Exercise Solutions Available
Step-by-step answers for all textbook questions in this chapter
Retailing: Exercise Solutions Guide
Use this page alongside the official Samacheer Kalvi textbook. Read the chapter, then revise with the model answers below.
I. Choose the Correct Answer (MCQ) — Textbook
Q1. Which of the following is not a type of retail trade?
(a) Itinerant traders (b) Departmental stores (c) Manufacturing ✓ (d) Supermarkets
Q2. Which of the following is an itinerant trader?
(a) Hawker ✓ (b) Departmental store (c) Supermarket (d) Chain store
Q3. A large-scale retail establishment dealing in a wide variety of goods under one roof is a
(a) Hawker (b) Cheap jack (c) Departmental store ✓ (d) Market trader
Q4. …… stores sell similar products through a number of branches under the same ownership.
(a) Departmental (b) Chain ✓ (c) Supermarket (d) Consumer cooperative
I. Choose the Correct Answer (MCQ) — Additional Important
Q1. Which of the following is a feature of itinerant traders?
(a) Fixed place of business (b) Deal in low-priced articles ✓ (c) Large capital investment (d) Centralised purchasing
Q2. A consumer cooperative store is owned by
(a) Government (b) Private shareholders (c) Members/consumers ✓ (d) Wholesalers
Q3. Supermarkets operate on the principle of
(a) Credit sales (b) Cash and carry ✓ (c) Door delivery (d) Personal selling
Q4. Which retail store sells a single line of products through many branches?
(a) Departmental store (b) Chain store ✓ (c) Supermarket (d) Mail order house
Q5. The retailer who moves from place to place is called
(a) Fixed shop retailer (b) Itinerant trader ✓ (c) Departmental store (d) Supermarket
Q6. Mail order houses sell goods through
(a) Personal selling (b) Post ✓ (c) Auction (d) Display in shop
Q7. Automatic vending machines sell goods
(a) On credit (b) At a discount (c) By inserting coins/currency ✓ (d) Through auction
Q8. A retail establishment owned and run by consumers themselves is called
(a) Departmental store (b) Chain store (c) Consumer cooperative store ✓ (d) Supermarket
II. Very Short Answer Questions — Textbook
Q1. What is retailing?
Retailing involves selling goods and services directly to ultimate consumers in small quantities. A retailer buys goods from wholesalers and sells them in small lots to consumers.
Q2. Who is a retailer?
A retailer is a person or business that sells goods directly to the ultimate consumer in small quantities. He is the last link in the channel of distribution.
Q3. State any two features of retailers.
1. Retailers deal directly with consumers. 2. Retailers sell goods in small quantities.
Q4. Name the types of retail trade.
Retail trade is classified into two broad types: 1. Itinerant traders (mobile traders without a fixed place) 2. Fixed shop retailers (retailers with a permanent place of business)
II. Very Short Answer Questions — Additional
Q1. What are itinerant traders?
Itinerant traders are mobile traders who have no fixed place of business. They move from place to place and deal in low-priced articles. Examples: peddlers, hawkers, street vendors.
Q2. What is a peddler?
A peddler is an itinerant trader who carries goods on his head or on a bicycle or cart and moves from village to village selling low-priced articles like toys, sweets, and small household items.
Q3. What is a hawker?
A hawker is an itinerant trader who moves from street to street selling goods. He carries goods on a cart, bicycle, or on his head and sells items like vegetables, fruits, and small household articles.
Q4. What is a cheap jack?
A cheap jack is an itinerant trader who hires a temporary shop at a fixed place for a short period and sells low-priced articles. He may shift his shop from one locality to another.
III. Short Answer Questions — Textbook
Q1. Explain the features of retailers.
The features of retailers are:
1. Direct contact with consumers: Retailers are in direct contact with the ultimate consumers. 2. Small quantity: Retailers buy in bulk from wholesalers but sell in small quantities to consumers. 3. Wide variety: Retailers stock a wide variety of goods to meet diverse consumer needs. 4. Personal service: Retailers provide personal service like credit facilities, home delivery, and after-sales service. 5. Last link: Retailers are the last link in the channel of distribution. 6. Convenient location: Retailers are located near residential areas for the convenience of consumers. 7. Display: Retailers display goods attractively to attract customers.
Q2. What are itinerant traders? Explain the types.
Itinerant traders are mobile traders who have no fixed place of business. They move from place to place and deal in low-priced articles. The types are:
1. Peddlers: Peddlers carry goods on their head, on a bicycle, or on a cart. They move from village to village selling low-priced articles like toys, sweets, and small household items.
