Retail Management Interview Questions & Answers

Question 1. What Is A Variety Store?

Answer :

A variety store is a retail store that sells a wide range of inexpensive household goods. Variety stores often have product lines including food and drink, personal hygiene products, small home and garden tools, office supplies, decorations, electronics, garden plants, toys, pet supplies, recorded media and motor and bike consumables.

Question 2. State The Features Of Full- Line Discount Store?

Answer :

1. It conveys the image of a high-volume, low- cost outlet selling a broad product assortment for less than conventional prices.
2. Shopping carts and centralized checkout service are provided. Customer service is not usually provided within store departments but at centralized area.
3. Products are normally sold via self: service pos equipment with minimum assistance in any single department.
4. Less fashion:sensitive merchandise is carried.

Question 3. Explain Environmental Theory Of Retailing?

Answer :

As retail institutions are economic entities they also confront an environment. Retail environment is made up of customers, competitors and changing technology. The changes in the external environment can alter the profitability of retail organizations. If an organisation is not able to cope with its external environment it will soon vanish from the market. Thus, the birth, success or decline of different forms of retail enterprises many a times is attributed to the business environment.

Question 4. What Is Wheel Of Retailing?

Answer :

Wheel of retailing refers to a company entering the market with low prices and affordable services in order to challenge competitors. The wheel of retailing is a theory to explain the institutional changes that take place when innovators, including large business houses, enter the retail arena. The wheel of retailing is a hypothesis that describes how retailers approach to capture market share and create brand value. It explains how retailers usually begin at the bottom of the wheel with low priority.

Question 5. What Are The Services Performed By Retailers To Consumers?

Answer :

1. They provide credit facilities to the consumers thereby helping them in times of difficulty.
2. They extend free home delivery and after sales service to the consumers.
3. They supply fresh products to the consumers.
4. They allow cash discount to the consumers on the products sold.
5. They buy and stock products best suited to the consumers.
6. They introduce new products to the consumers and also guide them as to their uses. 

Question 6. What Is Direct Selling?

Answer :

Direct selling is the marketing and selling of products directly to consumers away from a fixed retail location. Peddling is the oldest form of direct selling. Modern direct selling includes sales made through the party plan, one- on- one demonstrations and other personal contact arrangements as well as internet sales. Direct selling is a dynamic, vibrant, rapidly expanding channel of distribution for the marketing of products and services directly to consumers. 

Question 7. What Are The Disadvantages Of Franchise Stores?

Answer :

1. The prospective franchisee may find it difficult to assess the quality of the franchisor.
2. The franchise contract will contain some restrictions against the sale or transfer of the franchised business.
3. The franchisor's policies may affect the franchisee's profitability.
4. The franchisor may make mistakes in their policies.
5. The good name of the franchised business and its brand image may become less reputable for reasons beyond their control.

Question 8. State The Theories Of Retailing?

Answer :

Following are the important theories of retailing:-

1. Environmental Theory
2. Cyclical Theory
3. Conflict Theory  

Question 9. State The Advantages And Disadvantages Of Independent Stores?

Answer :

Advantages of independent stores are as follows:

1. Decision making is centralized.
2. Low investment cost.
3. No need to drive long distance.
4. Free home delivery.
5. Credit facility,

Disadvantages of independent stores are as follows:

1. Less bargain power with suppliers.
2. Cannot gain economies of scale.
3. Very little computerization.
4. Relatively high cost of advertising.
5. Over dependence on owner.

Question 10. Explain Mail Order?

Answer :

Mail order is the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote method such as telephone call or web site. Then, the products are delivered to the customer. The products are typically delivered directly to an address supplier by the customer. The goods are supplied on the system of P.O.D.(i.e., payment of delivery) or V.P.P.(i.e., value payable through the post).

Question 11. What Are Independent Stores?

Answer :

These are generally family- owned businesses catering to small sections of society. They are small, individually run and handled retail outlets. These stores operate in the local locality. Therefore, they are in the near vicinity of a particular locality. These are also known as mom- and- pop stores.

Question 12. What Is A Franchise?

Answer :

A franchise is a contractual agreement between the franchisor and franchisee which allows the franchise to conduct business under an established name as per a particular business format in return for a fee or compensation. Franchising can be a product or trademark where the franchise sells the products under franchisor name.

Question 13. What Is Retailing?

Answer :

Retailing includes all the activities involved in selling goods or services to the final customers for personal, non- business use. Retailing is the sale of goods or commodities in small quantities directly to consumers. Retailing is the final stage in a channel of distribution. Retailing functions are performed by any firm selling merchandise or providing services to the final consumer. 

Question 14. What Are The Advantages And Disadvantages Of Super Market?

