London Central DECA Team - Home



BMDM and FMP1.Environmental regulations are often developed to encourage buying and merchandising businesses to participate inA.law enforcement. C.resource identification. B.recycling programs. D.ethical contracts. 2.Quantex is organized as a partnership with eight equal partners. The partners would like to expand their business but limit the amount of money they could personally lose if the business were to fail. What form of ownership should Quantex consider?A.Sole proprietorship C.MonopolyB.CorporationD.Partnership 3.What marketing activity makes up about half of the total marketing costs?A.Warehousing C.PackagingB.Transportation D.Distribution 4.One advantage to a business of installing a global-positioning system in all of the business's delivery vehicles is that the drivers canA.calculate the fuel needed to complete a route. B.identify possible delays in traffic. C.obtain accurate directions to destinations. D.gain access to inventory data. 5.One of the most effective ways to encourage ethical behavior is to provide employees involved in the distribution process with a(n)petitive salary. C.suggestion box. anizational chart. D.code of ethics. 6.Which of the following is a situation that might cause horizontal conflict among several channel members:A.An intermediary returns defective products for credit on future purchases. B.An intermediary sells directly to consumers. C.A manufacturer begins to sell products online. D.A manufacturer sells the same product to many competing businesses. 7.One characteristic of an intensive distribution strategy is that products are A.available in a specific geographic area. C.available in all possible locations. B.sold by only a few vendors. D.sold in closed sales territories. 8.Under which of the four key areas of evaluating channel membership performance would an agreement on performance standards fall?A.Future consideration C.Financial concerns B.Ethical and legal issues D.Working relationships 9.Which of the following is a type of simple, written report that usually is distributed to employees within a retail chain's purchasing department:A.Memorandum C.Handbook B.Proposal D.Newsletter 10.To provide good service, store employees should give customersA.unsolicited advice. C.personal opinions.B.limited information. plete attention.11.Which of the following is an example of an employee reinforcing a service orientation through communication:A.Selecting certain customers to help C.Agreeing that customers are always rightB.Telling customers they are misinformedD.Offering to find information for customers 12.In most cases, the person who initially listens to customer complaints is theA.sales manager. C.buyer.B.salesperson. D.store owner.13.One way that electronic data interchange (EDI) has made order processing more efficient is byA.creating a secure connection to the merchant's web server.B.eliminating the need for paper documents used in business transactions.C.responding to customer inquiries through e-mail.D.increasing the amount of information that can be transmitted over the Internet.14.Lynx Wholesale Company mailed an advance invoice to Swifton's retail store. When the shipment of six cases of shampoo, eight cases of notebook paper, and nine cases of household detergents arrived, Swifton's receiving department was able to use the invoice to complete a __________ check of the goods.A.direct C.blindB.random D.quality15.Improved security and increased efficiency in marking and moving merchandise are advantages to a retail chain of storing goodsA.in centralized warehouses. C.in stockrooms.B.on the sales floor. D.with freight forwarders.16.A retailer that sells products in a variety of shapes and sizes would be likely to use __________ for storage.A.uniform containers C.metal palletsB.wooden crates D.adjustable shelves 17.One reason why many small retailers plan to store excess goods in the drawers of counters on the selling floor is because they haveA.inadequate sales. C.unused shelving. B.limited space.D.reserve stock.18.A major benefit of a dollar-control inventory system is that itA.spots slow-moving merchandise. C.shows the value of stock on hand.B.reduces inventory investment.D.identifies inventory shrinkage.19.Calculate the amount of inventory shrinkage given the following information: periodic stock count, 545 units; previous stock count, 800 units; units purchased, 150; and unit sales, 400.A.50 C.5 B.25 D.15020.When determining closing book inventory, the total merchandise deductions are found by addingA.sales, markdowns, and shortages. C.markdowns and markups. B.purchases and markdowns.D.opening inventory and purchases.21.Damaged merchandise that retailers send to salvage is oftenA.refurbished. C.destroyed.B.marked down. D.warehoused.pute the stock turnover rate if retail sales for a given period are $5,000,000 and the average value of the inventory during that time is $500,000.A.1 C.100B.10 D.1,00023.By promoting their goods and services and offering a number of purchasing arrangements, merchandising businesses help to create __________ utility.A.financial C.placeB.time D.possession 24.Which producers are the foundation on which all other businesses depend?A.Raw goods C.BuildersB.Manufacturers D.Retailers25.One way a general merchandising business can transfer the risk of losses due to fire, theft, or destruction is by purchasing __________ insurance.A.transportation C.liabilityB.property D.personal injury26.Which of the following would result if a nation's productivity increased at a greater rate than its population:A.Improved standard of living C.Increased unemployment B.Reduced use of technologyD.Decreased standard of living27.Handling differences of opinion within the team should help team members to learn how toA.manipulate others. C.disagree constructively. B.reach conclusions. D.make good decisions.28.Which of the following are characteristics of adaptable people:A.Objectivity and attentiveness C.Empathy and disrespect B.Creativity and resistance D.Fairness and fear 29.School grading systems, most sport-related awards, and wages and bonuses for work are examples ofA.formal recognition. rmal recognition. B.recognition that does not motivate. D.recognition that is ineffective. 30.If you like to feel as though you are an important member of the team, you will probably work best under a(n) __________ manager.A.authoritarian C.laissez-faireB.hands-off D.democratic 31.Which of the following is the most common investment for an individual who hopes to lessen the financial burden for dependent children with a case settlement in the event of the individual's death:A.Business investments C.Life insurance B.Securities such as stocks and bonds D.Real estate purchases 32.A store owner applying for a bank loan would probably ask the accounting department to provide records that show the value of the store's totalA.equipment. C.inventory.B.cash. D.assets. 33.Which of the following is not a question about changes in a merchandising business's market that sales forecasters might need to ask:A.Is the makeup of the trading area changing?B.What is the current rate of inflation?C.Has the local population increased or decreased?D.Will our customers be the same as they have been?34.When the owner or manager of a general store uses a budget, s/heA.can more accurately evaluate employees. C.has to try to make it interesting. B.demonstrates leadership. D.makes more informed decisions. 35.Another name for a profit and loss statement is a(n)A.balance sheet. C.inventory sheet.B.liability list. D.income statement.36.Exit interviews provide a company the opportunity to learn which of the following:A.Employees' views on policies, procedures, and operationsB.Insider information about competing companiesC.Employees' training and educational backgroundD.Employees' beginning and ending wages37.If employees are fired because their conduct is in serious violation of company policies, they are being terminated forA.resigning. C.cause.B.performance. D.incompetence.38.One reason it is usually important to recognize or reward employees and volunteers who worked on an event is toA.obtain their feedback. C.make them feel appreciated. B.remind them of their participation. D.get a future commitment. 39.What might result if employees complain about their working conditions but the business puts off taking any action?A.Decreased turnover C.Decreased vandalismB.Increased production D.Increased absenteeism40.A business owner marked down a line of products in order to sell them, but customers still didn't buy them. Marketing research might have been used in this situation to protect the business fromA.financial loss. petitors.B.embarrassment. D.loss of clientele.41.The general role of marketing in our private enterprise system is to coordinateA.production and consumption. ernment and business.B.selling and distribution. D.production and pricing. 42.Marketers know that changing one marketing-mix element affects theA.end goal. C.strategy. B.result. D.other elements. 43.Which of the following is one of the main reasons why general merchandisers have been forced to pay more attention to the needs of specific consumers:A.Increased costs of mass production C.Less knowledgeable consumersB.Increased amount of competitionD.Fewer differences among consumers 44.What do retailers need to do before developing specific strategies to appeal to certain groups of customers?A.Select target markets C.Prepare sales forecasts B.Analyze external threats D.Generate product ideas 45.Which of the following is an example of a marketing strategy that a merchandising business might develop in order to achieve an objective it has outlined in its marketing plan:A.Reducing operating costs C.Increasing profits by 10%B.Obtaining $1 million in salesD.Lowering prices by 5% 46.Why is it important for a retailer to conduct a situational analysis during the marketing-planning process?A.To ward off problems C.To forecast expensesB.To identify customers D.To redesign products47.Torry's staff is young and lacks work experience. A new store is coming to town that will be competing with Torry's store. Torry decides to send his staff for training, so they will be better prepared to face the competition. What SWOT marketing strategy is Torry using?A.S-T C.W-T B.S-O D.W-O 48.Predicting the number of units of a good or service that a merchandiser will sell during a given time is referred to as a(n)A.test market. C.sales forecast.B.marketing strategy. D.economic outlook.49.In the next two years, the CMV Corporation wants to increase the market share of its premiere product line by seven percent. This is an example of a(n)A.advertising goal. C.marketing objective. B.financial budget. D.purchasing strategy. 