You Represent a Group of Investors Who Are Exploring Alternatives $\bullet$

question 196

Multiple Choice

You represent a group of investors who are exploring alternatives for entering the retailing business. Many of these investors have significant past experience working for other retailing companies and they realize the retailing business is very competitive. They also realize there is a high failure rate for startups in this industry. They ask you recommend a retailing strategy that would meet the following criteria:
$\bullet$ No storefront would be needed
$\bullet$ No personal selling would be needed
$\bullet$ No traditional store operating expenses are necessary
$\bullet$ Customers can place orders via the Internet, telephone or mail
$\bullet$ Low operating expenses and limited customer service required
Which of following retailing strategy are you going to recommend they use?
​

• A)Telemarketing
• B)Automatic vending
• C)Direct selling
• D)Television home shopping
• E)Catalog marketing

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Definitions:

Concentrated Industry

An economic sector characterized by a small number of firms holding a large market share, leading to reduced competition.

Fuel-efficient Cars

Vehicles designed to use less fuel for the same distance traveled compared to standard vehicles, typically through advanced technology or design.

Concentration Ratio

A measure that assesses the level of market concentration, indicating the combined market share of the top firms (usually the top 4 or 8) in the industry.

Kinked Demand Curve

The demand curve for the cutthroat oligopolist, which is based on the assumption that competitors will match a price cut, but will not match a price increase.