2. Hawkers: Hawkers move from street to street selling goods. They carry goods on a cart, bicycle, or on their head and sell items like vegetables, fruits, and small household articles. They announce their arrival by shouting.
3. Street traders: Street traders display their goods on pavements or street corners. They sell low-priced articles like pens, books, and household items. They are common near railway stations and bus stands.
4. Market traders: Market traders sell goods at weekly markets (like weekly sandhai in Tamil Nadu) held on specific days. They deal in low-priced articles and set up temporary stalls.
5. Cheap jacks: Cheap jacks hire a temporary shop at a fixed place for a short period and sell low-priced articles. They may shift their shop from one locality to another.
Q3. What is a departmental store? Explain its features.
A departmental store is a large-scale retail establishment that offers a wide variety of products under one roof. It is organised into different departments, each dealing with a specific line of goods. For example, one department sells clothing, another sells electronics, another sells groceries, and so on.
Features of departmental stores:
1. Large size: Departmental stores are large-scale retail establishments. 2. Wide variety: They offer a wide range of products under one roof — from needles to cars. 3. Departmental organisation: The store is divided into departments, each specialising in a particular line of goods. 4. Centralised purchasing: All purchases are made centrally by the head office, ensuring better terms and quality. 5. Centralised location: Usually located in the heart of the city for easy accessibility. 6. Numerous facilities: They provide facilities like restaurants, restrooms, telephone, ATM, free home delivery, and parking. 7. Decoration: Attractive window display and interior decoration to draw customers.
Q4. Explain the merits and demerits of departmental stores.
Merits:
1. Convenience: Customers can buy all their requirements under one roof, saving time and effort. 2. Wide choice: A large variety of goods is available, giving customers plenty of choice. 3. Economies of scale: Bulk purchasing reduces per-unit cost. 4. Centralised purchasing: Eliminates duplication and ensures quality. 5. Attractive display: Window displays and interior decoration attract customers. 6. Facilities: Restaurants, restrooms, free home delivery, and parking add to customer convenience. 7. Credit facilities: Departmental stores offer credit facilities to customers.
Demerits:
1. High cost of operation: Rent, salaries, decoration, and facilities lead to high operating costs. 2. Lack of personal touch: The size of the store makes personal attention difficult. 3. Risk of loss: Huge investment and large stock increase the risk of loss. 4. Difficulty in management: Managing a large establishment with many departments is complex. 5. High prices: High overhead costs result in higher prices compared to small retailers. 6. Location disadvantage: Located in city centres, not convenient for suburban customers.
III. Short Answer Questions — Additional
Q1. What is a chain store? Explain its features.
A chain store (or multiple shop) is a retail establishment that sells similar products through a number of branches under the same ownership and management. Each branch sells the same type of goods at the same prices. Examples: Bata Shoe Stores, Raymond Showrooms.
Features of chain stores:
1. Same ownership: All branches are owned and managed by the same organisation. 2. Same products: All branches sell the same type of products. 3. Same prices: Uniform prices are maintained across all branches. 4. Centralised purchasing: Purchases are made centrally, ensuring bulk discounts and quality control. 5. Decentralised selling: Selling is done through multiple branches located in different areas. 6. Cash sales: Chain stores generally sell on a cash basis only. 7. Specialisation: They deal in a single line of products.
Q2. What is a supermarket? Explain its features.
A supermarket is a large-scale retail establishment that sells a wide variety of consumer goods on a self-service basis. Customers select goods from shelves and pay at the checkout counter. It operates on the principle of "cash and carry."
Features of supermarkets:
1. Self-service: Customers select goods themselves from open shelves. 2. Cash and carry: No credit facilities are provided; customers pay cash and carry goods. 3. Large size: Supermarkets are large stores with a wide variety of goods. 4. Low prices: Due to bulk purchasing and no credit or delivery services, prices are kept low. 5. No personal selling: There is no sales pressure; customers shop at their own pace. 6. Centralised location: Usually located in busy market areas. 7. Neat display: Goods are arranged neatly on shelves with price tags.
Q3. What are consumer cooperative stores?
A consumer cooperative store is a retail establishment owned and managed by the consumers themselves. It is formed on the principle of cooperation — "one member, one vote." The store buys goods in bulk and sells to members at reasonable prices. Any profit is distributed as dividend based on purchases made by members.
Features:
1. Owned by consumers: Members are both owners and customers. 2. Democratic management: "One member, one vote" principle. 3. No profit motive: The main aim is to provide goods at reasonable prices. 4. Cash sales: Generally sell on cash basis. 5. Limited profit margin: Goods are sold at fair prices with limited profit margin. 6. Dividend distribution: Profit is distributed as dividend based on purchases.