50.Which one of the following is a method that a manager might use to control marketing planning:A.Gamesmanship C.Operating delaysB.Behavioral displacement D.Environmental monitoring51.Why is it important for businesses to maintain records about the quantities and types of merchandise that customers are purchasing?A.To develop new displays C.To plan credit programs B.To forecast future sales D.To organize special events 52.At what point do most businesses prefer to stop suspected shoplifters?A.Outside the business C.As soon as s/he picks up an itemB.Inside the business D.In clear view of other customers53.What do many retail establishments require their employees to do after an accident occurs?A.Help redesign the work areas plete accident-report forms B.Attend a safety training program D.Participate in counseling sessions54.When handling emergency situations, it is important for store employees toA.know what to do. C.evacuate the building. B.move the victim. D.listen to the radio. 55.Creating the goods and services that all businesses must have in order to stay in business is one of the main purposes ofA.mechanization. C.consumption. B.production.D.specialization.56.Which of the following is an example of a merchandising business controlling expenses in order to increase profits:A.Creatively allocating funds C.Effectively using display spaceB.Obtaining a higher level of credit D.Expanding promotional activities 57.What would a retailer establish as part of its equipment maintenance program?A.Investment system C.Inspection schedule B.Cleanup procedure D.Purchasing routine58.A personal characteristic that helps people to reach their goals isA.procrastination. C.passivism.B.perseverance.D.pessimism. 59.If individuals enjoy operating machinery, driving vehicles, or using tools, they might consider a career that involves working withA.animals. C.people. B.things. rmation. 60.Sales representatives from a specific industry who gather together to display and discuss their products with buyers are participating in aA.chamber of commerce. C.trade show.B.resident buying office. D.trade association.61.What do both buyers and sellers want to receive when exchanging goods and services for a specific price?A.Credit C.ProfitB.Value D.Prestige62.Developing a pricing structure that encourages customers to buy additional services that they don't need in order to obtain the original product is often a(n) __________ tactic.A.unethical C.acceptedB.predatory D.illegal 63.Offering low-priced items that are unavailable to attract customers to a business that then tries to sell them high-priced items is an example ofA.high-pressure selling. C.price-ticket switching.B.bait-and-switch advertising.D.loss-leader promotion. 64.What is an effective way for a merchandiser to increase its share of the market for a specific product?A.Lower the price of the product C.Price above the competitionB.Develop a liberal return policyD.Offer free delivery on all purchases65.What advantage would a business receive from paying cash for resale products?A.Faster delivery C.Improved creditB.Lower price D.Better service66.How is variable-cost margin calculated?A.Divide variable costs by the number of units sold. B.Divide total fixed costs by total variable costs. C.Subtract variable costs per unit from selling price per unit. D.Add variable costs to fixed costs. 67.Which of the following is a purchasing-related cause of markdowns:A.Assortment mistakes C.Market changes B.Promotional errors D.Liberal return policies68.During which stage of new-product development does a retail merchandiser determine if it is practical to market a product? A.Screening C.Production B.Brainstorming D.Consumption 69.Which of the following is usually responsible for grading goods:A.Consumer groups ernment agencies B.Research organizations D.Sales representatives70.When a manufacturer provides a full warranty with a product, it is the manufacturer's responsibility toA.limit the time that an implied warranty is good.B.replace or repair a faulty product.C.repair only specific parts if they fail to function.D.refund the purchase price if the product is misused.71.Which of the following is a specific question that an employee might ask customers to evaluate their experiences with the retail merchandiser:A.Do you want to open an account with us? B.How often do you visit our web site? C.How can we improve our service? D.Do you want to receive our promotional materials? 72.When buyers add lower priced products or product lines, they are using the product-mix strategy ofA.trading-down. C.contraction.B.trading-up. D.positioning.73.A retail store should analyze each customer service in terms of the profit it makes for the store becauseA.every service must be a profit maker. B.if a service is unprofitable, prices must increase. C.inappropriate services increase costs and absorb profits. D.All of these answers are correct. 74.What business factor is a clothing store that decides to offer fitting rooms and alteration services paying attention to?A.Policies C.Budget B.Technology D.Products75.Fisher Industries wanted to protect its new CD player for automobiles by listing it with the appropriate government agency. What kind of protection is this?A.Brand licensing C.Registered trademark B.Brand positioning D.Descriptive name76.Planning and controlling sales, inventory levels, and profit margins are several activities involved in developing aA.logical approach. C.merchandise mix.B.market repositioning. D.merchandise budget. 77.What is one of the elements of a merchandising plan?A.Potential vendors C.Planned markdowns B.Operating expenses D.Shipping contracts78.Why do retailers frequently decide to carry promotional merchandise?A.Offers trendier choices to merchandise selectionC. Drives traffic for purchase of higher priced merchandiseB.Involves lower costs and higher margins D. Shortens the purchase cycles79.A large shopping mall's advertisement that promotes the mall's conservation efforts would be classified as __________ advertising.A.promotional B. institutionalC.patronageD.paid 80.Promotional activities focus on pointing out the differences between competing products when a company's product is in the __________ stage of its life cycle.A.growth B. introductoryC.decliningD.maturity 81.More retailers are installing and using kiosks in their stores to promote their merchandise because this form of technology isA.generic. B. interactive.C.portable. D.seasonable. 82.Advertisers use such words or phrases as "introducing," "finally," or "at last" in a print ad headline in order toA.offer something new or improved. C.make a claim.B.arouse the curiosity of readers.D.promise a benefit. 83.When a business decides to create an infomercial to advertise its new product, it can maximize its customer response rate by requesting a call to action __________ the infomercial.A.several times during C.at the beginning of B.at the end of D.in the middle of 84.A display which is designed to create an immediate favorable sales response for a certain item or line of items is called a(n) __________ display.A.balanced B. selectionC.promotionalD.institutional85.Which of the following is a housekeeping duty needed for the regular upkeep of displays:A.Sweeping aisles B. Dusting propsC.Removing trashD.Washing floors86.A display fixture that can be expensive to replace is a(n)A.costumer. B. hook stand.C.easel.D.kiosk.87.A consideration for a retailer in deciding whether to use manufacturers' point-of-purchase displays isA.display cost. B. space.C.color.D.product cost.88.A merchandiser's well-established body of customers usually has an important impact on the merchandiser'sA.increased costs. C.financial success.B.vendor relations. D.recruitment process.89.Customers often judge a store's ethical standards on the basis of their initial and ongoing contact with the store'sA.board of directors. C.maintenance crew. B.sales staff. D.receiving personnel. 90.Because technology increases sales efficiency and order processing, salespeople have more time toA.build and maintain a clientele. C.focus on competitors' activities. B.set their sales standards and goals. D.develop new goods and services. 91.If a retail salesperson does not disclose important information about a product during the selling process, s/he may be violating A.consumer-protection laws. C.false-labeling policies. B.customer-service regulations. D.exclusive-dealing statutes. 92.Which of the following kinds of product information would you use to help a customer who is comparing designer sweaters:A.Materials and content C.Production processB.Pricing information D.Product finish 93.One of the techniques that salespeople often use to encourage customers to try the product they sell is to put the productA.in the customer's hands. C.on the office floor.B.in a sealed case. D.on the customer's desk.94.Salespeople often are able to increase their total sales volume by effectively usingA.advertising campaigns. C.mass production.B.suggestion selling. D.industry forecasts.95.Buzz Modem receives a 10% employee discount on purchases of $250 or less, or a 15% discount on purchases of more than $250. What would Buzz's total purchase cost him, including a 6% sales tax, if he purchased the following items: a stereo receiver for $130.00, a CD player for $119.95, and three CD's for $12.95 each?A.$288.80 B. $245.48C.$275.52D.$260.21 96.What can retailers sell at their stores that encourages people to shop in their facilities?A.Customer service C.Payment optionsB.Gift certificates D.Sales promotion97.One of the most important pieces of information needed to process a customer's telephone order is theA.customer's age. B. method of paymentC.country of birth.D.number of dependents.98.A product's style, reorder, or catalog number is recorded in what part of the sales check?A.Department B. QuantityC.DescriptionD.Terms 99.Dean makes sure that each new worker assigned to him receives the necessary guidance, training in specific tasks, and a reward for hard work. Dean's techniques are used in his management function anizing. B. directingC.staffing.D.controlling.100.A merchandising business might obtain data about industry averages from Dun & Bradstreet Information Services if it is experiencing __________ problems.A.break-even B. cash flowC.asset-basedD.dollar-volume1.BRecycling programs. Environmental regulations set pollution standards that businesses must meet, establish rules for disposing of waste, encourage recycling, and monitor illegal dumping. The goal is to protect the environment. By encouraging businesses to participate in recycling programs, environmental regulations help to conserve natural resources and control waste. Agencies that oversee environmental regulations are the ones that enforce the laws. Environmental regulations do not encourage businesses to participate in resource identification or ethical contracts. SOURCE:BL:073SOURCE:Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.) [pp. 41-43]. Cincinnati: South-Western. 