activities than CBDs.

Blooms: Remember

Difficulty: Hard

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-25 Downtown locations

42. Tearing down old buildings or restoring them into new offices, housing developments, and

retailers is an example of:

A. commercialization

B. gentrification

C. modernization

D. retail segmentation

E. trade area expansion

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-26 Redevelopment efforts in city and town locations

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. modernization

B. trade zone expansion

C. retail segmentation

D. gentrification

E. commercialization

Gentrification occurs when old buildings are restored, and the general downtown area is spruced up.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-26 Redevelopment efforts in city and town locations

5-22Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-23Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

44. Costco requires a tremendous amount of operating space; therefore, you are most likely to

find them located in a/an:

A. neighbourhood centre

B. freestanding site

C. central business district

D. discount-anchored centre

E. off-price centre

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

45. What are the advantages gained from locating in a freestanding site?

A. Ample parking for customers

B. High rent, but visible location

C. Synergistic neighbours

D. Restrictive hours

E. All of these

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

46. The most serious disadvantage inherent in a freestanding site is:

A. high rent

B. lack of restrictions on merchandise sold

C. lack of synergy with other stores

D. loss of direct competition

E. loss of the ability to restrict hours of operation

Synergy is lost because a freestanding business has no other stores to attract customers to the area.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-24Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. Multilevel marketing centres

B. Shopping malls

C. Convention centres

D. Mixed-use developments

E. Central business districts

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

48. Mixed-use developments (MXDs) are popular with retailers because they:

A. bring additional shoppers to the store

B. have high security

C. offer low rent

D. offer short-term leasing agreements

E. provide free storage facilities to attract retailers

By containing hotels and residences, MXDs bring additional shoppers to the stores beyond those who might come to ordinary

shopping centres.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

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. Sales per square foot are similar to shopping malls

E. Wages are lower than in cities

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

5-25Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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/an:

A. power centre

B. store within a store

C. mixed-use development

D. freestanding site

E. merchandise kiosk

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

51. A ____________ is one in which the merchandise, selection, presentation, pricing, or

other unique factor act as a magnet for customers.

A. shopping goods store

B. theme/festival centre

C. freestanding site

D. destination store

E. service centre

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

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/an:

A. shopping goods store

B. theme/festival centre

C. service centre

D. destination store

E. freestanding site

A destination store is one in which demand for the service offered is created before the customer gets to the destination.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

5-26Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-27Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

53. How would you classify products you would most likely find at 7-Eleven or Sobeys?

A. convenience goods

B. fabricated merchandise

C. grocery goods

D. specialty goods

E. unsought goods

Customers go to convenience stores and supermarkets to find products they aren’t willing to spend effort to evaluate.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

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. Marketing costs can be shared within the strip centre

D. Supermarkets are price competitive, and strip centres have inexpensive rent

E. All of these

Blooms: Remember

Difficulty: Hard

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

55. Which of the following is an issue that affects the site decision?

A. Environmental issues

B. Zoning

C. Condition of building

D. Signs

E. All of these

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-08 Factors Affecting the Attractiveness of a Site

5-28Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. Road patterns

B. Artificial barriers, such as railroads tracks

C. Visibility

D. Traffic flow

E. All of these

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

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. how visible the site signs are from the roads surrounding the site

B. the general state of the roads near the site

C. the natural barriers in the community, such as rivers and mountains

D. whether there are enough on and off ramps for the highway that passes through the city

E. all of these

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

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 who depended on tourist dollars for its success

B. A retailer of do-it-yourself merchandise

C. An established bookstore with a loyal following

D. A large nursery

E. A restaurant with a four-star rating

Niagara Falls is a tourist area. The retailer who wants to attract tourists must be in a location that can be easily found by

them.

Blooms: Remember

Difficulty: Hard

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

5-29Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-30Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

59. Which of the following refers to the customer’s ability to see the store and enter the

parking lot safely?