Answer :

Advantages of retail market are as follows:

1.  Low overheads, particularly selling overheads.
2. Low prices and high profits because of quick turnover.
3. Situated at convenient places and within reach of buyers.
4. Avails economies of large scale operation.
5. The buyer is perfectly free as to what he should buy.

 Disadvantages of super markets are as follows:

1. Huge capital required.
2. Need of central place.
3. Lack of personal attention.

Question 15. Explain Cyclical Theory Of Retailing?

Answer :

Cyclical theory basically explains the different phases in a company. According to this theory, change follows a pattern and all phases have identifiable attributes associated with them. There are three primary components associated with the theory: wheel of retailing, retail life cycle and retail accordion. 

Question 16. State The Challenges Faced By Indian Organised Retailers?

Answer :

Following are the challenges faced by Indian organised retailers:

1. International Standards
2. Inefficient Supply Chain Management
3. Lack of Retail Space
4. Cultural Disparity
5. Escalating Real Estate Prices
6. Human Resource Problems
7. Frauds in Retail
8. Infrastructure and Logistics
9. Complexity in Tax Structure
10. Currency Fluctuation
11. Red- tapism
12. Political Risk.

Question 17. What Is A Convenience Store?

Answer :

Convenience store is a small store that stocks a range of everyday items such as groceries, snack, food, candy, milk, eggs, soft drinks, tobacco products and newspapers. They are comparatively smaller stores located near residential areas. They are opened for long hours for the convenience of customers and have a limited variety of stock and convenience products. These shops are open seven days a week and offer a limited line of convenience products. 

Question 18. How Does Telemarketing Work?

Answer :

Telemarketing is usually done through specific campaigns. Contact is established with hundreds of prospects in a campaign that normally runs through a few days. Several tele- callers re hired for the tele- call operation.

Question 19. State The Advantages Of Franchise Stores?

Answer :

Advantages of franchise stores are as follows:

1. The franchisee's lack of basic or specialised knowledge is overcome by the training programme of the franchisor.
2. The franchisee will usually need less capital than for setting up a business independently.
3. The franchisee receives the benefit of the franchisor's advertising and promotional activities.
4. The franchisee has the benefit of the use of the franchisor's patents, trademarks, copyrights, trade secrets.

Question 20. State The Advantages And Disadvantages Of Chain Stores?

Answer :

Advantages of chain stores are as follows:

1. They avail the advantages of bulk purchasing.
2. They have the benefit of specialisation in a particular type of product.
3. They usually have low operating costs.
4. Such shops sells only on cash basis.
5. There is flexibility of operation in this system.
6. As sales are on cash terms, the risk of bad debts is eliminated.

Chain stores have the following disadvantages:

• There is a lack of personal contact with customers.

Question 21. What Do You Understand By The Retail Accordion?

Answer :

The retail accordion aspect of cyclical theory suggests that some businesses go from outlets that offer an array of products to establishments providing a narrow selection of goods and services. These establishments later turn to a generalized outlet store. Retail accordion is also known as general- specific- general theory. 

Question 22. What Are Chain Stores?

Answer :

Chain stores are a group of stores handling similar lines of merchandise with single ownership and centralized location. A multiple shop system is a network of branch shops, situated at different localities in the city or in different parts of the country, under a centralized management and dealing in similar lines of goods. Examples for chain stores in India are Bata Shoe CO. and DCM. 

Question 23. What Are The Advantages And Disadvantages Of Hypermarket?

Answer :

Advantages of hypermarket are as follows:

• Customers can get everything at one place. Hence saving time, energy and money in searching.
• Cost reduction from bulk buying in hypermarket are transferred to customers.

Disadvantages of hypermarket are as follows:

• It causes major traffic problem.
• Forces smaller shops out of business.

Question 24. What Is A Warehouse Store?

Answer :

Warehouse store is a mass retailing of merchandise such as groceries, hardware, home furnishing, over-the-counter drugs etc., through a super store that offers very low prices and little or no customer service. These stores offer no frill experience and warehouse shelving stocked well with merchandise intended to move at higher volumes. Warehouse stores are also known as warehouse supermarket.

Question 25. What Is A Departmental Store?

Answer :

A departmental store is a large retail trading organization. It ahs several departments, which are classified and organized accordingly. Departments are made as per different types of goods to be sold. For example, individual departments are established for selling packed food goods, groceries, garments, stationery, cutlery, cosmetics, medicines, computers etc. so that consumers can purchase all basic household requirements under one roof. It provides them maximum shopping convenience.

Question 26. What Is Telemarketing? State The Advantages Of Telemarketing?

Answer :

Telemarketing is a form of direct marketing. Here, marketer goes direct to the customer using telecom/ IT facilities. 

Advantages pf telemarketing are as follows:

1. Telemarketing facilitates personalized contact though not face- to- face contact with prospective customers.
2. Compared to mass marketing programmes, it gives the marketer a better change to influence the prospects.
3. Telemarketing is less expensive compared to most other forms of selling.

