Which Of The Following Statements Is True Of Retailing?
Options:
A) All retail stores are full-service retail stores. B) A department store has a narrow product line with a deep assortment. C) The largest type of retail outlet is a supermarket. D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed. E) A feature common to all types of retail stores is the use of the everyday low pricing strategy.
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The Correct Answer Is:
- D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed.
Answer Explanation:
The correct answer is D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed.
Retailing is a diverse industry encompassing a wide range of products and services. Let’s explore each option and explain why the other options are not correct in detail.
A) All retail stores are full-service retail stores.
This statement is not true. Retail stores come in various formats and sizes, and they offer different levels of service. Full-service retail stores are those that provide extensive assistance to customers, often including personalized recommendations and assistance with product selection.
However, not all retail stores operate as full-service establishments. Many retailers, especially discount stores or self-service outlets, offer limited assistance to customers and focus more on providing a wide range of products at competitive prices.
Therefore, the statement is incorrect because retail stores can vary significantly in terms of the level of service they provide.
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B) A department store has a narrow product line with a deep assortment.
This statement is also incorrect. A department store is a type of retail establishment known for offering a wide variety of product categories under one roof.
Unlike specialty stores, which have a narrow product line with a deep assortment, department stores aim to provide a broad range of products across multiple categories. They typically have departments for clothing, home goods, cosmetics, electronics, and more.
The hallmark of a department store is its ability to offer a diverse selection of products rather than a narrow focus. Therefore, the statement misrepresents the nature of department stores.
C) The largest type of retail outlet is a supermarket.
This statement is not accurate. While supermarkets are indeed a significant segment of the retail industry, they are not necessarily the largest type of retail outlet in terms of size or overall revenue.
The retail landscape includes various types of outlets, such as department stores, hypermarkets, convenience stores, specialty stores, and online retailers, to name a few. The size and prominence of these outlets can vary based on factors like location, market demand, and consumer preferences.
It’s important to note that retailing encompasses a wide range of formats, and the “largest” type of outlet can vary by region and market dynamics. Therefore, this statement oversimplifies the complexity of the retail industry.
E) A feature common to all types of retail stores is the use of the everyday low pricing strategy.
This statement is also incorrect. Retailers employ various pricing strategies to attract customers and maximize profits. While some retailers may choose to implement an everyday low pricing (EDLP) strategy, which involves offering consistent, low prices on products without frequent discounts or promotions, it is not a universal approach used by all types of retail stores.
Many retailers, especially those in highly competitive markets, utilize other pricing strategies like high-low pricing (alternating between regular prices and sale prices), value pricing, or dynamic pricing (adjusting prices based on demand and inventory levels).
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The choice of pricing strategy depends on factors like the retailer’s target market, the nature of the products or services they offer, and their overall business objectives. Therefore, the statement incorrectly assumes that all retail stores employ the EDLP strategy.
Now, let’s explain why the correct answer is D) Services like hotels, banks, airlines, restaurants, colleges, and hospitals can be retailed.
Retailing is not limited to physical products; it also includes the sale of services. The concept of retailing essentially involves the process of selling products or services to consumers. While we often associate retailing with physical stores selling tangible goods, the retail industry has evolved to encompass a wide range of services.
These services include:
Hotels: Hotels offer accommodations as a service, and the booking and sale of hotel rooms to consumers can be considered a retail transaction. Customers select and pay for their preferred lodging options, making it a clear example of service retailing.
Banks: Retail banking involves the provision of financial services to individual consumers, such as savings accounts, loans, credit cards, and investment products. Banks market these services to consumers and engage in retail transactions when individuals open accounts or obtain financial products.
Airlines: Airlines provide transportation services to passengers. The purchase of airline tickets by individual travelers is a prime example of service retailing. Passengers select their flight options and pay for their seats, often through various distribution channels, including online platforms and travel agencies.
Restaurants: Restaurants offer dining services to customers. The act of choosing a restaurant, selecting items from a menu, and paying for meals constitutes service retailing. Customers receive a service (food and dining experience) rather than a physical product.
Colleges: Educational institutions, including colleges and universities, provide educational services to students. The enrollment process, course selection, and tuition payment are examples of retail interactions within the education sector.
Hospitals: Healthcare providers offer a range of medical services to patients. When patients schedule appointments, receive medical treatment, or pay for medical services, they engage in retail transactions for healthcare services.
In each of these examples, consumers engage in retail-like transactions to access services. They make choices, pay for services, and receive value in return. Therefore, the correct answer, option D, accurately reflects the diverse nature of the retail industry, encompassing both physical products and a wide range of services.
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