2.BCorporation. A corporation would benefit the partners by allowing them to have limited liability and greater financial power by issuing stock. A partnership is a form of business ownership in which the business is owned by two or more persons who combine the capital, but the partners have unlimited financial liability. A sole proprietorship is a form of business ownership in which the business is owned by one person who has limited capital and unlimited liability. A monopoly is a condition in which a market is controlled by one supplier, and there are no substitute goods or services readily available.SOURCE:BL:003SOURCE:BA LAP 7—Own It Your Way 3.DDistribution. One of the reasons distribution has become an increasingly important part of marketing is that the costs of distribution activities make up about half of the total marketing costs. Distributing the products to the customers is one of the most expensive and important parts of marketing. Transportation, warehousing, and packaging are activities involved in distribution.SOURCE:CM:001SOURCE:DS LAP 1—Distribution 4.CObtain accurate directions to destinations. Global-positioning systems installed in delivery vehicles make it possible for drivers to determine their exact location and obtain accurate directions to destinations. Global-positioning systems are the result of satellite technology which allows businesses to track a vehicle. These systems also enable drivers to obtain directions so they do not waste time searching for their destinations. The systems speed up the delivery process. Global-positioning systems do not allow drivers to identify possible delays in traffic, calculate the fuel needed to complete a route, or gain access to inventory data. SOURCE:CM:004SOURCE:Coyle, J.J., Bardi, E.J., & Langley, C.J. (2003). The management of business logistics: A supply chain perspective (7th ed.) [pp. 464-465]. Mason, OH: South-Western. 5.DCode of ethics. A code of ethics is a written guide to acceptable behavior and an explanation of the penalties for violating the code. When employees involved in the distribution process know what is expected of them and what will happen if they violate the rules, they are encouraged to behave ethically. A suggestion box is used as a means of upward communication. Organizational charts map out the hierarchy of a business's management. A competitive salary is used to acquire and maintain competent staff.SOURCE:CM:006SOURCE:Pride, W., Hughes, R., & Kapoor, J. (2002). Business (7th ed.) [p. 41]. Boston: Houghton Mifflin. 6.DA manufacturer sells the same product to many competing businesses. Horizontal conflict occurs among businesses at the same level in the distribution channel. Competing businesses that sell the same product are on the same level. Conflict may occur between the competing businesses if a manufacturer sells the same product to all of them, and they are all trying to sell the product to customers. For example, hosiery is sold by drugstores, department stores, discount stores, mail-order businesses, etc. Some of these businesses might complain to the manufacturer that the others are using unfair sales tactics or offering more discounts. If this happens, these businesses are involved in horizontal conflict. An intermediary selling directly to consumers, or a manufacturer beginning to sell products online, might result in vertical conflict. An intermediary returning defective products for credit does not cause horizontal conflict.SOURCE:CM:008SOURCE:Boone, L.E., & Kurtz, D.L. (2002). Contemporary marketing (p. 402). Mason, OH: South-Western. 7.CAvailable in all possible locations. An intensive distribution strategy involves making a product available in all possible locations to make it easy for customers to buy. Products that most consumers buy on a regular basis usually are available everywhere because the goal is to saturate the market with the products. For example, convenience items such as candy and soft drinks are available in grocery stores, drugstores, vending machines, and various other retail establishments. Consumers who want to buy these products will not have difficulty finding them. A characteristic of a selective distribution strategy is that products are sold by only a few vendors. Exclusive distribution involves selling products in a specific geographic area or in closed sales territories.SOURCE:CM:009SOURCE:Boone, L.E., & Kurtz, D.L. (2002). Contemporary marketing (pp. 398-400). Mason, OH: South-Western. 8.DWorking relationships. Working relationships include channel cooperation and are easiest to achieve if all parties agree on their functioning roles and performance standards prior to the business relationship. If channel conflict does arise, it can be settled according to the prearranged agreement. Financial concerns refer to profits and expenses in a particular channel. Ethical and legal issues arise but are usually covered under a code of ethics or laws and regulations. Looking to the future requires the business to project future needs and to be continuously moving toward those goals.SOURCE:CM:011SOURCE:Bearden, W.O., Ingram, T.N., & LaForge, R.W. (2001). Marketing: Principles and perspectives (3rd ed.) [pp. 305-312]. Boston: Irwin. 9.AMemorandum. Memorandums are a frequently used form of brief, written communication exchanged by people within a retail chain's purchasing department. Memorandums often are distributed to employees within a retail chain's purchasing department to update them on the progress of various projects or inform them of changes in policies and procedures. They are informal and simple because they are intended only for the use of the purchasing department's employees. A proposal usually is a complex, written report that is formal and may be distributed to those outside the retail chain. Handbooks and newsletters are internal company publications but they are not memorandums.SOURCE:CO:094SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 190). New York: Glencoe/McGraw-Hill.10.DComplete attention. Each customer is entitled to a store employee's complete attention. Employees should focus their attention on each customer in turn, not on what is going on around them. Employees are able to provide good service if they pay attention to what their customers want. Employees should not offer unsolicited advice or personal opinions to customers. Employees should provide customers with all available information.SOURCE:CR:004SOURCE:HR LAP 32—Customer-Service Mindset11.DOffering to find information for customers. Employees often need to communicate information to customers in order to provide service. On occasion, employees may not know the answer to a customer's question; but, instead of saying they do not know, they should offer to find out. Obtaining information for customers is an effective way of reinforcing a service orientation through communication. Employees should help all customers rather than be selective about who they serve. Employees should never tell customers that they are misinformed. Employees should be tactful when dealing with complaints because customers are not always right.SOURCE:CR:005SOURCE:Rokes, B. (2000). Customer service: Business 2000 (pp. 52-54). Mason, OH: South-Western.12.BSalesperson. The salesperson is the point of contact for customers in most situations. If the problem originated on the sales floor, the salesperson would be the person most likely to be approached by the customer about the problem. The sales manager might help the salesperson, if necessary, but the store owner would seldom be involved. The buyer would be familiar with the merchandise but would not be likely to come into contact with the customer. All complaints should be handled with the customer in mind.SOURCE:CR:010SOURCE:HR LAP 23—Handling Customer Complaints13.BEliminating the need for paper documents used in business transactions. Electronic data interchange (EDI) is efficient because retailers can transmit information about orders electronically rather than preparing paper documents such as purchase orders and invoices. EDI is a back-end function of distribution rather than a customer-service function, and so it is not used to respond to customer inquiries through e-mail. Secure sockets layer (SSL) creates a secure connection to the merchant's web server, whereas EDI is used to process orders. It is a higher bandwidth, not EDI, that increases the amount of information that can be transmitted over the Internet.SOURCE:DS:084SOURCE:Lamb, C.W., Jr., Hair, J.F., Jr., & McDaniel, C. (2003). Essentials of marketing (3rd ed.) [p. 335]. Mason, OH: South-Western.14.ADirect. Since Lynx Wholesale mailed the invoice in advance, Swifton's receiving workers will be able to sort, count, inspect, and check quality of the shipped merchandise against the invoice. The direct-check method is a method of checking goods in which the goods received are checked directly against the purchase order or the invoice. Random is a method of checking goods which involves checking a few items or containers chosen at random, rather than each item or container in the shipment. This is also called spot check. Blind is a method of checking goods in which the goods received are listed on a blank form, or dummy invoice, which is then compared to the real invoice in order to ensure the accuracy of the shipment. Quality is an examination of incoming goods or materials to ensure that they meet the quality standards of the purchaser.SOURCE:DS:004SOURCE:DS LAP 5—The Receiving Process15.AIn centralized warehouses. Retail chains often store merchandise in centralized warehouses because of the increased efficiency of marking and moving merchandise to the various shops in the chain. Large quantities of goods are delivered to the centralized warehouse where they are processed and distributed to the shops in the chain. Also, these centers are often equipped with a variety of security devices, such as surveillance cameras, which help to prevent theft. As a result, the chains are able to protect their merchandise and monitor the flow of goods from vendors and on to individual shops. A chain would not store goods on the sales floor or in the stockrooms