A. Micro analysis

B. Natural barriers

C. Congestion

D. Road condition

E. Visibility

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

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. macro zone

C. geographic zone

D. primary zone

E. secondary zone

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

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. tertiary zone

B. macro zone

C. geographic zone

D. primary zone

E. secondary zone

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

5-31Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-32Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. tertiary zone

B. macro zone

C. micro zone

D. primary zone

E. secondary zone

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

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 lowest priced pharmaceuticals

C. The only store in town that carries CCM skates

D. The store in town with the largest selection of computer games

E. Any of these could be an example of a destination store

A destination store is one in which a unique feature or selection or low price acts as a magnet for customers.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

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. magnet store

B. drawing store

C. destination store

D. discount retailer

E. symbiotic store

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

5-33Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-34Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. symbiotic store

B. magnet store

C. primary zone store

D. shopping goods store

E. destination store

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

66. Which of the following is least likely to be a destination store?

A. A home electronics store

B. A new car dealership

C. An IMAX cinema

D. A building supplies store

E. A convenience shop in a hotel

Blooms: Understand

Difficulty: Easy

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

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. secondary store

B. primary store

C. destination store

D. symbiotic store

E. tertiary store

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

5-35Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. primary store

B. symbiotic store

C. freeloading store

D. secondary store

E. destination store

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

69. Why do retailers use Statistics Canada Census data?

A. Retailers use the information provided when entering international markets.

B. The information provides updates and descriptions of current fads.

C. The literature provides retailers with quarterly economic trends that are easily understood.

D. They provide retailers with demographic information.

E. All of these are true.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

70. Which of the following can be used to determine how many customers are in a trade area

and where they live?

A. customer clustering

B. geographic research

C. primary research

D. customer spotting

E. None of these.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

5-36Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-37Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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. geographic research

B. customer spotting

C. primary research

D. customer clustering

E. residential research

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

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. Trade Area Topographical Map (TATM)

D. Retail Information System (RIS)

E. Gravitational Model

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

5-38Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

73. A Geographic Information System (GIS):

A. is a spatial database

B. contains data that are collected at the point of sale

C. identifies the boundaries of a trade area

D. is used to isolate target customer groups

E. is accurately described by all of these

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

5-39Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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 Internet

C. The Yellow Pages

D. The chambers of commerce

E. All of these

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-14 Methods of estimating demand

75. What is the difference between multiple regression analysis and the analogue approach?

A. Multiple regression analysis uses statistics rather than judgement to predict sales for a new

store

B. Multiple regression analysis uses geodemographic segmentation systems to determine

potential sales in a new market

C. The analogue approach uses statistics rather than judgement to predict sales

D. The analogue approach gathers its information through nationwide customer surveys

E. Multiple regression analysis cannot be used to determine potential sales like the analogue

approach

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-17 Regression analysis

Topic: 05-18 Analogue approach

5-40Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

76. The objective of Huff’s Gravity Model is to:

A. determine the hierarchy of retailing activities according to the assortment of merchandise

available

B. determine the probability that a customer residing in a particular area will shop at a

particular shopping centre

C. define the relationship between the size of a shopping area and the area’s income levels

D. define the relative ability of two cities to attract customers from the area between them

E. create a comparative model that allows the retailer to determine the ideal location

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-16 Gravitational theories

77. Why is it important to use the Huff’s Gravity Model in conjunction with the analogue and

regression methods?

A. The Huff’s model does not utilize demographic variables

B. The analogue and regression methods consider too many variables other than

demographics

C. There has been additional supportive research since the Huff’s model that can supplement

the findings of the Huff’s model

D. The Huff’s model only offers comparative data and is unable to assist in choosing specific

sites

E. The Huff’s model only offers information about income levels in comparison to the size of

the shopping area

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-17 Regression analysis

Topic: 05-18 Analogue approach

Short Answer Questions

5-41Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

78. Why have location decisions become more important in recent years?

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.

Blooms: Understand

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-01 Evaluating Specific Areas for Locations

79. What demographic characteristics would affect the location of a McDonald’s?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-14 Methods of estimating demand

80. What should a retail analyst consider when assessing overall demand for a particular

region or trade area?

