Which type of retailer typically carries deep product assortment of narrow product lines?

Factory outlet– an off-price retailing operation that is owned and operatedby a manufacturer and that normally carries the manufacturer’s surplus,discontinued, or irregular goods.Warehouse club– an off-price retailer that sells a limited selection of brandname grocery items, appliances, clothing, and a hodgepodge of other goods atdeep discounts to members who pay annual membership fees.Chain stores– two or more outlets that are commonly owned andcontrolled.Franchise– a contractual association between a manufacturer, wholesaler, orservice organization (a franchisor) and independent businesspeople(franchisees) who buy the right to own and operate one or more units in thefranchise system.Shopping center– a group of retail businesses built on a site that is planned,developed, owned, and managed as a unit.Wheel-of-retailing concept– a concept that states that new types ofretailers usually begin as low-margin, low-price, low-status operations butlater evolve into higher-priced, higher-service operations, eventuallybecoming like the conventional retailers they replaced.Wholesaling– all activities involved in selling goods and services to thosebuying for resale or business use.Wholesaler– a firm engaged primarily in wholesaling activities.Merchant wholesaler– an independently owned wholesaler business thattakes title to the merchandise it handles.Broker– a wholesaler who does not take title to goods and whose function isto bring buyers and sellers together and assist in negotiation.Agent– a wholesaler who represents buyers or sellers on a relativelypermanent basis, performs only a few functions, and does not take a title togoods.

D) involves high operation costs due to full-service customer assistanceE) is a multi-channel food and discount retailer that targets niche markets22) Which of the following statements is true of retailing?

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23) Leading "big-box" stores, such as Walmart and Target, now dominate the retail scene.However, even "small-box" stores like Dollar General, are thriving in the current economicenvironment. All three retailers are considered.

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24)have filled the ultralow-price, high-volume gap by buying at less-than-regularwholesale prices and charging consumers less than retail.

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25) Kids.com is an online retailer that buys clothing from a variety of brand namemanufacturers at less-than-regular wholesale prices and then charges customers less than retail.Kids.com is an example of a(n)_.A) specialty retailerB)independent off-price retailerC) departmental retailerD) full-service retailerE) category killer

Learning Objectives

• Assess the variety and assortment levels of goods for each type of merchandise retailer

Imagine the difference between shopping at a Macy’s, a Staples, a shoe store, and a Wal-Mart. These retailers all differ in their assortments and you likely wouldn’t buy everything you need from just one of them. Obviously a shoe store would not be the place to go for groceries, but it would be a good place to find a new pair of sandals. We will examine the differences in assortment and variety between different types of merchandise retailers below.

Department Stores

Department stores offer a broad assortments of products with multiple departments separating product categories. Their assortments have depth within each category and they have some variety, but usually focus mainly on soft goods such as apparel and bedding, but some hard goods, like appliances, are usually included as well.

Category Specialist

As the name suggests, category specialists are retailers that specialize in one category of products. These categories are fairly broad, such as clothing or hardware. Think of stores like Office Depot or Toys R Us that clearly have a specific type of product they’re selling, but still have a very broad assortment with lots of depth within that category.

Specialty Stores

Specialty stores, like category specialists, have a specific type of product that they sell, but specialty stores are even more particular than category specialists. While category specialists sell products of a certain category, specialty stores are much more product-specific. They don’t have much in the way of variety, but their assortment is very deep. Specialty stores would include florists, locksmiths, and hardware stores, among others.

Full Line Discount Stores

Full line discount stores are retailers that provide name-brand products at a lower cost than other stores. They make money by keeping sales high in order to be able to sell name-brand products at a lower cost than elsewhere. This system also necessitates lots of variety and a wide assortment so that sales can be driven up more easily.

Drug Stores

Drug stores don’t stock a wide variety of products, but have depth in their assortment of health products. It’s important for them to have this depth because they have to compete with other larger super center stores that have pharmacy departments.

Off-Price Stores

Off-price retailers offer high quality products at cheap prices. They buy from other retailers that overbought, manufacturers that overproduced, retailers selling their remaining inventory that is going out-of-season, and in other similar ways. Their assortments are primarily soft goods and because of the nature of their purchasing system, their inventory is inconsistent. T.J. Maxx and Marshalls are examples of off-price retailers.

Practice Questions

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