of individual shops. Freight forwarders are companies that consolidate shipments for several businesses. They do not store goods.SOURCE:DS:087SOURCE:Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.) [pp. 454-455]. Upper Saddle River, NJ: Prentice Hall.16.DAdjustable shelves. Retailers often need to store products that come in a wide variety of shapes and sizes. Many retailers use adjustable shelves for these goods because the height of each shelf can be changed to accommodate the size and shape of the item. Wooden crates and uniform containers are suitable for goods of a specific size and shape. Pallets generally are used to hold cases and boxes.SOURCE:DS:014SOURCE:Lambert, D.M., Stock, J.R., & Ellram, L.M. (1998). Fundamentals of logistics management (pp. 310-313). Boston: Irwin/McGraw-Hill.17.BLimited space. The amount of available storage space is a main concern of many small retailers. Most small retailers have limited space to store excess goods; therefore, many of them plan to store excess goods in drawers of counters or display fixtures or on shelves above the selling floor. They often take advantage of all available space on the selling floor because stockrooms are usually small. Small retailers generally use all shelving that is available. They do not store excess goods on the selling floor because they have inadequate sales. Reserve stock is merchandise that is stored off the selling floor.SOURCE:DS:039SOURCE:Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 346-347]. Mason, OH: South-Western.18.CShows the value of stock on hand. A dollar-control inventory system records the value of stock on hand rather than the number of items that would be shown by a unit-control system. Disadvantages of this system are that it does not spot slow-moving merchandise or inventory shrinkage. The dollar-control system also does not reduce inventory investment, but the information it provides may cause the business to reduce purchasing.SOURCE:DS:019SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 513). New York: Glencoe/McGraw-Hill.19.C5. Shrinkage is calculated by adding the previous stock count to the units purchased to determine total units on hand and subtracting net unit sales (800 + 150 = 950 - 400 = 550). The periodic stock count is subtracted from the perpetual inventory figure to calculate shrinkage (550 - 545 = 5).SOURCE:DS:026SOURCE:DS LAP 4—Inventory Shrinkage20.ASales, markdowns, and shortages. Total merchandise deductions are the reductions in value of inventory and include sales, markdowns, and shortages. Purchases and markups are not deductions but additions to the value of inventory. Adding the opening inventory and purchases provides the figure for total merchandise handled.SOURCE:DS:091SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 485-487). New York: Glencoe/McGraw-Hill.21.CDestroyed. Some merchandise becomes so extensively damaged that it cannot be sold. When this happens, retailers often send the damaged merchandise to salvage which means that the merchandise is no longer listed on the books and becomes a loss for the retailer. Salvaged merchandise is often destroyed because it is in such bad condition that it is not usable. Also, retailers may destroy salvaged merchandise because they do not want that type of merchandise that carries their name to accidentally get into the marketplace. Damaged merchandise that retailers send to salvage is not refurbished, marked down, or warehoused. These are methods of handling damaged goods that are not sent to salvage.SOURCE:DS:094SOURCE:Johnson, J.C., Wood, D.F., Wardlow, D.L., & Murphy, P.R. (1999). Contemporary logistics (7th ed.) [pp. 481-482]. Upper Saddle River, NJ: Prentice Hall.22.B10. Stock turnover is the number of times the inventory is sold and replaced in a given time period. To compute stock turnover rate, divide the retail sales for the period ($5,000,000) by the average inventory for the period at selling price ($500,000) which equals 10. This means that the inventory is completely sold and replenished 10 times during the identified time period. Increasing stock turnover gives the retailer a better return on investment.SOURCE:DS:053SOURCE:Wolfe, M.G. (1998). The world of fashion merchandising (p. 280). Chicago: Goodheart-Willcox.23.DPossession. Possession utility is created when ownership of a product is transferred from the seller to the user. Possession utility can be created through promotions which increase consumer demand for goods. Merchandising businesses also help to create possession utility by offering a number of purchasing arrangements that make it easy for customers to buy. Financial is not a type of utility. Time utility is having the products available at the time they are desired. Creating place utility means having the products, both goods and services, available at the place where they are needed by the consumer.SOURCE:EC:004SOURCE:EC LAP 13—Use It24.ARaw goods. Raw-goods producers provide goods in their natural, or raw, state. These producers are the foundation on which all other businesses depend. They include such businesses as farming, mining, fisheries, and lumber companies. A manufacturer is a type of producer that changes the shapes, or forms, of materials so that they will be useful to consumers. A builder is a type of producer that constructs roads, bridges, buildings, or houses. A retailer is a business that buys consumer goods or services and sells them to the ultimate consumer.SOURCE:EC:070SOURCE:MB LAP 6—Business and Society25.BProperty. Property insurance is designed to protect against the possible loss, damage, or destruction of property. Transportation insurance protects products while they are being moved from one location to another. Liability insurance is purchased by a business as protection against damage or losses to others such as the personal injury of employees or customers.SOURCE:EC:011SOURCE:EC LAP 3—Lose, Win, or Draw (Business Risk)26.AImproved standard of living. When productivity increases, the GDP per capita increases. When this increase is faster than population growth, the standard of living increases and more goods are available to consumers. A decrease in the standard of living results from a reduction in productivity. Unemployment increases when productivity slows down. More use of technology would be needed to keep up with increased productivity.SOURCE:EC:013SOURCE:EC LAP 18—Productivity27.CDisagree constructively. Team members will always have differences of opinion, but handling these disagreements helps team members to learn how to disagree constructively. A certain amount of conflict is a good sign because it indicates that the team's members are actively interested in the problem or situation. Team members should not learn how to manipulate others but to cooperate with them. Learning to handle differences does not necessarily help team members to reach conclusions or make good decisions.SOURCE:EI:045SOURCE:HR LAP 26—Teamwork28.AObjectivity and attentiveness. Adaptable people consistently exhibit certain attitudes or behavior, regardless of the circumstances. Some characteristics of adaptable people include objectivity; attentiveness; empathy; confidence; a respectful, positive, and self-corrective attitude; and constructive (positive) risk taking. Resistance, disrespect, and fear are not attributes of adaptable people. Increased creativity is considered a positive outcome of adaptable behavior, rather than a characteristic of adaptability.SOURCE:EI:006SOURCE:QS LAP 15—Stuff Happens29.AFormal recognition. Formal systems of reward and recognition are usually planned and well-thought-out. Examples include school grading systems, most sports-related awards, and wages and bonuses for work. Informal recognition is the opposite. It is praise offered outside formal systems and is often something spontaneous. The examples might indeed serve as motivators and are often very effective.SOURCE:EI:014SOURCE:QS LAP 13—Gimme Five!30.DDemocratic. If you like to feel as though you are an important member of the team, you will probably work best under a democratic manager. Such individuals usually have a participatory approach to management. Workers who like to be a part of a team, contribute their ideas, help solve problems, and generally take a personal interest in their work do well under democratic managers. Authoritarian managers see themselves as the sole source of authority. Laissez-faire managers prefer to exercise little to no control and use a hands-off approach.SOURCE:EI:037SOURCE:EI LAP 5 — Can You Relate? (Positive Working Relationships)31.CLife insurance. Life insurance has become an important investment for many people. Often, large settlements are disbursed to beneficiaries, such as dependent children, after a person passes away. Many financial institutions offer this service with the sole purpose of providing financial assistance in repaying mortgages, loans, debts, or death benefits. Although other financial services such as securities will produce revenue, they often involve a higher amount of risk. Business investments provide long-term financial growth but take time to turn into cash. Like business investments, real estate purchases often are lucrative but take time to liquidate.SOURCE:FI:081SOURCE:Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.) [pp. 502-503]. Cincinnati: South-Western.32.DAssets. All the items that a store owns that have value are its assets. Stores applying for loans usually have their accounting department compute the total value of their assets to present to the lending institution as verification of their ability to repay the loan. Cash, inventory, and equipment are types of business assets whose value would be listed on a balance sheet.SOURCE:FI:085SOURCE:FI LAP 5—Show Me the Money33.BWhat is the current rate of inflation? Inflation is a rapid rise in prices that may occur when productivity goes down and costs of labor go up. Inflation is an economic factor rather than a market factor. Increases or decreases in the population and changes in the makeup of the trading area are market factors that affect the sales forecast.SOURCE:FI:096SOURCE:IM LAP 4—Forecasting Sales34.DMakes more informed decisions. When a general store owner or manager uses a budget, s/he makes more informed decisions. A manager who uses a budget can make better decisions about the company's day-to-day activities by keeping the overall budget in mind. S/He may or may not demonstrate leadership by doing so. Being interesting is not necessarily a feature of budgets, but a budget might be interesting to a manager. Using a budget as a way to evaluate