DECA Retail Merchandising Practice Exam

What is defined as competition between retailers that sell similar merchandise using different types of stores?

1. Intra-type competition

2. Intertype competition

3. Direct competition

4. Indirect competition

The correct answer is: Intertype competition

The correct answer is intertype competition. This term refers to the competition that occurs between retailers who offer similar products but operate in different types of retail formats. For example, a discount store might compete with a department store as both sell clothing and household goods, yet they do so within distinct business models and environments. Intertype competition highlights the dynamic nature of the retail landscape, where diverse stores can influence each other's market share even though they are differentiated by their store types, such as specialty stores, department stores, or online retailers. Such competition requires retailers to understand not just their direct competitors within their own category (like two department stores) but also those in different formats that could attract the same customer base. In contrast to intertype competition, intra-type competition would involve retailers of the same type competing against each other, such as two grocery stores vying for customer loyalty in the same area. Direct competition typically refers to entities selling identical or nearly identical products directly against one another, while indirect competition involves businesses providing different products or services that still compete for the same consumer spending.