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.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-02 Economic conditions

Topic: 05-15 Estimating Potential Sales for a Store

5-42Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

81. Why did suburban shopping centres grow between the 1950s and 1980s?

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.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

82. What are the advantages and disadvantages of strip shopping centres?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

83. Why have power centres become so popular?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

5-43Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

84. What are three advantages that shopping malls have over alternative locations? Give

examples for each advantage.

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.

Blooms: Understand

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

85. If you were a mall manager of an old mall that was losing business, what could you do to

revitalize your mall?

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.

Blooms: Analyze

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-44Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

86. Why are Toys “R” Us stores found as freestanding sites or in power centres?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

Topic: 05-21 Shopping malls

87. How do Main Streets differ from central business districts (CBDs)?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-25 Downtown locations

88. What are the two stages of assessing accessibility in a trade area analysis? Briefly describe

them.

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

5-45Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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?

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.

Blooms: Understand

Difficulty: Hard

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

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.

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.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

5-46Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

91. What are some of the ways retailers obtain information when customer spotting?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

5-47Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

92. What are the four steps of the analogue approach to estimating demand?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-14 Methods of estimating demand

Topic: 05-18 Analogue approach

93. On what premise are the gravitation models that are used to measure trade areas based?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-16 Gravitational theories

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.

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

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-18 Analogue approach

5-48Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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.

(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.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-01 Evaluating Specific Areas for Locations

96. What are the two primary trade-offs when deciding where to locate a store?

The trade-offs have to do with the cost of the location versus its value to customers.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-01 Examine the four major factors retailers consider when evaluating an area.

Topic: 05-01 Evaluating Specific Areas for Locations

97. What is a trade area?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

5-49Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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?

Shopping malls restrict the hours of operation for their tenants.

Blooms: Understand

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

99. What are the advantages of malls?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

100. What are some of the challenges faced by malls?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

5-50Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

101. In the face of problems and declining business, what are malls doing to combat the

problem?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

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?

Fashion/specialty centres

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-20 Shopping centres

103. Where are “Main Street” shopping districts located?

They are located in the traditional shopping areas of small towns, or secondary business

districts in suburbs or within a larger city.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-23 City or Town Locations

5-51Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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?

Gentrification

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-26 Redevelopment efforts in city and town locations

105. What type of a site would Canadian Tire, a category specialist, most likely select?

A freestanding site

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

106. What is the most serious disadvantage of locating in a freestanding location?

The most serious disadvantage is lack of synergy with other stores.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

107. Why do real estate developers like Mixed-Use Developments?

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.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

5-52Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

5-53Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

108. What concept are retailers utilizing when a shopper can do his/her banking while grocery

shopping?

Store within a store

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-22 Other retail location opportunities

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?

Destination store

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-06 Discuss why some locations are particularly well-suited to specific retail strategies.

Topic: 05-28 Shopping behaviour of consumers in retailer’s target market

110. What is the difference between road pattern and road condition?

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.

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-02 Consider the three factors retailers consider when evaluating and selecting a specific site.

Topic: 05-09 Traffic flow and accessibility

5-54Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

111. Why are trade areas that are divided into two or three zones called polygons?

They are called polygons because their boundaries conform to streets and other map features.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-12 Trade area

112. What are the three types of information required to define a trade area?

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.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-03 Define what a trade area is for a store and how retailers determine the trade area, and develop an understanding

of the nature of consumers in the site’s trade area.

Topic: 05-13 Sources of information

113. What are three methods of estimating demand for a new store?

A retailer can use the analogue approach, regression analysis or Huff’s gravity model.

Blooms: Remember

Difficulty: Easy

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-15 Estimating Potential Sales for a Store

5-55Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

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?

Multiple regression analysis

Blooms: Remember

Difficulty: Medium

Learning Objective: 05-04 Review the three approaches for estimating potential sales for a store site.

Topic: 05-17 Regression analysis

5-56Chapter 05 – Retail Locations Strategy-Trade Area Decisions and Site Assessment

115. Discuss why outlet centres are declining as a consumer preferred place to shop. Explain

what outlet centres are doing to combat this?

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.

Blooms: Understand

Difficulty: Medium

Learning Objective: 05-05 Explore the types of locations that are available to retailers and the relative advantages of each location type.

Topic: 05-21 Shopping malls

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