employees may not work because budgets are estimates, and there are often valid reasons to change them.SOURCE:FI:106SOURCE:FI LAP 3—Money Tracks35.DIncome statement. A profit and loss statement shows a firm's total income and expenses for a given period of time. A balance sheet lists a company's assets and liabilities. An inventory sheet records amounts of merchandise on hand and on order. A liability list would include all debts of a business.SOURCE:FI:102SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 116-117). New York: Glencoe/McGraw-Hill.36.AEmployees' views on policies, procedures, and operations. Exit interviews are used to improve upon policies, procedures, and operations and not to determine wages, education, or training. Exit interviews are also not used to get information about competing companies. They are a tool for management to learn how to make their employees happy and improve their current way of doing business.SOURCE:HR:357SOURCE:Everard, K.E., & Burrow, J.L. (2001). Business principles and management (11th ed.) [p. 640]. Cincinnati: South-Western.ause. Termination for cause occurs when an employee's conduct seriously violates company policies or jeopardizes the company or other employees. A termination for performance is used when an employee consistently exhibits poor performance compared to established performance criteria, or is incompetent. A resignation is a voluntary act by an employee.SOURCE:HR:358SOURCE:Dessler, G. (2000). Human resource management (8th ed.) [pp. 378-382]. Upper Saddle River, NJ: Prentice Hall.38.CMake them feel appreciated. Employees and volunteers often put countless hours into an event. Many times they work for minimum compensation or for free. Therefore, at the end of the event, it is usually important to recognize or reward their efforts to make them feel appreciated. People who are recognized or rewarded, even with something simple, are often willing to help with next year's event or another, similar event. Finding loyal employees and volunteers is often difficult. Keeping them is much easier if they feel that they are appreciated. Recognition and rewards are not intended to remind them of their participation, obtain their feedback, or get a future commitment.SOURCE:HR:365SOURCE:Supovitz, F. (2005). The sports event management and marketing playbook (pp. 407-408). New York: John Wiley & Sons.39.DIncreased absenteeism. Listening to employees' complaints is not enough—management must take action to resolve employees' dissatisfaction. If the business does not take action, complaints might turn into major controversies that result in an increase in absenteeism. By being absent from work more often, employees are telling a business that they are dissatisfied with the way they are being treated. By refusing to respond to employees' complaints, a business might also experience an increase in vandalism, a decrease in production, and an increase in turnover.SOURCE:HR:366SOURCE:MN LAP 45—Handling Employee Complaints40.AFinancial loss. Having to mark down products and/or not being able to sell them creates a financial loss for the business. Businesses can use marketing research to protect themselves from this kind of financial loss because research can identify which products consumers are buying or want to buy. The situation does not indicate that competitors were part of the problem. It also does not mention any loss of clientele. The business is not likely to suffer embarrassment since this kind of situation occurs from time to time.SOURCE:IM:010SOURCE:IM LAP 5—Nature of Marketing Research41.AProduction and consumption. In effect, marketing serves as the connecting link or "bridge" between producers and consumers. Selling, distribution, and pricing are marketing functions. The relationship between government and business is monitored by the legal system.SOURCE:MK:001SOURCE:BA LAP 11—Have It Your Way42.DOther elements. Since the marketing mix functions as a unit—and the mix elements are interrelated—marketers know that changing one marketing-mix element affects the others. The strategy is determined before the marketing mix is developed. The goal is determined before the strategy. The result is the outcome, which may or may not represent the change as expected.SOURCE:MP:001SOURCE:IM LAP 7—Pick the Mix43.BIncreased amount of competition. Increased competition between general merchandisers is one of the reasons mass marketing is on the decline, and target marketing is increasing. Competition has forced merchandisers to pay more attention to the specific needs of consumers who are more knowledgeable and diverse than ever before. Mass production costs less than other types of production.SOURCE:MP:003SOURCE:IM LAP 9—Have We Met?44.ASelect target markets. A target market is the particular group of customers a retailer seeks to attract. Each target market is unique, which means that strategies that are effective with one market might not work with another market. Consequently, retailers need to select the target market before developing specific strategies. For example, if the target market consists of teenagers and young adults, the marketing strategies will be very different than if the target market consists of senior citizens. Once the target market is selected, a retailer can focus on developing the right strategies. Before developing specific strategies to appeal to certain groups of customers, retailers do not analyze external threats, prepare sales forecasts, or generate product ideas. SOURCE:MP:005SOURCE:Burrow, J.L. (2002). Marketing: Instructor's wraparound edition (p. 223). Mason, OH: South-Western.45.DLowering prices by 5%. Marketing strategies are plans of action for achieving marketing goals and objectives. To be effective, marketing strategies need to specify how a merchandising business will achieve it goals. For example, lowering prices by 5% is an action that a business can take to attract more customers, which is the purpose of the marketing plan. Obtaining $1 million in sales, increasing profits by 10%, and reducing operating costs are examples of marketing objectives. To achieve those objectives, the business identifies marketing strategies, such as lowering prices by 5%.SOURCE:MP:007SOURCE:Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an e-commerce world (7th ed.) [pp. 45-46]. Mason, OH: South-Western.46.ATo ward off problems. Retailers conduct situational analyses to obtain information about changes or trends that are beginning to develop in the environment or marketplace. This procedure allows retailers to identify changes at an early stage and ward off potential problems. It is important for retailers to understand changes in their external environment in order to adapt and avoid problems. Without this information, retailers may be unprepared to deal with problems that might cause them to lose their competitiveness or even fail. A retailer would not conduct a situational analysis to identify customers, forecast expenses, or redesign products. However, a retailer might redesign products after conducting a situational analysis and finding that they were losing their appeal in the marketplace.SOURCE:MP:008SOURCE:Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an e-commerce world (7th ed.) [pp. 41-42]. Mason, OH: South-Western.47.CW-T. Torry is using a W-T strategy. W-T strategies focus on ensuring that a store's weaknesses don't make it even more vulnerable to the threats it already faces. Torry is attempting to fix one of his store's weaknesses, so it can better face an incoming threat. In this situation, Torry is not using an S-O, S-T, or W-O strategy. S-O strategies focus on opportunities that are a good match with the store's strengths. S-T strategies focus on using a store's strengths to overcome its threats. W-O strategies focus on overcoming a store's weaknesses so the store can pursue opportunities.SOURCE:MP:010SOURCE:IM LAP 8—Analyze This! (SWOT Analysis)48.CSales forecast. A sales forecast is a prediction of what a firm's sales will be during a specific future time period using a certain marketing plan. A test market may provide data to be used in a sales forecast by indicating sales levels in a particular market. A marketing strategy is a plan of action for achieving marketing goals and objectives. The economic outlook is a projection of the economic climate, which will affect the sales forecast.SOURCE:MP:013SOURCE:IM LAP 3—Nature of Sales Forecasts49.CMarketing objective. A marketing plan is a set of procedures or strategies for attracting the target customer to a business. Marketing objectives are the goals that the business wants to reach with its marketing plan. Wanting to increase the market share by seven percent within a certain time frame is an example of a marketing objective. A budget is an estimate of income and expense for a specific time. An advertising goal is a desired outcome (objective) for an advertising campaign or a specific advertisement. Strategies are the specific plans of action for achieving goals and objectives.SOURCE:MP:015SOURCE:Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [p. 42]. Mason, OH: Thomson/South-Western.50.DEnvironmental monitoring. Environmental monitoring involves checking assumptions to see whether any of the marketing plan's basic assumptions have changed. Gamesmanship refers to management actions aimed at improving the manager's performance. Behavioral displacement occurs when the behaviors encouraged by control are inconsistent with company goals. Operating delays are an unfortunate consequence of manager-control efforts.SOURCE:MP:019SOURCE:Dessler, G. (1998) Management: Leading people and organizations in the 21st century (3rd ed.) [pp. 534-535, 544]. Upper Saddle River, NJ: Prentice Hall.51.BTo forecast future sales. Businesses maintain a variety of records about the quantities and types of merchandise that customers are purchasing. These records are usually known as sales records. By analyzing past sales records, businesses can determine what customers are buying, when they are buying, and how much they are buying. This helps a business forecast future sales so it can be prepared to offer the merchandise that customers want. Businesses do not maintain records about what customers are purchasing to develop new displays, plan credit programs, or organize special events.SOURCE:NF:002SOURCE:Burrow, J.L. (2006). Marketing (2nd ed.) [pp.120-121]. Mason, OH: South-Western.52.AOutside the business. Most businesses feel it is best to give the customer every opportunity to pay for goods. However, once the customer leaves the premises with an item for which s/he