Span

BUAD301
Ch. 12 Questions and Problems

1. Specialty shops sell special types of shopping products such as high-quality sporting goods, exclusive clothing, and cameras. They aim at a carefullydefined target market by offering a unique product assortment and very good service.

2. Discount houses offer hard goods at substantial price cuts to customers who would go to the discounter’slow-rent store, pay cash, and take care of any service of repair problems themselves. Mass merchandisers are large, self service stores with many departments that emphasize “soft goods” and staples butstill follow the discount house house’s emphasis on lower margins to get faster turnover. This sort of low price selling would probably not be successful in terms of food because everything would haveto be bought off of the shelves extremely fast. However, clothing and appliances would be sold more realistically, perhaps not on the internet because one cannot actually touch the product.

4.Buying retail on the Internet lowers the cost of communication and makes the process faster. The Internet produces the biggest gains in businesses where better information flows result in more efficiency.Consumers can get access to an endless variety of items. On the other hand, shopping online is inconvenient because you can’t physically touch or examine the product, and there are delays/costs to thedelivery of the product.

6. Chains are firms that own and manage more than one store. They take advantage of quantity discounts and develop their own efficient distribution centers. They can alsouse computer networks to control inventory cost and stock. They are becoming very powerful. Independent stores find is difficult to compete with large retail chains. However, some are working togetherto be more effectively.

7. Legal and cultural differences in international markets can make success difficult. Also consumers in less developed nations do not have the income to support mass...