Q4. Explain the merits and demerits of chain stores.
Merits:
1. Economies of scale: Centralised purchasing ensures bulk discounts and lower costs. 2. Uniform prices: All branches sell at the same prices, building customer trust. 3. Specialisation: Focus on a single line of products leads to better quality and service. 4. Easy identification: Uniform signboards and display make branches easy to identify. 5. Flexibility: Unprofitable branches can be closed easily. 6. No bad debts: Cash sales eliminate the risk of bad debts.
Demerits:
1. Limited variety: Only one line of products is sold, limiting customer choice. 2. No credit facilities: Cash-only policy may inconvenience customers. 3. No home delivery: No home delivery or personal service. 4. Rigid policies: Uniform pricing and policies may not suit local conditions. 5. High overheads: Running multiple branches increases operational costs. 6. Lack of initiative: Branch managers have limited authority, reducing initiative.
Q5. Explain the merits and demerits of supermarkets.
Merits:
1. Low prices: Bulk purchasing and self-service reduce operating costs, resulting in lower prices. 2. Wide choice: A large variety of goods is available under one roof. 3. No sales pressure: Self-service allows customers to shop without pressure from salespersons. 4. Cash and carry: No credit risk for the store; no bad debts. 5. Convenient: Open shelving and price tags make shopping easy. 6. Quality goods: Centralised purchasing ensures quality control.
Demerits:
1. No credit facilities: Customers must pay cash. 2. No personal service: Self-service means no assistance in selecting goods. 3. No home delivery: Customers must carry goods themselves. 4. Theft risk: Open shelves and self-service increase the risk of shoplifting. 5. Limited to cities: Supermarkets are mainly located in urban areas. 6. Large capital: Requires significant investment in premises and stock.
IV. Long Answer Questions — Textbook
Q1. Explain the types of itinerant traders in detail.
Itinerant traders are mobile traders who have no fixed place of business. They move from place to place and deal in low-priced articles. The types are:
IV. Long Answer Questions — Additional
Q1. Explain the role of retailers in the distribution channel.
Retailers play a vital role in the distribution channel:
1. Last link: Retailers are the last link between the producer and the consumer. They make goods available to the ultimate consumer. 2. Buying and selling: Retailers buy from wholesalers and sell to consumers, completing the distribution process. 3. Breaking the bulk: Retailers buy in bulk from wholesalers and sell in small quantities to meet individual consumer needs. 4. Assortment: Retailers stock a wide variety of goods from different producers, giving consumers a choice. 5. Credit facilities: Many retailers provide credit facilities to consumers, enabling them to buy now and pay later. 6. Market information: Retailers provide feedback to wholesalers and manufacturers about consumer preferences and market trends. 7. Promotion: Retailers display goods attractively and promote products through advertising and personal selling. 8. Risk bearing: Retailers bear the risk of spoilage, theft, price fluctuations, and changes in demand. 9. Convenience: Retailers are located near residential areas, making it convenient for consumers to buy. 10. After-sales service: Retailers provide after-sales service like installation, repair, and replacement.
Q2. Explain the merits and demerits of consumer cooperative stores.
Merits:
1. Reasonable prices: Consumer cooperative stores sell goods at reasonable prices by eliminating middlemen and their profit margins. 2. No exploitation: Members are both owners and customers, so there is no exploitation. 3. Democratic management: The "one member, one vote" principle ensures democratic control. 4. Dividend distribution: Profit is distributed as dividend based on members' purchases. 5. Cash sales: Cash sales eliminate the risk of bad debts. 6. Quality goods: Centralised purchasing ensures quality control. 7. Social welfare: Cooperative stores promote social welfare and economic equality.
Demerits:
1. Limited capital: Capital is limited to members' contributions and government loans. 2. Lack of initiative: Democratic management may lead to slow decision-making and lack of initiative. 3. Limited variety: They may not stock a wide variety of goods due to limited capital. 4. Management issues: Members may lack professional management skills. 5. No credit facilities: Cash-only policy inconveniences some members. 6. Competition: They face stiff competition from large retail stores and supermarkets.
Q3. Explain mail order houses and automatic vending machines as retail establishments.
Mail Order Houses:
Mail order houses are retail establishments that sell goods through the post/mail. Customers place orders by post (or online), and goods are delivered by post/courier. They do not have a physical retail shop. They operate on "cash on delivery" or advance payment basis.
Features:
- No physical shop is needed.
- Orders are placed by post, phone, or online.