has not paid, the business has the right to ask the customer to return. The matter should be handled out of the view of other customers as much as possible. Picking up an item is not shoplifting and would not be grounds for stopping an individual.SOURCE:OP:122SOURCE:Levy, M. L., & Weitz, B. A. (2007). Retailing management (6th ed.) [pp. 481-484]. Boston: McGraw-Hill/Irwin.omplete accident-report forms. Many retail establishments require employees to complete an accident-report form immediately or soon after an accident. This form commonly includes questions about where, when, and how the accident occurred, who was involved, the cause of the accident, and other details. Attending safety training, redesigning work areas, and employee counseling are not routinely required after an accident occurs.SOURCE:OP:009SOURCE:RM LAP 3—Handling Accidents54.AKnow what to do. Knowing what to do in an emergency situation may save someone's life. Therefore, many stores have established procedures for employees to follow if an emergency occurs. These procedures might include administering first aid, calling for help, evacuating the building, etc. In many cases, employees should not move the victim but wait for emergency medical personnel. Radio stations often announce emergency situations such as tornadoes, hurricanes, and earthquakes.SOURCE:OP:010SOURCE:Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 225-226). New York: Glencoe/McGraw-Hill.55.BProduction. Production is the process or activity of creating goods and services from economic resources. One of the main purposes of production is to produce goods and services that all businesses need—either to operate or to resell. Economic resources often are of no use to customers in their original form; therefore, production is necessary to make these resources into goods and services that customers want and need. Consumption is the process or activity of using goods and services. Mechanization is the use of machines to perform certain tasks. Specialization is the process of making the best use of resources in the production of goods and services.SOURCE:OP:017SOURCE:BA LAP 1—Nature of Production56.CEffectively using display space. Controlling expenses is important to a merchandising business because it is one way of increasing profits. Display space is an expense because it is an area in a business that must be paid for but which can increase sales volume per square foot if used effectively. Display space that is spread out, unorganized, or unattractive tends to discourage customers from buying. However, that same space can increase sales if it is organized and consolidated into an appealing area and contains the type of items that customers will be encouraged to buy. Businesses not only save money by using less space but increase profits because the displays generate additional sales. Expanding promotional activities, creatively allocating funds, and obtaining a higher level of credit will not help a business to control expenses.SOURCE:OP:029SOURCE:. (n.d.). How to reduce costs. Retrieved November 16, 2007, from (2000).57.CInspection schedule. Retailers usually establish a regular inspection schedule for equipment as part of a maintenance program. Regularly inspecting equipment allows the retailer to locate and correct minor problems before they become serious. During the inspection process, retailers can perform preventive maintenance in order to keep the equipment operating correctly. Retailers do not establish cleanup procedures, purchasing routines, or investment systems as part of a maintenance program.SOURCE:OP:033SOURCE:Berman, B., & Evans, J.R. (2004). Retail management: A strategic approach (9th ed.) [pp. 318-320]. Upper Saddle River, NJ: Prentice Hall.58.BPerseverance. Perseverance is the ability to stick with something, no matter what the obstacles, until it is finished. Having perseverance is very helpful in reaching goals. Pessimism is a negative attitude toward life. Passivism is a trait that causes people to take the path of least resistance in most circumstances. Procrastination is the habit of putting things off until a later time. None of these negative traits would help people to reach their goals.SOURCE:PD:018SOURCE:HR LAP 6—Goal Setting59.BThings. Individuals should consider what they like to do, their favorite activities, when identifying possible occupations. For example, some individuals enjoy operating machinery, driving vehicles, or using tools. As a result, they might consider a career that involves working with things which are tangible items. Examples include a landscaper who operates equipment and drives a truck, and a carpenter who uses tools to build furniture. Careers that involve working with people and animals require a lot of personal interaction and patience. Careers that involve working with information involve keeping track of data such as facts and statistics.SOURCE:PD:023SOURCE:Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 33-34). New York: Glencoe/McGraw-Hill.60.CTrade show. These functions offer excellent opportunities for buying and selling products specific to an industry as well as for learning new techniques and trends in an industry. A resident buying office is a group of retailers' representatives in a geographic area where many suppliers are located. A trade association is a group of persons in the same industry or geographic area who form a society to solve their common problems. A chamber of commerce is an organization of businesses that makes known to the government the recommendations of the business community and which helps local businesses resolve common problems.SOURCE:PD:036SOURCE:CD LAP 1—Trade Associations/Professional Organizations61.BValue. Both buyers and sellers want to feel that they are receiving value when exchanging goods and services for a specific price. Buyers want low prices and to make sure that they are making the best use of their money. Sellers want the highest prices that will still attract the most buyers. Prices should be set so that they satisfy both buyers and sellers in order for both to get the most value from the transaction. Buyers and sellers do not expect to receive credit or prestige when exchanging goods and services for a specific price. Only sellers want to make a profit from sales transactions.SOURCE:PI:001SOURCE:PI LAP 2—Pricing62.AUnethical. An unethical pricing tactic is one that is dishonest or immoral. Developing a pricing structure that encourages customers to buy additional services that they don't need in order to obtain the original product may be unethical. If customers are lead to believe that they need the additional services even though they don't, the business is deceiving customers, which is an unethical tactic. Businesses have an obligation to be fair with customers and not trick them into buying items that they don't need. Although this tactic is often unethical, it is not illegal. Predatory pricing involves setting very low prices on certain goods or services in order to hurt competitors and try to drive them out of business. This tactic is often illegal. It is not an accepted pricing tactic to encourage customers to buy items that they don't need in order to obtain the original product.SOURCE:PI:015SOURCE:Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd ed.) [pp. 327-328]. Boston: Irwin/McGraw-Hill.63.BBait-and-switch advertising. This is an illegal tactic that involves promoting a low-priced item to attract customers to whom the business then tries to sell a higher priced item. In many cases, the low-priced item is in limited supply or completely unavailable when customers try to buy it. The business then shows customers a more expensive item and encourages them to buy. A loss leader is a product that is sold below cost. High-pressure selling involves putting pressure on customers to buy. Price-ticket switching is a type of fraud by which a higher priced ticket is removed from merchandise and replaced by a lower priced ticket.SOURCE:PI:017SOURCE:Churchill, G.A., Jr., & Peter, J.P. (1998). Marketing: Creating value for customers (2nd ed.) [p. 328]. Boston: Irwin/McGraw-Hill.64.ALower the price of the product. Merchandisers that want to enter a market or increase their share in a market often lower the price of the product involved. Sales will most likely increase. Pricing above the competition is more likely to reduce market share. Developing a liberal return policy and offering free delivery are good techniques for increasing business in general but would not necessarily increase market share for a specific product.SOURCE:PI:002SOURCE:PI LAP 3—Factors Affecting Selling Price65.BLower price. Businesses that pay cash for products usually receive extremely favorable discounts from manufacturers and suppliers. These discounts lower the price of the products and reduce the final cost to the business. Paying cash for products does not necessarily guarantee faster delivery, improved credit, or better service.SOURCE:PI:019SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 578-579). New York: Glencoe/McGraw-Hill.66.CSubtract variable costs per unit from selling price per unit. The variable-cost margin is the amount that each sale contributes to fixed costs. It is also called the fixed-cost contribution. Adding fixed and variable costs determines total costs. The other alternatives are not part of calculating break-even.SOURCE:PI:006SOURCE:PI LAP 4—Tipping Point (Calculate Break-Even)67.AAssortment mistakes. There are a number of ways that purchasing errors can cause businesses to have to use markdowns in order to sell goods. One of those ways is buying the wrong assortment of goods or an assortment that does not meet the needs of customers. The other alternatives can cause markdowns, but they are not related to purchasing. A promotional error might be advertising an item at an incorrect, low price and having to sell it at what constitutes a markdown price. Liberal return policies may allow customers to return items at the end of a season when they must be marked down in order to be sold. Market changes include external factors that cause changes in consumer demand, requiring markdowns on items that have lost their popularity.SOURCE:PI:008SOURCE:Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 391-394]. Mason, OH: South-Western.68.AScreening. The screening process involves reviewing product ideas and making a decision about which ideas should be kept and which ones should be discarded. During the screening process, a retail merchandiser determines if there is a need or want for the product. The retail merchandiser also decides if it has the