Question 27. What Is A Hypermarket?

Answer :

Hypermarket is a superstore combining a supermarket and a department store. The result is an expensive retail facility carrying a wide range of products under one roof, including full groceries lines and general merchandise. Hypermarket is a very large store that carries products found in supermarket as well as merchandise commonly found in department stores. 

Question 28. What Are Super Markets?

Answer :

Super markets are large, low cost, low margin, high volume, self service operations designed to meet the needs for food, groceries and other non food items like health and beauty care products. They have huge premises and generally deal in food and non- food articles. The customers are to do shopping themselves from the racks which are properly labelled and at the end of the market there is a cashier who takes the cash after weighing and checking the commodities.

Question 29. What Is A Factory Outlet?

Answer :

Factory outlet is a retail store that sells discounted price items that are irregular,outdated or have been produced in excess quantities. A factory outlet store specializing in selling goods from a particular business might be located in physical proximity to its manufacturing facilities or in association with other factory outlet stores.

Question 30. Explain Briefly Retail Life Cycle?

Answer :

• The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity and decline stages.
• Innovation:- A new organization is born, it improves the convenience or creates other advantages to the final customers that differ sharply from those offered by other retailers. This is the stage of innovation, where the organization has a few competitors. 

Question 31. What Is A Consumer Cooperative?

Answer :

A consumer cooperative is a retail institution owned by its member customer. These arise largely because of dissatisfied consumer whose needs are not fulfilled by the existing retailers. A consumer's cooperative society is a combination of persons whose aim is to economize by buying in common and retain their profits by selling in common.

Question 32. State The Uses Of Retailing?

Answer :

Retails perform the following functions:

• Understanding the needs of consumers
• Buying and Assembling
• Breaking the Bulk
• Warehousing or Storing
• Selling
• Credit Facilities
• Risk Bearing
• Grading and Packaging
• Collection and Supply of Market Information
• Helps in Introducing New Products
• Windows Display and Advertising .

Question 33. What Is A Speciality Store?

Answer :

Speciality store is a small retail outlet that focuses on selling a particular product range and associated items. Most specialty store business operators will maintain considerable depth in the type of product that they specialize in selling, usually at premium prices, in addition to providing higher service quality and expert guidance to shoppers. The speciality stores specialize in a particular category or sub-category of goods such as footwear, sarees, dress material and jewellery.

Question 34. Who Are Off- Price Retailers?

Answer :

Off- price retailers are retailers who provide high quality goods at cheap prices. They usually sell second- hand goods, off- the- season items etc. These retailers offer inconsistent assortment of brand name and fashion- oriented soft goods at low prices. They buy manufacturer irregulars, seconds, closeouts, cancelled orders, overruns, goods returned by other retailers and end- of season close out merchandise. They buy products from manufacturers in off seasons as a deep discount and sell them .

Question 35. Who Are Catalogue Retailers?

Answer :

Catalogue retailers usually specialise in hard goods such as house ware, jewellery and customer electronics. These are retailers whose showrooms are adjacent to the warehouse.

Question 36. What Are Leased Departments?

Answer :

Leased departments are also termed as shop in shops. When a section of a department in a retail store is rented to an outside party, it is termed as a leased department. 

Question 37. What Are The Services Performed By Retailers To Wholesalers?

Answer :

1. Many retailers usually place orders in advance with the wholesalers which is very helpful in planning the purchases of the wholesalers.
2. Sometimes retailers make advance payments for the goods to be received from the wholesalers. In this manner, they help in financing the wholesale trade.
3. Without the services of the retailers a new product cannot be introduced in the market supplied to him by the wholesalers.

Question 38. State The Factors Affecting Indian Retail Industry?

Answer :

Following are the major factors contributing the growth of Indian retail industry:

1. Increase in per capita income
2. Demographic changes
3. High standard of living
4. Change in consumption pattern
5. Availability of low-cost consumer credit
6. Improvements in infrastructure
7. Entry in various sources of financing 

Question 39. What Is A Category Killer?

Answer :

Category killer is a product, service, brand or company that has such a distinct sustainable competitive advantage that competing firms find it almost impossible to operate profitably in that industry. The existence of a category killer eliminates almost all market entities. Example, as one of the most famous search engine, Google does not have real competitors. 

Question 40. State The Characteristics Of Super Markets?

Answer :

• They are located in the main shopping centres of an area with adequate parking facilities.
• They function on cash- and- carry lines and offer no credit.
• There are no selling counters or selling assistants to help the customers.
• They are large retail organisations and are a useful channel of distribution.
• They have low sales overheads since no salesmen are employed.
• It is one of the leading methods of retailing in the USA.