- Goods are delivered by post or courier.
- Payment is made through cash on delivery, VPP (Value Payable Post), or advance payment.
- Heavy and perishable goods are not suitable.
- Catalogues and advertisements are used to attract customers.
Merits:
- No need for a physical shop, saving on rent and overheads.
- Can reach remote areas where shops are not available.
- Low operating costs.
- No risk of bad debts (cash on delivery).
Demerits:
- No personal contact with customers.
- No inspection of goods before purchase.
- Delay in delivery.
- Limited to non-perishable and light goods.
- High postal and packaging costs.
Automatic Vending Machines:
Automatic vending machines are machines that sell goods automatically when coins or currency are inserted. They sell items like beverages, snacks, chocolates, newspapers, and tickets. They provide 24-hour service without any attendant.
Features:
- No shopkeeper or attendant is needed.
- Operate 24 hours a day.
- Insert coins or currency to get the product.
- Sell pre-packed items of standard quality.
- Commonly found in railway stations, airports, offices, and schools.
Merits:
- 24-hour service without any attendant.
- No need for sales staff.
- Quick and convenient.
- Standard quality and fixed price.
Demerits:
- Limited to small, pre-packed items.
- Cannot handle complex products requiring explanation.
- Risk of machine breakdown.
- Limited refund or exchange options.
Q4. Discuss the importance of retailing in the economy.
Retailing plays a crucial role in the economy:
1. Link between producer and consumer: Retailers are the last link in the distribution channel, making goods available to consumers. 2. Employment generation: Retailing is one of the largest employers, providing jobs to millions of people. 3. Consumer satisfaction: Retailers provide convenience, variety, and service to consumers, improving their standard of living. 4. GDP contribution: The retail sector contributes significantly to the Gross Domestic Product (GDP) of any country. 5. Market information: Retailers provide feedback about consumer preferences, helping manufacturers improve products. 6. Economic development: Retailing promotes trade, creates demand, and stimulates production. 7. Social function: Retailers provide credit facilities, home delivery, and after-sales service. 8. Price stabilisation: By maintaining stock and ensuring supply, retailers help stabilise prices. 9. Rural development: Itinerant traders and small retailers serve rural areas, making goods accessible in remote regions.
Q5. Explain the factors to consider when choosing the type of retail establishment.
The choice of retail establishment depends on several factors:
1. Nature of product: Perishable goods require quick turnover (supermarkets), while durable goods can be sold through departmental stores or chain stores. 2. Capital available: Large capital is needed for departmental stores and supermarkets; small capital is sufficient for general stores or itinerant trade. 3. Target market: Urban customers prefer supermarkets and departmental stores; rural customers rely on itinerant traders and general stores. 4. Location: City centres are suitable for departmental stores; residential areas for general stores; remote areas for itinerant traders. 5. Competition: The type of retail establishment should be chosen based on the level and nature of competition in the area. 6. Scale of operation: Large-scale operations suit departmental stores; small-scale operations suit general stores. 7. Customer preferences: Self-service (supermarkets) vs personal service (general stores) affects the choice. 8. Government regulations: Licensing, zoning laws, and regulations may affect the choice of retail format.
Common Mistakes to Avoid
1. Itinerant traders have NO fixed place of business. They move from place to place — this is the key distinction from fixed shop retailers. 2. Chain stores sell a SINGLE line of products through multiple branches. Departmental stores sell a WIDE variety of products under one roof. Do not confuse these two. 3. Supermarkets operate on "cash and carry" — no credit, no home delivery. This is a key difference from departmental stores. 4. A factor is NOT a retailer. A factor is a mercantile agent (from the previous chapter). Retailers sell to consumers; factors sell on behalf of principals. 5. Consumer cooperative stores follow "one member, one vote" — NOT "one share, one vote." This is cooperative democracy, not corporate governance. 6. Cheap jacks are NOT the same as peddlers. Cheap jacks hire a temporary fixed shop; peddlers move from place to place carrying goods.
Exam Checklist
- [ ] Can define retailing and state the role of a retailer
- [ ] Can list and explain all five types of itinerant traders (peddlers, hawkers, street traders, market traders, cheap jacks)
- [ ] Can explain departmental stores with features, merits, and demerits
- [ ] Can explain chain stores (multiple shops) with features, merits, and demerits
- [ ] Can explain supermarkets with features, merits, and demerits
- [ ] Can explain consumer cooperative stores with merits and demerits
- [ ] Can compare departmental stores vs chain stores (table format)
- [ ] Can distinguish between itinerant traders and fixed shop retailers