resources to obtain and distribute the product. If there is not enough desire for the product or the business does not have the appropriate resources, it is not practical for the business to distribute the product. Brainstorming is a creative-thinking technique that is used during the idea-generation stage of new-product development. Production and consumption occur after the screening stage.SOURCE:PM:129SOURCE:Zikmund, W., & d'Amico, M. (2001). Marketing: Creating and keeping customers in an e-commerce world (7th ed.) [pp. 287-288]. Mason, OH: South-Western.69.CGovernment agencies. Grading generally is done by government agencies using agreed-upon numbers or letters to describe quality. Government inspectors often are the ones who do the actual scoring of goods based on a point system. Sales representatives, research organizations, and consumer groups are not involved in grading goods.SOURCE:PM:019SOURCE:PM LAP 8—Grades and Standards70.BReplace or repair a faulty product. A warranty is a promise made by the seller to the consumer that the seller will repair or replace a product that does not perform as expected. A full warranty provides that if the product does not work properly, is defective, or does not live up to the warranty, it must be made good within a reasonable time. The company providing the warranty may not put time limits on any implied warranties the product may have. A limited warranty would only cover specific parts rather than the whole product. Most warranties state that improper use or handling of the product will void the warranty.SOURCE:PM:020SOURCE:PP LAP 4—Warranties and Guarantees71.CHow can we improve our service? To build positive customer relationships, a retail merchandiser needs to ask customers questions and obtain feedback about their experiences with the retailer. Once the retailer has the information, it can evaluate the feedback and take action to enhance the customers' future experiences with the store. By asking how the company can improve its service, the employee is requesting specific information that can help the retailer determine its customer service levels. The remaining alternatives are not questions that are constructed to provide specific information about the customers' experience with the store.SOURCE:PM:138SOURCE:Rokes, B. (2000). Customer service: Business 2000 (p. 36). Mason, OH: South-Western.72.ATrading-down. When a buyer decides to add a lower priced product or product line to the store's product mix, the buyer is using a trading-down product-mix strategy. Trading-up is a product-mix strategy in which a buyer adds a higher priced product or product line to the product mix. Positioning is a product-mix strategy in which a store creates a certain image or impression of a product in the minds of consumers. Contraction involves the deletion of product items or lines from the product mix.SOURCE:PM:003SOURCE:PP LAP 3—Product Mix73.CInappropriate services increase costs and absorb profits. However, services such as information desks, fashion shows, or gift certificates are not designed to make profits for the store, but rather are offered for customer convenience or as promotional traffic builders. These services are very valuable to the store and can help produce profits indirectly. The pricing policy of the store affects the nature and extent of its services, but the pricing policy should not be changed to make an unprofitable service show a profit.SOURCE:PM:036SOURCE:Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 446-450]. Mason, OH: South-Western.74.DProducts. A clothing store's products are the shirts, pants, and dresses it offers for sale. It makes sense to pay attention to these products because customers like to try garments on before buying them and have them altered if they don't fit. Fitting rooms and alteration services don't require technology, just some physical space and sewing supplies. When a business pays attention to its budget, it considers what its income and expenses will be over a specific period of time. Policies refer to the general rules or statements the business follows, and they establish guidelines for all employees to follow in making decisions about customer service.SOURCE:PM:013SOURCE:PM LAP 1—Customer Service Supersized!75.CRegistered trademark. A registered trademark is a brand that has been registered with the appropriate government agency for legal protection. In the U.S., trademark rights are protected by the Lanham Act of 1946. Brand licensing is legal authorization by the brand owner to allow another company to use the brand in exchange for a fee. Brand positioning refers to marketers creating a certain image or impression of a brand as compared to those of competitors' brands. Descriptive names are brand names which have fallen into everyday use so that the brand is used to describe every product in the brand's product category.SOURCE:PM:126SOURCE:PM LAP 10—Building Your Business's Brand76.DMerchandise budget. A merchandise budget is a financial management tool that retailers use to plan and control the total amount of inventory in dollars carried in stock at any one time. It tells the retailer how much it should invest in inventory during any specified time. Merchandise mix is a similar tool but is planned and controlled not in terms of dollars, but in terms of units. Market repositioning involves changing customers' existing image of a retailer relative to other retailers and to their shopping needs. Logical approach is a term to use a factual presentation about a merchandise offering.SOURCE:PM:061SOURCE:Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 276-281]. Mason, OH: South-Western.77.CPlanned markdowns. Markdowns are reductions in the selling price of goods. Businesses plan for reductions, such as markdowns and discounts, because they know that not all merchandise will be sold at the original price. These reductions have an effect on the business's profit and must be included in the merchandising plan in order for the business to purchase the right amount of goods. By planning markdowns, businesses are better able to prepare an effective merchandising plan and project profits. Operating expenses are all of the expenses involved in running the business. Vendors are suppliers of goods or services. Shipping contracts are transporting and delivery agreements.SOURCE:PM:067SOURCE:Dunne, P., Lusch, R., & Griffith, D. (2002). Retailing (4th ed.) [pp. 281-287]. Mason, OH: South-Western.78.CDrives traffic for purchase of higher priced merchandise. Promotional merchandise includes low-priced, closeout items or special buys. These are used by some retailers to drive additional traffic into the store, with the hope that shoppers will purchase more expensive items while they're there. This can be an effective strategy, although retailers must be careful to not tarnish their image or disappoint customers by offering lower priced merchandise. While promotional merchandise is lower cost, it does not translate into higher merchandise because it is also sold at lower prices. Margin is not the intent with promotional merchandise; it is intended as an incentive to get shoppers into the store. Promotional merchandise can be of any style and type and is not necessarily trendier than merchandise carried regularly. Purchase cycles may be short, but this varies according to the type of merchandise, shipping method, etc.SOURCE:PM:260SOURCE:Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.) [pp. 442-445]. Upper Saddle River, NJ: Prentice Hall.79.BInstitutional. Institutional promotion is used to create an image in the eyes of consumers. Promotional advertising focuses on selling a specific good or service. All advertising is paid. Patronage promotions are designed to promote a firm's prestige or its features.SOURCE:PR:002SOURCE:PR LAP 4—Know Your Options (Types of Promotion)80.DMaturity. The maturity stage exists when the product is well established and competition is increasing. The product life cycle begins with the introductory stage that involves the introduction of a new product to the market. Growth follows introduction, and competing products enter the market. The declining stage occurs when sales are dropping as newer products are entering the market. The promotional mix must be adjusted for each phase of the product's life cycle.SOURCE:PR:003SOURCE:PR LAP 1—Promotional Mix81.BInteractive. A kiosk is a stand-alone structure located in public places and is designed to provide information and sell products. Because the kiosks are interactive, customers can enter information into the kiosk's computer system and obtain what they want instantly. For example, customers can purchase theater tickets at the local cinema's kiosk and obtain a bridal registry at a department store's kiosk. Generic refers to a type of brand. Kiosks are not portable or seasonable.SOURCE:PR:100SOURCE:Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 537-538]. Mason, OH: Thomson/South-Western.82.AOffer something new or improved. Advertisers use this approach in the belief that people are attracted to something that is new or has a new feature. An ambiguous, unexpected, or provocative headline is used to arouse curiosity. An advantage to the consumer of using the product is stated when promising a benefit, and a general or specific statement makes a claim for the product.SOURCE:PR:014SOURCE:PR LAP 7—Parts of Print Ads83.ASeveral times during. As a form of direct advertising, an infomercial is a lengthy commercial (broadcast advertisement) that looks like a television program. To increase the number of viewers who respond to the advertisement, the business should request a call to action (e.g., place order, ask for more information) several times during the duration of the infomercial. This is because viewers do not always watch the entire infomercial. If the call to action appears only at the beginning, in the middle, or at the end of the broadcast, the viewers may miss it and not respond to the advertisement. When requesting a call to action, the infomercial should repeat the phone number, e-mail address, or web address many times, which may increase response rates.SOURCE:PR:089SOURCE:O'Guinn, T.C., Allen, C.T., & Semenik, R.J. (2003). Advertising and integrated brand promotion (3rd ed.) [pp. 688-689]. Mason, OH: South-Western.84.CPromotional. A selection display is one that exposes a complete assortment of merchandise, enabling customers to wait on themselves—self-service. Promotional displays are not always self-selection displays. An institutional display is of a noncommercial nature and promotes an event or theme of public interest. A balanced display is one in which the placement of merchandise and fixtures gives an impression of symmetrical balance.SOURCE:PR:023SOURCE:Diamond, J., & Diamond, E. (1999). Contemporary visual merchandising (pp. 22-24). Upper Saddle River, NJ: Prentice Hall.85.BDusting props. Displays must be maintained on a regular basis in order to keep them clean and attractive to customers. One of the housekeeping duties needed for the upkeep of displays is dusting props. Many displays contain props, such as furniture or racks, that may accumulate dust over a period of time. Regular dusting of the props will keep them clean and help maintain the overall appearance of the display. Sweeping aisles, removing trash, and washing floors are housekeeping duties associated with the entire store rather than with a display.SOURCE:PR:052SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 393). New York: Glencoe/McGraw-Hill.86.DKiosk. A kiosk is a free-standing booth used in selling small items. It is a floor fixture that is usually large enough to hold merchandise and a salesperson and would be a fairly expensive fixture to replace. A costumer is a counter display fixture used to hold small apparel items or accessories. A hook stand is a counter fixture used to display items that are in bags or on cards. An easel is an inexpensive floor or counter fixture used to hold informational signs.SOURCE:PR:031SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 387). New York: Glencoe/McGraw-Hill.87.BSpace. The retailer may not have room for these types of displays or may wish to use the space for another purpose. Point-of-purchase displays are supplied at little or no cost by vendors to promote their products. Color and product cost are not major considerations.SOURCE:PR:114SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 385-387). New York: Glencoe/McGraw-Hill.88.CFinancial success. Building a loyal clientele is important to the financial success of a merchandising business. Loyal customers return to buy regularly, thus providing the financial backbone for a growing business. Repeat business increases sales, which leads to higher profits. Loyal clientele making repeat purchases tend to reduce a business's selling costs. A business's vendor relations and recruitment process usually are not affected by a well-established body of customers.SOURCE:SE:828SOURCE:SE LAP 115—Keep Them Loyal (Building Clientele)89.BSales staff. Salespeople are usually the employees with whom customers are in ongoing contact. Therefore, it is important for salespeople to make a good impression. Part of making a good impression is exhibiting ethical behavior by being honest, trustworthy, and sincere. If the salesperson makes a positive impression on customers, the customers will generally have a positive impression of the store. Most customers do not have ongoing contact with a store's board of directors, maintenance crew, and receiving personnel.SOURCE:SE:106SOURCE:SE LAP 129—Keep It Real—In Sales (Sales Ethics)90.ABuild and maintain a clientele. Telephones, faxes, and computers help businesses process their sales orders quickly. Because these technological tools increase efficiency, salespeople have more time to call on prospective and existing customers. Sales managers usually set sales standards and goals for sales personnel. Although salespeople may want to monitor some of their competitors' activities, they should focus on building and maintaining a clientele. A salesperson's job does not usually involve developing new products for the business.SOURCE:SE:107SOURCE:Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [p. 577]. Mason, OH: Thomson/South-Western.91.AConsumer-protection laws. Governments develop consumer-protection laws to reduce the risk of consumer fraud or personal injury by products that businesses sell. Consumer-protection laws address selling activities. For example, if a retailer's salesperson does not tell a customer about a product's limitations and the customer misuses the product and receives injuries due to the misuse, the customer could sue the retailer. As a result, the retailer may experience consumer credibility problems and financial losses. Failure to disclose information about a product during the selling process is not a violation of customer-service regulations, false-labeling policies, or exclusive-dealing statutes.SOURCE:SE:108SOURCE:Greene, C. (2000). Selling: Business 2000 (pp. 104-105). Mason, OH: South-Western.92.AMaterials and content. You can use the information about the composition of products to help solve customer buying problems and to assist customers in comparing similar products. Finishes are used in enhancing the beauty of products, increasing their value, protecting their surfaces, aiding in their care, or providing safety features. Consumers usually are not interested in the technical manufacturing process which determines the quality of a product. Pricing information helps the customer make a buying decision on price alone and does not consider the quality of the merchandise.SOURCE:SE:062SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 664-666). New York: Glencoe/McGraw-Hill.93.AIn the customer's hands. Salespeople often use the product approach because it gives them the opportunity to put the product they sell in the customer's hands. Holding a product usually encourages customers to look at it more closely and even try it out. A salesperson using the product approach would not put the product in a sealed case. A salesperson might put the product on the office floor or on the customer's desk depending on its size, but the primary intent is to put it in the customer's hands if at all possible.SOURCE:SE:110SOURCE:SE LAP 124—Opening the Industrial Sale94.BSuggestion selling. Suggestion selling is a sales technique in which the salesperson attempts to increase the customer's purchase by suggesting additional items after the original decision to buy has been made. Salespeople often are able to increase their total sales volume by effectively using suggestion selling to encourage each customer to buy additional items. An advertising campaign is a series of advertisements planned around a central theme. Mass production is the production of a few items in large quantities. Industry forecasts are predictions of the future prospects for entire industries.SOURCE:SE:875SOURCE:SE LAP 110—Using Suggestion Selling95.D$260.21. Buzz receives the 15% discount because his total purchase is over $250. The discount is subtracted from the subtotal before the tax is added in. To determine the discount, calculate the extension for the multiple items (3 x $12.95 = $38.85) and add this figure to the other purchases ($38.85 + $130.00 + $119.95 = $288.80). Multiply the total by the rate of discount to determine the amount of discount ($288.80 x 15% or.15 = $43.32). Subtract the discount ($288.80 - $43.32 = $245.48) and multiply the discounted cost by the tax rate ($245.48 x 6% or .06 = $14.728 or $14.73). Add the cost to the tax to determine the total purchase amount ($245.48 + $14.73 = $260.21).SOURCE:SE:116SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 339, 555-556). New York: Glencoe/McGraw-Hill.96.BGift certificates. Gift certificates or cards are convenient for customers to purchase and give to the hard-to-buy-for recipient. Retailers benefit by selling gift certificates because the card recipient must use the card to purchase merchandise in the store. Customer service includes activities that create a certain level of satisfaction that a customer experiences before, during, and after a sales transaction. Credit, check, and cash are payment options or the way that customers pay for their purchases. Sales promotion refers to activities that businesses use to stimulate consumers buying in their stores. Customer service, payment options, and sales promotion are not activities that retailers sell to customers.SOURCE:SE:016SOURCE:Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.) [p. 576]. Upper Saddle River, NJ: Prentice Hall.97.BMethod of payment. In order to process telephone orders, the employee handling calls needs to ask the customers how they want to pay for the order. The most common methods are credit card, COD (cash on delivery), and personal check. Businesses will not process and deliver orders until the method of payment is established. The customer's age, country of birth, and number of dependents are not the kinds of information that the operator needs to process telephone orders.SOURCE:SE:835SOURCE:Berman, B., & Evans, J.R. (1998). Retail management: A strategic approach (7th ed.) [p. 221]. Upper Saddle River, NJ: Prentice Hall.98.CDescription. Products are identified on sales checks through style, reorder, or catalog number. In this way, the data can be used for inventory control, as well as a sales record. Terms on a sales check refer to the manner in which payment will be made. Quantity deals with the amount being sold, and department identifies the area where the merchandise was purchased.SOURCE:SE:117SOURCE:Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 335-336). New York: Glencoe/McGraw-Hill.99.BDirecting. Directing is the management function of providing guidance to workers and work projects. Organizing is the management function of setting up the way the business's work will be done. Controlling is the management function that monitors the work effort. Staffing is the management function of finding workers for the business.SOURCE:SM:001SOURCE:BA LAP 6—Manage This!100.BCash flow. Cash flow problems involve not enough cash coming into a merchandising business to enable it to carry out its activities. A business experiencing cash flow problems might obtain data about industry averages from Dun & Bradstreet Information Services because Dun & Bradstreet collects financial statements from a wide variety of industries and compares them in order to determine average industry performance. A business can use this information to find out how similar businesses in its geographic area handle their cash flow and use that data to solve its own cash flow problems. Break-even is the level of sales at which revenues equal total costs. Asset-based is a type of loan that guarantees repayment based on the business's assets. Dollar volume is a type of discount offered to advertisers for total dollar volume in a contract year.SOURCE:SM:005SOURCE:Longenecker, J.G., Moore, C.W., & Petty, J.W. (2000). Small business management: An entrepreneurial emphasis (11th ed.) [pp. 487-489]. Cincinnati: South-Western College. ................
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